2001 (10) TMI 1201 - HC - Indian Laws

Summary

Issues Involved:

1. Applicability of amended bye-laws of the Bombay Stock Exchange to transactions predating the amendment.
2. Power of the Bombay Stock Exchange to enact bye-laws with retrospective effect.
3. Application of the Limitation Act, 1963 to arbitration under the amended bye-laws.

Detailed Analysis:

1. Applicability of Amended Bye-laws:

The primary issue was whether the amended bye-laws of the Bombay Stock Exchange, which introduced a limitation period, applied to transactions and causes of action that arose before the amendment date of 29-8-1998. The petitioner argued that the transactions in question occurred between 1991-1992, and thus, the amended bye-laws should not apply. The Bombay Stock Exchange confirmed that the amended bye-laws were intended to apply only to transactions entered into after the amendment date. The court concurred, noting that the bye-laws as amended would not apply to transactions where the cause of action arose before the amendment, thereby supporting the petitioner's position.

2. Retrospective Effect of Bye-laws:

The court examined whether the Bombay Stock Exchange had the authority to enact bye-laws with retrospective effect. It was established that while legislative bodies have plenary power to enact laws with retrospective effect, delegated authorities like the Bombay Stock Exchange do not possess such power unless explicitly conferred by the parent statute. The court cited precedents, including judgments from the Supreme Court and various High Courts, emphasizing that retrospective legislation by a delegated authority requires express statutory authorization. Consequently, the court found no indication that the bye-laws were intended to have retrospective effect, supporting the view that they apply prospectively from 29-8-1998.

3. Application of the Limitation Act, 1963:

The court addressed whether the Limitation Act, 1963 applied to arbitration proceedings under the amended bye-laws. Section 43 of the Arbitration and Conciliation Act, 1996, provides that the Limitation Act applies to arbitrations as it does to court proceedings. However, Section 2(4) of the Arbitration Act excludes its application where provisions are inconsistent with other enactments or rules, which would include the Stock Exchange's bye-laws. The court noted that the new bye-laws incorporated limitation provisions applicable to transactions from 29-8-1998 onwards, aligning with the statutory framework. The court concluded that the Limitation Act would not apply to arbitration under the bye-laws for transactions predating the amendment, as the limitation provisions were not part of the contract terms for those transactions.

Conclusion:

The court allowed the petition, setting aside the arbitral award that dismissed the reference on the grounds of limitation. It was determined that the amended bye-laws did not apply retrospectively to transactions and causes of action arising before 29-8-1998. The petitioner was granted the opportunity to apply for a fresh reference, with the time elapsed during the arbitration proceedings and the setting aside of the award to be excluded for limitation purposes.