Holding

A High Court that does not exercise ordinary original civil jurisdiction is not a "court" within the meaning of Section 2(1)(e) of the Arbitration and Conciliation Act, 1996, so an appeal under Section 37(2) does not lie before it.

Summary

The appellant, Mis. Pandey & Co. Builders Pvt. Ltd., entered into a contract for canal repair work that contained an arbitration clause. Disputes arose and the appellant invoked arbitration, but the named arbitrator (the Superintending Engineer) retired and his successor delayed the proceedings. The Irrigation Department ordered the arbitration to be concluded within three months. The appellant challenged the arbitrator's jurisdiction and a former High Court judge was appointed as arbitrator, yet the Superintending Engineer issued an award. The appellant appealed the award under Section 37 of the Arbitration and Conciliation Act, 1996 to the Patna High Court. The High Court dismissed the appeal, holding that, under Section 37(2), the appeal lay before the District Court because the High Court does not exercise original civil jurisdiction and therefore is not a "court" within the meaning of Section 2(1)(e) of the Act. The Supreme Court affirmed this view, stating that the definition of "court" includes only the principal civil court of original jurisdiction in a district, and a High Court only when it exercises ordinary original civil jurisdiction. Consequently, the appeal could not be entertained by the High Court and the appeal was dismissed.

Issues considered

The meaning of "court" under Section 2(1)(e) of the Arbitration and Conciliation Act, 1996 for purposes of an appeal under Section 37(2).
Whether the Patna High Court, which does not exercise original civil jurisdiction, qualifies as a "court" within that definition.
Whether the appeal against the arbitral award should lie before the District Court as per Section 37(2) and the Bengal, Agra and Assam Civil Courts Act, 1857.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 14, s. 15, s. 16, s. 2(1)(e), s. 34, s. 37(1), s. 37(2), s. 37(3), s. 42, s. 5

Subjects

ArbitrationAppeal jurisdictionSection 37Definition of courtHigh Court original jurisdictionArbitration and Conciliation Act 1996Bengal Agra Assam Civil Courts ActArbitration clause

Judgment

....
MIS. PANDEY &CO. BUILDERS PVT. LTD. A
v.
STATE OF BIHAR AND ANR.

NOVEMBER I 0, 2006

[S.B. SINHA AND DAL VEER BHANDARI, JJ.]
B

Arbitration:

Arbitration and Conciliation Act, 1996:
c
Section 37-Appealable order-"Court"-Definition of-Arbitration
·clause-Execution of canal repair work-Contract for-Due to disputes and
differences contractor invoked the arbitration clause-Superintending
Engineer, having entered into reference, did not proceed with reference for
a long time-Irrigation Department ordered conclusion of arbitration D
proceedings within three months-A former Judge of the High Court was
nominated by the Chief Justice as an arbitrator-But, in the meanwhile, the
Superintending Engineer passed an award-The High Court judge held that
he had no jurisdiction to proceed with the matter-Contractor filed an
appeal-High Court dismissed the appeal holding that it had no jurisdiction
to hear the appeal as in terms of Section 37(2), the appeal lay before the E
District Court in view of the provisions of the Bengal, Agra and Assam Civil
Courts Act-Correctness of-Held: An appeal in terms of S. 37(2) is a
statutory appeal-" Court" in S.2(e) of the 1996 Act is the Principal Civil
Court oforiginal jurisdiction-Ifthe High Court does not exercise the original
civil jurisdiction, it would not be a "court" within the meaning of S.2(e)- F
hence, High Court rightly held that it had no jurisdiction to hear the appeal
under S.37(2)-Bengal, Agra and Assam Civil Courts Act, 1857.

Words & Phrases:

"Court"-meaning of-Jn the context of S. 2(e) of the Arbitration and G
Cone iliation Act, I 996.

The appellant undertook a contract for execution of canal repair work.
The said contract contained an arbitration clause. Disputes and differences
having arisen between the parties, the appellant invoked the said arbitration
997 II
998 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A clause. The Superintending Engineer, who was the named arbitrator, entered
into reference but he retired and his successor did not proceed with the
reference for a long time. The Irrigation Department of the respondent-State
asked the Superintending Engineer to conclude the arbitration proceedings
within three months. The appellant filed an objection questioning the
B jurisdiction of the said arbitrator on the premise that his nomination had
already been terminated. A former Judge of the High Court was appointed as
an arbitrator but the Superintending Engineer passed an award. Therefore,
the High Court Judge held that he had no jurisdiction to proceed with the
matter.

C The appellant filed an appeal before the High Court under Section 37
of the Arbitration and Conciliation Act, 1996. The High court dismissed the
appeal holding that it had no jurisdiction to hear the appeal as in terms of
Section 37(2) of the 19~6 act, the appeal lay before the District Court in view
of the provisions of the Bengal, Agra and Assam Civil Courts Act. 1957. Hence
the appeal.
D
Dismissing the appeal, the Court.

HELD: 1. The High Court does not exercise any original civil
jurisdiction. The definition of"court" in Section 2(l)(e) of the Arbitration
and Conciliation Act, 1996 mea~~ the Principal Civil Court of original
E jurisdiction in a district and includes the High Court which exercises the
original civil jurisdiction. If the High Court does not exercise the original
civil jurisdiction, it would not be a "court" within the meaning of the said
provision. Constitution of the courts vis-a-vis the hierarchy thereof is governed
by the Bengal, Agra and Assam Civil Courts Act, 1857. [1003-D, El
F 2. The Rules framed by the High Court in exercise of its jurisdiction
under Article 225 of the Constitution of India also do not authorize it to
entertain a suit as a court of original jurisdiction. [1004-A, B)

3. An appeal in terms of Section 37(2) of the 1996 Act is a statutory
G appeal. It may be true that Section 37(2) of the 1996 Act debars a second
appeal from an appellate order under Section 37(1) and (2) thereof but having
regard to Section 5 of the 1996 Act, the provisions for second appeal may be
held to be superfluous. [1004-F)

O.P. Malhotra: "The law and Practice ofArbitration and Conciliation",
H P. 12 70, referred to.

,....'
\
PANDEY &CO. BUILDERS.PVT. LTD. v. STATE OF BIHAR[S.B. SINHA, J.] 999
4. Having regard to the plain language of Section 37(2) of the 1996 Act, A
there is no reason as to why the definition of "court" shall not be put into
service. It may be true that the interpretation clause provides for "unless the
context otherwise requires". If application of the interpretation clause
contained in Section 2 of the 1996 Act shall lead to anomalous and absurd
results, one may not stick to the definition but no such case has been made B
out (1005-D, El

5. An order passed by a Chief Justice or his nominee under Section
11(6) of the 1996 Act may be a judicial order but the sa.me does not take away
the effect of the appellate jurisdiction to be exercised by a court under Section
37(2) of the 1996 Act. (1006-A)
c
SBP & Co. v. Patel Engineering Ltd., [2005) 8 SCC 618, followed.

Mukesh Tripathi v. Senior Division Manager, LIC, (2004) 8 SCC 387,
relied to.

Whirlpool Corporation v. Registrar of Trade marks, (199818sec11, D
referred.

Mis. Guru Nanak Foundation v. Mis. Rattan Singh and Sons, (1981) 4
SCC 634 and Mis. Raval and Co. v. KG. Ramachandran, (1974) 1 SCC 424,
held inapplicable.

6. There exists a distinction between an appeal and an application.
E
Whereas Section (31)(4) of the Arbitration Act, 1940 or Section 42 of the
1996 act provides for an application, Section 37(2) of the 1996 Act provides
for a statutory appeal. A forum of an appellate court must be determined with
reference to the definition thereof contained in the 1996 Act. (1010-A, B)
F
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4780 of2006.

From the final Judgments and Orders dated 21.9.2005 and 18.1.2006 of
the High Court of Judicature at Patna in M.A. No.196 of2004 and C.R. No.224/
2005 respectively.

Abhishek Singh and Praveen Agrawal, Advs. for the Appellant. G
Mohit Shah and Gopal Singh, Advs. For the Respondents.

The Judgment of the Court was delivered by

S.B. SINHA, J. Leave granted. H
1000 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A The parties hereto entered into a contract in terms whereof Appellant
herein undertook a contract for execution of canal repair work for Rs. 11,33,421.
An additional agreement was entered into by and between the parties. The
said contract contained an arbitration clause being Clause 23 of the contract.

Disputes and differences having arisen between the parties, Appellant
B invoked the said arbitration clause. The Superintending Engineer of the Circle
who was the named Arbitrator entered into reference. There being alleged
undue delay in conclusion of the proceedings of the ubitral tribunal, a notice
was served by Appellant purported to be in terms of Sections 14 and 15 of
the Arbitration and Conciliation Act, 1996 (for short "the 1996 Act"). The
C named Arbitrator retired and his successor did not proceed with the reference
for a long time, Another notice was issued by Appellant asking the then
incumbent of the office of Superintending Engineer to proceed with the
arbitration. He, however, instead of proceeding with the arbitration sought
for directions in this behalf from his superior officers. On 23.8.2002, he
expressed his inability to continue with the proceedings. A notice under
D Section 14 of the 1996 Act was again served. A proposal was made thereunder
to nominate another independent person as an Arbitrator. ~e Irrigation
Department of the State ofBihar asked the Superintending Engineer to conclude
the arbitration proceedings within three months by an office order dated 20th
November, 2002.

E An objection, however, was filed by Appellant questioning the
jurisdiction of the said Arbitrator on the premise that his nomination has
already been terminated. On the said plea that the named Arbitrator in terms
of Clause 23 could not have functioned as such, an application under Section
11 of the 1996 Act was filed before the Chief Justice of the Patna High Court.
p Justice P.S. Sahay, a former Judge of the Patna High Court was appointed but
the Superintending Engineer fixed a date for hearing on 12.2.2003 by an order
d~ted 8.2.2003, to which an objection was raised by Appellant. Appointment
of Justice P.S. Sahay was intimated to the said Superintending Engineer.

An award was passed by the Superintending Engineer on 20th February,
G 2003. In the meantime, Appellant had filed his claim before Justice P.S. Sahay.
Respondents also appeared on 21.2.2004 and filed an application under Section
14 of the 1996 Act seeking termination of his mandate on the ground that the
earlier Arbitrator has already given his award. The learned Arbitrator held
that he had no jurisdiction to proceed with the matter.

H
PANDEY &CO. BUILDERS PVT. LTD. v. STATE OF BIHAR (S.B. SINHA, J.] )001

A purported appeal was filed thereagainst by Appellant under Section A
37 of the 1996 Act before the High Court. By reason of the impugned
judgment, the High Court opined that it had no jurisdiction to hear the appeal
as in tenns of Sub-section (2) of Section 37 of the 1996 Act, the appeal lay
before the District Court. A review application filed thereagainst was also
dismissed.
B
It is not in dispute that in tenns of Section 16 of the 1996 Act, the
Arbitrator could have detennined his own jurisdiction. The learned Arbitrator,
nominee of the Chief Justice of the High Court, opined that there could not
be two awards in one proceeding. It was held:

"19. Thus, on a careful consideration of the submission made on C
behalf of the parties and after going through the papers filed by them,
I hold that I have no jurisdiction to continue with this proceedings
for the reasons, mentioned above."

The High Court in passing the impugned judgment opined that the D
Patna High Court having no original jurisdiction, in view of the provisions
contained in the Bengal, Agra and Assam Civil Courts Act, 1857 (for short
"the 1857 Act"), the appeal filed under Section 37(2) of the 1996 Act was not
maintainable before it stating:

"Accordingly, I am of the opinion that this Court being not a court E
of ordinary original civil jurisdiction to entertain the suit had the
subject matter of the arbitration being the subject matter of the suit,
the appeal is not maintainable.

Accordingly, I sustain the preliminary objection raised by Mr. Lalit
Kishore. Appellant, if so desire may take recourse to the remedy p
available to it before the competent forum."

Two submissions were made on behalf of Appellant before us, viz, :

(i) Having regard to the definition of"court" as contained in Section
2( 1)(e) of the 1996 Act, the court of the Principal Civil Court G
should be held to be not empowered to hear an appeal against
an order of the arbitral tribunal insofar as if Section 37 of the 1996
..,, Act is not construed, a second appeal being prohibited, no
appeal shall ever lie against the order of the District Judge,
Principal Civil Court before the High Court.
H
1002 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A (ii) As the order of the nominee of the Chief Justice of the Patna
High Court under Section 11 of the 1996 Act is a judicial order,
in view .of the. provisions contained in Section 42 thereof, a
proceeding was maintainable only before the High Court.

The purport and object sought to be achieved by the 1996 Act vis-a-
B vis the Arbitration Act, 1940 (for short "the 1940 Act") is well known.

The 1996 Act makes a radical departure from the 1940 Act. It has
embodied the relevant rules of the modem law but does not contain all the
provisions thereof. The 1996 Act, however, is not as extensive as the English
Arbitration Act.
c
Different statutes operated in the field in respect of a domestic award
and a foreign award prior to coming into force of the 1996 Act, namely, the
1940 Act, the Arbitration (Protocol and Convention) Act, 1937 and the Foreign
Awards (Recognition and Enforcement) Act, 1961. All the aforementioned
D statutes have been repealed by the 1996 Act. It makes provisions in two
different parts, namely, matters relating to domestic award and foreign award
respectively.

The Scheme of 1996 Act is absolutely distinct and different from the
1940 Act as also the 196 l Act.
E In the 1940 Act, no reason was required to be stated in the award unless
otherwise agreed upon. In the 1996 Act, reasons are required to be stated
unless agreed to otherwise by the parties. The court's intervention is sought
to be minimized under the provisions of the 1996 Act not only having regard
to the concerns expressed in the international community as regards delay in
F the arbitration proceedings but also in view of the fact that an award under
the 1996 is to be a reasoned one. In a large number of judgments, this Court
has emphasized that the extent of power of the court's intervention in relation
to a reasoned award and unreasoned one would be different. Whereas in
relation to an unreasoned award, the court's jurisdiction to interfere with the
G award was absolutely limited, a greater latitude had been given in relation to
a reasoned award.

After the 1996 Act came into force, under Section 16 of the Act the
party questioning the jurisdiction of the Arbitrator has an obligation to raise
the said question before the Arbitrator. Such a question of jurisdiction could
H be raised if it is beyond the scope of his authority. Such a question was
PANDEY & CO. BUILDERS PVT. LTD. i'. STATE OF BIHAR [S.B. SINHA, J.] ]003

required to be raised during arbitration proceedings or soon after initiation A
thereof as a preliminary issue.

Unlike the 1940 Act, the Arbitrator is entitled to determine his own
jurisdiction. In the event, the Arbitrator opines that he has jurisdiction in the
matter, he may proceed therewith, which order can be challenged along with
the award in terms of Section 34 of the 1996 Act. If the Arbitrator opines that B
he has no jurisdiction to hear the matter, an appeal lies before the court.
'Court' has been defined in Section 2(1 )(e) of the 1996 Act in the following
terms:

" Court" means the principal Civil Court of original jurisdiction in a
district, and includes the High Court in exercise of its ordinary original C
civil jurisdiction, having jurisdiction to decide the questions forming
the subject-matter of the arbitration if the same had been the subject-
matter of a suit, but does not include any civil court of a grade inferior
• to such principal Civil Court, or any Court of Small Causes;"

It is not disputed before us that the Patna High Court does not exercise
D
any original civil jurisdiction. The definition of "court" as noticed hereinbefore
means the Principal Civil Court of original jurisdiction in a district and includes
the High Court which exercises the original civil jurisdiction. If a High Court
does not exercise the original civil jurisdiction, it would not be a 'court' within
the meaning of the said provision. Constitution of the courts vis-a-vis the E
hierarchy thereof is governed by the 1857 Act, Section 3 whereof reads as
under:

"3. Classes of Courts There shall be the following classes of Civil
Courts under this Act, namely: -
F
(a) The Court of the District Judge;

(b) The Court of the Additional Judge;
(c) The Court of the Subordinate Judge; and

(d) · The Court of the Munsif."
G
Chapter Ill of the 1857 Act relates to ordinary jurisdiction of the civil
courts. Section IS provides for extent of original jurisdiction of District and
Subordinate Judge in the following terms:

"18. Extent of original jurisdiction of District or Subordinate Judge-
H
1004 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A Save as otherwise provided by any enactment for the time being in
force, the jurisdiction of a District Judge or Subordinate Judge extends,
subject to the provisions of Section 15 of the Code of Civil Procedure,
1908 to all original suits for the time being cognizable by Civil Courts."

The rules framed by the Patna High Court in exercise of its jurisdiction
B under Article 225 of the Constitution of India also do not authorize it to
entertain a suit as a court of original jurisdiction.

Section 3 7 of the 1996 Act reads as under:

"37. Appea/able orders. (l) An appeal shall lie from the following
C orders (and from no others) to the Court authorised by law to hear
appeals from original decrees of the Court passing the order, namely:

(a) granting or refusing to grant any measure under section 9:
(b) setting aside or refusing to set aside an arbitral award under •
section 34.
D
(2) An appeal shall also lie to a court from an order of the arbitral
tribunal -

(a) accepting the plea referred to in sub-section (2) or sub-
section (3) of section 16; or
E (b) granting or refusing to grant an interim measure under section
17.

(3) No second appeal shall lie from an order passed in appeal under
this section, but nothing in this section shall affect or taken away any
right to appeal to the Supreme Court."
F
An appeal in terms of Sub-section (2) of Section 37 is a statutory
appeal. It may be true that Sub-section (3) of Section 37 of the 1996 Act
debars a second appeal from an appellate order under Sub-sections (I) and
(2) thereof but having regard to Section 5 of the 1996 Act, the provisions for
G second appeal may be held to be superfluous.

In The Law and Practice of Arbitration and Conciliation by O.P. Malhotra
and Indu Malhotra, page 1270, it is stated:

"In the context of this Act, s 37(3) barring second appeal against an
H appellate order under s 37(1) and (2) is really superfluous. This Act
PANDEY & CO. BUILDERS PVT. LTD. v. STATE OF BIHAR [S.B. SINHA, J.) 1005
has not enacted any provision analogous to s 41 of the previous Act. A
It is radically different from the Act of 1940. Therefore, the Code of
Civil Procedure 1908 proprio vigore does not apply to the proceedings
before the court in its original or appellate jurisdiction. Section 5
imposes a blanket ban on judicial intervention of any type in the
arbitral process except 'where so provided under Part I' of this Act. B
Pursuant to this provision, s 37(1) provides appeals against certain
orders of the court, while s 37(2) provides appeal against certain
orders of the arbitral tribunal. However, s 37(3) prohibits a second
appeal against the appellate order under s 37(1) and (2). However, in
view of the provisions of s 5, a second appeal against the appellate
order under s 37(1) and (2) would not be permissible, even ifs 37(3) C
had not been enacted. It was, therefore, not really necessary to enact
this provision, and it seems to have been enacted by way of abundant
caution."

In this case, it is not necessary for us to go into the question as to
whether Sub-section (3) of Section 37 of the 1996 Act would debar an appeal D
from appellate order passed under Sub-section (2) of Section 37 thereof. The
consequences of the statutory embargo would ensue but then the question
will have to be considered as and when occasion arises therefor. Sub-section
(2) of Section 3 7 of the 1996 Act prescribes for an appeal to a court. We do
not see any reason as to why having regard to its plain language, the E
definition of "court" shall not be put into service. It may be true that the
interpretation clause provides for "unless the context otherwise requires". If
application of the intl!rpretation clause contained in Section 2 of the 1996 Act
shall lead to anomalous and absurd results, one may not stick to the definition
but we do not think that such a case has been made out.
F
Section 42 of the 1996 Act, to which our attention has been drawn by
the learned counsel appearing for Appellant, in the instant case has no
application. The said provision reads, thus:

"42. Jurisdiction. - Notwithstanding anything contained elsewhere in
this Part or in any other law for the time being in force, where with G
respect to an arbitration agreement any application under this Part
has been made in a Court, that Court alone shall have jurisdiction over
the arbitral proceedings and all subsequent applications arising out of
that agreement and the arbitral proceedings shall be made in that
Court and in no other Court."
H
1006 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A An order passed by a Chief Justice or his nominee under Sub-section
(6) of Section I I of the I 996 Act may be a judicial order, as has been held
by a Seven-Judge Bench of this Court in SBP & Co. v. Patel Engineering
Ltd. and Anr., [2005] 8 SCC 6 I 8 but the same does not take away the effect
of the appellate jurisdiction to be exercised by a court under Sub-section (2)
of Section 37 of the I 996 Act.
B
Section 42 of the I 996 Act refers to applications and not to appeals.

Reliance placed by the learned counsel on Mis. Guru Nanak Foundation
v. Mis. Rattan Singh and Sons, [I98I] 4 SCC 634 is not apposite. Therein,
C the court was dealing with a provision of Sub-section (4) of Section 3 I of the
I 940 Act and a~ the appointment was made by the High Court, it was held
that an application for setting aside of the award in terms of Sub-section (4)
of Section 3 I of the I940 Act would lie before this Court. It is significant to
note that therein also a contention of losing of a further right of appeal was
raised and rejected in the following terms:
D
"Mr Narula lastly urged that if this Court were to arrogate jurisdiction
to itself by the putting on sub-section (4) of Section 3 I a construction
as canvassed for on behalf of the Ist respondent it would deprive the
appellant of its valuable right to prefer an appeal under the letters
patent and approach this Court under Article I36 of the Constitution.
E If this Court has jurisdiction to entertain the Award and this Court in
view of Section 31 (4) alone has jurisdiction for entertaining the Award
meaning that the Award has to be filed in this Court alone and no
other, the same cannot be defeated by a specious plea. that the right
of appeal would be denied"

F Section 3I(4) of the 1940 Act reads, thus:

"(4) Notwithstanding anything contained elsewhere in this Act or in
any other law for the time being in force, where in any reference any
application under this Act has been made in Court competent to
entertain it, that court alone shall have jurisdiction over the arbitration
G proceedings and all subsequent applications arising out of that
reference and the arbitration proceedings shall be made in that court
and in no other Court."

In Mis. Guru Nanak Foundation (supra), analysing the said provision,
H this Court held:
PANDEY & CO. BUILDERS PVT. LTD.'" STA TE OF BIHAR [S.B. SINHA, J.] } 007

" .. .It opens with a non-obstante clause and is comprehensive in A
character. The non-obstante clause excludes anything anywhere
contained in the whole Act or in any other law for the time being in
force if it is contrary to or inconsistent with the substantive provision
contained in sub-section (4). To that extent it carves out an exception
to the general question of jurisdiction of the court in which Award B
may be filed elsewhere provided in the Act in respect of the
proceedings referred to in sub-section (4). The provision contained in
sub-section (4) will have an overriding effect in relation to the filing
of the Award ifthe conditions therein prescribed are satisfied. If those
conditions are satisfied the court other than the one envisaged in
Section 14(2) or Section 31(1) will be the court in which Award will C
have to be filed. That is the effect of the non-obstante clause in sub-
section (4) of Section 31. Sub-section (4) thus invests exclusive
jurisdiction in the court, to which an application has been made in any
reference and which that court is competent to entertain as the court
having jurisdiction over the arbitration proceedings and all subsequent
applications arising out of reference and the arbitration proceedings D
shall have to be made in that court and in no other court. Thus sub-
section (4) not only confers exclusive jurisdiction on the court to
which an application is made in any reference but simultaneously
ousts the jurisdiction of any other court which may as well have
jurisdiction in this behalf. To illustrate the point, if an Award was E
required to be filed under Section 14(2) read with Section 31 (1) in any
particular court as being the court in which a suit touching the
subject-matter of Award would have been required to be filed, but if
any application in the reference under the Act has been filed in some
other court which was competent to ente1tain that application, then
to the exclusion of the first mentioned court the latter court alone, in F
view of the overriding effect of the provision contained in Section
31 (4), will have jurisdiction to entertain the Award and the Award will
have to be filed in that court alone and no other court will have
jurisdiction to entertain the same."

In Mukesh K. Tripathi v. Senior Division Manager, LIC and Ors., [2004] G
8 SCC 387, this Court observed:

"The interpretation clause contained in a statute although may deserve
a broader meaning having employed the word "includes" but therefor
also it is necessary to keep in view the scheme of the object and H
1008 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A purport of the statute which takes him out of the said definition.
Furthermore, the interpretation section begins with the words "unless
the context otherwise requires".

In Ramesh Mehta v. Sanwal Chand Singhvi, it was noticed: (SCC p.
426, paras 27-28)
B
"A definition is not to be read in isolation. It must be read in the
context of the phrase which would define it. It should not be vague
or ambiguous. The definition of words must be given a meaningful
application; where the context makes the definition given in the
interpretation clause inapplicable, the same meaning cannot be
C assigned.

In State of Maharashtra v. Indian Medical Assn. one of us (V.N.
Khare, CJ.) stated that the definition given in the interpretation clause
having regard to the contents would not be applicable. It was stated:
(SCC p. 598, para 8)
D
'A tare perusal of Section 2 of the Act shows that it starts with the
words "in this Act, unless the context otherwise requires ... ". Let us
find out whether in the context of the provisions of Section 64 of the
Act the defined meaning of the expression "management" can be
assigned to the word "management" in Section 64 of the Act. In para
E 3 of the Regulation, the Essentiality Certificate is required to be given
by the State Government and permission to establish a new medical
college is to be given by the State Government under Section 64 of
the Act. If we give the defined meaning to the expression
"management" occurring in Section 64 of the Act, it would mean the
State Government is required to apply to itself for grant of permission
F
to set up a Government medical college through the University. Similarly
it would also mean the State Government applying to itself for grant
ofEssentiality Certificate under !Jara 3 of the Regulation. We are afraid
the defined meaning of lhe expression "management" cannot be
assigned to the expression "management" occurring in Section 64 of
G the Act. In the present case, the context does not permit or requires
to apply the defined meaning to the word "management" occurring in
Section 64 of the Act."

In Mis. Raval and Co. v. K.G. Ramachandran and Ors., [1974] I SCC
424, whereupon reliance has been placed by the leaned counsel, the question
H
PANDEY & CO. BUILDERS PVT.LTD. v. STA TE OF BIHAR [S.B. SINHA, J.] J009

arose as to whether the landlord can file an application for fixation of fair rent A
under Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. In that
context, it was held:

" .... As the object of the statute was to protect those inhabitants who
had previously no access to the rates (which the churchwardens had),
the meaning of the term "inhabitants" was limited to them. The same B
approach in interpretation must be adopted by us in the present case.
We must not allow ourselves to be unduly obsessed by the meaning
of "landlord" given in t_IJe definition or by its ordinary etymological
meaning but we must examine the scheme of the relevant provisions
of the statute, the contextual setting in which Section 4, sub-section C
(I) occurs and the 0bject which the legislation is intended to achieve,
in order to determine what is the sense in which the word "landlord"
is used in Section 4, sub-section (I) - whether it is intended to include
contractual landlord."

No such anomaly arises in the instant case. D
To the similar effect is the decision of this Court in Whirlpool
Corporation v. Registrar a/Trade Marks, Mumbai and Ors., [1998] 8 SCC I
wherein it was stated:

"Now, the principle is that all statutory definitions have to be read E
subject t:> the qualification variously expressed in the definition clauses
which created them and it may be that even where the definition is
exhaustive inasmuch as the word defined is said to mean a certain
thing, it is possible for the word to have a somewhat different meaning
in different sections of the Act depending upon the subject or context.
That is why all definitions in statutes generally begin with the qualifying F
words, similar to the words used in the present case, namely "unless
there is anything repugnant in the subject or context". Thus there may
be sections in the Act where the meaning may have to be departed
from on account of the subject or context in which the word had been
used and that will be giving effect to the opening sentence in the G
definition section, namely "unless there is anything repugnant in the
subject or context". In view of this qualification, the court has not
only to look at the words but also to look at the context, the collocation
and the object of such words relating to such matter and interpret the
meaning intended to be conveyed by the use of the words "under
H
1010 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A those circumstances".

There exists a distinction between an appeal and an application. Whereas
Section 31 (4) of the 1940 Act or Section 42 of the 1996 Act provides for an
application, Sub-section (2) of Section 37 of the 1996 Act provides for a
statutory appeal. A forum of an appellate court must be determined with
B reference to the definition thereof contained in the 1996 Act.

We, therefore, see no reason to differ with the High Court. The appeal
is dismissed. No costs.

v.s.s. Appeal dismissed.