Holding

A cross‑objection under Order 41 Rule 22 is maintainable only if the original appeal is maintainable under Section 39(1) of the Arbitration Act; if the original appeal is incompetent or time‑barred, the cross‑objection cannot be heard.

Summary

The Municipal Corporation of Delhi and others entered into a contract with International Security & Intelligence Agency Ltd. containing an arbitration clause. A non‑speaking award was made and later declared a rule of court, leading to a decree. Various objections, a review petition, and multiple appeals were filed. The key issue was whether a respondent could file a cross‑objection under Order 41 Rule 22 of the CPC in an appeal governed by Section 39 of the Arbitration Act, 1940, especially when the original appeal was found to be non‑maintainable (either time‑barred or outside the scope of Section 39(1)). The Supreme Court held that the right to file a cross‑objection is a substantive right of appeal and is only available if the original appeal itself is maintainable under Section 39(1); otherwise the cross‑objection is not maintainable. Both appeals were dismissed as the appellant’s appeal was time‑barred and the respondent’s cross‑objection could not be heard.

Issues considered

Whether a respondent has a right to file a cross‑objection in an appeal under Section 39 of the Arbitration Act, 1940.
Whether such a cross‑objection is maintainable when the original appeal is itself not maintainable under Section 39(1) or is time‑barred.

Legislation cited

Arbitration Act, 1940s. 39, s. 41
Code of Civil Procedure, 1908s. Order 22 Rule 4, s. Order 41 Rule 22
Limitation Act, 1963s. 5

Subjects

ArbitrationSection 39Cross objectionAppealLimitationCode of Civil ProcedureMaintainabilityNon‑speaking awardExecution

Judgment

MUNICIPAL CORPORATION OF DELHI AND ORS. A
., v.
)·
INTNL. SECURITY & INTELLIGENCE AGENCY LTD.

I FEBRUARY 6, 2003
... B
(R.C. LAHOTI. BRIJESH KUMAR AND ARIJIT PASAYA T, JJ. )

~~

Arbitration Act, 1940-Sections 39 and 41-Code of Civil Procedure,
1908-0rder 41 Rule 22-Cross objections in appeal under Section 39-
Rights to file and maintainability of-Held, right to take cross-objection is
exercise of substantive right of appeal conferred by the statute-Thus, cross
c
objection maintainable-The subject matter and relief sought therein must
. )- conform to the requirement ofSection 39{1)-However, if appeal by reference
to which cross objection has been filed is not maintainable, then the cross
objection cannot be heard and decided on merits.
D
Appellant and respondent entered into a contract and disputes arose
therefrom. In terms of the arbitration clause in the agreement disputes
were referred to the arbitrator. Arbitrator passed a non-speaking award .
• Respondent filed applicaHon for making award rule of the Court .
..,4
Appell•nt filed objection to the same. Court dismissed the objeciion and
made award rule of the court and decree was passed in terms of the award. E
1
Respondent filed review petition praying for award of future interest on
the decretal amount which was dismissed by Single Judge. Respondent
then filed appeal before the Division Bench seeking condonation of delay
in filing appeal by excluding time lost in prosecuting review petition.
Appeal was dismissed as not maintainable on the ground that order put F
in issue and relief sought for in the appeal did not fall within Section 39(1)
of the Act. Appellant also filed appeal against the order rejecting o~jection
petition filed by it. Division Bench dismissed the appeal as time'barred.

- Meanwhile respondent had filed petition for execution of the decree, to
which appellant filed objections which were overruled. Appellant then filed
an appeal before High Court which too was dismissed. Hence the present
appeals.
G

The appellant contended that its appeal in Hi11h Court, thou11h
barred by time, could he treated and heard as cross objection.
951 H
952 SUPREME COURT REPORTS 12003] I S.C.R.

A Dismissing the appeals, the Court

HELD: I. I. In all the appeals filed under Section 39 of the
Arbitration Act, 1940, the provisions of the Code of Civil Procedure, 1908
would be applicable. This would include the applicability of Order 41
including the right to take any cross objection under Rule 22 thereof to
B appeals under Section 39 of the Act. 1960-E, Fl

1.2. Right to prefer cross objection partakes of the right to prefer
an appeal. When the impugned decree or order is partly in favour of one
party and partly in favour of the other, one party may rest contended by
C his partial success with a view to giving a quietus to the litigation. However,
he may like to exercise his right of appeal if he finds that the other party
was not interested in burying the hatchet and proposed to keep the lis alive
by pursuing the same before the appellate forum. He too may in such
circumstances exercise his right to file appeal by taking cross objection.
Thus taking any cross objection to the decree or order impugned is the
D exercise of right of appeal though such right is exercised in the form of •
taking cross objection. The substantive right is the right of appeal; the
form of cross objection is a matter of procedure. [960-G, H; 961-AI

. 1.3. Right to take a cross objection is the exercise of substantive right .
of appeal conferred by a statute. Available grounds of challenge against
E the judgment, decree or order impugned remain the same whether it is
an appeal or a cross-objection. The difference lies in the form and manner
of exercising tht right; the terminus a quo-the starting point of limitation
also differs. 1962-FI

1.4. Once it is held that by taking cross objection what is being
F exercised is the right of appeal itself, it follows that the subject-matter of
cross objection and the relief sought therein must conform to the
requirement of Section 39(1). In other words, a cross objection can be
preferred if the applicant could have sought for the same relief by filing
an appeal in conformity with the provisions of Section 39(1) of the Act. If
G the subject-matter of the cross objection is to impugn such an order which
does not fall within the purview of any of the categories contemplated by
clauses (i) to (vi) of sub-section (1) of Section 39 of the Act, the cross
objection shall not be maintainable. 1963-E, Fl

Bhadurma/ v. Bizaatunnisa Begum and Ors., AIR (1964) AP 365;
H !nayatu//ah Khan v. Diwanchand Mahajan and Ors .. AIR (1959) M.P. 58;
M.C.D. ,._ INTNL. SECURITY & INTELLIGENCE AGENCY LTD. 953

Ramasray Singh and Ors. v. Bibhisan Sinha and Ors.. AIR (1950), Calcutta A
372; A.l.A. Alagappa Chettiar v. Chockalingam Chetty and Ors., AIR (1919)
Madras 784 and Shri Baru Ram v. Smt. f'rasanni and Ors., 119591 SCR
1403, referred to.

Superintending Engineer and Ors. v. B. Subba Reddy, 11999) 4 SCC
423, overruled. B
2.1. Under Order 22 Rule 4 of the CPC the cross objection may be
·~
;
heard in spite of the original appeal having not been heard on merits when
the original appeal being dismissed as withdrawn and the original appeal
being dismissed for default in appearance or any other default. Just as C
the enabling provisions of cross objection contained in Sub-Rule (I) of
Order 22 of the CPC are applicable to appeals under Section 39 of the
Act the disabling provision contained in sub-Rule (4) too would apply to
' '> appeals under Section 39 of the Act in view of the generality of the
pro,·isions contained in Section 41 of the Act. To put it brieOy, if the
Appellate Court forms an opinion that that original appeal itself was D
incompetent or not maintainable as it was filed against an order not falling
within one of the clauses (i) to (vi) of sub-section (I) of Section 39 then
the cross objection shall also fall to the ground and cannot be adjudicated
upon on merits. It has to be remembered that law of limitation operates
with all its rigour and equitable considerations are out of place in applying E
the law of limitation. The cross-objector ought to have filed appeal within
the prescribed period of limitation calculated from the date of the order
if he wished to do so. Having allowed the opportunity to lapse he gets
another extended period of limitation commencing from the date of service
of the notice of the appeal enabling him P.utting in issue for consideration
of the Appellate Court the same grounds which he could have otherwise F
done by way of filing an appeal. This extended period of limitation
commences from the date of service of the notice of appeal and such notice
ought to be in a valid or competent appeal. 1963-G, H; 964-A-DI

• 2.2. If the appeal cannot be heard on merits for the reason that it
was no appeal in the eye of law, service of notice in such appeal would G
not furnish cause for commencement of a new period of limitation for filing
appeal in the form of cross objection. The only exception in which the cross
objection can still be heard is one where the memo of cross objection can
be said to have been filed within the period prescribed for filing an original
appeal against the impugned order and the memo also independently H
954 SUPREME COURT REPORTS (2003] I S.C.R.

A satisfies all the requirements of a memo of appeal. Just as a belated or
time-barred memo of cross-appeal can be treated-and taken up for
consideration-as cross objection subject to its satisfying the requirements
of cross-objection memo so also a cross-objection can be treated as cross-
appeal and heard as such subject to its satisfying the requirements as to
B maintainability of an appeal with regard to limitation and otherwise.
1964-D, E, Fl

2.3. The original appeal filed by the respondents was found to be
not maintainable as not covered by any of the clauses (i) to (vi) of sub-
section (1) of Section 39 of the Act. It was dismissed as incompetent. The
C question of the memo of appeal filed in the High Court by the appellants
being treated as cross objection and being taken up for hearing on merits
does not arise. Independently treated as an original appeal the same was
held to be hopelessly barred by time as the delay was not explained -{
satisfactorily. Thus, the High Court rightly dismissed the appeal filed by
the appellants as time-barred and is not available to be heard and decided
D as cross objection in view of the original appeal filed in the High Court
by the respondents having failed as incompetent. f965·F, G, H; 966-AJ

Mis. Malhati Tea Syndicate Limited v. Revenue Officer, Ja/paiguri and
Ors., AIR (1973) Calcutta 78; Dhani Ram v. Smt. Sushi/a Devi, AIR (1977)
HP 83; Chancha/gauri Raman/al and Ors. v. Narendrakumar Chandulal and
E Ors., AIR (1986) Gujarat 55; Charity Commissioner v. Padmavati and Ors.,
AIR (1956) Bombay 86; A.LA. Alagappa Chettiar v. Chockalingam Chetty
and Ors., AIR (1919) Madras 784, approved.

Shankar Lal and Anr. v. Sarup Lal and Anr., (1912) 34 ILR Allahabad
F 140 and Nanak Bakhsh and Ors. v. Wazir Singh and Ors., (1909) 4 IC 625,
disapproved.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1062 of2003.

From the Judgment and Order dated 12.07.2002 of the High Court of
G Delhi in FAO (OS) 471/01.
WITH

Civil Appeal No. 1063/2003.

H Dr. K.S. Sidhu, Ms .. Maldeep Sidu, Mayank Goel and·S.K. Sinha, for
M.C.D.,., INTNL. SECURITY & INTELLIGENCE AGENCY LTD. [LAHOTI. J.] 955

the Appellants. A
Mr. R.F. Nariman. Mrs. Kamlesh Mahajan and Ashok K. Mahajan. for
the Respondent.

The Judgment of the Cou11 was deli\ered by
B
R.C. LAHOTI, J. Leave granted in both the SLPs.

The respondent-International Security and Intelligence Agency Ltd.
entered into a contract with the Municipal Corporation of Delhi whereby the
former undertook to provide security services etc. to the latter. The agreement
contained an arbitration clause obligating the parties to have the disputes C
arising between them and referable to the contract determined by reference
to arbitration under the provisions of the Arbitration Act, 1940, hereinafter
'the Act', for short.

It appears that originally \Vhen the agreement was entered into between
the parties the respondents were a sole proprietory concern and the appellant D
no. I was an institution known as Delhi Development Authority (Slum Wing).
Subsequently, the respondents, the sole proprietory concern, was taken over
, by a private limited company as the respondents presently are while the DDA
(Slum Wing) was taken over by the Municipal Corporation of Delhi. Whether
or not the arbitration clause incorporated in the contract entered into between E
the parties as they were then, would be binding on and available to be
invoked by the present parties, was the subject matter of controversy raised
by the appellants but we need not enter into the details thereof inasmuch as
that is irrelevant for adjudicating upon the neat questions of law arising for
decision in these appeals.
F
Disputes arose between the parties and on a petition under Section 8 of
the Act filed by the respondents, the Court directed the same to be determined
through arbitration by a retired Judge of the High Court. The order of the
Court appointing the arbitrator and referring the disputes for determination
by him achieved a finality as the appellants did not file any appeal there G
against and both the parties submitted to the jurisdiction of the arbitrator. On
14.3.1997, the arbitratpr gave an award. The award is a non speaking one.
The arbitration agreement between the parties does not require the arbitratqr
to make a reasoned award. The respondents filed an application under Section
14 of the Act for making the award a rule of the Court. On 26.5.1997,
objections were filed by the appellants seeking setting aside of the award. H
956 SUPREME COURT REPORTS P003l I S.C.R.

A Though the objection petition is styled as one under Sections 30 and 33
(both) of the Act. a perusal of the contents of the objection petition shows
.-(
that all the objections raised therein fall within the scope 'of Section 30 of.the
Act. During the pendency of the hearing on the said objection petition. on
20.1.2000 the appellants filed another objection petition styled as one under
B Section 33 of the Act wherein for the first time a plea was raised that so far
as the respondents compauy is concerned it was not a party to the contract
and therefore appointment of arbitrator at its instance and all the subsequent
proceedings upto the date of making of the award were without jurisdiction
and nullity and were liable to be adjudged so. By judgment dated 17.1.2001,
the Court directed the objection raised on behalf of the appellants to be
C dismissed and the award to be made a rule. of the Court. A decree in terms
of the award as upheld by the judgment was later drawn up and dated as
17.1.2001.

On 20.2.7001, the respondents moved an application seeking review of
the judgment. The judgment and the decree drawn up did not award future
D interest on the decretal amount to the respondents and the only relief sought
for in the review petition was to suitably modify the operative part of the
judgment and the decree so as to include therein a direction for payment of
interest from the date of decree till realization of the decretal amount. On
25.9.2001, the learned single Judge directed the review petition to be dismissed. ·
E On 8.10.200 I, the respondents filed an appeal before the Division Bench
of the High Court feeling aggrieved by the judgment and decree dated
17.1.2001. Condonation of delay in filing the appeal by excluding the time
lost in prosecuting the review petition was sought for. A perusal of the memo
of appeal shows that the only relief sought for in the appeal was for a suitable
F modification in the decree so as to include therein direction to pay future
interest from the date of decree till realization. On 27.10.2001, the appellants
too filed an appeal against the judgment and decree dated 17 .1.200 I laying
challenge to the order of the original court rejecting the objection petition

G
filed by it and directing the award to be made a rule of the Court. The appeal
was filed with a delay of 230 days. The appellants sought for con donation of ..
delay in filing the appeal on the ground that it was awaiting the resu1t of
revie"'·~ petition and was persuaded to file an appeal because of the respondents ..
having filed an appeal. The cause assigned by the appellants for seeking
condonation uf delay did not apparently amount to sufficient cause within the
meaning of Section 5 of the Limitation Act. When the matter came up for
H hearing, the appellants submitted that the memo of appeal filed on 27.10.2001,
M.C.D. ,. INTNL SECURITY & INTELLIGENCE AGENCY LTD. [LAHOTl.J.] 957

if barred by time and hence not maintainable as an appeal, could still be A
treated as a cross objection under Order 41 Rule 22 of the CPC which having
been filed within the prescribed period of limitation for filing cross objection
the same deserved to be heard and decided on merits along with the first
appeal filed by the respondents herein.

On 12th July, 2002. the first appeal filed by the appellants has been B
directed to be dismissed by the Division Bench as barred by time consequent
upon the dismissal of its application under Section 5 of the Limitation Act.
Feeling aggrieved by the judgment dated 12.7.2002, SLP(C) 20508/2002 has
been filed by Municipal Corporation of Delhi.

Subsequently by an order dated 20th September, 2002, the first appeal C
filed by the respondents has been directed to be dismissed by the Division
Bench as not maintainable on the Division Bench forming an opinion that the
• > <'rder put in issue by the respondents (herein and appellant in the High Court)
and the relief sought for in appeal did not fall within the purview of clauses
(i) to (vi) of sub-Section (I) of Section 39 of the Act and, therefore, the D
appeal was not maintainable and was incompetent.

On the respondents taking out execution of the decree based on award,
' the appellants preferred an objection petition under Section 47 of the Code
of Civil Procedure before the Executing Court submitting that in the absence
of any arbitration agreement between the parties, the reference to arbitration, E
the award and the decree incorporating the award were all invalid and hence
the decree was not executable. By order dated 5.3.2002 the Executing Court
over ruled the objection. Feeling aggrieved thereby, the appellants preferred
an appeal before the High Court which has been dismissed by the High Court
as devoid of any merit vide its decision dated 12th July, 2002. SLP(C) F
No.20511/2002 impugns the decision dated 12.7.2002 of the High Court.

It is not disputed by the learned senior counsel for the parties that so
far as appeal filed by the respondents before the Division Bench is concerned,
... the same was not maintainable under Section 39 of the Act and has, therefore,
been rightly dismissed as not maintainable. Two questions arise for decision G
in these appeals: firstly, whether in an appeal under Section 39 of the
Arbitration Act, 1940, a respondent has a right to file cross objection and, if
so, whether the cross objection must be heard and decided on merits though
the appeal by reference to which cross objection has been filed is itself
dismissed as not maintainable?
H
958 SUPREME COURT REPORTS f20031 I S.C.R.

A When the matter came up for hearing before a two-Judge Bench ofthis
Court. reliance was placed on behalf of the respondents on Superintending
Engineer and Ors. v. 8. Subba Reddy. (1999] 4 SCC 423, wherein a·two-
Judge Bench of this Court has held that cross objection in an appeal under
Section 39 of the Arbitration Act are not maintainable. On 09.12.2002, the·
B two-Judge Bench entertaining some doubt about the correctness of the view
taken in B. Subba Reddy's case deemed it proper for this appeal to be placed
for hearing before a three-Judge Bench.

We have heard Dr. K.S. Sidhu, Senior Advocate for the appellants and
Mr. R.F. Nariman, Senior Advocate for the respondents. We answer the
C questions posed before us as under.

Competence and maintainability of cross objections in an appeal preferred
under Section 39 of the Arbitration Act, 1940?

Sections 39 and 41 of the Act and Rule 22 of Order 41 of the Code of
D Civil Procedure provide as under:

'"Arbitration Act, 1940

Sec.39 Appealable orders-( I) An appeal shall lie from the following
orders passed under this Act (and from no others) to the Court
E authorized by law to hear appeals from original decrees of the
Court passing the order:

An order_
r
(i) superseding an arbitration;
F
(ii) on an award stated in the form of a special case;

(iii) modifying or correcting an award;

(iv) tiling or refusing to tile an arbitration agreement;
G ·f
(v) staying or refusing to stay legal proceedings where there is an
arbitration agreement;

(vi) setting aside or refusing to set a~ide an award;

.H Provided that the provisions of this section shall not apply to any
MC D. L INTNL SECURITY & INTELLIGENCE AGENCY LTD [LAHOTI. JI 959

order passed by a Small Cause Court. A
(2) No second appeal shall lie from an order passed in appeal under
this section, but nothing in this section shall affect or take a\\'ay any
right to appeal to the Supreme Court.

Sec. 41. Procedure and powers of court. - Subject to the provisions of B
this Act and of rules made thereunder

(a) the provisions of the Code of Civil Procedure, 1908 (5.of 1908),
shall apply to all proceedings before the Court, and to all appeals.
under this Act; and
c
(b) the Court shall have, for the purpose of, and in relation to,
arbitration proceedings, the same power of making orders in
respect of any of the matters set out in the Second Schedule as
it has for the purpose of, and in relation to, any proceedings
before the Court :
D
Provided that nothing in clause (b) shall be taken to prejudice
any power which may be vested in an arbitrator or umpire for
making orders with respect of any of such matters.
l.X
Order XL/ Rule 22 of CPC :
E
22. Upon hearing respondent may object to decree as if he had
preferred separate appeal.-(!) Any respondent, though he may not
have appealed from any part of the decree, may not only support the
decree but may also state that the finding against him in the Court
below in respect of any issue ought to have been in his favour; and
may also take any cross-objection to the decree which he could have F
taken by way of appeal, provided he has filed such objection in the
Appellate Court within one month from the date of service on him or
his pleader of notice of the day fixed for hearing the appeal, or within
such further time as the Appellate Court may see fit to allow.

(2) Form ofobjection and provisions applicable thereto.-Such cross-
G
objection shall be in the form of a memorandum, and the provisions
of rule I, so far as they relate to the form and contents of the
memorandum of appeal, shall apply thereto.

(3) Unless the respondent files with the objection a written H
960 SUPREME COURT REPORTS r2003l I S.C.R.

A acknowledgement from the party who may be affected by such
objection or his pleader of having received a copy thereof, the . . . . -"I
Appellate Court shall cause a copy to be served, as soon as may be
after the filing of the objection. on such party or his pleader at the
expense of the respondent.

B (4) Where, in any case in which any respondent has under this rule
filed a memorandum of objection, the original appeal is withdrawn or -~
is dismissed for default. the objection so filed may nevertheless be
heard and determined after such notice to the other parties as the
Court thinks fit.

c (5) The provisions relating to pauper appeals shall, so far as they can
be made applicable, apply to an objection under this rule."
-4.; ~

Right of appeal is creature of statute. There is no inherent right of
appeal. No appeal can be tiled, heard or determined on merits unless the
statute confers right on the appellant and power on the Court to do so.
D Section 39 of the Act confers right to file appeal, in so far as the orders
passed under this Act are concerned, only against such of the orders as fall
within one or other of the descriptions given in clauses (i) to (vi) of sub-
Section (I) of Section 39. The Parliament has taken care to specifically .+-.;
exclude any other appeal being filed. against any order passed under the Act
E but not covered by clauses (i) to (vi) abovesaid, by inserting the expression
"and from no others" in the text of sub-Section ( 1). Clause (a) of Section 41
extends applicability of all the provisions contained in the Code of Civil
Procedure, 1908 to (i) all proceedings before the Court under the Act, and (ii)
·)
to all the appeals, under the Act. However, the applicability of such of the
'
provisions of the Code of Civil Procedure shall be excluded as may be "jl.•
F --... .
inconsistent with the provisions of the Act and/or of rules made thereunder.
A bare reading of these provisions show that in all ttie appeals filed under
~ection 39, the provisions of the Code of Civil Procedure, 1908 would be
applicable. This would include the applicability of Order 41 including the
right to take any cross objection under Rule 22 thereof to appeals under
G Section 39 of the Act.

Right to prefer cross objection partakes of the right to prefer an appeal.
~
When the impugned decree or order is partly in favour of one party and
partly in favour of the other, one party may rest contended by his partial
success with a view to giving a quietus to the litigation. However, he may
H like to exercise his right of appeal if he finds that the other party was not
M.C.D. dNTNL SECURITY & INTELLIGENCE AGENCY LTD. [LAHOTI.J.] 961
interested in burying the hatchet and proposed to keep the lis alive by pursuing A
the same before the appellate forum. He too may in such circumstances
exercise his right to file appeal by taking cross objection. Thus taking any
cross objection to the decree or order impugned is the exercise of right of
appeal though such right is exercised in the form of taking cross objection.
The substantive right is the right of appeal; the form of cross objection is a
matter of procedure. B

Though the statement of law made hereinabove flows simply by the
reading of the relevant statutory provisions yet some available decisions may
also be noticed. In Bhadurmal v. Bizaatunnisa Begum and Ors., AIR (1964)
AP 365, a Division Bench presided over by Jaganmohan Reddy, J. (as His C
Lordship then was) held cross objection to be maintainable in an appeal
preferred under Sections 47 to 49 of Hyderabad Jagirdars Debt Settlement
Act, I 952 because the provisions of Civil Procedure Code were generally
applicable by virtue of Section 51 thereof. The applicability of Order 41 Rule
22 of the appeals under that Act was held not excluded merely because
provisions governing grounds of appeal and court fees were specifically D
enacted in the Hyderabad Act. In lnayatullah Khan v. Diwanchand Mahajan
and Ors., AIR (1959) M.P. 58, Chief Justice M. Hidayatullah (as His Lordship
then was) upheld maintainability of cross objection in an election appeal
under Section I I 6A of the Representation of the People Act, 1951 because
the High Court as an Appellate Court hearing an appeal under Section l 16A E
was enjoined to exercise the same powers, jurisdiction and authority and to
follow the same procedure as it would have exercised or followed in respect
of a civil appeal under the Code of Civil Procedure. In Ramasray Singh and
Ors. v. Bibhisan Sinha and Ors., AIR (1950) Calcutta 372, the Division
Bench consisting of Harries, CJ and Bachawat, J. (as His Lordship then was)
held that conferment of right of appeal by Section 38 of Bengal Money- F
Lenders Aci, 1940 which spoke of the order being appealable in the same
manner as if it were a decree of the court implied a right in the respondent
to file cross objection inasmuch as the jurisdiction to hear appeal was conferred
on a pre-established Civil Court namely the Court of the District Judge and
nothing was expressly stated as to the procedure regulating such appeal. In G
A.L.A. Alagappa Chettiar v. Chockalingdm Chetty and Ors., AIR (1919)
Madras 784, a Full Bench of the High Court of Madras presided over by
)- Wallis, C.J. held that right of respondent to proceed by way of memorandum
of cross objections was strictly incidental to the filing of appeal by opposite
party and therefore in an appeal under Sections 46 and 47 of the Provincial
Insolvency Act, 1907 cross objections were maintainable as the procedure H
962 SUPREME COURT REPORTS [2003] I S.C.R.

A prescribed in the Civil Procedure Code is the standard procedure and applicable
to courts exercising powers in insolvency cases.

With advantage, we may also refer to observations of this Court made
in Shri Boru Ram v. Smt. Prasanni and Ors., [1959) SCR 1403. Section
I l 6A of the Representation of the People Act, 19 51 contemplates an appeal
B being laid before the Supreme Court from every order made by High Court
under Section 98 or Section 99 of that Act. Section 1l 6C provides for every
such appeal being heard and determined by the Supreme Court as nearly as
may be in accordance with the procedure applicable to the hearing and
determination of any appeal from any final order passed by the High Court
C in exercise of its original civil jurisdiction subject to the provisions of that
Act and the Rules, if any. All the provisions of the Code of Civil Procedure,
t 908 and rules of the Court shall, so far as may be, apply in relation to such
appeal. P.B. Gajendragadkar, J. (as His Lordship then was) speaking for the
Court observed.-"There is no doubt that, in an ordinary civil appeal, the
respondent would be entitled to support the decree under appeal on grounds
D other than those found by the trial court in his favour. Orde~ 4 t, Rule 22 of
the Code of Civil Procedure which permits the respondent to file cross-
objection:s recognizes the respondent's right to support the decree on any of
the grounds decided against him by the court below. In the present ca:;e no
appeal could have been preferred by respondent 1 because she had succeedt:l.!
E in obtaining the declaration that the appellant's election was void and it
should therefore be open to her to support the final conclusion of the High
Court by contending that the other finding recorded by the High Court which
would go to the root of the matter is erroneous. Primafacie there appears to
be some force in this contention." However, the Court did not express any
final opinion thereon as it was considered not necessary to decide the point
F in that appeal.

We have, therefore, no doubt in our mind that right to take a cross
objection is the exercise of substantive right of appeal conferred by a statute.
Available grounds of challenge against the judgment, decree or order impugned
G remain the same whether it is an appeal or a cross-objection. The difference
lies in the form and manner of exercising the right; the terminus a quo (the
starting point) of limitation also differs.

In Superintending Engineer and Ors. v. B. Subba Reddy, (supra) a two-
Judges Bench of this Court observed (vide para 24) "if there is no right of
H cross-objection given under Section 39 of the Act, it cannot be read into
M.C.D. r. INTNL_ SECURITY & INTELl.IGENCE AGENCY LTD. {LAHOTI. J.] 963

Section 41 of the Act. Filing of cross objection is not procedural in nature. A
Section 41 of the Act merely prescribes that the procedure of the Code would
be applicable to the appeal under Section 39 of the Act. We are. therefore,
of the opinion that cross objection by the respondent was not maintainable.'·.
Such observation is not correct and proceeds on certain wrong premises.
Firstly, form of cross objection is procedural and is only a manner of exercising B
right of appeal which is substantive. as we have already stated. Secondly, it
is not merely the procedure prescribed by the Code of Civil Procedure which
has been made applicable to proceedings under the Arbitration Act by Section
41 (a) of the Act; the entire body of the Code of Civil Procedure, 1908 has
been made applicable to all proceedings before the Court and to all appeals
under the Arbitration Act, 1940. The provision is general and wide in its C
applicability which cannot be curtailed; the only exception being where the
provisions of the Arbitration Act and/or of rules made thereunder may be
inconsistent with the provisions of the Code of Civil Procedure, 1909 in
which case the applicability of the latter shall stand excluded but only to the
extent of inconsistency. We may hasten to add that to the extent of our
disagreement with the law laid down in B. Subba Reddy's case, the proposition D
appears to have been rather widely stated in that case. In fact the question
before the Court in B. Subba Reddy's case was whether cross objection
seeking the relief of award of interest at a higher rate was maintainable
though such an order did not fall within the purview of Section 39(1) of the
~ E
Once ~1 e ho!d that by taking cross objection what is being exercised is
the right of appeal itself, it follows that the subject-matter of cross objection
and the relief sought therein must conform to the requirement of Section
39( 1). In other words, a cross objection can be preferred if the applicant
could have sought for the same relief by filing an appeal in conformity with F
the provisions of Section 39(1) of the Act. If the subject-matter of the cross
objection is to impugn such an order which does not fall within the purview
of any of the categories contemplated by clauses (i) to (vi) of sub-Section (I)
of Section 39 of the Act, the cross objection shall not be maintainable.

Effect on cross objection if the appeal itself is held not competent or not
G
maintainable

What happens to cross objections if the appeal itself is found to be
incompetent or not maintainable? Sub-Rule (4) of Order 22 of the CPC
provides for only two situations in which the cross objection may be heard H
964 SUPREME COURT REPORTS [2003] I S.C.R.

A in spite of the original appeal having not been heard on merits. These situations
are two: (i) the original appeal being dismissed as withdrawn, (ii) the original
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appeal being dismissed for default (default in appearance or any other default).
Just as the enabling provisions ·Of cross objection contained in sub-Rule (I)
of Order 22 of the CPC are applicable to appeals under Section 39 of the Act
B the disabling provision contained in sub-Rule (4) too would apply to appeals
under Section 39 of the Act in view of the generality of the provisions
contained in Section 41 of the Act. To put it briefly, if the Appellate Court
forms an opinion that the original appeal itself was incompetent or not
maintainable as it was filed against an order not falling within one of the
clauses (i) to (vi) of sub-Section (I) of Section 39 then the cross objection
C shall also fall to the ground and cannot be adjudicate<:! upon on merits. It has
to be remembered that law of limitation operates with all its rigour and
equitable considerations are out of place in applying the law of limitation.
The cross-objector ought to have filed appeal within the prescribed period of
limitation calculated from the date of the order if he wished to do so. Having
allowed that opportunity to lapse he gets another extended period of limitation
D commencing from the date of service of the notice of the appeal enabling him
putting in issue for consideration of the Appellate Court the same grounds
which he could have otherwise done by way of filing an appeal. This extended
period of limitation commences from the date of service of the notice of
appeal and such notice ought to be in a valid or competent appeal.
E
If the appeal cannot be heard on merits for the reason that it was no
appeal in the eye of Jaw, service of notice in such appeal would not furnish
cause for commen~ement of a new period of limitation for filing appeal in
the form of cross objection. The only exception in which the cross objection
can still be heard is one where the memo of cross objection .can be said to
F have been filed within the period prescribed for filing an original appeai
against the impugned order and the memo also independently satisfies all the
requirements of a memo of appeal. Just as a belated or time-barred memo of
cross-appeal can be treated - and taken up for consideration - as cross objection
subject to its satisfying the requirements of cross-objection memo so also a
G cross-objection can be treated as cross-appeal and heard as such subject to its
satisfying the requirements as to maintainability of an appeal with regard to
limitation and otherwise.

Illustratively, we may refer to some judicial opinion as to non-
maintainability of cross objections consequent upon the non-maintainability
H of the original appeal. In Mis. Malhati Tea Syndicate limited v. Revenue
M CD.,. INTNL SECURITY & INTELLIGENCE AGENCY LTD [LAHOTI, J.] 965

Officer, Jalpaiguri and Ors., AIR (1973) Calcutta 78, a Division Bench of A
Calcutta High Coun presided over by P.B. Mukherji, CJ (as His Lordship
then was) held the cross objection liable to fail in view of the original appeal
itself failing in view of its having been filed in the name ofa company which
was no longer in existence. In Dhani Ram v. Smt. Sushi/a De'd, AIR (1977)
HP 83, R.S. Pathak. CJ (as His Lordship then was) held that thougkOrder
41 Rule 22 speaks of an appeal. it contemplates a valid appeal which ordinarily B
calls for consideration on its merits. It is such an appeal the pendency of
which would entitle the respondent to file a cross objection. An appeal which
is barred by time is not a valid appeal and the cross objections too shall have
to be rejected. In Chanchalgauri Raman/al and Ors. v. Narendrakumar
Chandulal and Ors., AIR (1986) Gujarat 55, a Division Bench presided over C
by Hon 'ble the Chief Justice held that a cross objection filed in a validly
instituted appeal against a decree is as good as an appeal and shall have to
be disposed of on merits but if an appeal does not lie any cross objection in
such an appeal would not call for adjudication on merits. In Charity
Commissioner v. Padmavati and Ors., AIR (1956) Bombay 86, Chagla, CJ
_speaking for the Division Bench held that in a time-barred appeal where the D
delay was refused to be condoned the appeal itself was rendered not
maintainable and the cross objection would not survive for consideration. In
A.l.A. Alagappa Che/liar v. Chocka/ingam Chetty and Ors. (supra), Wallis,
C). opined that the right of respondent to proceed by way of memorandum
of objections is strictly incidental to the filing of the original appeal in time E
and it is open to a pal1y against whom a memorandum of objections has been
filed to set up the bar that the original appeal was filed out of time. We are
in respectful agreement with the view of the law taken by several High
Cou11s and noticed hereinabove. The cross objection is available to be heard
if the original appeal is available for hearing on merits. A view to the contrary
has been taken by a Division Bench of Allahabad High Court in Shankar Lal F
and Anr. v. Sarup Lal. and Anr., (1912) 34 ILR Allahabad 140, and Nanak
Bakhsh and Ors. v. Wazir Singh and Ors., (1909) 4 IC 625 (Punjab Chief
Cou11). Both the decisions are not suppol1ed by any convincing reasoning or
logic and to say the least do not lay down the correct law, in our opinion.

The original appeal filed by the respondents herein was found to be not
G
maintainable as not covered by any of the clauses (i) to (vi) of sub-Section
(1) of Section 39 of the Act. It was dismissed as incompetent. The question
of the memo of appeal filed in the High Court by the appellants herein being
treated as cross objection and being taken up for hearing on merits does not
arise. Independently treated as an origil'i~I appeal the same was held to be H
966 SUPREME COURT REPORTS f2003l I S.C.R.

A hopelessly barred by time as the delay was not explained satisfactorily. On
this aspect we are not persuaded to take a view different froril the one taken
by the High Court The appeal filed in the High court by the appellants herein
has been rightly held liable to be dismissed as time-barred and is not available
to be heard and decided as cross objection in view of the original appeal filed
B in the High Court by the respondents herein having failed as incompetent.

The appeal!> are dismissed. Costs easy.

N.J. Appeals dismissed.

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