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TMI Blog2007 (7) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... absolute accordingly. There shall be no order as to costs. - WRIT PETITION NO. 1133 OF 2006 - - - Dated:- 23-7-2007 - F.I. REBELLO AND A.V. MOHTA, JJ. Sunil V. Manohar and Ms. Chandana Salgaocar Radia for the Petitioner. S.U. Kamdar, Simil Purohit, P.N. Modi and Sagar Divekar for the Respondent. JUDGMENT F.I. Rebello, J. - The respondent No. 1 had filed an Arbitration Reference against the present petitioner and respondent Nos. 2 and 3, under Bye-laws of the Bombay Stock Exchange, Mumbai. The Arbitral Tribunal passed an Award on 19-3-2002 against the petitioner and respondent Nos. 2 and 3. That Award was challenged by the petitioner before this court in Arbitration Petition No. 264 of 2003. A learned Judge of this court was pleased to set aside the Award by Judgment dated 31-8-2004. 2. Respondent No. 1 then filed Arbitration Reference No. 21 of 2005 against the petitioner. The petitioner herein filed an Application under section 16 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act ) it was the petitioner s contention that there was no agreement between the petitioner and the respondent No. 1, nor was there any cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said bye-law shall be reversed." 4. In the first instance, it is submitted that the Bye Law 274A of the Stock Exchange is ultra vires the provisions of the Arbitration and Conciliation Act, 1996 and must yield to the provisions of the Act. The Bye-law to that extent is clearly inoperative and is liable to be struck down. It is then submitted that the Appeal under section 274A of the Bye laws was not maintainable as the order of the Arbitral Tribunal dated 19-10-2005 was in fact not an Award but an order, considering section 16 of the Act, which would be appealable under section 37(2) of the Act. The Appellate Tribunal in entertaining the said proceedings, as if, the challenge was to an Award acted without jurisdiction and consequently that order is liable to be set aside. 5. On the other hand, on behalf of the respondent No. 1 the learned counsel submits that the petition filed is not maintainable and consequently ought to be dismissed. It is submitted that if the petitioner was aggrieved by the order of the Appellate Tribunal, the remedy for the petitioners would be to prefer an appeal under section 37(2) of the Act. It is next submitted that all that Bye-law 274 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear that an appeal lies against an Award. The Act uses various terminologies like "Award", "order" and "decision". That issue had come up for consideration before a learned Judge of this Court in Anuptech Equipments (P.) Ltd. v. Ganpati Co-op. Housing Society Ltd. 1999 (2) Bom. C.R. 331. It was held that the expression "Award" and "Order" are different expressions used in the Act of 1996. An Award can be an interim Award or a final Award. An Award, however, decides partly or fully the subject-matter of the reference. An order made under section 16 of the Arbitration and Conciliation Act, 1996 is not an Award which is capable of being challenged under section 34 of the Act, 1996, but can be challenged whilst challenging the Award, in those cases where the Arbitral Tribunal had rejected the plea as to the jurisdiction. Under section 37(2) of the Act of 1996 an appeal would lie if the Tribunal holds that it has no jurisdiction. 9. It is no doubt true that the learned counsel for respondent No. 4 had drawn our attention to the judgment of the Supreme Court in SBP Co. v. Patel Engg. Ltd. [2005] 8 SCC 618 and most specifically to paragraph 45 and direction ( vi ) of the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts (P.) Ltd. s case ( supra ) after considering the various provisions of the Act, 1996 has held that the writ jurisdiction can be invoked in the matter of termination of proceedings and if there be no remedy available to a party under the Act of 1996. In Dr. Vimal Madhukar Wasnik v. Sole Arbitrator, the Hon ble Shri Justice M.S. Deshpande 2006 (1) Bom. C.R. 419, the Division Bench again to which one of us (Rebello, J.), was a party, reiterated the view that in a case where the proceedings are terminated and no remedy is available to a party under the provisions of the Act, 1996, it will be open to the party aggrieved to invoke the extraordinary jurisdiction of this court. If we consider para 45 in the judgment of Patel Engg. Ltd. s case ( supra ); the language used is an order passed by an arbitral Tribunal during arbitration. The judgment has not taken a view, that where proceedings are terminated, no petition would lie. If the order of the Arbitral Tribunal is considered to be an order under section 16, then the Appellate Tribunal could not have exercised jurisdiction. Against the order of Appellate Tribunal, there would be remedy available to the petitioner under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bom. 476. This was under the Arbitration Act, 1899. It was argued before the learned Judge that section 11 of the Act in terms contemplates an Award made by arbitrators or an umpire, and excludes an Award made by the board of directors in Appeal from the Award of the umpire. After considering various authorities as also the practices of various Boards, the learned Judge was pleased to hold that there was nothing inconsistent to have a second submission. A Division Bench of the Madras High Court had an occasion to consider the Bye-Laws of Madras Oil and Seeds Exchange (Pte.) Ltd., in the case of M.A. Sons v. Madras Oil Seeds Exchange Ltd. AIR 1965 Mad. 392. It was under the Arbitration Act of 1940. There also in terms of the bye laws, against the order of the Arbitral Tribunal, an appeal lay to the appellate Tribunal. A contention was urged that appeal itself was ultra vires as it was opposed to section 10 of the Indian Arbitration Act. After noting the judgments of the Calcutta High Court, the learned Bench was pleased to observe as under : "We are dealing with a private dispute, and the obligation to refer the dispute to arbitration results from the contract between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is a provision for a second submission to Arbitration, an appeal would not lie when the remedy of the second submission is not availed of. The English Law, therefore, recognizes that a provision for a second submission is not incompatible with the provisions of the Arbitration Act, 1996, which is also modelled on the Uncitral Code. 13. It would be clear, therefore, that courts in our country have not disapproved a second submission to arbitration. At this stage, we may note that our attention was invited by the learned counsel for the petitioner to the judgment of the Supreme Court in Centrotrade Minerals Metal. Inc. v. Hindustan Copper Ltd. JT 2006 (5) SC 507. One of the contentions which was considered by S.B. Sinha, J. was an issue as to whether a multi-tier arbitration is consistent with the provisions of the Act, 1996. The learned Judge on consideration of the law, held that under the Act of 1996 a multi-tier arbitration is inconsistent. Tarun Chatterjee, J. on the other hand relying on the view of the Calcutta, Bombay and Madras High Courts, is of the considered opinion that the two tier arbitration option is not inconsistent with the provisions of the Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been conferred on the Central Government after consultation with the governing bodies of stock exchange in general or with the governing body of any stock exchange in particular, to make rules or amend any rules in respect of matters specified under section 3(2) of the Act. Section 3(2) is a power on behalf of the stock exchange to make an application for being recognised under this Act. By section 7A power has been conferred on the stock exchange to make rules or amend any rules for the matters provided thereto. Under section 31, the Exchange Board of India has been conferred powers to make regulations consistent with the provisions of the Act and the rules made thereunder to carry out the purpose of the Act. Under section 9 power has been conferred on the Stock Exchange subject to the provisions of approval of the Securities and Exchange Board to make the bye-laws for the regulations and control of the contracts. 16. We may now consider the nature of various bye-laws. Provisions for framing of bye laws is also provided for under the Maharashtra Co-operative Societies Act. The nature of the bye law came up for consideration in Babaji Kondaji Garad v. Nasik Merchants Co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectly enacted in the statute in question and which is gatherable from its express language or by necessary implication therefrom. The words "under the Act" would, in that context signify what is not directly to be found in the statute itself but is conferred or imposed by virtue of powers enacting this to be done; in other words, bye-laws made by a subordinate law-making authority which is empowered to do so by the parent Act. The distinction is thus between what is directly done by the enactment and what is done indirectly by the rule making authorities which are vested with powers in that behalf by the Act". Proceeding further, the Supreme Court then observed : "Thus the utmost could be said would be that though normally and in their ordinary signification the words under the Act would include both rules framed under section 20 as well as bye-laws under section 11 or 12, the reference to rules might be eliminated as tautologous, since they have been specifically provided by the words that follow. . . ." Subba Rao, J., in the minority judgment, was examining the nature of the subordinate legislation and its various forms. The learned Judge observed as under : "(41) S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section may be an enactment . . . ." (p. 175) It would be clear therefore, that there is a distinction between expression enactment and an Act . In T.B. Ibrahim v. Regional Transport Authority AIR 1953 SC 79, the Supreme Court noticed the distinction between bye-laws and the rules and observed as under : "11. Reliance was placed on a passage at page 299 of Crajes on Statute Law as laying down that a bye-law must not be repugnant to the statute or the general law. But bye-laws and rules made under a rule making power conferred by a statute do not stand on the same footing, as such rules are part and parcel of the statute itself." (p. 82) In Atlas Cycle Industries Ltd. v. State of Haryana AIR 1972 SC 121, the Supreme Court was considering the power to issue notification and the words "rules, bye-laws, orders and directions and powers". Referring to section 21 of the General Clauses Act, the Court held that it speaks of power to issue notifications, orders, rules or bye-laws and it is therefore, apparent that the power to issue notification, orders, rules or bye-laws refers to different and separate methods of expression of exercise of power under the statute. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bye laws made for the internal administration. This distinction has to be noted as there are various forms of subordinate legislation. 20. The nature of the bye-laws made by the Stock Exchange have been considered by the Supreme Court in Bombay Stock Exchange v. Jaya I. Shah [2004] 1 SCC 160 1 . While considering the issue, the court observed as under : "36. Rules, bye-laws and regulations are made by the Exchange. They, although are not made under a statute but having regard to the scheme as also the purport and object thereof, have a statutory flavour. Bye-laws are required to be made for regulation and control of contracts, whereas rules relate in general to the constitution and management of a stock exchange." (p. 176) A learned Division Bench of this Court, however, in Stock Exchange, Mumbai v. Vinay Bubna [1999] 20 SCL 175, as proceeded to hold that the bye-laws made under the stock exchange are statutory, having the force of law and to the extent of inconsistency with the provisions of the Arbitration Act, 1996; the same would prevail. In our opinion, considering the judgment of the Supreme Court in Jaya I. Shah s case ( supra ), where the Supreme Court has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard . The decision of the arbitral Tribunal, holding that there was no provision for arbitration, was an order and not an award. An appeal under bye-law 274A would lie at the instance of a party dissatisfied with an Award made under the bye-law 260. The decision rendered by the Tribunal, at the first instance being an order, no appeal lay nor could the respondents have invoked the provision for second arbitration. The challenge to that order would be available only under section 37 of the Arbitration and Conciliation Act, 1996. Once that be the position, the assumption of jurisdiction and the order, setting aside the order by the first Tribunal dated 17-3-2006 and remitting the matter to the arbitral Tribunal, would be without jurisdiction. Ordinarily and as set out, considering, section 5 of the Act and other provisions, this court would not interfere with the orders in exercise of its extraordinary jurisdiction. In the instant case, we have entertained the present petition for reasons already discussed. In the instant case, however, the challenge to the party was available under section 37(2) of the Act, 1996. Once that be the case, the second arbitration as invoked, was without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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