TaxTMI 
TaxTMI 
2018 (8) TMI 181
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....ded by the Act 3 of 2016 (hereinafter referred to as "the Act"). On June 19, 2018 when this application was taken up for hearing, a serious objection was raised on behalf of the respondent to the maintainability of the application. Therefore, before considering the petitioner's prayer for stay of the arbitral award this Court fixed the heaving to decide the merit of the above objection raised by the respondent. On June 29, 2018 when this Court took up the matter for hearing the objection of the respondent to the maintainability of the petitioner's application the learned Senior Counsel for the petitioner further moved an application, G.A. No. 1555 of 2018. In the said application the petitioner stated that after filing the application, A.P. No. 346 of 2018 within the statutory period of 120 days, on June 20, 2018 it issued a notice under sub-section (5) of Section 34 of the Act which was received by the latter and its advocate. The petitioner also disclosed an affidavit showing receipt of the said notice dated June 20, 2018 by the advocate of the respondent. Therefore, in the said application, G.A. No. 1555 of 2018 the petitioner prayed for, inter alia, an order accepting....
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....pplication for setting aside and (iii) the application for setting aside is to be disposed of within one year from the date of issuance of notice under sub-Section (5). Reference was made by the respondent to the 246th report of the Law Commission in August, 2014 recommending various amendments to the Act including introduction of sub-Sections (5) and (6) to Section 34 which is reproduced below. ".....the Commission has found that challenges to arbitration awards under Sections 34 and 48 are similarly kept pending for may years. In this context, the Commission proposes the addition of Sections 34(5) and 48(4) which would require that an application under those sections shall be disposed of expeditiously and in any event within a period of one year from the date of service of notice." Learned Senior Counsel for the respondent further relied upon the statement of objects and reasons of the Amending Act 3 of 2016 introducing various provisions to the Act, including sub- sections (5) and (6) to Section 34 thereof to the effect that the amendments proposed in the Bill will ensure that arbitration process becomes more user-friendly, cost effective and lead to expeditious disposal of ....
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....r setting aside of an arbitral award. Lastly, reliance was placed by the respondent on a Division Bench decision of the Patna High Court in the case of Bihar Rajya Bhumi Vikas Bank Samiti-vs-The State of Bihar reported in (2017) 1 PLJR 285 and a Division Bench decision of the Kerala High Court in the case of Shamsuddeen -vs- Shriram Transport Finance Company Ltd. & Anr. reported in (2016) 4 KLJ 778 = 2016 SCC On Line Ker 23728. In the said decisions the Division Bench of the Patna High Court and Division Bench of the Kerala High Court, respectively held that the provision contained in sub- section (5) of Section 34 of the Act is mandatory. On the strength of the said decisions learned counsel for the respondent urged that in the present case, when the petitioner has filed the application, A.P. No. 346 of 2018 without complying with such mandatory requirement the same is liable to be rejected and neither of the applications, G.A. No. 14018 of 2018 and G.A. 1555 of 2018 filed by the petitioner can be entertained. The respondent pressed for dismissal of all the applications filed by the petitioner. On the other hand, Mr. S.N. Mukherjee, learned Senior Counsel appearing for the petiti....
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.... giving any notice at all to the defendant Government, in the suit and without obtaining leave from the Court, would entail dismissal of the suit, but none of the provisions in Section 34 of the Act provide for dismissal of the application for setting aside of the arbitral award only on the ground of absence of any notice under sub-section (5) thereof. Even sub-section (6) of Section 34 of Act does not provide for any consequence in case the application for setting aside of the arbitral award is not decided within the time stipulated herein. According to the petitioner, when the provision incorporated even by sub- section (6) to Section 34 of the Act is a procedural provision providing for no consequence in case of the Court is not able to dispose of the setting aside application within the stipulated time, the said provision cannot and do not have any bearing on the interpretation of the provision in sub-section (5) of the said section. It was urged that there is no merit in any of the contentions raised by the respondent to oppose the maintainability of any of the three applications filed by the petitioner. In his reply, learned counsel for the respondent submitted that none of ....
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....ch the intent is clothed. The meaning and intention of the Legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other...." Considering the above rule of interpretation, in paragraph 29 of the decision in the case of Babu Ram Upadhya (supra), the Supreme Court held as follows: "The relevant rules of interpretation may be briefly stated thus: When a statute uses the word "shall", prima facie, it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute. For ascertaining the real intention of the Legislature the Court may consider, inter alia, the nature and the design of the statute, and the consequences which would follow from construing it the one way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstance, namely, that the statute provides for a contingency of the non- compliance with the provisions, the fact that the non-compliance with the....
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....lone, the impugned interlocutory order passed by the learned Single Judge was liable to be set aside. The defendant in the said suit not only relied on the provisions incorporated in sub-rule (4) of Rule 15 under Order VI of the Code by the Amending Act of 1999, he also relied upon the provisions contained in sub-section (2) of Section 26, read with the provisions incorporated by sub-rule (3) of Rule 1 under Order IV of the Code all introduced by the same Amending Act of 1999. Sub-section (2) of Section 26 incorporated by the Amending Act of 1999 stipulates that in every plaint, facts shall be proved by affidavit and sub-rule (3) of Rule 1 under Order IV incorporated by the said Amending Act of 1999 stipulates that the plaint shall not be deemed to be duly instituted unless it complies with the requirements in sub-rules (1) and (2). Now sub-rule (2) of Rule 1 under Order 12 of the Code stipulates that every plaint shall comply with the rules contained in Order VI and VII so far as their applicable. It was contended by the defendant in the suit before the Division Bench that in view of the amended provisions incorporated by sub-rule (4) of Rule 15 under Order VI, sub-section (2) of ....
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.... The defendant shall, within thirty days from the date of service of summons on him, present a written statement of his defence: Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the same on such other day, as may be specified by the court, for reasons to be recorded in writing, but which shall not be later than ninety days from the date of service of summons." The Supreme Court held that the Proviso to Order VIII Rule 1 incorporated by the amendment Act of 1999 as quoted above, is procedural in nature and the word "shall" appearing in the said Proviso cannot be held to be mandatory. Even in the case of Sardar Amarjit Singhy Kalra - vs- Pramod Gupta reported in (2003) 3 SCC 272, a Constitution Bench of the Supreme Court held that laws of procedure are meant to regulate effectively, assist and aid the object of doing substantial and real justice and not to foreclose even an adjudication on merits of substantial rights of citizen under personal property and other laws. Procedure has always been viewed as the handmaid of justice and not meant to hamper the cause of justice or sanctify miscarriage ....
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....ay be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or )b) the Court finds that- (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India. Explanation 1. - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,- (i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice. Explanation 2.- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. (2A) An arbitral award arisin....
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....f the arbitral award and sub-section (6) contemplates the time limit for expeditious disposal of an application for setting aside of an arbitral award. Sub-section (5) of Section 34 of the Act is silent on the consequence, flowing from the petitioner's default in issuing prior notice to the respondent of the filing of the application for setting aside of the arbitral award. Similarly, sub-section (6) of Section 34 of the Act does not provide for any consequence if the Court is not able to dispose of the application for setting aside of the arbitral award within the time limit mentioned therein. The provisions in sub-sections are purely procedural. Although, the purpose and intention of incorporation of the provisions contained in sub-sections (4) and (5) of Section 34 of the Act is expeditious disposal of the application for setting aside of the arbitral award but as held by the Supreme Court in the cases of Vidyawati Gupta (supra) and Sambhaji (supra), the said provisions being procedural in nature cannot be construed as mandatory. This interpretation of the provisions in sub-sections (5) and (6) of Section 34 of the Act is also in line with the ratio laid down by the Supreme ....