Holding

No appeal is maintainable against the Single Judge’s order because Section 39(2) bars a second appeal and the order does not fall within the categories enumerated in Section 39(1).

Summary

The State of West Bengal sought the appointment of an arbitrator under clause 25 of a contract, but the Chief Engineer failed to act, prompting the respondent to approach the High Court. A Single Judge of the Calcutta High Court revoked the Chief Engineer's authority and appointed Shri D.K. Roy Chowdhury as sole arbitrator. The State appealed the order, invoking Section 39(2) of the Arbitration Act, 1940 and the Letters Patent jurisdiction. The Supreme Court examined whether an appeal against a Single Judge’s order under Section 39(1) is permissible as a second appeal or under the Letters Patent. It held that Section 39(2) expressly bars a second appeal from an order passed under Section 39(1) and that the order in question does not fall within any of the six categories listed in Section 39(1), rendering the appeal untenable. Consequently, the appeal was dismissed with costs.

Issues considered

Whether an appeal against an order passed by a Single Judge under Section 39(1) of the Arbitration Act, 1940 is maintainable under Section 39(2).
Whether such an appeal can be entertained under the Letters Patent jurisdiction.

Legislation cited

Arbitration Act, 1940s. 39(1), s. 39(2)

Subjects

ArbitrationAppealSection 39Letters PatentArbitrator appointmentSecond appeal

Judgment

A STATE OF WEST BENGAL
v.

GAURANGALAL CHATTERJEE
MAY 11, 1993
B
[K. RAMASWAMY AND R.M. SARAI, JJ.]
Arbitration Act, 1940: Sections 39 (1) and (2>-Letters Patent Jurisdiction
Clause 15-An appeal against the order passed by Single Judge of High Court
under Section 39 (]}-Whether appealable u/s 39 (2) or tmder Letters Patent
Jurisdiction-Section 39( 1) itself la)·s down when an appeal could befiled-Appeal
c held not maintainable.

Despite several letters by the respondent to the Chief Engineer Public
works Department the State did not appoint any Arbitrator as provided in
Clause 25 of the agreement.
D
Shri D.K. Roy Choudhry who was appointed as a sole Arbitrator by the
learned Single Judge revoking the authority of the Chief Engineer to act as an
Arbitrator under the agreement.

On.appeal by the State under Section 39(2) ofthe Act or under Letters
E Patent. The High Court dismissed the appeal as not maintainable.

This appeal is against the judgment of the High Court.

..
Appeal dismissed,
F
HELD: 1. Section39 of the Arbitration Actcameupon for consideration
in U.0.1. v. Mohindra Supply Company [1962] 3 SCC 497 and the Court held
that .flO Second Appeal lay under section 39(2) against a decision given by a
learned Single Jutfge under
<:!
Section 39(1). Arbitration Act is a consolidating
and amending act relating to arbitration, it must be construed without any
G assumption that it was not intended to alter the law relating to appeals. The·
Court held that in view of bar created by sub-section (2) of Section 39
..
'
debarring a second appeal from an order passed in appeal under sub-section
(1) that the 'conclusion was inevitable that it was so done with a view to restrict
the right of appeal within strict limits defined by Section 39'. Therefore the
~intainability of the appeal under Letters Patent it stands concluded by this
H
.\
- -- '
. STAlEOFWESTBENGALv.GAURANGALALCHATlERJEE 641

decision. (642-G-H) A
\
-2. Sub-section (1) or Section 39 or the Arbitration Act is extracted
below:-

"(1) An appeal shall lie Crom the rollowing orders passed under
this Act (and Crom no others) to the Court authorised bv law to B
hear app;,als rrom original decisions or the Court p,..;ing the·
orile'r.

An order-
c
0) superseding an arbitration;

(ii) on an award stated in the form oh special case;

C,iil modifying or correcting_an award;
D
'
(iv) ruing or refusing-to nle an arbitration agreement;

(•)staying or refosi_ng to stay legal proceedings where there is
an arbitration agree~eµ.~;
E
.. ';~
(vi) Setting aside or r~fusing to sCt aside an award;

Provided that the provisions or this Section shall not apply to
any order passed by a Small Causes Court._
. .- \~I F
· _(2) No second appe:i.l,shall_lie Crom an ord~,r p~ed in appeal
'.under this ~<;t~on, .but nothing in this ~<;ti~n sh:ilI affector take
........ away any right tO appeal to the Suprem~_Court". (643-D-E-G-
m . '.,.. . \. . .•
, ..
. . .: . \,-~ ';:.,\', :·-· '.~.-··'.: ··." '.
Provides that an appeal could lie o~J1 rrom th~ n~ifers mentioned in the G
sub-section itself.Since the order passed by le.arne\f Si,i;gro Judge revoking the
authority or the Chier Engineer on his failure to acta5 an Arbitrator was not
·. covered in either or the six clauses mentioned in Section 39 it is obvious that . ·
· no .appeal could be riled against the order of the learned Single Judge. (644-
H
'
642 SUPREME COURT REPORTS [1993) 3 S.C.R.

A CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2544 of 1993.

From the Judgment and Order dated 7.5. 1992 of the Calcutta High Court in
Appeal No. Nii of 1992 in Matter No. 21of1991.

P.S. Poti, and S.K. Nandy for the Appellant.
B
K. Parasaran, A.K. Ganguli, G.K. Banerjee and. Som Manda! for the
Respondent.

The Judgment of the Court was delivered by.
c
R.M. SABAi, J. The short and the only question of law that arises for
consideration in this appeal is if an appeal was maintainable against an order
passed by the L.earned Single Judge under Section 39(1) of the Arbitration Act·
either under Section 39(2) of the Act or under the Letters patent jurisdiction.

D
Facts are not io dispute. Since the State did not appoint any arbil(ator as
provided for in clause 25 of the agreement despite letters by the responde~t to the
Chief Engineer, Public Works Department (P.W.D) and the Secretary P.:\V'.D. the
respondent approached the High Court and a Learned Single Judge by order dated
6th September, 1991 revoked the authority of the Chief Engineer to act as an
E arbitrator and directed one Shri D.K. Roy Chowdhury to act as the sole arbitrator
as suggested by the respondent. Against this order State filed an appeal which has
been dismissed by the Division Bench upholding the objection of the respondent
as not maintainable. It has been held that the appeal was not maintainable either
under Section 39(2) or under Letters Patent. It is the correctness of this view that
tfas been assailed in this appeal.
F
Section 39 of the Arbitration Act came up for.consideration in Union ofIndia
v. M.ohindra Supply Company [1962] 3 S.C.R. 497. The Court after going into
detail and examining various authorities given by different High [Courts held that
norsero.!_ld appeal lay imder Section 39 (2) against a decision given by. a Learned
Single Judge under Section 39(1). In respect of the jurisdiction under Letters
G
Patent the Court observed that since Arbitration Act was a consolidating and
amending act relating to arbitration it must be construed without any assumption
that it was not intended to alter the law relating to appeals. The Court held that in
view of bar created by sub-section (2) of Section 39 debarring an, second appeal
from an order passed in appeal under sub-section (1) the 'conclusion was
H
STATE OF WEST BENGAL v. GAURANGALAL CHATIERJEE [SAHAI.J.] 643

inevitable that it was so done with a view to restrict the right of appeal within strict A
limits defined by Section 39'. Therefore, so far the second part is concerned,
namely, the maintainability of the appeal under Letters Patent it stands concluded
by this decision.

The Learned counsel for the appellant vehemently argued that since the
decision by the Supreme Court was in respect of an appeal directed against an order B
passed by a Learned Single Judge in exercise ofappellate jurisdiction no second
appeal lay but that principle could not be applied where the orderof Learned Single
Judge was passed not in exercise of appellate jurisdiction but original jurisdiction.
The argument appears to be without any substance as Sub-section (1) of Section
39 which is extracted below :
c
"( 1) An appeal shall lie from the following orders passed under this
Act (and from no others) to the Court authorised by law to hear
appeals from original decrees of the Court passing the order :

An order- D

(i) superseding an arbitration;

(ii) on an award stated in form of a special case;

E
(iii) modifying or correcting an award;

(iv) filing or refusing to file an arbitration agreement;

(v) staying or refusing to stay legal proceedings where there is an
arbitration agreement; F

(vi) setting ~ide or refusing to set aside an award ;

Provided that the provisions of this section shall not apply to any
order passed by Small Cause Court. G

(2) No second appeal shall lie from an order passed in appeal under
this section, but nothing in this section shall affect or take away any
right to appeal to the Supreme Court."

u.
644 SUPREME COURT REPORTS [1993] 3 S.C.R.

A provides that an appeal could lie only from the orders mentioned in the sub- -
section itself. Since the order passed by Learned Singe Judge revoking the
authority of the Chief Engineeron his failure to act as an arbitrator was not covered
in either of the six clauses mentioned in Section 39 it is obvious that no appeal
could be filed against the order of the Learned Single Judge.]

B Reliance was placed on certain orders passed by this Court and it was urged
that settlement of dispute under clause 25 of the agreement being in e x elusive
domain of the Chief Engineer the High Court was not empowered to appoint
anyone else. The submission is devoid of any merit. It is not made out from the
agreement. Rather clause 25 itself permits appointment of another arbitrator if the
C Chief Engineer fails or omits to act as such. Relevant portion of the agreement is
extracted below :

"Should the Chief Engirteer be for any reason unwilling or unable
to act as such Arbitrator such questions and disputes shall be
referred to an Arbitrator to be appointed by the Arbitrator shall be
D final, conclusive and binding on all the parties to this contract."

In one of the decisions given by this Court the order of the High Court was
set aside as the dispute being technical in nature the appointmen~ of a non-technical
arbitrator was not justified. Here in this the High Court has appointed a retired
Chief Engineer and not a non-technical man. No allegation has been made against
E him. Therefore, the order of the learned Single Judge also does not suffer from any
infirmity.

In the Circumstances the view taken by the Division Bench dismissing the
appeal as not maintainable appears to be well founded.' The appeal accordingly
F fails and is dismissed with costs.

S.K. Appeal dismissed.