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Executive Engineer, ... v. Thingom Iboyaima Sin...
Structured Summary of the Judgment
Factual and Procedural Background
Disputes arose between the contractor, Th. Iboyaima Singh (the respondent), and the Executive Engineer, Highways (South Division), Manipur, concerning special repair work to a bridge on the Imphal River. The dispute was referred to arbitration and the arbitrator delivered an award on 6-12-1965 adverse to the contractor. The contractor applied under Section 33 of the Arbitration Act to the Subordinate Judge, Imphal, to set aside the award; that application was rejected by order dated 4-4-1967. The contractor then sought a review of the 4-4-1967 order. The petitioners (the Executive Engineer, the Union Territory of Manipur and the Union of India) opposed the review both on merits and on the legal ground that the Court had no power to review such an order. The Subordinate Judge ruled, as a preliminary issue by order dated 20-12-1967, that the objection to the power to review was not valid in law. Aggrieved, the Executive Engineer, the Union Territory and the Union of India filed the present revision petition to this Court challenging that preliminary ruling on the power to review.
Legal Issues Presented
- Whether judgments and orders made under the Arbitration Act are subject to review under Section 41 of the Arbitration Act read with Sections 114 and 141 and Order 47 of the Civil Procedure Code (the Code).
- If Section 41 of the Arbitration Act incorporates the provisions of the Code, whether the right of review under Section 114 and Order 47 of the Code is available in respect of orders made in arbitration proceedings (including an order rejecting an application under Section 33 to set aside an award).
- Whether the expressions and limitations appearing in Section 114 of the Code (for example, that review is available "by a decree or order from which an appeal is allowed by this Code" or "from which no appeal is allowed by this Code") must be read literally when those provisions are applied to arbitration proceedings by virtue of Section 41 of the Arbitration Act, or whether a different, contextual reading is required.
Arguments of the Parties
Respondent's Arguments (counsel: Shri Nilamani Singh)
- Although the Arbitration Act does not explicitly mention review, Clause (a) of Section 41 of the Act makes the provisions of the Code applicable to arbitration proceedings "subject to the provisions of the arbitration act and of the rules made thereunder", and thus confers a right to claim review under Section 114 and the procedure in Order 47 of the Code.
- The omnibus language of Clause (a) of Section 41 was intended to make all provisions of the Code, including review provisions (Section 114 and Order 47), applicable to arbitration proceedings so long as there is no conflict with the Arbitration Act or rules made thereunder.
- When Section 114 and Order 47 are read along with Section 41 of the Act, a party aggrieved by an order in arbitration proceedings can claim review; a contextual reading permits application of review even if the literal words of Section 114 refer to "this Code".
Petitioners' / Government Arguments (counsel: Shri N. Ibotombi Singh, Government Advocate)
- Section 114 and Order 47 must be read together, and the prerequisites of Section 114 must be satisfied before a right to review arises in arbitration proceedings.
- Review under Section 114 is available only in respect of a decree or order described in Clauses (a) or (b) of Section 114 — i.e., where an appeal is allowed by the Code (but no appeal has been preferred) or where no appeal is allowed by the Code — and, so argued, since the Code neither allows nor disallows an appeal with respect to orders in arbitration proceedings, the respondent cannot invoke review.
- Since Section 39 of the Arbitration Act provides for an appeal against an order rejecting an application to set aside an award, the provisions of Section 114 of the Code are not attracted to orders of this nature under the Act.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Jwala Prasad v. Jwala Bank Ltd., AIR 1961 All 381 (FB) | Whether Section 114 of the Code applies to decrees made in appeals by the High Court under Letters Patent. | The Court noted the decision affirmed that Section 114 applies in that context, but held it was not helpful for resolving the present question concerning arbitration proceedings because Jwala Prasad concerned Letters Patent appeals, not arbitration orders. |
| Suba Singh v. Neki Kishen, AIR 1953 Punj 106 | Applied Section 114 (as part of the body of cases considering applicability of Section 114 to Letters Patent appeals). | Noted by the Court as reaching a similar view in the Letters Patent context; distinguished from the present case because those cases involved appeals provided by Sections 109 and 110 of the Code. |
| Ratanchand v. Damji, AIR 1927 Bom 232 | Authority treating Section 114 as applicable to Letters Patent appeals in that jurisdiction. | Referenced and distinguished by the Court for the same reason: applicability in the Letters Patent context where appeals to the High Court (and further to the Supreme Court) are provided by the Code. |
| Venkatasubbarayudu v. Govinda Krishna, AIR 1917 Mad 670 | Another decision holding Section 114 applicable to Letters Patent appeals. | Similarly cited and distinguished: these authorities deal with High Court Letters Patent appeals (covered by Sections 109 and 110 of the Code) and thus are not directly on point for arbitration proceedings under the Arbitration Act. |
Court's Reasoning and Analysis
The Court analyzed the competing contentions by carefully reading Clause (a) of Section 41 of the Arbitration Act together with Sections 114 and 141 and Order 47 of the Civil Procedure Code.
- The Court observed that the Arbitration Act (1940) does not expressly deal with review but contains Section 41(a), which states that, subject to the Act and rules thereunder, the provisions of the Code shall apply to proceedings before the Court and to appeals under the Arbitration Act. The respondent's contention was that this clause imports the Code's review provisions into arbitration proceedings.
- The Court contrasted Section 141 of the Code, which allows the procedure of the Code to be applied "as far as it can be made applicable" to other civil proceedings, with Section 41 of the Arbitration Act. Section 141 in the Code is concerned with procedure; Section 41, by its wider terms, was intended by the Legislature to make the provisions of the Code applicable to arbitration proceedings, subject only to non-conflict with the Act or rules. The absence of the qualifying phrase "as far as it can be made applicable" in Section 41 was treated as significant.
- The Court placed weight on legislative history: arbitration (outside Presidency towns) was formerly governed within the second schedule to the Code until the Arbitration Act of 1940, suggesting legislative intent not to depart radically from prior practice and to import Code provisions into the Act's regime.
- The Court rejected a narrow, literal interpretation urged by the Government Advocate that the words in Section 114 ("appeal is allowed by this Code" or "no appeal is allowed by this Code") must be read without modification. The Court concluded that a strictly literal reading would render Section 41 almost otiose and would be an unduly technical approach. Where a statute makes provisions of another statute applicable to a different variety of proceedings, reasonable textual adjustments may be required.
- For the limited purpose of applying Section 114 to arbitration proceedings by virtue of Section 41(a), the Court held it is permissible to read references to "this Code" contextually so that the practical operation of Section 114 is preserved in relation to arbitration orders (i.e., read as if references were to the Act where necessary).
- The Court relied particularly on Clause (b) of Section 114 (review where there is "a decree or order from which no appeal is allowed by this Code"). It found that the Code does not provide an appeal against an order rejecting an application to set aside an award (the 4-4-1967 order rejecting the respondent's Section 33 application), and therefore Clause (b) applies as it stands. The Court rejected the Government's narrower reading that "no appeal is allowed by this Code" should mean only when an appeal is disallowed by a Court.
- The Court noted an alternate argument relying on Section 39 of the Arbitration Act (which was said by the Government Advocate to provide an appeal against an order rejecting the application to set aside an award), but the Court's analysis concluded that, on the plain words of Section 114 read with Section 41, review is available in the circumstances presented. The Court held that review could be claimed either (i) where an appeal respecting the order is allowed by the Act and no appeal has been preferred, or (ii) where no appeal is provided by the Act.
- Finally, the Court considered precedent cited (notably Jwala Prasad and other Letters Patent cases) and found them distinguishable because they concerned Letters Patent appeals under Sections 109 and 110 of the Code — situations where Section 114 and Order 47 clearly applied. Those cases did not resolve the present point concerning arbitration proceedings and therefore offered no direct assistance.
Holding and Implications
Holding:
DISPOSED OF: The Court dismissed the revision petition. The Court concluded that the order made by the Subordinate Judge on 20-12-1967 (holding that the objection to the power of review was not valid in law) was correct and that the respondent could claim review of the order dated 4-4-1967 under Clause (b) of Section 114 of the Code read with Section 41 of the Arbitration Act.
Implications / Consequence for the parties:
- The revision petition filed by the Executive Engineer, the Union Territory of Manipur and the Union of India fails and is dismissed.
- Because the question was purely legal and lacking authoritative precedent ("barren of authority"), the Court ordered that the parties shall bear their own costs.
- The judgment's practical effect is to permit the respondent to pursue a review of the Subordinate Judge's order dated 4-4-1967 under the mechanism described (Section 114 read with Section 41 of the Arbitration Act and Order 47 procedure), subject to the limitations expressed in the opinion. The opinion does not advert to creating or declaring a broader new precedent beyond its reasoning and disposition in this case; the Court observed the matter was res integra and barren of authority and therefore left costs to the parties.
Disposition: Petition dismissed. Parties to bear their own costs.
This revision petition by the Executive Engineer, P. W. D., Manipur, and others raises the question whether the judgments and Orders made under the Arbitration Act are subject to review in terms of Section 41 of the Arbitration Act read with Sections 114 and 141 and Order 47 of the Civil Procedure Code, hereinafter called the Code.
2. Disputes having arisen between the contractor Th. Iboyaima Singh, the respondent herein, and the Executive Engineer, Highways (South Division), Manipur, respecting the contract work by the former of special repairs to a bridge on the Imphal river, a reference was made to arbitration for settlement thereof. The arbitrator gave the award on 6-12-1965 which went against the contractor, who, therefore, made an application to the Subordinate Judge, Imphal, under Section 33 of the Act for setting aside the award. That application was rejected by the Court on 4-4-1967.
Thereafter, the contractor moved an application praying for review of the order dated 4-4-1967 on the grounds stated therein. That application was opposed by the present petitioners on merits as also on the footing that the Court had no power to review the order. This latter objection having been controverted by the contractor, the Court dealt with it as a preliminary issue and by its order dated 20th December, 1967 held the same to be not valid in law. Aggrieved by that order, the Executive Engineer, the Union Territory of Manipur and the Union of India have come up in revision to this Court.
3. The parties' counsel were agreed that the right of review like that of an appeal is not a natural or inherent right available to a litigant and that it can either be given expressly by a statute or by the rales having the force of law. Arbitration Act does not deal explicitly with the subject of review. Shri Nilamani Singh urged for the respondent that despite that circumstance right to claim review is conferred on a party to arbitration proceedings by clause (a) of Sec. 41 of the Act. That clause states that subject to the provisions of the arbitration act and of the rules made thereunder, the provisions of the Code shall apply to all proceedings before the Court and to all appeals under the Arbitration Act.
Shri Nilaniani Singh, submitted, while developing the point, that the omnibus nature of clause (a) of Section 41 of the Act makes all the provisions of the Code including those of review comprised in Section 114 and Order 47 applicable to the arbitration proceedings, subject, of course, to the overriding proviso that the provisions of the Code are not in conflict with the provisions of the Act and the rules made thereunder.
4. To appreciate these submissions, it is appropriate that Section 114 of the Code should be reproduced here. It runs as under :
"Subject to such conditions and limitations as may be prescribed, any person considering himself aggrieved -
(a) by a decree or order from which an appeal is allowed by this Code, but from which no appeal has been preferred,
(b) by a decree or order from which no appeal is allowed by this Code, or
(c) by a decision on a reference from a Court of Small Causes, may apply for a review of judgment to the Court which passed the decree or made the order, and the Court may make such order thereon as it thinks fit."
This section contains a brief statement of the Court's general power of review. The exact terms subject to which a prayer for review can be made to the Court and the procedure to be adopted in connection therewith are specified in details in Order 47 of the Code. It was the contention of Shri Nilamani Singh that when clause (a) of Section 41 of the Act is read along with Section 114 of the Code there is left no room for doubt that the right of review can be claimed by a party to an arbitration proceeding.
5. Shri N. Ibotombi Singh, the Government Advocate, urged, on the other hand, that the provisions of Order 47 have to be read in conjunction with Section 114 of the Code and that unless the requirements or Section 114 are proved to exist the right to review cannot be claimed by a party to an arbitration proceeding despite what is stated in clause (a) of Section 41 of Act and Order 47 of the Code. While explaining his stand further, Shri Ibotombi Singh submitted that right to review is available in terms of Section 114 of the Code only in respect of a decree or order from which an appeal is allowed by the Code and none has been preferred, or when no appeal is allowed by the Code, and that since neither the Code allows nor disallows an appeal respecting an order or decree made in arbitration proceedings, it is not open to the respondent of the instant case to approach the Court for review of its order dated 4-4-1967.
He stated further that since an appeal against an order rejecting a prayer, for setting aside an award is provided for in Section 39 of the Act, the provisions of Section 114 of the Code are not attracted. Shri Nilamani Singh challenged this interpretation of Section 114 of the Code read with cl. (a) of Section 41 of the Act. The parties counsel were, however, at one in stating that the point in issue is res integra and so it has to be determined by this Court without the aid of any judicial pronouncement on the relevant provisions of the Act and the Code.
6. After carefully going through Sections 114 and 141 of the Code and clause (a) of Section 41 of the Act, I have reached the conclusion that the view canvassed by Shri Nilamani Singh appears to be more sound than the one pronounced by Shri Ibotombi Singh. section 141 of the code enacts that the procedure provided in the Code in regard to suits shall be allowed, as far as it can be made applicable in all proceedings in any Court of civil jurisdiction. It is not in dispute that the proceedings under the Arbitration Act are in the nature of proceedings in a Court of civil jurisdiction. However, Section 141 refers only to the "Procedure" provided by the Code and not to the rest or the provisions forming part of the Code, e. g., the provisions relating to appeals, revisions and review.
The Arbitration Act was placed on the statute book of the country in the year 1940 while the Civil Procedure Code came into force in the year 1908. It is therefore legitimate to presume that the Legislature was well aware of Section 141 of the Code when the Arbitration Act came up before it for consideration. In that context the corollary that follows is that Section 41 was incorporated in the Act to serve some purpose which could not be achieved by Sec. 141 of the Code in respect of arbitration proceedings. A plain reading of Clause (a) of Section 41 would indicate that the Legislature meant to apply all the provisions of the Code to the arbitration proceedings subject only to one proviso, namely, that the provision of the Code sought to be availed of by a party to an arbitration proceeding was not in conflict with any provision of the Act or the rules made thereunder. This was not an abnormal step taken by the Legislature.
The law relating to arbitration in India excepting the Presidency towns was contained in the second schedule to the Civil Procedure Code until the Arbitration Act of 1940 was passed, and so the arbitration proceedings till, the latter event were primarily governed by the provisions of the Code. It was therefore out of historical compulsion that the Legislature incorporated Section 41 in the Arbitration Act. Apparently, the Legislature did not want to make a complete departure from the practice prevalent in past, and the wide amplitude in which Clause (a) of Section 41 was cast is a clear pointer to that legislative intendment.
7. The only point emphasised by Shri Ibotombi Singh against the submission made by Shri Nilamani Singh was that despite the apparently vast ambit of Clause (a) of Section 41 of the Act, it cannot be read to have changed, explicitly or impliedly, the scope of Section 114 of the Code in its applicability to arbitration proceedings. In other words, Shri Ibotombi Singh's contention was that since review can be claimed only respecting a decree or order of the nature mentioned in Clauses (a) and (b) of Section 114, and since the impugned order dated 4-4-1967 does not bear that description, the claim for review is not sustainable.
I regret my inability to accept that interpretation of the provisions of the code and the act because it smacks of much too narrow and an highly technical approach. If that interpretation were accepted, it would make Section 41 of the Act almost otiose if not a dead letter. Such an interpretation cannot commend itself to the Court. When the provisions of one statute meant to govern a particular variety of judicial proceedings are made applicable by a clause in another statute concerned with a different nature of such proceedings, some adjustment of words here and there in the former statute will have to be made to fit in with the requirements of the latter proceedings. Hence, the expression "appeal is allowed by this Code" used in the Clauses (a) and (b) of Section 114 of the Code must not be literally adhered to when their applicability is sought in respect of an arbitration proceeding by virtue of Clause (a) of Section 41 of the Act.
It will be noted that the expression "as far as it can be made applicable'' used in section 141 of the code is conspicuous by its absence in Section 41 of the Act. That feature of the Section has its obvious significance, and it is, in my opinion, compatible only with the proposition that the Legislature meant to apply the provisions of the Civil Procedure Code in their entirety to the arbitration proceedings. As such it would not be doing any violence to the combined reading of Section 114 of the Code and Clause (a) of Section 41 of the Act to state that the remedy of review is available to a party aggrieved by an order made in an arbitration proceeding, provided an appeal respecting the order made in those proceedings is allowed by the Act and no appeal has been preferred, or no appeal is provided by the Act, or, in other words, if the word 'Code' used in Section 114 is substituted by the word 'Act' for that limited purpose.
8. The same conclusion can be reached by plain interpretation of Clause (b) of Section 114 of the Code. According to that clause, a review of judgment giving rise to "a decree or order from which no appeal is allowed by" the Code can be claimed by an aggrieved party. Certainly, the Code does not provide an appeal against an order rejecting an application for setting aside an award. Therefore, respecting the order dated 4-4-1967 fay which the application of the respondent Th. Iboyaima Singh under Section 33 of the Act was rejected, it can be stated without demur that no appeal against that order is provided by the Code and so Clause (b) of Section 114 of the Code will apply as it stands. The interpretation canvassed by Shri Ibotombi Singh of the words "no appeal is allowed by this Code" in Clause (b) of Section 114 of the Code if taken to its logical conclusion would mean "when an appeal is disallowed by the Court." To accept that contention would tantamount to doing offence to the plain words of the clause. Hence, I uphold the submission made by Shri Nilamani Singh that review of the impugned order can be claimed by the respondent under Clause (b) of Section 114 of the Code read with Section 41 of the Act.
9. Shri Nilamani Singh cited the decision in Jwala Prasad v. Jwala Bank Ltd., AIR 1961 All 381 (FB), to reinforce his submission that the provisions of Section 114 and Order 47 of the Code apply to arbitration proceedings. In my opinion, no assistance can be derived from that authority for deciding the point that requires determination in the present revision petition. The exact point debated in the case of Jwala Prasad was whether the provisions of Section 114 of the Code apply to decrees made in appeals by the High Court under the Letters Patent. The verdict was given in the affirmative.
A similar view was taken by the Punjab High Court in the case of Suba Singh v. Neki Kishen, AIR 1953 Punj 106, by the Bombay High Court in Ratanchand v. Damji, AIR 1927 Bom 232 and by the Madras High Court in the case of Venkatasubbarayudu v. Govinda Krishna, AIR 1917 Mad 670. Since an appeal to the Supreme Court against a decree made by the High Court under the Letters Patent is provided in Sections 109 and 110 of the Code, Section 114 and Order 47 very obviously can be availed of in connection with such decrees, and so those cases are quite distinguishable from the case in hand. I have made a short reference to the case of Jwala Prasad because quite a good time of the Court during the arguments was taken by both the counsel in debating its exact legal implications and the relevancy or otherwise of those implications to the facts of the present case.
10. As a result of the conclusions recorded above, the revision petition fails and is dismissed. In view of the fact that the question involved in the revision is purely legal and is barren of authority, I leave the parties to bear their own costs.
Petition dismissed.
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