TMI Blog2018 (2) TMI 1757X X X X Extracts X X X X X X X X Extracts X X X X ..... 34-17 provisions inserted by the Arbitration & Conciliation (Amendment) Act, 2015 would apply to such proceedings filed after 23rd October, 2015 or not? Held that:- A perusal of section 26 of the Amendment Act of 2015 clearly indicates that unless the parties otherwise agree, no provisions of the Amendment Act would apply to arbitral proceedings commenced in accordance with the provisions of section 21 of the Arbitration and Conciliation Act, 1996 prior to 23rd October, 2015. It also makes it clear that the provisions of Amendment Act shall apply in relation to the arbitral proceedings commenced on or after the date of commencement of the Amendment Act. It is thus clear that if in an arbitration agreement is entered into prior to 23rd October, 2015, and the parties had agreed that the parties would be governed not only by carbp434-17 the provisions of the Arbitration and Conciliation Act, 1996 but also by statutory amendment thereto or repeal thereto and if the notice invoking arbitration agreement under section 21 is received by the other party prior to 23rd October, 2015 when the arbitral proceedings contemplated under section 21 is commenced, the party will be governed by not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 80 of the Code of Civil Procedure, 1908. In view of the fact that now by virtue of the amendment to section 36, merely upon filing of the arbitration application for challenging an award under section 34, there is no automatic stay, the petitioner who challenges the arbitral carbp434-17 award by filing an application under section 34 would not wait and would not cause any delay by not issuing notice upon the other party to obviate any situation of execution of award under the provisions of the Code of Civil Procedure, 1908 - the requirement under section 34(5) has to be construed as directory and nor mandatory. Petition disposed off. - COMMERCIAL ARBITRATION PETITION NO.434 OF 2017 WITH NOTICE OF MOTION NO.488 OF 2017 IN COMMERCIAL ARBITRATION PETITION NO.434 OF 2017 - - - Dated:- 21-2-2018 - Mr. R.D. DHANUKA, J. COMMERCIAL ARBITRATION PETITION NO.236 OF 2017 WITH NOTICE OF MOTION NO.690 OF 2017 WITH NOTICE OF MOTIONNO.165 OF 2017 IN COMMERCIAL ARBITRATION PETITION NO.236 OF 2017 ARBITRATION PETITION NO.159 OF 2017 WITH COMMERCIAL ARBITRATION PETITION NO.173 OF 2017 WITH ARBITRATION PETITION NO.230 OF 2017 WITH ARBITRATION PETITION NO.232 OF 2017 WITH ARBITRATION PE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even if the parties would be governed by the provisions of the Arbitration Conciliation (Amendment) Act, 2015 depending upon the facts and circumstances of each case, whether issuance of prior notice under section 34(5) by the petitioner upon the respondent before filing the arbitration petition under section 34 is mandatory or directory carbp434-17 and the consequence, if any, for non-compliance of such prior notice ? 3. The petitioner in Commercial Arbitration Petition No.434 of 2017 began the arguments on these issue first and thus the facts in the said arbitration petition which are relevant for the purpose of deciding these preliminary issues raised by the respondents are summarized in this order. 4. The respondents had invited the bids for setting up flying schools at 11 airports all over India including two at Surat Airport. The final bid of the petitioner was accepted by the respondents. The petitioner accepted all the terms and conditions of the allotment letter sent by the respondents. The respondents issued a modification by a letter of allotment to the petitioner on 28 th March, 2008. The petitioner accepted the terms and conditions of the letter of allotment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents in their brief preliminary objection raised at the threshold carbp434-17 that the said provision is mandatory and not directory. In view of this preliminary objection raised by the respondents through their respective counsel, I have heard the learned counsel for the parties on these preliminary objections. 8. Mr.Mehta, learned senior counsel for the petitioner in Commercial Arbitration Petition No.434 of 2017 submits that the notice invoking arbitration agreement was admittedly issued by the petitioner on 28th February, 2011, which was immediately received by the respondent. The respondent did not agree to the appointment of any arbitrator. The petitioner had thus filed an arbitration application under section 11(6) of the Arbitration Conciliation Act, 1996 before this Court in the year 2012. He submits that the then designate of the Hon'ble Chief Justice by an order dated 4 th December, 2012 had appointed a former Judge of this Court as a sole arbitrator and referred the disputes between the parties to the arbitration of the learned arbitrator. He submits that in view of the petitioner invoking arbitration agreement as far back as on 28 th February, 2011, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after this Act comes into force; (b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act. 11. Learned senior counsel placed reliance on clause 20 of the agreement entered into between the parties which recorded the arbitration agreement, which is extracted as under :- 20. All disputes and differences arising out of or in any way touching or concerning this Agreement (except those the decision whereof is otherwise herein before expressly provided for or to which the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 and the rules framed thereunder which are now in force or which may hereafter come into forces are applicable shall be referred to the sole arbitration of a person to be appointed by the chairman of the Authority on in case the designation of Chairman is changed or his office is abolished by the person for the time being entrusted, whether or not in addition to other functions with the functions of the Chairman. Airports Authority of India, by whatever designation such person may be called and if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a learned single Judge of this Court in case of M/s.Rendezvous Sports World vs. The Board of Control for Cricket in India, (2016) SCC OnLine 6064 and in particular paragraphs 10, 11, 12, 17 and 20 to 23. He submits that the second part of section 26 of the Amendment Act does not provide that it would apply to the arbitral proceedings commenced earlier and prior to the amendment having brought into force. He submits that since the rights had been accrued in favour of the petitioner under the unamended provisions of the Arbitration Conciliation Act, 1996, the same cannot be taken away impliedly or explicitly by virtue of insertion of section 34(5) by the Amendment Act with effect from 23rd October, 2015. He submits that the arbitration proceedings in Court cannot be considered as continuation of the arbitral proceedings before the learned arbitrator. 15. It is submitted that in the judgment of this Court in case of M/s.Rendezvous Sports World (supra), learned single Judge has interpreted section 36 of the Amendment Act and not the rights of the parties under sections 34 and 37 of the Act. He submits that in any event the said judgment was not dealing with section 34 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the purpose and intent of the legislation in inserting section 34(5) and (6) in section 34 by virtue of the provisions of the Amendment Act was that the proceedings filed under section 34 shall be heard expeditiously. He submits that the period of one year is contemplated for the disposal of the application under section 34 from the date of service of notice under the provisions of section 34(5). He submits that section 34(5) refers to issuance of notice and does not provide the mode and manner of service of notice. Whether a copy of the arbitration petition is also required to be served upon the respondent or not is also not provided in the said provision. He submits that the said provisions also do not provide for any consequences in case of any default for not issuing the notice under section 34(5) before filing of the arbitration petition or if the arbitration petition is not disposed of within one year from the date of service of the notice under section 34(5). 19. Learned senior counsel placed reliance on the judgment of the Supreme Court in case of Vidyawati Gupta Ors. vs. Bhakti Hari Nayak Ors., (2006) 2 SCC 777 and in particular paragraphs carbp434-17 16, 22, 49, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished the judgment of Patna High Court in case of Bihar Rajya Bhumi Vikas Bank Samiti Bihar vs. State of Bihar Others, delivered on 28th October, 2016 in Letters Patent Appeal NO.1841 of 2016 on the ground that the Patna High Court has not considered that no consequences/effect of non-compliance of the procedure prescribed under section 34(5) is considered by the Patna High Court in the said judgment. He also invited my attention to paragraphs 57, 59, 78 and 82 of the said judgment. 24. Mr.Sanjay Jain, learned counsel appearing in the Commercial Arbitration Petition No.236 of 2017 adopts the submissions of Mr.Mehta in Commercial Arbitration Petition No.434 of 2017 and made various additional submissions on the preliminary issues. carbp434-17 25. Learned counsel invited my attention to the report of the Law Commission of India dated 5th August, 2014 suggesting various amendments to the Arbitration and Conciliation Act, 1996 and more particularly the Note in respect of section 34(5) which provides that the said provision has been included to streamline the process and to cut-short the long delays which accrued due to issue of Court notice. He submits that the interpretatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 8th August, 2016 in Chamber Summons No.1530 of 2015 and more particularly paragraphs 50 and 53. He submits that the rights of the petitioner as prevailing on the date of commencement of arbitral proceedings in the present case was prior to 23rd October,2015. Such right did not have any such pre- conditions. An impediment now created by section 34(5) cannot affect the vested right. Though processual in nature, an impediment which affects a vested right, has to be treated as prospective and cannot be given a retrospective effect. He placed reliance on section 6 of the General Clauses Act and would submit that the said provision clearly protects rights already vested and accrued in favour of any party which cannot be taken away by any amendment or a repeal carbp434-17 unless it is so provided in such amendment. 29. It is submitted by the learned counsel that the Arbitration and Conciliation Act, 1996 is a completed code qua arbitral proceedings. The Act clarifies that the arbitral tribunal shall not be bound by the provisions of the Civil Procedure Code, 1908 or the Evidence Act, 1872. The Code of Civil Procedure, 1908 is however applicable to the proceedings under the Arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date of service of notice on the opposite party. He submits that the said provision also does not provide for any consequence if the said application is not disposed of within 60 days from the date of service of the notice on the other side. 33. Learned counsel for the petitioner also placed reliance on sections 8(1), 16(2), 25(a) and 34(3) and would submit that those provisions clearly provides for consequences of not complying with those provisions which consequences are absent in section 34(5) and 34(6) in those newly added provisions. Learned counsel appearing for the petitioner placed reliance on following judgments :- carbp434-17 a). Judgment of this Court in case of Ashraf Ahmed vs. The Municipal Corporation of Greater Bombay in First Appeal No.292 of 1999, b). Judgment of this Court in case of Macquire Bank Ltd. vs. Shilpi Cable Technologies Ltd. In Civil Appeal No.15135 of 2017, c). Judgment of Supreme Court in case of Kailash vs. Nanhku Ors. (2005) 4 SCC 480, d). Central Bank of India vs. Femme Pharma Ltd. Ors., AIR 1982 Bom. 67, e). Thirumalai Chemicals Ltd. vs. Union of India Ors., 2011 6 SCC 739, f). M/s.Babbar Sewing Machine Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt commencement of the arbitral proceedings is equated to the institution of the proceedings in Court. 37. It is submitted that the phrase date of commencement of the arbitral proceedings is a legal fiction and on the date of commencement there are in fact no arbitral proceedings instituted. A request for reference of disputes to arbitration is the date of commencement of the arbitral proceedings. It is submitted that the phrase arbitral proceedings is not a stand alone phrase but it is in conjunction with the words commenced in accordance with section 21 . Arbitral proceedings commences on such notice, irrespective of whether the reference is ultimately made to the arbitral tribunal or not. It only seeks to identify the date of commencement and not the nature of the proceedings to which it applies. It sets a time line i.e. starting line. He submitted that the amended provisions inserted by the said Amendment Act thus would apply to those arbitral proceedings where a notice under section 21 is issued after 23 rd October, 2015. 38. Learned counsel refers to the phrase arbitral proceedings in various provisions of the Arbitration Conciliation Act, 1996 and more parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of effecting the service of notice. 41. Learned counsel then placed reliance on section 34 (6) and would submit that even if an arbitration petition filed under section 34 is not decided within one year from the date of service of notice under section 34(5) of the Act, the Court does not cease to loose powers to decide such petitions and does not become functus officio. The Court has to make an endeavor to decide such arbitration petition within one year from the date of service of notice under section 34(5) and thus such provisions have to be construed as directory and not mandatory. Learned counsel placed reliance on the dictionary meaning of the term notice prescribed in Law of Lexicon. He also placed reliance on section 12(2) of the Bombay Rent Control Act, 1947 and submits that the Courts have construed the said provision as mandatory after considering the wordings and the legislative intent for providing such provision. He submits that section 34(5) cannot be compared with section 12(2) of the Rent Act. The said powers under section 34(5) does not fatter upon the powers under sections 34(1) and 34(2) of the Act. Learned counsel cited the judgment of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive intent of expeditious disposal of the arbitration proceedings would be frustruted. It is submitted that the provisions of section 3(5) and 34(6) cannot be read in isolation but have to be read with section 34(1) and section 34 (2). Section 34(5) cannot be made otiose by declaring it as directory. The notice period is not required to be excluded by computing the period of limitation under section 34(3). 46. Learned counsel invited my attention to the averments in the Commercial Arbitration Petition No.434 of 2017 and would submit that the notice invoking arbitration agreement was issued by the other party on 20th February, 2011. The award was rendered by the learned arbitrator on 12th April, 2017. On 5th June, 2017, the learned arbitrator passed an order under section 33 of the Arbitration Conciliation Act, 1996. The arbitration petition was filed on 11 th July, 2017. She submits that admittedly the arbitral award is rendered after 23 rd October, 2015 and the arbitration petition also came to be filed after 23rd October, 2015. She strongly placed reliance on the judgment of this Court in case of M/s.Rendezvous Sports World (supra) and in particular paragraphs 10, 11, 21, 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not maintainable. She submits that issuance of a notice is a sine qua non before filing of a challenge petition. It is submitted that section 34(1) clearly provides that a recourse to Court against an arbitral award may be made only by an application for setting aside such an award in accordance with sub-sections 2, 3 and 5. A petition which is not in compliance of the requirement of section 34 is not valid and is not maintainable. She led emphasis on the word shall used in section 34(5) and would submit that the said word would clearly indicate that the petition itself could be filed only after compliance of the mandatory notice and not otherwise. 49. Learned counsel placed reliance on the judgment of the Supreme Court in case of Union of India Ors. vs. A.K. Pandey holding that it is the duty of the Courts of justice to try to get the real intention of the legislature by considering the whole scope of the statutes. She placed reliance on the words an application under section 34(1) shall be disposed in any event within a period of one year from the date of such notice referred to in sub-section 5 is served . She submits that the word only is an exclusive word and indic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Tribunal in case of Era Infra Engineering Limited vs. Prideco Commercial Projects Pvt. Ltd. in Company Appeals (AT) (Insolvency) No.31 of 2017, iii). The judgment of the Supreme Court in case of State of Kerala vs. M.S. Mani Ors. in Contempt Petition (Civil) No.280 of 1999, iv). The judgment of the Supreme Court in case of Yogendra Pratap Singh vs. Savitri Pandey Anr. in Criminal Appeal No.605 of 2012 and another connected matters, v). The judgment of the Supreme Court in case of M/s.Shreeram Finance Corporation vs. Yasin Khan Ors., AIR 1989 SC 1769, carbp434-17 vi). The judgment of the Supreme Court in case of Sharif-ud- Din vs. Abdul Gani Lone, AIR 1980 SC 303, vii). The judgment of the Supreme Court in case of M/s. Raptakos Brett Co. Ltd. vs. Ganesh Property, AIR 1998 SC 3085, viii). The judgment delivered by the Division Bench of the Patna High Court delivered on 28th October, 2016 in Letters Patent Appeal No.1841 of 2016 in case of Bihar Rajya Bhumi Vikas Bank Samiti, Bihar - Jharkhand vs. The State of Bihar Ors. 53. Learned counsel for the respondent makes an attempt to distinguish the judgment of this Court in case of The Board of Trustee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court in case of M/s.Rendezvous Sports World (supra) and Enercon GmbH (supra). 57. Insofar as the judgment delivered by a single Judge of the carbp434-17 Patna High Court in case of Bihar Rajya Bhumi Vikas Bank Samiti (supra) is concerned, it is submitted by the learned counsel for the respondent that the said judgment is overruled by the Division Bench of the Patna High Court. Insofar as the judgment of the Himachal Pradesh High Court dated 24th August, 2016 in case of M/s.Madhava Hytech Engineers Pvt. Ltd. vs. The Executive Engineers and Anr. In OMP (M) No.48 of 2016, delivered on 24th August, 2017 is concerned, learned counsel for the respondent distinguished the said judgment on the ground that the said judgment has dealt with an application under section 14 of the Limitation Act and the facts before the Himachal Pradesh High Court in the said judgment were totally different and are distinguishable in the facts of this case. 58. Mr.Ashish Kamat, learned counsel appearing for the respondent in Arbitration Petition No.624 of 2017 adopted the submissions made by Ms.Munim, learned counsel for the respondent in Commercial Arbitration Petition No.434 of 2017 and would submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain led emphasis on paragraph 22(5) of the judgment of the Supreme Court in case of Thyssen Stahlunion GMBH (supra). He submits that the right to file an application under section 34 of the Arbitration Conciliation Act, carbp434-17 1996 had accrued in favour of the petitioner when the petitioner had invoked the arbitration agreement by issuing a notice and when the same was received by the other side in view of section 21 of the Arbitration Conciliation Act, 1996. He submits that at the most, the Court can construe that the requirement of notice under section 34(5) introduced by the Amendment Act would provide an additional condition and not mandatory condition. REASONS AND CONCLUSIONS : 61. Since the main arguments are advanced by the learned counsel for the parties in Commercial Arbitration Petition No.434 of 2017 and Commercial Arbitration Petition No.236 of 2017, I shall briefly indicate the admitted facts which are relevant for the purpose of deciding the legal issues raised by the respondent in these batch of petitions. 62. Insofar as Commercial Arbitration Petition No.434 of 2017 is concerned, the petitioner had issued a notice invoking arbitration clause on 28t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 5 th August, carbp434-17 2011. The arbitration agreement provides that the provision of the Arbitration Conciliation Act, 1996 or any statutory modification or re-enactment thereof and the rules made thereunder for the time being in force shall apply to the arbitration proceedings under the said provision. 67. By section 27 of the Amendment Act, the Arbitration and Conciliation (Amendment) Act, 2015 is repealed. Section 21 of the Arbitration and Conciliation Act, 1996 provides that unless agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent. Section 43 of the Arbitration and Conciliation Act, 1996 provides that for the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on the date referred in section 21. 68. The Supreme Court in case of Thyssen Stahlunion GMBH (supra) has construed section 85(1)(a) of the Arbitration and Conciliation Act and has held that the provisions of Arbitration Act, 1940 shall apply in relation to the arbitral proceedings which are com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to be enforced under the new Act. Both the Acts are vastly different to each other. It is held that when arbitration proceedings are held under the old Act, the parties and the arbitrator keep in view the provisions of that Act for the enforcement of the award. In paragraph (32) of the said judgment, it is held that it is not necessary that for the right to accrue that legal proceedings must be pending when the new Act comes into force. To have the award enforced when arbitral proceedings commenced under the old Act under that very Act is certainly an accrued right. 71. This Court in case of The Board of Trustees of the Port of Mumbai vs. Afcons Infrastructure Limited (supra) has considered a situation where notice invoking arbitration agreement was issued much prior to 23rd October, 2015. The arbitral award was rendered prior to 23rd October, 2015. The arbitration petition was filed in the year 2012 and was pending till 23 rd December, 2016. There was no provision in the arbitration agreement that the parties would be governed by not only the provisions of the Arbitration and Conciliation Act, 1996 but also by the statutory amendment or repealed thereto. This Court accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Amendment Act would apply in view of such agreement between parties. This Court also adverted to the judgment of Supreme Court in case of Duro Felguera vs. Gangavaram Port Ltd., (2017) 9 SCC 729 in which the Supreme Court had held that the parties would be governed by the amended provisions under section 11(6-A) of the Amendment Act and also to the several judgments of various High Courts taking a similar view. In my view, the principles laid down by the Supreme Court in the said judgment would apply to the facts of this case. I am respectively bound by the said judgment. 74. In my view, the principles laid down by the Supreme Court in case of Thyssen Stahlunion GMBH (supra) and judgments of this Court in case of The Board of Trustees of the Port of Mumbai vs. Afcons Infrastructure Limited (supra) and Padmini C. Menon vs. Vijay C. Menon Ors. (supra) would apply to the facts of this case. I am respectively bound by those judgments. 75. A perusal of section 26 of the Amendment Act of 2015 clearly indicates that unless the parties otherwise agree, no provisions of the Amendment Act would apply to arbitral proceedings commenced in accordance with the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing for the parties have dealt with both these judgments threadbare for consideration of this Court in support of their rival submissions. 79. Insofar as the judgment M/s.Rendezvous Sports World (supra) is concerned, chamber summons was filed by the original petitioner who had filed application under section 34 of the Arbitration Act inter-alia praying for dismissal of the application for execution of the arbitral award filed by the judgment debtor. The arbitral awards in that matter were made on 22nd June, 2015, 22nd June, 2015 and 28th January, 2015 respectively. Arbitration petitions were filed on 16th September, 2015 challenging the arbitral awards. One of the arbitration petition was admitted on 19th October, 2015. The question that arose before this Court in the said matter was whether in respect of those awards which were delivered prior to 23rd October, 2015 and the arbitration petitions also having been filed prior to 23rd October, 2015, those awards would become enforceable only if and when those petitions under section 34 were refused and not otherwise. A question was also before this Court that if Amendment Act is held applicable, whether after expiry of three mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the arbitral award operates only in future i.e. after 23rd October, 2015 on the basis of an existing state of affairs, even if the award was passed or the petition under section 34 of the Arbitration Act was filed before 23rd October, 2015. The Amended section 36 of the Arbitration Act cannot be said to operate retrospectively, its operation is prospective in nature. This Court accordingly dismissed the chamber summons inter-alia praying for dismissing of the execution application. 82. A perusal of the judgment rendered by this Court in case of M/s.Rendezvous Sports World (supra) indicates that this Court has held in the said judgment that right vested in the party under section 34 of the Arbitration and Conciliation Act is unaffected and not taken away by the amendment to section 36 of the Arbitration Act. A vested right available to the award-debtor would be only in the matter of challenge to the arbitral award which had remained intact. It is held that section 36 of the Arbitration Act pertains only to the enforcement of an award and its executability. The original section 34, imposed a disability on the award-holder in executing the award during pendency of the challenge t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be construed as proceedings before Court or cannot be construed as two separate proceedings at two different stages i.e. one which commences on receipt of notice invoking arbitration agreement under section 21 and another before a Court i.e. at the stage of challenging an award or otherwise. 85. In my view, a plain and simple interpretation of section 26 of the Amendment Act on conjoint reading with other provisions of the Arbitration Act referred to aforesaid wherein the term 'arbitral proceedings' are referred would clearly indicate that the provisions in the Arbitration and Conciliation Act prior to the provisions of Amendment Act having been brought into effect would apply to all the arbitral proceedings wherein a notice invoking arbitration agreement under section 21 was received by the other party prior to 23 rd October, 2015 and the provisions of the Arbitration Act duly amended by the Amendment Act would apply to all the arbitral proceedings which have commenced after 23rd October, 2015 by virtue of a receipt of notice invoking arbitration agreement by other party in view of section 21 of the Arbitration and Conciliation Act, 1996. The phrase the date of comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in that case and held that the High Court ought not to have interfered with the process and progress of the arbitration. The principles laid down by the Supreme Court in case of Aravali Power Company Pvt. Ltd. (supra) squarely applies to the facts of this case. This judgment of the Supreme Court is delivered after the date of delivery of the judgment of this Court in case of M/s.Rendezvous Sports World (supra) and in case of Enercon GmBH (supra). This Court while delivering these judgments did not have benefit of the judgment of Supreme Court in case of Aravali Power Company Pvt. Ltd. (supra). 89. In my view, the judgment of this Court in case of M/s.Rendezvous Sports World (supra) holding that there are two stages of arbitral proceedings referred in section 26 of the Amendment Act is based on the consensus of the parties and even otherwise contrary to the judgment of Supreme Court in case of Aravali Power Company Pvt. Ltd. (supra). I am bound by the judgment of Supreme Court. 90. In case of Voestalpine Schienen GmbH vs. Delhi Metro Rail Corporation Ltd., (2017) 4 SCC 665, the Supreme Court has considered a different situation where the notice invoking arbitration agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d remedies accrued to the petitioner and subsequent rights and/or remedy in filing the proceedings before the superior Court or the appellate forum would continue and cannot be divested by the amendment unless it is shown clearly intended by the amendment to make it applicable with retrospective effect. It is held that the petitioner in that matter had filed the 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 of the original proceedings would be continued. 93. It is held that the petitioner had 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 2 and the regulations of the Bombay Stock Exchange thereby taking away the powers of the appellate bench to condone the delay. This Court held that in such a situation section 6(e) of the General Clauses Act, 1897 would be attracted. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitral award is rendered or when the arbitration petition challenging an arbiral award is filed. 96. The Supreme Court in case of Milkfood Limited (supra) has construed section 21 as well as section 85(2)(a) of the Arbitration Conciliation Act, 1996 and also the provisions of section 37(3) of the Arbitration Act, 1940. It is held by the Supreme Court that the service of notice and/or issuance of request for appointment of an arbitrator in terms of the arbitration agreement must be held to be determinative of commencement of the arbitral proceedings. The Supreme Court adverted to the judgment in case of Thyssen Stahlunion GMBH (supra) and has held that the judgment in that case itself is an authority for proposition that in relation to the domestic arbitration proceedings, commencement thereof shall co- incide with the service of request / notice. 97. It is held by the Supreme Court that the commencement of the arbitration proceedings for the purpose of limitation or otherwise is of the Court's conscience. If a proceeding commences, the same becomes relevant for many purposes including that of limitation. In paragraph 70 of the said judgment, it is held that those arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration petition challenging the award under section 30 of the Arbitration Act, 1940 is filed after the Arbitration Conciliation Act, 1996 came into force. 101. The Supreme Court in case of Andhra Pradesh Power Coordination Committee Ors. vs. Lanco Kondapalli Power Ltd. Ors., (2016) 3 SCC 468 has held that the notice of arbitration amounting to initiation of the arbitral proceedings as contemplated under section 21 of the Arbitration Conciliation Act, 1996. 102. This Court in case of Board of Trustees of Jawaharlal Nehru Port Trust vs. Three Circles Contractors, (2015) SCC OnLine Bom. 951 has held that as the arbitration proceedings commences in respect of the disputes which are referred in the notice invoking the arbitration agreement on the date on which such notice is received by the respondent, limitation in respect of such disputes stops. 103. Insofar as the submission of the learned counsel for the respondent that the judgment of this Court in case of M/s.Rendezvous Sports World (supra) applies to the facts of this case and is binding on this Court is concerned, even in the said judgment, this Court has held that the Amendment Act does not repeal section 34. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in the petition and to such other persons as may seen to him to be likely to be affected by the proceedings, requiring all or any of such persons to show cause, within the time specified in the notice, why the relief sought in the petition should not be granted. The said rules framed by this Court are statutory rules. 108. Rule 803-B clearly provides that save as otherwise provided in the said rules, all applications under the Arbitration Conciliation Act, 1996 shall be made by the petitioner and shall be placed on board for admission after prior notice to all parties concerned. The Judge, may consider the admission of the Petition in exercise of his discretion even though no such notice is served on the other side. The Judge may admit or reject the Petition or pass such other orders thereon as he may deem fit. It is thus clear that all the respondents are required to be served with a copy of notice before the arbitration petitions are heard for admission. The recommendation of the Law Commission of India, in the said report that the purpose of introducing section 34(5) is to streamline the process and to cut short the long delays which accrued due to issuance of Court n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Rules, 1980 and Rule 220(4) of the High Court (Original Side) Rules, 1957 and has held that though the suit is placed on board for dismissal, under the old Rules of 1957, the discretion of the Court was limited to sufficient cause being shown and if sufficient cause is not shown, the suit has to be dismissed. However, under the Rules of 1980, it only provides for a suit to be placed on board for dismissal but is silent on what happens thereafter. The new Rules of 1980 provides a wider discretion than before and the Court is not bound to dismiss the suit. 113. A perusal of section 34(5) read with section 34(6) of the Amendment Act makes it clear that even if prior notice is not given to the other party by the petitioner of filing an application under section 34 challenging an award and even if such application filed under section 34 is not decided by the Court within one year from the date of service of the said notice under section 34(5), no consequence of carbp434-17 such default is provided therein. Section 34(5) also does not provide the mode and manner of such service. Whether a copy of the arbitration petition along with annexures proposed to be filed also is required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitration petition as contemplated under section 34(5) of the Amendment Act. If the arguments of the respondent is accepted, the Court has to dismiss such arbitration petitions which are filed without issuing prior notice under section 34(5) of the Amendment Act. The consequence of the petitioner not issuing such prior notice before filing of the arbitration petition would be serious and would amount to taking away the vested and substantive right available to the petitioner to impugn the arbitral award within the time prescribed under the Act. The procedure prescribed under section 34(5), can in my view be complied with even after the arbitration petition is filed by the petitioner under the said provisions or in accordance with the provisions of the High Court (Original Side) Rules. 117. The Supreme Court in case of Thirumalai Chemicals Limited vs. Union of India Ors. (2001) 6 SCC 739 has held that carbp434-17 the procedural law established a mechanism for determining those rights and liabilities and a machinery for enforcing them, the same cannot be called a substantive right and an aggrieved person cannot claim any vested right. It is held that unless the language used pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. It is held that if the statute is silent and there is no specific prohibition then the statue should be interpreted which advances the cause of justice. 121. In my view since there is no consequence provided in section 34(5) as well as section 34(6) for non-compliance of the requirement mentioned therein, the Court has to balance the situation and exercise its discretionary power to permit the petitioner to issue notice along with papers and proceedings upon the other party even after the petition is filed to avoid any delay in disposal of such application. In my view section 34(5) cannot be equated with section 80 of the Code of Civil Procedure, 1908. In view of the fact that now by virtue of the amendment to section 36, merely upon filing of the arbitration application for challenging an award under section 34, there is no automatic stay, the petitioner who challenges the arbitral carbp434-17 award by filing an application under section 34 would not wait and would not cause any delay by not issuing notice upon the other party to obviate any situation of execution of award under the provisions of the Code of Civil Procedure, 1908. For this reason also, I am of the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of extension of time not exceeding 15 days , does not prescribe any kind of period of limitation. The Supreme Court accordingly held that the provision appears to be directory in nature. It is held that the provision is more by way of procedure to achieve the object of speedy disposal of such disputes. But it falls short of creating any kind of substantive right in favour of the complainant by reason of which the respondent may be debarred from placing his version in defence in any circumstances whatsoever. 125. In section 34(5) also, no consequence is provided in the event of the petitioner not issuing any prior notice before filing of the arbitration petition under section 34 to the respondent. Similarly, there is also no consequence provided in section 34(6), if the Court is not able to dispose of the arbitration petition under section 34 within one carbp434-17 year from the date of service of notice contemplated under section 34(5) upon other party. The purpose and the legislative intent of inserting those provisions is the speeder disposal of the proceedings and not to penalise the petitioner for non-compliance of the procedure which is directory. Powers of the Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued as prospective. The principles of law laid down by the Supreme Court in the said judgment are applicable to the facts of this case. 130. Insofar as the judgment delivered by the Division Bench of the Patna High Court in case of The Bihar Rajya Bhumi Vikas Bank Samiti, Bihar - Jharkhand (supra) relied upon by the learned counsel for the respondent is concerned, a perusal of the said judgment clearly indicates that the Patna High Court in the said judgment has not dealt with the judgments of the Supreme Court holding that if the notice under section 21 is received by other party carbp434-17 prior to 23rd October, 2015, the provisions of the unamended Arbitration Conciliation Act, 1996 would be applicable to the parties, whereas if such notice is received after 23rd October, 2015, the parties will be governed by the provisions of Amendment Act. The Patna High Court has also not considered the issue that there is no consequence provided in section 34(5) and 34(6) of the Amendment Act in the event of non-compliance of the said provisions. The Bombay High Court (Original Side) Rules specifically provides for issuance of notice by the petitioner upon the other party before the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding with the matter expeditiously is already served by insertion of appropriate rule in Bombay High Court (Original Side) Rules. The Court can always direct the petitioner to issue notice along with papers and proceedings upon other party before the matter is heard by the Court for admission as well as for final hearing. The vested rights of a party to challenge an award under section 34 cannot be taken away for non-compliance of issuance of prior notice before filing of the arbitration petition. carbp434-17 134. Insofar as the judgment of the Supreme Court in case of Union of India vs. Popular Construction Company Limited (supra) relied upon by the learned counsel for the respondent is concerned, the Supreme Court in the said judgment has construed sections 5 and 29(2) of the Limitation Ac, 1963, and also section 34 of the Arbitration Conciliation Act, 1996. It is held by the Supreme Court that in view of section 29(2) of the Limitation Act, 1963, the period prescribed for limitation under section 34(3) of the Arbitration Conciliation Act, 1996 would apply. The expression but not thereafter described in section 34(3) is interpreted by the Supreme Court and it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to and relied upon by the learned counsel for the petitioner referred to aforesaid, which are sought to be distinguished by the learned counsel for the respondent is concerned, in my view, learned counsel for the respondent could not distinguish any of those judgments. This Court has already dealt with those judgments in great detail in the earlier paragraphs of this judgment and are found clearly applicable to the facts of this case and assist the case of the petitioner. carbp434-17 138. The conclusion drawn by this Court in this judgment is summarized as under :- a). If notice invoking arbitration agreement is received by other party prior to 23rd October, 2015, the arbitration proceedings would commence prior to 23rd October, 2015. The provisions of the Arbitration Conciliation Act, 1996 in force prior to 23 rd October, 2015 would be applicable to such matters for all the purposes. b). If notice invoking arbitration clause is received by other party after 23rd October, 2015,the parties will be governed by the provisions of the Arbitration Conciliation (Amendment) Act, 2015 for all the purposes. c). The date of filing of the arbitration petition under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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