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TMI Blog2014 (1) TMI 1952X X X X Extracts X X X X X X X X Extracts X X X X ..... pute 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - HON BLE R.D. DHANUKA, J For the Appellant : Mr. G.R. Joshi a/w Mr. Jayant Gaikwad i/b M/s Ajay Khandhar Co For the Respondent : Mr. Neville Debon COMMON JUDGMENT JUDGMENT : 1. By these two petitions, filed under section 34 of the Arbitration and Conciliation Act, 1996 the petitioner seeks to impugn the awards dated 1.11.2011 in both the matters dismissing the appeals filed by the petitioner on the ground of limitation. By consent of the parties, both the matters were heard together and are disposed of by a common Judgment. 2. Since facts of both the matters are identical, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t maintainable and the appeal therefore stood rejected. 5. The petitioner filed this petition under section 34 of the Arbitration and Conciliation Act, 1996 impugning the said decision of the appellate bench and filed this petition on 27.2.2013 that is within three months from the date of receipt of the award of the appellate bench. 6. For the purpose of appreciating the arguments advanced by both the sides, it will be necessary to refer to some of the bye laws and regulations of the Bombay Stock Exchange unamended and amended which provides for arbitration and limitations. 7. Prior to the amendment, Bye law 252 (1) (b) provided for time to make a claim against a member who was declared a defaulter. Bye law No.252 (2) provided that the Arbitrator shall not take cognisance of any claim/complaint/difference or dispute unless the same had been received by the Exchange within six months from the date of transaction or from the date on which the client claimed to have given instructions/order to buy or sell or recovery or from the date of which the client claimed to have paid or given a security whichever was earlier. Bye law 252 (3) provided that subject to clauses 1 (a) to (c) and cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Stock exchanges with a view to streamline the arbitration mechanism for arbitration of disputes arising between the client and a member across various market segments. It was provided in the said circular that the limitation period of filing arbitration reference shall be governed by the law of limitation i.e. Indian Limitation Act, 1963. The party aggrieved by the Arbitral award may appeal to the Appellate panel of arbitration of Stock Exchange against such an award which appeal may be filed within one month from the date of receipt of the arbitral award. It was further provided that a party aggrieved may file an application to the court of competent jurisdiction in accordance with section 34 of the Arbitration and Conciliation Act, 1996 . The said circular was issued in exercise of the powers conferred under section 11(1) of the Securities and Exchange Board of India at 1992 read with section 10 of the said circular in Contracts (Regulation) Act, 1956. RELEVANT AMENDMENTS MADE TO THE BYE LAWS AND REGULATION PURSUANT TO THE CIRCULAR DATED 11.8.2010 ISSUED BY SECURITIES AND EXCHANGE BOARD OF INDIA 11. By a Board Resolution dated 17.2.2010 and approved by the Securities and Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Arbitration Secretary within 30 (thirty) days of the receipt of the award of the Arbitral Tribunal. The appellant shall not be entitled to prefer an appeal from the arbitral award after the expiry of the aforesaid period of 30 days and the appeal if any, filed after the expiry of the said period of 30 (thirty) days shall not be taken cognizance of by the Appeal Bench. 14. Regulation No.15.23 (iv) which had empowered the appeal bench to condone the delay on the party showing sufficient cause is deleted vide Board Resolution dated 17.12.2010. 15. Mr. G.R. Joshi learned counsel for the petitioner submits that there was clerical or typographic error in the impugned award rendered by the learned sole Arbitrator. The petitioner had made an application under section 33 read with bye law no.258 (1) (a) before the learned Arbitrator for correction of the impugned award dated 1.11.2011 which application was received by the SEBI on 14.11.2011. It is submitted that without filing such an application for correction, the petitioner could not have filed an appeal before the appeal bench of the exchange under by law 274 (A) (3). The learned counsel submits that though the said application was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the litigant and exists as on and from the date of lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution. Paras 23 and 72 of the said judgment reads as under : 23. From the decisions cited above the following principles clearly emerge: (i) That the legal pursuit of a remedy suit appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. (ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant an exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he word proceeding is not limited to suits it is wide enough to include appeals. Just as a right of suit which had accrued before repeal is saved by S.6 so also is a right of appeal. This is all that the above observation means. It does not mean that when under this section a right of suit is saved, a right of appeal against the decree passed therein is in addition saved. This is clear from the following observations : It is clear that it was the intention of the legislature to take away the right to appeal in any case in which it existed at the date of passing of the Bombay Court's Act. When therefore, a suit or could not maintain a proceeding by way of appeal at the date of the repealing Act, Ratanchand Shrichand vs Hammantrav Shivbakas (Z23) (supra) is no authority for holding that such a right is preserved to him as comprised in a right of suit which he had that date. 17. Mr. Joshi learned counsel also placed reliance on the judgment of R.C.GOENKA VS CHASE TRADING CO 2002 (1) MH.LJ 774 . Reliance is placed on paras 1,2,3,6 and 7 of the said judgment in support of his submissions that the dispute having arisen prior to the date of amendment of the bye laws and regulation, ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bye-laws of the Stock Exchange were amended from 29-8- 1998. By the amendment, limitation has now been provided in respect of transactions between Members and Constituents. The Respondents herein before the Arbitrators raised a preliminary objection that the claim preferred was barred by limitation and consequently the reference ought to be dismissed. The Arbitral Tribunal considered the above contention arrived at the conclusion that the bye-laws as amended would apply to the present reference as it was filed on 11-10-1999 and the bye-laws has come into force on 5-8-1998. The Arbitral Tribunal noted that the last entry in the books of accounts had been made on 22-3-1993. After excluding the period between 21-5-1998 to 5-8-1998 the Arbitral Tribunal found that the dispute was barred by limitation and therefore, rejected the reference. 2. At the hearing of the petition, on behalf of the petitioner, it is contended that considering the findings by the Arbitral Tribunal itself that the last entry in the Books of Account being 22-3-1993, these would be transactions before the bye-laws were amended on 29-8-1998. The amended bye-laws would only apply to transactions after the amendmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f action arose before 29-8- 1998. There is no dispute that insofar as procedure is concerned, it will apply from 29-8-1998. The question is whether the bye-laws involving limitation will apply to references pending at the time when the new Bye-laws came into force; to references made pursuant to an award being set aside under the Act of 1940 or an award set aside under the Act of 1996, if the cause of action had arisen before the bye-laws came into force or will only apply in respect of contracts entered into after the new bye-laws came into force. Insofar as pending proceedings are considered, Section 31(s) of the Limitation Act, 1963 would apply. That would only leave cases of those who had not applied or cases like the petitioner who had withdrawn the reference to file a fresh reference or awards made on a reference before the bye-laws were amended which is set aside and a fresh reference is sought. The new Act does not provide for remitting the award as in the case of the Act of 1940. The limited power is as contained in Section 33 or Section 34(4) of the Act of 1996. Therefore, even if time is saved between the commencement of the arbitration and the date of the order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment of Rajasthan v. Sangram Singh, MANU/RH/0009/1962, was considering the effect of repeal of old law of limitation and its replacement by a new law. The Full Bench of the Rajasthan High Court noted that it is not always true to say that law of limitation is only a law of procedure and does not bar the remedy altogether so as to destroy the right. It is a well settled proposition of law that the new law of limitation would not revive a barred right. Similarly, it may be taken to be equally well settled that the new law of limitation cannot be construed retrospectively so as to destroy altogether the remedy of litigant to enforce his right in a court of law. In case the remedy to enforce a vested right is altogether barred on the date when the new law comes into force without providing any breathing time to a litigant, that remedy must continue to be governed by the old law of limitation. It is true that the legislature has full powers to make law retrospectively. It is also accepted position that the law of limitation does not extinguish the right but only bars the remedy. The proposition of law may be set out as observed by Asutosh Mookerjee, J. in Manju Bibi v. Akkel Mahmud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot), differences and disputes of the nature referred to in Sub-clause (a) in respect of all dealings, transactions and contracts of a date prior or subsequent to the date of contract shall be submitted to and decided by arbitration as provided in the Rules, Bye-laws and Regulations of the Exchange and that in respect thereof any question whether such dealings, transactions and contracts have been entered into or not, shall also be submitted to and decided by arbitration as provided in the Rules, Bye-laws and Regulations of the Exchange; In other words, disputes prior to or subsequent to the contract. There was no provision for limitation in the contract as a term, until 29th August, 1998 except for disputes arising from Contracts between Members and Members. All that bye law 252(2) states is that the provision of the Limitation Act, 1963, or any other law relating to limitation shall apply to arbitration under these bye-laws as they apply to the proceedings in the Court. There is nothing in the said bye-laws to hold that the said provisions will also apply to contracts which were entered into and to which contracts, bye-law 252(2) was not incorporated as a term of the contract. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected in the impugned award passed by the sole Arbitrator, the petitioner need not have applied for correction under section 33 of the Arbitration and Conciliation Act, 1996 read with Bye-law 258 (1)(A). The Arbitrator took more than2 months to decide the said application filed by the petitioner under section 33. The petitioner received a copy of the corrected award on 10.3.2012. On 12.4.2012 the petitioner filed the appeal before the appeal bench along with the application for condonation of delay. The appeal bench took more than 7 months to decide the application for condonation of delay and dismissed the said application and the appeal on 15.11.2012. Within three months from the date of receipt of copy of the award of the appeal bench, the petitioner filed this petition under section 34 of the Arbitration and Conciliation Act, 1996. It is submitted that since the bye laws provided for a remedy of appeal against an order passed by the learned sole arbitrator the petitioner exercised such option to file an appeal. During the pendency of such application under section 33 read with Rule 258 (1) A) Bye-law 252, 274 A and Regulation 15.23 came to be amended and applicability of provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion be clearly manifested by express words or necessary implication. 9. Sri Ganapathy Aiyar urges that the language of section 22(1) as amended clearly makes the section retrospective. The new proviso, it is pointed out, peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which the appeal is preferred and this duty the authority must discharge at the time the appeal is actually preferred before him. The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited. It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date. A similar argument was urged before the Calcutta Special Bench in Sardar Ali v. Dalimuddin (supra), namely, that after the amendment the court had no authority to entertain an appeal without a certificate from the Single Judge. Rankin C.J. repelled this argument with the remark a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Calcutta High Court in Nagendra Nath Bose v. Man Mohan Singha (supra). No cogent argument has been adduced before us to show that that decision is not correct. There can be no doubt that the new requirement touches the substantive right of appeal vested in the appellant. Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended section gives is certainly less than the right which was available before. A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement cannot be said merely to regulate the exercise of the appellant's pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure. 21. Learned counsel appearing for the respondents on the other hand submits that by virtue of amendment to Bye-law 252 and 274 A right to file an appeal is not taken away. Time to file appeal which was 15 days was substituted by a period of 30 days and power of appeal bench to condone the delay are taken away. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal after expiry of the period of limitation accompanied by application supported by an affidavit stating forth the facts on which the appellant relies and sufficient cause for not preferring an appeal within the stipulated time. The appeal bench was empowered to condone the delay if sufficient cause was shown after an opportunity to file a reply and after hearing both the parties. 25. 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. 26. 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 suffici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be made, then, unless a different intention appears, the repeal shall not-- (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed. 31. In my view, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner having exercised that option, the petitioner also had right to apply for condonation of delay after sufficient cause being shown. In view of the gross delay on the part of the learned Arbitrator and thereafter by the appeal bench, time to challenge the impugned award passed by the sole Arbitrator directly under section 34 of the Arbitration and Conciliation Act 1996 also became time barred. The petitioner cannot be made to suffer because of the gross delay on the part of the sole Arbitrator and by the appeal bench. 34. In my view, 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. In my view, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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