1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.4064 OF 2008 Mr Puneet Malhotra and Anr. ...Petitioners v/s. Mr.R.S.Gai,Sole Arbitrator & others ...Respondents --- Mr S.S. Kanetkar for Petitioners. Mr Vikas Shivarkar for Respondent Nos.3 and 4. WITH ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.340 OF 2007 WITH ARBITRATION PETITION NO.341 OF 2007 The Municipal Corporation of Greater Mumbai. ...Petitioner v/s. M/s Joint Venture Angerlehner Michell Bau GMBH ...Respondents --- Mr R.D. Dhanuka with Mr R. Yadav, Mr R.Y. Shirsekar and Mr H.C. Pimple for Petitioners. 2 Mr Zal Andhyarujina with Mr Rajeev Talasikar and Ms. Shivani i/b Mr Javed Gaya for Respondents. WITH ARBITRATION PETITION (L) NO.590 OF 2007 The Municipal Corporation of Greater Mumbai. ...Petitioner v/s M/s Angerlehner Structural and Civil Engineering Co. ...Respondents --- Mr R.D. Dhanuka with Mr R. Yadav, Mr R.Y. Shirsekar and Mr H.C. Pimple for Petitioners. Mr Zal Andhyarujina with Mr Rajeev Talasikar and Ms. Shivani i/b Mr Javed Gaya for Respondents. WITH ARBITRATION PETITION (L) NO.591 OF 2007 WITH ARBITRATION PETITION (L) NO.592 OF 2007 ARBITRATION PETITION (L) NO.593 OF 2007 M/s Angerlehner Structural and Civil Engineering Co. ...Petitioners v/s The Municipal Corporation of Greater Mumbai. ...Respondents --- 3 Mr Zal Andhyarujina with Mr Rajeev Talasikar and Ms Shivani i/b Mr Javed Gaya for Petitioners. Mr R.D. Dhanuka with Mr R. Yadav, Mr R.Y. Shirsekar and Mr H.C. Pimple for Respondents. WITH ARBITRATION PETITION NO.2 OF 2007 Mr Girish S. Khandagale ...Petitioner v/s Union of India, through Deputy Chief Engineer, Central Railway and anr. ...Respondents --- Mr U.S. Samudrala for Petitioner. Mr Suresh Kumar for Respondents. WITH ARBITRATION PETITION NO.310 OF 2007 Kotak Securities Ltd. ...Petitioners v/s Gaurav Goel and anr. ...Respondents --- Mr Karan Bharihoke for Petitioners. Mr Uday Warunjikar for Respondents. --- 4 CORAM: D.K.DESHMUKH J,& S.J.VAZIFDAR J. & J.P.DEVADHAR,J. DATED:23rd October, 2008. JUDGMENT: (PER D.K.DESHMUKH, J.) 1. This bench has been constituted by the Hon'ble The Chief Justice of the Bombay High Court for answering the following question:- “When a petition is filed challenging an Award under section 34 of the Arbitration and Conciliation Act,1996, under which Article of the Bombay Court fees Act 1959, the court fees would be payable ?” 2. The necessity of constituting a larger bench for consideration of this question arose in the following circumstances:- When the Arbitration Act,1940 (hereinafter 5 referred to as “the 1940 Act”) was in force, a person desiring to challenge an Award under 1940 Act had to apply to the Court under Section 33 of that Act. The term “Court” was defined by Section 2(c) of the 1940 Act, to mean a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit. Thus, in so far as the State of Maharashtra is concerned, in the State of Maharashtra excluding Bombay, an application under section 33 of the 1940 Act was to be filed before the Civil Court and so far as the Bombay is concerned, an application to be filed either before this Court or the City Civil Court depending on the amount involved in the Award. When an application under Section 33 of the 1940 Act was filed in a Civil Court in the State of Maharashtra excluding city of Bombay, court fee was paid under Article 1(a) of the Second Schedule i.e. Rs.5/- and when an application was made to the City Civil Court in Bombay, the same court fee was to be paid under the same Article. But when an application was to be made under Section 33 before this Court, court fee was to be paid under Article 1(f)(iii) of 6 the Second Schedule i.e. Rs.25/-. The court fee was paid under the Second Schedule because of Article 3 found in the First Schedule of the Bombay Court fees Act which provided that when an application to set aside or modify an Award otherwise than an Award under the 1940 Act, then court fee is payable on the amount of value of the Award sought to be set aside or modified, according to the scale prescribed under Article 1. Thus, because of Article 3 of Schedule I of the Court fees Act, an application under Section 33 of the 1940 Act challenging an Award made by an Arbitrator under the 1940 Act was excluded from Article 3, and therefore, court fee on an application filed under Section 33 of the 1940 Act was payable under the Second Schedule. The 1940 Act was repealed by the Arbitration and Conciliation Act 1996 (hereinafter referred to as “the 1996 Act”). Section 34 of the 1996 Act provides that an Award made under that Act by an Arbitrator can be challenged by making an application to the Court. The term “Court” is defined by Section 2(e) of the 1996 Act, to mean the principal Civil Court of original jurisdiction in a district and includes the High Court in exercise of 7 its ordinary original civil jurisdiction having jurisdiction to decide questions forming the subject matter of the Arbitration if the same had been the subject matter of a suit, but does not include any civil court of a grade inferior to such principal Civil court or any small causes Court. Thus, the definition of the term “Court” found in the 1940 Act and the 1996 Act is little different. Under the 1940 Act an Award could be challenged before any Civil Court but now it can be challenged only before the principal Civil Court of original jurisdiction in a district. Thus, now an Award made under the 1996 Act can be challenged by making an application under section 34 of that Act either in the district Court or in this Court on its original side. A question, therefore, arose as to which provision in the Bombay Court fees Act would apply when an application under section 34 of the 1996 Act is made. That question arose when a Division Bench of this Court had before it an appeal filed under Section 37 of the 1996 Act challenging an order passed by a learned Single Judge of this Court dismissing an application filed under Section 34 of the 1996 Act. On that appeal, the 8 appellant had paid court fee according to Article 13 of Schedule II of the Bombay Court fees Act, which provides that when a memorandum of appeal is filed, challenging an order which is not a decree and which does not have force of decree, in the High Court, court fee payable would be Rs.25/-. The Division Bench by its judgment in the case of “Maharashtra Industries Development Corporation Vs. Govardhani Constructions Company, 2007(2) Bombay Cases Reporter 835” decided on 7.3.2007 held that an appeal filed against an order dismissing a petition filed under section 34 of the 1996 Act will be governed by Article 3 of Schedule I of the Bombay Court fees Act. The Court held that by Article 3 of Schedule I only an application or memorandum of appeal challenging an award made under the Arbitration Act 1940 is excluded. In effect, the Division Bench held that when an application under Section 34 of the 1996 Act against the Award is made or an appeal is filed under Section 37 of the 1996 Act challenging the order made under Section 34 of the 1996 Act, payment of court fee will be governed by Article 3 Schedule I of the Bombay Court fees Act. The Division Bench held so 9 because, according to the Division Bench, only an application or appeal challenging the Award made under the 1940 Act has been excluded from Article 3 of Schedule I of the Bombay Court Fees Act, and therefore, an application under Section 34 of the 1996 Act or an appeal under Section 37 of the 1996 Act would not be excluded from Article 3 of Schedule I of the Bombay Court fees Act, and therefore, Court fee will be payable according to Article 3 of Schedule I of the Bombay Court Fees Act. It appears that when a learned Single Judge of this Court had before him petition filed under Section 34 of the 1996 Act where Court fee in accordance with Article 3 of Schedule I of the Bombay Court fees Act was not paid, an objection was raised relying on the judgment of the Division Bench in the case of “Govardhani Construction Company” referred to above. The learned Single Judge found that he cannot agree with the view taken by the Division Bench in the judgment in the case of “Govradhani Construction Company”, because according to him, while deciding the question, the Division bench in that case did not consider the provisions of Section 8 of the General Clauses Act 10 and as the Division Bench did not consider the provisions of Section 8 of the General Clauses Act, the view taken by the Division Bench in the case of “Govardhani Construction Company” was not proper, and therefore, the learned Single Judge made an order dated 19.6.2008 directing the office to place papers before the Hon'ble the Chief Justice for placing the matter before a larger bench. The Hon'ble the Chief Justice pursuant to the order made by the learned Single Judge made an order on 1.8.2008 constituting this bench for considering the question referred to above. It appears that another Division bench of this Court in appeal no.77 of 2007 and appeal no.78 of 2007 in the case “Oil & Natural Gas Corporation Ltd. Vs. Jindal Drilling & Industries Ltd.” has considered the question “whether to an application filed under Section 34 of the 1996 Act and to an appeal filed under Section 37 of the 1996 Act, the provisions of Article 3 of Schedule I would be applicable”. The Division Bench has considered the question with reference to the provisions of Section 8 of the General Clauses Act and has come to the conclusion that because the scheme of 1996 Act is 11 totally different from the 1940 Act, the 1996 act cannot be said to be re-enactment of the 1940 Act and therefore, even considering the provisions of Section 8 of the General Clauses Act, it cannot be said that Article 3 of Schedule I of the Bombay Court fees Act is applicable to an application made under Section 34 and an appeal filed under section 37 of the 1996 Act. 3. Thus, it is clear from what has been observed above that for answering the question framed above, first we have to consider whether Article 3 of Schedule I of the Bombay Court fees Act applies to an application filed under Section 34 and an appeal filed under Section 37 of the 1996 Act, and if we find that Article 3 of Schedule I of the Bombay Court fees Act does not apply then we will have to make an enquiry to find out which is the provisions which will be applicable ? 4. In so far as the writ petition no.4064 of 2008 which also has been placed before us is concerned, it appears that a petition under Section 34 of the 1996 Act challenging an Award was filed 12 before the District Judge, Pune. Before the learned District Judge, an application was made by the respondent for direction to applicant to pay court fee in accordance with Article 3 of Schedule I of the Bombay Court Fees Act. That application has been decided by the learned District Judge by order dated 20.2.2008. The learned District Judge held that court fee is payable according to the provisions of Article 3 of Schedule I of the Bombay Court fees Act. That order was challenged in writ petition no.4064 of 2008. When that writ petition came up before the learned Single Judge of this Court, it was contended before the learned Single Judge that the judgment of the Division Bench in “Govardhani Constructions Company” case needs reconsideration. The learned Single Judge on finding that the question of correctness or otherwise of the judgment of the Division Bench in the case of “Govardhani Constructions Company” has been referred to a larger bench, has directed the office to place the paper to the Hon'ble the Chief Justice, and accordingly, that petition has also been placed before us. The question to be considered in that petition is also 13 the same as in the other petitions that are listed before us. As the question before us relates to payment of Court fees, we issued notice to the State of Maharashtra. In response to the notice, the learned Advocate General appeared before us, we heard him. 5. On behalf of the petitioners, it was submitted that Article 1(f)(iii) of Schedule II of the Bombay Court Fees Act is applicable to the petitions filed under Section 34 of the 1996 Act and not Article 3 of Schedule I of the Bombay Court Fees Act. It was submitted that the Arbitration Act,1940 has been repealed and re-enacted by the Arbitration & Conciliation Act,1996. It was submitted that remedy to challenge an award was by way of an arbitration petition under Section 33 of the 1940 Act, and since the Court is considering the issue as to which article of Bombay Court Fees Act is attracted to a petition challenging an Award under Section 34 of the 1996 Act, the Court would have to examine whether there is any repeal and re-enactment of the provision relating to challenge of an award under the 14 Arbitration Act,1940 by another provision under the 1996 Act. It was further submitted that remedy of challenging an Award which was available under the provisions of the 1940 Act is now available under section 34 of the 1996 Act. It was submitted that Article 18(a) of Schedule II provided for payment of fixed court fees on an application under Section 20 of the 1940 Act. It was submitted that though the 1940 Act has been repealed and re-enacted by the 1996 Act, subject legislated upon i.e. arbitration has remained the same. It was submitted that remedy of challenging an award available under section 33 of the 1940 Act is continued under section 34 of the 1996 Act. It was submitted that since the Court is considering the applicability of the relevant article of Bombay Court fees Act, the Court has to see whether the relevant article applicable to the petition challenging an award under the provisions of the 1940 Act has been repealed and re-enacted by another provisions under the 1996 Act or not. It was submitted that since section 33 of the 1940 Act is repealed and re-enacted by the 1996 Act, in view of the provisions of Section 8 of the General Clauses 15 Act, the provisions applicable to challenge an Award is Section 34 of the 1996 Act on which court fees is to be paid, therefore, reference in Article 3 of the Bombay Court Fees Act to 1940 Act has to be read as reference to 1996 Act. The learned Counsel relied on the judgment of the Supreme Court in the case “State Vs. A.Parthiban, (2006)11 Supreme Court Cases 473 , as also the judgment of the Supreme Court in the case “New Central Jute Mills Co.Ltd. Vs. The Asstt. Collector of Central Excise, Allahabad and other, 1970(2) Supreme Court Cases 820”. 6. He further submitted that section 8 of the General Clauses Act does not require that latter Act repealing and re-enacting an earlier Act should be a repealing and amendment Act but only requires that a Central Act should repeal and re-enact a former enactment either with modification or without modification. He submitted that where a provision of an Act omitted by an Act and the said Act is simultaneously re-enacts a new provision which specially covers the filed occupied by the repealed provision with certain modification, in that event 16 such re-enactment is regarded as having force continuously and the modification or changes are considered as amendment coming into force with effect from the date of enforcement of re-enacted provision. He relied on the judgment of the Supreme Court in the Case “Commissioner of Income Tax, Bangalore Vs. Venkateshwara Hatcheries (P) Ltd, AIR 1999 Supreme Court 1225”. He further submitted that even the statement of objects and reasons of the 1996 Act makes it clear that the bill sought to consolidate and amend the law relating to domestic arbitration, international and commercial arbitration, enforcement of foreign arbitral award and to define the law relating to conciliation taking into account the Uncitral modern law and rules. He further submitted that most of the provisions of the 1940 Act are also incorporated in the 1996 Act with or without modification. It was submitted that some of the provisions of 1940 Act are deleted in 1996 Act and certain new provisions are introduced in the 1996 Act. It was submitted that chapter regarding Conciliation proceedings has been introduced in the 1996 Act. It was submitted that section 8 of General 17 Clauses Act applies even when any provision of a former enactment is repealed and re-enacted with or without modification. The learned Counsel then took us through the definition of term “modification” given in “Law Lexicon”. Then the learned Counsel took us through the provisions of Section 85 of the 1996 Act to show that the 1940 Act has specifically been repealed by Section 85 of the 1996 Act. The learned Counsel then relied on the judgment of the Supreme Court in the case “Thyssen Stahlunion Gmbh vs. Steel Authority of India Ltd., (1999)9 Supreme Court Cases 334” and submitted that the Supreme court in that judgment has held that when an arbitration clause entered into before 1996, the 1940 Act is referred to, to the arbitration proceedings initiated after the commencement of 1996 Act in relation to such an arbitration clause, the provisions of the 1996 Act apply. The learned Counsel submits that the Division Bench in its judgment in the case “Jindal Drilling & Industries Ltd.” could not have considered all the provisions of the 1996 Act and the 1940 Act because only the relevant provisions were to be considered in view of Section 8 of the General Clauses Act. The 18 learned Counsel, thus, submitted that in view of the provisions of Section 8 of the General Clauses Act it has to be held that reference to the provisions of 1940 Act in Article 3 of Schedule I of the Bombay court fees Act has to be read to the relevant provisions of the 1996 Act. 7. On the other hand, the learned Advocate General submitted that Article 3 of Schedule I of the Bombay Court fees Act carves out an exemption from payment of ad-valorem court fee in case of any application, petition, including memorandum of appeal for setting aside or modifying any award under the 1940 Act. It was submitted that the said provision specifically referred to the 1940 Act and the exemption conferred thereunder is restricted to an award made under the 1940 Act and the said exemption cannot be extended to the arbitration petition challenging the award made under the 1996 Act. It was submitted that in order to claim benefit under section 8(1) of the General Clauses Act, the following elements are required:- (i) Repeal and re-enactment of any 19 provision. (ii) With or without modification. (iii) Reference to the said provision in any other enactment. (iv) Unless contrary intention appears, to be construed as reference to the re-enacted provision. It was further submitted relying on the observations of the Supreme Court in the case “Sundaram Finance Ltd. Vs. NEPC India Ltd. (1999)2 SCC 477” that the scheme of the 1996 Act and the 1940 Act is totally different and the provisions of the 1940 Act cannot be referred for interpreting the provisions of the 1996 Act. It was, therefore, submitted that the 1996 Act is not a re-enactment of the 1940 Act. It was submitted that the 1996 Act is entirely a new enactment. It was further submitted that section 34 of the 1996 Act cannot be said to be an enactment of Section 30 or section 33 of the 1940 Act. The learned Advocate General took us through the provisions of Sections 30 and 33 of the 1940 Act and the provisions of Section 34 of the Arbitration Act and submitted 20 that width and amplitude of challenge provided by two provisions is totally different. It was submitted, therefore, that section 34 of the 1996 Act cannot be said to be a re-enactment with modification of Sections 30 or 33 of the 1940 Act. The learned Advocate general took us through some decisions to show what, according to him, is the meaning of term “modification”. It was submitted that although heading of section 34 of the 1996 Act is similar to that of Section 33 or Section 30 of the 1940 Act, the substance thereof is entirely new. It was contended that the reliance placed by the petitioners on the observations of the Supreme Court in its judgment in the case “Thyssen Stahlunion Gmbh vs. Steel Authority of India Ltd.” referred to above is also not proper because the question that was considered by the Supreme Court is totally different. 8. For the purpose of considering the first question that is “whether the provisions of Article 3 of Schedule I of the Bombay Court Fees Act apply to a petition filed under Section 34 of the 1996 Act or an appeal filed under Section 37 of that Act”, we have 21 first to see Article 1 and Article 3 of Schedule I of the Bombay Court fees Act. Perusal of Article 1 of Schedule I shows that on a plaint or memorandum of appeal presented to any civil or revenue Court, the Court fee is liable to be paid according to the subject matter involved in such a plaint or memorandum of appeal. Thus, according to Article 1 court fee is payable on ad-valorem basis. Article 3 of Schedule I reads as under:- 3. Plaint, application or --- A fee on the petition (including amount or value of memorandum of appeal), to the award sought set aside or modify any to be set aside or award otherwise than under modified,according the Arbitration Act,1940. to the scale prescribed under Article 1. According to Article III of Schedule I, on any plaint, application or petition or memorandum of appeal for setting aside or modifying an award, same court fee is payable as is payable on a plaint or memorandum of appeal under Article 1. Thus, when an award is challenged by a plaint, application, 22 petition or memorandum of appeal, court fee is payable on ad-valorem basis. But from this requirement of payment of court fee on ad-valorem basis, Article 3 excludes an application or petition or memorandum of appeal filed in civil or revenue Court challenging any award made under the Arbitration Act,1940. Thus, the provisions of Article III of Schedule I do not apply when an application is filed or appeal is filed challenging an award made under the Arbitration Act,1940. The question, therefore, that arises for consideration is “whether reference to the provisions of 1940 Act found in Article III of Schedule I of the Bombay Court fees Act can be said to include reference to the 1996 Act.” The petitioners have relied on the provisions of section 8 of the General Clauses Act to contend that reference to the provisions of the 1940 Act in Article III of Schedule I has to be taken as reference to the relevant provisions in the 1996 Act. It is sub-section 1 of Section 8 of the General Clauses Act which has been relied on. Sub-section (1) of Section 8 of the General Clauses Act reads as under:- 23 “8. Construction of references to repealed enactments.- (1) Where this Act, or any [Central Act] or Regulation made after the commencement