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TMI Blog2010 (11) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 10F of the Companies Act are not maintainable, in view of the specific bar stipulated by section 50 of the Companies Act. 2. The appellants have contested the applications. In the reply, reference is made to the pleas and contentions raised in the appeals on merits relating to challenge to the orders dated 20-7-2010. It is submitted that all orders of CLB including an order wrongly referring the disputes to arbitration can be made subject-matter of an appeal under section 10F of the Companies Act. Section 50 of the Arbitration Act cannot control the scope and ambit of an appeal under section 10F of the Companies Act. All orders of CLB are amiable and can be made subject-matter of an appeal under section 10F of Companies Act on questions of Law. 3. The present applications raise the issue of jurisdiction and scope of section 50 of the Arbitration Act, section 10F of the Companies Act and whether the impugned orders dated 20-7-2010 passed by the CLB allowing the applications and referring the parties to arbitration can be assailed and challenged in an appeal under the said section 10F of the Companies Act and whether section 50 of the Arbitration Act bars/prohibits the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice" means the place which has longest been the registered office of the company during the six months immediately preceding for presentation of the petition for winding up. 10F. Appeals against the orders of the Company Law Board.-Any person aggrieved by any decision or order of the Company Law Board [made before the 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 : 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." 6. It is admitted case of the parties that the appellants herein had filed two petitions under sections 397-398 of the Companies Act alleging oppression and mismanagement before the CLB in the affairs of M/s. Tinna Agro Industries Limited and Tinna Oil and Chemicals Limited. During the pendency of the said petitions, applications under sections 8 and 45 of the Arbitration Act were filed and by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislative provision under which the impugned order dated 8-12-2000 has been passed. If in the aforesaid determination, this court arrives at the conclusion that the order was passed by the Company Law Board in exercise of its jurisdiction to settle a dispute flowing out of the provisions of the Companies Act, 1956, then and only then, the instant plea advanced on behalf of the appellants would merit acceptance. In such an eventuality, it would have to be concluded that the search for the appellate forum would have to be restricted to the Companies Act, 1956. However, if this court arrives at the conclusion that the impugned order dated 8-12-2000 had been passed by the Company Law Board in its capacity of 'judicial authority' in exercise of obligations flowing out of the Arbitration Act, 1996, in furtherance of the provisions of the Arbitration Act, 1996, then certainly, the remedy must be searched for, from within the provisions of the Arbitration Act, 1996. In such an eventuality, the contention advanced on behalf of the appellants would not merit acceptance. 9. Undoubtedly, when the petition was filed by the respondents (herein) before the Company Law Board, the Company L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion, it must not be assumed that we have accepted the submission that the Arbitration Act, 1996, is merely an adjective, incidental, supplemental and procedural legislation, when compared with the Companies Act, 1956. The instant question simply does not arise and, therefore, need not be gone into." 9. The Punjab and Haryana High Court also rejected the contention that the ordinary incident of procedure of the Court, including right to appeal, where proceedings were/are pending would automatically get attached with the decision. The Punjab and Haryana High Court has held that the rule of attachment is not applicable in view of the express provisions and the bar under section 37 of the Arbitration Act. It was observed:- "15.2 In fact, even the judgment in Vanita M. Khanolkar's case (supra), which, according to the counsel for the appellants, completely covers the controversy in the present case, it is apparent from the extract already reproduced above that the procedure including the fight of appeal would not get attached '. . unless the statutory enactment concerned expressly excludes appeals . .' . Additionally, in Vanita M. Khanolkar's case AIR 1998 SC 424 (supra), the obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal from the order of the subordinate court and not from the order passed by a learned Single Judge sitting on the original side of the High Court. There is also another decision of a two-Judge Bench of this Court in Vanita M. Khanolkar v. Pragna M. Pai [1998] 1 SCC 500 which appears to have taken a contrary view relying upon clause 15 of the Letter Patent applicable to the High Court of Bombay. Thus, there appears to be conflict of decisions on this question'." 10. The Punjab and Haryana High Court has further held that the Arbitration Act is an exclusive, exhaustive and comprehensive code as the said Act is a consolidating and an amending Act relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards and for matters connected with or incidental thereto. The High Court relied upon observations of the Supreme Court in Union of India v. Mohindra Supply Co. AIR 1962 SC 256 with reference to enactment of Arbitration Act, 1940, which was again a consolidating and an amending statute. It was accordingly held that the remedy by way of appeal would be permissible only if expressed, specifically or by necessary implication in Part I o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk Convention, an appeal can be filed against the orders passed by the trial Court/first forum only against an order refusing to refer the parties to arbitration or an order refusing to enforce an award under section 48 of the Arbitration Act and not against other orders. Section 50 of the Arbitration Act creates the said bar. Similar view has been taken in Shivnath Rai Harnarain India Co. v. G.G. Rotterdam [2009] 164 DLT 197 and in Usha Drager (P.) Ltd. v. Dragerwerk AG [2010] 170 DLT 628. 12. In Sumitomo Corpn. v. CDC Financial Services (Mauritius) Ltd. [2008] 4 SCC 911 the CLB had refused to refer the parties to arbitration under section 45 of the Arbitration Act. An appeal was filed before the Delhi High Court under section 50 of the Arbitration Act and was registered as FAO. This FAO was dismissed by the Delhi High Court for lack of territorial jurisdiction holding that section 10(1)(a) of the Companies Act will take precedence over section 50 of the Arbitration Act. The question, which arose before the Supreme Court was whether the order passed by the CLB refusing to refer the parties to arbitration under section 45 of the Arbitration Act was liable to be challenged to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of jurisdiction arises only in regard to original jurisdiction and it cannot have any application to appellate jurisdiction as 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 arises. In such circumstances, we are unable to accept the lengthy arguments advanced on the abovementioned 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 case." 14. Thus, the Supreme Court has held that section 50 of the Arbitration Act stipulates the orders that can be made subject-matter of appeal but does not prescribe or fix the forum which will hear the appeal. The forum to which an appeal will lie, is determined and decided with reference to appropriate law governing the authority of the forum which has passed an order which is appealable under section 50 of the Arbitration Act. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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