TaxTMI 
TaxTMI 
2016 (8) TMI 1255
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....earances provided,: "Mr. Sharon Jagtiani alongwith Mr. Prateek Bagaria, Mr. S. Rathod i/by. Nishith Desai Association, Advocate for the applicant" to be replaced with "Mr. Sharan Jagtiani alongwith Mr. Prateek Bagaria, Mr. Siddharth Ratho i/by. Nishith Desai Associates, Advocate for the Decree Holder." AND "Mr. Gaurav Joshi, Senior Counsel alongwith Mr. R. Panchmatia, Mr. P. Jehangir, Mr. A. Agarwal, Mr. M. Kanoria, Ms. Aastha Arora, Ms. Natasha K. i/by. Khaitan & Co., Advocate for the respondent" to be replaced with "Mr. Gaurav Joshi, Senior Counsel alongwith Mr. R. Panchmatia, Mr. P. Jehangir, Mr. A. Agarwal, Mr. M. Kanoria, Ms. Aastha Arora, Ms. Natasha K i/by. Khaitan & Co. Advocate for the Judgement-debtor. (iii) At page-8, paragraph-6, line-12 "Mr. Gaurav Joshi, the learned Senior Counsel appeared for the respondent and Mr. Sharon Jagtiani for the applicant in the Chamber ....
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.... 2015. In the meantime i.e. on 23rd October, 2015, the Arbitration and Conciliation (Amendment) Ordinance, 2015 (No. 9 of 2015) (Arbitration Ordinance) was promulgated by the President of India. It was published in the official Gazette on 23rd October, 2015 and came into force from that date. On 17th December, 2015 and 23rd December, 2015, the Arbitration and Conciliation (Amendment) Bill, 2015 (Bill) was passed by the Lok Sabha and Rajya Sabha respectively. The Bill received assent of the President of India on 31st December, 2015 and was notified as the Arbitration and Conciliation (Amendment) Act, 2015 ("Amending Act" for short) on 1st January, 2016. 5. One of the major amendments to the Arbitration Act is amendment to Section 36. By the amendment, the entire Section 36 stands repealed and replaced by a new Section 36. Section 36 as it stood prior to the amendment and as it stands today read as follows: Pre-amendment. "36 ENFORCEMENT:- Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such a....
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....e awards during pendency of the applications under Section 34. Denial of this protection would result into grave and irreparable injury to it. The Chamber Summonses are contested by RSW and KPCL contending that the applications under Section 34 of the Arbitration Act filed by BCCI would be governed by the Arbitration Act as amended by the Arbitration Ordinance. 6. If the Amended Act is held applicable, after expiry of three months from the date of the arbitral award, it becomes enforceable in accordance with provisions of the Civil Procedure Code, irrespective of whether a challenge has been filed under section 34 of the Act or not. Section 36(2) of the Amended Act requires the judgment-debtor to move a separate application, specifically seeking stay of operation of the award in case it wishes to seek a stay of the execution proceedings. Under section 36(3), if the Court is inclined to grant stay of operation of the award, it has to record reasons in writing and also have due regard to the provisions for grant of stay of a money decree under the Civil Procedure Code. On the other hand if the Amendment Act is held not applicable, the judgment-debtor will continue to enjoy the prote....
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....mmencement of this Act". Section 26 is seen to consist of two parts. The first part provides that nothing contained in the Amendment Act shall apply "to the arbitral proceedings commenced in accordance with Section 21 of the Principal Act" before the commencement of the Amendment Act i.e. prior to 23rd October, 2015, unless the parties agree otherwise. The second part provides that the Amendment Act shall apply "in relation to arbitral proceedings commenced on or after the date of commencement of the Amendment Act" i.e. 23rd October, 2015. The term "arbitral proceedings" has a specific meaning and duration under the Arbitration Act, since the date of commencement of the proceedings and the date of termination of the proceedings have been specifically provided for. Under Section 21 of the Arbitration Act, unless otherwise agreed by the parties, the arbitral proceedings in respect of particular dispute commenced on the date on which a request for that dispute to be referred to arbitration is received by the respondent. Section 32(1) of the Arbitration Act provides that the arbitral proceedings shall be terminated by the final award or by an order of arbitral Tribunal under Sub-Secti....
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....aving Section 26 non-exhaustive and therefore aid of Section 6 of the General Clauses Act has to be taken. Whereas according to the respondents-award holders, the use of restrictive phrase is not on account an inadvertent omission or lapse, but it is a deliberate and intentional omission so as to deliberately keep certain matters i.e. the proceedings post-final award, outside the saving from application of the Amendment Act. In that circumstance, by necessary implication, the saving Section becomes exhaustive i.e. it takes within it's fold all different types of proceedings arising out of the Arbitration Act. 12. Mr. Dada submitted that, since the first part of Section 26 of the Amendment Act does not provide for the post-award proceedings, the section is necessarily non-exhaustive. In such circumstances, according to him, Section 6 of the General Clauses Act becomes applicable. The relevant provision of Section 6 of the General Clauses Act reads as under: "6 Effect of Repeal--- Where this Act, or any [Central Act] or Regulation made after the commencement of this Act, repeals any enactment hitherto made or here....
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....s Act to Section 26. He argued that, by Section 19 of the Amendment Act, there is substitution of Section 36 of the unamended Act by Section 36 of the amended Act. The substitution of the Section would amount to, according to him, repeal of Section 36 and partial repeal of the Arbitration Act. On the subject of partial repeal of a statute, Mr. Dada relies upon decisions of the Apex Court in the case of (i) G. Ekambarappa and Others Vs. Excess Profits Tax Officer, Bellary, reported in AIR 1967 Supreme Court page 1541 and (ii) The State of Tamil Nadu and Others Vs. K. Shyam Sunder and Others reported in (2011) 8 Supreme Court Cases, page 327. In the facts of Ekambarappa's case, the appellants carried on business in partnership in Bellary Town and the partners were also residents of Bellary Town during the period the firm was carrying on business. Later, the firm stood dissolved. The Bellary District was a part of old Madras State which was a "Part-A" State under the Constitution of India till its merger with the Mysore State on 1st October, 1953 which was a part "B State". When the Excess Profits Tax Act was first promulgated, it was extended to the territory of former British In....
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....of a different intention appearing in the repealing Act. In other words, if the provision inadvertently or erroneously leaves something unattended to, the general provision of the General Clauses Act needs to be resorted to. If the Saving Section is seen to take within it's fold, all types of proceedings either expressly or by necessary implication, there can be no resort to the General Clauses Act. 17. Mr. N.H. Seervai, the learned Senior Counsel appearing for KCPL submitted on the other hand, that, the Saving Section 26 of the Amending Act, in fact is very clear and complete in itself and does not need aid of the General Clauses Act. According to him, on a bare reading of Section 26 of the Amending Act, it is ex-facie clear that the provisions of substituted Section of 36 of the Arbitration Act are applicable in cases where a petition under Section 34 of the Arbitration Act has been filed before 23rd October, 2015. He refers to the use of the phrase "to the arbitral proceedings" in the first part of Section 26 in contradistinction to use of the phrase "in relation to arbitral proceedings" in the second part. He argued that, this language deliberately employed by Section 26 o....
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....ex Court in Shah Sadiq's case does not lay down an absolute proposition that a right or legal proceedings must be expressly saved or taken away by the saving provision. At para 15 of the decision, the Apex Court held that in the case before it, the savings provision in the repealing statute was not exhaustive of the rights, which are saved and which survive repeal of the statute under which such rights had accrued. It does not rule out the possibility of repeal by necessary implication. In fact this is recognised also by Section 6 of the General Clauses Act, which is applicable only when "a different intention" does not appear from the Act. It is, therefore necessary, to see whether a different intention can be said to appear from the section of not saving the post-award proceedings filed prior to 23rd October, 2015. 20. The first test to determine that, would be the language of the section. The intention of the legislature is primarily to be gathered from the language used. The statute must be read as it is. This means attention must be paid to what has been said as also to what has not been said. Whether the omission in the first part is conscious and deliberate or whether i....
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....o arbitral proceedings commenced before the new Act came into force and (b) the old Act will not apply in such cases where the parties agree that it will not apply in relation to arbitral proceedings which commenced before the new Act came into force. It then interpreted the expression "in relation to" in following terms: "23. ......The expression "in relation to" is of the widest import as held by various decisions of this Court in Daypack Systems (P) Ltd. (1988) 2 SCC 299, Mansukhlal Dhanraj Jain (1995) 2 SCC 665, Dharajamal GobindramAIR 1961 SC 1285 and Navin Chemicals Mfg, (1993) 4 SCC 320. This expression "in relation to" has to be given full effect to, particularly when read in conjunction with the words "the provisions" of the old Act. That would mean that the old Act will apply to the whole gambit of arbitration culminating in the enforcement of the award. If it was not so, only the word "to" could have sufficed and when the legislature has used the expression "in relation to", a proper meaning has to be given. This expression does not admit of restrictive meaning. The first limb of Section 85(2)(a) is not a limited saving clause. It saves not only the ....
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.... the old Act. There is no such provision under the new Act." 22. Mr. Seervai while making extensive submissions on Thyssen's case has relied upon decision of Madras High Court in New Tirupur Area Development Corporation vs. Hindustan Construction Company Ltd. (A. No. 7674 of 2015 in O.P. No. 931 of 2015 - judgment dated January 27, 2016) ("New Tirupur"), with a submission that Madras High Court has, in it's decision highlighted the difference between the language of Section 85(2)(a) of the Arbitration Act and the saving Section 26 of the Amending Act. According to him, the discussion in Thyssen's case also supports his arguments as regards the meaning to be given to the phrase "to arbitral proceedings". 23. In the New Tirupur's case, the petitioner after filing the Arbitration Petition had filed an application for stay of the impugned award in view of Section 36(2) of the Arbitration Ordinance. Later he took a stand that by virtue of introduction of Section 26 in the Amendment Act, which was also deemed to have come into force on 23rd October, 2015. Section 36(2) of the Arbitration Ordinance, which stipulated a condition of filing a separate application for stay h....
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....ted "Transitory Provisions" to the Arbitration Act. Section 85(A) had provided for prospective application of the Amending Act with three exceptions which exceptions read as follows: "(a) the provisions of section 6-A shall apply to all pending proceedings and arbitrations. Explanation : It is clarified that where the issue of costs has already been decided by the court/tribunal, the same shall not be opened to that extent. (b) the provisions of section 16 sub-section (7) shall apply to all pending proceedings and arbitrations, except where the issue has been decided by the court/tribunal. (c) the provisions of second proviso to section 24 shall apply to all pending arbitrations." The Legislature had consciously dropped this recommendation from the Arbitration Ordinance. As rightly pointed out by Mr. Seervai had Section 85(A) been included in the Amending Ordinance or the Amending Act the amended Section 36 may not have been made applicable to post-award proceedings. Even when later, a saving provision came to be introduced in the Amending Act it was not in terms of recommended Section 85(A) but in the form of Section ....
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.... to deposit any part of the award into Court. While this decision was in relation to the powers of the Supreme Court to pass such an order under section 42, the Bombay High Court in Afcons Infrastructure Limited v. The Board of Trustees, Port of Mumbai 2013(1) Arb LR 512 (Bom) applied the same principle to the powers of a Court under section 9 of the Act as well. Admission of a section 34 petition, therefore, virtually paralyzes the process for the winning party/award creditor." 44 The Supreme Court, in National Aluminium, has criticized the present situation in the following words : "However, we do notice that the this automatic suspension of the execution of the award, the moment an application challenging the said award is filed under section 34 of the Act leaving no discretion in the court to put the parties on terms, in our opinion, defeats the very objective of the alternate dispute resolution system to which arbitration belongs. We do find that there is a recommendation made by the concerned Ministry to the Parliament to amend section 34 with a proposal to empower the civil court to pass suitable interim orders in such cases. In view of the urgency of su....
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....ues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise." 29. In Garikapati's case, suit had been filed against the appellant on 22nd April, 1949. By the order dated 14th November, 1950, the suit was dismissed. The plaintiff preferred an appeal against the order of dismissal. The appeal was allowed and the suit was decreed. The application for leave to appeal to the Apex Court was dismissed on the ground, inter-alia, that the value of the property was only Rs. 11,400/- and did not come up to the amount of Rs. 20,000/-. In his application before the Apex Court, the appellant contended that the order being one of reversal of the judgment and the value of the property being abo....
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.... and the Federal Court having been abolished, the Supreme Court was substituted by the Federal Court as the machinery for the purpose of giving effect to the exercise of that right of appeal. 30. The second decision cited by Mr. Dada is in Videocon International Limited Versus. Securities and Exchange Board of India, reported in (2015) 4 Supreme Court Cases page 33. In the facts of that decision, an amendment was made to Section 15-Z of the Securities and Exchange Board of India Act, 1992 with effect from 29th October, 2002 whereby, (i) the forum of appeal against orders of the Securities Appellate Tribunal was changed from the High Court to the Supreme Court; and (ii) the questions on which such appeals could be filed was changed from any question of fact or law to any question of law. The High Court held that the amended Section 15-Z would not apply to appeals already filed prior to 29th October, 2002 but all appeals filed in the High Court after that date were not maintainable. The two questions considered by the Apex Court in the decision cited were, (i) whether an order passed by the Securities Appellate Tribunal prior to 29th October, 2002 would be appealable under the....
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....Small-Scale Industries Development Corporation Ltd., reported in (2010) 3 Supreme Court Cases, page 34, in which the issue was with respect to the interpretation of the term "appeal" in Section 7 of the Interest on Delayed Payments to Small-Scale and Ancillary Industrial Undertakings Act ("The Interest Act" for short). The said Section provided that while preferring an appeal against a decree, award or other order in favour of a small scale or ancillary industrial undertaking, the appellant was required to deposit 75% of the amount payable in terms of such decree, award or other order. An award-debtor (the award-holder being a small scale or ancillary industrial undertaking) filed and application under Section 34 of the 1996 Act, which application was dismissed by the Single Judge on account of non-compliance with requirement of deposit of 75% on the basis that the term 'appeal' in the said Section was wide enough to include an application under Section 34 of the 1996 Act. The Division Bench held to the contrary and reserved the order passed by the Single Judge. After exhaustively examining a number of precedents, the Hon'ble Supreme Court observed at para 36 as follows....
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.... 34(2)(b) of the Act. Making an award allowing or granting a claim, contrary to any provision of the contract, would violate Section 34(2)(b)(ii) read with Section 28(3) of the Act. 33. According to Mr. Khambhata, interpretation of the term "appeal" in The Interest Act in Snehadeep's case to include application under Section 34 of the Arbitration Act was clearly a purposive interpretation of the term in the context of the object of that Act. Relying upon the decision of the Apex Court in S. Mohan Lal vs. R. Kondiah, reported in (1979) 2 Supreme Court Cases, 616, he argued that reference to the provisions of the statute to interpret the same expression used in another statute is not a sound principle of construction unless the two Acts in which the same word is used are cognate Act. The relevant observations at para 3 of the decision cited read as follows: "3.... It is not a sound principle of construction to interpret expressions used in one Act with reference to their use in another Act; more so if the two Acts in which the same word is used are not cognate Acts. Neither the meaning, nor the definition of the term in one statute affords a guide to the con....
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....y undertaking preferred arbitral proceedings, prior to the incorporation of the reference procedure in 1908. Arbitration necessarily has to result in an 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 by 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 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 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 predeposit to appeal under Section 37, therefore, we will be rendering the term "award" a nullity, which we are not empowered to do. 47. The ....
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.... the award. Hence the general approach of a civil court expected is to uphold the arbitral award. This view gets support from the following observations in the decision of the Apex Court in Union of India Vs. A.L. Rallia Ram, reported in AIR 1963 Supreme Court page 1685 relied upon by Mr. Khambhata. "The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right, the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement." Unlike the application under Section 34 of Arbitration Act, the court of appeal under Civil Procedure Code has power to pass any decree, make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require. It can modify the decree, remit it entirely or in part for reconsideration and set it aside in whole or in part. The appellate court can frame additional issues. It can acc....
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....bitration Act has been filed before 23rd October, 2015 and pending as on that date. According to him, this contention is ex-facie borne out by the language of the substituted Section 36 itself i.e. de-hors reference to Saving Section 26 of the Amending Act. He points out that the language of Section 36(2) of the Amended Act uses the phrase "has been filed" by way of description to the application under Section 34 of the Arbitration Act, to provide that such an application shall not by itself render, that award unenforceable, unless the Court grants an order of stay of the operation of arbitral award. The verb "has been" used in the section is in "present perfect tense" and as such would be applicable to the proceedings already filed and pending in Court." Mr. Seervai argues that the meaning and scope of words "has been" was considered by the Apex Court in it's decision in The State of Bombay (now Maharashtra) vs. Vishnu Ramchandra, reported in AIR 1961 Supreme Court, page 307. By that decision, the verb "has been" is held to be in the present perfect tense describing past actions. 39. In it's decision in Vishnu Ramchandra's case, the Apex Court was considering whether ....
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....e a debt has been proved under the principal act" are capable of such a meaning. But this form of words is often used to refer, not to a past time which preceded the enactment, but to a time which is made past by anticipation a time which will have become a past time only when the event occurs on which the statute is to operate. In former times draftsmen would have used the words "where a debt shall have been proved," but in modern Acts the past tense is frequently used where no retrospective operation can be intended. These observations are required to be appreciated in the facts of the decision cited. The Queens Bench Division was considering, The Bankruptcy Act, 1890 which provided that, where a debt, including interest "has been proved" on a debtor's interest, such interest shall for the purposes of be calculated at a rate not exceeding 5% p.a. without prejudice to the right of the creditor to receive out of the estate any higher rate of interest to which he may be entitled after all the debts have been paid in full. In the facts of the case, the Queens Bench Division noted that, the enactment did not merely affect procedure. If the section was construed retrospectively, i....
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....efers to "in any proceeding under this section". Those words are very significant. There cannot be a "proceedings under this section", before the section itself has come into force. A proceeding under that section can only be on or after December 15, 1971. That also gives an indication that Section 11-A applies only to disputes which are referred for adjudication after the section has come into force." Bare reading of the observations quoted above, is sufficient to know that the special circumstance of the proviso to Section 11-A, was determinative of the meaning given to the words "has been referred". There is no such special circumstance available in the facts of the case herein. 42. I find substance in the submission advanced by Mr. Seervai particularly in view of the object and purpose of amendments to Section 36 of the Act. Plain literal meaning, will have to be given to the provision in the absence of any special circumstance available to a party under the provision and use of verb "has been" must be held to be in present perfect tense. If use of verb "has been" is held to be in "present perfect tense", Section 36 of the Arbitration Act will be applicable not only to cases ....
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....omplete and a judgment given that, a decree in terms of the award followed. The award then became executable as a decree of the Court. This position changed under the Arbitration and Conciliation Act, 1996. With the enactment of Section 35 thereunder, an arbitral award on it's passing became final and binding on the parties. There was no requirement to file the award or the proceedings in Court. The compulsory judicial scrutiny of the award, before it became enforceable, was done away with. It's judicial scrutiny is only on the award-debtor filing application under Section 34 and is limited to the grounds stated therein. The enforceability of the award was, however, postponed under the pre-amendment Section 36, to 3 months after passing of the award or until after refusal of the application to challenge the award, if filed, by the award-debtor. In other words, the moment an application under Section 34 was filed, there was automatic suspension of the execution of the arbitral award. As already noted earlier, such automatic suspension of execution was strongly disapproved by the Apex Court in Nalco's case which led to the amendments to Section 36. By the amendments, the ....
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....ehalf of the respondent No. 1 to decide the case as per the amended Section 34 of the Act has no merits because Section 6 of the General Clauses Act, 1897 provides that an Act (or an Ordinance for that matter) does not have retrospective operation unless so provided and vested rights are not deemed to be taken away by means of the amending or the repealing Act. Once the objections are filed under a wider provision as existing of Section 34 of the Act when objections were filed, such vested rights to have the Award set aside on the basis of Section 34 which existed on the date of filing of the objection, petition cannot be taken away by holding that by the 2015 amendment Ordinance such a vested right has been impliedly taken away. Section 6 of the General Clauses Act talks of vested rights being protected and therefore unless such rights are expressly or by necessary implications taken away, it cannot be held that an amending Act will have a retrospective application to the pending litigation. I do not find any express or implied retrospective operation of the newly amended Section 34 of the Act so that this Court should hold that even pending litigations under Section 34 of the Act....
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....-executability, in question pertains to the jurisdiction of certain courts and not to the rights of the judgment-debtors. Further the relevant provisions of the Civil Procedure Code in force in Madhya Bharat did not confer the right claimed by the judgment debtors. All that has happened in view of the extension of 'the Code' to the whole of India in 1951 is that the decree which could have been executed only by courts in British India are now made executable in the whole of India. The change made is one relating to procedure and jurisdiction. Even before 'the Code' was extended to Madhya Bharat the decree in question could have been executed either against the person of the judgment-debtors if they had happened to come to British India or against any of their properties situate in British India. The execution of the decree within the State of Madhya Bharat was not permissible because the arm of 'the Code' did not reach Madhya Bharat. It was the invalidity of the order transferring the decree to the Morena Court that stood in the way of the decree-holders in executing their decree in that court on the earlier occasion and not because of any vested rights of t....
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....older from being able to execute the decree against judgment-debtor provides a vested or accrued right to the judgment-debtor, not to have the decree executed against him, on account of change in law has already been considered by the Apex Court in it's decision in Narhari Shivram Shet Narvekar Vs. Pannalal Umediaram, reported in (1976) 3 Supreme Court Cases, page 203. In that decision, the Apex Court was considering whether a decree of the Bombay High court of the year 1960, which was held to be inexecutable in Goa by the executing court at Panjim in the year 1965 could be executed after Code of Civil Procedure was extended to Goa in the year 1967. Contention was raised before Goa High Court that the inexecutability of the decree on account of disability imposed by the law on the decreeholder granted a vested right to the judgment-debtor not to have the decree executed against him, when the law changed and removed the disability against execution. The Apex Court negatived the propositions with the following observations at paras 10 and 11 of its decision: "10 As regards the argument of the learned counsel for the appellant that the executability of the dec....
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.... Code of Civil Procedure had not been applied to Goa. But that does not put the respondent/decreeholder out of court. The decree could be transferred and was valid and executable. But because of an impediment or an infirmity, it could not be executed so long as the Code of Civil Procedure was not made applicable to Goa. Thus the only bar which stood in the way of the execution of the decree was the non-applicability of the provisions of the Code of Civil Procedure to Goa. This was, however, not an insurmountable bar or an obstacle and the bar or the obstacle disappeared the moment the Code of Civil Procedure was applied to Goa on June 15, 1966. It is common ground that this was done during the pendency of the appeal before the Additional Judicial Commissioner passed the impugned order on June 28, 1967. In these circumstances, therefore, it seems to us that this is a fit case in which the doctrine of eclipse would apply and the wall or the bar which separated Bombay from Goa having disappeared there was no impediment in the execution of the decree. The decree lay dormant only so far as no bridge was built between Bombay and Goa but as soon as the bridge was constructed in the shape ....
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....(2011) 6 SCC page 739 to support his submission. In that decision, the question considered was, whether the Appellate Tribunal constituted under the Foreign Exchange Management Act ("FEMA" for short) was right in dismissing an appeal preferred under Section 19(1) of FEMA by applying the first proviso to Section 52(2) and Foreign Exchange Regulation Act, 1973 ("FERA" for short) holding that, it had no power to condone the delay beyond 90 days. Although the cause of action had arisen when FERA was in force, show cause notices and impugned notices were issued, when FEMA was imposed and appeals were also preferred under Section 19(1) of FEMA. The Apex Court, in that decision considered, the distinction between substantive and procedural law at paras-23 to 27. The same reads as under:- "23. Substantive law refers to a body of rules that creates, defines and regulates rights and liabilities. Right conferred on a party to prefer an appeal against an order is a substantive right conferred by a statute which remains unaffected by subsequent changes in law, unless modified expressly or by necessary implication. Procedural laws establishes a mechanism for determining thos....
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....cause is shown, are procedural rights." 54. The reliance on this decision is based on the argument that, original Section 34 and original Section 36 together constitute a right of an award-debtor to have the validity of an arbitral award examined and upheld by the Court before the award becomes enforceable. Hence, it constitutes substantive accrued vested right. In other words, there is a package of rights available under Section 34 and Section 36 to the award-debtor. This argument has already been negatived. Besides, it is also seen above that, the vested right of the award-debtor under Section 34 of the Arbitration Act is unaffected by the amendment to Section 36 of the Arbitration Act. Hence, the decision cited cannot help BCCI. 55. The second decision cited by Mr. Dada is of Messers Hoosein Kasam Dada (India) Ltd., v. The State of Madhya Pradesh & Others, reported in A.I.R. 1953, Supreme Court, page 221 to submit that the right of appeal is not merely a matter of procedure, but it is a matter substantive right. This right of appeal becomes vested in a party when proceedings are first initiated and/or before a decision is given by inferior court. Such vested right cannot be ta....
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....jectionable retrospectivity, which is that the legal effect of an act or omission is retroactively altered by a later change in the law. However, the mere fact that a change is operative with regard to past events does not mean that it is objectionably retrospective. Changes relating to the past are objectionable only if they alter the legal nature of a past act or omission in itself. A change in the law is not objectionable merely because it takes note that a past event has happened, and bases new legal consequences on it". 58. Mr. Seervai next relies upon the following three English decisions in support of his submissions:- 1 In the Queen v. The Inhabitants of St. Mary Whitechapel (1848) 12 QBR 120, Lord Denman C.J. 2 In West v. Gwynne [1911] 2 Ch. D. 1 Cozens-Hardy M.R. 3 In Re A Solicitor's Clerk [1957] 1 W.L.R. 1219 The facts of the first decision cited were that a pauper was residing in the concerned parish alongwith her husband at the time of his death, which happened on 6th June, 1846. The parish obtained an order for her removal and served notice of chargeability. On 3rd September in the same year, the paupe....
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..... Gwynne's case, in the year 1892 the Registry with the intent to prevent in future the exaction of a fine by the lessor for giving the lessee a licence to assign and so Section 3 of the Conveyancing and Law of Property Act, 1892, was enacted. The question was raised, whether the operation of this Section, must not, by construction be restricted to cases where the lease was granted after the commencement of the Act. Cozens-Hardy M.R. L.J. observed in the decision as under:- "It was forcibly argued by Mr. Hughes that a statute is presumed not to have a retrospective operation unless the contrary appears by express language or by necessary implication. I assent to this general proposition, but I fail to appreciate its application to the present case. "Retrospective operation" is an inaccurate term. Almost every statute affects rights which would have been in existence but for the statute. Sect. 46 of the Settled Estates Act, 1877, above referred to, is a good example of this. Sect. 3 does not annul or make void any existing contract; it only provides that in the future, unless there is found an express provision authorizing it, there shall be no right to exac....
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....licitor's clerk in the future and what happened in the past is the cause or reason for the making of the order, but the order has no retrospective effect. It would be retrospective if the Act provided that anything done before the Act came into force or before the order was made should be void or voidable, or if a penalty were inflicted for having acted in this or any other capacity before the Act came into force or before the order was made. This Act simply enables a disqualification to be imposed for the future which in no way affects anything done by the appellant in the past." 61. The Constitution Bench of the Apex Court, in Trimbak Damodhar Raipurkar vs. Assaram Hiraman Patil & Others, reported in 1962 Supp. (1) SCR page 700 referred with approval the judgment in West v. Gwynne's case to observe that it is relevant to distinguish between an existing right and the vested right. Whereas the Statute operates in future, it cannot be said to be retrospective merely because within the sweep of its operation all existing rights are included. In Trimbak's case, by the amendments to Bombay Tenancy and Agricultural Lands Act, the tenancy of the ordinary tenants as distinct ....
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....t imposing levy on 50% of sugar produced by manufacturers. It was submitted that, the order could not have any retrospective operation so as to apply to the stock of sugar manufactured prior to the date of the order and would apply only to the sugar produced after coming into force of the impugned notification. The Apex Court rejected the submission and held that once the Notification for imposing the levy was made, it will naturally apply to the stock of sugar which was with the manufacturers irrespective of the fact that it was manufactured before or after the order. The reasons stated therefore at para-2 of the decision, read as under:- "So far as this argument is concerned we find no substance in the same because it is not a question of retrospectivity of the stature but its actual working. Once the notification imposing the levy was made it will obviously apply to stock of Khandsari produced by the petitioners either before or after the order. This principle has been clearly laid down by the Constitution Bench of this Court in the case of Trimbak Damodhar Raipurkar v. Assaram Hiraman Patil, 1962 Supp 1 SCR 700, where Gajendragadkar, J. speaking for the cou....
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....lder from executing the award in his favour irrespective of the merit in the challenge. In this circumstance, there could be no question of any right accruing to the award-debtor by filing the application under Section 34. The Amended Section 36 lifts the shadow over the right of the award-holder. His disability gets removed. At the same time, the application under Section 34 of the award-debtor remains intact. The removal of disability is not complete. It is partial. The provision enables the award-debtor to apply to the Court for make the award inexecutable pending his application. His right to apply for interim relief during the pendency of the application under Section 34 is not affected in any way. In this way in fact the Amending Act brings in balance between the rights and liabilities of both the sides. The ambit and scope of the Amended Section 36, is to cure the defect by removing the imbalance. Thus the application of the provision on the petitions under Section 34 pending on 23rd October, 2015, is prospective. It makes no difference if the application under Section 34 filed by the award-debtor was prior to 23rd October, 2015. Removal of shadow over the rights of the awar....