SUMITOMO CORPORATIONversusCDC FINANCIAL SERVICES (MAURITIUS) LTD. & ORS.

                              [2008] 3 S.C.R. 309


                        SUMITOMO CORPORATION                                   A
                                        II.
        CDC FINANCIAL SERVICES (MAURITIUS) LTD. & ORS.
                 (Civil Appeal No. 1496 of 2008)
                            FEBRUARY 22, 2008
                                                                               B
          [TARUN CHATTERJEE AND P. SATHASIVAM, JJ.]
~
              Companies Act, 1956 - ss.10(1)(a), 10F - Appeal -
        Territorial jurisdiction - Order of Company Law Board refusing
        to refer the parties to arbitration uls. 45 of the Arbitration Act -   c
      · Appeal against - Held: Shall lie to the High Court within
        ;urisdiction of which the Registered Office of the company in
        issue is situatea - Arbitration and Conciliation Act, 1996 -
        ss.50,45.
            Respondent Nos.1 to 5 filed company petition before D
~      the Company Law Board (CLB) seeking redressal under
       ss.397, 398 and 402 of the Companies Act, 1956 for
       oppression and mismanagement on the part of Appellant
       and the nominee directors of Appellant in the management
       and conduct of the affairs of Respondent No.6, the E
       company in issue. In the company petition, Appellant filed
       an application seeking reference to arbitration under s.45
       of the Arbitration and Conciliation Act, 1996. The CLB
._,    passed order refusing to refer tlie parties to arbitration .
       Appellant filed appeal before the High Court under. s.50 F
       of the said Arbitration Act. High Court dismissed the appeal
       not on merits but for lack of territorial jurisdiction holding
       that s.10(1)(a) of the Companies Act will take precedence
       over s.50 of the Arbitration Act.
            In the present appeal, the question which arose for G
       consideration is whether the order passed by the CLB
       refusing to refer the parties to arbitration under s.45 of
y      the Arbitration Act was liable to be challenged before the
       forum under s.50 of the Arbitration Act or before the forum
                                   309                             H
    310      SUPREME COURT REPORTS               [2008] 3 S.C.R.


A under s.10(1)(a) of the Companies Act.
          Dismissing the appeal, the Court
        HELD: 1.1. The reading of s.50 of the Arbitration Act
  clearly suggests that an appeal shall lie from the order of
B the CLB to the Court authorized by law to hear the appeals
  from such order of the CLB. To make it clear that in the
  event the order under s.45 is passed by the CLB, the forum           ;;
  which is provided under law for hearing the appeal from
  the order of the CLB, will be the Appellate Forum. In other
c words, while s.50 of the Arbitration Act provides for the
  orders which can be made the subject-matter of the
  appeal, the forum to hear the appeal is to be tested with
  reference to the appropriate law governing the authority
  or forum which passed the original order, that is, in the
  case on hand, the CLB. S.10F read with s.10(1)(a) of the
D
  Companies Act provides for such forum to hear the appeal             ....
  from the orders of the CLB as the High Court within the
  jurisdiction of which the Registered Office of the company
  in issue is situated. [Para 9J [320-E"H; 321-AJ
E      1.2. An appeal against any order of the CLB including
  an order passed refusing reference to arbitration shall lie
  to the High Court within the jurisdiction of which the
  Registered Office of the company is situated. That is the
  reason s.50 of the Arbitration Act' purposively uses the
F expression "authorized by law to hear the appeal".
  [Para 1OJ [321-A, BJ
                                                                   ,   .
        1.3. It cannot be that an order passed by the CLB
  becomes appealable to a civil court or a court exercising
  civil jurisdiction when Parliament has chosen to provide
G for a specific appellate forum which should hear the appeal
  from the orders of the CLB. [Para 1OJ (321-B, CJ
         1.4. Ouster of jurisdiction arises only in regard to
    original jurisdiction and it cannot have any application to
    appellate jurisdiction as the one provided in s.50 of the
H
       SUMITOMO CORPN. v. CDC FINANCIAL SERVICES                311
         (MAURITIUS) LTD. & ORS. [P. SATHASIVAM, J.)
¥
      Arbitration Act. The appeal is a statutory remedy and it A
      can lie only to the specified forum. The appellate forum
      cannot be decided on the basis of cause of action as
      applicable tll original proceedings such as suit which
      could be filed in any court where part of cause of action
      arises. [Para 12] [323-C, D, E]                           B

;i.        Hindustan Petroleum Corpn. Ltd. vs. Pinkcity Midway
      Petroleums, (2003) 6 SCC 503; Bhatia International vs. Bulk
      Trading S.A., (2002) 4 SCC 105; Smt. Ganga Bai v. Vijay
      Ku.mar and Ors. (1974) 2 SCC 393; Stridewell Leathers (P)
      Ltd. and Ors. v. Bhankerpur Simbhaoli Beverages (P) Ltd.,        c
      and Ors. (1994) 1 SCC 34; Hind Samachar Ltd. Jalandhar v.
      Smt. Sudarshan Chopra and Ors. (2002) 4 Comp LJ 1 and
      Sudarshan Chopra v. Company Law Board 2004 (2) Arb LR
      241- referred to.
                                                                       D
-+-        CIVILAPPELLATE JURISDICTION : Civil Appeal No. 1496
      of 2008.
           From the final Judgment/Order dated 21/2/2007 of the High
      Court of Delhi at New Delhi in F.A.O. No. 305/2006.
                                                                       E
           C.A. Sundaram, Krishnan Venugopal, Rahul P. Dave,
      Rohini Musa, Dinesh Mathur and Rohit Mahajan (for Mis. Dua
      Associates) for the Appellant.

~-'        Sudipto Sarkar, Jaideep Gupta, M.G. Ramachandran,
      Sanjay Sen, Rana S. Biswas, Sarla Chandra, Rudreshwar            F
      Singh, Kaushik Poddar, Kumar Ranjan, Gopal Kumar Jha,
      Saurabh Jain, Sanjay Jain and Rameshwar Prasad Goyal for
      the Respondents.
           The Judgment of the Court was delivered by                  G
           P. SATHASIVAM, J. 1) Leave granted.
,y         2) This appeal is directed against the judgment and order
      dated 21.02.2007 passed by the High Court of Delhi in F.A.O.
      No. 305 of 2006 by which the High Court dismissed the appeal     H
    312       SUPREME COURT REPORTS                   (2008) 3 S.C.R.


A filed by the appellant herein for lack of territorial jurisdiction     "'
  holding that Section 10(1 )(a) of the Companies Act, 1956 will
  take precedence over Section 50 of the Arbitration and
  Conciliation Act, 1996.
          3) Brief facts, in a nutshell, are:
B
          On 05.10.1984, a Joint Venture Agreement was entered
                                                                          <i
    into between Sumitomo Corporation (appellant herein), Punjab
    Tractors Pvt. Ltd. (respondent No.5 herein) and Swaraj Mazda
    Limited (Respondent No.6 herein) comprehensively specifying
c   the respective rights and obligations of the parties including the
    management control of the affairs of the company. The Joint
    Venture Agreement, which is filed as Annexure P-1, contains in
    Article XVI, arbitration agreement between the parties.
        In the beginning of 2005, the shareholding pattern of the
D appellant - Sumitomo Corporation (in short "SC") and                    .,,.
  respondent No. 5 - Punjab Tractors Pvt. Ltd. ( in short "PTL") &
  respondent No. 6 - Swaraj Mazda Ltd. (in short "SML") was :
  respondent No.5 - PTL - 29.04%, respondent No.6 - SML -
  15.66%, appellant- SC -10.44% and respondent No.1 - CDC
E Financial Services (Mauritius) Ltd., respondent No.2 - South
  Asia Regional Fund, Mauritius, respondent No.3 - CDC-PTL
  Holdings Ltd. and respondent No.4 -ACTIS Agri Business Ltd.
  -17.45%. On 30.06.2005, an agreement (Annexure P-2) was
  entered into between PTL, SC and SML for purchase by the
F SC, appellant herein, of 1,573,000 shares of SML from PTL.
                                                                         ...
                                                                         .-


  Thus, the shareholding of SC increased to 41 % while the holding
  of PTL came down to 14%. The said agreement also contains
  arbitration agreement in A11icle II, Section 2.03.

G      In May-June, 2006, disputes arose between the parties
  regarding rights of the parties envisaged in Section 4.1 and
  other provisions of the Joint Venture Agreement. PTL sought to
  nominate four Directors on the Board of SML and the same                     '<;
  was disallowed in view of Section 4.1 of the Joint Venture
H Agreement.
           SUMITOMO CORPN. v. CDC FINANCIAL SERVICES                   313
             (MAURITIUS) LTD. & ORS. [P. SATHASIVAM, J.]

                On 3.8.2006, PTL and 4 others i.e. Respondent Nos. 1to A
          5 herein filed Company Petition No. 68 of 2006 before the
          Company Law Board, Principal Bench, New Delhi seeking
          redressal under Sections 397,398,402 etc. of the Companies
          Act, 1956 (for short the "Companies Act") for oppression and
          mismanagement on the part of the appellant and nominee B
          directors of the appellant in the management and conduct of
    l     the affairs of Swaraj Mazda Ltd., the company in issue
          (Respondent No.6 herein). In the company petition, the appellant
          herein i.e. S.C. filed an application being C.A. No. 259 of 2006
          seeking reference to arbitration under Section 45 and               c
          alternatively under Section 8 of the Arbitration & Conciliation
          Act, 1996 (hereinafter referred to as the "Arbitration Act"). On
          26.9.2006, the Company Law Board passed an order refusing
          to refer the parties to arbitration under Section 45 of the Act.
          Against the said order, the appellant filed an appeal being F.A.O. D
...,;.,
          No. 305 of 2006 under Section 50 of the Act on 30.10.2006 in
          the High Court of Delhi.
                On 21.2.2007, the High Court delivered the judgment
          dismissing the appeal not on merits but for lack of territorial
          jurisdiction holding that Section 10(1 )(a) of the Companies Act    E
          will take precedence over Section 50 of the Arbitration Act.
          Aggrieved by the said order, the appellant - SC filed this appeal
          before this Court.

               4) We heard Mr. C.A. Sundaram, learned senior counsel
          appearing for the appellant and Mr. Sudipto Sarkar and Mr.          F
          Jaideep Gupta, learned senior counsel appearing for the
          contesting respondents.
                5) According to Mr. C.A. Sundaram, learned senior
          counsel for the appellant, the High Court whilst noticing that it G
          was the forum under Section 50 of the Arbitration Act has
          committed an error in holding that the forum of appeal was not
r         the forum contemplated under Section 50 of the said Act and
          the appeal was liable to be filed in forum contemplated under
          Section 10(1 )(a) of the Companies Act. He further submitted H
    314       SUPREME COURT REPORTS                     [2008] 3 S.C.R.


A that in view of the fact that the appellant herein filed an application
  under Section 45 of the Arbitration Act though in a petition filed
  under Sections 397, 398, 402 etc. of the Companies Act for
  oppression and mis-management, in the light of the language
  used, namely, "judicial authority" under Section 45 of the
B Arbitration Act, the order dated 26.09.2006 having been passed
  by the Company Law Board (for short the "CLB") in its capacity
  as a judicial authority under the Arbitration Act, the appeal against
  the order lies under the Arbitration Act. He also submitted that
  the source of jurisdiction of the CLB exercising powers in passing
c the order impugned in the High Court is Section 45 of the
  Arbitration Act and not any provision of the Companies Act.
  According to him, the Arbitration Act has been held to be a
  complete code as regards the law of arbitration and the same
  being a special statute has overriding effect than the Companies
0
  Act in the light of the language used in Section 50 of the
  Arbitration Act. The Delhi High Court is the appropriate Court
  authorized by law to hear appeals; hence the contrary conclusion
  cannot be sustained and liable to be interfered. On the other
  hand, Mr. Sudipto Sarkar and Mr. Jaideep Gupta, learned senior
  counsel for the contesting respondents submitted that Section
E 50 of the Arbitration Act clearly suggests that an appeal shall lie
  from the order of the CLB to the Court authorized by law to hear
  the appeal from such order of the CLB. In other words, according
  to them, in the event the order under Section 45 is passed by
  the CLB, the forum which is provided under law for hearing the
                                                                            .__.
F appeal from the orders of the CLB, will be the Appellate Forum.
  They elaborated that Section 10-F read with Section 10(1)(a)
   of the Companies Act, provides for such forum to hear the appeal
  from the orders of the CLB as the High Court within the jurisdiction
   of which the Registered Office of the company in issue is
G situated.
       6) We have carefully perused all the relevant materials,
  Annexures and considered the rival contentions .. The only
  question to be considered in the present appeal is whether the
H order elated 26.09.2006 of the CLB refusing to refer parties to
             SUMITOMO CORPN. v. CDC FINANCIAL SERVICES                     315
               (MAURITIUS) LTD. & ORS. [P. SATHASIVAM, J.]

     ""     arbitration under Section 45 of the Arbitration Act was liable to A
            be challenged to the forum under Section 50 of the Arbitration
          · Act or to the forum under Section 10(1 )(a) of the Companies
            Act.
                 7) It is relevant to point out that in a company petition filed
           by the PTL and 4 others (Respondent Nos.1-5 herein) before B
           the CLB, Principal Bench, New Delhi, the second respondent
     #     therein (appellant herein, namely, SC) filed Company Application
           No. 259 of 2006 under Section 45 of the Arbitration Act for
           referring the parties to arbitration. The said Section 45 reads
           thus:                                                                  c
                 "45. Power of judicial authority to refer parties to
                 arbitration.- Notwithstanding anything contained in Part I
                 or in the Code of Civil Procedure, 1908 (5 of 1908), a
                 judicial authority, when seized of an action in a matter in
                                                                                D
                 respect of which the parties have made an agreement
     -+          referred to in section 44, shall, at the request of one of the
                 parties or any person claiming through or under him, refer
                 the parties to arbitration, unless it finds that the said
                 agreement is null and void, inoperative or incapable of
                 being performed."                                              E

                  By pointing out the provisions of the Joint Venture
            Agreement (in short "JVA"), it was contended on behalf of the
            appellant that the dispute having directly arisen from the terms
            of the arbitration agreement, the same has to be necessarily. F
            determined only by the arbitral tribunal, hence the CLB is bound
            to refer the parties to arbitration. It is not in dispute that as held
            by this Court in Hindustan Petroleum Corpn. Ltd. vs. Pinkcity
            Midway Petroleums, (2003) 6 SCC 503, if there is an
            arbitration clause, in terms of Section 8, the Court has a
                                                                                    G
            mandatory duty to refer the disputes arising between the
            contracting parties to arbitrator. It is also not in dispute that in
     y
            Bhatia International vs. Bulk Trading S.A., (2002) 4 SCC
     )
            105, it has been held that Part 1 of the Act applies to international .
            arbitration held outside India also. On the other hand, it was
-t
                                                                                    H

~
    316        SUPREME COLRT REPORTS                   (2008] 3 S.C.R.


A submitted on behalf of the respondents that the appellant
   invoked the provisions of the Arbitration Act on the ground that
   both JVA and Share Purchase Agreement (in short "SPA")
   provide for arbitration, in the JVA arbitration has been provided
   only in case of disputes between the company (SVUPTL on the
B one hand and Mazda/SC on the other), there is no provision for
  an arbitration in case of disputes between the company and
  the contesting respondents. It was also pointed out that in the
  two agreements, namely, JVA and SPA three arbitral tribunals
  have been named, hence in the light of the uncertainty regarding
C the contractual forum to which the parties are to be referred, the
  application cannot be entertained. It was also highlighted since
  some of the respondents herein were not being parties to the
  JVA, they cannot be referred to arbitration. It was also pointed
  out that the main grievance is that the company is not complying
  with the provisions of Article 87, therefore, the actual dispute is
0
  between the company and the respondents, even though the
  company is a party to the JVA, the arbitration clause does not
  cover the company, in such an event, the question of referring
  the parties to arbitration does not arise.
E        8) In the company api:;lication filed by the appellant herein,
  the main allegation relates to the claim, namely, the PTL has the
  right to nominate four directors and it is based on not only clause
  4(1) of JVA but also on article 87 of AOA. We have already
  referred to the fact that the said application had been filed under
F Section 45 of the Arbitration Act. Section 2(h) of the Arbitration
  Act mentions that the "party" means a party to an arbitration
  agreement. To put it clear the party to the judicial proceeding
  should be a party to the arbitration agreement. As rightly
  observed by the CLB, the proceeding under Section 397/398
G of the Companies Act always relates to the affairs of the
  company. Insofar as the arbitration clause in the JVA is
  concerned, to bind the company it has to be a party to the
  arbitration agreement. It was pointed out that even though the
  company is a party to the JVA, no arbitration has been provided

H
  for disputes between the shareholders and the company or in             ,
            SUMITOMO CORPN. v. CDC FINANCIAL SERVICES                      317
              (MAURITIUS) LTD. & ORS. [P. SATHASIVAM, J.]

          relation to allegations in the affairs of the company. A perusal of      A
          the agreement show that the arbitration clause contained in JVA
          has provided for resolution of disputes through arbitration
          classifying the company and/or PTL as one party and Mazda or
          SC as another party. In other words, no arbitration has been
          envisaged in the JVA if dispute arises even with reference to            B
          the terms of the JVA between PTL on the one hand and the
    f     company on the other. It is relevant to mention that the provisions
          of Section 397/398 of the Companies Act can be invoked only
          if the disputes, even among the shareholders or allegations
          against each other, relate to the affairs of a company. In the           c
          company petition, the composition of the board of directors is
          in the ciffairs of the company and the contesting respondents
          herein have alleged that the company is not complying with the
          provisions of article 87 in the matter of composition of the board.
          The CLB, on analyzing those relevant aspects, concluded that
                                                                                   D
    -t-
          the grievances of the petitioners therein {contesting respondents)
          falls squarely in the affairs of the company and since no
           arbitration has been provided in regard to the disputes between
           PTL and the company, there is no arbitration agreement at all
           between the company and PTL in the JVA to refer the parties to
          arbitration. The CLB has also concluded that petitioner Nos. 2-          E
          5 therein are not parties to either of the two agreements. Based
          on the above factual aspects, the CLB has concluded that there
          is no commonalities of parties and considering all the relevant
, )._     aspects arrived at a conclusion that the application deserves to
          be dismissed on the main ground that the company in the affairs          F
          of which application has been filed, is not a party to the arbitration
          agreement in the JVA and petitioner Nos. 2 to 5 therein were
          not parties to the JVA or SPA could also independently prosecute
          the said petition as they satisfy the requirements of Section 399
          and finally, the arbitral forum is not specific.                         G
               9) In the light of the said conclusion, in order to ascertain
 ..,,     the correctness of the same, it is useful to refer to the provisions
~
          of Section 50 of the Arbitration Act and Section 10(1)(a) and
          Section 10-F and of the Companies Act.
                                                                                   H
    318         SUPREME COURT REPORTS                  [2008] 3 S.C.R.


A         "50. Appealable orders.- (1) An appeal shall lie from the
          order refusing to-
          (a) refer the parties to arbitration under section 45;
          (b) enforce a fcreign award under section 48,
B         to the court authorized by law to hear appeals from such
          order.
          (2) xxx    xxxx"
          "10. Jurisdiction of Courts.- (1) The Court having
c         jurisdiction under this Act shall be-
          (a)   the High Court having jurisdiction in relation to the
                place at which the registered office of the company
                concerned is situate, except to the extent to which
D               jurisdiction has been conferred on any District Court
                or District Cqurts subordinate to that High Court in      ...
                pursuance of sub-section (2); and
          (b)   where jurisdiction has been so conferred, the District
                Court in regard to matters falling within the scope of
E               the jurisdiction conferred, in respect of companies
                having their registered offices in the district."
          "10F. Appeals against the order of the Company Law
          Board.- Any person aggrieved by any decision or order
          of the Company Law Board made before the
F         commencement of the Companies (Second Amendment)
          Act, 2002 may file an appeal to the High Court within sixty
          days from the date of communication of the decision or
          order of the Company Law Board to him on any question
          of law arising out of such order:
G
          Provided that the High Court may, if it is satisfied that the
          appellant was prevented by sufficient cause from filing the
          appeal within the said period, allow it to be filed within a
          further period not exceeding sixty days."
H         The above provisions make it clear that the forum shall be
              SUMITOMO CORPN. v. CDC FINANCIAL SERVICES                    319
                (MAURITIUS) LTD. & ORS. [P. SATHASIVAM, J.]

             court authorized by law to hear the appeals from such order. In A
             this regard, it is useful to reproduce the Explanation to Section
             47 of the Arbitration Act which reads thus:
                  "47. Evidence.- xxx       xxxx
                  Explanation.- In this section and all the following sections B
                  of this Chapter, "Court" means the principal Civil Court of
        I         original jurisdiction in a district, and includes the High Court
                  in exercise of its ordinary original civil jurisdiction, having
                  jurisdiction over the subject-matter of the award 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
                                                                                   c
-4.
                  Court, or any Court of Small Causes."
                   As rightly pointed out, it is clear that unlike the explanation
             to Section 47, Section 50 uses the expression "Court" not
             simpliciter but qualified by the wording "authorized by law to D
4      -~
             hear appeals from such order." It is not the court having
             jurisdiction if the subject-matter is a suit where jurisdiction is
             determined in accordance with the provisions of Sections 16-
             20 of the Code of Civil Procedure. On the other hand, Section
             50 of the Arbitration Act specifically used the word "authorized E
             by law" and not the "Civil Procedure Code" or "suit".
                   In Smt. Ganga Bai vs. Vijay Kumar and Others, (1974)
             2 SCC 393, while considering relevant provisions from the Civil
      ~· ~
             Procedure Code in respect of right of appeal against a finding,
             res judicata etc., this Court in para 15 held thus:                  F
~
                  "15. It is thus clear that the appeal filed by Defendants 2
                  and 3 in the High Court was directed originally not against
                  any part of the preliminary decree but against a mere
                  finding recorded by the trial court that the partition was not
                  genuine. The main controversy before us centres round. G
.                 the question whether that appeal was maintainable. On
      .,..        this question the position seems to us well established .
      •           There is a basic distinction between the right of suit and
                  the right of appeal. There is an inherent right in every
                  person to bring a suit of a civil nature and unless the suit H
-:;
    320        SUPREME COURT REPORTS                         [2008] 3 S.C.R.

                                                                                  ~
A         is barred by statute one may, at one's peril, bring a suit of
          one's choice. It is no answer to a suit, howsoever frivolous
          to claim, that the law confers no such right to sue. A suit for
          its maintainability requires no authority of law and it is
          enough that no statute bars the suit. But the position in
B         regard to appeals is quite the opposite. The right of appeal
          inheres in no one and therefore 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."
c          It is clear that if there is no bar in any statute, no difficulty in
    filing a suit, on the other hand in the case of appeals for its
    maintainability there must be a specific provision/clear authority
    of law. In view of the same, while exercise of original jurisdiction
    as provided in Section 47 and other similar sections of the
D   Arbitration Act should be by the court within the jurisdiction of
    which the suit would have been filed, the appeal shall always be              ~-

    to the appellate forum which hears appeals from the order of
    the forum which passes the order. It is also clear from Section
    37 of the Act dealing with appeals. Here also the appeal is to
    the court which hears the appeal and not the court which
E
    exercises original jurisdiction if the subject-matter had been a
    suit as provided in the explanation to Section 47 or Section
    2(c) of the Arbitration Act. To our mind, the reading of Section
    50 clearly suggests that an appeal shall lie from the order of the
    CLB to the court authorized by law to hear the appeals from                   _.
F   such order of the CLB. To make it clear that in the event the
    order under Section 45 is passed by the CLB, the forum which
    is provided under law for hearing the appeal from the order of
    the CLB, will be the Appellate Forum. In other words, while
    Section 50 of the Arbitration Act provides for the orders which
G   can be made the subject-matter of the appeal, the forum to hear
    the appeal is to be tested with reference to the appropriate law
    governing the authority or forum which passed the original order,
    that is, in the case on hand, the CLB. Section 10F read with                       .
                                                                                      ""
    Section 10(1 )(a) of the Companies Act provides for such forum
H   to hear the appeal from the orders of the CLB as the High Court
 SUMITOMO CORPN. v. CDC FINANCIAL SERVICES                    321
   (MAURITIUS) LTD. & ORS. [P. SATHASIVAM, J.]

within the jurisdiction of which the Registered Office of the        A
company in issue is situated.
        10) Now let us look into Section 10(1 )(a) and Section 1OF
of the Companies Act. An appeal against any order of the CLB
including an order passed refusing reference to arbitration shall
lie to the High Court within the jurisdiction of which the Registered B
Office of the company is situated. That is the reason Section 50
of the Arbitration Act purposively uses the expression "authorized
by law to hear the appeal". As rightly pointed out, it cannot be
that an order passed by the CLB becomes appealable to a civil
court or a court exercising civil jurisdiction when Parliament has C
chosen to provide for a specific appellate forum which should
hear the appeal from the orders of the CLB.
      11) In Stridewell Leathers (P) Ltd. and Others vs.
Bhankerpur Simbhaoli Beverages (P) Ltd., and Others, D
(1994) 1 sec 34, the main question for decision relates to the
meaning of the expression "the High Court" in Section 1OF of
the Companies Act, 1956 which has been inserted in the principal
Act by the Companies (Amendment) Act, 1988 w.e.f. May 31,
1991. The controversy is whether the High Court to which the
appeal lies under Section 1OF from an order of the CLB is the E
High Court having jurisdiction in relation to the place at which
the registered office of the Company is situate or it is the High
Court having jurisdiction in relation to the place at which the
Company Law Board makes the order under appeal. The Court
has concluded as under:-                                          F
     "18. For the aforesaid reasons, we are of the opinion that
     the expression "the High Court" in Section 10-F of the
     Companies Act means the High Court having jurisdiction
     in relation to the place at which the registered office of the G
     company concerned is situate as indicated by Section
     2(11.) read with Section 10(1 )(a) of the Act. Accordingly, in
     the present case, the appeal against the order of the
     Company Law Board would lie in the Madras High Court
     which has jurisdiction in relation to the place at which the
                                                                     H
    322       SUPREME COURT REPORTS                   [2008] 3 S.C.R.

                                                                         '1
A         reg1stc:red office of the company concerned 1s situate a•• a
          not the Delhi High Court merely because the order was
          made by the Company Law Board at Delhi. This appeal
          is allowed and the impugned order made by the Delhi
          High Court is set aside resulting in acceptance of the
B         preliminary objection raised by the appellants in the Delhi
          High Court. The Delhi High Court will now make the
          consequential order."
        As per the ratio decidendi, the appeal under Section 50
  of the Arbitration Act from an order passed by the CLB on
c matters concerning Swaraj Mazda whose Registered Office is
  in Punjab is maintainable in the High Court of Punjab and
  Haryana and not to the High Court of Delhi. Reliance placed by
  the appellant on the decision of the High Court of Punjab and
  Haryana in Hind Samachar Ltd., Jalandhar vs. Smt.
D Sudarshan Chopra and Others, (2002) 4 Comp LJ 1 to
  contend that an appeal from an order passed by the CLB sitting
  in Delhi should be to the Delhi High Court notwithstanding the
  Registered Office of the company concerned is in Punjab is not
  sustainable.A perusal of the said decision shows that the Punjab
E and Haryana High Court was not considering the issue of
  territorial jurisdiction on matters arising out of an order passed
  by the CLB. On the other hand, the High Court was considering
  the issue whether an appeal is maintainable from an order
  passed by the CLB rejecting the application under Section 8 of
F the  Arbitration Act when Section 37 of the said Act expressly
   provides that no appeal shall lie against orders specifically
                                                                          ""
   mentioned in Section 37 and from no others and Section 8 is
   not mentioned in that section. As rightly pointed out by learned
   senior counsel appearing for the contesting respondents in that
   case the Punjab and Haryana High Court did not consider the
G
   issue that when an appeal lies which Court will have jurisdiction
   to entertain and decide the appeal. This is clear from the reading
   of paras 17 and 18 of the judgment of the Punjab and Haryana               "'•
   High Court. It is also brought to our notice that in Sudarshan
   Chopra vs. Company Law Board, 2004 (2) Arb LR 241
H
                SUMITOMO CORPN. v. CDC FINANCIAL SERVICES                  323
                  (MAURITIUS) LTD. & ORS. [P. SATHASIVAM, J.]

               referring to various authorities, the very same Punjab and        A
               Haryana High Court has ruled that the jurisdiction of the
               Company Law Board under Sections 397 and 398 is not in any
               way affected by the existence of arbitration clause and,
               therefore, the CLB which exercises power under those Sections
               and passes orders as per the provisions of Section 402 of the      B
               Companies Act can proceed with the matter notwithstanding
          ,,   the arbitration clause.
                     12) In view of our conclusion, we are satisfied that the
               appellant has wrongly based its arguments on matters such as
               ouster of jurisdiction, over-riding effect of special statute over c
               general statute, over-riding effect of subsequent statute etc.
               Since they have no application whatsoever to the matter in issue,
               there is no need to refer various decisions in those aspects.
               Ouster of jurisdiction arises only in regard to original jurisdiction
               and it cannot have any application to appellate jurisdiction as D
               the one provided in Section 50 of the Arbitration Act. The appeal
               is a statutory remedy and it can lie only to the specified forum.
               The appellate forum cannot be decided on the basis of cause
               of action as applicable to original proceedings such as suit
               which could be filed in any court where part of cause of action E
               arises. In such circumstances, we are unable to accept the
               lengthy arguments advanced on the above-mentioned subject
               by learned senior counsel for the appellant. Likewise, the
               submission of the appellant, namely, the Arbitration Act being a
    ,,,,.. \   special and subsequent statute has no relevance to the present F
'         "'
               case.
                     13) In the light of what has been stated above, we sustain
               the impugned order of the High Court dated 21.02.2007 in F.A.O.
               No. 305 of 2006. Consequently, the appeal fails as devoid of
               any merit and the same is dismissed. It is made clear that the G
               time taken by the appellant in pursuing their appeal before the
               Delhi High Court as well as this Court shall be excluded for the
               purpose of limitation. No costs.
      •"
•              B.B.B                                       Appeal dismissed .
                                                                                  H