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Jet Airways (India) Limited and Ors. vs. Subrata Roy Sahara and Ors

Jet Airways (India) Limited and Ors. vs. Subrata Roy Sahara and Ors.:

Section 36 of The Arbitration and Conciliation Act, 1996 and Code of Civil Procedure, 1908 (CPC) was under question. Whether proceedings under Section 36 of the 1996 Act were proceedings under CPC. It was held that the 1940 Act clearly provided for a decree being passed by the Court. There is fundamental difference in the provisions of Section 36 of the 1996 Act and Section 17 of the 1940 Act only in this regard. Proceedings under 36 were not proceedings under the CPC. Arbitration Act, 1940 (10 of 1940) amended Section 104 of the CPC and Sub-clause (a) to (f) of Sub-section 1 of Section 104 of CPC, which all dealt with arbitration proceedings, were deleted. Only the procedure for enforcement of a decree passed by Civil Court is to be utilised for enforcement of an award and, merely on that ground, the said proceedings did not become proceedings under the CPC. They continued to be proceedings under the 1996 Act. In fact Section 19 of the 1996 Act also makes it clear that the provisions of CPC do not apply to the arbitration proceedings. Section 36 of the 1996 Act uses the words "the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a Decree of a Court." The words "as if it were a decree of the "Court" used in section 36 have already been interpreted by the Supreme Court in Paramjeet Singh Patheja v. ICDS Ltd. The words Court, "adjudication" and "suit" conclusively show that only a Court can pass a decree and that too only in suit commenced by a plaint and after adjudication of a dispute by a judgment pronounced by the Court. It is obvious that an Arbitrator is not a Court, arbitration is not adjudication and, therefore, an award is not a decree. The words "decision" and "Civil Court" unambiguously rule out an award by Arbitrators. It is settled by decisions of this Court that the words 'as if' in fact show the distinction between two things and such words are used for a limited purpose. They further show that a legal fiction must be limited to the purpose for which it was created. The words "as if" demonstrate that award and decree or order are two different things. The legal fiction created is for the limited purpose of enforcement as a decree. The fiction is not intended to make it a decree for all purposes under all statutes, whether State or Central. On an independent consideration of the provisions of the 1940 Act and 1996 Act, the conclusion is inevitable that proceedings under 36 are not proceedings under the Code. In view of the aforesaid clear and binding pronouncement of law it was held that the proceedings initiated by the Appellants and the Respondents before the learned Single Judge were proceedings under Section 36 of the 1996 Act and cannot be held to be proceedings of execution under Section 47 or Order 21 of the Code of Civil Procedure, 1908. Arbitration - Applicability of provision - Section 36 of the Arbitration and Conciliation Act, 1996 - Whether the provisions of Clause 15 of the Letters Patent were applicable to the impugned judgment and order and whether applicability of Clause 15 was impliedly excluded by Section 37 of the 1996 Act or by the amendment of Section 2(2), 47 by Act 104 of 1976 amending the Civil Procedure Code, 1908 - Held, 1996 Act and the 1940 Act provides for filing of an appeal against only some specified orders and do not provide for an appeal against every order passed in the proceedings under the 1996 Act. General law cannot defeat a provision of special law to the extent to which they are in conflict; else effort has to be made on reconciling the two provisions by homogeneous reading. In the present case, the provisions of Section 37 (the relevant portion of which is pari materia relevant portion of Section 39 of 1940 Act) left no manner of doubt that the provisions of the special enactment would prevail over the general law namely, the 1908 Code. The Statutory Scheme of 1996 Act and the Letters Patent and the binding precedents of Supreme Court and this Court led to only one conclusion that Clause 15 of the Letters Patent were impliedly excluded by the 1996 Act.

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BY : Niharika Shukla

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