Delhi High Court Restates Apex Court: An Appeal must have the Authority of Law

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A Division Bench consisting of Justice Subramonium Prasad and Justice Hima Kohli heard the case of Prasar Bharati v. M/S Stracon India Limited & Anr. The Court held that an appeal against an arbitral award is not maintainable if it does not fall under the restrictions of Section 37 of the Arbitration and Conciliation Act, 1966.

Brief facts of the case

The Appellant challenges an Order passed in the enforcement of an arbitral award. The learned Single Judge had directed the Registrar of the Court to release only a sum of Rs.11 crores in favour of the Respondents. This was out of the total sum of Rs.33,69,94,847/- which the Appellant deposited with the Registry.

The Court passed the aforesaid Interlocutory Order under Section 36 of the Arbitration and Conciliation Act (“A&C Act”) which deals with enforcement of arbitral awards.

Appellant’s Arguments

The Counsel for the Appellant submits that the appeal is maintainable under Section 13 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (“Commercial Courts Act”). He contends that Section 10 of the Act states that all matters relating to arbitration fall within the ambit of the Act. Thus, the present appeal is also maintainable under Section 13 of the CCA.

He asserts that a later enactment (Commercial Courts Act, 2015) will override the earlier enactment (A&C Act, 1996). Furthermore, even if the appeal is not maintainable under Section 37 of the A&C Act, it would be maintainable under Section 13 of the CCA.

Respondent’s Arguments

The Counsel for the Respondents objected to the maintainability of the present appeal. He contends that the appeal referred to in Section 13 of the CCA can only be upheld against those orders passed by a Commercial Court. It is also stated in Order XLIII of the CPC and Section 37 of the A&C Act.

However, the Order under challenge is not one which falls under Order XLIII of the CPC or Section 37 of the A&C Act. The present appeal is filed against an Order which has been passed in proceedings under Section 36 of the A&C Act. Thus, it is not maintainable under Section 37 of the A&C Act, which deals with the appealable orders.

Furthermore, Section 37 of the A&C Act was amended in 2019. The Amendment introduced a non-obstante clause (a clause having an overriding effect). As a result, an appeal can be filed only against the orders that have been mentioned in Section 37 of the A&C Act. The amended Section 37 of the A&C Act is the later will of the legislature. Hence, it has to prevail.

Court’s Observations

The issue that arises is whether the present appeal is maintainable under Section 13 of the CCA.

The Bench emphasized on the explanation in Ganga Bai vs Vijay Kumar, (1974) 2 SCC 393. “There is an inherent right in every person to bring a suit of a civil nature. But the right of appeal inheres in no one. Thus an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute.”

The Bench dismissed the contention that the CCA being the subsequent enactment would override the A&C Act. Instead, there is no inconsistency between the two Acts. Section 11 of the CCA restricts the jurisdiction of Commercial Courts. It states that an appeal under the CCA would be maintainable only against those orders that find mention under Section 37 of the A&C Act.

The A&C Act would be considered as a special Act for all proceedings arising under the Act. It would, therefore, prevail over the CCA, which would be treated as a general act. Since Section 37 was amended in 2019 and the provision added a non-obstante clause, it would have to prevail over the CCA.

Court’s Decision

Under Section 37, no appeal is maintainable from any order passed under Section 36 of the A&C Act. Further, Section 36 of the A&C Act does not attract the provisions of the CPC. Since the statute does not provide for an appeal against and order passed under Section 36, the present appeal is also not maintainable. Moreover, the challenged order would neither fall under Order XLIII of the CPC nor Section 37 of the A&C Act.

Thus, the present appeal filed under Section 13 of the CCA, is not maintainable.


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