9911796707
TMI Blog2016 (12) TMI 1747X X X X Extracts X X X X X X X X Extracts X X X X ..... age used in Section 85 (2) (a) of 1996 Act and Section 26 of Act 3 of 2016, the amended provisions are not applicable if the arbitral proceedings before the arbitral Tribunal commenced before the commencement of Act 3 of 2016 and pending before arbitral tribunal. If commenced and terminated before the commencement of Act 3 of 2016 the new provisions alone are applicable but not the old provisions. Consequently, section 36 of the old Act cannot be applied to the present facts since the right accrued to the petitioner i.e. deemed stay under Section 36 of the Act was taken away by virtue of amendment to Section 36 by its substitution read with Section 26 of the Act 3 of 2016. Hence, the petitioner is not entitled to claim benefit under Section 36 of pre-amended Act, as such right was taken away by amendment to declaratory statute substituting new section in the place of old section. On an over all analysis of the law laid down by various Courts and the principles of interpretation laid down by Court, the following conclusions are arrived (1) Section 26 of Act 3 of 2016 made it clear that the amended provisions shall not apply to all the pending arbitration proceedings commenced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. During the year 1998, the respondent herein has supplied electric conductors to the predecessor (combined state) of the petitioner herein and though the amount was paid as per invoices with some delay, the respondent without any protest has received entire amount. Later, the respondent initiated the arbitration proceedings by filing claim petition before the Haryana Micro and Small Enterprises Facilitation Council (hereinafter, for short, referred to as Council) at Chandigarh in Case No.7 Award No.HMSEFC/2010/08, against the petitioner herein under the provisions of Interest on Delayed Payments Act, 1993. The petitioner herein having received the notices in the said case filed its counter and contested the matter. After hearing both the parties the Council partly allowed the claim petition, passed Award dated 21.06.2010 for an amount of ₹ 22,42,619/- in respect of invoice Nos.26 to 45 appended as annexure A.W.1 to the said order and rejected rest of the claim made by the respondent herein. Being aggrieved by the said Award dated 21.06.2010 passed by the Council, the petitioner filed Arbitration O.P.No.523 of 2010 before the Chief Judge, City Civil Court at Hyd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court for the States of Punjab and Haryana at Chandigarh in F.A.O.No.68 of 2015 and F.A.O.No.34 of 2015. Against the Arbitration Case No.3 of the Council two more appeals vide F.A.O.No.10525 of 2014 and F.A.O.No.10507 of 2014 are also filed. The High Court for the States of Punjab and Haryana at Chandigarh passed common order dated 29.01.2016 holding that the order dated 28.08.2014 passed by the District Court, Chandigarh remanding the matter to the Council for fresh decision is bad and set aside the same and also set aside the order passed by the District Court, Chandigarh in Arbitration Case No.580 of 2010 and remanded the matter to the District Court, Chandigarh with a direction to give opportunity to the petitioner to pay any deficit amount towards 75% of the Award amount and to decide the matter on merits. Thus, District Court at Chandigarh again posted the matter to 15.02.2016 and the petitioner filed calculation memo in respect of 75% of the award amount and the respondent also filed its calculation memo. Subsequently, the respondent filed E.P.No.295 of 2016 against the petitioner before Additional District Court, Chandigarh. The petitioner also filed objections, more pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the States of Punjab and Haryana at Chandigarh in F.A.O.No.34 of 2015, thereby there is no decree or award for recovery of amount covered by Sl.Nos.1 to 25 of annexure A.W.1 attached to the award as the claim is pending for adjudication before the District Judge, Chandigarh in pursuance of the order dated 29.01.2016 passed by the High Court for the States of Punjab and Haryana at Chandigarh with a specific direction referred above. It is further contended that the present execution petition is filed for wrongful gain and that the same is not maintainable at this stage and finally prayed to set aside the impugned order dated 30.06.2016 passed in E.P.No.33 of 2016 by the II Additional Chief Judge, City Civil Court, Hyderabad in F.A.O.No.34 of 2015 on the file of the High Court for the States of Punjab and Haryana at Chandigarh dated 29.01.2016 preferred against the order in A.A.No.399 of 2010 on the file of the Additional District Judge, Chandigarh dated 28.08.2014 preferred against the Award No.HMSEFC/2010/08 (case No.7) on the file of Haryana Micro and Small Enterprises Facilitation Council, Chandigarh dated 21.06.2010 and to set aside the same. During hearing learned Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the commencement of amendment and the application filed under Section 34 is continuation of earlier proceedings, thereby as on today there is, absolutely, no executable award, consequently, the impugned garnishee order passed by the II Additional Chief Judge, City Civil Court, Hyderabad is liable to be set aside. Learned Advocate General also contended that when the Act is amended, the right accrued to the parties under a specific enactment cannot be taken away and such amendment will have prospective effect only and such amendments, which are procedural in nature cannot be given effect to the proceedings pending already before the Courts so as to render the pending matters useless and in support of his contention, he relied on a judgment of the Supreme Court rendered in Videocon International Limited v. Securities and Exchange Board of India (2015) 4 SCC 33. Per contra Sri M.V.Pratap Kumar, learned counsel for the respondent, would contend that when Section 36 of the Arbitration Act is amended, earlier right that accrued to the petitioner to claim deemed stay under Section 36 of the Act is no more available in view of setting aside the order passed by the High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferred like decree under the provisions of C.P.C. the award is not executable in the State of Andhra Pradesh by filing Execution Petition before City Civil Court, Hyderabad, but the learned counsel for the respondent refuting such contention drawn the attention of this Court to a judgment of the High Court of Madras rendered in Kotak Mahindra Bank Ltd. v. Sivakama Sundari and others wherein it is held that there is no need to transfer the award like a civil court decree. Considering the rival contentions, perusing the material available on record, the points that arise for consideration are: (1) Whether the amended provisions of Arbitration and Conciliation Act by Act 3 of 2016, which came into effect from 23.10.2015 are applicable to the proceedings under Section 34 of Arbitration and Conciliation Act 1996 before the District Judge, Chandigarh if so, whether the right to claim deemed stay under Section 36, which is accrued to the petitioner be taken away by such amendment? (2) Whether this Court is competent to set aside the order dated 30.06.2016 passed in E.P.No.33 of 2016 by the II Additional Chief Judge, City Civil Court, Hyderabad? P O I N T Nos.1 and 2: T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant against the award aforementioned, it would be apt to refer Section 19 of the Act statutorily provides deposit of 75% of the amount. Thus, the order of the High Court of Punjab and Haryana is clear that so far as part of the order passed by the objecting Court in respect of item Nos.1 to 25 was totally set aside and remanded the matter to the objecting Court and also set aside the order of the objecting Court in respect of item Nos.26 to 45. Thus, as on today the order, at best, executable is only in respect of item Nos.26 to 45 but not the order passed by the objecting Court in respect of item Nos.1 to 25 since it was set aside by the High Court of Punjab and Haryana. Strangely, the respondent filed E.P. before the City Civil Court, Hyderabad for recovery of amount covered by items including Sl.Nos.1 to 25 though the order passed by the objecting Court was clearly set aside by the High Court of Punjab and Haryana, remanded the matter to the objecting Court to decide the matter afresh with regard to item Sl.Nos.1 to 25. When the order of the objecting Court with regard to item Sl.Nos.1 to 25 was set aside by the High Court of Punjab and Haryana, absolutely there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceedings before the objecting Court on remand by the High Court of Punjab and Haryana. No doubt, the matter is remanded by the High Court of Punjab and Haryana to the objecting Court i.e. District Court, it is deemed that the petition filed under Section 34 of the Act is pending. Amended Section 26 of Act 3 of 2016 made it clear regarding applicability of pre-amended provisions of Arbitration and Conciliation Act. The difference between pre-amended and after amendment to Section 36 is as follows: Pre-amended Section 36 Amended Section 36 (Act 3 of 2016) Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court. 36. (1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the court. (2) W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions were filed before objecting Court i.e. District Court prior to commencement of amended Act on its remand by the High Court of Punjab and Haryana to the objecting Court i.e. District Court, there is automatic stay of enforcement of the award, placed reliance on judgment of Apex Court in Thyssen Stahlunion GMBH v. Steel Authority of India Ltd and Videocon International Limited v. Securities and Exchange Board of India, (referred supra) besides judgments of other High Courts, which will be referred at appropriate stage. Learned counsel for the respondent Sri M.V.Pratap Kumar while refuting the contentions of the learned Advocate General, drawn the attention of this Court to various provisions of amended Act, placing reliance on judgments of Bombay, Madras and Calcutta High Courts in support of his contentions, which will be discussed at appropriate stage. In view of rival contentions, it is necessary to interpret Section 26 of Act 3 of 2016 to decide application of amended provisions. As a general rule statute must be read as a whole. The meaning of the statute and the intention of the legislature in enacting it can only be properly derived from the consideration of whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act against the order passed by the Council under Arbitration and Conciliation Act, it is not continuation of arbitral proceedings of the Council and the analogy applicable to the suits and appeals cannot be applied to the proceedings under Arbitration and Conciliation Act. Under Code of Civil Procedure, first appeal is a substantive right to litigant but obtaining stay is not a substantive right under Order XLI Rule 5 of C.P.C. Whereas under Arbitration and Conciliation Act filing of application under Section 34 though deemed to be a substantive right, as per pre-amended provision filing of an application would operate as stay automatically, but after the amendment by Act 3 of 2016, no such deemed stay is available. A similar question came up for consideration before Bombay High Court i.e. to decide whether the application filed under Section 34 of Arbitration and Conciliation Act can partakes the character of appeal; Single Judge of Bombay High Court in its unreported judgment rendered in The Board of Control for Cricket in India v. M/s Rendezvous Sports World, held that the proceedings under Section 34 of Arbitration and Conciliation Act cannot be equated with the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 34 outside the ambit of an appeal especially when even a power of revision is treated as an exercise of appellate jurisdiction by this Court and the Privy Council. In another judgment rendered in J.G. Engineers Private Limited v. Union of India (2011) 5 SCC 758 the Apex Court considered the scope of Section 34 of Arbitration and Conciliation Act and held that a civil court examining the validity of an arbitral award under Section 34 of the Act exercises supervisory and not appellate jurisdiction over the awards of an Arbitral Tribunal. A court can set aside an arbitral award, only if any of the grounds mentioned in Sections 34(2)(a)(i) to (v) or Sections 34(2)(b)(i) and (ii), or Section 28(1)(a) or 28(3) read with Section 34(2)(b)(ii) of the Act, are made out. An award adjudicating claims which are excepted matters excluded from the scope of arbitration, would violate Sections 34(2)(a)(iv) and 34(2)(b) of the Act. Making an award allowing or granting a claim, contrary to any provision of the contract, would violate Section 34(2)(b)(ii) read with Section 28(3) of the Act. But in Snehadeep Structures Private Limited V. Maharashtra Small-Scale Industries Development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction of the Court is limited to Section 34 (2) (a) (i) to (v) of the Act. Thus, the scope of Section 34 is restricted to the grounds mentioned in Section 34 of the act only. The Bombay High Court by applying the principle laid down in J.G. Engineers Private Limited v. Union of India and Another concluded that the application under Section 34 of the Act cannot partake the character of appeal since the jurisdiction of objecting Court is supervisory in nature. Same principle was also reiterated in Union of India Vs. A.L. Rallia Ram AIR 1963 SC 1685 , as follows: The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right, the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement. The judgment of Bombay High Court following various judgments of Apex Court is inconsonance with the object of amendment by Act 3 of 2016 and since no appeal is provided against the arbitral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted solicitors clerk, who had been convicted of larceny in 1953. In reply to the contention that the committee was giving retrospective effect to the 1956 Act, it was held that the order was valid even though the Act was not retrospective. That act enables an order to be made disqualifying a person from acting as a solicitors clerk in the future and what happened in the past is the cause or reason for the making of the order, but the order has no retrospective effect. It would be retrospective if the Act provided that anything done before the Act came into force or before the order was made should be void or voidable, or if a penalty were inflicted for having acted in this or any other capacity before the Act came into force or before the order was made. This Act simply enables a disqualification to be imposed for the future which in no way affects anything done by the appellant in the past. Recently, the Division Bench of this Court in W.A.Nos.259 and 260 of 2015 and batch while interpreting Section 24 of Right to Fair Compensation and Transparency in land Acquisition, Rehabilitation and Resettlement Act, 2013 after reviewing the entire law on the interpretation of statutes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... choose one but beyond that you must not go. (Cross in Statutory Interpretation (3rd Edn., 1995; Harbhajan Singh v. Press Council of India). The Heydens rule, or the mischief rule, can be applied where a statutory provision suffers from some ambiguity necessitating adoption of a rule other than the literal rule or the plain meaning rule of construction of statutes. Rules of interpretation are not rules of law. They are mere aids to construction, and constitute some broad pointers. It is the task of the Court to decide which one, in the light to all relevant circumstances, ought to prevail. (Keshavji Ravji Co. v. CIT (1990) 2 SCC 231). In each case Court must look at all relevant circumstances and decide, as a matter of judgment, what weight to attach to any particular rule. (Utkal Contractors and Joinery (P) Ltd. v. State of Orissa AIR 1987 SC 2310 ; Keshavji Ravji Co. v. CIT(1990) 2 SCC 231; Maunsell v. Olins ). As we are satisfied that Section 24(1)(b) does not suffer from ambiguity, it is wholly unnecessary for us to apply any other rule of construction. In Balasinor Nagrik Cooperative Bank Ltd. v. Babubhai Shankerlal Pandya 1987 (1) SCC 606 the Apex Court in paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute maker , provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place (See: Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. AIR 1987 SC 1023 ) Even otherwise, normally the Courts in our state following the principles laid down by various authors and applied in interpretation of statutory provisions. It is clear that the Court has to ascertain the intention of the legislation based on the language used in the document. Time and again, the Court have laid down certain principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a contract or statute are possible the one which helps to make the contract or statute operative to be preferred to the other which tends to make it inoperative. 12. the special will exclude the general 13. Rule of expression unius est exclusion alterius 14. Rule of noscitus a sociss 15. Ejusdem generic rule will apply both the contract and statute 16. place of Punctuation in interpretation of documents or statutes. In Shyam Sunder and Anr. v. Ram Kumar and Anr. (referred supra) the Apex Court followed the principle of statutory interpretation based on Carries on a Statute Lw, 7th Edition stated the statement of law thus: If a doubt is felt as to what the common law is on some particular subject, and an Act is passed to explain and declare the common law, such an act is called a declaratory Act. G.P. Singh on Principles of Statutory Interpretation quoting Craies statue thus: For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any statute. Such Acts are usually held to be retrospective. The usual reason for passing a declaratory Act is to set aside what Parliament deems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... express enactment or by implication and that this latter is the much more frequent method. The presumption is against such operation (except as to procedure in which nobody has a vested right), especially where it would affect vested or acquired rights. Another presumption to the opposite effect has been suggested. It is said that where an Act contains a clause postponing its operation for a certain period, it is an indication that the legislature intended it to have a retrospective action, because it gives time for proceedings to be taken in respect of causes of action already accrued and if the litigant neglects or omits to take advantage of that opportunity he must take the consequences of being caught by the retrospective effect, if any, of the new Act (See: Odgers Construction of Deeds and Statutes Fifth Edition at page Nos.289 and 290) In Re Athlumney (referred supra) Justice Wright held that one exception to the general rule (i.e. that a retrospective intent is not to be assumed) has sometimes been suggested viz., that where as here (section 23 of the Bankruptcy Act 1890) the commencement of the operation of the Act is suspended for a time, that is an indication that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a general proposition, it may be admitted that ordinarily a court of appeal cannot take into account a new law., brought into existence after the judgment appealed from has been rendered, because the rights of the litigants in an appeal are determined under the law in force at the date of the suit. Even before the days of Coke whose maxim - a new law ought to be prospective, not retrospective in its operation - is off-quoted, courts have locked with disfavour upon laws which take away vested rights or affect pending cases. Matters of procedure are, however, different and the law affecting procedure is always prospective. But is does not mean that there is an absolute rule of inviolability of substantive rights. If the new law speaks in language, which, expressly or by clear intendment, takes in even pending matters, the court of trial as well as the court of appeal must have regard to an intention so expressed, and the court of appeal may give effect to such a law even after the judgment of the court of first instance. (Emphasis is brought out) In Hitendra Vishnu Tahkur v. State of Maharashtra 1995CriLJ517 the Apex Court laid down the ambit and scope of an amending Act and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of the Act and the intention of the legislature in incorporating such provision is to take away the right whatever accrued to the parties, such statutes can be interpreted without causing any violence, either by addition or by subtracting any words, to the language used in the statute, without frustrating the intention of the legislature considering the plaint language used in the amended Act. Turning to the facts of the present case the Arbitration and Conciliation Act, 1996 offered benefit of automatic stay under Section 36 of the Act, but by virtue of Act 3 of 2016 such right was taken away. The main contention of the learned Advocate General for the State of Andhra Pradesh is that when a similar question came up before the Apex Court when 1996 Act came into force, but by virtue of Section 85 (2) (a) of the Act in Thyssen Stahlunion GMBH v. Steel Authority of India Ltd (referred supra) the Supreme Court concluded that all the arbitration cases, in which proceedings are commenced are saved and the same analogy is to be applied to the present facts of the case also. Whereas learned counsel for the respondent refuting the contention of the learned Advocate General (Andhr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral award or by an order of the arbitral tribunal under sub-section (2). Section 32 (2) of the Act reads thus: 32 (2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where- (a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognizes a legitimate interest on his part in obtaining a final settlement of the dispute, (b) the parties agree on the termination of the proceedings, or (c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible. Sub-section (3) of Section 32 further says that subject to section 33 and sub-section (4) of Section 34, the mandate, the arbitral tribunal shall terminate with the termination of the arbitral proceedings. Thus, when an award is passed by the arbitral tribunal, here the Council, the proceedings are deemed to be terminated for all practical purposes within Section 32 of Arbitration and Conciliation Act. In the present case, the arbitral proceedings commenced before the Council in the year 2008 and terminated on 21.06.2010 by passing an award by the Council. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be applied to the present case. Learned Advocate General (Andhra Pradesh) drawn the attention of this Court to a unreported judgments of High Court of Delhi in Ministry of Defence, Government of India v. CENREX SP. Z.O.O. and Ors (O.M.P.No.408 of 2007) and unreported judgments of the High Court of Calcutta in Electrosteel Castings Limited v. Reacon Engineers (India) Private Limited (AP No.1710 of 2015), Sri Nitya Ranjan Jena v. Tata Capital Financial Services Ltd. (G.A.No.145 of 2016 with A.P.No.15 of 2016). In all the three judgments, learned Single Judge of Delhi High Court and Calcutta High Court held that the provisions of Section 26 of amended Act 3 of 2016 have no application to the proceedings already pending since the Act came into operation on 23.10.2015, but the proceedings were commenced before the commencement of the amended Act. However, in unreported judgment of Bombay High Court The Board of Control for Cricket in India v. M/s Rendezvous Sports World. (Chamber Summons No.1530 of 2015) and in unreported judgment of Madras High Court in New Tirupur Area Development Corporation Ltd. v. M/s Hindustan Construction Co. Ltd and 2 others (A.No.7674 of 2015), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other Court. (2) If the judgment of the Apex Court in Thyssen Stahlunion GMBH v. Steel Authority of India Ltd (referred supra) is relied on, the first limb of Section 26 did not apply to the arbitration related court proceedings, but applies only to proceedings commenced and pending before the arbitral tribunal i.e. Council in the present case. (3) Amended Section 26 has taken away the right to claim deemed stay accrued to the petitioners. Finally, the proceedings pending before the objecting Court cannot be equated with an appeal and therefore, the amended provisions of the Act 3 of 2016 have retrospective effect and applicable to all the awards passed prior to the commencement of Act 3 of 2016. One of the contentions raised by the learned Advocate General is that in the absence of transfer of decree from Chandigarh Court to City Civil Court, Hyderabad under Section 40 of C.P.C., the award/decree is not executable. No doubt, a decree in a suit unless it is transferred under Section 40 of C.P.C. it is not executable in City Civil Court, Hyderabad. But here, it is only award. However, the learned counsel for the respondent strongly contended that award need not be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court of Punjab and Haryana in FAO Nos.10525 of 2014, 10507 of 2014, 34 of 2015 and 68 of 2015. In view of the applicability of provisiosn of amended Act 3 of 2016 the remedy open to the petitioner is to file an application under Section 36 of the amended Act 3 of 2016 and on filing of such application, the objecting Court has to pass appropriate order subject to compliance of requirement of 75% under MSMED Act, 2006. Hence, leaving it open to the petitioner to move appropriate application before the objecting Court under Section 36 of the Act as amended by Act 3 of 2016. I find no ground to set aside the award pertaining to item Nos.26 to 45. Consequently, filing of E.P. for the award in respect of item Nos.1 to 25 and garnishee order issued by the II Additional Chief Judge, City Civil Court, Hyderabad for recovery of amount covered by item Nos.1 to 25 is illegal since there is no executable award in view of the order of High Court of Punjab and Haryana. Consequently, the garnishee order to the extent of amount covered by item Nos.1 to 25 is hereby set aside while upholding the impugned garnishee order in respect of item Nos.26 to 45. Accordingly, the points are answere ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
