Holding

A Letters Patent Appeal is not available against a Single Judge’s order condoning delay under Section 34(3); such orders are not appealable under Section 37 of the Arbitration and Conciliation Act, 1996.

Summary

The Union of India entered into a reconstruction contract with M/s. Simplex Infrastructures Ltd, which it later rescinded alleging delay. An arbitrator held the rescission illegal and awarded payment to the respondent. The Union filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award, and the Single Judge of the Calcutta High Court condoned a 131‑day delay in filing the petition. The respondent appealed this condonation order via an intra‑court Letters Patent Appeal under clause 15. The Division Bench set aside the Single Judge’s order, but the Supreme Court held that such an appeal is not permissible because Section 37 of the Act provides appeal only against orders setting aside or refusing to set aside an award, not against a condonation order. Consequently, the Letters Patent Appeal was dismissed and the matter was left open for challenge before the Supreme Court via a special leave petition. The Supreme Court set aside the Division Bench’s judgment and allowed the appeals.

Issues considered

Whether an intra‑court Letters Patent Appeal under clause 15 of the Calcutta High Court Letters Patent is maintainable against a Single Judge’s order condoning delay under Section 34(3) of the Arbitration and Conciliation Act, 1996.
Whether an order condoning delay in filing a Section 34 petition is appealable under Section 37 of the Act.

Legislation cited

Arbitration and Conciliation Act, 1996s. 16, s. 17, s. 34, s. 34(3), s. 37, s. 42, s. 9

Subjects

ArbitrationArbitral awardSection 34Section 37Letters Patent AppealCondonation of delaySelf‑contained codeJurisdictionAppealabilitySupreme Court

Judgment

[2017) 3 S.C.R. 544

A UNION OF INDIA
v.
MIS. SIMPLEX INFRASTRUCTURES LTD: ·
(Civil Appeal Nos. 4892-4893of2017)
B APRIL 13, 2017
[DIPAK MISRA AND A. M. KIIANWILKAR, JJ.]
Arbitration and Conciliation Act, 1996 - ss. 34, 3 7 -
Respondent entered into an agreement with appellant in resper;t of
c reconstruction project - According to appellant, rejpondent failed
to adhere to the time frame for completion of contract -
Consequently, appellant rescinded the contract - Then rejp01ideni
invoked arbitration clause, wherein the Arbitrator passed an mvard
holding that the rescindment order passed by the appellant was
illegal - Aggrieved appellant filed a petition for selling aside award
D u/s.34 before the district court, which held petition not maintainab/e-
Appellant then challenged the award before High Court along with
application for condonation of delay - Single Judge allowed the
_ application for condonation of delay - Aggrieved respondent
preferred intra court Letters Patent Appeal - Division bench reversed
the order of Single Judge by invoking its jurisdiction under Letters
E
Patent appeal - On appeal, held: There is no scope of remedy of
Letters Patent appeal in relation to judgment of the Single Judge -
No appeal is provided against an order passed by the court of
competent jurisdiction condoning the delay in filing the petition
u/s.34 - Whether Single Judge had rightly exercised the discretion
F or otherwise, could be assailed by the respondent before Supreme
Court by way of a special leave petition - But, not by way of Lellers
Patent Appeal u/Cl. 15 - Jurisdiction - Lellers Patent of High Court
at Calcutta - Cl.15.
Allowing the appeals, the Court
G HELD: 1. There is no scope to contend that the remedy of
Letters Patent Appeal was available in relation to judgment of
the Single Judge of the High Court in question. This legal position
has been restated in the recent decision of Supreme Court in the
case of Arun Dev Upadhyaya v/s. Integrated Sales Service Ltd.
H & Anr. [Para 10) [551-E]
544
UNION OF INDIA v. M/S. SIMPLEX INFRASTRUCTURES LTD. 545

2. In the instant case, the Division Bench of the High Court, A
made a fine distinction by holding that the judgment ofthe Single
Judge of condoning delay in filing of the petition under Section
34 of the Act was without jurisdiction and not in terms of the
provisions of the Act. It is not possible to countenance this
approach. The Division Bench was not right in observing that
8
the decision in Mis. Tanusree Art Printers & Anr. being of a
special bench of three-Judges of the same Court, was binding,
in spite of having noticed the decision of this Court in l<'uerst Day
Lawson Limited - which is directly on the point and was pressed
into service by the Appellant. Neither the Division Bench of the
High Court at Calcutta which dealt with the case of Modi Korea c
Teleco111munication Ltd. nor the three-Judges Bench which
decided the case of M/s. Tanusree Art Printers & Anr., had the
benefit of the judgment of this Court in l<'uerst Day Lawson
Limited, which is later in time. (Para 11) [551-J<'-H; 552-A)
'
3. On a bare reading of Section 37 of the Act, it is noticed D
that remedy of appeal has been provided only against an order of
setting aside or refusing to set a~ide an arbitral award under
Section 34(1) (c). No appeal is provided against an order passed
by the Court of competent jurisdiction condoning the delay in
filing the petition under Section 34 of the Act as such. The Division
Bench in the impugned Judgment, therefore, rightly noted that E
remedy of ap1>cal against the impugned order of the Single Judge
was not otherwise available under Section 37 of the Act. [Para
13) [552-G]
4. The issue is squarely answered against the Respondent
by the decision of Supre111e Court in J<'ucrst Day Lawson Limited. F
In that, the Judgment of the Single Judge was passed on an
application purported to be under Section 34(3) of the Act, for
condoning delay in filing of the petition for setting aside the arbitral
award. Hence, the remedy of Letters Patent Appeal against that
decision is unavailable. The question as to whether the Single G
Judge had rightly exercised the discretion or otherwise, could
be assailed by the Respondent before Supreme Court by way of
special leave petition. But, certainly not by way of a Letters Patent
Appeal under clause 15. [Para 14J[552-11; 553-A-B)

H
546 SUPREME COURT REPORTS [2017] 3 S.C.R.

A Fuerst Day Lawson Limited v. Jindal Exports Limited
(2011) 8 SCC 333 : [2011] 11 SCR 1 - relied on.
Modi Korea TelecommunicaNon Ltd. v. Appcon
Consultants Pvt. Ltd. (1999) 2 CUN 107; Mis. Tanusree
Art Printers & Anr. v. Rabindra Nath Pal (2000) 2 CHN
B 213; P.S. Sathappan v. Andhra Bank Ltd. (2004) 11 SCC
672 : [2004] 5 Suppl. SCR 188; Arun Dev Upadhyaya
v. Integrated Sales Service Ltd & Am'. (2016) 9 SCC
524 : [2016) 7 SCR 976 - referred to.
Case Law Reference
c ..
[2011] 11 SCR 1 relied on Para 6
(1999) 2 CUN 107 referred to Para6
(2000) 2 CIIN 213 referred to Para6
[2004] 5 Suppl. SCR 188 referred to Para 9
D
[2016] 7 SCR 976 referred to Para 10
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4892-
4893 of2017.
From the Judgment and Order dated 20.06.2016 of the High Court
E at Calcutta in GA No. 1650/2016 in APOTNo. 183/2016 in AP No. 224/
2016.
Ranj it Kumar, SG, Ritin Rai, Ms. Asha G Nair, Aabhas Kshetrapal,
Raj Bahadur, Mukesh Kumar Maroria, Advs. for the Appellant.
Jaideep Gupta, Sr. Adv., Abhijat P. Medh, Adv. for the Respondent.
F
The Judgment of the Court was delivered by
A. M. KIIANWILKAR, J. I The short question that arises for
consideration in this appeal is: whether an intra-Court Letters Patent
Appeal under clause 15 of the Letters Patent of High Court at Calcutta
G can be maintained against an order passed by the Single Judge on an
application for condonation of delay filed along with the petition (for
setting aside an Arbitration Award) under Section 34 of the Arbitration
and Conciliation Act, 1996 (hereinafter referred to as 'the Act')?
2. Briefly stated, the Respondent being the lowest bidder was
H allotted a contract by the Appellant in respect of work styled as
UNION OF INDIA v. MIS. SIMPLEX INFRASTRUCTURES LTD. 547
(A. M. KHANWlLKAR, J.]

"Construction ofTsunami Reconstruction Project in A& N Islands. SH: A
Construction of 821 units of permanent shelters (single stories) including
internal water supply sanitary installation & internal Electrification in the
Island of Teressa." The contract agreement was entered into between
the parties on S'h October, 2006. According to the Appellant, the
Respondent failed to adhere to the time frame for completion of the
B
contract. As a result, a show cause notice was issued to the Respondent
on 27th April, 2007 to show cause as to why the contract should not be.
rescinded by invoking clause 3 of the agreement. The Respondent
submitted its response thereto 'on 8th May, 2007. Despite the dismal
performance of the Respondent, the Appellant gave it one more
opportunity to improve on the performance vide a letter.d_ated 20'h June, c
2007. The Respondent, however, submitted its 12'h revised completion
plan dated I O'h October, 2007. Since the Respondent failed to adhere to
the extended time line and also miserably failed to maintain the quality
and progress of work, the Appellant served it with a second show cause
notice on 4'h January, 2008. The Respondent replied to the said show
D
cause notice on I" February 2008. However, the explanation offered by
the Respondent, in the perception of the Appellant, was found to be
unsatisfactory and baseless. Hence, the Appellant rescinded the.contract
vide letter No. 57( 12)/RE/TRP/Kamorata/07-08/638 dated 25th February,
2008.
E
, 3. The Respondent then invoked the arbitration clause in the
agreement, pursuant to which the competent authority appointed an
Arbitrator vide letter no. 23(6)/(1 )ADG(SR)/TRP/08-09/469 dated 27'h
August, 2008'. The arbitration hearing concluded on 271hMarch, 2014.
An Award was published vide letter No.ARB/RKM/TRP/Case 005/
2014-20 dated 271h October, 2014. The Appellant received a hard copy F
of the Award on 31" October, 2014, wherein the Arbitrator held that the
rescindment order passed by the Appellant was illegal as time was not
the essence of the contract and further directed the Appellant to pay the
final bill submitted by the Respondent. Aggrieved, the Appellant filed a
petition for setting aside the arbitral award before the District Court at
G
Port Blair being Appeal No. 2 of 2015. The Respondent, on the other
hand, filed an execution. proceedii1g in relation to the self same Award
before the High Cou1t at Calcutta being EC Case No. 734 of 2015. The.
Appellant then preferred an application in Appeal No.2 of201.5 before
the·])jstrict Court, for stay of the Award. The District Judge allowed the
said application. That fact was brought to the notice of the High Court at H
q'

548 . suPREME couRT REro~rs: · /" '
[2017) 3 S.C.R.

A Calcutta in execution proceedings initiated by the Respondent. The High
Court vi de order dated I S'h September, 2015, disposed of.the Execution
petition filed by the Respondent and gave liberty to the Respondent to
appear before the District Court and to resist the proceedings pending in
that court.
B · 4. The Respondent then filed objections in the proceedings before
the District Court. According to the Respondent, the appeal before the
District Court was not maintainable as the application under Section 9 of
the Arbitration Act with regard to the subject matter of the arbitration
proceedings was filed before the High Court at Calcutta. lt was then
contended that the District Court did not have territorial jurisdiction as
c per Section 42 of the Act and that the petition under Section 34 against
the subject award can proceed only before the High Court. The District
Court vide order dated I 2'h February, 2016 accepted that objection. It
held that the petition filed by the Appellant under Section 34 of the Act
was not maintainable on account of territorial jurisdiction.
D 5. The Appellant then challenged the Award by filing Arbitration
Petition No. 224of2016 before the High Court at Calcutta under Section
34 of the Act and prayed for setting aside the Arbitral Award. The
Appellant also filed an application being G.A. No: 958 of 2016 for
condoni11g delay, mentioning the circumstances in which the Appellant
E had to approach the High Court under Section 34 of the Act. The learned
Single Judge after hearing the parties allowed the said application for
condonation of delay, being satisfied that sufficient cause was made out
by the Appel Iant for condoning the delay of 13 I days. The said order
reads thus:

F "The Court: After considering the submissions made by the
learned advocate for the applicant/petitioner and upon
perusing the application for condonation of delay, it appears
that sufficient cause has been shown to explain the delay in
filing the application, bei11g AP No.224 of 2016 and as such
the delay is condoned. The application for co11do11ation of
G delay, being GA No.958 of 2016, is accordingly allowed."
6. Aggrieved by the aforementioned order dated 27'h April, 2016,
the Respondent preferred an intra court letters patent appeal being G.A:
No.1650of2016. This appeal was contested by the Appellant inter alia
on the ground that such letters patent appeal was not maintainable. The
H Division Bench adverted to the relevant decisions pressed into service
!·•'•

UNION OF INDIA v. MIS. SIMPLEX INFRASTRUCTURE;.S Ll,".0., y19.'
[A. M. KHANWILKAR, J.] .' "'

by both the sides including the decision of this Court in :Fuerst Day A
Lawson Limited v. Jindal Exports Limited.' It bas also noted that
the order under appeal is not appealable under Section 37 of the Act.
The Division Bench, however, relied on the judgment of the Division
Bench of the High Court at Calcutta in the case of Modi Korea
Telecommunication Ltd. V. Appcon Consultants Pvt. Ltd. 2 and of
B
the special Bench of three-Judges in Mis. Tanusree Art Printers &
Anr. V. Rabindra Nath Pal,3 to hold that the three-Judge Bench decision
of the High Court was directly on the point and was binding on it. It then
proceeded to· conclude that the order passed by the learned Single Judge,
sensu stricto was not falling within the provisions of the Act and was
without jurisdiction. On that logic the Division Bench reversed the order c
of the learned Single Judge by invoking its jurisdiction under Letters
Patent Appeal.
7. The Appellant contends that the Division Bench coinmitted
manifest error in entertaining the appeal disregarding the settled legal
position restated by this Comi in J.<'ucrst Day Lawson Limited (supra). D
It is submitted that the Act is a self contained code. It provides for a
remedy against the arbitral award, including for con donation of delay in
filing of the petition under Section 34 of the Act. The order passed by
the learned Single Judge on the subject application for condonation of
delay in filing petition under Section 34 was, therefore, in relation to the
arbitration proceedings. Even if the discretion or for that matter E
jurisdiction is misapplied and is not in accordance with law, that can be
no reason to hold that the order in such proceedings was not under the
provisions of the Act as such. It would nevertheless come within the
ambit of the Act. Fu1iher, such order has not been made appealable
under Section 37 of the Act as applicable at the relevant time. The F
correctness whereof could be assailed before the appropriate forum,
but not by way ofa Letters Patent Appeal under clause 15. The Appellant .
has stoutly relied on the dictum of this Cou1i in the case of Fuerst Day
Lawson Limited (supra) to buttress this contention.
8. The Respondent, on the other hand, has supported the view G
taken by the Division Bench in the impugned judgment being in conformity
with the dictum of the special bench of the High Court of three-Judges
1
(2011) s sec 333
2 (1999) 2 CHN 107
3
(2000) 2 CHN 213 H
550 SUPREME COURT REPORTS [2017] 3 S.C.R.

A in the case ofM/s. TanusreeArt Printers & Anr.(supra). It is submitted
that as the order passed by the learned Single Judge is not in terms of
the provisions of the Act and thus without jurisdiction, the exercise of
powers under clause 15 of the letters patent appeal was just and proper.
.It was submitted that Section 34 of the Act gives no jurisdiction to the
court to condone delay in filing of the petition for setting aside the award,
B
beyond the period prescribed in sub-Section (3) thereof. After expiry of
.the prescribed period, it is submitted that even though it may be a case
of gross hardship caused to the Appellant because of the ill advised
remedy pursued before the District Court and virtually being rendered
remediless, that is the inevitable consequence of the mandate of Section
c 34 of the Act. Further, the explanation offered by the Appel !ant in the
application for condo nation of delay cannot be reckoned as a sufficient
cause in law. Thus, the learned Single Judge committed manifest error
in entertaining the same to show indulgence to the Appellant by condoning
the delay of 131 days in filing of the petition under Section 34 of the Act.
D 9. After hearing the counsel for the parties and going through the
decisions relied upon by both sides, we have no hesitation in allowing
this appeal. The efficacy of the provisions of the Act has been expounded
by this Court in the case of Fuerst Day Lawson Limited (supra).
After analyzing the relevant provisions and the decisions on the subject
and in particular the decision in P.S. Sathappan v. Andhra Bank Ltd.\
E it has been held that the Act is a self contained Code relating to arbitration.
In paragraphs 88 and 89 of the reported judgment, this Court opined:
"88. Mahindra Supply Co. 3 was last referred in a
'Constitution Bench decision of this Court in P.S.
Sathappan 16, and the way the Constitution Bench
.. 'F understood and interpreted Mahindra Supply Co. J
would be clear from the following para 10 of the
iudl{ment: (P.S. Sathappan case 16, SCC pp. 689-90)
"10. ... The provisions in the Letters Patent providing
for appeal, insofar as they related to orders passed in
G arbitration proceedings, were held to be subject to the
provisions of Sections 39(1) and (2) of the Arbitration
Act, as the same is a self-conlained code relating to
arbitration. "

H ' (2004J 11 sec 672
UNION OF INDIA v. MIS. SIMPLEX INFRASTRUCTURES LTD. 551
[A. M. KHANWILKAR, J.]

89. It is, Lhus, lo be seen that Arbitration Act, 1940, A
from its inception and right through to 2004 (in PS.
Sathappan) ·was held to be a se(fcontained code. Now,
if the Arbitration Act, 1940 was held to be a self-
contained code, on mallers perlaining lo arbitration,
the Arbitration and Conciliation Act; 1996, which
B
consolidates, amends and designs the law relating to
arbitration bring it, as 111uch as possible, in harmony
with the UNCITRAL Model must be held only to be 111ore
so. Once it is held that the Arbitration Act is a self-
contained code and exhaustive, then it 111ust also be held,
_using the lucid expression of Tulzapurkar, J., that it c
carries with it "a negative import that only such acts as
are mentioned in the Act are permissible to be done and
acts or things not 111enlioned therein are not permissible
to be done''. In other words, a letters patent appeal
would be excluded by the application of one of the
D
general principles that where the special Act sets out a
self-contained code the applicability of the general law
procedure would be impliedly excluded."
10. After this decision, there is no scope to contend that the remedy
of Letters Patent Appeal was available in relation to judgment of the
learned Single Judge in question. This legal position has been restated in E
the recent decision of this Court (to which one of us was party, Justice
Dipak Misra), in the case of Arnn Dev Upadhyaya V/s. Integrated
Sales Service Ltd & Anr.~
11. The Division Bench of the High Court, however, made a fine
distinction by holding that the judgment of the learned Single Judge of F
condoning delay in filing of the petition under Section 34 of the Act was
without jurisdiction and not in terms of the provisions oftheAct. It is not
possible to countenance this approach. The Division Bench, in our opinion,
was not right in observing that the decision in Mis. Tanusree Art
Printers & Anr. (supra) being of a special bench of three-Judges of G
the same Court, was binding, in spite of having noticed the decision of
this Court in J<'uerst Day Lawson Limited (supra)- which is directly
on the point and was pressed into service by the Appellant. Neither the
Division Bench of the High Court at Calcutta which dealt with the case
' (2016) 9 sec 524 H
552 . SUPkEME COURT REPORTS [2017] 3 S.C.R.

I /.. ,, 't',-'».'
A of Modi Korea Telecommunication Ltd. (supra) nor the three-Judges
Bench which decided the case of Mis. Tanusree Art Printer.s &
Anr.(supra), had the benefit of the judgment of this Court in Fuerst
Day Lawson Limited (~upra), whic.h is later in time. ·
12. The Act as applicable to the present case, provides for a remedy
B of appeal in terms of Section 37 of the Act. The same reads thus:-
"J 7. Appealable orders. - (I) An appeal shall lie from the
following orders (and from no others) to the Court authorized
by law to hear appeals from original decrees of the Court
passinR th_e order, namely:-
C, , [(fl) Refusing to refer the parties to arbitration under section
8;
(b) granting or refusing to grant any measure under section
9;
(c) setting aside or refusing to set aside an arbitral mvard
D
under section 34.]
(2) An appeal shall also lie to a Court from an order of the
arbitral tribunal-
(a) accepting the plea referred to in sub-section (2) or sub-
£ section (3) of section 16; or
'(b) granting or refusing to grant an interim measure under
section 17.
(3) No second appeal shall lie from an order passed in appeal
under this section, but nothing in this section shall affect or
F take away any right to appeal to the Supreme Court."
13. On a bare reading of this provision, it is noticed that remedy
of appeal has been provided only against an order of setting aside or
refusing to set aside an arbitral award under Section 34( I )(c ). No appeal
is provided against an order passed by the Court of competent jurisdiction
G condoning the delay in filing the petition under Section 34 of the Act as
such. The Division Bench in the impugned Judgment, therefore, rightly
noted that remedy of appeal against the impugned order of the learned
Single Judge was not otherwise available under Section 37 of the Act.
14. In our opinion, the issue is squarely answered against the
H Respondent by the decision of this Cou11 in ~Fuerst Day Lawson Limited

<:} ----
UNION OF INDIA v, M/S. SIMPLEX INFRASTRUCTURES LTD. 553.
[A. M: KHANWILKAR, J.] I ,
\ 'r,
.,,,
"
. . .· l '
(supra). In that, the Judgment of the learned Single Judge dated 27 1h A
April, 2016, was passed on an application purported to be under Section 'l,·

34(3) ofthe'Act;for cqPidoning delay in filing of the petition for setting
aside the arbitral award. Hence, the remedy of Letters Patent Appeal
against that decision is wmvailable. The question as to whether the learned
Single Judge had rightly exercised the discretion or otherwise, could be
B
assailed by the Respondent before this Court by way of special leave
petition. But, certainly not by way of ll Letters Patent Appeal under
clause 15. Fot, ev~n ifthe learned Single Judge may have committed
manifest error or wrongly decided the application for condonation of
delay, that judgment is ascribable to exercise ofjurisdiction under Section
34(3) of the Act. In other words, whether the prayer for condo nation of c
delay can be ac~epted or whether the application deserves to be rejected, .
is a matter well within the jurisdiction of that court.
15. The learned counsel for the Respondent was at pains to
persuade us that the decision of the learned Single Judge is palpably
wrong and cannot be sustained in law. However, we cannot permit the D
Respondent to agitate that plea in the present appeal preferred by the
Appellant challenging the impugned decision ofthe Division Bench.
lnstead, we deem it appropriate to leave all contentions available to both
sides open and give :liberty to the Respondent to challenge the jutlg~ent
of the learned Single Judge dated 27rh April, 2016 in G.A.No.958 of
E
2016, if so advised.
16. Accordingly, the impugned judgment of the Division Bench of
the High Court at Calcutta dated 20'h June, 2016 passed in G.A.No.1650
of 2016 in APOT No;. 183/2016 in A.P. Ho. 224/2016 is set aside with
... liberty to'the Respondent to challenge the judginent of the learned Single
Judge dated.27 1hApril, 2016 in G.A. No. 958of2016 in AP No.: 224 of F
2016. All contentions available to both sides with regard to the correctness
ofthe"Judgment of the Learned Single Judge dated 27'h April, 2016, are
kept open.
17. While parting, we may take note of the order dated 7rh
November, 2016 passed by this CoUii directing the Appellant to deposit . G
Rs. 5,00,00,000/-(Rupees Five Crores) in the Registry of this Court and
further to invest the same in a short term fixed deposit. We are informed
that the Appellant has complied with the said order and deposited the
amount in the Registry. That has been invested by the Registry. The
said amount along with interest accrued thereon be transferred to an H
554 SUPREME COURT REPORTS (2017) 3 S.C.R.

A escrow account linked to the proceedings pending before the High Court
at Calcutta beingA.P. No.224 of2016. The High Court will be free to
pass appropriate directions regarding disbursement or investment of the
said amount.
18. The appeals are allowed in the above terms with no order as
B to costs.

Ankit Gyan Appeals allowed.