# [1959] 1 S.C.R. 1177
- **Citation:** [1959] 1 S.C.R. 1177
- **Court:** Supreme Court of India
- **Decided:** 1959
- **Bench:** VENKATARAMA ArYAR, Gajendragadkar, A. K. Sarkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1959-1-s-c-r-1177-1465
- **Pages:** 15
## Headnote
Appeal to Su.preme Court-Maintainability-Decision of High
Court in appeal from an award-If and when a judgment, decree or
ord
est-Defence of India Act, r939 (No. XXXV of r939),
s r9(r)(u), r9(r)(j)-Code of Civil Procedure (Act V of r908). ss.
09, IIO.
•
•
. rfhese t\VO appeals were preferred against the decision of the
Nagpur Hiih Court in _an.appeal under s. rg(r)(f) of the Defence •
of India Acf, r939, mod1fymg an award of tompensation made
•
v.
Sangappa
Sarkar J.
August 22.
•
•
Jlansk11111nr
/\" islt11trcluuul
'"
Thr. lJ11iv11 of
l 11tlia
1178
[ lli:>9]
under s. I(J(I}lb) of that :\ct in r1~spect of c1·rtai11 prc1nises rl·quisitioncd by the
(~O\'(~fllllh!'It und1.:r 75(.:\) of the Hull!s lra111cd
111111t~r the :\ct.
Both the parties applit'd ior and ohtainea11y \'. J11c C:otli:cfo;-, /(i1>1;;.o'.1:1, (llJ12)
L. I<. 3y I..<\. I\)f. '/'I!( Sf)cci,1l U/iccr,
Salst'f!~ l?1ti!di11g Sites \".
/)us~al,/u11· 1-Jc:o;zji, (Io:a1!j1
J/,_1!11;.:. '•,
,1.q13) 1·7 c·. \\'. \'. 421, }[a11ar:1hran1Ja '/'1no11.1:pad \'. '[Iii: Cc 1llt'C
f<:r uf Iii<' ;,\'i!gtir.,-, (IqIS)_I. L. 1\
1 •. 11 \Lld. 1j4J and_ Srcri:!ar_'l' G)
•
.9]
under s. I(J(I}lb) of that :\ct in r1~spect of c1·rtai11 prc1nises rl·quisitioncd by the
(~O\'(~fllllh!'It und1.:r 75(.:\) of the Hull!s lra111cd
111111t~r the :\ct.
Both the parties applit'd ior and ohtainea11y \'. J11c C:otli:cfo;-, /(i1>1;;.o'.1:1, (llJ12)
L. I<. 3y I..<\. I\)f. '/'I!( Sf)cci,1l U/iccr,
Salst'f!~ l?1ti!di11g Sites \".
/)us~al,/u11· 1-Jc:o;zji, (Io:a1!j1
J/,_1!11;.:. '•,
,1.q13) 1·7 c·. \\'. \'. 421, }[a11ar:1hran1Ja '/'1no11.1:pad \'. '[Iii: Cc 1llt'C
f<:r uf Iii<' ;,\'i!gtir.,-, (IqIS)_I. L. 1\
1 •. 11 \Lld. 1j4J and_ Srcri:!ar_'l' G)
•
.J.ken bv the le:trned Solicitor.General to the
m>tintainability of Civil Appeal No. 224 of 1954 on tlw
groull thP maintainability of the
appeal, th6ugh the remit of ow· upholding it would
entail the di8rnissal of Civil Appeal Xo. 225 of 1954 as
well.
We accordingly proceed to dispose of the objcc·
tion on the merits.
It will be convenient al this stage to rPfer to the
proYisions of the Act hearillg upon the presci1t controversy. Section 19(1) provides that :
" Where ...... any action is taken of the nature
decribed in sub-section (2) of section 299 of the Government of India Act, 1935, there shall be paid compensation, the amount of which shall be determined in the
manner, and in accorclancc with the principlcs,l!_erl'inafter ~ct nut. ..... ".
"'
Section I~(!) (a) provides for the amount of compc't'.,..._
~ation being fixed by agreement, anrl s. 19( I) (h) Ptmcts "\
• that:
•
"\Ylwrc llO i;1u:h agre1mwnt can be rea,:hcd, the
CPntrn,1 novcrnmcnt sball appoint as arbitrat-Or a.
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S.C.R.
SU~EME COURT REPORTS
1181
person qualified under sub-section (3) of section 220 of
the above-mentioned Act for appointment as a Judge
of a High Court."
Sub-section (c) of s. 19(1) provides for the appointment
by the Central Government of a person having expert
knowledge as to the nature of the property acquired
and for the nomination of an assessor by the person
to be compensated, for the purpose of assisting the
arbitrator. Sub-section (e) of s. 19(1) enacts that the
arbitrator in making his award shall have regard
to the provisions of sub-s. (1) of s. 23 of the Land
Acquisition Act, 1894, so far as the same can be made
applicable. Then comes sub-s. (f), which is important
for the present purpose, and it is as follows :
" An appeal shall lie to the High Court against
an award of an arbitrator except in cases where the
amount thereof does not exceed an amount prescribed
in this behalf by rule made by the Central Government."
Th~n we have sub-s. (g), which is as follows:
"Save as provided in this section and in any
rules made thereunder, nothing in any law for the time
be1ng in force shall apply to arbitrations under this
section."
On these provisions, the contention on behalf of the
Government is that the reference under s. 19(1) (b) and
the appeal under s. 19(1) (f) are all arbitration proceedings, that the decision of the High Court in the appeal
is really an award, and that it is, in consequence, not
appealabl~ under ss. 109 and 110 of the Code of Civil
Procedure, as they apply only to judgments, decrees or
orders of Courts and not to awards. Mr. Achhru Ram,
learned counsel for the appellant does not dispute that
the proceedings under s. 19(1) (b) are by way of arbitration, but he contends that when once the matter
comes before the High Court by way of appeal under
s .. Y.Y(.0(f), it becomes a civil proceeding under the
Hanskumar
Kiskanchand
v.
The Union of
India
Venkatarama
Aiyar ].
•
~rdinary jurisdiction of the Court, and that any decision
, therein is open to appeal under ss. 109 and 110 of the
Code of Civil Procedure. He further contends that •
even apa11t from those provisions, the.appjla! was competent under Cl. 29 of the L~tters Patent, and that,
•
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1182
SUPREME COURT REP~RTS
[1959]
the certificate granted by the High Court is under that
}irovision as ,; ell.
llun.'·k11mat
1,,,,,•n•hand
Before discussing the authorities cited on either
side in support of their respective contentions, it
n, u,,;.,, of
will be useful to state the well-established pri11ciples
v.
I»d:"
applicabl,• to
I-lie
determination of the present
I' cnkatatama
Aiyar }.
quest-ion.
"'hen p11rl-ies enter iuto an agreemeut
to haYc their dispute settled by arbitrntion, its
effect is to take t-hc /is out of the hands of the ordin:11'y
I
Courts of the land and t-0 entrust it. to the decision of
what has been termed a private tribuual. Such an
agrecmcut is not hit by s. 28 of the Contract Act as
being in rcstmint. of legal proceedings, because s. 21 of
the Specific Relief Act expressly provides that "sarn
1is prnYided by the Arbitration Act, 1!!40, no contraet
lo refer J>resent 01· future differences to arhitrntion
slmll be specifically enforced; but if any J>ersou who
has marlc stu:h a contra<:t. .. :rnd has refused to perform
it sues in respect of any Huhjcct which he has contrncted to refer, the existence of such contract shall bar.the
suit-."
There is a similar provision in s. 28 of the
Contract Act which is applicable, where the Arbitration Act is not in force.• Where an t1rhit-ration is held
iu pursuance of such an agreement and th11t- results in
a deci;;ion,.that decision takes t-hc place of an adjudiciit-ion by the ordinary Conrt-s, •ind the rights of the
partiPs arc thereaft.er regulated by it-.
It is true thtit
under the law tlw Courts have t.he authoritv to Hetaside the :Hrnrds macle LY arbitrators ou· certain
grounds stwh as that I-hey :i°re on maU.ers ns>t referred
tn arhitrntion, or tlrnt the arhitrntors had miscoll(]uc:ted thcmseh'CH, 01· that thfn'e are 1:rror• apparcl1ton the
face of t.hc aw:ird.
But where the award is not open
t.o any sueh objection, the Court has to pass a decree
in terms of the award, and under s. I 7 of the Arbitration Act, tin appc:1l lics against- such a decree only on
the ground that- it is in excess of, or not. othc1""·~ in
accordance 1dth the award. In ot.her words, it is t.he
decision of the arbit.rator where it is not set aside tha\..
i>peralc·s as the real adjudic:Lt.ion binding on the '
• parties,· and it is with a l"iew to its enforcement. that
the Coi1rt. hi altthorised to pass ,a decre1~ in terms
thereof.
There is thus' a sharp disti11vtion between ·a,
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I
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•
S.C.R.
SUPREME COURT REPORTS
1183
decision which is pronounced by a Court in a cause
which it hears on the merits, and one which is given by
it in a proceeding for the filing of an award. The
former is a judgment, decree or order rendered in the
exerci~e of its normal jurisdiction as a Civil Court, and
that is appealable under the general law as for
example, under ss. 96, 100, 104, 109 and llO of the
Code of Civil Procedure. The latter is an adjudication
of a private tribunal with the imprimatur of the Court
stamped on it, and to the extent that the award is
within the terms of the reference, it is final and not
appealable. The position in law is the same when the
reference to arbitration is made not under agreement
of parties but under provisions of a statute. The result
of those provisions again is to withdraw the dispute
from the jurisdiction of the ordinary courts and to
refer it for the decision of a private tribunal. That
decision is an award, and stands on the same footing
as an award made on reference under agreement of
patties. It is for this reason that s. 46 of the Arbitration Act X of 1940 enacts that:
"The provisions of this Act, except sub-section (1)
o{ section 6 and sections 7, 12, 36 and 37 shall apply
to every arbitra.tion under any other enactment for
the time being in force, as if the arbitration were
pursuant to au arbitration agreement and ·as if that
other enactment were
an arbitration agreement,
except in so far as this Act is inconsistent with that
other enactment or with any rules made thereunder."
Nor do~s it make any difference in the legal position
that the reference under the statute is to a Court as
arbitrator. In that case, the Court hears the matter
not as a Civil Court but as persona designata, and its
decision will be an award not open £o appeal under
the ordinary law applicable to decisions of Courts.
A
statute, however, might provide for the decision of a
disputrmined t.hat a stun of Rs. J:~,25,720 was payable as
compensat.ion.
. Dissatisfied with this decision, tlw
ow11ers preferred a11 appeal to the Pri\')' Council under
the pro\•isions of the Code of Civil Procedure.
A preliminary ohjcctio11 was t.aken tD the maintainability of
the appeal 011 the ground that. the decision sough.t to
be appealed against wa8 not a judgment of Court hut.
a.11 award. and was t.Jwreforc not appealahle.
In ·-
giving pffcd to this objection, the Board ohscrvnd:
'
"Their Lordships cannot accept the argument or
(1) (1c..12) L.R.39 I.A. 197,
(::?) {I!JI:l) LL.R.
3i ~m. 506.
(3) (1913) 17 C.W.X. 421.
,
(4) (1918) 1.L.R. 41 \lad. 943·
(5) (1931) L.R. 58 l.A. 259 •
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I
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I
S.C.R.
SUP:\tEME COURT REPORTS
1185
suggestion that when once the claimant is admitted to
the High Court he has all the' rights of an ordinary
suitor, including the right to carry an award made in
an arbitration as to the value of land taken for public
purposes up to this Board as if it were a decree of the
High Court made in the course of its ordinary jurisdiction. "
Shortly after this judgment was pronounced, the
question arose for determination in The Special Officer,
Salsette Building Sites v. Dossabhai Bezonji ('),whether
a decision given by the High Court in appeal under
s. 54 of the Land Acquisition Act was a judgment
within CL 39 of the Letters Patent, so as to enable a
party to appeal to the Privy Council under that provision. The applicant sought to distinguish the decision
in Rangoon Botatoung Company v. The (Jollector, Rangoon (2) on the ground that there, the decision sought
to be appealed against was that of the Chief Court of
Burma, and the question of maintainability fell to be
decided on the terms of the Code of Civil Procedure,
whereas in the instant case, the party had a right to
appeal to the Privy Council under CL 39 of the Letters
Patent. In rejecting this con~ention, the High Court
reTerred to the observations in Rangoon Botatoung
Company's Case(') already quoted, and observed:
"This passage shows that it is a inistake to .
suppose that the award made in such a case by the
High Court is a decree within the ordinary jurisdiction
to which the Civil Procedure Code refers; and it seems
to me it would be equally erroneous to regard such an
award as a final judgment or order within the meaning
of clause 39 of the Letters Patent. "
Leave to appeal to the Privy Council was accordingly
refused.
There was an application to the Privy
Council for special leave in this matter, but that was
also rejected, and the report of the proceedings before
the.Pi;,ivy Council in The Special O.fficer, Salsette Building· Sites v. Dassabhai Basanji Motiwala (3) shows that
. the interpretation put by the Bombay High Court in
The Special O.fficer, Salsette Building Sites v. Dossabhdi
Hanskutnar
Kishanchand
v.
The Union of
India
Venkatarania
Aiyar ].
•
Bezonji (1) was accepted as correct.
•
In JJ1 a!iavikraman Tirumalpad v. 'Jlhe Collector of the.
(1) (1912) I.L.R. 37 Boin. 506.
(2) (1912) L.R. 39 I.A. 197.
(3) (1913) 17 C.W.N. 421.
•
JJn,iskumar
l\i_;ha11chnnd
v.
1}u Vnio>1 of
India
Vo1kataramn
Aiyar J.
•
1186
l-iCPRE~IE COURT REP"RTS
[1959]
Xilgn'.s ('), the question was "·hether it judgment. of
the High Court passed'in an appeal under the Land
AcquiAition Act was a. judgment within the meaning
of Cl. 15 of the Letl{)rs P11tcnt so as to entitle a party
to file a further tl, and it was held, 011 IL considemtion'of the
authorities above referrer\ to, that it was not. Su:rc.
tary of Sta.le for India in Co11.nci/. ,. . llindusthan Co.
071eratirr. Insurance Society Limited(') is a decision
unJer the Calcnttn. Improvement Act, 1911.
Under
that Act, there is IL t.ribumtl constituted for deter.
mining the 1Lrnou11t of com pen sat ion payable on
a.cquisition of land, and under the Citlcutta Improvement (Appeals) Act, 1911, an appeal
i~ pruYirled in
certain c:i;es from t ht! decision of the tribunal to the
Cak11tt11 Higi1 Cunrt.
The point that a.rose for detcrminat.ion was whether the decision given by the High
Court in appeal under this proviHion was open to
fnrthPr appeal to the Privy Council.
In •Lnswering it
in the negative, the Privy Council ohsen·ed that in
,·icw of the deci8ion in Hangoon Botatoung Company' , ..
The ()oUechJr, Rangoon('), there could be no right of
1tppcal again8t the de~iHion uf the High Court·.
It
further held that this conclusion w1i,: not :dfoctPd liy
t.he amendnwnt of the L:rnd Acquisit.ion Act., IO:!i,
providing for "" appeal to the Privy Council against
t.he decision of the High Co mt under s. 54 of that Act,
as that amendment could not be heltl to lmve been
incorporated by reforencc in the Calcutta Improvement Act, l!H I.
The law as 11ticl down in t.he ahoYe a.uthohties mav
thus be summed up: l t is not e1·ery decision given b):
a Court that could be said to he a judgment, decree or
order within the provisions of the Code of Civil
Procedure or the Letters Patent.
Whether it is so or
not will depend 011 whcLher the proceeding in which it
was given came before the Court in its normal ei\•il
jurisdiction, or rle hors it as 1111ers01ui designa.U1. ~' liere
the dispute is reforrcd to the Comt for dewrmination
l>;' way of' arbitmtion
<~S in Ranyoon Hot.atouny Com·
• Jiany v. 'l'he Colkt:ior, Ran~1oon ('), en· where it. come;
(1) (1910) 1.L.jl .. 11 •lad. 9.13.
(2) (1931) L.H. 5S 1.A.1219.
(3) (1RTS
[1959]
further slage of the 9rigimd arbitration proceedings.
In our \'iew, a proceeding whir:h is at the inception an
arbitration proceeding must rctuin its charncter as
arbitmt.ion, even when it is taken up in appeal, whcro
that is prn\'idcd by the statute.
•
The question w hethcr an iippeal um!P.r s. 19( I )(f)
is of the nature of arbitration prnce<'dings,
and
whether ihe decision given th(>rein is an award eanw
up directly for consideration in Kollrual Silk Filutwes
Ltd. "· l'ro1:ince of Jlladra" (') before a Bench of the
;\fadras High Court consisting of Patanjnli Sastri a11d
Chandrasekharn Aiyar J,J. and it was helcl hy them
that the word " arbitration " in s. 19( I )(g) of the
Act coYered t.hc entire procee!li11gs from their commencement before the arbitrator to their terminal.ion
in the High Court on 11ppeal where an appeal Imel
been preferred, ancl the High Court in hearing and
deciding the appeal acted essentially as au arbitratio11
tribunal. We agree with this decision that the appeal
under s. Hl(l) (f) is an arbitration proceeding .• \Ye
must therefore hold that the dccisio11 of the High
Court in the appeal under that provision is not a
judgment, decree or ortler either within ss. 109 and ·110
of the Code of Civil Procedure or cl. 29 of the Letters
Patent of.the ~agpur High Court, which corrcspomfa
to cl. 39 of the Letters Patent of the Calcutta, :Madras
a11d Bomlmy High Courts, and that, therefore, the
present appeals arc iucompctent.
lllr. Achhrn Ham fi11ally contended that even if no
appeal lay under ss. 109 and 110 of the Code of CiY ii
Procedure or d. 20 of the Letters Patent, it was, nC\'('l'-
thelcss, within the competence of this Court' to grant
leave to appeal, and that this was a lit caHe for the grnut
of such leave.
He argued that the Privy Council had
the power t.o gm11t leave to appeal against the decision
of the Nagpur High Court in the appeal under s. ID(l)
(f), that under s. 3(ft)(ii) of the Federal Col1l't ·(En1'1rgement of ,J uriscliction) Act I of 1948 that power
became vested in the Federnl Court, and under Art. 135
"it has devolved on this Court, and that in the exercise
of that power we should grant leave to apptal against
l•) l.L.R. ['1948] ·~lad. 490 . •
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S.C.R.
sui'RE!IIE COURT REPORTS
1191
the decision now under challenge. It is sufficient
answer to this contention that the :Federal Court had
power under s. 3(a) (ii) to grant leave only when the
proposed appeal was against a judgment, and that,
under the definition in s. 2(b}, meant a judgment,
decree or order of a High Court in a civ ii case ; and
that on our conclusion that the decision in the appeal
under s. 19(1) (f) is not a judgment, decree or order
but an award, no order could have been passed
granting special leave under s. 3(a) (ii).
In the result, we dismiss both the appeals as
incompetent. _The parties will bear their own costs in
this Court.
Appeals dismissed.
THE STATE OF BIHAR
v.
D. N. GANGULY. & OTHERS
(VENKATARAMA_ AIYAR, GAJENDRAGADKAR
A. K. SARKAR JJ.)
and
Industrial Dispute-Supersession of adjudication pending before
industrial tribunal--V alidity-Power of appropriate Govcm111entIndustrial Disputes Act, I947 (XlV .of I947), s. IO(I)-General
Clames Act, r897 (ro of I897), s. ZI.
SecticJ'n ro(r) of the Industrial Disputes Act, 1947, does not
confer on the appropriate Government the po\ver to cancel or
supersede a reference made thereunder in respect of an industrial
dispute pending adjudication by the tribunal constituted for
that purpose.
Nor cans. 21 of the General Clauses Act, 1897.
vest such a po\ver by necessary iinplication.
It is well settled that the rule of construction embodied in
s. 2r 11.f the General Clauses Act can apply to the provisions of a
statufe only where the subject matter, context and effect of such
provisions are in no 'vay inconsistent ,vith such application.
So
judged it is clear that that section cannot apply to~. ro(r) of the
Industrial Disputes Act.
•
Mimyva Mills Ltd. v. Their Workmen, [r954] S. C.R. 465,•
held inapplicable.
•
]{ anskuntar
Kishanchand
v.
The Union of
India
Vc11halara111a
Aiyar ].
August 22.
•