TaxTMI 
TaxTMI 
2018 (2) TMI 1757
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....N NO.159 OF 2017 WITH COMMERCIAL ARBITRATION PETITION NO.173 OF 2017 WITH ARBITRATION PETITION NO.230 OF 2017 WITH ARBITRATION PETITION NO.232 OF 2017 WITH ARBITRATION PETITION NO. 413 OF 2017 WITH ARBITRATION PETITION NO.448 OF 2017 WITH ARBITRATION PETITION NO.976 OF 2016 WITH ARBITRATION PETITION NO.399 OF 2017 WITH ARBITRATION PETITION NO.484 OF 2017 WITH ARBITRATION PETITION NO.614 OF 2017 WITH ARBITRATION PETITION NO.624 OF 2017 WITH ARBITRATION PETITION NO.655 OF 2017 ORDER 1. The respondents in all these petitions have raised a preliminary issue of maintainability of these petitions on the ground that no notice under section 34 (5) of the Arbitration & Conciliation Act, 1996 has been issued by the petitioners to the respondents before filing these arbitration petitions and thus the petitions are liable to be dismissed on that ground itself. In view of this preliminary objection raised by the respondents, learned counsel appearing for the parties have addressed this Court on this issue at this stage at great length, which is being considered by this Court by passing a common order in the aforesaid matters. 2. The questions that arise for consideration of this ....
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.... The respondents issued a modification by a letter of allotment to the petitioner on 28 th March, 2008. The petitioner accepted the terms and conditions of the letter of allotment as well as modification thereto on 4th April, 2008. The dispute arose between the parties. 5. On 28th February, 2011, the petitioner issued a notice invoking arbitration agreement to the respondents to settle the claims between the parties. The petitioner sent a reminder to the respondents on 7th April, 2011 and once again called upon to appoint a sole arbitrator. On 5th January, 2012, the respondents issued a notice of termination of agreement. The petitioner filed an application under section 11 of the Arbitration & Conciliation Act, 1996 for seeking an appointment of a sole arbitrator. On 4 th December, 2012, the learned designate of the Hon'ble Chief Justice of this Court disposed of the said Arbitration Application No.67 of 2012 and carbp434-17 referred the disputes between the parties by appointing a sole arbitrator. On 12th April, 2017, the learned arbitrator rendered an award thereby rejecting the claims made by the petitioner and partly allowing the counter claim made by the respondent. Be....
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.... disputes between the parties to the arbitration of the learned arbitrator. He submits that in view of the petitioner invoking arbitration agreement as far back as on 28 th February, 2011, the arbitral proceedings had already commenced upon receipt of the said notice invoking arbitration agreement by the respondent which was much prior to insertion of section 34(5) of the Arbitration & Conciliation Act, 1996 in section 34 which was inserted with effect from 23rd October, 2015. 9. It is submitted by the learned senior counsel that merely because the arbitral award came to be rendered on 12th April, 2017 i.e. after the said provision of section 34(5) was inserted in section 34, the said provision under section 34(5) cannot be made applicable to the arbitral proceedings which had commenced prior to 23 rd carbp434-17 October, 2015. He submits that merely because this arbitration petition was filed after the said provision of section 34(5) was inserted, the said provision cannot be made applicable to the arbitration application filed under section 34 of the Arbitration & Conciliation Act, 1996. The Court has to consider whether the arbitral proceedings had already commenced prior to ....
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....his office is abolished by the person for the time being entrusted, whether or not in addition to other functions with the functions of the Chairman. Airports Authority of India, by whatever designation such person may be called and if the arbitrator so appointed and willing to act, to sole arbitration of some other person to be similarly appointed and willing to carbp434-17 act as such arbitrator. It will be no objection to any such appointment that the arbitrator so appointed is a servant of the Authority and that he had to deal with the matters to which this Agreement relates and that in the course of his duties as such servant of Authority he had expressed views on all or any of the matters in dispute or difference. The award of the arbitrator so appointed shall be final and binding on the parties. The Arbitrator may with the consent of the parties extend from time to time then time for making the publishing the award." 12. Learned senior counsel placed reliance on the judgment of the Supreme Court in case of Thyssen Stahlunion GMBH vs. Steel Authority of India Limited, (1999) 9 SCC 334 and in particular paragraphs 2, 4, 5, 7, 12, 13, 22, 23, 25, 27, 28, 30, 32 and 33. He al....
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....ld (supra), learned single Judge has interpreted section 36 of the Amendment Act and not the rights of the parties under sections 34 and 37 of the Act. He submits that in any event the said judgment was not dealing with section 34 of the Arbitration & Conciliation Act, 1996 which section is invoked by the carbp434-17 petitioner for challenging the impugned award. In support of this submission, learned senior counsel invited my attention to paragraphs 46, 49, 52, 53, 56 to 58, 62, 65, 66, 67 and 78 of the said judgment in case of M/s.Rendezvous Sports World (supra) and would submit that paragraphs 22(5) and 32 of the judgment of the Supreme Court in case of Thyssen Stahlunion GMBH (supra) have not been considered by the learned single Judge of this Court in the said judgment of M/s.Rendezvous Sports World (supra). 16. Mr.Mehta, learned senior counsel also invited my attention to the judgment delivered by the learned single Judge of this Court in case of Enercon GmbH vs. Yogesh Mehra & Ors., 2017 SCC OnLine Bom. 1744 and in particular paragraphs 29, 36 and 45. He submits that in that case the arbitration petition was filed admittedly under section 34 after 23rd October, 2015 and t....
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....e under section 34(5). 19. Learned senior counsel placed reliance on the judgment of the Supreme Court in case of Vidyawati Gupta & Ors. vs. Bhakti Hari Nayak & Ors., (2006) 2 SCC 777 and in particular paragraphs carbp434-17 16, 22, 49, 51 and 52. He also placed reliance on the Bombay High Court (Original Side) Rules and more particularly Rule 803-B and would submit that the said provision also provides for issuance of a notice to the respondent before admitting the petition to obviate the delay on account of the Court notice. 20. Learned senior counsel placed reliance on the judgment of the Supreme Court in case of Kailash vs. Nanhku & Ors. (2005) 4 SCC 480 and in particular paragraphs 41 and 42. He also placed reliance on the judgment of the Supreme Court in case of Topline Shoes Limited vs. Corporation Bank, (2002) 6 SCC 33 and in particular paragraphs 5, 8 and 11 in support of his submission that the provisions under section 34(5) cannot be construed as mandatory but has to be considered as directory. He submits that no specific right is created in favour of the respondent even if no prior notice before filing of the arbitration petition under section 34 is issued to the ....
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....icularly the Note in respect of section 34(5) which provides that the said provision has been included to streamline the process and to cut-short the long delays which accrued due to issue of Court notice. He submits that the interpretation of a provision has to be done to achieve the object of the enactment i.e. to avoid delays involved in the service of notice by the Court. The object is not to prevent the petition being filed. The interpretation has to be textual as well as contextual i.e. purposive interpretation. 26. Section 34(5) does not prescribe the nature of the notice or the contents of the notice and the said provision is vague. He also placed reliance on section 34(6) which was also inserted by the said Amendment Act and would submit that if the provision of section 34(5) is read with section 34(6), a party could issue and serve a notice on the 1st day of service of the award and file a petition under section 34 on the 120th day. In such a situation, the period available to the Court to dispose of the section 34 petition would be only 8 months which could not have been an intention of the legislature. 27. It is submitted by the learned counsel that section 34(5) ....
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....ngs. The Act clarifies that the arbitral tribunal shall not be bound by the provisions of the Civil Procedure Code, 1908 or the Evidence Act, 1872. The Code of Civil Procedure, 1908 is however applicable to the proceedings under the Arbitration and Conciliation Act, 1996 in Court. The Code of Civil Procedure, 1908 gives ample powers to the Court to dispense with the requirement of notice or to waive the same in appropriate matters under section 151 or to extend the time to issue the notice under section 148. The Arbitration Act recognizes party autonomy. 30. It is submitted by the learned counsel that section 26 of the Amendment Act permits parties to agree "otherwise". The respondent by not objecting and by not issuing a notice under section 34(5) has agreed otherwise. The petitioner has served the notice along with copy of the arbitration petition upon the respondent on 18th April, 2017 and has complied with or in any event substantially complied with the requirement under section 34(5) of the Arbitration Act. It is submitted by the learned counsel that the respondent can also waive a notice as required under section 34(5). Section 4 of the Arbitration and Conciliation Act, wh....
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....e of Kailash vs. Nanhku & Ors. (2005) 4 SCC 480, d). Central Bank of India vs. Femme Pharma Ltd. & Ors., AIR 1982 Bom. 67, e). Thirumalai Chemicals Ltd. vs. Union of India & Ors., 2011 6 SCC 739, f). M/s.Babbar Sewing Machine Company vs. Trilok Nath Mahajan (1978) 4 SCC 188, g). State of Goa vs. Western Builders, (2006) 6 SCC 239, h). Raptakos Brett And Co. Ltd. vs. Ganesh Property, AIR 1998 SC 3085, and i). Rohanlal Kuthalia & Ors. vs. R.B.Mohan Singh Oberoi, (1975) 4 SCC 628. 34. Learned counsel submits that if the consequence is not carbp434-17 provided for compliance of any particular provision, such provision has to be construed as directory and not mandatory. Such provision can be also waived. He also placed reliance on the Bombay High Court (Original Side) Rules and more particularly Rule 227 providing for six months time for issuance of notice by the Court in arbitration matters. He also placed reliance on section 80 of the Code of Civil Procedure, 1908 and section 527 of the Mumbai Municipal Corporation Act, 1882. 35. It is submitted by the learned counsel that section 34(5) only refers to issuance of prior notice and does not contemplate filing of ....
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....e arbitral proceedings where a notice under section 21 is issued after 23 rd October, 2015. 38. Learned counsel refers to the phrase "arbitral proceedings" in various provisions of the Arbitration & Conciliation Act, 1996 and more particularly in sections 9, 13, 16, 17, 21, 22, 27, 29, 29-A, 30, 31, 31-A, 32, 34, 38 and 77. He submits that the intention of the legislature is thus clear that if the notice invoking arbitration carbp434-17 agreement is issued prior to 23rd October, 2015, then all such matters would be governed by the provisions under the Arbitration & Conciliation Act, 1996 and not by the provisions of the Amendment Act. 39. It is submitted that even in those cases where the notice invoking the arbitration agreement is issued after 23 rd October, 2015 and the arbitral proceedings have commenced after that date, insofar as the provisions under section 34(5) and 34(6) of the Arbitration & Conciliation Act, 1996 inserted by the Amendment Act is concerned, the same being directory and not mandatory, all such arbitration petitions filed without issuing such notice prior to the date of filing of the arbitration petition cannot be dismissed on that ground. It is submit....
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....at section 34(5) cannot be compared with section 12(2) of the Rent Act. The said powers under section 34(5) does not fatter upon the powers under sections 34(1) and 34(2) of the Act. Learned counsel cited the judgment of the Supreme Court in case of Kailash vs. Nanhku & Ors. (2005) 4 SCC 480 and in particular paragraphs 23 to 28. It is submitted that even if a notice under section 34(5) is not issued prior carbp434-17 to the date of filing of the arbitration petition, substantive remedy of the aggrieved party cannot be taken away under section 34(1). 42. Learned counsel for the petitioner placed reliance on the judgment of the Supreme Court in case Parasramka Commercial Company vs. Union of India, 1969 (2) SCC 694 and in particular paragraph 5 in support of his submissions that even if a notice is issued by the petitioner to the respondent post filing of the petition, it would amount to substantial compliance of provisions of section 34(5) and the purpose of such notice would be served. 43. Mr.Pujari, learned counsel appearing for the respondent in Arbitration Petition No.238 of 2017 placed reliance on the unreported judgment delivered on 25th October,2013 in First Appeal No.....
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....ctober, 2015 and the arbitration petition also came to be filed after 23rd October, 2015. She strongly placed reliance on the judgment of this Court in case of M/s.Rendezvous Sports World (supra) and in particular paragraphs 10, 11, 21, 25 to 28, 33, 34, 52, 53, 57, 58 and 78 and also in case of Enercon GmbH (supra) and in particular carbp434-17 paragraphs 24, 28, 32, 38, 40 and 44 in support of her submission that though the notice invoking arbitration agreement was given prior to 23rd October, 2015 and the award was rendered after that date, all the arbitration petitions challenging such award would be governed by section 34(5) and 34(6) to be read with section 34(1) and those provisions thus will have to be complied with. She submits that there are two sets of arbitral proceedings contemplated under section 26 of the Arbitration & Conciliation Act, 1996 i.e. one before the arbitral tribunal and another in Court post award. 47. Learned counsel placed reliance on the judgment of the Supreme Court in case of Thyssen Stahlunion GMBH (supra) and submits that the phrase "in relation to the arbitral proceedings" cannot be given a narrow meaning to mean only the pendency of the arbit....
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.... the words "an application under section 34(1) shall be disposed in any event within a period of one year from the date of such notice referred to in sub-section 5 is served". She submits that the word "only" is an exclusive word and indicates the legislative intent that the section is mandatory. She placed reliance on section 25 of the Law Commission Report in carbp434-17 support of this submission. 50. Learned counsel placed reliance on section 11(13) of the Arbitration & Conciliation Act, 1996 and would submit that in the said provision, a mandate is provided that the High Court or the Supreme Court as the case may be shall decide an application as expeditiously as possible and an endeavor shall be made to dispose of the matter within a period of 60 days from the date of service of the notice on the opposite parties. The words "in any event" are not used in the said provision, whereas such words are used in section 34(6) of the Amendment Act. She submits that the effect of section 34(5) is clearly to impose a bar against the institution of the application under section 34(1) and the same is the only legislative purpose and intent to dispose of the challenge applications withi....
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....41 of 2016 in case of Bihar Rajya Bhumi Vikas Bank Samiti, Bihar - Jharkhand vs. The State of Bihar & Ors. 53. Learned counsel for the respondent makes an attempt to distinguish the judgment of this Court in case of The Board of Trustees of the Port of Mumbai (supra) on the ground that the said judgment is in conflict with the judgment of this Court in case of M/s.Rendezvous Sports World (supra) and Enercon GmbH (supra). Learned counsel distinguished the judgment of the Supreme Court in case of Thyssen Stahlunion GMBH (supra) on the ground that the question for consideration of the Supreme Court in the said judgment was of the construction of section 85(2)(a) of the Arbitration & Conciliation Act, 1996. Learned counsel for the respondent also makes an attempt to distinguish the judgment of the Supreme Court in case of Milkfood Limited (supra) on similar ground. 54. Learned counsel for the respondent distinguished the judgment of the Supreme Court in case of Vidyawati Gupta & Ors. (supra) and would submit that section 34(5) in this case being mandatory, non-compliance of such mandatory provision would carbp434-17 render the proceedings non-est in the eyes of law. Learned couns....
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....ish Kamat, learned counsel appearing for the respondent in Arbitration Petition No.624 of 2017 adopted the submissions made by Ms.Munim, learned counsel for the respondent in Commercial Arbitration Petition No.434 of 2017 and would submit that the object and purpose of introducing the section 34(5) and 34(6) is expeditious disposal of the arbitration petitions challenging an arbitral award. Such provisions are mandatory in its nature. The arbitration petition challenging the arbitral award can be filed only post issuance of such mandatory notice. The obligation to issue such notice is on the party who seeks to challenge an arbitral award. The duty is cast on the office of the Court to ensure that due compliance of such mandatory notice is made by the petitioner before filing of the arbitration petition under section 34. 59. It is submitted by the learned counsel that section 34(5) provides for an implied consequence of non-compliance of issuance carbp434-17 of the mandatory notice. Though there is no specific consequence provided in section 34(6), if such arbitration application is not disposed of within one year from the date of service of the notice under section 34(5) upon th....
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....purpose of deciding the legal issues raised by the respondent in these batch of petitions. 62. Insofar as Commercial Arbitration Petition No.434 of 2017 is concerned, the petitioner had issued a notice invoking arbitration clause on 28th February, 2011. On 4th December, 2012, the learned designate of the Chief Justice appointed the sole arbitrator in an application filed by the petitioner under section 11(6) of the Arbitration & Conciliation Act, 1996. On 23 rd October, 2015, the Amendment Act came into effect. On 12th April, 2017, learned arbitrator made an award i.e. after the Amendment Act came into force. On 21 st August, 2017, the petitioner filed this arbitration petition. The respondent has raised a plea in the affidavit in reply dated 5th October, 2017 about the maintainability of this petition in view of non-issuance of prior notice by the petitioner under section 34(5) of the Amendment Act 63. Insofar as Commercial Arbitration Petition No.236 of 2017 carbp434-17 is concerned, the petitioner had issued a notice invoking arbitration agreement on 14th June, 2014. Learned arbitrator accepted his nomination and entered upon the reference on 7 th August, 2014. Learned arb....
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....t in case of Thyssen Stahlunion GMBH (supra) has construed section 85(1)(a) of the Arbitration and Conciliation Act and has held that the provisions of Arbitration Act, 1940 shall apply in relation to the arbitral proceedings which are commenced before coming into force of the Arbitration and Conciliation Act, 1996. Supreme Court has held that in the cases where arbitral proceedings have commenced before coming into force of the New Act (1996 Act) and are pending before the Arbitrator, it is open to the parties to agree that new Act be applicable to such arbitral proceedings and they can so agree even before the coming into force of the new Act. The new Act would be applicable in relation to arbitral proceedings which commenced on or after the new Act carbp434-17 comes into force. 69. It is held that once the arbitral proceedings have commenced, it cannot be stated that right to be governed by the old Act for enforcement of the award was an inchoate right. It was certainly a right accrued. It is not imperative that for right to accrue to have the award enforced under the old Act that some legal proceedings for its enforcement must be pending under that Act at the time new Act ca....
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....6. There was no provision in the arbitration agreement that the parties would be governed by not only the provisions of the Arbitration and Conciliation Act, 1996 but also by the statutory amendment or repealed thereto. This Court accordingly held that since the notice invoking arbitration agreement was issued prior to 23rd October, 2015, the provisions of amended section 34 brought into effect on 23rd October, 2015 would not be applicable to the facts of this case. 72. In case of Padmini C. Menon vs. Vijay C. Menon & Ors. in Arbitration Petition No.9 of 2015 in its judgment delivered on 10th January,2018, this Court held that in view of there being an agreement between the parties that the parties would be governed carbp434-17 not only by the Arbitration and Conciliation Act, 1996 but also statutory amendment or repeal thereto, though the arbitration proceedings had commenced prior to 23rd October, 2015, the amendment inserted in section 11 as section 11(6-A) would be applicable to the parties though the arbitration application filed by the applicant in the year 2015 was pending in this Court on 23 rd October, 2015 and thereafter this Court after adverting to section 85(2)(a) a....
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....ments. 75. A perusal of section 26 of the Amendment Act of 2015 clearly indicates that unless the parties otherwise agree, no provisions of the Amendment Act would apply to arbitral proceedings commenced in accordance with the provisions of section 21 of the Arbitration and Conciliation Act, 1996 prior to 23rd October, 2015. It also makes it clear that the provisions of Amendment Act shall apply in relation to the arbitral proceedings commenced on or after the date of commencement of the Amendment Act. It is thus clear that if in an arbitration agreement is entered into prior to 23rd October, 2015, and the parties had agreed that the parties would be governed not only by carbp434-17 the provisions of the Arbitration and Conciliation Act, 1996 but also by statutory amendment thereto or repeal thereto and if the notice invoking arbitration agreement under section 21 is received by the other party prior to 23rd October, 2015 when the arbitral proceedings contemplated under section 21 is commenced, the party will be governed by not only the provisions of Arbitration and Conciliation Act, 1996 but also by the statutory amendments thereto or repeal thereto and not otherwise. 76. If....
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....2015, those awards would become enforceable only if and when those petitions under section 34 were refused and not otherwise. A question was also before this Court that if Amendment Act is held applicable, whether after expiry of three months of the arbitral award, it becomes enforceable in accordance with the provisions of Code of Civil Procedure, irrespective of fact whether challenge has been filed under section 34 of the Act or not. 80. This Court recorded that there was no dispute between the parties as regards the specific meaning of the term arbitral carbp434-17 proceedings under the Arbitration Act. This Court also recorded that there was no dispute between the parties that the first part of section 26 carries restrictive meaning that the proceedings before the arbitral tribunal which proceedings get terminated on passing of the final award. It is held that 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. It is thus clear that in that judgment, there was no contest between the parties that the first part of saving section 26 carries restrictive meaning....
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.... is held that section 36 of the Arbitration Act pertains only to the enforcement of an award and its executability. The original section 34, imposed a disability on the award-holder in executing the award during pendency of the challenge to the award. It is held that the right to interim relief cannot be a vested or accrued substantive right. The disability imposed on the award-holder under original section 36 was absolute. It is thus clear that even in the said judgment, it is held by this Court that insofar as right of an aggrieved party to challenge an arbitral award is concerned, the said right is a vested right accrued to him which is not affected by section 36 by virtue of insertion of such amendment by the Amendment Act. carbp434-17 83.This Court in the said judgment in case of M/s.Rendezvous Sports World (supra) held that the parties in that case were ad-idem and both the parties had agreed that the term 'arbitral proceedings' referred in section 26 of the Amendment Act refers to two separate arbitral proceedings i.e. one before the arbitral tribunal before rendering of an award and another before this Court of law after rendering of an award. In these proceed....
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....ral proceedings which have commenced after 23rd October, 2015 by virtue of a receipt of notice invoking arbitration agreement by other party in view of section 21 of the Arbitration and Conciliation Act, 1996. The phrase "the date of commencement of the arbitral proceedings" is a legal fiction and has to be read in conjunction with the words "commenced in accordance with section 21". 86. The judgment of this Court in case of M/s.Rendezvous Sports World (supra) thus to this extent does not support the case of the respondent but supports the case of the petitioner that the right to challenge an arbitral award is vested in favour of the aggrieved party and cannot be taken away by virtue of an amendment. carbp434-17 87. The Supreme Court in case of Aravali Power Company Pvt. Ltd. vs. M/s.Era Infra Engineering Ltd., 2017 SCC OnLine 1072 has considered the applicability of the Amendment Act in a matter where notice invoking arbitration agreement was issued prior to 23rd October, 2015. During the pendency of the arbitral proceedings, section 12 of the Arbitration and Conciliation Act, 1996 was amended by the same Amendment Act. The respondent before the Supreme Court had invoked ....
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....ound by the judgment of Supreme Court. 90. In case of Voestalpine Schienen GmbH vs. Delhi Metro Rail Corporation Ltd., (2017) 4 SCC 665, the Supreme Court has considered a different situation where the notice invoking arbitration agreement was issued after 23rd October, 2015 and the arbitral proceedings had commenced after Amendment Act came into force. The appointment of the arbitrator was not in conformity with section 12(1) of the Amendment Act Supreme Court interfered with such appointment by applying the provisions of the Amendment Act, 2015. The Supreme Court distinguished the judgments delivered prior to the carbp434-17 said amendment to the facts of that case before the Supreme Court in view of the admitted fact that the notice invoking arbitration agreement was issued after 23rd October,2015. 91. This judgment of the Supreme Court is adverted to by the Supreme Court in case of Aravali Power Company Pvt. Ltd. (supra) and was distinguished on the ground that in that matter, the notice under section 21 of the Arbitration Act was issued prior to 23rd October,2015. In my view the principles of law laid down by the Supreme Court would apply to the facts of this case to a s....
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....law 2 and the regulations of the Bombay Stock Exchange thereby taking away the powers of the appellate bench to condone the delay. This Court held that in such a situation section 6(e) of the General Clauses Act, 1897 would be attracted. This Court accordingly has set aside the order passed by the appellate bench of the Bombay Stock Exchange and directed that the appellate bench to hear the application for condonation of delay. 94. In this case also, it is not the case of any of the parties that section 34(5) an 34(6) inserted by the Amendment Act would be carbp434-17 applicable with retrospective effect. Even otherwise the intent of the legislation while inserting these two provisions does not indicate that the said provisions are brought into effect with retrospective effect. In my view, when the arbitration proceedings commenced in view of the notice issued by the petitioner under section 21 much prior to 23rd October, 2015 and since at that point of time, the petitioner was not required to issue any prior notice to the respondent before filing of the arbitration petition under section 34, merely because the award is rendered after 23rd October, 2015 and the petition is filed....
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....the purpose of limitation or otherwise is of the Court's conscience. If a proceeding commences, the same becomes relevant for many purposes including that of limitation. In paragraph 70 of the said judgment, it is held that those arbitral proceedings which were commenced before coming into force of the 1996 Act are saved and the provisions of the 1996 Act would apply in relation to the arbitral proceedings which commenced on or after the said Act came into force. Even for the said limited purpose, it is necessary to find out as to what is meant by commencement of carbp434-17 arbital proceedings for the purpose of the 1996 Act wherefor also necessity of reference to section 21 would arise. In my view, the principles laid down by the Supreme Court in case of Milkfood Limited (supra) would squarely apply to the facts of this case. 98. The reference to "arbitral proceedings" in section 26 of the Amendment Act refers to such proceedings at two different stages i.e. one before the Amendment Act came into effect and another after such amendment came into force i.e. after 23rd October, 2015. It is thus clear beyond reasonable doubt that the term "arbitral proceedings" referred in se....
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....nt of this Court in case of M/s.Rendezvous Sports World (supra) applies to the facts of this case and is binding on this Court is concerned, even in the said judgment, this Court has held that the Amendment Act does not repeal section 34. This Court in the said judgment has categorically carbp434-17 held that the vested right available to the award debtor would be only in the matter of challenge to the arbitration award which has remained intact and such right is unaffected by the amendment to section 36 of the Arbitration & Conciliation Act, 1996. In my view, Mr.Jain, learned counsel for the petitioner is right in his submission that impediment created by section 34(5) i.e. for issuance of prior notice before filing of the arbitration application cannot affect the vested right prescribed under section 34(1) of the Arbitration & Conciliation Act, 1996. 104. In this case, the petitioner had already served a copy along with a copy of the arbitration petition upon the respondent on 18 th April, 2017 i.e. after filing of the arbitration petition. In my view, learned counsel is right in his submission that the principles under section 4 of the Arbitration & Conciliation Act, 1996 are....
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....heard for admission. The recommendation of the Law Commission of India, in the said report that the purpose of introducing section 34(5) is to streamline the process and to cut short the long delays which accrued due to issuance of Court notice is carbp434-17 taken care of. 109. It is the practice of this Court not to hear any arbitration petition unless a copy of notice and the papers and proceedings are first served upon the opponents. Section 34(5) does not contemplate that after the prior notice is served, the petitioner is not required to serve the notice along with papers and proceedings upon the other party before the matter is heard for admission. 110. This Court in case of Ashraf Ahmed vs. The Municipal Corporation of Greater Bombay in First Appeal No.292 of 1999 has construed the requirement of notice under section 527 of the Mumbai Municipal Corporation Act and the consequence of non-compliance thereof. It is held that all the object of the notice under section 527 of the said Act is to give sufficient time to the Bombay Municipal corporation and/or its authorities to consider the prayer for redressal of the plaintiff's grievances without resorting to any litig....
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....consequence of carbp434-17 such default is provided therein. Section 34(5) also does not provide the mode and manner of such service. Whether a copy of the arbitration petition along with annexures proposed to be filed also is required to be served along with such notice or not is not contemplated in the said provision. 114. The said provision also is silent on the issue i.e. if there are office objections raised by the office of this Court and if the petitioner is required to make any changes in the petition in the format or in the contents of the petition for the purposes of removal of such objections raised by the office, whether the petitioner is required to issue a fresh notice along with the papers with the corrections in the petition or not. Section 34(6) provides that such petition has to be disposed of within one year from the date on which the notice referred to in sub section 5 of section 34 is served upon the other party. If after giving the notice on the first day itself upon the receipt of the signed copy of the award from the arbitral tribunal,if the petitioner issues such notice as referred to in sub section 5 of section 34 and does not file the petition for the ....
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....d a mechanism for determining those rights and liabilities and a machinery for enforcing them, the same cannot be called a substantive right and an aggrieved person cannot claim any vested right. It is held that unless the 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 statue merely procedural is to be construed as retrospective and a statue which while procedural in its character, affects vested rights adversely, is to be construed as prospective. 118. In my view, Mr.Mehta, learned senior counsel and Mr.Jain, learned counsel have rightly contended that issuance of such notice under section 34(5) is a requirement however, not mandatory. The discretionary power is given to the Courts to look into the facts in each case and decide if the same has to be made mandatory or not. If the provision of section 34(5) is construed as mandatory, it would take away the discretionary powers from the Court. Any strict interpretation of such procedural provision will cause inconvenience to the parties and would result in lengthening the procedure and defeating the entire pur....
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....34 would not wait and would not cause any delay by not issuing notice upon the other party to obviate any situation of execution of award under the provisions of the Code of Civil Procedure, 1908. For this reason also, I am of the view that the requirement under section 34(5) has to be construed as directory and nor mandatory. 122. The Division Bench of this Court in case of Bankay Bihari G. Agrawal & Ors. vs. M/s.Bhagwanji Meghji & Ors., (2001) 1 Mh.L.J. 345 while construing the order 37 Rule 2 of the Code of Civil Procedure, 1908 has held that merely because the defendant fails to appear or file his Vakalatnama or fails to obtain leave to defend the suit, the suit cannot be decreed if the Judge is satisfied that there is no cause of action at all disclosed in the plaint. It is this wide discretion of the Court which has been expressly recognized in Rule 221. It it held that notwithstanding the somewhat peremptory phraseology used in Order 37, Rule 2(2), suggesting that no such discretion is vested in the Court, there is always vested in the Court the judicial discretion to permit a plaintiff to take advantage of the summary procedure or to relegate him to the normal remedy ....
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....upon other party. The purpose and the legislative intent of inserting those provisions is the speeder disposal of the proceedings and not to penalise the petitioner for non-compliance of the procedure which is directory. Powers of the Court under section 34(5) are not circumscribed by powers under section 34(2). 126. The Madras High Court in case of M/s.Jumbo Bags Limited (supra) has construed the provisions of section 11(6-A) which is also inserted by the Amendment Act and after considering the fact that the notice invoking arbitration agreement was issued prior to 23rd October, 2015 and after adverting to the judgment of the Supreme in case of Milkfood Limited (supra) held that the amended provisions under section 11(6-A) would not come into play in that case. In my view, the principles laid down by the Madras High Court would clearly apply to the facts of this case. I am in complete agreement with the views expressed by the Madras High Court in the said judgment. 127. The Kerala High Court in case of Shamsudeen (supra) has considered the provisions of section 34(5) inserted by the Amendment Act and has considered the fact that the notice invoking arbitration agreement was ....
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....ction 34(5) and 34(6) of the Amendment Act in the event of non-compliance of the said provisions. The Bombay High Court (Original Side) Rules specifically provides for issuance of notice by the petitioner upon the other party before the matter is heard by the Court. The judgment of the Patna High Court is thus clearly distinguishable and would not assist the case of the respondent. 131. The Supreme Court in case of Ananthesh Bhakta & Ors. vs. Nayana S. Bhakta, (2017) 5 SCC 185 has construed section 8(2) providing that the Judicial authorities shall not entertain the application or referring the disputes to arbitration unless the said application is accompanied by the original arbitration agreement or duly certified copy thereof and held that section 8(2) has to be interpreted to mean that the court shall not consider any application filed by the party under section 8(1) unless it is accompanied by the original arbitration agreement or duly certified copy thereof. The filing of the application without such original or certified copy, but bringing original arbitration agreement on record at the time when the court is considering the application shall not entail rejection of the ap....
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....tion Act, 1963, the period prescribed for limitation under section 34(3) of the Arbitration & Conciliation Act, 1996 would apply. The expression "but not thereafter" described in section 34(3) is interpreted by the Supreme Court and it is held that the Arbitration Act being a self-contained Code, the Court has no power to condone delay beyond the period of 30 days and that also provided sufficient cause is shown. The judgment of the Supreme Court in case of Union of India (supra) is clearly distinguishable and would not assist the the case of the respondent. 135. Insofar as the judgment of the Supreme Court in case of M/s.Raptakos Brett & Co. Ltd. (supra) is concerned, the Supreme Court in the said judgment has construed section 69(2) of the Partnership Act, 1932 and has held that the said provision with regard to an unregistered firm is a penal provision and has to be strictly construed. In my view since under section 34(5) of the Amendment Act, no consequence is provided, the said provision cannot be considered as a penal provision and cannot be construed strictly. Section 34(5) and the Arbitration & Conciliation Act, 1996 cannot be equated with section 69(2) of the Partnershi....