TaxTMI 
TaxTMI 
2016 (8) TMI 1255
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..... 66 of 2016. (ii) In the appearances 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....
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....on petitions was however done on 4th December, 2015. Reach Cargo has filed Arbitration Petition No. 1220 of 2015, which was admitted on 19th October, 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 By the amendment, the entire Section 36 stands repealed and replaced by a new Section 36.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:- &....
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.... under Section 34 are refused and not otherwise. According to it, a substantive right has accrued to it under Section 34 read with Section 36 of the Pre-amendment Arbitration Act of protection against execution of the 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....
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....rdance with the provisions of Section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement 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 di....
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....award. There is no dispute between the parties about this restrictive meaning also. The dispute is about the effect of the use of the restrictive phrase or expression. According to the applicants award-debtors, the use of the restrictive phrase renders the saving 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 ....
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....epeal would be applicable. 14. Mr. Dada, while acknowledging the position that Section 6 of the General Clauses Act provides for "Effect of repeal" and the fact that the Arbitration Amendment Act, does not repeal the Arbitration Act, submitted that the same should not affect applicability of Section 6 of the General Clauses 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 f....
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....itution of Section 36 of the Arbitration Act by Section 36 of the Arbitration Amendment Act, amounts to repeal of Section 36 and part repeal of the Arbitration Act. However, that by itself will not be sufficient to attract the provision of Section 6 of the General Clauses Act to it since it becomes applicable only in the absence 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....
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....But that does not mean that the rights that are not saved by the savings provisions are extinguished or stand ipso facto terminated. The rights which are accrued are saved unless they are taken away expressly. Section 6(c) of the General Clauses Act saves accrued rights unless they are taken away by the repealing statute. 19. The Apex 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 deter....
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....tion to arbitral proceedings, which commenced before the new Act came into force unless otherwise agreed by the parties and (ii) a new Act shall apply in relation to arbitral proceedings which commenced on/or after the new Act came into force. It further bifurcated the first limb into (a) provisions of the old Act shall apply in relation to 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....
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....mpire have power to state a special case for the opinion of the court on any question of law involved in the proceedings. Under sub-section (3) of Section 14 of the old Act when the court pronounces its opinion thereon such opinion shall be added to and shall form part of the award. From this part of the award no appeal is maintainable under Section 39 of 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....
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....ct. 25. The deliberate intention of omission can be inferred, also from the context of introduction of Section 26 in the Amending Act and the context of the amendments to Section 36 of the Arbitration Act. It is significant to note that Report No. 246 of the Law Commission of India that recommended amendments to the Arbitration Act had recommended introduction of Section 85(A) tilted "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 dropp....
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.... decree only after the time for filing a petition under section 34 has expired or after the section 34 petition has been dismissed. In other words, the pendency of a section 34 petition renders an arbitral award unenforceable. The Supreme Court, in National Aluminium Co. Ltd. v. Pressteel & Fabrications, (2004) 1 SCC 540 held that by virtue of section 36, it was impermissible to pass an Order directing the losing party 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 se....
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....sp; (ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior Court accrues 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 w....
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....,000/-. The provision, however, by virtue of Clause-20 of the order, did not affect any right, privilege, obligation or liability already acquired, accrued or incurred under any existing law. The Apex Court, held that the true implications of these provisions was that the preexisting right of appeal to the Federal Court for the appellant before it, continued to exist and the old law which created that right of appeal also continues to exist to support the continuation of that right 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....
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.... would continue to vest in the parties engaged in the lis till the eventual culmination of the proceedings. When a lis commences, all rights and obligations of the parties get crystallised on that date and the mandate of the General Clauses Act simply ensures that pending proceedings under the unamended provision shall remain unaffected. 31. The third decision cited by Mr. Dada and also by Mr. Sub-ramaniyam for BCCI is of the Apex Court in Snehadeep Structures Private Limited V. Maharashtra 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 applica....
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....f an arbitral award under Section 34 of the Act exercises supervisory and not appellate jurisdiction over the awards of an Arbitral Tribunal. A court can set aside an arbitral award, only if any of the grounds mentioned in Sections 34(2)(a)(i) to (v) or Sections 34(2)(b)(i) and (ii), or Section 28(1)(a) or 28(3) read with Section 34(2)(b)(ii) of the Act, are made out. An award adjudicating claims which are "excepted matters" excluded from the scope of arbitration, would violate Sections 34(2)(a)(iv) and 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 i....
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.... the Interest Act need not be necessarily interpreted within the meaning of that word in Code of Civil Procedure. This view gets fortified by the reasons stated by the Apex Court at paras 46 and 47, which read as under: "46. Further, if the word "appeal" is not construed as including an application under Section 34 of the Arbitration Act, we 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 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 ....
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....lance at the grounds of challenge specified in Section 34 of the Arbitration Act is sufficient to note that each ground goes to the root of the matter. While exercising the jurisdiction under Section 34 the civil court cannot correct the errors of the arbitrator in the award or remit the award for reconsideration or modify the award or set aside part of the award. The jurisdiction of the civil court is only to set aside the award provided any of the grounds specified in Section 34 is established. The emphasis in the section is to maintain 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 oppo....
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....rable. The continuation of the proceedings and the package of rights available could at the highest be for the proceedings under Section 34 and Section 37 of the Arbitration Act. Section 36 which is about enforceability of the arbitral award cannot go along with the application for challenge to the arbitral award so as to form a package of rights. 38. Mr. Seervai submitted that, on a bare reading of the substituted Section 36 of the Arbitration Act, it is clear that the said provision is applicable to cases where a petition under Section 34 of the Arbitration 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 s....
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.... it, it was manifest that the former meaning is intended and the verb "has been" describes past actions. It is used to express a hypothesis without regard to time. 40. Mr. Subramaniyam, submitted in reply that the use of verb "has been" will not necessarily be determinative of the fact whether the amendment be applicable to pending proceedings. In this connection, he relied upon the following observations of Queen's Bench Division in the case of In re ATHLUMNEY Ex parte WILSON reported in 2Q.B page 547:- "No doubt the words "where 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....
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.... observes: "The words 'has been referred' in Section 11-A are no doubt capable of being interpreted as making the section applicable to references made even prior to December 15, 1971. But is the section so expressed as to plainly make it applicable to such references ? In our opinion, there is no such indication in the section. In the first place, as we have already pointed out, the section itself has been brought into effect only some time after the Act had been passed. The proviso to Section 11-A, which is as much part of the section, refers 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 ....
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....he award-holder and award-debtor. A reference to the Arbitration Act, 1940 is also inevitable. 45. Under Arbitration Act, 1940 before an award could be made enforceable, the intervention of Court was essential. First, an award had to be filed in Court under Section 14 of the 1940 Act with the record of proceedings that had been filed before the Arbitrator. Then the Court had to be satisfied under Section 17 of the 1940 Act that a judgment in terms of the award could be given including disposing of any challenges under Section 30 of the 1940 Act. It was only after this process was complete 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 ....
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....tion 36, can never be termed a "right" let alone as an "accrued" or "vested" right and at the highest, it can be termed as an "existing right". 47. Mr. Dada, referred to the decision of the Delhi High Court dated 8th December, 2015 in O.M.P. No. 408 of 2007 (viz. Ministry of Defence, Government of India v. Cenrex SP. Z.O.O. & Ors.), to submit that, applicability of the Amendment Act to the applications already filed under the unamended Section 34, has already been considered therein. The observations relied upon by Mr. Dada, read as under:- "The argument urged on behalf 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 th....
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....ecution application. It was contended on behalf of the judgment debtors that when the decree was passed, they had a right to resist it in the court at Morena in view of the provisions of Indian Code of Civil Procedure then in force and the same was a vested right. It was further contended that the right was preserved by the Saving Section of the Code of Civil Procedure (Amendment Act), 1950. While rejecting the contention, the Apex Court held that: "It is difficult to consider the non-executability of the decree in Madhya Bharat as a vested right of the judgment-debtors. The non-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'....
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....rved as follows: "30 For purposes of these clauses the "right" must be "accrued" and not merely an inchoate one. The distinction between what is and what is not a right preserved by Section 6 of the General Clauses Act, it is said, is often one of great fineness. What is unaffected by the repeal is a right 'acquired' or 'accrued' under the repealed statute and not "a mere hope or expectation" of acquiring a right or liberty to apply for a right." 50. Mr. Seervai submitted that the question as to whether inexecutability arising from disability imposed by law on a decree-holder 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 ....
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....nt to execute the decree." "11 It was then argued that as the Code of Civil Procedure was not applicable to Goa at the time when the Bombay High Court passed the order transferring the decree to the Goa court, the order of transfer was absolutely without jurisdiction. We are, however, unable to agree with this contention. To begin with, as the decree was passed by the Bombay High Court. Section 38 of the Code of Civil Procedure would clearly apply because the decree passed by the Bombay High Court was not a foreign decree. It is true that at the time when the Bombay High Court passed the order of transfer, the 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....
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....half of KPCL and RSW is two-fold. Firstly, that the application of the amendment to the pending matters would be prospective in nature. If the first argument is not acceptable, the second argument is that, it is retrospective in nature. The further arguments to support the retrospective effect are (i) the amendment is curative and (ii) the amendment is in respect of procedural matters. 53. Mr. Dada, argued that the amendment to Section 36 affects the substantive right of an award-debtor and hence it must take prospective effect. He refers to the decision of the Apex Court in Thirumala Chemicals Ltd. V/s. Union of India and Ors. reported in (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 notice....
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....he language used plainly manifests in express terms or by necessary implication a contrary intention a statute divesting vested rights is to be construed as prospective, a statute merely procedural is to be construed as retrospective and a statute which while procedural in its character, affects vested rights adversely is to be construed as prospective. 27. Rights of appeal conferred under Section 19(1) of FEMA is therefore a substantive right. The procedure for filing an appeal under sub-section (2) of Section 19 as also the proviso to sub-section (2) of Section 19 conferring power on the Tribunal to condone delay in filing the appeal if sufficient 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 negativ....
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....f the Arbitration Act. The lifting of this shadow or impediment, on the enforceability of the arbitral award operates only in future i.e. after 23rd October, 2015 on the basis of an existing state of affairs, even if the award was passed or the petition under Section 34 of the Arbitration Act was filed before 23rd October, 2015. Therefore, the Amended Section 36 of the Arbitration Act cannot be said to operate retrospectively, its operation is prospective in nature. 57. Mr. Seervai takes support from the following para in Bennion on Statutory Interpretation (Fifth Ed.), at page 317, on the effect of the amendments: "It is important to grasp the true nature of objectionable 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....
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....ns who had become widows after the Act passed, and that the presumption against a retrospective statute being intended supported this construction; but we have before shown that the statute is in its direct operation prospective, as it relates to future removals only, and that it is not properly called a retrospective statute because a part of the requisites for its action is drawn from time antecedent to its passing. The clause is general, to prevent all removals of the widows described therein after the passing of the Act; the description of the widow does not at all refer to the time when she became widow; and we are therefore of opinion that the pauper was irremovable at the time she was removed". 59. In West v. 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 a....
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....reported in [1957] 1 W.L.R. Queen's Bench Division page 1219, the Court was concerned with the question, as to whether the disqualification added in the year 1956 by which a person was disqualified from acting as a solicitor's clerk if he was convicted of larceny, embezzlement or fraudulent conversion of any property irrespective of whether it belonged to his employee or one of his clients could be applied to a person who was convicted of larceny in the year 1953 i.e. before the disqualification was added. The Court followed the decision in West and Gwynne's case to observe as follows:- "But in my opinion this Act is not in truth retrospective. It enables an order to be made disqualifying a person from acting as a solicitor'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....
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....because the regulation laid down additional eligibility condition, it does not mean that any vested right of the appellants was affected, nor does it mean that the regulation is, retrospective in operation. A vested right would arise only if the appellant had actually been appointed to the post. Till then, there was no vested right and the only right was to be considered for the post. The condition therefore was, prospective in action as it would apply only at the stage of appointment. 63. In yet another decision, the Apex Court, in similar situation, has referred with approval, the decision in West V/s. Gwyne's case. In New India Sugar Works V/s. State of Uttar Pradesh & Others reported in (1981) 2 SCC page 293, it was considering order of U.P. Government 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 ....
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....ere with existing rights. To construe this section, I have simply to read it, and, looking at the Act in which it is contained, to say what is its fair meaning." 65. Coming to the facts of the present case, in view of the above position in law, application of amended Section 36 to the existing matters i.e. the applications under Section 34 of the Arbitration Act, that are pending as on 23rd October, 2015 is giving prospective effect to the amendment and not retrospective effect. The most relevant consideration for applying it to the existing matters is the nature, ambit and scope of the Amending Act. Under the original Section 36, filing of an application under Section 34 had the effect of casting shadow upon the executability of the award. This act of the award-debtor disabled the award-holder 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-debt....