Arindam Chaudhuri v. Zest Systems Pvt Ltd & Anr

8) We had doubts about the correctness of the view taken in D & H India Ltd. (Supra). We felt that the said view went against the very purpose for which the Commercial Courts Act was enacted i.e. to provide for speedy disposal of high value commercial disputes, as is evident from the Statement of Objections and Reasons for the said Act. The effect of judgment in D & H India Ltd. (Supra) was that all orders passed by the Commercial Courts, or the Commercial Division of the High Court, would be appealable when, before the enactment of the Commercial Courts Act, only such orders were appealable, which were either specifically made appealable, such as, under Section 104, or within Order XLIII CPC, or qualified as “judgments” within the meaning of that expression, as explained by the Supreme Court in Shah Babulal Khimji V. Jayaben D. Kania & Another, AIR 1981 SC 1786. Thus, the right to prefer an appeal – if D & H India Ltd. (Supra) were to be accepted as the correct view, stood expanded by Section 13 of the Commercial Court Act, when compared to the right of appeal available prior to its enactment. We were of the prima facie view that this would go contrary to the purpose and object of the Commercial Courts Act, as creation of a right of appeal against all and sundry orders passed in Original Commercial Causes would impede the progress of the causes. Every appeal at the interlocutory stage of the proceedings acts as a speed breaker in the progress of the cause. Moreover, if the proviso to Section 13(1A) were to be read as not limiting or qualifying the right of appeal contained in Section 13(1) and the first part of Section 13(1A), then there was no need to enact the proviso. The view taken in D & H India Ltd. (Supra) rendered the proviso to Section 13(1A) a surplusage – which is not to be presumed in respect of any part of a legislation. Thirdly, the view taken by the Division Bench in D & H India Ltd. (Supra) neither took into account Section 13(2), nor the interpretation adopted by the Division Bench could be reconciled with the clear plain meaning of Section 13(2). A party aggrieved by an order passed at the interlocutory stage of the proceedings is not entirely remediless, in as much, as, Section 105 CPC entitles the party aggrieved by any such interlocutory order, to assail the same which appealing against the decree by raising a ground in the Memorandum of Appeal. Moreover, the option to assail the interlocutory order before the Supreme Court, by preferring a Special Leave Petition, is also available. Since we were finding it difficult to persuade ourselves to accept the view expressed in D & H India Ltd. (Supra), we decided to hear the submissions of learned counsels, and directed them to place on record copies of the judgements that they wish to rely upon.

9) The respondents, who are opposing the maintainability of the appeals, have placed before the Court the judgement rendered by the Supreme Court in Kandla Export Corporation & Ors. vs OCI Corporation &Ors., (2018) 14 SCC 715, wherein the Supreme Court has interpreted Section 13 of the Commercial Courts Act, and held as follows: “14. Section 13(1) of the Commercial Courts Act, with which we are immediately concerned in these appeals, is in two parts. The main provision is, as has been correctly submitted by ShriGiri, a provision which provides for appeals from judgments, orders and decrees of the Commercial Division of the High Court. To this main provision, an exception is carved out by the proviso. The primary purpose of a proviso is to qualify the generality of the main part by providing an exception, which has been set out with great felicity in CIT v. Indo-Mercantile Bank Ltd., MANU/SC/0070/1959: 1959 Supp (2) SCR 256 at 266-267, thus: “The proper function of a proviso is that it qualifies the generality of the main enactment by providing an exception and taking out as it were, from the main enactment, a portion which, but for the proviso would fall within the main enactment. Ordinarily it is foreign to the proper function of a proviso to read it as providing something by way of an addendum or dealing with a subject which is foreign to the main enactment. “It is a fundamental rule of construction that a proviso must be considered with relation to the principal matter to which it stands as a proviso”. Therefore it is to be construed harmoniously with the main enactment. (Per Das, C.J. in Abdul Jabar Butt v. State of Jammu & Kashmir [MANU/SC/0017 1956: [(1957) SCR 51, 59]). Bhagwati, J., in Ram Narain Sons Ltd. v. Assistant Commissioner of Sales Tax [MANU/SC/0084 1955:[(1955) 2 SCR 483, 493] said: “It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted as a proviso and to no other.” Lord Macmillan in Madras & Southern Maharatta Railway Co. v. Bezwada Municipality [MANU/PR/0060/1944 [(1944) LR 71 IA 113, 122] laid down the sphere of a proviso as follows: “The proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case. Where, as in the present case, the language of the main enactment is clear and unambiguous, a proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it by implication what clearly falls within its express terms.” The territory of a proviso therefore is to carve out an exception to the main enactment and exclude something which otherwise would have been within the section. It has to operate in the same field and if the language of the main enactment is clear it cannot be used for the purpose of interpreting the main enactment or to exclude by implication what the enactment clearly says unless the words of the proviso are such that that is its necessary effect. (Vide also Corporation of City of Toronto v. Attorney-General for Canada [(1946) AC 32, 37].)”

15. The proviso goes on to state that an appeal shall lie from such orders passed by the Commercial Division of the High Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure Code, 1908, and Section 37 of the Arbitration Act. It will at once be noticed that orders that are not specifically enumerated under Order XLIII of the CPC would, therefore, not be appealable, and appeals that are mentioned in Section 37 of the Arbitration Act alone are appeals that can be made to the Commercial Appellate Division of a High Court.

16. Thus, an order which refers parties to arbitration under Section 8, not being appealable under Section 37(1)(a), would not be appealable under Section 13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in sub-sections (2) and (3) of Section 16 of the Arbitration Act would equally not be appealable under Section 37(2)(a) and, therefore, under Section 13(1) of the Commercial Courts Act.” (emphasis supplied)

10) A perusal of the above extract shows that the Supreme Court has already interpreted and pronounced upon the scope of the appeals maintainable under Section 13 of the Commercial Courts Act, and while doing so, the Supreme Court has held that the primary purpose of the proviso is to qualify the generality of the main part by providing an exception.

11) This decision of the Supreme Court in Kandla Export Corporation (supra ) decided on 07.02.2018, was rendered prior to the judgement in D & H India Ltd. vs. (supra), rendered by a Division Bench of this Court. However, this judgement was, apparently, not brought to the notice of the Division Bench and has, therefore, escaped the attention of the Division Bench.

12) A perusal of D & H India Ltd. vs. (supra) shows that the Division Bench has also not referred to and dealt with, specifically Section 13 (2) of the Commercial Courts Act that, in terms, states that “notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act.” Thus, an appeal from an order passed in a commercial cause would lie only in accordance with Section 13(1) and 13(1A), and not otherwise. An appeal, by resort to the Letters Patent (in the light of the judgement of the Supreme Court in Shah Babulal Khimji (supra)) is also not maintainable under Section 13 of the Commercial Courts Act.

13) With due respect, the judgement of the Division Bench in D & H India Ltd. (supra) cannot be regarded as laying down the correct interpretation of Section 13 of the Commercial Courts Act, and we are, therefore, not bound to follow the same, since there is a contrary view of the Supreme Court. We are bound by the judgement of the Supreme Court. In the ordinary course, we would have referred the decision in D & H India Ltd. vs. (supra) for reconsideration by a larger Bench since, we were inclined to take a contrary view to that taken in D & H India Ltd. (Supra). However, since the issue already stands settled by the Supreme Court, there is no necessity to adopt that course of action. Hence, in our view, these appeals are not maintainable, since none of the impugned orders are appealable under Order XLIII Rule 1 of the Civil Procedure Code.

14) The Appeals are, accordingly, dismissed.

VIPIN SANGHI, J JASMEET SINGH, J SEPTEMBER 10, 2021 Sahil Sharma