TaxTMI 
TaxTMI 
2014 (1) TMI 1952
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.... of some of the transactions. Since the impugned award is challenged only on the ground of limitation, this Court need not summarize all the facts considering the merits of the claim. 4. On 1.11.2011 the learned Arbitrator appointed under the rules, bye laws and regulations of the Bombay Stock Exchange Ltd rendered an award in the claims filed by the petitioner herein against the respondent no.1 thereby rejecting the claims. The petitioner received copy of the said award on 4.11.2011. On 12.11.2011 the petitioner made an application under section 33 of the Arbitration and Conciliation Act, 1996 before the learned Arbitrator inter alia praying for corrections in the said award. The said application was received by the Stock Exchange on 14.11.2011. On 5.3.3012 the learned Arbitrator found that there were some inadvertent errors crept in the said award which were capable of correction under section 33 of the Arbitration and Conciliation Act, 1996 and passed an order on 5.3.2012 allowing the said application partly and also by exercising the jurisdiction under bye-law No.258 (1) (a) of the Bombay Stock Exchange bye laws and directed the office to correct the award to the extent ment....
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....empowers the Arbitral Tribunal to correct any computable error, any arithmetical error, any clerical or typographical error or any other error of a similar nature occurring in the award if an application is made within 15 days of the receipt of the Arbitral award. Bye law 258 (2) provides that if the Arbitral tribunal considers the request made under bye-law 258 (1) to be justified, it shall make the correction or give interpretation and such interpretation shall form part of the award. Bye-law No.258 (3) empowers the Arbitral tribunal to correct its own errors or typographical indicated in sub clause (a) of clause (a) of bye law 258 within 10 days of making the award. Bye law No.274 (A) provided that a party dissatisfied with an award may appeal to the appeal bench against such an award within 15 days of the receipt of such an award. Bye-law No.274 (A) (1) provided for other bye-laws of that chapter as may be applicable shall apply mutatis mutandis to the proceedings before the appeal bench and award by the appeal bench. 9. Regulation No.15.23 (iii) provided that the appeal memo shall be submitted by a party appealing or his authorised representative to the Arbitration Secretar....
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.... not take cognizance of any claim, complaint, difference or dispute unless the same has been received by the concerned Regional Arbitration Centre of the Exchange within the period prescribed therefor under the Limitation act, 1963. Any dispute as to whether a claim, complaint, difference or dispute falls within the ambit of this clause shall be decided by the Arbitrators. Provided that the claim, complaint, difference or dispute which were rejected solely on the ground that they were not filed within the six month period provided under the Rules, Bye-laws and Regulations in force prior to1st September, 2010 shall be entertained by the Arbitrators provided such claim, complaint, difference or dispute are, as on the date of their filing before them are within the limitation period as prescribed under the Limitation Act, 1963. The Board of Directors or the Managing Director and Chief Executive officer may, from time to time appoint Committees separately for each Regional Arbitration Centre to amicably settle all claims, complaints, differences and disputes that are referred to it." 12. Bye law 252 (3) which provided that the provisions of the Limitation Act, 1963....
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...., copy of the said award was served on the petitioner only on 10.3.2012. It is submitted that the time to file an appeal and seek condonation of delay on showing sufficient cause had accrued to the petitioner when the petitioner had filed his claim before the Bombay Stock Exchange. When such a claim was filed before the Bombay Stock Exchange in case of any delay on sufficient cause being shown, the petitioner could seek condonation of delay in filing the appeal before the appeal bench under Regulation No.15.23 (iii) and 15.23 (iv). At the relevant time under Bye law No. 252 (3), the provisions of the Indian Limitation Act 1963 were applicable to the arbitration as they applied to the proceedings in Court. The learned counsel submitted that under section 5 of the Indian Limitation Act,1963 read with regulation No.15.23, the petitioner could not have made application for condonation of delay if sufficient cause was shown by the petitioner. It is submitted that since the right to file an appeal is a substantive right, right of seeking condonation of delay on showing sufficient cause also is a substantive right and such rights having accrued on the date when arbitration claim was filed....
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....peal. (v) This vested right of appeal can be taken away only by a subsequent enactment if it so provides expressly or by necessary intendment and not otherwise. 72. But it is said that there were before the decision in Sadar Ali vs Dalimuddin (supra) authorities of Indian courts which had held that a suit appeal and second appeal were to be regarded as constituting one proceeding that Sadar vs Dalimuddin (K) merely and grafted this principle on the decision Colonial Sugar Refining Co vs Irving (A) supra and that the decision come to therein was therefore well placed on principle. These decision however when examined contain little that really supports the conclusion reached in Sadar Ali vs Dalimuddin (K). In fact they are merely referred to in the judgment at pages 516 and 517 without any discussion as authorities relied on by the counsel for appellant in support of his contention that the principle of S.6 of the General Clauses Act was applicable in the construction of the Letters Patent. The first of these decisions is Ratanchand Shrichand vs Hammantray Shivbakas 6 Bom HCR 166 (Z) 23). There the facts were that a suit for Rs. 23,319/- was instituted in the court....
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....he Bye-laws and regulation applicable and existing on the date of accrual of original cause of action. Paras, 1,2,3,6 and 7 reads thus : 1) Petitioner by the present petition impugns the Award passed under the Arbitration and Conciliation Act, 1996 on 17th January, 2001. By the said Award, the Arbitral Tribunal upheld the objections of the respondents herein that the claim was barred by limitation and accordingly rejected the reference. That Award has been impugned on the ground that the transactions were transactions before the bye-laws of Stock Exchange came to be amended and consequently they would not apply to transactions or in respect of a cause of action which had arisen before the bye-laws were amended. The transactions between the parties were of the year 1991-1992. The amendment to the bye-laws was brought into force on 29-8-1998. Earlier, petition had filed an arbitration reference on 6-11-1997 in respect of the same subject matter. It was numbered as Reference No. 278 of 1997 and was withdrawn on 5-8-1998. It is subsequent to this that the fresh reference was made to the Arbitral Tribunal. As noted earlier, the material on record shows that the transac....
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....ment and not cover transactions in respect of which cause of action had arisen before the amendment. Considering the issue involved and as it would affect other references, notice was issued to the Bombay Stock Exchange as to their stand on the issue. It was the Bombay Stock Exchange that had framed the Bye-law. On behalf of the Bombay Stock Exchange, their learned counsel after taking instructions has made a statement to this court that it is the stand of the Bombay Stock Exchange that only transaction which have been entered into after 29-8-1998 would be covered by the amended bye-laws. Transaction previous to that period, and completed before that period would be covered by the bye-laws as earlier existing. In other words if the cause of action had arisen before the bye-laws as amended had come into force, the bye-laws as amended would not apply. 3. Let me therefore, consider as to whether the bye-laws as amended would apply to transactions in respect of which cause of action had arisen before the amendment. Section 43 of the Arbitration Act, 1996, provides that the Limitation Act, 1993 shall apply to arbitrations as it applies to proceedings in the court. However, Sect....
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....te of the order of the Court under Section 43(4), a fresh reference will be barred if after excluding such time the reference is barred by limitation. It cannot be contemplated that this was the intention of Parliament when it enacted Section 43(4) or of the Bombay Stock Exchange when it framed the bye-law providing for limitation. The real issue to be considered is whether the Bombay Stock Exchange had the power to make a bye-law having retrospective effect and if it was its intention to make bye-law 252, retrospective? It may be important to note that though a Legislature can make law with retrospective effect as its power is plenary the same is not the position insofar as delegated legislation is concerned. The scope of that power is not coextensive with that of the legislature. This was noted by a Division Bench of the Allahabad High Court in Modi Food Products v. Commissioner of Sales Tax, MANU/UP/0017/1956 : AIR 1956 All 35. The learned Division Bench observed that the body exercising subordinate and delegated legislative powers cannot make legislation retrospective in effect, unless that power is expressly conferred. Support for that proposition was found i....
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.... observed by Asutosh Mookerjee, J. in Manju Bibi v. Akkel Mahmud as under; '"No doubt, we find it frequently asserted in judicial decisions that a Statute of Limitation embodies merely a rule of procedure; but this statement is only generally and not universally true. The essence of the matter is that when a new Statute of limitation which shortens the period for institution of suits and comes into force the moment it becomes law is sought to be made retrospectively applicable to causes of action which have accrued earlier than the length of time prescribed, it ceases to be a statute of mere procedure and serves to destroy preexisting and enforceable rights. Under circumstances, like these, the Court, when invited to hold that the new statute has retrospective operation, will struggle against the acceptance of such interpretation, unless there is the clearest indication that the Legislature intended to destroy existing rights without notice and thus to penalise innocent litigants." The position of law from Corpus Juris as quoted in interpretation of Statutes by Bindra, 1961, Third Edition, Page 586 is as under; "While it has been said that statutes re....
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....entered into and to which contracts, bye-law 252(2) was not incorporated as a term of the contract. In other words, only those contracts which have been entered into after bye-law 252(2) came into force will the provisions of limitation become applicable as a term of the contract. They therefore, become applicable to those contracts entered into after the amendment was gazetted. This was notified by the notice dated 20th October, 1998. Bye-laws were gazetted on 29-8-1998. They would come into force from 29-8-1998. There is nothing to indicate that they would be retrospective in character. There is nothing also which indicates that they were made with purpose of being retrospective. On the contrary, on behalf of the Stock Exchange, statement is made that they will apply to transactions entered into as on 29-8-1998, when they came into force. Bye-laws framed are now made applicable to transactions between the Member and constituent and vice versa. This form part of the contract which contain terms of limitation unlike contracts entered into earlier. Respondent No. 2 has been conferred powers under Security and Exchange Act to make bye-laws. These bye-laws before they came in....
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....ion under section 33 read with Rule 258 (1) A) Bye-law 252, 274 A and Regulation 15.23 came to be amended and applicability of provisions of the Limitation Act,1963 came to be deleted. It is submitted that in view of the gross delay on the part of the learned sole arbitrator who at the first instance took time to dispose of the application under section 33 read with Bye law 258 (1) (A) and thereafter by the appeal bench in disposing of the application for condonation of delay, limitation to challenge the original award rendered by the sole Arbitrator under section 34 of the Arbitration and Conciliation Act, 1996 expired. The petitioner cannot be made to suffer because of the delay on the part of the sole learned Arbitrator and the appeal bench in disposing of the proceedings filed by the petitioner. The learned counsel submits that there is no dispute raised by the respondents that the petitioner has not shown any sufficient cause for condonation of delay of 2/3 days in filing appeal before the appeal bench. The impugned order passed by the appeal bench is thus contrary to law laid down by the Supreme Court and by this Court and contrary to section 6 of the General Clauses Act. ....
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....ndment the court had no authority to entertain an appeal without a certificate from the Single Judge. Rankin C.J. repelled this argument with the remark at page 520 :- "Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants' right." In our view the above observation is apposite and applies to the case before us. The true implication of the above observation as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the preexisting right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has....
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....274 A right to file an appeal is not taken away. Time to file appeal which was 15 days was substituted by a period of 30 days and power of appeal bench to condone the delay are taken away. It is submitted that right to make an application for condonation of delay is not a substantive right but is procedural law and thus provisions for condonation of delay having been deleted, the appeal bench was right in rejecting the application for condonation of delay and the order thus passed was in compliance with amended Bye laws and regulations and cannot be interfered with. 22. The learned counsel made an attempt to distinguish the Judgment of the Supreme Court in case of GARIKAPATI VEERAYA (supra) on the ground that the said judgment did not deal with application for condonation of delay but was dealing with right to file an appeal which was a substantive right. 23. Learned counsel for the respondents placed reliance on the judgment of the Supreme Court in ASSAM URBAN WATER SUPPLY AND SEWERAGE BOARD vs SUBHASH PROJECTS MARKETING LTD 2012-LAWS 9SC)-1-48 Civil Appeal No.(s) 2014 of 2006 dated 19.1.2012 para 8 which read thus : 8. In Popular Construction Co.(supra) this court ....
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.... on the date when the petitioner had invoked arbitration agreement and had filed a claim before the learned sole Arbitrator the petitioner had a vested right to file an appeal before the appeal bench and after showing sufficient cause to seek condonation of delay. The appeal bench had power to condone delay by exercising such powers under section 5 of the Limitation Act,1963 read with Regulation 15.23 (iv). 27. The Supreme court in the case of GARIKAPATI VS SUBBIAH CHOUDHARY supra has held that the right of appeal is not mere matter of procedure but, is a substantive right which is vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when adverse judgment is pronounced, such a right has to be governed by law prevailing on the date of institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. This vested right of appeal can be taken away only by subsequent enactment if it so provides expressly or by necessary intendment and not otherwise. 28. The Supreme Court in the case ....
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....d not been passed." 31. In my view, the rights and remedies accrued to the petitioner and subsequent rights and/or remedy for filing proceedings before the superior Courts or appellate forum would continue and cannot be divested by amendment unless it is shown clearly intended by amendment to make it applicable with retrospective effect. The petitioner has already having filed proceedings before the learned Arbitrator, the right of filing an appeal against the impugned award if any and a right to file an application for condonation of delay on showing sufficient cause on the date of filing the original proceedings would be continued. A perusal of the amendment to Bye law 252,274 A and regulation 15.23 does not indicate that the said amendment was to be made applicable with retrospective effect and the rights and remedies which were already vested on the date of filing the claim before the learned Arbitrator were taken away with retrospective effect. 32. In my view, since the option to file an appeal before the appeal bench which was the mechanism conferred under the Bye-laws before filing a petition under section 34 of the Arbitration and Conciliation Act, 1996, the petitione....
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....tion 6(e) of the General Clauses Act, 1897. In view of such existing right vested in the petitioner on the date of filing original proceedings by the petitioner before the learned sole Arbitrator such amendment cannot affect the legal proceedings or remedy in respect of which any such right or privilege which the petitioner had existing when the original proceedings filed by the petitioner were filed. Amended Bye-law and regulation does not provide that the same were applicable with retrospective effect. The intent of such an amendments can be seen from the circular issued by the SEBI which also does not indicate that the amendment proposed to bye law and regulations were to be made applicable with retrospective effect. 35. In so far as the judgment in case of ASSAM WATER SUPPLY (supra) relied upon by learned counsel for the respondents is concerned, it is held by the Supreme Court that under section 34(3) of the Arbitration and Conciliation Act, 1996 time to file arbitration application having been specifically provided, under section 5 of the limitation Act is not applicable. In my view, the ratio of the Supreme court on the said issue does not apply to the facts of this case.....