2014 (1) TMI 1952 - HC - Indian Laws

Challenge to Arbitral Award - dismissal of appeals filed by the petitioner on the ground of limitation - section 34 of the Arbitration and Conciliation Act, 1996 - whether the bye-law as amended will cover references already pending and would also apply to those references where the cause of action arose before 29-8- 1998? - HELD THAT - Unamended bye-law 274 A (3) provided that party dissatisfied may appeal to the appeal bench against an award within 15 days of the date of the receipt of such an award. By virtue of amendment the period of 15 days for filing the appeal came to be substituted by 30 days. Bye-laws provided an option to a party dissatisfied with the award to file an appeal before the appeal bench constituted by Bombay Stock Exchange before filing an Arbitration Petition under section 34 of the Arbitration and Conciliation Act, 1996 directly in the appropriate Court. It is not in dispute that 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). The Supreme court in the case of GARIKAPATI VS SUBBIAH CHOUDHARY 1957 (2) TMI 54 - SUPREME COURT 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. 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. 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 petitioner had a vested right to impugn the arbitral award rendered by the sole Arbitrator along with an application for condonation of delay in the event of delay by showing sufficient cause. The day on which the impugned award was rendered by the learned sole arbitrator, there was no amendment to Bye-law 252 (3) 274 A and Regulation 15.23 (iv) described aforesaid. The right to file an appeal includes right to file application for condonation of delay and which right is parallel to right of appeal and is also a substantive right provided sufficient cause is shown by the petitioner. Thus, sufficient cause having been shown the appeal bench had power to condone such a delay in view of section 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. The appellate bench was not right in taking the view that there was no power vested in the appellate bench to condone the delay under bye law 274 (A). The appellate bench has failed to exercise its power to condone the delay once the petitioner had shown sufficient cause for delay in filing the appeal by 3 days. The impugned award rendered by the appeal bench thus deserves to be set aside. The impugned awards passed by the appeal bench (Exhibit C to the petition) are set aside. The appeals filed by the petitioner along with the application for condonation of delay are restored to file. The appeal bench is directed to hear the application for condonation of delay by exercising powers of condonation of delay on its own merits expeditiously - Arbitration petitions are allowed.

Summary

Issues Involved:
1. Whether the right to file an appeal includes the right to seek condonation of delay as a substantive right.
2. Whether the amendments to the bye-laws and regulations of the Bombay Stock Exchange have retrospective effect.
3. Whether the appellate bench of the Bombay Stock Exchange had the power to condone the delay in filing an appeal.

Issue-wise Detailed Analysis:

1. Right to File an Appeal and Condonation of Delay:
The judgment emphasizes that the right to file an appeal is not merely procedural but a substantive right. This right includes the ability to seek condonation of delay if sufficient cause is shown. The court referenced the Supreme Court's decision in GARIKAPATI VEERAYA VS N.SUBIAH CHOUDHRY, which established that the right of appeal is a vested right that accrues from the date the legal proceedings commence. This right cannot be taken away by subsequent amendments unless expressly stated or necessarily implied. The court concluded that the petitioner had a vested right to file an appeal and seek condonation of delay, which was a substantive right parallel to the right of appeal.

2. Retrospective Effect of Amendments:
The court analyzed whether the amendments to the bye-laws and regulations of the Bombay Stock Exchange, which removed the provision for condonation of delay, applied retrospectively. It was determined that the amendments did not explicitly state they were to apply retrospectively. The court cited the principle that unless a statute or regulation clearly indicates an intention to apply retrospectively, it should not be construed to do so. The court held that the rights and remedies that accrued to the petitioner at the time of filing the original proceedings could not be divested by the amendments, as there was no clear intent for retrospective application.

3. Power of the Appellate Bench to Condon Delay:
The appellate bench of the Bombay Stock Exchange rejected the petitioner's appeal due to a three-day delay, citing the amended bye-laws that removed the power to condone delays. However, the court found that the appellate bench failed to exercise its power to condone the delay, as the petitioner had shown sufficient cause. The court referenced Section 6(e) of the General Clauses Act, 1897, which protects existing rights and remedies from being affected by amendments unless explicitly stated. The court concluded that the appellate bench should have considered the petitioner's application for condonation of delay on its merits, given the vested right to appeal and seek condonation.

Conclusion:
The court set aside the appellate bench's decision, restoring the petitioner's appeal and the application for condonation of delay. It directed the appellate bench to hear the application for condonation of delay on its merits, reaffirming the petitioner's right to appeal and seek delay condonation as substantive rights. The judgment underscores the importance of protecting vested rights against retrospective application of amendments unless clearly intended.