Bombay High Court
Shri Harjinder Sinh S/O Balwant Singh vs Paramjeet Singh S/O Balwant Singh Osan on 18 September, 2008
Author: Anoop V. Mohta
Bench: Anoop V. Mohta, C.L. Pangarkar
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
ARBITRATION APPEAL ST. NO. 11067 OF 2008
AND
CIVIL APPLICATION NO. 6279 OF 2008
1. Shri Harjinder Sinh s/o Balwant Singh
Osan, aged about 57 years, Occ. Business,
R/o 13, AVG Layout, Lakadganj, Nagpur
and others. .... APPELLANTS.
....Versus....
1. Paramjeet Singh s/o Balwant Singh Osan
aged about 50 years, Occ. Business,
R/o 15 AVG Layout, Lakadganj, Nagpur
& others. .... RESPONDENTS.
Mr. S.C. Khati, Counsel for appellants/applicants,
CORAM: ANOOP V. MOHTA & C.L. PANGARKAR, JJ.
DATED: SEPTEMBER 18, 2008.
ORDER (PER ANOOP V. MOHTA, J.)
1} The appellants being aggrieved by the judgment passed in Misc.
Civil Application No. 448/05 by the District Judge, Nagpur thereby set aside the award dated 16.4.2005 on an application filed under Section 34 of the Arbitration & Conciliation Act, 1996 (for short "Act of 1996"), preferred this appeal under Section 37(1)(b) of the Act of 1996.
::: Downloaded on - 09/06/2013 13:52:22 ::: 22} The office has raised an objection and directed to pay ad valorem Court fees under the Bombay Court Fees Act, 1959 (for short "BCF Act"), in view of decision in Maharashtra Industries Development Corporation .vs. Govardhani Constructions Company : 2007(3) Mh.L.J. 514. The appeal is also valued for the purpose of Court fee and jurisdiction at Rs.51,00,000/- accordingly. The appellants have paid Rs.5000/- and sought time for the balance amount. The time was granted on 17.7.2008 once. By a second application, the appellants have prayed for further time. The matter remained under objection no.6, for want of deficit Court fee of Rs.69,430/-. The appeal and the application are listed before this court for orders.
3} The learned Counsel appearing for the applicants has objected the demand of Court fee on such appeal though there is a judgment of Division Bench of this Court in Govardhani (supra) and following the same a Single Bench judgment in Arbitration Appeal No. 851/07 Manish Construction & others .vs. V.G. Darunde. There is also an unreported judgment in Appeal No. 77/07 Oil & Natural Gas Corporation Limited .vs. Jindal Drilling & Industries Limited dated 13.8.2008 passed by a Division Bench confirming as under :-
::: Downloaded on - 09/06/2013 13:52:22 ::: 3"16. As rightly submitted on behalf of the respondents, all the aspects of the matter in relation to non-
applicability of Article 13 of Schedule II to the proceedings under the New Act has been elaborately discussed in Govardhani's case by this Court and it was held that the Court fee payable on appeals arising out of the orders passed under Section 34 of the New Act would be in accordance with Article 3 of Schedule I read with Article 1 thereof and not in terms of Article 13 of Schedule II. The Article 3 cannot be read as referring to the new Act and, therefore, any challenge either by way of petition or by way of an appeal to get the award set aside or modified passed under the New Act will have to carry the Court fee in terms of Article 3 read with Article 1 of Schedule I of the BCF Act.
17. For the reasons stated above, therefore, the objection raised in this regard on behalf of the respondents is upheld. The appellants would be liable to pay the Court fee as has been held hereinabove. Considering the provisions of Section 149 of the Code of Civil Procedure, the time to pay the Court fee or the difference in Court fee is extended by four ::: Downloaded on - 09/06/2013 13:52:22 ::: 4 weeks, within which period the appellants will have to pay the Court fee, failing which the appeals shall stand dismissed for non-prosecution. On payment of the Court fee as above within the specified period, both the appeals shall be listed for further proceedings in accordance with law."
4} We ourselves, with respect, are not agreeing with the views so expressed and the demand of Court fee on such application or Appeal.
The learned Counsel appearing for the appellants has also relied on various authorities and submitted to refer the matter to a larger Bench.
We are inclined to consider the said submission because of following facts and reasons.
Facts :-
5} The appellants and respondents being members of the same family decided to settle their dispute through a mode of mediation. The parties arrived at an amicable settlement which has been recorded after due signature of all the parties as per the provisions of law. They have also decided and agreed for the arbitral award in terms of the agreement.
The said settlement falls within the meaning of Section 73 of Act of 1996.::: Downloaded on - 09/06/2013 13:52:23 ::: 5
That was a composite settlement including an agreement for arbitration to the limited extent of passing an award in terms of Section 30 of Act of 1996.
6} As agreed, the Arbitral Tribunal consisting of 3 members have passed an arbitral award dated 16.4.2005. One member of the family Paramjeet Singh, respondent no.1 in the present appeal filed a Misc. Civil Application No. 448/05 before the District Judge, Nagpur under Section 34 of the Act of 1996 for setting aside the arbitral award. It appears that ad valorem Court fee was directed to be paid on the amount of award in view of the decision in Govardhani (supra). The application was resisted by the other members of the family.
7} By order dated 3.7.2007, the learned District Judge allowed the application by referring to Sections 7, 13, 19(2), 20(1), 23, 34(2)(a)(iii) & 34(2)(b)(ii) of Act of 1996 and thereby quashed and set aside the arbitral award dated 16.4.2005 passed by the Tribunal.
8} This is an appeal under Section 37(1)(b) of Act of 1996 for setting aside the order, and not the award, allowing the application under ::: Downloaded on - 09/06/2013 13:52:23 ::: 6 Section 34 of Act of 1996 whereby, the arbitral award dated 16.4.2005 was set aside and thereby, the application under Section 9 of Act of 1996 filed by the appellants in Misc. Civil Application No. 448/05 for return of the amount was also rejected. The four appellants in the appeal were respondent nos. 4, 6, 8 & 9 in the said Application.
Reasons :-
9} On the basis of above facts, we are also inclined to refer the matter to the larger Bench as the demand of Court fee in such appeal under Section 37(1)(b) of Act of 1996 is against the scheme and purpose of mediation, conciliation and arbitration proceedings itself. The relevant provisions of the BCF Act, i.e. Schedule I with regard to ad valorem fees of the Court Fee Act (1) and (3) are reproduced as under :-
(1) Plaint or When the amount or value Two hundred rupees of the subject matter in memorandum of dispute does not exceed appeal (not otherwise one thousand rupees.
provided for in this Act) or of cross- ..............
objection presented to ..............
any Civil or Revenue
Court
::: Downloaded on - 09/06/2013 13:52:23 :::
7
3) Plaint, application ........ A fee on the amount or
value of the award sought to
or petition (including
be set aside or modified,
memorandum of according to the scale
prescribed under Article 1.
appeal), to set aside or
modify any award
otherwise than under
the Arbitration Act,
1940
The other relevant Article 13 in Schedule II (which deals with fixed Court fee) is reproduced below :-
13. Memorandum of appeal (a) to any Civil Court other Five rupees when the appeal is not from than the High Court, or to a decree or an order having any Revenue Court or the force of a decree, and is Executive Officer other than presented -- the High Court or Chief Controlling Revenue or Executive Authority
(b) to the Chief Controlling Ten rupees Executive or Revenue Authority.
(c) to the High Court Twenty five rupees.
10} It is also necessary to refer the relevant provisions of Act of
1996.
S.2 Definitions :
(1) In this Part, unless the context otherwise requires, --
(a) 'arbitration' means any arbitration whether or not ::: Downloaded on - 09/06/2013 13:52:23 ::: 8 administered by permanent arbitral institution;
(b) 'arbitration agreement' means an agreement referred to in Section 7;
(c) "arbitral award" includes an interim award."
"S. 34. Application for setting aside arbitral award.--
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3), (2) An arbitral award may be set aside by the Court only if --
(a) the party making the application furnishes proof that--
i. a party was under some incapacity; or ii. the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or iii.the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or ::: Downloaded on - 09/06/2013 13:52:23 ::: 9 iv. the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or v. the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that --
i. the subject-matter of the dispute is not ::: Downloaded on - 09/06/2013 13:52:23 ::: 10 capable of settlement by arbitration under the law for the time being in force, or ii. the arbitral award is in conflict with the public policy of India.
Explanation.-- Without prejudice to the generality of sub-
clause (ii) of clause (b), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not ::: Downloaded on - 09/06/2013 13:52:23 ::: 11 thereafter, (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award."
S. 35 : Finality of arbitral awards - Subject to this Part an arbitral award shall be final and binding on the parties and persons claiming under them respectively.
S. 36 : Enforcement.-- 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.
::: Downloaded on - 09/06/2013 13:52:23 ::: 12S. 37 : Appealable orders. -- (1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:-
(a) granting or refusing to grant any measure under section 9;
(b) setting aside or refusing to set aside an arbitral award under section 34, (2) An appeal shall also lie to a Court from an order of the arbitral tribunal--
(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant interim measure under section 17, (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."
(emphasis added) "S. 85 : Repeal and saving.-- (1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, ::: Downloaded on - 09/06/2013 13:52:23 ::: 13 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed.
(2) Notwithstanding such repeal,--
(a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or 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} Section 17 of repealed Arbitration Act of 1940 (for short "Act of 1940") is reproduced as under :-
"S.17. Judgment in terms of award.-- Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court, shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment ::: Downloaded on - 09/06/2013 13:52:23 ::: 14 according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award."
12} Act of 1940 had also a provision of appeal, i.e. Section 39 which is reproduced as under :-
"S. 39 : Appealable orders. -- (1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order :-
An order ---
i. superseding an arbitration, ii. on an award stated in the form of a special case;
iii. modifying or correcting an award;
iv. filing or refusing to file an arbitration agreement;
v. staying or refusing to stay legal proceedings where there is an arbitration agreement;
vi. setting aside or refusing to set aside an award;
Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court, ::: Downloaded on - 09/06/2013 13:52:23 ::: 15 (2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."
13} The relevant Section 8 of General Clauses Act, 1897 is reproduced as under :-
"S.8. Construction of references to repealed enactments.--
(1) Where this Act, or any (Central Act) or Regulation made after the commencement of this Act, repeals and re-enacts, with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted.
(2) Where before the fifteenth day of August, 1947, any Act of Parliament of the United Kingdom repealed and re-enacted with or without modification, any provision of a former enactment, then references in any Central Act or in any Regulation or instrument to the provision so repealed shall, ::: Downloaded on - 09/06/2013 13:52:23 ::: 16 unless a different intention appears, be construed as references to the provision so re-enacted."
14} The scheme and purpose of Act of 1996 is as under :-
"The Arbitration and Conciliation Act, 1996, is much more comprehensive than the repealed 1940 Act. It consists of 86 sections divided into four parts. Part I relates to domestic as well as international commercial arbitrations; Part II relates to enforcement of foreign awards under the New York and Geneva Conventions; Part III relates to conciliation; and Part IV contains supplementary provisions. The Act has three Schedules. The First Schedule reproduces the provisions of the New York Convention on Recognition of Enforcement of Foreign Arbitral Awards; the Second Schedule contains provisions of the Geneva Protocol of Arbitration Clauses of 1923; and the Third Schedule contains provisions of Geneva Convention on Execution of Foreign Arbitral Awards. Part II is a virtual reproduction of the provisions of the repealed 1937 Act and the 1961 Act excepting the deletion of Section 9(1)(b) of both the Acts.
The Act seeks to make the arbitration and conciliation law on ::: Downloaded on - 09/06/2013 13:52:23 ::: 17 the lines of the recommendations of the United Nations and the Model Law adopted by the United Nations Commission on International Trade Law (UNCITRAL). It has provided a unified formula for both international commercial arbitration and domestic arbitration and has consolidated the entire law on arbitration in one single Act."
15} By Act of 1996 it is intended the reduction of Court's intervention.
The term "arbitration agreement" is also available as recorded in Section 7. For interim measure;- Section 9 which is a self-
contained provision like Section 41-B read with Second Schedule of Act of 1940. The composition of Arbitral Tribunal - Chapter III Sections 10 to 15 are new provisions. The jurisdiction of Arbitral Tribunals is provided in Section 16 is also a new provision. Section 17 provides power to Arbitral Tribunal to pass interim measures of protection. The recourse against arbitral award subject to modification is also provided under the Act, 1996 including remedies against such award. The aspect of finality of arbitral award is a major reform. Section 36 is a new provision which makes an award automatically enforceable as decree without aid or intervention of the Court. This is also a major reform as under the Act of ::: Downloaded on - 09/06/2013 13:52:23 ::: 18 1940 there were many stages between the award becoming a decree for its enforcement (S/17). Now, the award is enforceable in a manner, as if it were a decree of the Court and, therefore, Order XXI of Code of Civil Procedure is applicable to the enforcement of such final arbitral award.
Section 37 of Act of 1996 provides appeals from orders, so was Section 39 of Act of 1940.
16} We have also to take into consideration the above purpose and object of such alternative dispute resolution mechanisms. The crux is "arbitration", "arbitration proceedings" and "arbitral award" passed by "arbitral Tribunal". An award as defined and explained under Section 2(1)(e) includes interim award; ex-parte award under Section 25, and a compromise award under Section 30 of Act of 1996. The basic scheme and purpose of both the Acts are same with regard to the scheme of arbitration.
17} Therefore, it is difficult to accept that Act of 1996 is totally new Act. It is a modified Arbitration Act to achieve national and international standards of arbitration proceedings based upon UNCITRAL views.
Section 85 of Act of 1996 has taken into account all the old Acts. There ::: Downloaded on - 09/06/2013 13:52:23 ::: 19 is no other Arbitration Act in India which governs the Arbitration and Conciliation proceedings arising out of any arbitration agreement, even as per other statutes.
18} Importantly, the Supreme Court while considering Section 8 of General Clauses Act has observed in Union of India and others .v. Filip Tiago De Gama of Vedem Vasco De Gama : AIR 1990 SC 981 in paragraph no.16 as under :-
"16. The paramount object in statutory interpretation is to discover what the legislature intended. This intention is primarily to be ascertained from the text of enactment in question. That does not mean the text is to be construed merely as a piece of prose, without reference to its nature or purpose. A statute is neither a literary text nor a devine revelation. "Words are certainly not crystals, transparent and unchanged" as Mr. Justice Holmes has wisely and properly warned. (Tower v. Eisher, (1918) 245 US 418, 425. Learned Hand, J. was equally emphatic when he said: "Statutes should be construed, not as theorems of Euclid, but with some imagination of the purposes which lie behind them." (Lenigh ::: Downloaded on - 09/06/2013 13:52:23 ::: 20 Valley Coat Co. v. Yensavage : 218 FR 547 at 553).
Further, it is observed in State through S.P., New Delhi .vs. Ratan Lal Arora : 2004 AIR SCW 2480 and State Represented by Inspector of Police, Pudukottal, T.N. .vs. A. Parthiban : (2006) 11 SCC 473 as under :-
"11......... The object of the said provision, obvious and patently made known is that where any Act or Regulation is repealed and re-enacted, references in any other enactment to provisions of the repealed former enactment must be read and construed as references to the re-enacted new provisions, unless a different intention appears......."
19} In Gammon India Limited .vs. Special Chief Secretary and others : (2006) 3 SCC 354, the Supreme Court in paragraph 56 observed as under :-
"56. A three-Judge Bench of this Court in India Tobacco Co.
Ltd. .v. CTO (1975) 3 SCC 512) held that repeal is not a matter of mere form but is of substance, depending on the intention of the legislature. If the intention indicated either expressly or by necessary implication in the subsequent ::: Downloaded on - 09/06/2013 13:52:23 ::: 21 statute was to abrogate or wipe off the former enactment wholly or in part, then it would be a case of total or pro tanto repeal. If the intention was merely to modify the former enactment by engrafting an exception or granting an exemption, or by superadding conditions, or by restricting, intercepting or suspending its operation, such modification would not amount to a repeal. Broadly speaking, the principal object of a repealing and amending Act is to "excise dead matter, prune off superfluities and reject clearly inconsistent enactments".
20} It is important to note, considering the scheme and object of consolidated Act of 1996, the following declaration by the Supreme Court in Southern Petrochemical Industries Co. Ltd. .vs. Electricity Inspector & Etio and others : (2007) 5 SCC 447 :-
"79. The words "consolidate and amend" furthermore often occur in a statute in repealing provision. Such a statute is not intended to alter the law."
80. In Union of India v. Mohindra Supply Co. (AIR 1962 SC
256) this Court observed : (AIR pp.260-61, para 7) ::: Downloaded on - 09/06/2013 13:52:23 ::: 22 "7. ...The Arbitration Act of 1940 is a consolidated and amending statute and is for all purposes a code relating to arbitration...."
81. However, there is no constitutional or statutory embargo that a consolidating Act must also be an amending Act. When different terms are used in the new Act, it would not be proper for the Court to refer to the provisions of a repealed statute.
82. We may furthermore notice that the distinction between consolidating statute and other statutes is no longer valid. It is only in certain exceptional situations that the language used in the earlier Act can be resorted to. In G.P. Singh's Principles of Statutory Interpretation, 10th Edn., pp. 315-16, it is stated :
"The distinction between consolidating statutes and other statutes for purposes of interpretation is being obliterated. Recent decisions have emphasised that a consolidation Act should be interpreted according to normal canons of construction and recourse to repealed enactments can be taken only to solve any ambiguity, for the process of consolidation would lose much of its point if, whenever a question as to construction of a consolidating Act arose, ::: Downloaded on - 09/06/2013 13:52:23 ::: 23 reference had to be made to the statutes which it has consolidated and repealed. The primary rule of construction of a consolidation Act is to examine the language used in the Act itself without any reference to the repealed statutes. It is only when the consolidation Act gives no guidance as to its proper interpretation that it is permissible to refer to the repealed enactments for guidance and it is never legitimate to have recourse to repealed enactments to make obscure or ambiguous that which is clear in the consolidation Act. It is only when there is a real or substantial difficulty or ambiguity that the court is to attempt to resolve the difficulty or ambiguity by reference to the legislation which has been repealed and re-enacted in the consolidation Act. This rule applies to all types of consolidation Acts which are now three :
(1) pure consolidation i.e. re-enactment, (2) consolidation with correction and minor improvement, and (3) consolidation with Law Commission amendments. But when 'the provisions of the Act itself invited reference to the earlier law and in some cases were unintelligible without them' recourse to the earlier law for construing the Act becomes inevitable."::: Downloaded on - 09/06/2013 13:52:23 ::: 24
21} In view of above, we are disagreeing with the view so expressed by the Division Bench (supra) based upon Sundaram Finance Limited v.
NEPC India Limited : (1999) 2 SCC 479, Shin-etsu Chemical Co. Ltd.
v. Aksh Optifibre Limited and another : (2005) 7 SCC 234, Konkan Railway Corporation Limited and others v. Mehul Construction Co. :
(2000) 7 SCC 201 and Union of India v. Popular Construction Co. :
(2001) 8 SCC 470 that Act of 1996 is new and different from Act, 1940.
The judgment in Sundaram Finance Limited (supra) nowhere expresses that Act of 1996 is not Arbitration Act or it is other than Arbitration Act as contemplated under the UNCITRAL Model Law. We are concerned with the aspect whether both are Arbitration Act or not for the purpose of demand of Court fee. There is no other law in existence and, therefore, as the new Act takes into its sweep all old Arbitration Acts and such related Acts, in our view, it is re-enactment and/or modification of the repealed Acts. It replaces old Act of 1940 by this Act of 1996 for all the purposes of arbitration and conciliation. Mere departure or modification from the old provisions that itself cannot be the reason to frustrate the scheme and purpose of the Arbitration Act at national, as well as, international level.
::: Downloaded on - 09/06/2013 13:52:23 ::: 2522} The provisions of the earlier Acts as consolidated and modified by Act of 1996, it become a part and parcel of the present Act for the purpose of Arbitration and all such related aspects. Section 8 as explained above speaks of re-enactment with or without modification.
The modification in the present case does not destroy the essential substance of the arbitration. In its essence, the provision remains the same though the substitution of a different form, subject to modification, are incorporated. The object and subject of the Act of 1996 is same as that of 1940, though modified.
23} It is clear from the wordings of Article 3 of Schedule I of the BCF Act that only awards that are excluded from the operation of this Article are the awards under the Act of 1940. Under Act of 1996, the word "order" is not defined but the decision or opinion expressed by the Arbitral Tribunal is for all the purpose is an "order".
24} Therefore, in this background, for the purpose of filing of an appeal under Section 37 of Act of 1996, it is not correct to say that the order appealed against is against a decree as contemplated under the Civil Procedure Code and/or Bombay Court Fees Act. As noted, the arbitral ::: Downloaded on - 09/06/2013 13:52:23 ::: 26 award only be treated "as if it is a decree" but not as a decree. It is enforceable as if a decree under Order XXI of Civil Procedure Code "having a force of a decree". Such appeal, therefore, needs to be treated as a Miscellaneous Appeal against the award which has a force of decree.
Admittedly, earlier no ad valorem Court fee was payable on a claim petition before the Arbitral Tribunal and later on while filing an application for setting aside arbitral award till above decisions. The demand of ad valorem Court fee from the appellants or such other person in our view, frustrates the whole scope and purpose of arbitration and mediation. On the other hand, Schedule II Article 13 provides fixed fee when the appeal is not from a decree or an order having the force of a decree. In such cases, fixed fees is provided and not ad valorem Court fee as claimed.
25} We are of the view that the award passed under the Act of 1996 is excluded under Article 3 of Schedule I and it falls under the ambit of Schedule II Article 13 being an order having force of a decree. Section 8(1) also makes a provision clear after considering the scheme and purpose of the modified Act of 1996 and as no different intention appears on the record, we are of the view that to construe otherwise would ::: Downloaded on - 09/06/2013 13:52:23 ::: 27 frustrate the whole purpose and object of the Arbitration Act. We have noted that there are various corresponding provisions which are quite similar to the old Act under the new Act though definitely modified, pursuant to the UNCITRAL model.
26} It is clear that the BCF Act is enacted to collect revenue for the benefit of the State and not to arm a contesting party with a weapon of defence to obstruct proceedings. (Rathna Varmaraja .vs. Smt. Vimla :
AIR 1961 SC 1299). In State of Maharashtra .vs. Mishrilal Tarachand Lodha and others : AIR 1964 SC 457 the Supreme Court has observed in paragraph 9 as under :-
"..........The Act is a taxing statute and its provisions therefore have to be construed strictly, in favour of the subject-litigant.
The other provisions are for the purpose of allowing the party feeling aggrieved against the decision of the High Court to take up his case to the next higher Court, the Privy Council and therefore the relevant provisions in that regard had to be given a liberal construction."
It is relevant to note the following observations also as made in Gujarat State Financial Corporation .vs. Natson Manufacturing Company ::: Downloaded on - 09/06/2013 13:52:23 ::: 28 Private Limited and others : (1979) 1 SCC 193 in paragraph no.15 :
"15. When dealing with a question of court fee, the perspective should be informed by the spirit of the magna carta and of equal access to justice which suggests that a heavy price tag on relief in Court should be regarded as unpalatable."
27} Therefore, the Act of 1996 need to be read and referred in place of old Act in Article 3 in Schedule I of the Bombay Court Fees Act.
Therefore, in absence of any other contrary provision, as per the provision of Article 13 of Schedule II, the fixed Court fee is payable on application or appeal arising out of the orders passed under Sections 34 & 37 of Act of 1996 and not in accordance with Article 3 of Schedule I with Article I of the BCF Act. Earlier, as noted, claimant is not required to pay Court fee on an application for claims before the arbitral Tribunal and even thereafter for setting aside the arbitral award under Section 34; whereas as per the scheme of Court Fees Act the plaintiff is required to pay ad valorem Court fee subject to valuation of claim and even on appeal by the aggrieved party thereafter. Earlier Act of 1940 was exempted, now there is no reason not to give such exemption of payment of ad valorem Court fee under Act of 1996.
::: Downloaded on - 09/06/2013 13:52:23 ::: 2928} The aspect of General Clauses Act is not at all considered in MIDC .vs. Goverdhani (supra). In ONGC .vs. Jindal Drilling (supra) it is not considered that Act of 1996 is consolidated and modified Act by repealing the earlier Acts. This goes to the root of the matter. For the above reason, with utmost respect, we are unable to persuade ourselves with the reasons and decisions in MIDC .vs. Goverdhani (supra) and Oil and Natural Gas Corporation .vs. Jindal Drilling (supra).
Order 29} Therefore, these being issues of general importance, it would be necessary to refer the matter to a larger Bench. Questions that can be referred are as follows :-
I. Whether Act of 1996 be read as Act of 1940 in Article 3 of Schedule I of BCF Act ?
II. Whether exemption from ad-valorem Court fee as per Article 3 of Schedule I of BCF Act is applicable to an application or petition or appeal to set aside or modify any award passed under Act of 1996 as same being consolidated and modified Arbitration Act by repealing the earlier Acts?
III. Whether Act of 1996 is consolidated and modified Act of Arbitration Act of 1940 and/or whether it is re-enacted or amended Act as ::: Downloaded on - 09/06/2013 13:52:23 ::: 30 contemplated under the General Clauses Act ?
IV. Whether the demand of ad-valorem Court fee on application or appeal under Sections 34 & 37 of the Act, 1996, under Article 3 of Schedule I of BCF Act, would frustrate the scheme and object of Act, 1996 ?
V. Whether Article 3 of Schedule I (ad valorem Court fee) or Article 13 of Schedule II (fixed Court fee) or such other Article applies to such application and or appeal against the award passed by the Arbitral Tribunal under Act of 1996 ?
30} In view of above, the Registry to place the matter before the Hon'ble Chief Justice for appropriate order for reference to a larger Bench.
JUDGE. JUDGE.
J.
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