SNEHADEEP STRUCTURES PRIVATE LIMITEDversusMAHARASHTRA SMALL SCALE INDUSTRIES DEVELOPMENT CORPORATION LTD.

                         [2009) 1 S.C.R. 76


A        SNEHADEEP STRUCTURES PRIVATE LIMITED
                              v.
          MAHARASHTRA SMALL SCALE INDUSTRIES
             DEVELOPMENT CORPORATION LTD.
                (Civil Appeal No. 10 of 2010)
B                        JANUARY 5, 2010
      [TARUN CHATTERJEE AND V.S. SIRPURKAR, JJ.]

       Interest on Delayed Payment to Small Scale and
C Ancillary Undertakings Act, 1993 - s. 7 - Expression 'appeal'
  under - Scope of - Held: Word 'appeal' u/s 7 includes an
  application uls 34 of Arbitration Act in view of language of s. 7,
  object of legislation and contextual meaning of the term
  'appeal' - Arbitration and Conciliation Act, 1996 - s.34 -
D Interpretation of Statutes.

      Interpretation of Statutes - In case of doubt about
  meaning of a word in a statute, the interpretation which
  harmonizes the object and purpose of the statute should be
E adopted.
        Words and Phrases - 'Appeal' - Meaning of, in the
    context of s. 7 of Interest on Delayed payment to Small Scale
    and Ancillary Undertakings Act, 1993.

F      The question for consideration before this Court was
  whether the expression 'appeal' occurring uls. 7 of
  Interest on Delayed Payments to Small Scale and
  Ancillary Undertakings Act, 1993, whether would include
  an application uls. 34 of the Arbitration and Conciliation
G Act, 1996.

        Partly allowing the appeal, the Court

      HELD: 1. "Appeal" is a term that carries a wide range
  of connotations with it and that appellate jurisdiction can
H                             76
   SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA    77
      SMALL SCALE INDUS. DEVELOPMENT CORPN. LTD. ·

be exercised in a variety of forms. It is not necessary that A
the exercise of appellate jurisdiction will always involve
re-agitation of entire matrix of facts and law. It is not
correct to say that appeal shall mean only a challenge to
a decree or order where the entire matrix of law and fact
can be re-agitated with respect to the impugned order/ B
decree. [Para 32] [95-G-H; 96-A-C]

    Nagendra Nath v. Suresh Chandra AIR 1932 PC 165;
Raja Kulkarni v. State of Bombay AIR 1954 SCR 384; Mela
Ram v. CIT AIR 1956 SC 367; S.R.Abhayankar v. K.D. Bapat
(1969) 2 SCC 74; Tirupati Balaji v. State of Bihar (2004) 5 C
sec 1, relied on.
     Gramophone Company of India vs. Birendra Bahadur
Pandey and Ors. (1984) 2 SCC 534; Central Bank of India
v. State of Kera/a 2009 (3) SCR 735; Santa Singh v. State D
of Punjab (1976) 4 SCC 190; State of Gujarat v. Salimbhai
Abudul Gaffar Shaikh and Ors. (2003) 8 SCC 50; Promotho
Nath Roy v. WA. Lee AIR 1921 Cal 415, referred to.

     2.1. Keeping in mind the language of Section 7, E
object of the legislation and the contextual meaning of
the term appeal, the term "appeal" appearing in Section
7 ?f the Interest Act should include an application u/s 34
as well. [Para 58] [108-8-C]

     State of Kera/a v. MK. Krishnan Nair 1978 1 SCC 552,   F
referred to.

    2.2. Section 34 envisages only limited grounds of
challenge to an award; however, that alone will not take
out an application u/s 34 outside the ambit of an appeal G
especially when even a power of revision is treated as
an exercise of appellate jurisdiction. [Para 32] [96-C-D)

   2.3. So far as interest on delayed payment to Small
Scale Industries as well as connected matters are
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    78      SUPREME COURT REPORTS                (2010] 1 S.C.R.


A concerned, the Act is a special legislation with respect to
  any other legislation, including the Arbitration Act.
  Therefore, it is not correct to say that the matter of interest
  payment will be governed by Section 37(1) of the
  Arbitration Act. Section 4 of the Interest Act endorses the
8 same which sets out the liability of the buyer to pay
  interest to the supplier 'notwithstanding anything
  contained in any agreement between the buyer and the
  supplier or in any law for the time being in force.' Thus,
  Interest Act is a special legislation as far as the liability
C to pay interest, or to make a deposit thereof, while
  challenging an award/decree/order granting interest.
  [Para 34) (96-H; 97-A-C]

        Jay Engineering Works v. Industry Facilitation Council
    and Anr. 2006 (8) sec 677, referred to.
D
       2.4. Section 6(1) of Interest Act empowers the buyer
  to obtain the due payment by way of any proceedings.
  Thus the proceedings that the buyer can resort to, no
  doubt, includes arbitration as well. As opposed to
E Section 6(2), Section 6(1) does not state that in case the
  parties choose to resort to arbitration, the proceedings
  in pursuance thereof will be governed by Arbitration Act.
  Hence, the right context in which the meaning of the term
  'appeal' should be interpreted is the Interest Act itself. The
F meaning of this term under Arbitration Act or CPC would
  have been relevant if the Interest Act had made a
  reference to them. Therefore, it is not relevant to say that
  the Arbitration Act deals with applications and appeals in
  two different chapters. [Para 36) [97 -E-G]

G        Morgan Securities and Credit Pvt. Ltd. v. Modi Rubber
    Ltd. AIR 2007 SC 683, relied on

         Hanskumar Keshavchand v. Union of India AIR 1958 SC
    947, referred to.
H
     SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA   79
        SMALL SCALE INDUS. DEVELOPMENT CORPN. LTD.

     2.5. The word 'appeal' appearing in Section 7 of A
Interest Act need not be necessarily interpreted within the
meaning of that word in CPC. It is not correct to hold that
the expression "appeal" shall be construed solely in the
context of a decree or order wtfen the Section clearly
makes reference to 'Awards' as well. The plea of the B
Corporation, that the word 'award' appearing in Sectio11
7 relates to those that result from a reference made under
Maharashtra Cooperative Societies Act to the Industry
Facilitation Council, is not acceptable. The provisions for
such reference, which is to be governed by Arbitration       c
Act, were incorporated in 1998 by way of an amendment
in the Interest Act. However, Section 7 contained the
word 'award' even before such reference mechanism
was incorporated. Therefore, it is difficult to see why
'award' in Section 7 should not include an arbitral award
                                                            0
other than the one arising from reference made to the
Industries Facilitation Council. [Paras 40 and 41] [99-C-
G]
     2.6. If the word 'appeal' is not construed as including
an application under section 34 of Arbitration Act, it would E
render the term 'award' redundant and the requirement
of pre-deposit, a total nullity with respect to all cases
where a Small Scale Industry undertaking preferred
arbitral proceedings, prior to the incorporation of the
reference procedure in 1998. Arbitration necessarily has F
to result in an award. The only way of challenging an
award in a court, in accordance with Section 5 r/w the
opening clause of Section 34 is filing an application under
the latter Section. If such challenge is not construed as
an 'appeal', the requirement of pre-deposit of interest G
before the buyer challenging an award passed against
him, becomes a total nullity. The fact that an order passed
on such application/challenge u/s 34 is appealable u/s 37
is of no consequence. [Para 42] [99-H; 100-A-C]
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    80      SUPREME COURT REPORTS                [2010) 1 S.C.R.


A        Sri Paravathi Parameshwara Cables, K.M. Va/asa
    represented by its Managing Partner, K. Surapu Naidu and
    Ors. vs. A.P. Transmission Corpn. Ltd. represented by
    Chairman and Managing Director and Anr. 2006 (5) ALT 647,
    disapproved.
B
          2.7. In almost all definitions of 'appeal', there is
    reference to removal of a cause from an inferior Court to
    a superior Court. It is also trite that an arbitrator deriving
    his authority from a private agreement does not fit into
    the ordinary hierarchy of courts. However, an appeal
C   need not necessarily lie from an inferior Court to a
    superior Court, especially within the meaning of Section
    7, for the following reasons: (1) Section 7 itself uses the
    term 'before a Court or other Authority'. Hence, the inter
    se relation between an arbitrator and court is not relevant
D   for the purpose of interpreting Section 7. If an appeal can
    lie only from an inferior court to a superior Court, the
    words 'other authority' in Section 7 will be rendered
    redundant. The terminology of the Section indicates that
    it is intended to cover a wide range of judicial/non-judicial
E   determinations and challenges instituted therefrom
    before courts or any other authority empowered to
    entertain such challenge. (2) Section 37(2) provides for
    appeals from arbitral tribunals. Thus it is not impossible
    to have appeals lying from arbitral tribunals to courts. (3)
F   Though practically unknown in India, there are two tier
    arbitration mechanisms known to other jurisdictions.
    These contemplate appeal from an arbitral award to yet
    another appellate arbitral tribunal. The arbitrator and the
    appellate arbitral tribunal do not constitute inferior and
G   superior Courts, but a challenge instituted against the
    award passed by the former before the latter is treated
    as an 'appeal' nonetheless. (4) There are other
    legislations in which the term 'appeal' is used when
    courts are not in the context of reference. [Para 46) [92-
H   A-HJ
   SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA         81
      SMALL SCALE INDUS. DEVELOPMENT CORPN. LTD.·

     Virgo Conductors Pvt. Ltd. represented by its M8naging       A
Director v. A.P. Transmission Corporation represented by its
Chairman and Managing Director and Anr. AIR 2008 AP 123,
held inapplicable.

   Promotho Nath Roy v. W.A. Lee AIR 1921 Cal 415;                B
Sanshin Chemicals Industry v. Oriental Carbons and
Chemicals Ltd. and Ors. (2001) 3 SCC 341, referred to.

     2.8. An application may sometimes be treated as
appeal. It is not correct to say that if an application uls.
34 is treated as an appeal, an appeal uls 37 from the order       c
disposing of such an application, then will be a second
appeal, which is prohibited uls 37(3) of the Arbitration Act.
A second appeal is prohibited from an order that is
passed u/s 37. This bar operates with respect to the
period post such appeal, and not prior to it. The Section         D
prohibits a second appeal only from an order passed in
appeal under that very Section. An award may be
challenged by an application u/s 34, which may be treated
as an appeal for the purposes of Interest Act, and an
order can be made either setting aside/remitting/ or              E
affirming the said award. Only when from that order an
appeal is filed uls 37, the bar of second appeal u/s 37
applies which is clearly evinced by the use of the words:
"from an order passed in appeal under this Section."
[Paras 51 and 52] [104-E-H; 105-A-B]                              F
     Mis. Pandey & Co. Builders Pvt. Ltd. v. State of Bihar and
Anr. (2007) 1 sec 467, relied on.

    'The Law and Practice of Arbitration and Conciliation' by
O.P. Malhotra and lndu Malhotra, page 1270, referred to.          G

    2.9. When there is doubt about the meaning of a
word appearing in legislation, the interpretation that
harmonizes the object and purpose of the statute should
                                                                      .~




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    82      SUPREME COURT REPORTS               [2010] 1 S.C.R.

A be adopted, rather than the one which renders the
  legislation a futility. The interest Act is a beneficial piece
  of legislation intended to expedite timely payment of
  money owed to Small Scale Industries. Most of the
  contracts of supply or sale that Small Scale Industries
B enter into, contain arbitration clauses. These arbitration
  proceedings result in an 'award'. If the term 'appeal' is
  interpreted in the limited context of a 'decree or order'
  and as excluding an application to set aside or remit such
  awards, the very purpose behind the enactment of
c Interest Act will be defeated. [Para 56] [107-C-E]
       Supdt. and Remembrancer of Legal Affairs to Govt. of
    West Bengal v. Abani Maity (1979) 4 sec 85, relied on.

         Nokes v. Doncaster Collieries All ER 1940 HL 549,
D referred to

       2.10. Section 19 of 2006 Act, no doubt, requires the
  deposit to be made before an application u/s 34 of the
  Arbitration Act is filed. However, this provision of a
E subsequent legislation cannot be read into the provision
  in question. While the appellant-company urged that the
  Legislature had used the terms 'appeal' and 'application'
  interchangeably, the same cannot be inferred
  conclusively. Use of the term 'application' in Section 19
F appears to be in the context of the dispute resolution
  mechanism provided for uls 17 which essentially
  comprises of conciliation and arbitration, to be governed
  by Arbitration Act, 1996. The legislature has intended to
  bring about improvements to the Interest Act as stated
  in the Statement of Objects and Reasons of the Act of
G 2006. Indeed, it might have contemplated a change in the
  legal position while enacting the Act of 2006, but that
  change cannot be applied retrospectively. A subsequent
  enactment cannot be read into an Act which was
  repealed by the former. [Para 55] (106-F-H; 107-A-B]
H
  SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA    83
     SMALL SCALE INDUS. DEVELOPMENT CORPN. LTD.

                     Case Law Reference:                   A
    (1984) 2 sec 534        Referred to.        Para 21
    2009 (3) SCR 735        Referred to.        Para 21
    (1976) 4 sec 190        Referred to.        Para 21
                                                           B
    (2003) 8 s~c 50         Referred to.        Para 23
    AIR 1932 PC 165         Relied on           Para 24
    AIR 1954 SCR 384        Relied on.          Para 25
                                                           c
    CIT AIR 1956 SC 367     Relied on.          Para 26
    AIR 1921 Cal 415        Referred to.        Para 27
    (1969) 2 sec 74         Relied on.          Para 28
    (2004) 5 sec 1          Relied on.          Para 29    D

    (2006) 8 sec 677        Referred to.        Para 33
    AIR 2007 SC 683         Relied on.          Para 37
    AIR 1958 SC 947         Referred to.        Para 39    E
    (2006) 5 ALT 647        disapproved. ·      Para 43
    AIR 2008 AP 123         held inapplicable   Para 48
    (2001) 3 sec 341        referred to.        Para 50
                                                           F
    (2007) 1 sec 467        relied on.          Para 52
    All ER 1940 HL 549      relied on.          Para 55
    (1979) 4 sec B5         relied on.          Para 56
                                                           G
    1978 1 sec 552          referred to.        Para 57

     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10
of 2010.

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    84       SUPREME COURT REPORTS                  [2010] 1 S.C.R.


A       From the Judgment & Order dated 5.2.2008 of the High
    Court of Judicature at Bombay in Appeal No. 485 of 2006.

        Vinod Bobde, Shyam Mudaliar, Arjun V. Bobde,
    Hrishikesh Baruah, Arjun Singh Bawa, Balvir Dosanjh, Jagjit
    Singh Chhabra for the Appellant.
8
        S.K. Dholakia, M.P. Rao, AK. Mishra, Abhay Chandrakant
    Mahimkar for the Respondent

         The Judgment of the Court was delivered by
c        TARUN CHATTERJEE, J. 1. i..eave granted.

        2. This appeal by Special Leave arises from a judgment
  and order dated 5th of February, 2008 of the High Court of
  Bombay in Appeal No. 485 of 2006 whereby the Division
D Bench of the High Court had set aside the order dated 25th of
  January, 2006 of the learned Single Judge of the same High
  Court dismissing an Arbitration Petition being Arbitration
  Petition No.499/2003 filed by the respondents.

E         3. The crucial question that arises for our consideration is
    with respect to the interpretation of the term 'appeal' appearing
    in Section 7 of the Interest on Delayed Payments to Small Scale
    and Ancillary Undertakings Act, 1993 (hereinafter referred to
    as 'the Interest Act').
F        4. The facts of the case can be summarised as follows:

       The appellant company is a Small Scale Industrial
  Undertaking for the purposes of the Interest Act. The
  Maharashtra State Electricity Board (in short 'MSES') issued
G a Work Order dated 27th of March, 1995 in favour of
  Maharashtra Small Scale Industries Development Corporation
  (hereinafter referred to as 'the Corporation'). The order was for
  supply of pipeline, bends and fixtures to be used for laying a
  slurry pipeline at the Chandarpur Thermal Power Station. The
H Corporation, in their turn, issued a Supply Order dated 30th of
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL       85
SCALE INDUS. DEVELOPMENTCORPN. LTD. [TARUN CHATIERJEE, J.]

March, 1995 in favour of the appellant-company. The work was A
completed and the bills were duly submitted by the appellant-
company. However, there was a huge delay on the part of the
Corporation in paying the said bills to the appellant company
and no reasonable cause was shown. Resultantly, the appellant
company demanded interest on delayed payment under the B
Interest Act by a letter dated 7th of December, 1999. The claim
was allegedly denied by the Corporation by a letter dated 24th
of April, 2000. On 21st of December, 2001, the appellant-
company served a notice on the Corporation pointing out that
the refusal of the Corporation to pay interest as demanded by C
the appellant company has given rise to a dispute which shall
be referred to the Chairman of the Corporation/his nominee in
accordance with clause 27 of the Supply Order, within 15 days
from the date of service of notice. Though the Corporation
acknowledged the delay and claim for interest vide a letter
dated 05th of February, 2002,.it held the view that the liability D
to pay the interest lay on MSEB, which was the buyer, and not
on the Corporation. Therefore, the letter stated that reference
to arbitration at that stage was not warranted. Aggrieved by the
refusal of the respondent to refer the matter to arbitration, the
appellant-company preferred an Arbitration Application under E
Section 11 of the Arbitration and Conciliation Act, 1996 (for
short the 'Arbitration Act') before the High Court of Bombay.
The High Court appointed a former Judge of the High Court
Mr. Justice S.W. Puranik as the Sole Arbitrator. The Arbitrator
by his Award dated 30th of June, 2003 directed the F
Corporation to pay a sum of Rs.78, 19,540.73 to the Appellant
company.
        '
     5. Aggrieved, the Corporation filed an application under
section 34 of the Arbitration Act before the High Court of         G
Bombay for setting aside the award which came to be
numbered as Arbitration Petition No. 499 of 2003. During the
pendency of these proceedings the Appellant company pointed
out that under section 7 of the Interest Act the Corporation has
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    86       SUPREME COURT REPORTS                 [2010] 1 S.C.R.


A to deposit 75 % of the amount awarded by Arbitrator under the
  Award.

        6. The Learned Single Judge of the High Court, vide his
  order dated 23rd of August, 2005 dismissed the application
  filed under Section 34 of the Arbitration Act for setting aside
8 the award of the Arbitrator. It was found that despite the
  statement ma® on behalf of the Corporation that a Bank
  Guarantee would be furnished to comply with Section 7 of the
  Interest Act recorded on 9th of August, 2005, they had not done
  so; nor have they asked for any extension of time. Hence, it was
C held that the petition under Section 34 of the Arbitration Act was
  liable to be dismissed.

          7. On appeal preferred against the said order by the
    Corporation, which came to be registered as Appeal No. 855
o   of 2005, the Division Bench of the High Court, by its order
    dated 17th of November, 2005 had set aside the judgment and
    order of the learned Single Judge and restored the Arbitration
    Petition for consideration of the issue whether Section 7 of the
    Interest Act was applicable in the instant case.
E      8. The Learned Single Judge vide his judgment and Order
  dated 25th of January, 2006 held that an application made
  under Section 34 of the Arbitration Act is an 'appeal' for the
  purpose of Section 7 of the Interest Act. The learned Single
  Judge had taken into consideration the fact that the Interest Act
F was a beneficial piece of legislation. Since the term 'appeal'
  takes colour from its context, it must be given the widest
  meaning for the purposes of the case at hand. A learned Single
  Judge relied on a decision of this Court in the case of State of
  Gujarat v. Salimbhai Abdul Gaffar Shaikh, [(2003) 8 SCC 50)
G to understand the meaning of the word 'appeal' and held that
  the word 'appeal for the purposes of Section 7 of the Interest
  Act shall include an application filed under Section 34 of the
  Arbitration Act. The prerequisite to an appeal in form of deposit,
  hence, was held applicable. Admittedly, no deposit was made.
H Therefore, it was held that the application for setting aside the
  SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL 87
  SCALE INDUS. DEVELOPMENT CORPN. LTD. [TARUN CHATTERJEE, J.]

 award under Section 34 of the Arbitration Act could not be A
 entertained. The Learned Single Judge also found that the
 conditions in the Supply Order dated 30th of March, 1995
 established the buyer-supplier relationship between the
 Corporation and the Appellant company and hence the liability
 to pay interest also lay on the Corporation.                  8

         9. The Corporation preferred an appeal before the Division
, Bench of High Court of Bombay, which came to be numbered
   as Appeal No. 485 of 2006. The Division Bench of the High
   Court by the impugned order dated 5th of February, 2008 C
   allowed the appeal and directed that the Arbitration Petition
   filed by the Corporation shall be heard. The High Court was of
  the opinion that the expression 'appeal' in Section 7 of the
   Interest Act cannot include an application under Section 34 of
  the Arbitration Act. The term 'appeal' is in the context of a
  decree and can only include 'a judicial determination by a D
  Regular Civil Court considering the hierarchy of Courts'. After
  considering the general scheme of awards and.appeals under ... ~,
  the Arbitration Act, 1940 and under the Arbitration Act, 1996,
  the Division Bench of the High Court was of the view that an
  order passed under Section. 34 of the Arbitration Act is an order E
  setting aside or refusing to set aside an arbitral award.
  Therefore, the decision of the competent court under Section
  34 is neither a judgment nor a decree. The order so passed is
  appealable under Section 37(1)(b) of ttie Arbitration Act.
  Remedy by way of appeal, therefore, is provided under the F
  Arbitration Act itself. The Arbitration Act, therefore, in respect
  of an arbitral award makes a distinction between a challenge
  to an award and an appeal against an order refusing to set
  aside or setting aside an award in a Petition filed under section
  34(2) of the Arbitration Act. Under the Arbitration Act, in case, G
  the award is not set aside under Sectio~ 34, an appeal can be
  preferred against that order under Section 37. The provisions
  of Section 7 may apply to such an app~~i. Uncier section 34,
  the Court hearing the challenge ha~ no power to issue
  alternative decisions binding on ttie for4m
                                         •,  \
                                                below.
                                                ·'                   H
    88      SUPREME COURT REPORTS                  [2010] 1 S.C.R.


A      10. The High Court further held that Section 19 of the Micro
  Small and Medium Enterprises Development Act, 2006 (in short
  'the Act of 2006') cannot be made applicable to the present
  case as the reference to arbitration was not in terms of Section
  19 of the Act of 2006. At the time when the challenge of pre
B deposit under section 7 of the Interest Act was heard by the
  learned Single Judge of the High Court, the Act of 2006 was
  not in force.

       11. The Division Bench of the High Court after considering
C various decisions cited by both the parties before us and some
  of the dictionaries dealing with the term 'appeal', held:

         "Applying these principles, in our opinion and considering
         the history of the Act and the Legislation which were in
         force when the Interest Act was enacted, it would be clear
D        that the application to challenge the award under Section
         34 apart from it not being a judicial proceedings or
         emanating from the court, cannot be considered as an
         appeal within the meaning of Section 7 of the Act."

E         12. As regards the question, whether the respondents
    were buyers, and not suppliers, the High Court was of the
    opinion that the said issue would have to be decided when the
    challenge to the award under Section 34 will be heard and
    finally disposed of. In sum, the High Court allowed the appeal
    and ordered that the pending petition to challenge the award
F   be disposed of according to law, as the preliminary objection
    in terms of the requirement of pre-deposit of interest awarded
    was ruled out.

        13. It is this order of the High Court dated 5th of February,
G 2008 which is challenged before us by way of this special leave
  petition which on grant of leave was ·heard by us in presence
  of the learned Counsel for the parties.

         14. The only question that arises for our consideration is:

H Whether the expression 'appeal' used in Section 7 of the
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL 89
SCALE INDUS. DEVELOPMENT CORPN. LTD. [TARUN CHATTERJEE, J.]

Interest Act includes an application to set aside the arbitral       A
award filed under Section 34 of the Arbitration Act, 1996 ?

     It may be pertinent to reproduce Section 7 of the Interest
Act, before we proceed to interpret the word 'appeal'.

     Section 7 of the Interest Act reads as under:                   8·

     "Appeal- No appeal against any decree, award or other
     order shall be entertained by any court .or other authority
     unless the appellant company (not being a supplier) has
     deposited with it seventy-five per cent of the amount in        C
     terms of the decree, award or, as the case may be, other
     order in the manner directed by such court, or, as the case
     may be, such authority."

     15. The learned counsel for the app.ellant company
                                                                     D
strenuously, contended before us that the term 'appeal' in the
                                                                    "-'
aforementioned section shall include an application under
section 34 of the Arbitration Act and hence deposit of 75 % of
the amount awarded was a pre requisite for entertaining the
application filed by the respondent corporation to set aside the
award passed by the learned arbitrator.                              E

      16. The learned counsel for the corporation hotly contested
this submission and argued that an "appeal" within the meaning
of section 7 of the Interest Act cannot include an application
filed under section 34 of the Arbitration Act and hence the           F
corporation was not liable to deposit 75 % of the amount
awarded by the learned arbitrator for entertaining the
application filed under section 34 of the Arbitration Act.

      17. According to the learned counsel for the appellant         G
company, no term can have a definite meaning independent
of its context. The exercise of appellate jurisdiction can take
various forms. There is no reason to read 'appeal' in a narrow
sense as being an appeal under Section 96 of the Code of Civil
Procedure (in short 'the Code') against a decree or against an
order under Section 4 of the Code. The learned counsel further       H
    90       SUPREME COURT REPORTS                   [2010] 1 S.C.R.


A argued that the word 'award' in Section 7 cannot be ignored,
  nor can it be rendered meaningless and hence an "appeal"
  within the meaning of the said section could lie from an arbitral
  award as well.

         18. The respondents, on the other hand, submit that when
8
    a statutory provision is clear and unambiguous, the Court is not
    empowered to read anything extraneous to the Statute into it.
    The words of the Statute shall be given effect to, irrespective
    of the consequences.

C        19. The contention of the appellant company that while.
  interpreting a statutory provision, its context and the object
  behind the same cannot be lost view of, is no doubt, correct.
  At the same time, the contention of the respondents that when
  a term appearing in the Statute is clear and unambiguous, only
D the literal rule of interpretation will apply, must also be accepted.
  What then has to be seen is whether the term 'appeal' is one
  of clear and definite meaning. If it is so, that meaning shall be
  given effect to irrespective of the consequences of such
  construction. If, on the other hand, the meaning of the 'appeal'
E is ambiguous, the interpretation that advances the object and
  purpose of the legislation, shall be accepted.

       20. Before we proceed to consider the true meaning of the
  word 'appeal', we may note the contention of the learned
F counsel for the appellant company that no expression can have
  a meaning independent of its context. The Appellant company
  relied on a number of decisions in support of the proposition
  that: ''A word is not a crystal, transparent and unchanged; it is
  the skin of a Jiving thought and may vary greatly in color and
  content according to the circumstances and the time in which
G it is used."

       21. In Gramophone Company of India vs. Birendra
    Bahadur Pandey & Ors. [(1984) 2 SCC 534], while interpreting
  the term 'import', this Court observed that the dictionary was
H not helpful where word of common parlance with varied
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL           91
SCALE INDUS. DEVELOPMENT CORPN. LTD. [TARUN CHATTERJEE, J.J

meanings is to be construed and it was held that such word             A
shall be construed in the context in which it appears. Similarly
in Central Bank of India v. State of Kera/a, (in Civil Appeal
no. 95 of 2005, decided on 27th of February, 2009) while
interpreting the term 'debt' and 'security interest', this Court has
followed the principle as mentioned herein above. Similar view         B
was also expressed in Santa Singh v. State of Punjab, (1976)
4 sec 190 while dealing with the ambit of the expression 'shall
hear' appearing in Section 235 of the Code of Criminal
Procedure.

     22. At this stage, we may now deal with the decisions cited       C
by the le_arned counsel for the appellant in which the meaning
of the word 'appeal' was an issue.

     23. The case of State of Gujarat v. Salimbhai Abudul
 Gaffar Shaikh and others, [(2003) 8 SCC 50] on which the D
Single Judge of the High Court relied on while delivering his
judgment, which was set aside by the Division bench of the
High Court by the impugned order, had categorically held that
the term 'appeal' cannot have a universal meaning fitting all
contexts and purposes.                       ·                E

      24. In the case of Nagendra Nath v. Suresh, [AIR 1932
PC 165], their Lordships of the Privy Council were concerned
with the construction of Article 182 Schedule 1 of the Limitation
Act, 1908. The time of limitation under this provision would run
from the date of the final decree or order of the appellate Court,     F
if there was an appeal. However, in an application purported
to be an appeal filed by one Madan Mohan, only the decree
holders, not the judgment debtors, were made parties. Further,
it was incorrectly stated that no decree was drawn up and the
'appeal' was purported to be from the 'order' of the Court             G
below. It was contended that the application was not 'an
appeal', but a merely abortive attempt to mean 'appeal' as not
all necessary parties were made a party to it, and also because
it did not imperil the whole decree. The Court held that: "any
application by a party to an appellate Court, asking it to set         H
    92      SUPREME COURT REPORTS                  [2010] 1 S.C.R.


A aside or revise a decision of a subordinate court, is an "appeal"
  within the ordinary acceptation of the term, and that it is no less
  appeal because it is irregular or incompetent." Their Lordships,
  in that case, adopted the literal meaning of the term 'appeal'
  and held that it was not open for them to read into the Statute
B any qualification as to the character of the appeal or as to the
  parties to it.

       25. In the case of Raja Kulkarni v. State of Bombay, [AIR
  1954 SCR 384], a similar question was raised in the context
  of Industrial Tribunals (Appellate Tribunal) Act, 1950 which
C prohibited a workman from going on a strike during the
  pendency of an appeal. Relying on the decision of Nagendra
  Nath (supra), this Court held that it was not necessary that such
  pending appeal should be a valid and competent appeal. This
  Court, however, unlike the Privy Council, looked into the object
D of the Act i.e. industrial peace should not be disturbed so long
  as the matter was pending in the Court of appeal, irrespective
  of the fact whether such an appeal was competent in law.

       26. The case of Mela Ram v. CIT, [Al R 1956 SC 367] was
E also relied on as it was pertinent to the issue. In this case, it
  was held that an appeal presented out of time is an appeal,
  and an order dismissing it, as time barred is one passed in
  appeal.

         27. In the case of Promotho Nath Roy v. WA. Lee (AIR
F 1921 Cal 415), an order dismissing an application as barred
    by limitation after rejecting an application under Section 5 of
    the Limitation Act to excuse the delay in presentation was held
    to be one 'passed on appeal' within the meaning of Section
    109 of the Code.
G
       28. The learned senior counsel for the appellant-company
  further argued that an appeal may not necessarily always lead
  to the review of the impugned judgment on questions of fact
  and law. It may be an application for possible reversal of the
H impugned order or award on the ground of illegality or improper
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL        93
SCALE INDUS. DEVELOPMENT CORPN. LTD. [TARUN CHATIERJEE, J.]

proceedings. Hence, an application under section 34 of the A
Arbitration Act which empowers the Court to set aside the
arbitral award on limited grounds enumerated therein, can also
be an appeal. In the case of S.R.Abhayankar v. K.D. Bapat,
[(1969) 2 SCC 74], the question was whether the High Court
could interfere under Articles 226 and 227 of the Constitution B
with the order of the Appellate Court in proceedings under an
Act, when a petition for revision under Section 115 of the Code
against the same order had been previously dismissed by a
learned Single Judge of the High Court. The following
paragraphs from the judgment are apposite to the issue. c
(Paragraphs 5 & 6)

     "5. It would appear that their lordships of the Privy Council
     regarded the revisional jurisdiction to be a part and parcel
     of the appellate jurisdiction of the High Court. This is what
     was said in Nagendra Nath. Dey v. Suresh Chandra Dey            D
     59 l.A.283

    There is no definition of appeal in the CPC, but their
    Lordships have no doubt that any application by a party
    to an Appellate Court, asking it to set aside or revise a        E
    decision of a subordinate Court, is an appeal within the
    ordinary acceptation of the term ....

    Similarly in Raja of Ramnad v. Kamid Rowthen and Ors.
    53 l.A.74 a civil revision petition was considered to be an F
    appropriate form of appeal from the judgment in a suit of.
    small causes nature. A full bench of the Madras High Court
    in P.P.P. Chidambara Nadar v. C.P.A. Rama Nadar and
    Ors. A.l.R.1937 Mad. 385 had to decide whether with
    reference to Article 182(2) of the Limitation Act, 1908 the
    term "appeal" was used in a restrictive sense so as to G
    exclude revision petitions and the expression "appellate
    court" was to be confined to a court exercising appellate,
    as opposed to, revisional powers. After an exhaustive
    examination of the case law including the decisions of the
    Privy Council mentioned above the full bench expressed H
    94       SUPREME COURT REPORTS                     [2010] 1 S.C.R.


A         the view that Article 182(2) applied to civil revisions as well
          and not only to appeals in the narrow sense of that term
          as used in the Civil Procedure Code ... [right of appeal]
          was one of entering a superior Court and invoking its aid
          and interposition to redress the error of the court below.
B         Two things which were required to constitute appellate
          jurisdiction were the existence of the relation of superior
          and inferior Court and the power on the part of the former
          to review decisions of the latter. In the well known work of
          Story on Constitution (of United States) vol. 2, Article 1761,
c         it is stated that the essential criterion of appellate
         jurisdiction is that it revises and corrects the proceedings
          in a cause already instituted and does not create that
          cause. The appellate jurisdiction may be exercised in a
         variety of forms and, indeed, in any form in which the
         legislature may choose to prescribe. According to Article
D
          1762 the most usual modes of exercising appellate
         jurisdiction, at least those which are most known in the
         United States, are by a writ of error, or by an appeal, or
         by some process of removal of a suit from an inferior
         tribunal. An appeal is a process of civil law origin and
E        removes a cause, entirely subjecting the fact as well as the
         law, to a review and a retrial. A writ of error is a process
         of common law origin, and it removes nothing for re-
         examination but the law. The former mode is usually
         adopted in cases of equity and admiralty jurisdiction; the
F        latter, in suits at common law tried by a jury.

         6. Now when the aid of the High Court is invoked on the
         revisional side it is done because it is a superior court and
         it can interfere for the purpose of rectifying the error of the
G        court below. Section 115 of the CPC circumscribes the
         limits of that jurisdiction but the jurisdiction which is being
         exercised is a part of the general appellate jurisdiction of
         the High Court as a superior court. It is only one of thA
         modes of exercising power conferred by the Statute;
H        basically and fundamentally it is the appellate jurisdiction
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL        95
SCALE INDUS. DEVELOPMENT CORPN. LTD. [TARUN CHATIERJEE, J.]

     of the High Court which is being invoked and exercised in      A
     a wider and larger sense. We do not, therefore, consider
     that the principle of merger of orders of inferior Courts in
     those of superior Courts would be affected or would
     become inapplicable by making a distinction between a
     petition for revision and an appeal".                          B

     29. The decision in the case of Tirupati Balaji v. State of
Bihar, [(2004) 5 sec 1] may also be taken note of:

      "Appeal implies in its natural and ordinary meaning the
     removal of a cause from any inferior Court or tribunal to C
     a superior one for the purpose of testing the soundness
     of decision and proceedings of the inferior court or
     tribunal. The superior forum shall have jurisdiction to
     reverse, confirm, annul or modify the decree or order of
     the forum appealed against and in the event of a remand D
     the lower forum shall have to rehear the matter and
     comply with such directions as may accompany the order
     of remand."

     30. The High Court had considered this decision while          E
delivering the impugned judgment and order.

      31. It is the contention of the learned counsel for the
respondent- corporation, on the other hand, that Section 7 is
applicable only when an appeal is filed from a decree or order,
under which the entire matrix of facts and law could be re-         F
agitated. Section 34(2) of the Arbitration Act enumerates the
limited grounds of challenge under Section 34 and such a
challenge is not an "appeal".

     32. On a perusal of the plethora of decisions                  G
aforementioned, we are of the view that "appeal" is a term that
carries a wide range of connotations with it and that appellate
jurisdiction can be exercised in a variety of forms. It is not
necessary that the exercise of appellate jurisdiction will always
involve re-agitation of entire matrix of facts and law. We have     H
    96      SUPREME COURT REPORTS                 [2010] 1 S.C.R.


A already seen in the case of Abhayankar (supra) that even an
  order passed by virtue of limited power of revision under
  Section 115 of the Code is treated as an exercise of appellate
  jurisdiction, though under that provision, the Court cannot go
  into the questions of facts. Given the weight of authorities in
B favour of giving such a wide meaning to the term 'appeal', we
  are constrained to disagree with the contention of the learned
  counsel for the respondent-corporation that appeal shall mean
  only a challenge to a decree or order where the entire matrix
  of law and fact can be re-agitated with respect to the impugned
C order/decree. There is no quarrel that Section 34 envisages only
  limited grounds of challenge to an award; however, we see no
  reason why that alone should take out an application under
  section 34 outside the ambit of an appeal especially when even
  a power of revision is treated as an exercise of appellate
  jurisdiction by this Court and the Privy Council.
0
        33. According to the learned counsel for the respondent-
  Corporation, Arbitration Act treats 'appeals' and 'applications'
  separately under two distinct chapters: Chapter VI II and
  Chapter IX respectively. It was also strenuously contended by
E the learned counsel for the respondent that the Arbitration Act
  contains specific provisions for awarding interest and that Act
  being a special enactment will prevail over the Interest Act. He
  relied on the case of Jay Engineering Works v. Industry
  Facilitation Council & Anr., [2006 (8) SCC 677] to show that
F against the provisions of Interest Act, the provisions of
  Arbitration Act will prevail, as the latter is a complete code in
  itself. The Interest Act will apply only when the party prefers a
  suit to arbitration.

G        34. The preamble of Interest Act shows that the very
    objective of the Act was "to provide for and regulate the
    payment of interest on delayed payments to small scale and
    ancillary industrial undertakings and for matters connected
    therewith or incidental thereto." Thus, as far as interest on
    delayed payment to Small Scale Industries as well as
H
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL          97
SCALE INDUS. DEVELOPMENT CORPN. LTD. [TARUN CHATTERJEE, J.)


connected matters are concerned, the Act is a special                 A
legislation with respect to any other legislation, including the
Arbitration Act. The contention of the respondent that the matter
of interest payment will be governed by Section 31 (7) of the
Arbitration Act, hence, is erroneous. Section 4 of the Interest
Act endorses the same which sets out the liability of the buyer       B
to pay interest to the supplier 'notwithstanding anything
contained in any agreement between the buyer and the supplier
or in any law for the time being in force.' Thus, Interest Act is a
special legislation as far as the liability to pay interest, or to
make a deposit thereof, while challenging an award/decree/            c
order granting interest.

     35. Section 6(1) empowers the supplier to whom paymerit
is due, to recover the same by way of a suit or any other
proceedings. Section 6(2), which was inserted by way of an
amendment in 1998, states that any dispute can be resolved            D
by reference to the Industries Facilitation Council who shall
conduct arbitration or conciliation proceedings in accordance
with the Arbitration Act.

      36. It may be noted that section 6 (1) empowers the buyer       E
to obtain the due payment by way of any proceedings. Thus
the proceedings that the buyer can resort to, no doubt, includes
arbitration as well. It is pertinent to note that as opposed to
section 6(2), Section 6( 1) does not state that in case the parties
choose to resort to arbitration, the proceedings in pursuance         F
thereof will be governed by Arbitration Act. Hence, the right
context in which the meaning of the term 'appeal' should be
interpreted is the Interest Act itself. The meaning of this term
under Arbitration Act or Code of Civil Procedure would have
been relevant if the Interest Act had made a reference to them.       G
For this very reason, we also do not find it relevant that the
Arbitration Act deals with applications and appeals in two
different chapters. We are concerned with the meaning of the
term 'appeal' in the Interest Act, and not in the Arbitration Act.
The learned counsel for the respondent-corporation invited our        H
    98      SUPREME COURT REPORTS                 (2010] 1 S.C.R.


A attention to Rule 803 B and Rule 876 of the High Court of
  Bombay Rules to show the differences in procedures for filing
  and dealing with applications, on one hand and appeals, on the
  other hand. The difference in procedures with respect to
  application and appeal under the Bombay High Court rules is
B only indicative of the procedural aspect of the matter, that too
  with limited application for matters pending before that Court.

         ~7. The learned counsel for the respondent-corporation·
  relied on the decision of Morgan Securities and Credit Pvt. Ltd.
C v. Modi Rubber Ltd., [AIR 2007 SC 683] which held that: "The
  1996 Act is a complete Code by itself. It lays down the
  machinery for making an arbitral award enforceable. In terms
  of ·Section 36 of the 1996 Act, an award becomes enforceable
  as if it were a decree; where the time for making the application
  for setting it aside under Section 34 has expired, or such
D application having been made, has been refused."

        38. However, it can be seen that this case offers support,
  if any, to the case of appellant company. The question involved
  was whether the provisions of the Arbitration Act would prevail
E over the provisions of the Sick Industrial Companies (Special
  Provisions) Act, 1985 (for short, 'SICA'). It was held that when
  there is a conflict between the Arbitration Act and the SICA,
  latter which have been made to seek to achieve a higher goal
  would be applicable despite non-obstante clause contained in
F Section 5 of the Arbitration Act.

       39. The learned Counsel for the respondent-corporation
  relied on the decision of Hanskumar Keshavchand v. Union
  of India, [AIR 1958 SC 947]. In that case, a preliminary
  objection was taken to the maintainability of Civil Appeal on the
G ground that the judgment of the High Court passed in appeal
  under Section 19(1)(f) of the Defence of India Act, 1939 was
  an award and not a judgment, decree or order within the
  meaning of sections 109 and 110 of the Code of Civil
  Procedure, and that accordingly the appeal before the Court
H was incompetent. Thus, the question was whether an order
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL        99
SCALE INDUS. DEVELOPMENT CORPN. LTD. [TARUN CHATTERJEE, J.]

made in an appeal under Section 19 (1)(f) of Defence of India       A
Act, 1939 will be a judgment, decree, or order to the effect that
it is possible to file an appeal from such order under the appeal
provisions of Code. The Court held that when the Court acts in
the capacity of an arbitrator, as it does under the Section in
question, the verdict rendered by it will not be a judgment,        B
decree or order and hence an appeal will be incompetent under
the provisions of Code.

     40. The High Court, while delivering the impugned
judgment had taken this decision into consideration. While we       C
are in respectful agreement with the decision, we have already
stated that the word 'appeal' appearing in Section 7 of Interest
Act need not be necessarily interpreted within the meaning of
that word in CPC.

     41. In its impugned judgment, the Division Bench of the        D
High Court had held that if one considers the expression
"appeal" in the context of the expression decree, it can only be
a judicial determination by a Regular Civil Court considering
the hierarchy of courts. We fail to understand why the
expression "appeal" shall be construed solely in the context of     E
a decree or order when the Section clearly makes reference
to 'Awards' as well. According to the Respondents, the word
'award' appearing in Section 7 relates to those that result from
a reference made under Maharashtra Cooperative Societies
Act to the Industry Facilitation Council. The provisions for such   F
reference, which is to be governed by Arbitration Act, were
incorporated in 1998 by way of an amendment in the Interest
Act. However, section 7 contained the word 'award' even before
such reference mechanism was incorporated in the Interest Act
by way of the Amendment Act, 1998. Therefore, it is difficult to    G
see why 'award' in section 7 should not include an arbitral
award other than the one arising from reference made to the
Industries Facilitation Council.

     42. Further, if the word 'appeal' is not construed as
including an application under section 34 of Arbitration Act, we    H
    100      SUPREME COURT REPORTS                    [2010] 1 S.C.R.


A are afraid that it would render the term 'award' redundant and
   the requirement of pre-deposit a total nullity with respect to all
   cases where a Small Scale Industry undertaking preferred
   arbitral proceedings, prior to the incorporation of the reference
   procedure in 1998. Arbitration necessarily has to result in an
B award. The only way of challenging an award in a Court, in
   accordance with section 5 read with the opening clause of
   section 34 is filing an application under the latter section. If such
  challenge is not construed as an 'appeal', the requirement of
   pre-deposit of interest before the buyer challenging an award
c passed against him, becomes a total nullity. The fact that an
  order passed on such application/challenge under section 34
   is appealable under section 37 is of no consequence. As the
   learned counsel for the appellant company rightly argued, such
  appeal is filed against an order passed by the Court under
  section 34, not against an award passed against the buyer and
0
  in favour of the Small Scale Industry undertaking. In all cases
  where the Small Scale Industry undertaking enters into
  arbitration proceedings to obtain payment of interest, if we limit
  the requirement of pre-deposit to appeal under Section 37,
  therefore, we will be rendering the term 'award' a nullity, which
E we are not empowered to do. The requirement of pre-deposit
  of interest is introduced as a disincentive to prevent dilatory
  tactics employed by the buyers against whom the Small Scale
  Industry might have procured an award, just as in cases of a
  decree or order. Presumably, the legislative intent behind
F section 7 was to target buyers, who, only with the end of pushing
  off the ultimate event of payment to the small scale industry
  undertaking, institute challenges against the award/decree/
  order passed against them. Such buyers cannot be allowed to
  challenge arbitral awards indiscriminately, especially when the
G section requires pre-deposit of 75 % interest even when appeal
  is preferred against an award, as distinguished from an order
  or decree.

          43. In Sri Paravathi Parameshwara Cables, K.M. Va/asa,
H represented by its Managing Partner, K. Surapu Naidu and
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL 101
SCALE INDUS. DEVELOPMENT CORPN. LTD. [fARUN CHATIERJEE, J.]

Ors. vs A.P. Transmission Corpn. Ltd. represented by A
Chairman and Managing Director and Anr., [2006 (5) ALT
647), a case decided by the High Court of Andhra Pradesh the
identical question of law was raised. The Court held, relying on
the definition of 'appeal' laid down in the case of Nagendra
Nath Dey v. Suresh Chandra Dey (supra), that :                   B

    "If we apply the tests whether an application under Section
    34 of the Arbitration Act would amount to an appeal or not,
    one would come to the conclusion that it cannot be termed
    as an appeal. Whereas, the appeal is heard on questions
    of fact as well as on questions of law, ·an application for C
    setting aside the order of award under Section 34 of the
    Arbitration Act can be heard on limited grounds, which are
    mentioned in Section 34 of the Arbitration Act. As a matter
    of fact, generally speaking, the questions of fact decided
    by an arbitrator cannot be gone into by the Court while D
    hearing an application for setting aside an arbitral award.
    Secondly, where there is an appeal provided, it lies to a
    higher Court from the decision of a lower Court, the
    application under Section 34 of the Arbitration Act lies to
    a Court against an award passed by an arbitrator and E
    arbitrator cannot be termed as a Court inferior to the Court
    of appeal."

     44. According to the High Court of Andhra Pradesh, thus
"when the Court refuses to set aside an arbitral award under F
Section 34 of the Arbitration Act and an appeal is filed before
an appellate Court, Section 7 of the 1993 Act would operate
and not at the stage when an application under Section 34 of
the Arbitration Act has been moved.

     45. We have already stated that the term 'appeal' does not G
always indicate a process where all questions of fact and law
can be re-agitated. We have already seen that various Courts
have held even a revision petition to be an 'appeal', keeping
in mind the object of the legislation.
                                                                H
    102         SUPREME COURT REPORTS                 [2010] 1 S.C.R.


A      46. It is true that in almost all definitions of 'appeal', there
  is reference to removal of a cause from an inferior Court to a
  superior Court. It is also trite that an arbitrator deriving his
  authority from a private agreement does not fit into the ordinary
  hierarchy of Courts. In our opinion, howev;;r, an appeal need
B not necessarily lie from an inferior Court to a superior Court,
  especially within the meaning of Section 7, for the following
  reasons:

          (1)     Section 7 itself uses the term 'before a Court or
                  other Authority'. Hence, the inter se relation
c                 between an Arbitrator and Court is not relevant for
                  the purpose of interpreting S. 7. If an appeal can
                  lie only from an inferior court to a superior Court,
                  the words 'other authority' in S. 7 will be rendered
                  redundant. The terminology of the section indicates
D                 that it is intended to cover a wide range of judicial/
                 ·non-judicial determinations and challenges
                  instituted therefrom before Courts or any other
                  authority empowered to entertain such challenge.

E         (2)    Section 37 (2) provides for appeals from arbitral
                 tribunals. Thus it is not impossible to have appeals
                 lying from arbitral tribunals to Courts.

          (3)    Though practically unknown in India, there are two
                 tier arbitration mechanisms known to other
F                jurisdictions. These contemplate appeal from an
                 arbitral award to yet another appellate arbitral
                 tribunal. The arbitrator and the appellate arbitral
                 tribunal do not constitute inferior and superior
                 Courts, but a challenge instituted against the award
G                passed by the former before the latter is treated as
                 an 'appeal' nonetheless.

          (4)    There are other legislations in which the term
                 'appeal' is used when Courts are not in the context
H                of reference. For instance, under the Right to
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL 103
SCALE INDUS. DEVELOPMENT CORPN. LTD. [TARUN CHATTERJEE, J.)

            Information Act, 2005 an appeal lies from the order     A
            of the Central/State public information officer to a
            senior official of higher rank. These officials, no
            doubt, can not be called Courts.                ·

    47. For these reasons, we are not in a position to agree
                                                                    8
with reasoning or conclusion of the High Court of Andhra
Pradesh in the decision aforementioned.

     48. In the case of Virgo Conductors Pvt. Ltd. represented
by its Managing Director v. A.P. Transmission Corporation
represented by its Chairman And Managing Director and Anr.,         C
[AIR 2008 AP 123], a case decided by the same High Court
on 20 December, 2007, it was held:

    "Section 7 contemplates filing of only 'appeal' against any
    decree, award or other order, but not any other proceeding 0
    like original petition. Section 7 casts a liability only on the
    'appellant company' to deposit 3/4th of the amount
    awarded while filing the appeal. There is no prohibition
    contained in Section 7 of the Old Act with regard to filing
    of an original petition challenging the ?Ward under the E
    provisions of the Arbitration Act without deposit of 3/4th
    of the awarded amount. On the other hand, filing of such
    original petition without deposit of any portion of the
    awarded amount is permissible under the provisions of
    the of Sub-section (2) of Section 6 of the Old Act. The
    earlier batch Arbitration Act, which provisions are made F
    applicable by virtue of petitions filed by the Appellant
    company seeking a direction to the first respondent for
    deposit of the 75% of the awarded amount were
    accordingly dismissed by the learned Additional Chief
    Judge and the same was confirmed by this Court also G
    while dismissing the civil revision petitions filed in that
    regard."

     This case does not, however, give any cogent reason for
holding that the old Act did not require deposit of any interest.   H
    104      SUPREME COURT REPORTS                  [2010] 1 S.C.R.


A        49. An application may sometimes be treated as appeal.
    As noted earlier, in the case of Promotho Nath Ray (supra) a
    decision passed on an application to condone the delay was
    held to be one passed on appeal.

       50. The Law Commission, in its 176th Report on
8
  "Amendments to the Arbitration Act, 1996" has repeatedly
  referred to the need of providing appeals from certain orders
  of the Arbitrator under section 34. Further, this Court in the case
  of Sanshin Chemicals Industry v. Oriental Carbons and
  Chemicals Ltd. and Ors. [(2001) 3 SCC 341] had also made
C several references to 'an appeal' under section 34. The English
  Arbitration Act, 1996 provides that when the parties had
  excluded the 'right to appeal' (by way of what is known as an
  'exclusion agreement') the right to file certain applications to
  invoke the Court's indulgence in the matter is also taken away.
D Hence, it is not difficult to see that ordinarily, an application
  under section 34 is referred to as an appeal.

        51. The learned counsel for the Corporation contends that
  if an application u.nder S. 34 is treated as an appeal, an appeal
E under S. 37 from the order disposing of such an application,
  then will be a second appeal, which is prohibited under Section
  37(3) of the Arbitration Act.

          Section 37 (3) of the Arbitration Act reads:

F         "No second appeal shall lie from an order passed in
          appeal under this section, but nothing in this section shall
          affect or take away any right to appeal to the Supreme
          Court".

G      52. A second appeal is prohibited from an order that is
  passed under S. 37. This bar operates with respect to the
  period post such appeal, and not prior to it. The Section
  prohibits a second appeal only from an order passed in appeal
  under that very section. An award may be challenged by an
H application under section 34, which may be treated as an
SNEHADEEP STRUCTURES PRIVATE
                         'I
                             LTD. v. MAHARASHTRA SMALL 105
SCALE INDUS. DEVELOPMENTCORPN. LTD. [TARUN CHATTERJEE, J.]

appeal for the purposes of Interest Act, and an order can be          A
made either setting aside/remitting/ or affirming the said award.
Only when from that order when an appeal is filed under section
37, the bar of second appeal under section 37 applies which
is clearly evinced by the use of the words: 'from an order
passed in appeal under this section." Further, this Court, in the     B
case of M/S. Pandey & Co. Builders Pvt. Ltd v. State Of Bihar
& Anr, (2007)1 SCC 467 held that the bar under Section 37
(3) is inserted only by way of abundant caution since in view of
Section 5 read with Section 37 (1) and 37(2), a second appeal
would not have been possible at any rate. The Court quoted            c
from The Law and Practice of Arbitration and Conciliation by
O.P. Malhotra and lndu Malhotra, page 1270:

    "... Section 5 imposes a blanket ban on judicial intervention
    of any type in the arbitral process except 'where so
    provided under Part I' of this Act. Pursuant to this provision,   D
    Section 37(1) provides appeals against certain orders of
    the court, while Section 37(2) provides appeal against
    certain orders of the arbitral tribunal. However, Section
    37(3) prohibits ~ second appeal against the appellate
    order under Section 37(1) and (2). However, in view of the        E
    provisions of Section 5, a second appeal against the
    appellate order under Section 37(1) and (2) would not be
    permissible, even if Section 37(3) had not been enacted.
    It was, therefore, not really necessary to enact this
    provision, and it seems to have been enacted by way of            F
    abundant caution."

     53. This decision elaborates on the true scope of Section
37. Hence, we are afraid we will have to disagree with the
learned counsel for the respondent in this respect.
                                                                      G
     54. The learned counsel for the appellant c0mpany further
relied on the Act of 2006' which has repealed the Interest Act. '1
Section 19 of this Act uses the term 'application' against award, )
decree or order while providing for a reasonable deposit/
Therefore, the learned counsel for the appellant company H
    106       SUPREME COURT REPORTS                  [201 OJ 1 S.C.R.

A argued that the Legislature uses the terms 'appeal' and
  'application' interchangeably. In response, the learned counsel
  for the respondent-corporation argued that the provisions of the
  2006 Act cannot be used for the purpose of interpreting the
  Arbitration Act.
8
          Section 19 of the Act of 2006 reads as follows:

          "No application for setting aside any decree, award or
          other order made either by the Council itself or by any
          institution or centre providing alternate dispute resolution
c         services to which a reference is made by the Council, shall
          be entertained by any court unless the appellant company
          (not being a supplier) has deposited with it seventy-five
          per cent of the amount in terms of the decree, award or,
          as the case may be, the other order in the manner directed
D         by such court:

          Provided that pending disposal of the application to set
          aside the decree, award or order, the court shall order that
          such percentage of the amount deposited shall be paid to
          the supplier, as it considers reasonable under the
E
          circumstances of the case subject to such conditions as it
          deems necessary to impose."

       55. This provision, no doubt, requires the deposit to be
  made before an application under Section 34 of the Arbitration
F Act is filed. However, we are not inclined to read this provision
  of a subsequent legislation into the provision in question. While
  the learned counsel for the appellant company urged that the
  Legislature had used the terms 'appeal' and 'application'
  interchangeably, we are of the view that we cannot conclusively
G infer the same. Use of the term 'application' appears to be in
  the context of lhe dispute resolution mechanism provided for
  under Section 17 which essentially comprises of conciliation
  and arbitration, to be governed by Arbitration Act, 1996. The
  legislature has intended to bring about improvements to the
H Interest Act as stated in the Statement of Objects and Reasons
SNEHADEEP STRUCTURES PRIVATE LTD. v. MAHARASHTRA SMALL 107
SCALE INDUS. DEVELOPMENT CORPN. LTD. [TARUN CHATTERJEE, J.]

of the Act of 2006. Indeed, it might have contemplated a change      A
in the legal position while enacting the Act of 2006, but we
cannot make that change apply retrospectively. In this respect,
we agree with the reasoning of the High Court and with the
contentions of learned counsel for the respondents as we
cannot read the provision of a subsequent enactment into an          8
Act which was repealed by the former.

       56. The learned counsel for the appellant company further
contended that when there is doubt about the meaning of a
word appearing in legislation, the interpretation that harmonizes
the object and purpose of the object of the Statute should be C
adopted, rather than the one which renders the legislation a
futility. (See Nokes v. Doncaster Collieries, All ER 1940 HL
549, Supdt. and Remembrancer of Legal Affairs to Govt. of
West Bengal v. Abani Maity, (1979) 4 SCC 85). The interest
Act is a beneficial piece of legislation intended to expedite D
timely payment of money owed to Small Scale Industries. Most
of the contracts of supply or sale that Small Scale Industries
enter into contain arbitration clauses. These arbitration
proceedings result in an 'award'. If the term 'appeal' is
interpreted in the limited context of a 'decree or order' and as E
excluding an application to set aside or remit such awards, the
very purpose behind the enactment of Interest Act will be
defeated. We are in agreement with the learned counsel for the
appellant company in this respect.
                                                                     F
     57. According to the learned counsel for the appellant
company, if the term 'appeal' is restricted to challenges
launched against a decree or an order, it will effectively lead
to discrimination between Small Scale Industries who have an
award in their favour, and the ones which have procured either
a decree or an order in their favour, submitted that if there is a   G
construction that leads to the constitutionality of the provision
in question, that should be adopted even if straining of
language is necessary, relying on the case of State of Kera/a
v. M.K. Krishnan Nair, 1978 1 SCC 552. In the light of our
                                                                     H
    108      SUPREME COURT REPORTS                 [2010] 1 S.C.R.


A views expressed hereinabove, we do not need to delve into the
  question whether section 7 will lead to an unreasonable
  classification if pre-deposit of interest is not required before an
  award is challenged under section 34 of the Arbitration Act.

       58. Keeping in mind the language of Section 7, object of
8 the legislation and the contextual meaning of the term appeal,
  we are, therefore, of the view that the term "appeal" appearing
  in Section 7 of the Interest Act should include an application
  under Section 34 as well. The judgment and order of the High
  Court shall, therefore, stand set aside and the appeal is allowed
C to the extent indicated above. The respondent-corporation shall
  make a deposit of 75 % of the amount awarded by the learned
  Arbitrator by his award dated 30th of June, 2003 in Court where
  the application for setting aside the award is now pending
  decision. Such deposit shall be made within three months from
D this date. In the event, such deposit is made the court shall
  decide the application for setting aside the award filed under
  Section 34 of the Arbitration Act as expeditiously as possible
  preferably within six months from the date of deposit to the
  Corporation.
E
       59. The appeal is thus allowed to the extent indicated
  above. There will be no order as to costs.

        60. In view of the above judgment, the application for
    impleadment becomes infructuous and is dismissed as such.
F
    K.K.T.                                  Appeal partly allowed.