Orissa High Court
M/S. Sara International Pvt. Ltd vs South Eastern Railways & Another ... ... on 11 December, 2020
Equivalent citations: AIRONLINE 2020 ORI 210
Author: Mohammad Rafiq
Bench: Mohammad Rafiq
1
AFR IN THE HIGH COURT OF JUDICATURE FOR ORISSA
AT CUTTACK
ARBP No. 28 of 2020
(An application under Sections 29(A)(4) & 29(A)(5) of the Arbitration
& Conciliation Act, 1996).
M/s. SARA International Pvt. Ltd. ... Petitioner
-Versus-
South Eastern Railways & Another ... Opp. Parties
Advocate(s) who appeared in this case by Video Conferencing mode:-
For Petitioner : Mr. Pitambar Acharya,
Sr. Advocate
with Mrs. Pami Rath, Advocate.
For Opp.Parties : Mr. Sabita Ranjan Pattnaik,
Advocate.
HONOURABLE THE CHIEF JUSTICE MR. MOHAMMAD RAFIQ
JUDGMENT
11.12.2020 This application under Sections 29(A)(4) & 29(A)(5) of the Arbitration and Conciliation Act, 1996 (for short, "the Act") has been filed by M/s. SARA International Private Ltd., with the prayer to extend the time for completion of the arbitral proceedings so as to enable the Arbitral Tribunal to pass the award, by at least twelve months; and to impose exemplary costs on the opposite party in terms of Section 29(8) of the Act for causing inordinate delay owing to which the arbitral proceedings could not be concluded in time.
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2. The case of the petitioner as set up in the present application in brief is that the petitioner and opposite party entered into Wagon Investment Agreement dated 26.12.2016, which was subsequently modified by two supplementary agreements. Since certain disputes arose between them, the petitioner sent notice dated 03.05.2017 to the opposite party by invoking the arbitration clause in the agreement. As per Arbitration Clause 22 of the Agreement, the arbitral penal shall comprise of three arbitrators, one Arbitrator each to be nominated by the petitioner and the opposite party and both Arbitrators so nominated were to then appoint the Presiding Arbitrator. Accordingly, while sending the said notice dated 3.5.2017, the petitioner nominated Ms. Justice Usha Mehra, a retired Judge of Delhi High Court as its nominee arbitrator and requested the opposite party to nominate their arbitrator. Since the opposite party failed to appoint their Arbitrator, the petitioner approached this Court by filing ARBP No. 63 of 2017 under Section 11(6) of the Act, 1996 for appointment of the Arbitral Tribunal in terms of the arbitration agreement. This Court, after considering the matter and hearing the parties felt that since as per the arbitration clause both the parties are required to nominate their arbitrators, asked the parties to suggest the name of their nominee, if any. The petitioner suggested the name of Ms. Justice Usha Mehra and the opposite party suggested the name of Sri Premanda Mohanty, Retd. FA & CAO of East Coast Railways, as their nominees. Accordingly, this Court by order dated 04.01.2019, with the consent of the parties, appointed Ms. Justice Usha Mehra and Sri Premananda Mohanty as -3- Arbitrators and further directed that both the Arbitrators shall choose a third Arbitrator to form the Arbitral Tribunal to decide upon the disputes and differences between the parties. After getting the said order, both the nominated Arbitrators, after due consultation, appointed Mr. Justice Devinder Gupta, former Chief Justice of Andhra Pradesh High Court, to be the Presiding Arbitrator. The Presiding Arbitrator entered into the reference on 02.02.2019 and sent notice to both the parties fixing the first sitting of the Arbitral Tribunal at 11.30 A.M. on 11th March, 2019 at New Delhi. On the said scheduled date and time the first hearing of the Tribunal took place where both the parties entered appearance with their Advocates. The Tribunal on that date directed the parties also to cooperate with the Tribunal in adhering to the statutory timeline stipulated under Section 29A of the Act to conclude the proceeding. The second hearing of the Tribunal took place on 16.07.2019. The petitioner and opposite parties had by then already filed their statement of claim and counter claim. However, the affidavits filed by the opposite parties were incomplete. The Tribunal taking note of the discrepancies directed the opposite parties to file the same within two weeks. On that day, the Tribunal also fixed its fees for the entire matter amounting to Rs.30,00,000/- (thirty lakhs) per arbitrator for both claim and counter claim to be paid by each party. The third hearing of the Tribunal took place on 20.09.2019.
3. It was thereafter that the opposite parties filed an application for modification of earlier orders dated 11.03.2019 and 16.07.2019 regarding arbitral fees of the Tribunal. The Tribunal while stating that -4- the application of the petitioner will be dealt with separately, further directed the parties to file their respective list of witnesses and affidavits in lieu of examination in chief by 5.11.2019. On 5.10.2019, the Tribunal passed a detailed order dismissing the application of the opposite parties seeking modification of the orders of the Tribunal with regard to arbitral fees. Instead of filing the list of witnesses and affidavits by 5.11.2019, as per the order of the Tribunal, the opposite parties sent an email dated 20.11.2019 to the Tribunal seeking adjournment of the proceeding, mentioning therein that the opposite parties are planning to move the High Court of Orissa under Section 14 of the Act against that order along with an application for stay of the arbitral proceedings. The Tribunal rejected the said request of the opposite parties and directed the parties to appear on the next date of hearing, failing which it would proceed ex-parte. However, the opposite parties filed an Interim Application No. 54/2019 in ARBP No. 63/2017 before this Court under Section 14 of the Act, challenging the orders of the Tribunal dated 16.07.2019 and 5.10.2019 praying for stay of the further proceedings of the Tribunal. But the said application was dismissed by this Court with an observation that the appropriate remedy available to the opposite parties is to file writ petition. Thereafter, the forth hearing of the Tribunal took place on 30.11.2019, where the Tribunal again directed the parties to file their list of witnesses and affidavits in lieu of examination in chief by 10.01.2020. However, the opposite parties filed W.P.(C) No. 25868 of 2019 for substitution of the Arbitral Tribunal and to stay the further proceedings, but this High -5- Court vide its order dated 17.12.2019 refused to stay operation of the orders of the Tribunal and directed the opposite parties to pay the Arbitral fees. On 18.01.2020, fifth hearing of the Tribunal took place wherein the Tribunal granted last opportunity to the opposite parties to file its list of witnesses and affidavits. The sixth hearing of the Tribunal took place on 17.2.2020, but the cross examination could not take place due to the adjournment sought by the counsel for the opposite parties on his personal ground. The seventh hearing of the Tribunal took place on 3.3.2020 and statement of the first witness of the petitioner was recorded and the matter was adjourned to 04.03.2020 on the request of the opposite parties.
4. On 06.03.2020, the W.P.(C) No. No. 25868 of 2019 filed by the opposite parties for substitution of the Arbitral Tribunal was dismissed by the High Court due to non-prosecution, but the opposite parties moved the restoration application before this Court being CMAPL No. 178/2020, praying for restoration of the said writ petition. In the meantime, duo to the outbreak of COVID-19 pandemic in the country and in compliance to the advisory issued by the Ministry of Health, Government of India, the Tribunal on 15.03.2020 adjourned the proceedings to further date till improvement of the situation. Due to the growing pandemic, as the further physical hearings in the matter could not take place, the Tribunal on 07.08.2020 sent an email to the parties to commence the arbitral proceedings on 20.08.2020 through video conferring mode. Since the petitioner's second witness was not available on 20.08.2020, the ninth hearing of the Tribunal was fixed on -6- 28.08.2020, but on that date the opposite parties, instead of appearing in the matter, informed the Tribunal vide its letter dated 27.8.2020 that the Tribunal has failed to comply with the provision of Section 29A of the Act and has failed to pass its award within a period of 12 months from the date of entering upon reference i.e. 02.02.2019, therefore, the Tribunal has lost the mandate to continue with the proceedings further. However, the Tribunal took note of the letter of the opposite parties and vide its order dated 28.8.2020 apprised the parties about the order dated 6.5.2020 of the Supreme Court of India regarding indefinite extension of the time period of making an arbitral award till further orders on account of ongoing pandemic situation of Covid-19 and fixed the next date of hearing to 7.9.2020, which was duly communicated to the opposite parties. On 7.9.2020 the tenth hearing of the Tribunal took place, but opposite parties failed to appear on the said date and instead again sent an email dated 7.9.2020 reiterating its stands on the termination of the mandate of the Tribunal and refused to participate in the proceedings. The petitioner objected to the said letter of opposite parties, however, the Tribunal after taking note of the conduct of the opposite parties adjourned the matter. Petitioner contends that even though the Supreme Court has extended the time period due to pandemic COVID-19, the petitioner has filed this petition under Sections 29(A)(4) & 29(A)(5) of the Act, in the interest of expeditious resolution of the disputes, for extension of at least 12 months time so as to enable the Tribunal to conclude the proceedings.
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5. Contesting the stand taken by the petitioner, the opposite parties have filed their reply to the present application by way of counter affidavit, contending that as per the order of this Court dated 04.01.2019, passed in ARBP No. 63 of 2017, the Arbitral Tribunal was required to conclude the proceedings within six months from the date of entering into the reference. In the instant case, the Tribunal has entered upon the reference on 02.02.2019 but could not conclude the proceedings within the prescribed period of six months as directed by this Court. The Tribunal has also failed to conclude the proceedings even as per the statutory provision under Section 29A of the Arbitration and Conciliation (Amendment) Act, 2015, under which the Tribunal was required to conclude the proceedings within a period of one year i.e. on or before 01.02.2020. It is contended by the opposite parties that at the time of commencement of the Arbitral proceedings, the Amendment Act of 2015 was prevailing, and for that reason, the parties would be governed by the provisions of the Amendment Act, 2015 and not the Amendment Act, 2019.. The order of the Arbitral Tribunal dated 30.11.2019, which reveals that consent was obtained from the counsel for both the parties to be governed under the amended provision of Amendment Act, 2019 is untenable in law. When the Tribunal visualized that it may not be possible on its part to conclude the proceedings within a period of one year as per the provisions of Amendment Act, 2015 the Tribunal evolved the tactics in making applicability of the provisions of 2019 Amendment Act with the consent of the learned counsel for the parties and observed that period of making -8- the award may be reckoned with effect from 27.08.2019 i.e. from the date of completion of pleadings. It is stated that there was no consent given, either oral or written, by the opposite parties to be governed under the amendment provisions of 2019 Amendment Act. Further, even assuming that the learned counsel for both the parties gave consent to be governed under the provisions of 2019 Amendment Act, it is per se illegal and the Tribunal could have realized that the applicability of the provisions of law cannot be as per the choice of the parties, rather it should be as per the principles of law. The 2019 Amendment Act cannot be made applicable retrospectively to a proceeding which started much before the introduction of 2019 Amendment. As regards the fixation of the fees of the Arbitrators, it is contended that the learned Tribunal, in the 2nd sitting dated 16.7.2019 raised the issue of fees of the Arbitrators and has fixed the fees at a much exorbitant rate, which is beyond the limit prescribed under the fourth schedule of the Amendment Act of 2015. For which, the opposite parties raised objection and filed an application before this Court to set aside the order dated 16.07.2019 and 5.10.2019 of the Tribunal. It is further contended by the opposite parties that the Tribunal of its own has made applicability of the order of the Supreme Court dated 06.05.2020 in Suo Moto Writ (Civil) No. 3 of 2020 with regard to automatic extension of the Arbitral proceedings, but it has failed to correctly comprehend that the said order of the Supreme Court is applicable to the proceedings, which are in force and not possible to continue due to COVID-19 situation. But the said order cannot be made applicable to the proceeding, like instant case, which -9- has already expired statutorily much before the order of the Supreme Court.
6. Mr. Pitambar Acharya, learned Senior Counsel on behalf of the petitioner referring to Section 29A of the Act submitted that the scheme of Section 29A does not state that once the time frame of twelve months is over and if the arbitration proceedings could not be completed, then the arbitration is over for all times and there is no alternative remedy. Rather, lays down various remedial measures which are available to the parties for completion of the arbitration proceedings and also gives power to the Court to enhance the period for justifiable reasons. Therefore, Section 29A of the Act is directory in nature and allows continuation of the proceedings beyond it with the consent of the parties and further extension of time with the permission of the Court. It is submitted that both the parties agreed before the Tribunal to be bound by the new time frame inserted into Section 29A of the 2019 Amendment Act. Thus time of twelve months time for passing ofthe award shall be counted from the date of completion of pleadings which is 27.8.2019, and the allegation of the petitioner that they never gave consent to be governed under 2019 Amendment Act is just an afterthought to frustrate the proceedings and that has been raised for the first time on 4.9.2020. If the opposite parties had the objection to the proceedings after completion of one year from the date of entering reference, then they should have taken the same stand and should not have participated in the proceedings after 02.02.2020. The opposite parties participated in the proceedings on 03.03.2020 and 04.03.2020 -10- through its counsels and has even filed affidavit of examination in chief on 18.03.2020. Therefore, they are now estopped from taking such a plea in order only to frustrate the proceedings and escape from their liabilities. Further, the applicability of the 2019 Amendment is not subject to agreement of the parties, rather it automatically applies to all pending proceedings.
7. Mr. Pitambar Acharya, learned Senior Counsel placing reliance on the judgments of the Delhi High Court in Shapoorji Pallonji and Co. Private Ltd. Vs. Jindal India Tharmal Power Ltd. [order dated 23.01.2020 in OMP Misc. (Comm.) 512/2019]; and ONGC Patro Additions Ltd. Vs. Ferns Constructions, 2020(3) RCR(Civil)522, submitted that it is now trite law that the amended Section 23(4) and Section 29A(1) of the Act are procedural in nature and hence, these provisions will be retrospectively applicable to all pending arbitral proceedings as on the effective date i.e. 30.08.2019. Therefore, in the instant case, the provisions of Section 29A(1) of the Act shall be applicable and accordingly the parties to the present arbitration proceedings are very well governed by 2019 Amendment Act. It is further submitted that the provisions of Section 29A(4) of the Act, even prior to 2019 Amendment and post amendment, enabled the parties to approach the court even after expiry of twelve months' period. The powers of the Court to pass order of extension under Section 29A(5) remains unchanged in both situations. Therefore, it is prayed that this Court may be pleased to extend the time for completion of the proceedings, taking into consideration the fact that the proceeding is -11- almost half concluded and only due to pandemic COVID-19 situation, the Tribunal could not proceed and since there are disputes and differences between the parties, if the proceedings are not completed, it will frustrate the arbitration agreement itself and petitioner will suffer irreparable loss.
8. On the other hand, Mr. S.R. Patnaik, learned counsel for the opposite parties submitted that since the Tribunal has failed to conclude the proceedings even within one year as mandated under Section 29A of the pre-amended Act of 2019, it should not continue further. Apart from the fact that the opposite parties have specifically mentioned in their objection that no consent was taken from them with respect to extension of time for hearing of the proceedings, they never agreed that the said proceedings may be governed as per amended provisions of the Act, 2019. In this regard, learned counsel for the opposite parties has placed reliance on an order of the Delhi High Court in MBL Infrastructures Ltd. Vs. Rites Ltd., (OMP(Misc.Comm) No. 56/2020 dated 10.01.2020, and submitted that therein the Delhi High Court has clearly held that the 2019 Amendment Act, which came into existence vide Notification dated 30.08.2019, does not have retrospective effect. It is further argued that even assuming that the mandate of the Arbitral Tribunal stands extended in view of 2019 Amendment Act and as per the consent given by the counsel for the opposite parties on 30.11.2019, and the date of 27.08.2019 is taken into consideration for counting the period of one year, the same has also expired on 26.08.2020 and therefore, the continuation of the present arbitral proceedings will be beyond the -12- statutory provisions of law i.e. even beyond the scope of 2019 Amendment Act.
9. In replicating the stand taken in the counter affidavit, it is submitted by the learned counsel for the opposite parties that the Arbitral Tribunal has become biased and acted arbitrarily without giving opportunity of hearing and many things have been recorded wrongly in the minutes of the proceedings. Further, the Tribunal has decided the arbitrators fees of its own which is not in accordance with law and is beyond the permissible limit as prescribed under the Act, for which reason the opposite parties were compelled to file W.P.(C) No. 25868 of 2019 before this Court wherein notice was issued to the petitioner as well as to the Tribunal. However, when the matter was at hearing stage, the said writ petition was unfortunately dismissed for default on 06.03.2020 for which the CMAPL No. 178 of 2020 was filed on the same date for restoration of the said writ petition and in that CMAPL also on 18.03.2020 this Court was pleased to issue notice fixing 03.04.2020 as the returnable date, but due to pandemic COVID-19 situation thereafter, the matter could not be heard till date. Therefore, in the interest of justice, the said application and writ petition is required to be decided first. Learned counsel for the opposite parties, in view of the above submissions, prays for dismissal of this Arbitration Petition being not maintainable.
10. I have given my thoughtful consideration to rival submissions and perused the material on record.
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11. It is not in dispute that there is an arbitration clause in the agreement between the parties and the petitioner sent notice dated 03.05.2017 invoking the said clause. Section 26 of the Amendment Act of 2015 clearly stipulated that the Amendment Act of 2015 shall apply only after commencement of the said Act with effect from 23.10.2015. Section 6(a) of the Amendment Act 2019 substituted Section 29 A (1) of the Arbitration Act, 1996, which now provides that in matters of domestic arbitration, the award shall be made by the Arbitral Tribunal within a period of 12 months from the date of completion of pleadings as per newly inserted sub-section (4) of section 23 of the Act vide Section 5 of the Amendment Act, 2019. Therefore, the provisions of Section 26 of the Amendment Act of 2015, which made the applicability of Section 29A, introduced with effect from 23.10.2015, prospective is not attracted to the present case. Though the Supreme Court in BCCI Vs. Kochi Cricket (P) Ltd., (2018) 6 SCC 287 while dealing with Section 29A of the Act introduced by the Amendment Act 2015, held it to be procedural law as it does not create any new rights or liabilities. But at the same time, the Supreme Court held that in view of Section 26 of the Amendment Act 2015, it will apply only prospectively. It is appropriate to reproduce Section 29A, as it stood after introduction of Amendment Act 2015, i.e. prior to and after 30.08.2019, for better appreciation of the provisions, which read thus:
"Section 29A prior to its Amendment Act, 2019:
" (1) The award shall be made within a period of twelve months from the date the arbitral tribunal entrs upon the reference.
Explanation :- For the purpose of this subsection, an arbitral tribunal shall be deemed to have entered upon the -14- reference on the date on which the arbitrator or all the arbitrators, as the case may be, have received notice, in writing, or their appointment..."
Section 29A after amendment in 2019:
"(1) The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23: provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavor may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23."
12. Evidently, unlike Section 26 of the Amendment Act 2015, which explicitly provided for prospective applicability of the provisions of that Amendment Act,2015, there is no provision analogous to thereto in the Amendment Act of 2019 making the amended Section 29A, introduced by way of Amendment Act, 2019, prospective in its application. Section 29A after introduction of amendments vide Amendment Act, 2019 stipulates that the award in the matters of domestic arbitrations shall be made by the Arbitral Tribunal within a period of twelve months from the date of completion of pleadings. With a view to ensuring timely completion of the proceedings Sub section (4) was simultaneously inserted in Section 23 by Section 5 of the same Amendment Act 2019, which provides that the statement of claim and defence under this section shall be completed within a period of six months from the date the arbitrator or all the arbitrators, as the case may be, received notice, in writing, of their appointment.
13. The Single Bench of Delhi High Court in ONGC Petro Additions Ltd. (supra), concurred with the view taken by the earlier Single Bench of that Court in Shapoorji Pallonji and Co. Pvt. Ltd.(supra), -15- wherein it was held that Section 29A as amended vide Amendment Act of 2019 shall be retrospective in operation. It further held that the judgment passed by another Single Bench in MBL Infrastructures Ltd. (supra), as relied by the learned counsel for the opposite parties in the present case, holding that the amended of Section 29A, as brought under the Amendment Act 2019, would be only prospective in nature, per incurium, as the said judgment was delivered without noticing the earlier judgment of the co-ordinate Bench in Shapoor Ji Pallonji (supra). It is deemed appropriate to reproduce herein paragraph 25 of the judgment of the Delhi High Court in ONGC Petro Additions Ltd. (supra), which reads as under:
"25. So, it follows that the conclusion of a Coordinate Bench in Shapoorji (supra) wherein the Court has held that the amendment being a procedural in nature shall be applicable to all pending arbitrations as on the date of amendment is correct. This I say so, for the following reasons:
a. The Supreme Court in BCCI (supra) referring to Section 29A of the Act, as incorporated in by way of Amendment of 2015 held it to be a procedural law, as it does not create new rights and liabilities, but held that amendment to be prospective in view of Section 26 of the Amendment of 2015, which clearly stipulated that the said Amendment Act of 2015 shall apply in relation to arbitration proceedings commenced on or after the date of the commencement of the said Act. The relevant portion of BCCI (supra) (foot note to paragraph 38) reads as under:
"Section 29-A of the Amendment (sic Amended) Act provides for time limits within which an arbitral award is to be made. In Hitendra Vishnu Thakur v. State of Maharashtra (1994) 4 SCC at p. 633: 1994 SCC (Cri) 1087, this Court stated (SCC p. 633, para 26) "26. ...(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law.
(iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to -16- create new disabilities or obligations or to impose new duties in respect of transactions already accomplished.
(v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication." It is, inter alia, because timelines for the making of an arbitral award have been laid down for the first time in Section 29-A of the Amendment (sic Amended) Act that parties were given the option to adopt such timelines which, though procedural in nature, create new obligations in respect of a proceeding already begun under the unamended Act. This is, of course, only one example of why parties may otherwise agree and apply the new procedure laid down by the Amendment Act to arbitral proceedings that have commenced before it came into force".
14. It is trite that while substantive law refers to a body of rules that creates, defines and regulates rights and liabilities, whereas procedural law establishes a mechanism for determining those rights and liabilities and machinery for enforcing them. Any change/amendment to substantive laws affecting the rights and liabilities of a party or imposing a disability thereof, will be prospective in nature and any change/amendment to the provisions of statute dealing merely with the matters of procedure or procedural laws, will be retrospective in nature, unless there exists a contrary intention of the legislature. While in the Amendment Act of 2015 a contrary introduction of applicability of provisions of the 2015 amendment was evident from Section 26 thereof, there is no such contrary introduction discernible from any of the provisions of the Amendment Act 2019. Since Section 26 of the Amendment Act 2015 expressed the intention that its provisions would apply only prospectively, the Supreme Court in BCCI (supra) held that even though the provisions of Section 29A introduced vide 2015 amendment is procedural in nature, but it will apply -17- prospectively. In that view of the matter, it can be said that provision of Section 29A is retrospective in nature and hence it is applicable to all pending arbitral proceedings which commenced after 23.10.2015. For the domestic arbitration, therefore, the clock for timeline of twelve months envisaged in the substituted provisions of Section 29A(1) for passing of the award would now start ticking from the date of completion of the pleadings as per Section 23(4) of the Act.
15. The Bombay High Court, speaking through the uninimitable Justice M.C. Chagla, the the Hon'ble Chief Justice, in Shiv Bhagan Moti Ram Saraoji Vs. Onkarmal Ishar Dass & Ors. reported in AIR 1952 Bombay 365, held that no party has a vested right to a particular proceeding or to a particular forum, and it is also well settled that all procedural laws are retrospective unless the Legislature expressly states to the contrary. Therefore, procedural laws in force must be applied at the date when a suit or proceeding comes on for trial or disposal. It was also held that the Court is bound to take notice of the change in the law and was bound to administer the law as it was when the suit came on for hearing. Therefore, if the Court had jurisdiction to try the suit when it came up for disposal, it could not refuse to assume jurisdiction by reason of the fact that it had no jurisdiction to entertain it at the date when it was instituted.
16. In Thirumalai Chemicals Ltd. Vs. Union of India, (2011) 6 SCC 739, the Supreme Court said that the procedural law is retrospective meaning thereby that it will apply even to acts or transactions under the repealed Act. While dealing with this aspect of -18- the law, again the Supreme Court, in Securities and Exchange Board of India Vs. Classic Credit Limited, (2018) 13 SCC 01, held that procedural amendments are presumed to be retrospective unless expressly or impliedly provided otherwise. In the context of change of "forum" being procedural, by virtue of amendment of the 'forum' it would operate retrospectively, referring to its earlier judgments in New India Insurance Co. Ltd. v. Shanti Misra, (1975) 2 SCC 840; Securities and Exchange Board of India v. Ajay Agarwal, (2010) 3 SCC 765; and Ramesh Kumar Soni v. State of Madhya Pradesh, (2013) 4 SCC 696, it was held that it is clear and unambiguous that procedural amendments are presumed to be retrospective in nature, unless the amending statute expressly or impliedly provides otherwise. The Supreme Court in Hitendra Vishnu Thakur v. State of Maharashtra, (1994) 4 SCC 602, held that a statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application.
17. In T. Kaliamurthi & Another Vs. Five Gori Thaikkal Wakf & Ors., (2008) 9 SCC 306, at paragraph 40, observed as under:
".....It is well settled that no statute shall be construed to have a retrospective operation until its language is such that would require such conclusion. The exception to this rule is enactments dealing with procedure. This would mean that the law of limitation, being a procedural law, is retrospective in operation in the sense that it will also apply to proceedings pending at the time of the enactment as also to proceedings commenced -19- thereafter, notwithstanding that the cause of action may have arisen before the new provisions came into force. However, it must be noted that there is an important exception to this rule also. Where the right of suit is barred under the law of limitation in force before the new provision came into operation and a vested right has accrued to another, the new provision cannot revive the barred right or take away the accrued vested right."
18. Further, the contentions of the both the parties reveal that the learned Arbitral Tribunal on 30.11.2019 recorded consent of the learned counsel for the respective parties that the proceedings of the Tribunal will be governed under the amended provisions of Section 29A in 2019 Amendment Act and therefore the period for making the award can be reckoned from 27.08.2019 i.e. the date when the pleadings were completed. However, the opposite parties are now disputing such consent stating that no oral or written consent was given on their behalf to agree to the said proposition. The said denial of the opposite parties cannot make any difference for three reasons. Firstly, the learned counsel who was duly authorized on their behalf to plead the proceedings before the Tribunal has actually consented to the same and even if it is accepted, this being a consent in law, could not bind the opposite parties that they were not governed by the Amendment Act of 2019, the issue has to be decided as per applicable law. Secondly, the Arbitral Tribunal proceeded beyond one year from the date of entering upon the reference i.e. after 02.02.2020, even it is assumed that undeniable fact is that the opposite parties participated in the proceedings on 02.02.2020, 03.03.2019 and 04.03.2020 without raising any objection with regard to termination of the mandate of the Tribunal. The opposite parties even filed their affidavits before the Arbitral -20- Tribunal, on 18.03.2020 for being treated as examination in chief. Their conduct thus shows that they acquiesced in such consent. Thirdly, the amendment in Section 29 A vide the Amendment Act,2019 being procedural in nature in any case has to be read as retrospective in nature.
19. In the instant case, it is not disputed by the parties that after entering upon the reference by the Arbitral Tribunal, pleadings were completed on 27.8.2019 and accordingly, if the Section 29A(1) of Amendment Act, 2019 is applied to the instant case, the date of passing of the award would be 26.08.2020. However, it is also an undisputed fact that due to pandemic COVID-19 situation, the functioning of the offices, courts and even arbitration tribunals like the present one, due to lock down situation started in the country from March, 2020, was affected enormously, at least in the first three months. The Supreme Court took cognizance of the nationwide lockdown situation due to pandemic Covid-19 and by order dated 23.03.2020, in Suo Motu W.P.(Civil) No. 03/2020 ("In re- Cognizance for extension of limitation") extended all periods of limitation prescribed under either general law or under special laws (both central and state) w.e.f. 15.03.2020 till further orders. The said matter was again taken up by the Supreme Court which by its order dated 06.05.2020 extended the periods of limitation till further orders and specifically stated in the said order that all periods of limitation prescribed under the Arbitration and Conciliation Act, 1996 and under Section 138 of the Negotiable Instruments Act 1881, shall be extended with effect from 15.03.2020 till further orders. The said orders -21- were issued by the Supreme Court in exercise of power under Article 142 read with Article 141 of the Constitution of India and that order is binding within the meaning of Article 141 on all Courts/Tribunals and authorities. Since the Arbitral proceedings in question would attract the applicability of Section 29A of the Amendment Act 2019, as it has got retrospective effect, it cannot be said that the benefit of said extension orders granted by the Supreme Court has no applicability to the present case. Therefore, the prayer for the petitioner merits acceptance and the stand taken by the opposite parties to the contrary cannot be countenanced.
20. In view of the above discussion and taking into consideration that pleadings are complete and affidavits of witnesses have been filed in the interest of justice, it is deemed appropriate to extend the time period, for completion of arbitral proceedings, by six months from today so as to enable the learned Arbitral Tribunal to pass the final award.
With the aforesaid observation and directions this ARBP stands disposed of. There shall be however no order as to costs.
As restrictions are continuing due to COVID-19 situation, learned counsel for the petitioner may utilize the soft copy of this judgment available in the High Court's official website or print out thereof at par with certified copies in the manner prescribed, vide Court's Notice No.4587 dated 25.03.2020.
(Mohammad Rafiq) Chief Justice //A.Dash/Secretary.//