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Vidyawati Construction Company v. Rail India Technical & Economic Services Ltd.
Factual and Procedural Background
The respondent awarded the appellant the contract for construction of the Government Girls Polytechnic Hostel at Allahabad on 6 March 1992, with a completion date of 5 March 1993. Disputes arose regarding payment of the final bill, security deposit, and wrongful deductions. The appellant invoked the arbitration clause by a letter dated 6 February 1997, requesting the competent authority to appoint an arbitrator. Despite receipt, the competent authority did not appoint an arbitrator. Consequently, the appellant filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the Act) on 8 August 1997, praying for the Court to appoint an arbitrator. The respondent opposed the petition, claiming an arbitrator had been appointed on 15 October 1997. The learned Single Judge dismissed the appellant's petition on 11 February 1999, holding the petition infructuous due to the appointment of an arbitrator by the competent authority. The appellant challenged this dismissal by way of appeal.
Legal Issues Presented
- Whether an appeal is maintainable against an order passed under Section 11(6) of the Arbitration and Conciliation Act, 1996.
- Whether the competent authority's delayed appointment of an arbitrator after the notice period negates its authority to appoint, thereby justifying the High Court's appointment of an arbitrator.
- Whether the learned Single Judge's order dismissing the petition under Section 11(6) was passed in exercise of Ordinary Civil Jurisdiction, thus making the appeal maintainable under Section 10 of the Delhi High Court Act, 1966.
Arguments of the Parties
Appellant's Arguments
- The competent authority abdicated its power to appoint an arbitrator by not acting within the notice period, thus no power remained to appoint an arbitrator thereafter.
- The High Court was requested under Section 11(6) of the Act to appoint an arbitrator, but failed to do so, making the impugned dismissal order liable to be set aside.
- The order dismissing the petition was not passed under the Act on merits but in exercise of Ordinary Civil Jurisdiction; hence, appeal is maintainable under Section 10 of the Delhi High Court Act, 1966.
Respondent's Arguments
- Under Section 37 of the Act, appeal lies only against specified orders; the impugned order under Section 11(6) is not appealable.
- Petitions under the Arbitration Act are not suits; therefore, Ordinary Original Civil Jurisdiction under Section 5(2) of Delhi High Court Act does not apply, and Section 10 of the Delhi High Court Act is inapplicable.
- Relied on precedents under the Arbitration Act, 1940, establishing that petitions under the Act are not plaints and hence not subject to ordinary civil appeal provisions.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Union of India v. Gorakh Mohan Das and another, AIR 1964 Allahabad 477 | Petitions under Arbitration Act are not plaints and thus not suits for purposes of Ordinary Civil Jurisdiction. | Supported the respondent’s argument that Section 10 of Delhi High Court Act does not confer appeal rights in arbitration petitions. |
| Nawab Usmanali Khan v. Sugar Mal, AIR 1965 SC 1799 | Similar principle that arbitration petitions are distinct from suits and not subject to ordinary civil appeal rights. | Reinforced the non-applicability of Section 10 of Delhi High Court Act to arbitration petitions. |
| P.A Ahammed Ibrahim v. Food Corporation Of India, JT 1999 (6) SC 382 | Clarification on the nature of arbitration proceedings as distinct from civil suits. | Used to bolster the position that appeal rights are circumscribed by the Arbitration Act. |
| Lloyd Insulations (India) Ltd. v. Cement Corporation of India Ltd., 90 (2001) DLT 1 : 2001 (57) DRJ 606 | Further authority on the non-appealability of certain arbitration-related orders under ordinary civil procedural provisions. | Supported the conclusion that no appeal lies against orders under Section 11(6) of the Act. |
| East India Hotels Ltd. v. Jyoti Pvt. Ltd., 1996 111 AD (Delhi) 242 : 1996 (36) DRJ 706 | Appeal is a creature of statute and no inherent right of appeal exists; Section 10 Delhi High Court Act provides a forum, not a right. | Used to reject the appellant’s contention that appeal was maintainable under Section 10 of Delhi High Court Act. |
Court's Reasoning and Analysis
The Court examined the scope of Section 37 of the Arbitration and Conciliation Act, 1996, which enumerates the orders against which appeal lies. The impugned order, being a dismissal of a petition under Section 11(6), does not fall within the appealable orders specified under Section 37. The appellant’s contention that the order was passed under Ordinary Civil Jurisdiction and hence appealable under Section 10 of the Delhi High Court Act was rejected on the basis that Section 10 merely provides a forum for appeal but does not create a statutory right of appeal. The Court further relied on precedents establishing that petitions under the Arbitration Act are not suits and thus are not subject to ordinary civil appeal provisions. The dismissal of the petition was based on the fact that the respondent had appointed an arbitrator, rendering the petition infructuous. Since the statute does not confer any right of appeal against such an order, the appeal was held to be not maintainable.
Holding and Implications
The appeal is dismissed as not maintainable.
The decision directly affects the parties by upholding the dismissal of the appellant's petition under Section 11(6) of the Arbitration and Conciliation Act, 1996. No appeal lies against such orders under the statute. The Court emphasized that appeal rights are strictly statutory and cannot be expanded by invoking provisions of the Delhi High Court Act. No new precedent was set; rather, the judgment reaffirmed established principles governing appealability of arbitration-related orders.
Devinder Gupta, J.— The order passed on 11.2.1999 by learned Single Judge dismissing the application of appellant filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) is under challenge in this appeal.
2. A preliminary objection has been raised to the maintainability of the appeal on behalf of the respondent. It has been urged that under Section 37 of the Act legislature has restricted the right of appeal. Appeal is maintainable only against the orders as are specified in the said provision making it clear that appeal shall not lie from any other order. Order being one. passed on an application moved under Section 11(6) of the Act appal is not maintainable.
3. The facts in brief are that work of construction of Government Girls Polytechnic Hostel at Allahabad was awarded by respondent to the appellant on 6.3, 1992. Stipulated date of completion was 5.3.1993 Disputes are stated to have arisen between the parties in respect of payment of final bill, security deposit an wrongful deduction etc. for which arbitration Clause 47 was invoked by the appellant through letter dated 6.2.1997 with a request to the competent authority to appoint arbitrator and refer the disputes to arbitration. Despite receipt of the notice competent authority failed to appoint the arbitrator and to refer the claims of the appellant for arbitration. In these circumstances, the appellant on 8.8.1997 filed a petition (AA 203/97) in this Court under Section 11 (6) of the Act praying for reference of the claims to arbitrator to be appointed by the Court. Respondent was served for 8.9.97 Reply was filed by the respondent opposing the appellant's petition on the ground that the respondent had already appointed an arbitrator through letter dated 15.10.1997 for adjudication of the claims of the appellant. Learned Singly Judge by the impugned order proceeded to dismiss the appellant's petition holding that in view of the appointment of arbitrator by the competent authority on 15.9.1997 the petition had been rendered infructuous.
4. The above order is under challenge on the ground that when the appointing authority had neglected to appoint the arbitrator within the notice period mentioned in the notice the competent authority had abdicated its authority to appoint the arbitrator and no power is vested thereafter in the competent authority to appoint an arbitrator. It is urged that since prayer in the application under Section 11(6) of the Act was to the High Court to appoint an arbitrator and as the arbitrator has not been appointed by the High Court, the impugned order is liable to be set aside. On the question of maintainability of the appeal learned counsel for the appellant urged that the learned Single Judge had not disposed of the petition filed under Section 11(6) of the Act on merits as such no order can be said to have been passed under the Act. It was an order passed by the Court of Ordinary Civil Jurisdiction and any order passed by a Single Judge of this Court is appealable to a Division Bench under Section 10 of Delhi High Court Act, 1966. Learned counsel for the appellant referred to the definition of the Court as defined in Clause (e) of Sub-section (2) of Section 1 of the Act and to Section 10 of Delhi High Court Act urging that the impugned order was passed by learned Single Judge of this Court in exercise of Ordinary Civil Jurisdiction, therefore, the appeal was maintainable before the Division Bench.
5. Learned counsel for the respondent refuting the submission made on behalf of the learned counsel for the appellant on merits as well as on the question of maintainability of the appeal made reference to sub-section (2) of Section 5 of Delhi High Court Act and urged that the Ordinary Original Civil Jurisdiction vested in this Court is with respect to suits. A petition filed under the Arbitration Act is not a suit, therefore, there was no question of applicability of Section 10 of Delhi High Court Act. Reliance was placed on a few decisions under the Arbitration Act, 1940 that petitions filed under the said enactment are not a plaint. The decisions relied upon are Union of India v. Gorakh Mohan Das and another, AIR 1964 Allahabad 477, Nawab Usmanali Khan v. Sugar Mal, AIR 1965 SC 1799, P.A Ahammed Ibrahim v. Food Corporation Of India, JT 1999 (6) SC 382 and Lloyd Insulations (India) Ltd. v. Cement Corporation of India Ltd., 90 (2001) DLT 1 : 2001 (57) DRJ 606.
6. We have given our due consideration to the submissions made at the bar. Sub-section (1) of Section 37 of the Act enumerates appealable orders and says:—
“An appeal shall lie from the following 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.
7. Admittedly the impugned order disposing of the petition filed under Section 11(6) of the Act is not an order against which an appeal would be maintainable under Section 37 of the Act. As noticed above learned counsel for the appellant contended that the order has been passed by learned Single Judge of this Court in exercise of Ordinary Civil Jurisdiction. Therefore, the appeal is maintainable under Section 10 of Delhi High Court. This submission has no force and deserves rejection. Section 10 of Delhi High Court Act does not confer any right of appea. It provides only a forum of appeal. Appeal is a creature of statute and there is no inherent right of appeal. Reference, if any, in this regard be made to the decision of this Court in the The East India Hotels Ltd. v. Jyoti Pvt. Ltd., 1996 111 AD (Delhi) 242 : 1996 (36) DRJ 706.
8. On the face of it the impugned order has been passed on the appellant's petition seeking appointment of an arbitrator. The petition was dismissed as infructuous after the court noticed the reply submitted by the respondent which had stated that an arbitrator had since been appointed. Accordingly learned Single Judge proceeded to dismissed the application. The said order as such is an order passed dismissing a petition under Sec. 11(6) of the Act which order admittedly is not appealable under Sec. 37 of the Act. Since the statute does not confer any right of appeal no appeal is maintainable
Consequently the appeal is dismissed as not maintainable.
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