TaxTMI 
TaxTMI 
2018 (3) TMI 812
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....ese, Adv., Mr. Vineet Unnikrishnan, Adv., Ms. Nikitha Shenoy, Adv., Mr. Arjun Sreenivas Adv., Ms. Purnima Krishna, Adv., Ms. Bihu Sharma, Adv., Mr. Abhinav Mukerji, AOR, Mr. Siddhant Buxy, Adv., Ms. Rohini Musa, Adv., Mr. Avishek Gupta, Adv., Mr. ZafarR Inayat, Adv., Mr. Apoorv Tripathi, Adv., Mr. K.V. Vishwanathan, Sr. Adv., Mr. Indranil Deshmukh, Adv., Mr. Kirat Singh Nagra, Adv., Mr. Aditya Mehta, Adv., Mr. Kartik Yadav, Adv., Mr. Vineet Unnikrishnan, Adv., Ms. Neha Shrna, Adv., Ms. Olga Lumepereiro, Adv., Mr. Arjun Sreenivas, Adv., Ms. Siddhant Buxy, Adv., for M/S. Cyril Amarchand Mangaldas Aor, AOR, Mr. P. Chidambaram, Sr. Adv., Mr. Jehangir Jejeebhoy, Adv., Mr. Vivek A. Vashi, AOR, Mrs. Kanika Sharma Goenka, Adv., Mr. Hrushi Narvekar, Adv., Ms. Shaheda Madraswala, Adv., Mr. Utkarsh Srivastava, Adv., Mr. Kapil Sibal, Sr. Adv., Mr. Jehangir Jejeebhoy, Adv., Mr. Vivek A. Vashi, Adv., Mrs. Kanika Sharma Goenka, Adv., Mr. Hrushi Narvekar, Adv., Ms. Shaheda Madraswala, Adv., Mr. Utkarsh Srivastava, Adv., Mr. Mohammed Nizam Pasha, Adv., Dr. Abhishek Manu, Sr. Adv., Mr. Jehangir Jejeebhoy, Adv., Mr. Vivek A. Vashi, Adv., Mrs. Kanika Sharma Goenka, Adv., Mr. Hrushi Narvekar, Adv., Ms.....
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....ings commenced, in accordance 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." 3. The questions raised in these appeals require the mentioning of only a few important dates. In four of these appeals, namely, Board of Control for Cricket in India v. Kochi Cricket Pvt. Ltd. and Ors. (SLP(C) No. 19545-19546 of 2016), Arup Deb & Ors. v. Global Asia Venture Company (SLP(C) No. 20224 of 2016), M/s Maharashtra Airports Development Company Ltd. v. M/s PBA Infrastructure Ltd. (SLP(C) No.5021 of 2017) and UB Cotton Pvt. Ltd. v. Jayshri Ginning and Spinning Pvt. Ltd. (SLP(C) No.33690 of 2017), Section 34 applications under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "1996 Act") were all filed prior to the coming into force of the Amendment Act w.e.f. 23rd October, 2015. In the other four appeals, the Section 34 applications were filed after the Amendment Act came into force. The question with which we are confronted is as to whether Section 36, which was substitu....
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...., which was transferred, by an order dated 12th January, 2017, to the Commercial Court, Rajkot as Execution Petition No. 1 of 2017. In the other cases, namely, Wind World (India) Ltd. v. Enercon GMBH through its Director (SLP(C) Nos.8372-8373 of 2017), Yogesh Mehra v. Enercon GMBH through its Director (SLP(C) Nos.8376-8378 of 2017), Ajay Mehra v. Enercon GMBH through its Director (SLP(C) Nos.8374-8375 of 2017), and Anuradha Bhatia v. M/s Ardee Infrastructure Pvt. Ltd. (SLP(C) Nos.9599-9600 of 2017), the Section 34 applications were filed after 23rd October, 2015, viz., on 7th December, 2016 in the first two appeals, on 6th December, 2016 in the third appeal and on 4th January, 2016 in the last appeal. 6. Section 36, which is the bone of contention in the present appeals, is set out hereinbelow: PRE-AMENDED PROVISION "Section 36. Enforcement. Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court." AMENDED PROVISION ....
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....right is preserved, the amendment is only prospective in nature, and for this purpose, he has cited a large number of judgments, starting with the celebrated judgment in Garikapati Veeraya v. N. Subbiah Choudhry (1957) SCR 488. He then referred to a chart of the effect of the amendments made in general by the Amendment Act, in which he divided the amended sections into three parts, namely, those that are only procedural, those that are only substantive and those that are procedural as well as substantive. In his submission, Section 36 is substantive in nature, in that, in place of an automatic stay of the award under the old regime, Order LXI, Rule 5 of the CPC will now be applicable. As a result of this, instead of an automatic stay, a deposit of the entire amount or substantial amount of the award would now have to be made in the interim period between the award and the decision in the Section 34 application. He referred to the 246th Law Commission Report as well as the debates leading to the Amendment Act to buttress his submissions. He also referred to the report of a High Level Committee headed by Justice B.N. Srikrishna, delivered on 30th July, 2017, in which, after referring....
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....26 of the Amendment Act and, therefore, the judgment in Thyssen (supra) must apply on all fours. The learned senior counsel also forcefully put to us a number of anomalies that would arise if the amendment to Section 36 were to be given retrospective operation. According to him, the right to be governed by the broad appellate/supervisory procedure found in sections 34 and 37 of the 1996 Act would be a vested right, resulting in the Amendment Act not being applicable. Insofar as Section 36 is concerned, the learned senior counsel made elaborate submissions on the difference between enforceability and execution, and stated that whereas the former dealt with substantive rights, the latter dealt with procedural rights. Equally, the expression "has been" contained in the amended Section 36(2) is purely contextual and equivalent to the expression "is". For this, he has cited certain judgments which we will refer to in due course. According to the learned senior counsel, the decision in National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd. (2004) 1 SCC 540, which exhorted the legislature to amend Section 36, cannot take the matter any further, in that the said decision cannot b....
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....ould not apply to Court proceedings simpliciter, but to arbitral tribunals which have their seat outside India. He further argued that Sections 34 and 36 are part of one scheme and are the "appeal package" insofar as arbitral proceedings are concerned and must, therefore, go along with the arbitral proceedings. This being the position, it is clear that the pre-amendment position would apply in case of arbitrations which commenced before the Amendment Act came into force. 12. Leading arguments for the other side, Shri Neeraj Kaul, learned senior counsel appearing in SLP(C) Nos.19545-19546 of 2016, emphasized that in the first part of Section 26, there is an absence of the mention of Court proceedings. According to the learned senior counsel, this was of great significance and would, therefore, show that the Amendment Act would retrospectively apply to Court proceedings, as distinguished from arbitral proceedings. On a correct construction of Section 26, according to the learned senior counsel, the second part of Section 26 takes within its sweep both arbitral proceedings as well as Court proceedings in relation thereto and would, therefore, apply to arbitral proceedings as well a....
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....but execution of an award, as if it were a decree under the Code of Civil Procedure, 1908. He further argued that it is well settled that execution proceedings are procedural in nature and would be retrospective and, therefore, the substituted Section 36 would apply even in cases where the Section 34 application is made before the commencement of the Amendment Act. Another argument was that the expression "has been" contained in Section 36(2), as amended, would, in any case, refer to Section 34 proceedings that have already been filed, even preamendment, and for this purpose, he referred to certain judgments. 13. Shri P. Chidambaram, learned senior counsel appearing for the Respondents in SLP (C) Nos.8372-8373 of 2017, emphasised the word "but" that appears in Section 26, which not only segregates the first part of Section 36 from the second part, but also makes it clear that the two parts apply to two different situations. The first part, according to learned senior counsel, would apply to the arbitral proceedings themselves i.e. from the Section 21 stage up to the Section 32 stage of the 1996 Act, whereas the second part would include all proceedings that begin from the Sectio....
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....an arbitral tribunal and the second part would apply only to court proceedings in relation thereto. This becomes clear from two things; one, the expression "to" appearing in the first part as contrasted with the expression "in relation to" appearing in the second part; and, two, the presence of Section 21 of the 1996 Act in the first part and its absence in the second part of Section 26. According to him, this would be the correct interpretation of Section 26, which would result in no anomalies, as it is clear that the date of commencement of an arbitral proceeding would be fixed with reference to Section 21 and the date of commencement of a court proceeding would be fixed with reference to the date on which the court proceeding is filed, and it is only arbitral proceedings and court proceedings which are filed after the commencement of the Amendment Act that would be so covered. 16. Shri Nakul Dewan, learned Advocate appearing on behalf of the Respondent in SLP (C) No.20224 of 2016 has argued that the first part of Section 26 speaks of "the arbitral proceedings" commenced in accordance with the provisions of Section 21. The second part of Section 26 omits the word "the" as well....
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....d to have been done or taken under the corresponding provisions of the principal Act, as amended by this Act. xxx xxx xxx Section 85. Repeal and savings.- (1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed. (2) Notwithstanding such repeal,- (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force; (b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act." 18. At this point, it is instructive to refer to the 246th Law Commission Report which led to the Amendment Act. This Report, which was handed over to the Government in August, 2014, had this to state on why it was proposing to replace Section 36 o....
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....he Act, to clarify the scope of operation of each of the amendments with respect to pending arbitrations/proceedings. As a general rule, the amendments will operate prospectively, except in certain cases as set out in section 85-A or otherwise set out in the amendment itself." The Report then went on to amend Section 36 as follows: "Amendment of Section 36 19. In section 36, (i) add numbering as subsection (1) before the words "Where the time" and after the words "Section 34 has expired," delete the words "or such application having been made, it has been refused" and add the words "then subject to the provision of subsection (2) hereof," (ii) insert sub-section "(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render the award unenforceable, unless upon a separate application made for that purpose, the Court grants stay of the operation of the award in accordance with the provisions of sub-section (3) hereof;" (iii) insert sub-section "(3) Upon filing of the separate application under subsection (2) for stay of the operation of the awar....
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....he instant section,- (a) "fresh arbitrations" mean arbitrations where there has been no request for appointment of arbitral tribunal; or application for appointment of arbitral tribunal; or appointment of the arbitral tribunal, prior to the date of enforcement of the Arbitration and Conciliation (Amending) Act, 2014. (b) "fresh applications" mean applications to a court or arbitral tribunal made subsequent to the date of enforcement of the Arbitration and Conciliation (Amending) Act, 2014. [NOTE: This amendment is to clarify the scope of operation of each of the proposed amendments with respect to pending arbitrations/proceedings.]" 19. The debates in Parliament in this context were referred to by counsel on both sides. Shri T. Satpathy (Dhenkanal) stated: "You have brought in an amendment to Section 25 (a) saying that this Act will not be retrospective. When the Bill for judges' pension and salary could be retrospective, why can you not amend it with retrospective effect so that ONGC-RIL case could be brought under this Act and let it be adjudicated as early as possible within 18 months and let the people of this country get some justice some....
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....h has not been adopted by the Amendment Act) and the third deals with the second proviso to Section 24, which deals, inter alia, with oral hearings and arguments on a day-to-day basis and the non-grant of adjournments, unless sufficient cause is made out. 21. What can be seen from the above is that Section 26 has, while retaining the bifurcation of proceedings into arbitration and Court proceedings, departed somewhat from Section 85A as proposed by the Law Commission. 22. That a provision such as Section 26 has to be construed literally first, and then purposively and pragmatically, so as to keep the object of the provision also in mind, has been laid down in Thyssen (supra) in paragraph 26 as follows: "26. Present-day courts tend to adopt a purposive approach while interpreting the statute which repeals the old law and for that purpose to take into account the objects and reasons which led to the enacting of the new Act. We have seen above that this approach was adopted by this Court in M.M.T.C. Ltd. case [(1996) 6 SCC 716]. Provisions of both the Acts, old and new, are very different and it has been so observed in Sundaram Finance Ltd. case [(1999) 2 SCC 479]. In t....
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....ame is used; but it would be a totally different thing to say that the arbitration proceedings commence only for the purpose of limitation upon issuance of a notice and for no other purpose. The statute does not say so. Even the case-laws do not suggest the same. On the contrary, the decisions of this Court operating in the field beginning from Shetty's Constructions [(1998) 5 SCC 599] are ad idem to the effect that Section 21 must be taken recourse to for the purpose of interpretation of Section 85(2)(a) of the Act. There is no reason, even if two views are possible, to make a departure from the decisions of this Court as referred to hereinbefore." 23. All learned counsel have agreed, and this Court has found, on a reading of Section 26, that the provision is indeed in two parts. The first part refers to the Amendment Act not applying to certain proceedings, whereas the second part affirmatively applies the Amendment Act to certain proceedings. The question is what exactly is contained in both parts. The two parts are separated by the word 'but', which also shows that the two parts are separate and distinct. However, Shri Viswanathan has argued that the expression "but" mea....
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....rties may "otherwise agree" and apply the Amendment Act to arbitral proceedings that have commenced before the Amendment Act came into force. (Section 29A of the Amendment Act provides for time limits within which an arbitral award is to be made. In Hitendra Vishnu Thakur v. State of Maharashtra (1994) 4 SCC 602 at 633, this Court stated: "(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law. (iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished. (v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication." It is, inter alia, because timelines for the making of an arbitral award have been laid down for the first time in Section 29A of the Amendment Act that parties were given the option to adopt such timelines which, though procedural in nature, create new obligations in res....
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.... commenced on or after the Amendment Act came into force. 26. We now consider some of the submissions of learned counsel for the parties as to what ought to be the true construction of Section 26. According to Shri Sundaram, the second part of Section 26 should be taken to be the principal part, with the first part being read as an exception to the principal part. This is so that Section 6 of the General Clauses Act then gets attracted to the first part, the idea being to save accrued rights. Section 6 applies unless a contrary intention appears in the enactment in question. The plain language of Section 26 would make it clear that a contrary intention does so appear, Section 26 being a special provision having to be applied on its own terms. 27. Thus, in Transport and Dock Workers' Union & others v. New Dholera Steamship Ltd., Bombay and others, (1967) 1 LLJ 434, a Five Judge Bench of this Court held: "6. It was contended before us that as an appeal is a continuation of the original proceeding the repeal should not affect the enforcement of the provisions of the Ordinance in this case. Reliance is placed upon Section 6 of the General Clauses Act, 1897 wherein is....
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....3 of the Finance Act, 1950, already extracted above, this Court observed at p. 68: "Nor can Section 6 of the General Clauses Act, 1897, serve to keep alive the liability to pay tax on the income of the year 1949-50 assuming it to have accrued under the repealed State law, for a "different intention" clearly appears in Sections 2 and 13 of the Finance Act read together as indicated above." It is true that whether a different intention appears or not must depend on the language and content of Section 297(2). It seems to us, however, that by providing for so many matters mentioned above, some in accord with what would have been the result under Section 6 of the General Clauses Act and some contrary to what would been the result under Section 6, Parliament has clearly evidenced an intention to the contrary." 28. Shri Sundaram's submission is also not in consonance with the law laid down in some of our judgments. The approach to statutes, which amend a statute by way of repeal, was put most felicitously by B.K. Mukherjea, J. in State of Punjab v. Mohar Singh, 1955 1 SCR 893 at 899-900, thus: "In our opinion the approach of the High Court to the question is ....
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....ly the provisions of the unamended 1996 Act. Similarly, when arbitral proceedings have commenced under Section 21 after the coming into force of the Amendment Act, those proceedings, including all courts proceedings in relation thereto, would be governed by the Amendment Act. This is not the scheme of Section 26 at all, as has been pointed out above. Further, this argument is more or less the conclusion reached by the report of the High Level Committee, headed by Justice B.N. Srikrishna, to amend the 1996 Act. (Shri Tushar Mehta, learned ASG, referred to a press release from the Government of India, dated March 7th, 2018, after arguments have been concluded, in a written submission made to us. According to him, the press release refers to a new Section 87 in a proposed amendment to be made to the 1996 Act. The press release states that the Union Cabinet, chaired by the Prime Minister, has approved the Arbitration and Conciliation (Amendment) Bill, 2018 in which a new Section 87 is proposed to be inserted as follows: "A new section 87 is proposed to be inserted to clarify that unless parties agree otherwise the Amendment Act 2015 shall not apply to (a) Arbitral proceedin....
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....of 2016 decided on 02.03.2016), the Madhya Pradesh High Court in Pragat Akshay Urja Limited Company v. State of M.P and Ors., (Arbitration Case Nos. 48, 53 and 54/2014, decided on 30.06.2016), the Madras High Court in New Tirupur Area Development v. Hindustan Construction Co. Limited, (Application No. 7674 of 2015 in O.P. No. 931 of 2015) and the Bombay High Court in Rendezvous Sports World v. BCCI (Chamber Summons No. 1530 of 2015 in Execution Application (L) No. 2481 of 2015, Chamber Summons No. 1532 of 2015 in Execution Application (L) No. 2482 and Chamber Summons No. 66 of 2016 in Execution Application (L) No. 2748 of 2015 decided on 08.08.2016). In addition to this, the following decisions by various High Courts also deal with the applicability of the Amendment Act: i. Calcutta High Court: Nitya Ranjan Jena v. Tata Capital Financial Services Ltd., GA No. 145/206 with AP No. 15/2016, West Bengal Power Development Corporation Ltd. v. Dongfang Electric Corporation, 2017 SCCOnline Cal 9388, Saraf Agencies v. Federal Agencies for State Property Management, AIR 2017 Cal. 65, Reliance Capital Ltd. v. Chandana Creations, 2016 SCC Cal. 9558 and Braithwaite Burn & Jess....
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....endment would be required to Section 26 to incorporate its findings. Section 87 of the proposed Arbitration and Conciliation (Amendment) Bill, 2018 cannot be looked at, at this stage, for the interpretation of Section 26 of the Amendment Act for two reasons: (i) Section 87, as ultimately enacted, may not be in the form that is referred to in the press release; and (ii) a proposed Bill, introducing a new and different provision of law can hardly be the basis for interpretation of a provision of law as it now stands. Obviously, therefore, Shri Viswanathan's approach leads to an amendment of Section 26, as recommended by the Srikrishna Committee, and not interpretation thereof. For all these reasons, his argument must, therefore, be rejected. Shri Datar's argument is more or less the same as Shri Viswanathan's, and suffers from the same infirmity as Shri Viswanathan's interpretation. Shri A. Krishnan, in bringing in the concept of "seat", is again doing complete violence to the language of Section 26, as "place of arbitration" is a well-known concept contained in Section 20 of the 1996 Act, which finds no mention whatsoever in Section 26 of the Amendment Act. For these reasons, his in....
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....tral proceedings before the arbitral tribunal, as otherwise Section 26 would not apply the Amendment Act to such arbitral proceedings. We are afraid that this alternative interpretation does not appeal to us, for the simple reason that when the first part of Section 26 makes it clear that arbitral proceedings commenced before the Amendment Act would not be governed by the Amendment Act, it is clear that arbitral proceedings that have commenced after the Amendment Act comes into force would be so governed by it, as has been held by us above. The negative form of the language of the first part only becomes necessary to indicate that parties may otherwise agree to apply the Amendment Act to arbitral proceedings commenced even before the Amendment Act comes into force. The absence of any reference to Section 21 of the 1996 Act in the second part of Section 26 of the Amendment Act is also a good reason as to why arbitral proceedings before an arbitral tribunal are not contemplated in the second part. 33. Shri Sibal has argued that Section 26 is not a savings clause at all and cannot be construed as such. According to the learned senior counsel, Section 26 manifests a clear intention ....
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.... 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. The expression "in relation to" is of the widest import as held by various decisions of this Court in Doypack Systems (P) Ltd. [(1988) 2 SCC 299], Mansukhlal Dhanraj Jain [(1995) 2 SCC 665], Dhanrajamal Gobindram [AIR 1961 SC 1285 : (1961) 3 SCR 1020] 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 proceedings pending at the time of commencement of the new Act but also the provisions of the old Act for enforcement of the award un....
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.... commenced before the 1996 Act were to be governed by the repealed Acts. These proceedings would be the entire gamut of proceedings, i.e. from the stage of commencement of arbitral proceedings until the challenge proceedings against the arbitral award had been exhausted. Similar was the position with respect to the applicability of the 1996 Act, which would again apply to the entire gamut of arbitral proceedings, beginning with commencement and ending with enforcement of the arbitral award. It is clear, therefore, that Section 85(2)(a) has two major differences in language with Section 26: one, that the expression "in relation to" does not appear in the first part of Section 26 and only the expression "to" appears; and, second, that "commencement" in the first part of Section 26 is as is understood by Section 21 of the 1996 Act. The second part of Section 85(2)(a) is couched in language similar to the second part of Section 26 with this difference, that Section 21 contained in the first part of Section 26 is conspicuous by its absence in the second part. 38. The judgment in Thyssen (supra) was followed in N.S. Nayak (supra). After setting out paragraph 32 of the judgment in Thys....
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....e appeals were pending before the High Court under the provisions of the old Act and, therefore, appeals are required to be decided on the basis of the statutory provisions under the said Act. Hence, there is no substance in the submission made by the learned counsel for the appellant." (at pages 63-64) The majority judgment in Milkfood Limited (supra), after referring to the judgments in Thyssen (supra) and N.S. Nayak (supra), concluded that, on the facts of that case, the 1940 Act will apply and not the 1996 Act. These judgments are distinguishable for the same reasons, as they only follow and apply Thyssen (supra). 39. From a reading of Section 26 as interpreted by us, it thus becomes clear that in all cases where the Section 34 petition is filed after the commencement of the Amendment Act, and an application for stay having been made under Section 36 therein, will be governed by Section 34 as amended and Section 36 as substituted. But, what is to happen to Section 34 petitions that have been filed before the commencement of the Amendment Act, which were governed by Section 36 of the old Act? Would Section 36, as substituted, apply to such petitions? To a....
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.... of the Code of Civil Procedure. Also, Section 36(3), as amended, refers to the provisions of the Code of Civil Procedure for grant of stay of a money decree. This, in turn, has reference to Order LXI, Rule 5 of the Code of Civil Procedure, which appears under the Chapter heading, "Stay of Proceedings and of Execution". This being so, it is clear that Section 36 refers to the execution of an award as if it were a decree, attracting the provisions of Order XXI and Order LXI, Rule 5 of the Code of Civil Procedure and would, therefore, be a provision dealing with the execution of arbitral awards. This being the case, we need to refer to some judgments in order to determine whether execution proceedings and proceedings akin thereto give rise to vested rights, and whether they are substantive in nature. 42. In Lalji Raja and Sons v. Hansraj Nathuram, (1971) 1 SCC 721 at 728, this Court was concerned with a judgment debtor's right to resist execution of a decree. Section 20(1)(b) of the Code of Civil Procedure (Amendment) Act, 1951 was extended to Madhya Bharat and other areas, as a result of which the judgment debtor's right to resist execution of a decree was protected. In this c....
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....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 situated 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 the judgment-debtors. Even if the judgment-debtors had not objected to the execution of the decree, the same could not have been executed by the court at Morena on the previous occasion as that court was not properly seized of the execution proceedings. By the extension of "the Code" to Madhya Bharat, want of jurisdiction on the part of the Morena Court was remedied and that court is now made competent to execute the decree. 16. That a provision to preserve the right accrued under a repealed Act "was not intended to preserve the abstract rights conferred by the repealed Act......
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....eedings were over, but which is now made executable as if it was a decree with immediate effect, and that this change would, therefore, take away a vested right or accrued privilege in favour of the Respondents. It has been argued, relying upon a number of judgments, that since Section 36 is a part of the enforcement process of awards, there is a vested right or at least a privilege accrued in favour of the Appellants in the unamended 1996 Act applying insofar as arbitral proceedings and court proceedings in relation thereto have commenced, prior to the commencement of the Amendment Act. The very judgment strongly relied upon by senior counsel for the appellants, namely Garikapati Veeraya (supra), itself states in proposition (v) at page 515, that the vested right of appeal can be taken away only by a subsequent enactment, if it so provides specifically or by necessary intendment and not otherwise. We have already held that Section 26 does specifically provide that the court proceedings in relation to arbitral proceedings, being independent from arbitral proceedings, would not be viewed as a continuation of arbitral proceedings, but would be viewed separately. This being the case, ....
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....edings that the buyer can resort to, no doubt, includes arbitration as well. It is pertinent to note that as opposed to Section 6(2), Section 6(1) does not state that in case the parties choose to resort to arbitration, the proceedings in pursuance thereof will be governed by the Arbitration Act. Hence, the right context in which the meaning of the term "appeal" should be interpreted is the Interest Act itself. The meaning of this term under the Arbitration Act or the Code of Civil Procedure would have been relevant if the Interest Act had made a reference to them. For this very reason, we also do not find it relevant that the Arbitration Act deals with applications and appeals in two different chapters. We are concerned with the meaning of the term "appeal" in the Interest Act, and not in the Arbitration Act." 44. Learned senior counsel appearing on behalf of the Respondents, has also argued that the expression "has been" in Section 36(2), as amended, would make it clear that the section itself refers to Section 34 applications which have been filed prior to the commencement of the Amendment Act and that, therefore, the said section would apply, on its plain language, even to S....
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....effect of the decision of the House in the Bremer Vulkan case, coupled with the inability of the courts to furnish any alternative remedy which might provide a remedy for the abuse of stale claims, aroused a chorus of disapproval which was forceful, sustained and (so far as I am aware) virtually unanimous. There is no need to elaborate. The criticisms came from every quarter. Several Commonwealth countries hastily introduced legislation conferring on the court, or on the arbitrator, a jurisdiction to dismiss stale claims in arbitration. The history of the matter, and the reasons why the question was not as easy as it might have appeared, were summarized in an article published in 1989 by Sir Thomas Bingham (Arbitration International, vol. 5, pp. 333 et seq.), and there is no need to rehearse them here. Taking account of various apparent difficulties the Departmental Advisory Committee on Arbitration hesitated for a time both as to the principle and as to whether the power to dismiss should be vested in the court or the arbitrator, but the pressure from all quarters became irresistible and in 1990 the Courts and Legal Services Act inserted, through the medium of Se....
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....rnative dispute resolution system, and that the Section should be amended at the earliest to bring about the required change in law. It would be clear that looking at the practical aspect and the nature of rights presently involved, and the sheer unfairness of the unamended provision, which granted an automatic stay to execution of an award before the enforcement process of Section 34 was over (and which stay could last for a number of years) without having to look at the facts of each case, it is clear that Section 36 as amended should apply to Section 34 applications filed before the commencement of the Amendment Act also for the aforesaid reasons. 47. Both sides locked horns on whether a proceeding under Section 36 could be said to be a proceeding which is independent of a proceeding under Section 34. In view of what has been held by us above, it is unnecessary for us to go into this by-lane of forensic argument. 48. However, Shri Viswanathan strongly relied upon the observations made in paragraph 32 in Thyssen (supra) and the judgment in Hameed Joharan v. Abdul Salam, (2001) 7 SCC 573. It is no doubt true that paragraph 32 in Thyssen (supra) does, at first blush, support ....
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....fferent concepts in law, was in the context of Article 136 of the Limitation Act, 1963, read with Section 35 of the Indian Stamp Act, 1899, which is wholly different. The argument in that case was that Article 136 of the Limitation Act prescribes a period of 12 years for the execution of a decree or order, after it becomes enforceable. What was argued was that it would become enforceable only when stamped and Section 35 of the Stamp Act was referred to for the said purpose. In this context, this Court held: "And it is on this score it has been contended that the partition decree thus even though already passed cannot be acted upon, neither becomes enforceable unless drawn up and engrossed on stamp papers. The period of limitation, it has been contended in respect of the partition decree, cannot begin to run till it is engrossed on requisite stamp paper. There is thus, it has been contended, a legislative bar under Section 35 of the Indian Stamp Act for enforceability of partition decree. Mr Mani contended that enforcement includes the whole process of getting an award as well as execution since execution otherwise means due performance of all formalities, necessary to give....
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....a Debt Relief Act. This Court held that as the original decree could not be enforced and only the amended decree could be enforced, 12 years has to be counted from the date of the amended decree. It is clear that this judgment also does not carry the matter further. 52. It was also argued that an award by itself had no legal efficacy, until it became enforceable, and that, therefore, until it could be enforced as a decree of the Court, it would continue to remain suspended. Here again, the judgment in Satish Kumar (supra) is extremely instructive. The question in that case was as to whether, under the 1940 Act, an award had any legal efficacy before a judgment followed thereupon and it was made into a decree. A Full Bench of the Punjab and Haryana High Court held that until it is made a rule of the Court, such an award is waste paper. This Court strongly disagreed and followed its unreported decision in Uttam Singh Dugal & Co. v. Union of India as follows: "It seems to us that the main reason given by the two Full Benches for their conclusion is contrary to what was held by this Court in its unreported decision in Uttam Singh Dugal & Co. v. Union of India [ Civil Appeal....
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.... judgment of a court of last resort. Therefore, if the award which has been pronounced between the parties has in fact, or can, in law, be deemed to have dealt with the present dispute, the second reference would be incompetent. This position also has not been and cannot be seriously disputed." This Court then held on the merits "that the dispute in regard to overpayments which are sought to be referred to the arbitration of Respondent 2 by the second reference are not new disputes; they are disputes in regard to claims which the Chief Engineer should have made before the arbitration under the first reference". This Court accordingly allowed the appeal and set aside the order passed by the High Court. This judgment is binding on us. In our opinion this judgment lays down that the position under the Act is in no way different from what it was before the Act came into force, and that an award has some legal force and is not a mere waste paper. If the award in question is not a mere waste paper but has some legal effect it plainly purports to or affects property within the meaning of Section 17(1)(b) of the Registration Act." (at pages 248-....
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....enquiry, which we are not required to undertake in the facts of the present cases, except to the extent indicated above, namely, the effect of the substituted Section 36 of the Amendment Act. 55. Learned counsel for the Appellants have painted a lurid picture of anomalies that would arise in case the Amendment Act were generally to be made retrospective in application. Since we have already held that the Amendment Act is only prospective in application, no such anomalies can possibly arise. It may also be noted that the choosing of Section 21 as being the date on which the Amendment Act would apply to arbitral proceedings that have been commenced could equally be stated to give rise to various anomalies. One such anomaly could be that the arbitration agreement itself may have been entered into years earlier, and disputes between the parties could have arisen many years after the said arbitration agreement. The argument on behalf of the Appellants is that parties are entitled to proceed on the basis of the law as it exists on the date on which they entered into an agreement to refer disputes to arbitration. If this were to be the case, the starting point of the application of ....
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....mmittee recommended that since many provisions of the said Bill were contentious, the Bill may be withdrawn and a fresh legislation may be brought after considering its recommendations. Accordingly, the said Bill was withdrawn from the Rajya Sabha. 3. On a reference made again in pursuance of the above, the Law Commission examined and submitted its 246th Report on "Amendments to the Arbitration and Conciliation Act, 1996" in August, 2014 and recommended various amendments in the Act. The proposed amendments to the Act would facilitate and encourage Alternative Dispute Mechanism, especially arbitration, for settlement of disputes in a more user-friendly, cost effective and expeditious disposal of cases since India is committed to improve its legal framework to obviate in disposal of cases. 4. As India has been ranked at 178 out of 189 nations in the world in contract enforcement, it is high time that urgent steps are taken to facilitate quick enforcement of contracts, easy recovery of monetary claims and award of just compensation for damages suffered and reduce the pendency of cases in courts and hasten the process of dispute resolution through arbitration, so as ....
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....to challenge the award is to be disposed of by the Court within one year. 7. The amendments proposed in the Bill will ensure that arbitration process becomes more user-friendly, cost effective and lead to expeditious disposal of cases." (Emphasis Supplied) 57. The Government will be well-advised in keeping the aforesaid Statement of Objects and Reasons in the forefront, if it proposes to enact Section 87 on the lines indicated in the Government's press release dated 7th March, 2018. The immediate effect of the proposed Section 87 would be to put all the important amendments made by the Amendment Act on a back-burner, such as the important amendments made to Sections 28 and 34 in particular, which, as has been stated by the Statement of Objects and Reasons, "...have resulted in delay of disposal of arbitration proceedings and increase in interference of courts in arbitration matters, which tend to defeat the object of the Act", and will now not be applicable to Section 34 petitions filed after 23rd October, 2015, but will be applicable to Section 34 petitions filed in cases where arbitration proceedings have themselves commenced only after 23rd October, 2015. Th....
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.... the fag end of the arguments, Shri Viswanathan, in rejoinder, raised another point which arises only in Civil Appeals arising out of SLP(C) No. 8374-8375 of 2017 and 8376-8378 of 2017. According to him, the impugned judgment, when it dealt with the majority award in favour of respondent Enercon GmbH, went behind the award in ordering execution of a portion of the award in favour of Enercon, when the majority award, in paragraph 331(3) (b), specifically ordered the 2nd and 3rd defendants to pay to WWIL, which is a joint venture company, a sum of Rs. 6,77,24,56,570/-. The majority award of the tribunal had specifically stated, in paragraph 298, as follows: "Enercon's claim is first pleaded as damages payable by the Mehra directors directly to Enercon. It also pleads an alternative claim for such further or other relief as the Tribunal considers appropriate (paragraph 18 of the application of 13 December 2015 and paragraph 323.4 of its closing written submission dated 13 May 2016, as also its Statement of Claim of 30 September 2014, at paragraph 102(M).) In the Tribunal's view, given that WWIL is only part owned by Enercon (hence Enercon's pecuniary disadvantage resulting fr....