9911796707
TMI Blog2002 (7) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... anuary 19, 2001, entered into between the petitioner and respondent No. 1. Admittedly, the agreement dated January 19, 2001, contained an arbitration clause being clause No. 7. The petitioner has made a statement that it intends to invoke the arbitration clause for deciding the dispute between the parties. In the meanwhile, it seeks interim protection. The transaction giving rise to the dispute appears to be as follows: Respondent No. 1 (hereinafter referred to as "PIL") appears to have represented to the petitioner that there was an opportunity of acquiring a controlling interest in some good media and entertainment company. The petitioner is apparently in the media and entertainment business. The respondents, therefore, told the petitioner that an investment of Rs. 25 crores would be needed. On the very next day the respondents informed the petitioner to ensure payment of Rs. 25 crores on that very day. There is no dispute that the petitioner paid the said sum of Rs. 25 crores to the respondent in pursuance of the agreement dated January 19, 2001, signed on behalf of the petitioner by one Ashok Sanghavi and on behalf of the respondents by one Kirtikumar Parekh. The recitals to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law for the time being in force, where with respect to an arbitration agreement any application under this part has been made in a court, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other court." According to learned counsel by virtue of the aforesaid provision which is contained in an Act of Parliament, enacted subsequent to the Special Courts Act this court alone would have jurisdiction over the arbitral proceedings. It is, therefore, necessary to examine the legislative scheme in the context of which the rival submissions were made. The Special Courts Act was enacted to deal with irregularities and malpractices which led to the diversion of funds from banks and financial institutions to the individual accounts of certain brokers. Under that Act a special court is established. The Act provides for the trial of such person by the special court and also provides for appointment of a custodian under the Act for cancellation of contracts fraudulently entered into and the cognizance of cases by the special court. The persons lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the petitioner regarding the continued applicability of section 9B subsequent to the enactment of the Arbitration and Conciliation Act, 1996. As observed earlier, the contention on behalf of the petitioner is that this court, by virtue of section 42, is conferred with or in any case retains its jurisdiction to decide over arbitral proceedings and all applications arising out of an arbitration agreement. It is not disputed that before the enactment of the Arbitration and Conciliation Act, 1996, it is the special court alone which had the jurisdiction and powers of a court conferred under the Arbitration Act, 1940. The question, therefore, is whether the subsequent enactment makes any difference. In my view it does not. A comparison of section 31(4) of the Arbitration Act, 1940, with section 42 of the Arbitration and Conciliation Act, 1996, shows that the two provisions are almost identical and in any case in pari materia. Section 31(4) of the Arbitration Act, 1940, reads as follows : "Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act, has been made in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned references to the 1940 Act. This being the position it must follow that the reference to the Arbitration Act, 1940 in section 9B of the Special Courts Act must be construed as a reference to the re-enacted Act of 1996. There is no doubt that it must be so construed unless a different intention appears. I am of the view, however, that there is nothing in the legislative scheme which shows a different intention. The Arbitration and Conciliation Act, 1996, has completely replaced the Arbitration Act, 1940. The intention of section 9B of the Special Courts Act was to confer the powers of a court under the 1940 Act on the special court. On a repeal and re-enactment of the 1996 Act, the reference in section 9B to a court under the Arbitration Act, 1940, must be construed as a reference to the court under the 1996 Act. Therefore, in my view where a person has been notified under section 3(2) of the Special Courts Act and he is said to have entered into an arbitration agreement a court as defined by the Arbitration and Conciliation Act, 1996, does not have jurisdiction to entertain arbitration proceedings arising out of an arbitration agreement entered into by such a notified person. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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