Delhi High Court
Villayati Ram Mittal Pvt. Ltd. & Ors. vs Institute For Socialist Education on 29 May, 2018
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 29th May, 2018
+ CM(M) No.769/2017 & CM No.26038/2017 (for stay)
VILLAYATI RAM MITTAL PVT. LTD. & ORS. .... Plaintiffs
Through: Ms. Risha Mittal, Adv.
Versus
INSTITUTE FOR SOCIALIST EDUCATION ......Defendant
Through: None.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. This petition under Article 227 of the Constitution of India impugns
the order [dated 25th April, 2017 in CS No.58677/2016 of the Court of
Additional District Judge (ADJ)-01, Patiala House Courts, New Delhi] of
dismissal of the application of the petitioners / defendants under Section 8 of
the Arbitration & Conciliation Act, 1996 as not maintainable for the reason
of the petitioners / defendants, along with the application, having filed
merely a scanned copy of the Collaboration Agreement containing the
arbitration clause and not the original Collaboration Agreement containing
the arbitration clause or certified copy thereof.
2. The petition came up before this Court first on 25th July, 2017 when it
was enquired from the counsel for the petitioners as to how the remedy under
Article 227 of the Constitution of India was maintainable when the
CM(M) No.769/2017 Page 1 of 7
impugned order was appealable under Section 37(1)(a) of the Arbitration
Act.
3. The counsel for the petitioners stated that the suit, from which this
petition arises, was instituted in the year 2013 and the application under
Section 8 of the Arbitration Act also had been filed in the year 2013 though
had been dismissed on 25th April, 2017. It was further argued that the order
of dismissal of an application under Section 8 of the Arbitration Act had
been made appealable under Section 37, only vide the amendment of
Arbitration Act by the Arbitration & Conciliation Amendment Act, 2015
which had come into force on 23rd October, 2015. The counsel for the
petitioners drew attention to Section 26 of the Amendment Act and
contended that owing thereto, the remedy of appeal under Section 37 was not
available to the petitioners.
4. It was however enquired from the counsel for the petitioners as to how
Section 26 of the Amendment Act was relevant to an appeal against an order
of refusal to refer to arbitration under Section 8 of the Act and which had
nothing to do with arbitration proceedings referred to in Section 26 of the
Act.
CM(M) No.769/2017 Page 2 of 7
5. On request of the counsel for the petitioners, further hearing was
adjourned to 9th August, 2007 and thereafter from time to time to 13 th
October, 2017.
6. On 13th October, 2017, the counsel for the petitioners referred to i)
Ardee Infrastructure Pvt. Ltd. Vs. Anuradha Bhatia 237 (2017) DLT 140
(DB), ii) Shyam Sundar Vs. Ram Kumar AIR 2001 SC 2472, iii) Hitendra
Vishnu Thakur Vs. State of Maharashtra (1994) 4 SCC 602, iv) Shetty's
Constructions Co. Pvt. Ltd. Vs. Konkan Railway Construction (1998) 5
SCC 599, v) Milkfood Ltd. Vs. GMC Ice Cream (P) Ltd. (2004) 7 SCC 288,
and, vi) Ananthesh Bhakta Vs. Nayana S. Bhakta (2017) 5 SCC 185 and to
Section 6 of the General Clauses Act, 1897.
7. During the hearing on 13th October, 2017, attention of the counsel for
petitioners was drawn to Raffles Design International India Private
Limited Vs. Educomp Professional Education Limited 2016 (234)
DLT 349 though taking a view different from that taken in Ardee
Infrastructure Pvt. Ltd. supra but not noticed by the Division Bench.
8. Though being prima facie not satisfied with the maintainability of the
petition, the file was sent to the chamber for dictating the order but learning
CM(M) No.769/2017 Page 3 of 7
of the controversy also pending in the Supreme Court, passing of orders in
the petition went on a backburner and the orders are being pronounced now.
9. The Division Bench in Ardee Infrastructure Pvt. Ltd. supra was
concerned with the question, whether the amendments made by the
Amendment Act to Section 34 and Section 36 of the Arbitration Act would
apply to arbitral proceedings commenced prior to coming into force of the
Amendment Act on 23rd October, 2015 and in which arbitral award was also
made prior to 23rd October, 2015 but a petition under Section 34 of the Act
was pending on 23rd October, 2015. It was held that only those provisions of
the Amendment Act would apply to the pending proceedings which were
merely procedural and did not affect any accrued rights and axiomatically it
was held that the amendments to Section 34 and Section 36 pertaining to
enforceability of the arbitral award affected accrued rights of the parties
therein and thus petitions under Section 34 of the Act would have to be
construed under unamended Act and the petitioners would be entitled to
automatic stay of enforcement of the arbitral award till the disposal of the
petition.
10. Shyam Sundar & Hitendra Vishnu Thakur supra were cited on the
propostion of law that when the repeal of enactment is followed by a fresh
CM(M) No.769/2017 Page 4 of 7
legislation, such legislation does not affect the substantive rights of the
parties on the date of the suit or adjudication of suit unless such a legislation
is retrospective and a court of appeal cannot take into consideration a new
law brought into existence after the judgment appealed from had been
rendered because the rights of the parties in an appeal are determined under
the law in force on the date of the suit, save in the matters which relate to
procedure.
11. Shetty's Construction Co. Pvt. Ltd. supra holding that where the
request for referring the dispute to arbitration was moved for consideration
before coming into force of the Arbitration & Conciliation Act, 1996 on 26 th
January, 1996, then the proceedings would be governed by the Arbitration
Act, 1940 and only where the request was subsequent thereto would the
proceedings be governed by the 1996 Act is not found to be relevant for the
present purpose.
12. Insofar as Milkfood Ltd. supra is concerned, attention was drawn to
paras no.45 and 46 thereof holding that 'commencement of arbitration
proceedings' and 'commencement of proceeding before the arbitrator' are
two different expressions and carry different meanings and that only for the
CM(M) No.769/2017 Page 5 of 7
purpose of Section 21 of the Arbitration Act providing for commencement of
an arbitration, does a notice of arbitration assume significance.
13. Ananthesh Bhakta supra lays down that what is prohibited by Section
8(2) is only entertainment of application unless it is accompanied by original
Arbitration Agreement or its certified copies and thus an application filed
under Section 8 (1) without such original or certified copy shall not entail
rejection under Section 8(2) when original Arbitration Agreement or its
certified copy is brought on record at the time when the Court is considering
the said application and is on the merits of the challenge made in the petition
and not on the maintainability thereof.
14. Supreme Court, recently in Board of Control for Cricket in India Vs.
Kochi Cricket Pvt. Ltd. 2018 SCC OnLine SC 232, has held that the words
'arbitral proceedings' under Section 26 of the Amendment Act refer to
proceedings before an Arbitral Tribunal and axiomatically it was held that
Section 36 as substituted by the Amendment Act would apply even to
pending Section 34 applications on the date of commencement of the
Amendment Act.
15. Following the aforesaid ratio, notwithstanding the suit in which the
petitioners application under Section 8 of the Arbitration Act has been
CM(M) No.769/2017 Page 6 of 7
dismissed, having been instituted prior to coming into force of the
Amendment Act and the application under Section 8 having also been filed
prior to commencement of the Amendment Act, Section 37(1)(a) of the
Arbitration Act as amended w.e.f. 23rd October, 2015 would apply to the
order of dismissal of the application of the petitioners under Section 8 of the
Arbitration Act and the remedy thereagainst would be of appeal under
Section 37 of the Arbitration Act and not by way of this petition under
Article 227 of the Constitution of India.
16. It has been held in Sadhana Lodh Vs. National Insurance Co. Ltd.
(2003) 3 SCC 524 that where a statutory remedy or a remedy under CPC is
available, jurisdiction under Article 227 cannot be invoked.
17. The petition is thus dismissed.
No costs.
RAJIV SAHAI ENDLAW, J.
MAY 29, 2018 'gsr' CM(M) No.769/2017 Page 7 of 7