We have no hesitation in concluding that the Ordinance can by
no stretch of imagination be construed as a special enactment concerning the
subject matter of arbitral disputes. Rather the said Ordinance is a law giving
birth to a class of ordinary Courts of the land exclusively reserved for the
adjudication of commercial disputes of the specified value. The fact that
incidental reference to arbitral disputes has been made therein does not
clothe the said Ordinance with the status of a special law qua arbitration.
This would require sub-Section 1 and sub-Section 2 of Section 10 of the
Ordinance to be read down and the words ‘Commercial Appellate Division’
to be read as ‘Commercial Division’ concerning applications or petitions
against which an appeal lies under Section 37 of the Arbitration and
Conciliation Act, 1996.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision : December 10, 2015
OMP (I) (Comm.) 16/2015
ASCOT ESTATES PVT. LTD.
versus
BON VIVANT LIFE STYLE PVT. LTD. .
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE MUKTA GUPTA
Dated;DECEMBER 10, 2015
1. The above captioned OMP (I) (Comm.) 16/2015 is an application
filed under Section 9 of the Arbitration and Conciliation Act, 1996 by the
petitioner concerning a hire agreement dated January 20, 2012, having an
arbitration clause. Pleading that on account of non-payment of hire charges
by the respondent the agreement in question has been determined, prayer
made is to appoint a receiver to take possession of the assets which were
hired. The subject matter of the dispute is concededly a Commercial dispute
of the specified value as per the Commercial Courts, Commercial Division
and Commercial Appellate Division of High Courts Ordinance, 2015.
2. Being filed on November 20, 2015, after the Commercial Courts,
Commercial Division and Commercial Appellate Division of High Courts OMP (Comm.) No.16/2015 Page 2 of 19
Ordinance, 2015 (hereinafter referred as 'Ordinance') was promulgated on
October 23, 2015, which provided for Constitution of Commercial Court,
Commercial Division and Commercial Appellate Division, concerning
Commercial disputes of the specified value, vesting exclusive jurisdiction
concerning said disputes in the Commercial Court, Commercial Division
and Commercial Appellate Division, the Registry has placed the OMP
before the Division Bench, and the reason for which is Section 10 of the
Ordinance, which reads as under:-
“10. Whereas the subject matter of an arbitration is a
commercial dispute of a Specified Value and –
(1) If such arbitration is an international commercial
arbitration, all applications or appeals arising out of such
arbitration under the provisions of the Arbitration and
Conciliation Act, 1996 that have been filed in a High Court,
shall be heard and disposed of by the Commercial Appellate
Division where such Commercial Appellate Division has been
constituted in such High Court.
(2) If such arbitration is other than an international
commercial arbitration, all applications or appeals arising out
of such arbitration under the provisions of the Arbitration and
Conciliation Act, 1996 that have been filed on the original side
of the High Court, shall be heard and disposed of by the
Commercial Appellate Division where such Commercial
Appellate Division has been constituted in such High Court.
(3) If such arbitration is other than an international
commercial arbitration, all applications or appeals arising out
of such arbitration under the provisions of the Arbitration and
Conciliation Act, 1996 that would ordinarily lie before any
principal civil court of original jurisdiction in a district (not
being a High Court) shall be filed in, and heard and disposed
of by the Commercial Court exercising territorial jurisdiction OMP (Comm.) No.16/2015 Page 3 of 19
over such arbitration where such Commercial Court has been
constituted.”
3. On November 30, 2015, this Bench noted that an issue arises
concerning right of appeal conferred by Section 37 of the Arbitration and
Conciliation Act, 1996, and thus while issuing notice to the respondent we
had issued notice to the learned Additional Solicitor General of India
returnable for December 07, 2015, on which date the matter was adjourned
for today to enable the learned Additional Solicitor General to obtain
instructions. The respondent was directed to file a reply to the petition
within two days, which we note has not been filed, and as prayed we grant
three further days’ time for reply to be filed concerning the averments made
in the petition. But because of the fact the issue involves the jurisdiction of
whether it is the Commercial Division or the Commercial Appellate
Division which would hear the instant petition as also other applications and
petitions filed under the Arbitration and Conciliation Act, 1996 after
October 23, 2015, with consent of learned counsel for the parties, including
the learned Additional Solicitor General of India, we have heard arguments
on the issue : whether Section 10 of the Ordinance takes away the right of
appeal conferred by Section 37 of the Arbitration and Conciliation Act,
1996, and which issue would subsume : whether the language of the
Ordinance needs to be read down.
4. Section 15 of the Ordinance reads as under:-
“15.(1) All suits and applications, including applications
under the Arbitration and Conciliation Act, 1996, relating to a
commercial dispute of Specified Value pending in a High Court
where a Commercial Division has been constituted, shall be
transferred to the Commercial Division.OMP (Comm.) No.16/2015 Page 4 of 19
(2) All suits and applications, including applications under
the Arbitration and Conciliation Act, 1996, relating to a
commercial dispute of Specified Value pending in any civil
Court in any district or area in respect of which a Commercial
Court has been constituted, shall be transferred to such
Commercial Court:
Provided that no suit or application where the final judgment
has been reserved by the Court prior to the constitution of the
Commercial Division or the Commercial Court shall be
transferred either under sub-Section (1) of sub-Section (2).
(3) Where any suit or application, including an application
under the Arbitration and Conciliation Act, 1996, relating to a
commercial dispute of Specified Value shall stand transferred
to the Commercial Division or Commercial Court under subSection
(1) or sub-Section (2), the provisions of this Ordinance
shall apply to those procedures that were not complete at the
time of transfer.
(4) The Commercial Division or Commercial Court, as the
case may be, may hold case management hearings in respect of
such transferred suit or application in order to prescribe new
timelines or issue such further directions as may be necessary
for a speedy and efficacious disposal of such suit or application
in accordance with Order XIV-A of the Code of Civil
Procedure, 1908:
Provided that the proviso to sub-rule (1) of Rule 1 of
Order V of the Code of Civil Procedure, 1908 shall not apply to
such transferred suit or application and the court may, in its
discretion, prescribe a new time period within which the
written statement must be filed.
(5) In the event that such suit or application is not
transferred in the manner specified in such-section (1), subsection
(2) or sub-Section (3), the Commercial Appellate
Division of the High Court may, on the application of any of the OMP (Comm.) No.16/2015 Page 5 of 19
parties to the suit, withdraw such suit or application from the
court before which it is pending and transfer the same for trial
or disposal to the Commercial Division or Commercial Court,
as the case may be, having territorial jurisdiction over such
suit, and such order of transfer shall be final and binding.”
5. As per sub-Section 1 of Section 3 of the Ordinance Commercial
Courts at District Level have to be constituted by the State Government in
consultation with the concerned High Court, and as per the Proviso no
Commercial Court shall be constituted for the territory over which the High
Court has ordinary original civil jurisdiction. As per Section 4 of the
Ordinance, in all High Courts, having ordinary civil jurisdiction, the Chief
Justice of the High Court has to constitute a Commercial Division
comprising a Single Judge for the purpose of exercising the jurisdiction and
powers conferred on it under the Ordinance. As per Section 5, Commercial
Appellate Division has to be constituted for the purpose of exercising the
jurisdiction and powers conferred on it by the Ordinance.
6. Since the Delhi High Court is vested with Ordinary Original Civil
Jurisdiction as per Section 5 of the Delhi High Court Act, 1966, in the Union
Territory of the National Capital Territory of Delhi, no Commercial Court
has to be constituted and Commercial Division has to be constituted, which
has been constituted by the Hon’ble Chief Justice of this Court.
7. In the decision dated November 30, 2015, in OMP (Comm.)
No.1/2015 Roger Shashoua & Ors. Vs. Mukesh Sharma & Ors. noting a
conflict between Section 10 and Section 15 of the Ordinance and therefore
harmonising the same, it was opined that to preserve the mandate of Section
15 of the Ordinance as also Section 10 thereof, pending Commercial
disputes of the specified value concerning arbitration matters are required to OMP (Comm.) No.16/2015 Page 6 of 19
be heard by the Commercial Division and not the Commercial Appellate
Division.
8. It is trite that the ratio of a judgment is with reference to the facts
thereof and the statutory provisions interpreted and not what may logically
flow out therefrom.
9. The said decision thus cannot be read to mean that by implication it
was held that Commercial disputes of the specified value filed after the
Ordinance was promulgated have been held to be decided by the
Commercial Appellate Division.
10. Sub-Clause (1) and sub-Clause 2 of Section 10 of the Ordinance
provides that all applications or appeals emanating from international and
domestic arbitrations respectively governed by the Arbitration and
Conciliation Act, 1996, that have been filed on the original side of the High
Court, shall be adjudicated by the Commercial Appellate Division
constituted in terms of Section 5 of the Ordinance.
11. Sub-Clause (1) of Section 5 of the Ordinance envisages that the Chief
Justice of the concerned High Court shall constitute Commercial Appellate
Division having one or more Division Benches for the purpose of exercising
the jurisdiction and powers conferred on it by the Ordinance.
12. The Arbitration and Conciliation Act, 1996 was promulgated on
August 16, 1996, and as per its preamble it is an Act to consolidate and
amend the law relating to domestic arbitration, international commercial
arbitration and enforcement of foreign arbitral awards as also to define the
law relating to conciliation and for matters connected therewith or incidental
thereto. OMP (Comm.) No.16/2015 Page 7 of 19
13. It needs hardly any emphasis, because a cursory reading of the two
sub-clauses of Section 10 of the Ordinance require, commercial disputes of a
specified value concerning arbitration matters to be heard and disposed of by
the Commercial Appellate Division where such Commercial Appellate
Division have been constituted in a High Court. This sets at naught Section
37 of the Arbitration and Conciliation Act, 1996, and renders it otiose.
14. Section 37 of the Arbitration and Conciliation Act, 1996 reads as
under:-
"CHAPTER IX
APPEALS
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 subsection
(3) of section 16; or
(b). granting or refusing to grant an 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."
15. Thus, as per Section 37 of the Arbitration and Conciliation Act, 1996,
a remedy of appeal is available and lies to a Court authorized by law to hear OMP (Comm.) No.16/2015 Page 8 of 19
appeals from original decrees of the Court passing the order; and concerning
this Court it would mean a Bench comprising two Judges.
16. Since Section 10 of the Ordinance contemplates that all applications
and appeals emanating from the Arbitration and Conciliation Act, 1996 shall
be dealt by Commercial Appellate Division alone, which would comprise of
Division Benches, the operation of the Ordinance, in such cases, would
leave no avenue for a litigant to exercise her right to appeal secured under
Section 37 of the Arbitration and Conciliation Act, 1996 pertaining to such
orders which are made appealable under said Section. An order passed
granting or refusing to grant any measure under Section 9 of the Act is an
appealable order by virtue of clause (a) of sub-Section 1 of Section 37 of the
Arbitration and Conciliation Act, 1996.
17. Thus, the case at hand presents a question of interpretation arising
from the conflict between the provisions contained in distinct enactments for
the reason the above captioned OMPs invoking remedy under Section 9 of
the Arbitration and Conciliation Act, 1996 have been filed in this Court after
October 23, 2015.
18. Since time immemorial it is a settled proposition of law that the right
to appeal is not merely a procedural adjunct but is a substantive legal right
created by a statute. The right to appeal is a vested right that accrues to the
litigant from the date the lis commences although it may be actually
exercised later when the adverse judgment is pronounced. The said right can
be taken away only by a subsequent enactment, if it so provides expressly or
by necessary intendment and not otherwise. The said position of law was
laid down beyond pale of controversy by a Constitution Bench of the OMP (Comm.) No.16/2015 Page 9 of 19
Supreme Court in the decision reported as AIR 1957 SC 540 Garikapati
Veeraya v. N. Subbiah Choudhry & Others. The Supreme Court followed
the celebrated decision of the Privy Council reported as [1905] A.C. 369 The
Colonial Sugar Refining Company Limited v. Irving, wherein, it was
observed that right to appeal was not a mere matter of procedure but
qualitatively different. Further, the Court cited with approval the luminous
observations of the Queen's Bench Division in the decision reported as
1884-12 QBD 224 Hough v. Windus, at p. 237 to the effect that a statute
should be interpreted, if possible, so as to respect vested right. Para 23 of
the decision in Gari Kapati Veeraya’s case reads as under:-
“23. From the decisions cited above, the following principles
clearly emerge :
(i) That the legal pursuit of a remedy, suit, appeal and
second appeal are really but steps in a series of
proceedings all connected by an intrinsic unity and are to
be regarded as one legal proceeding.
(ii) The right of appeal is not a mere matter of
procedure but is a substantive right.
(iii) The institution of the suit carries with it the
implication that all rights of appeal then in force are
preserved to the parties thereto till the rest of the career of
the suit.
(iv) The right of appeal is a vested right and such a
right to enter the superior court accrues to the litigant and
exists as on and from the date the lis commences and
although it may be actually exercised when the adverse
judgment is pronounced such right is to be governed by the
law prevailing at the date of the institution of the suit or OMP (Comm.) No.16/2015 Page 10 of 19
proceeding and not by the law that prevails at the date of
its decision or at the date of the filing of the appeal.
(v) This vested right of appeal can be taken away only
by a subsequent enactment, if it so provides expressly or by
necessary intendment and not otherwise.”
19. Confronted with similar situations in the past caused by inter-play of
provisions in different statutes, the Courts evolved suitable principles of
interpretation to tackle the legal conundrum created by oversight of
legislative draftsmen. It is in such circumstances, the principle of 'generalia
specialibus non derogant' (a general provision does not derogate a special
one) was developed.
20. Bennion on Statutory Interpretation, 5th Edition, Lexis Nexis
expounds upon the said principle in the following words [Pg. 306] :-
"Where the literal meaning of a general enactment covers a
situation for which specific provision is made by another
enactment contained in an earlier Act, it is presumed that the
situation was intended to continue to be dealt with by the
specific provision rather than the later general one.
Accordingly the earlier specific provision is not treated as
impliedly repealed."
21. Maxwell on The Interpretation of Statutes, 12th Edition by P. St. J.
Langan [Pg. 196], expresses the view on the subject as follows:-
"Now if anything be certain it is this," said the Earl of Selborne
L.C. in The Vera Cruz, "that where there are general words in
a later Act capable of reasonable and sensible application
without extending them to subjects specially dealt with by
earlier legislation, you are not to hold that earlier and special
legislation indirectly repealed, altered, or derogated from
merely by force of such general words, without any indication
of a particular intention to do so." In a later case, Viscount OMP (Comm.) No.16/2015 Page 11 of 19
Haldane said: "We are bound... to apply a rule of construction
which has been repeatedly laid down and is firmly established.
It is that wherever Parliament in an earlier statute has directed
its attention to an individual case and has made provision for it
unambiguously, there arises a presumption that if in a
subsequent statute the Legislature lays down a general
principle, that general principle is not to be taken as meant to
rip up what the Legislature had before provided for
individually, unless an intention to do so is specially declared.
A merely general rule is not enough, even though but its terms
it is stated so widely that it would, taken by itself, cover special
cases of the kind I have referred to."
22. The said rule has also been subject of discussion in Craies on Statute
Law, 7th Edition, Sweet and Maxwell- London, 1971, wherein, it has been
pertinently observed [Pg. 582] :-
"The rule applicable in such cases is well stated in a Canadian
case, Ontario, etc., Ry. v. Canadian Pacific Ry. (1887) 14
Ont.Rep. 432, 445, by Ferguson J., quoting Lord Westbury L.C.
in Re The Westminster Bridge Act, 1859 (1864) 33 L.J.Ch. 372,
376 viz. that where there are provisions in a special Act and a
general Act on the same subject which are inconsistent, if the
special Act gives a complete rule on the subject, the expression
of the rule acts as an exception of the subject-matter of the rule
from the general Act."
23. In the present case, it may be observed that the Arbitration and
Conciliation Act, 1996, is an Act passed by the Parliament with the avowed
object to consolidate and amend the law relating to domestic arbitration,
international commercial arbitration and enforcement of foreign arbitral
awards as also to define the law relating to conciliation and for matters
connected therewith or incidental thereto. The said legislation evidently
occupies the field as a special law which comprehensively and exclusively
deals with the various nuances involved in functioning of the arbitral mode OMP (Comm.) No.16/2015 Page 12 of 19
of adjudication of disputes in substitution of the ordinary courts of the land.
Per contra, the Ordinance provides for the constitution of Commercial
Division and Commercial Appellate Division in the High Courts exercising
ordinary original civil jurisdiction for adjudicating Commercial disputes of
specified value and for matters connected therewith or incidental thereto. A
perusal of the various provisions and the scheme of the said Ordinance
palpably evidences that the predominant object underlying its promulgation
is to establish a class of Courts dedicated for the adjudication of
Commercial disputes of the specified value. The connotation Commercial
dispute has been defined in the said Ordinance in a plenary manner to
include a wide spectrum of disputes.
24. At this juncture, it would be pertinent to refer to the definition of the
term ‘Commercial dispute' as comprised in the Ordinance. It reads:-
"2. (1) In this Ordinance, unless the context otherwise
requires,-
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transaction of merchants, bankers, financiers and
trade such as those relation to mercantile documents, including
enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft
equipment and helicopters, including sales, leasing and
financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including
tenders;
(vii) agreements relating to immovable property used
exclusively in trade or commerce;
(viii) franchising agreements;OMP (Comm.) No.16/2015 Page 13 of 19
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the
service industry including outsourcing services and financial
services;
(xiv) mercantile agency and mercantile usage;
(xv) partnership agreements;
(xvi) technology development agreements;
(xvii) intellectual property rights relating to registered and
unregistered trademarks, copyright, patent, design, domain
names, geographical indications and semiconductor integrated
circuits;
(xviii) agreements for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural
resources including electromagnetic spectrum;
(xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and
(xxii) such other commercial disputes as may be notified by the
Central Government.
Explanation.- A commercial dispute shall not cease to be a
commercial dispute merely because-
(a) it also involves action for recovery of immovable property
or for realisation of monies out of immovable property given as
security or involves any other relief pertaining to immovable
property;
(b) one of the contracting parties is the State or any of its
agencies or instrumentalities, or a private body carrying out
public functions."
25. The ambit of the Ordinance subsumes within its fold diverse issues
and also incidentally impinges upon the field of arbitral disputes by enacting
certain provisions, such as Section 10 that have been discussed by us earlier.OMP (Comm.) No.16/2015 Page 14 of 19
26. Merely because the Ordinance, which is indisputably later in time,
happens to trench upon the subject of arbitral disputes does not lead to the
inescapable conclusion that the same impliedly repeals or derogates the
conflicting provisions contained in the Arbitration and Conciliation Act,
1996 concerning the right of appeal vested by Section 37 of the said Act.
27. In the decision reported as [1922] 1 A.C. 284 Eileen Louise Nicolle v.
John Winter Nicolle, the Judicial Committee of the Privy Council observed:-
"It is no doubt a sound principle of all jurisprudence that a
prior particular law is not easily to be held to be abrogated by
a posterior law, expressed in general terms and by the apparent
generality of its language applicable to and covering a number
of cases of which the particular law is but one. This as a matter
of jurisprudence, as understood in England, has been laid down
in a great number of cases, whether the prior law be an express
statute as in Hawkins v. Gathercole; Seward v. Vera Cruz; or
be the underlying common or customary law of the country..."
28. Even earlier, similar views have been expressed in the decision
reported as [1898] A.C. 748 Barker v. Edger & Others, wherein it was
observed by Lord Hobhouse that when the Legislature has given its attention
to a separate subject, and made provision for it, the presumption is that a
subsequent general enactment is not intended to interfere with the special
provision unless it manifest that intention very clearly.
29. In the decision reported as (1978) 4 SCC 16 The U.P. State Electricity
Board & Anr. v. Hari Shankar Jain & Ors., the Supreme Court observed as
under:-
"9. The reason for the rule that a general provision should yield
to a specific provision is this: In passing a special Act,
Parliament devotes its entire consideration to a particular
subject. When a general Act is subsequently passed, it is logical OMP (Comm.) No.16/2015 Page 15 of 19
to presume that Parliament has not repealed or modified the
former Special Act unless it appears that the Special Act again
received consideration from Parliament. Vide London and
Blackwall Railway v. Limehouse District Board of Works [26
LJ Ch 164 : 69 ER 1048] , and Thorpe v. Adams [(1871) LR 6
CP 125] . In J&K. Cotton Spinning and Weaving Mills Co.
Ltd. v. State of U.P. [AIR 1961 SC 1170 : (1961) 3 SCR 185 :
(1961) 1 LLJ 540 : (1960-61) 19 FJR 43] , this Court observed
(at p. 1174):
“The rule that general provisions should yield to specific
provisions is not an arbitrary principle made by lawyers
and Judges but springs from the common understanding
of men and women that when the same person gives two
directions, one covering a large number of matters in
general and another to only some of them his intention is
that these latter directions should prevail as regards
these while as regards all the rest the earlier direction
should have effect.”
30. In the decision reported as (1998) 3 SCC 495 A.B. Krishna & Ors. v.
State of Karnataka & Ors., while placing reliance on treatises of eminent
authors and the celebrated pronouncement in Vera Cruz case, the Supreme
Court repelled the argument regarding implied supersession. The Court also
reiterated the views expressed earlier in its decision reported as AIR 1966
SC 1931 Maharaja Pratap Singh Bahadur v. Thakur Manmohan Dey,
wherein, it had been held that earlier special law cannot be abrogated by
mere implication.
31. Further, in its decision reported as (1974) 2 SCC 323 as Vasudev
Ramchandra Shelat v. Pranlal Jayanand Thakar & Ors., the Supreme Court
held:-
"... But, this certainly does not mean that a provision of one Act
could be nullified by any provision of the other Act. It means OMP (Comm.) No.16/2015 Page 16 of 19
that the provisions of the two Acts should be read consistently
with each other so far as it is reasonably possible to do so. We
think that this end can be best achieved here by examining the
objects and the subject-matter of each enactment and by
viewing each relevant provision as a limb of an integrated
whole meant to serve the underlying purposes. In this way, their
separable spheres of operation will be clarified so as to avoid
possibilities of conflict between them or any unnecessary
overflow of what really appertains to one field into another."
(Emphasis supplied)
32. We would be failing not to bring to fore certain provisions integrally
enmeshed in the Ordinance itself that are plainly repugnant to the hypothesis
of implied repeal of Section 37 of the Arbitration and Conciliation Act, 1996
owing to the introduction of Section 10 of the Ordinance.
33. Section 13 of the Ordinance reads:-
"CHAPTER IV
APPEALS
13. (1) Any person aggrieved by the decision of the Commercial
Court or Commercial Division of a High Court may appeal to
the Commercial Appellate Division of that High Court within a
period of sixty days from the date of judgment or order, as the
case may be:
Provided that an appeal shall lie from such orders passed by a
Commercial Division or a Commercial Court that are
specifically enumerated under Order XLIII of the Code of Civil
Procedure, 1908 as amended by this Ordinance and section 37
of the Arbitration and Conciliation Act, 1996." (Emphasis
supplied)
34. A bare perusal of the above highlighted proviso to sub-Section 1 of
Section 13 of the Ordinance strongly rebuts any speculation arising from
Section 10 of the Ordinance with regard to the intent harboured by the law OMP (Comm.) No.16/2015 Page 17 of 19
makers to even impliedly repeal Section 37 of the Arbitration and
Conciliation Act, 1996.
35. It would also be profitable to take note of sub-Section 1 of Section 15
of the Ordinance which reads as under:-
" CHAPTER V
TRANSFER OF PENDING SUITS
15. (1) All suits and applications, including applications under
the Arbitration and Conciliation Act, 1996, relating to a
commercial dispute of Specified Value pending in a High Court
where a Commercial Division has been constituted, shall be
transferred to the Commercial Division."
36. A simple analysis of the above extracted provision lends support to
the conclusion that all applications under the Arbitration and Conciliation
Act, 1996 relating to a Commercial dispute of the specified value has to be
adjudicated by a Commercial Division and not the Commercial Appellate
Division. The said provision, unlike Section 10 of the Ordinance, does not
mandate adjudication of applications under the Arbitration and Conciliation
Act, 1996 by Commercial Appellate Division and thus, the valuable remedy
of appeal as envisaged under Section 37 of the Arbitration and Conciliation
Act, 1996 does not stand immutably foreclosed.
37. We may also take cognizance of amendments effected in the
Arbitration and Conciliation Act, 1996 vide 'The Arbitration and
Conciliation (Amendment) Ordinance, 2015' promulgated on October 23,
2015. Section 2 of the said Amendment Ordinance has retained Section 37
of the Arbitration and Conciliation Act, making minor amendments as
under:-OMP (Comm.) No.16/2015 Page 18 of 19
"20. In Section 37 of the principal Act, in sub-section (1), for
clauses (a) and (b), the following clauses shall be substituted,
namely:-
(a) refusing to refer the parties to arbitration under section 8;
(b) granting or refusing to grant any measure under section 9;
(c) setting aside or refusing to set aside an arbitral award
under section 34."
38. The inescapable conclusion is that the law makers consciously chose
to retain Section 37 of the Arbitration and Conciliation Act, 1996 despite
affecting numerous amendments in the said Act recently goes a long way to
negate the hypothesis of its implied repeal.
39. Furthermore, there exists a strong presumption against ouster of
jurisdiction of superior Courts.
40. It would be pertinent to highlight the luminous observations in this
regard contained in Maxwell on The Interpretation of Statutes, 12th Edition
by P. St. J. Langan [Pg. 153]:-
"A STRONG leaning exists against construing a statute so as to
oust or restrict the jurisdiction of the superior Courts... "the
well-known rule that a statute should not be construed as taking
away the jurisdiction of the Courts in the absence of clear and
unambiguous language to that effect" now rests on a reluctance
to disturb the established state of the law or to deny to the
subject access to the seat of justice..."Any one bred in the
tradition of the law," said Viscount Simonds, "is likely to regard
with little sympathy legislative provisions for ousting the
jurisdiction of the Court, whether in order that the subject may
be deprived altogether of remedy or in order that his grievance
may be remitted to some other tribunal."
41. Thus, we have no hesitation in concluding that the Ordinance can by
no stretch of imagination be construed as a special enactment concerning the
subject matter of arbitral disputes. Rather the said Ordinance is a law giving
birth to a class of ordinary Courts of the land exclusively reserved for the
adjudication of commercial disputes of the specified value. The fact that
incidental reference to arbitral disputes has been made therein does not
clothe the said Ordinance with the status of a special law qua arbitration.
This would require sub-Section 1 and sub-Section 2 of Section 10 of the
Ordinance to be read down and the words ‘Commercial Appellate Division’
to be read as ‘Commercial Division’ concerning applications or petitions
against which an appeal lies under Section 37 of the Arbitration and
Conciliation Act, 1996.
42. The above captioned OMPs would now be placed for consideration
before the Commercial Division as per Roster on December 16, 2015 and as
directed hereinabove the respondent is permitted to file a reply to the
petition within further three days from today.
43. Copy of this decision be given dasti to learned Additional Solicitor
General of India.
(PRADEEP NANDRAJOG)
JUDGE
(MUKTA GUPTA)
JUDGE
DECEMBER 10, 2015
Print Page
no stretch of imagination be construed as a special enactment concerning the
subject matter of arbitral disputes. Rather the said Ordinance is a law giving
birth to a class of ordinary Courts of the land exclusively reserved for the
adjudication of commercial disputes of the specified value. The fact that
incidental reference to arbitral disputes has been made therein does not
clothe the said Ordinance with the status of a special law qua arbitration.
This would require sub-Section 1 and sub-Section 2 of Section 10 of the
Ordinance to be read down and the words ‘Commercial Appellate Division’
to be read as ‘Commercial Division’ concerning applications or petitions
against which an appeal lies under Section 37 of the Arbitration and
Conciliation Act, 1996.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision : December 10, 2015
OMP (I) (Comm.) 16/2015
ASCOT ESTATES PVT. LTD.
versus
BON VIVANT LIFE STYLE PVT. LTD. .
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE MUKTA GUPTA
Dated;DECEMBER 10, 2015
1. The above captioned OMP (I) (Comm.) 16/2015 is an application
filed under Section 9 of the Arbitration and Conciliation Act, 1996 by the
petitioner concerning a hire agreement dated January 20, 2012, having an
arbitration clause. Pleading that on account of non-payment of hire charges
by the respondent the agreement in question has been determined, prayer
made is to appoint a receiver to take possession of the assets which were
hired. The subject matter of the dispute is concededly a Commercial dispute
of the specified value as per the Commercial Courts, Commercial Division
and Commercial Appellate Division of High Courts Ordinance, 2015.
2. Being filed on November 20, 2015, after the Commercial Courts,
Commercial Division and Commercial Appellate Division of High Courts OMP (Comm.) No.16/2015 Page 2 of 19
Ordinance, 2015 (hereinafter referred as 'Ordinance') was promulgated on
October 23, 2015, which provided for Constitution of Commercial Court,
Commercial Division and Commercial Appellate Division, concerning
Commercial disputes of the specified value, vesting exclusive jurisdiction
concerning said disputes in the Commercial Court, Commercial Division
and Commercial Appellate Division, the Registry has placed the OMP
before the Division Bench, and the reason for which is Section 10 of the
Ordinance, which reads as under:-
“10. Whereas the subject matter of an arbitration is a
commercial dispute of a Specified Value and –
(1) If such arbitration is an international commercial
arbitration, all applications or appeals arising out of such
arbitration under the provisions of the Arbitration and
Conciliation Act, 1996 that have been filed in a High Court,
shall be heard and disposed of by the Commercial Appellate
Division where such Commercial Appellate Division has been
constituted in such High Court.
(2) If such arbitration is other than an international
commercial arbitration, all applications or appeals arising out
of such arbitration under the provisions of the Arbitration and
Conciliation Act, 1996 that have been filed on the original side
of the High Court, shall be heard and disposed of by the
Commercial Appellate Division where such Commercial
Appellate Division has been constituted in such High Court.
(3) If such arbitration is other than an international
commercial arbitration, all applications or appeals arising out
of such arbitration under the provisions of the Arbitration and
Conciliation Act, 1996 that would ordinarily lie before any
principal civil court of original jurisdiction in a district (not
being a High Court) shall be filed in, and heard and disposed
of by the Commercial Court exercising territorial jurisdiction OMP (Comm.) No.16/2015 Page 3 of 19
over such arbitration where such Commercial Court has been
constituted.”
3. On November 30, 2015, this Bench noted that an issue arises
concerning right of appeal conferred by Section 37 of the Arbitration and
Conciliation Act, 1996, and thus while issuing notice to the respondent we
had issued notice to the learned Additional Solicitor General of India
returnable for December 07, 2015, on which date the matter was adjourned
for today to enable the learned Additional Solicitor General to obtain
instructions. The respondent was directed to file a reply to the petition
within two days, which we note has not been filed, and as prayed we grant
three further days’ time for reply to be filed concerning the averments made
in the petition. But because of the fact the issue involves the jurisdiction of
whether it is the Commercial Division or the Commercial Appellate
Division which would hear the instant petition as also other applications and
petitions filed under the Arbitration and Conciliation Act, 1996 after
October 23, 2015, with consent of learned counsel for the parties, including
the learned Additional Solicitor General of India, we have heard arguments
on the issue : whether Section 10 of the Ordinance takes away the right of
appeal conferred by Section 37 of the Arbitration and Conciliation Act,
1996, and which issue would subsume : whether the language of the
Ordinance needs to be read down.
4. Section 15 of the Ordinance reads as under:-
“15.(1) All suits and applications, including applications
under the Arbitration and Conciliation Act, 1996, relating to a
commercial dispute of Specified Value pending in a High Court
where a Commercial Division has been constituted, shall be
transferred to the Commercial Division.OMP (Comm.) No.16/2015 Page 4 of 19
(2) All suits and applications, including applications under
the Arbitration and Conciliation Act, 1996, relating to a
commercial dispute of Specified Value pending in any civil
Court in any district or area in respect of which a Commercial
Court has been constituted, shall be transferred to such
Commercial Court:
Provided that no suit or application where the final judgment
has been reserved by the Court prior to the constitution of the
Commercial Division or the Commercial Court shall be
transferred either under sub-Section (1) of sub-Section (2).
(3) Where any suit or application, including an application
under the Arbitration and Conciliation Act, 1996, relating to a
commercial dispute of Specified Value shall stand transferred
to the Commercial Division or Commercial Court under subSection
(1) or sub-Section (2), the provisions of this Ordinance
shall apply to those procedures that were not complete at the
time of transfer.
(4) The Commercial Division or Commercial Court, as the
case may be, may hold case management hearings in respect of
such transferred suit or application in order to prescribe new
timelines or issue such further directions as may be necessary
for a speedy and efficacious disposal of such suit or application
in accordance with Order XIV-A of the Code of Civil
Procedure, 1908:
Provided that the proviso to sub-rule (1) of Rule 1 of
Order V of the Code of Civil Procedure, 1908 shall not apply to
such transferred suit or application and the court may, in its
discretion, prescribe a new time period within which the
written statement must be filed.
(5) In the event that such suit or application is not
transferred in the manner specified in such-section (1), subsection
(2) or sub-Section (3), the Commercial Appellate
Division of the High Court may, on the application of any of the OMP (Comm.) No.16/2015 Page 5 of 19
parties to the suit, withdraw such suit or application from the
court before which it is pending and transfer the same for trial
or disposal to the Commercial Division or Commercial Court,
as the case may be, having territorial jurisdiction over such
suit, and such order of transfer shall be final and binding.”
5. As per sub-Section 1 of Section 3 of the Ordinance Commercial
Courts at District Level have to be constituted by the State Government in
consultation with the concerned High Court, and as per the Proviso no
Commercial Court shall be constituted for the territory over which the High
Court has ordinary original civil jurisdiction. As per Section 4 of the
Ordinance, in all High Courts, having ordinary civil jurisdiction, the Chief
Justice of the High Court has to constitute a Commercial Division
comprising a Single Judge for the purpose of exercising the jurisdiction and
powers conferred on it under the Ordinance. As per Section 5, Commercial
Appellate Division has to be constituted for the purpose of exercising the
jurisdiction and powers conferred on it by the Ordinance.
6. Since the Delhi High Court is vested with Ordinary Original Civil
Jurisdiction as per Section 5 of the Delhi High Court Act, 1966, in the Union
Territory of the National Capital Territory of Delhi, no Commercial Court
has to be constituted and Commercial Division has to be constituted, which
has been constituted by the Hon’ble Chief Justice of this Court.
7. In the decision dated November 30, 2015, in OMP (Comm.)
No.1/2015 Roger Shashoua & Ors. Vs. Mukesh Sharma & Ors. noting a
conflict between Section 10 and Section 15 of the Ordinance and therefore
harmonising the same, it was opined that to preserve the mandate of Section
15 of the Ordinance as also Section 10 thereof, pending Commercial
disputes of the specified value concerning arbitration matters are required to OMP (Comm.) No.16/2015 Page 6 of 19
be heard by the Commercial Division and not the Commercial Appellate
Division.
8. It is trite that the ratio of a judgment is with reference to the facts
thereof and the statutory provisions interpreted and not what may logically
flow out therefrom.
9. The said decision thus cannot be read to mean that by implication it
was held that Commercial disputes of the specified value filed after the
Ordinance was promulgated have been held to be decided by the
Commercial Appellate Division.
10. Sub-Clause (1) and sub-Clause 2 of Section 10 of the Ordinance
provides that all applications or appeals emanating from international and
domestic arbitrations respectively governed by the Arbitration and
Conciliation Act, 1996, that have been filed on the original side of the High
Court, shall be adjudicated by the Commercial Appellate Division
constituted in terms of Section 5 of the Ordinance.
11. Sub-Clause (1) of Section 5 of the Ordinance envisages that the Chief
Justice of the concerned High Court shall constitute Commercial Appellate
Division having one or more Division Benches for the purpose of exercising
the jurisdiction and powers conferred on it by the Ordinance.
12. The Arbitration and Conciliation Act, 1996 was promulgated on
August 16, 1996, and as per its preamble it is an Act to consolidate and
amend the law relating to domestic arbitration, international commercial
arbitration and enforcement of foreign arbitral awards as also to define the
law relating to conciliation and for matters connected therewith or incidental
thereto. OMP (Comm.) No.16/2015 Page 7 of 19
13. It needs hardly any emphasis, because a cursory reading of the two
sub-clauses of Section 10 of the Ordinance require, commercial disputes of a
specified value concerning arbitration matters to be heard and disposed of by
the Commercial Appellate Division where such Commercial Appellate
Division have been constituted in a High Court. This sets at naught Section
37 of the Arbitration and Conciliation Act, 1996, and renders it otiose.
14. Section 37 of the Arbitration and Conciliation Act, 1996 reads as
under:-
"CHAPTER IX
APPEALS
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 subsection
(3) of section 16; or
(b). granting or refusing to grant an 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."
15. Thus, as per Section 37 of the Arbitration and Conciliation Act, 1996,
a remedy of appeal is available and lies to a Court authorized by law to hear OMP (Comm.) No.16/2015 Page 8 of 19
appeals from original decrees of the Court passing the order; and concerning
this Court it would mean a Bench comprising two Judges.
16. Since Section 10 of the Ordinance contemplates that all applications
and appeals emanating from the Arbitration and Conciliation Act, 1996 shall
be dealt by Commercial Appellate Division alone, which would comprise of
Division Benches, the operation of the Ordinance, in such cases, would
leave no avenue for a litigant to exercise her right to appeal secured under
Section 37 of the Arbitration and Conciliation Act, 1996 pertaining to such
orders which are made appealable under said Section. An order passed
granting or refusing to grant any measure under Section 9 of the Act is an
appealable order by virtue of clause (a) of sub-Section 1 of Section 37 of the
Arbitration and Conciliation Act, 1996.
17. Thus, the case at hand presents a question of interpretation arising
from the conflict between the provisions contained in distinct enactments for
the reason the above captioned OMPs invoking remedy under Section 9 of
the Arbitration and Conciliation Act, 1996 have been filed in this Court after
October 23, 2015.
18. Since time immemorial it is a settled proposition of law that the right
to appeal is not merely a procedural adjunct but is a substantive legal right
created by a statute. The right to appeal is a vested right that accrues to the
litigant from the date the lis commences although it may be actually
exercised later when the adverse judgment is pronounced. The said right can
be taken away only by a subsequent enactment, if it so provides expressly or
by necessary intendment and not otherwise. The said position of law was
laid down beyond pale of controversy by a Constitution Bench of the OMP (Comm.) No.16/2015 Page 9 of 19
Supreme Court in the decision reported as AIR 1957 SC 540 Garikapati
Veeraya v. N. Subbiah Choudhry & Others. The Supreme Court followed
the celebrated decision of the Privy Council reported as [1905] A.C. 369 The
Colonial Sugar Refining Company Limited v. Irving, wherein, it was
observed that right to appeal was not a mere matter of procedure but
qualitatively different. Further, the Court cited with approval the luminous
observations of the Queen's Bench Division in the decision reported as
1884-12 QBD 224 Hough v. Windus, at p. 237 to the effect that a statute
should be interpreted, if possible, so as to respect vested right. Para 23 of
the decision in Gari Kapati Veeraya’s case reads as under:-
“23. From the decisions cited above, the following principles
clearly emerge :
(i) That the legal pursuit of a remedy, suit, appeal and
second appeal are really but steps in a series of
proceedings all connected by an intrinsic unity and are to
be regarded as one legal proceeding.
(ii) The right of appeal is not a mere matter of
procedure but is a substantive right.
(iii) The institution of the suit carries with it the
implication that all rights of appeal then in force are
preserved to the parties thereto till the rest of the career of
the suit.
(iv) The right of appeal is a vested right and such a
right to enter the superior court accrues to the litigant and
exists as on and from the date the lis commences and
although it may be actually exercised when the adverse
judgment is pronounced such right is to be governed by the
law prevailing at the date of the institution of the suit or OMP (Comm.) No.16/2015 Page 10 of 19
proceeding and not by the law that prevails at the date of
its decision or at the date of the filing of the appeal.
(v) This vested right of appeal can be taken away only
by a subsequent enactment, if it so provides expressly or by
necessary intendment and not otherwise.”
19. Confronted with similar situations in the past caused by inter-play of
provisions in different statutes, the Courts evolved suitable principles of
interpretation to tackle the legal conundrum created by oversight of
legislative draftsmen. It is in such circumstances, the principle of 'generalia
specialibus non derogant' (a general provision does not derogate a special
one) was developed.
20. Bennion on Statutory Interpretation, 5th Edition, Lexis Nexis
expounds upon the said principle in the following words [Pg. 306] :-
"Where the literal meaning of a general enactment covers a
situation for which specific provision is made by another
enactment contained in an earlier Act, it is presumed that the
situation was intended to continue to be dealt with by the
specific provision rather than the later general one.
Accordingly the earlier specific provision is not treated as
impliedly repealed."
21. Maxwell on The Interpretation of Statutes, 12th Edition by P. St. J.
Langan [Pg. 196], expresses the view on the subject as follows:-
"Now if anything be certain it is this," said the Earl of Selborne
L.C. in The Vera Cruz, "that where there are general words in
a later Act capable of reasonable and sensible application
without extending them to subjects specially dealt with by
earlier legislation, you are not to hold that earlier and special
legislation indirectly repealed, altered, or derogated from
merely by force of such general words, without any indication
of a particular intention to do so." In a later case, Viscount OMP (Comm.) No.16/2015 Page 11 of 19
Haldane said: "We are bound... to apply a rule of construction
which has been repeatedly laid down and is firmly established.
It is that wherever Parliament in an earlier statute has directed
its attention to an individual case and has made provision for it
unambiguously, there arises a presumption that if in a
subsequent statute the Legislature lays down a general
principle, that general principle is not to be taken as meant to
rip up what the Legislature had before provided for
individually, unless an intention to do so is specially declared.
A merely general rule is not enough, even though but its terms
it is stated so widely that it would, taken by itself, cover special
cases of the kind I have referred to."
22. The said rule has also been subject of discussion in Craies on Statute
Law, 7th Edition, Sweet and Maxwell- London, 1971, wherein, it has been
pertinently observed [Pg. 582] :-
"The rule applicable in such cases is well stated in a Canadian
case, Ontario, etc., Ry. v. Canadian Pacific Ry. (1887) 14
Ont.Rep. 432, 445, by Ferguson J., quoting Lord Westbury L.C.
in Re The Westminster Bridge Act, 1859 (1864) 33 L.J.Ch. 372,
376 viz. that where there are provisions in a special Act and a
general Act on the same subject which are inconsistent, if the
special Act gives a complete rule on the subject, the expression
of the rule acts as an exception of the subject-matter of the rule
from the general Act."
23. In the present case, it may be observed that the Arbitration and
Conciliation Act, 1996, is an Act passed by the Parliament with the avowed
object to consolidate and amend the law relating to domestic arbitration,
international commercial arbitration and enforcement of foreign arbitral
awards as also to define the law relating to conciliation and for matters
connected therewith or incidental thereto. The said legislation evidently
occupies the field as a special law which comprehensively and exclusively
deals with the various nuances involved in functioning of the arbitral mode OMP (Comm.) No.16/2015 Page 12 of 19
of adjudication of disputes in substitution of the ordinary courts of the land.
Per contra, the Ordinance provides for the constitution of Commercial
Division and Commercial Appellate Division in the High Courts exercising
ordinary original civil jurisdiction for adjudicating Commercial disputes of
specified value and for matters connected therewith or incidental thereto. A
perusal of the various provisions and the scheme of the said Ordinance
palpably evidences that the predominant object underlying its promulgation
is to establish a class of Courts dedicated for the adjudication of
Commercial disputes of the specified value. The connotation Commercial
dispute has been defined in the said Ordinance in a plenary manner to
include a wide spectrum of disputes.
24. At this juncture, it would be pertinent to refer to the definition of the
term ‘Commercial dispute' as comprised in the Ordinance. It reads:-
"2. (1) In this Ordinance, unless the context otherwise
requires,-
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transaction of merchants, bankers, financiers and
trade such as those relation to mercantile documents, including
enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft
equipment and helicopters, including sales, leasing and
financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including
tenders;
(vii) agreements relating to immovable property used
exclusively in trade or commerce;
(viii) franchising agreements;OMP (Comm.) No.16/2015 Page 13 of 19
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreements;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the
service industry including outsourcing services and financial
services;
(xiv) mercantile agency and mercantile usage;
(xv) partnership agreements;
(xvi) technology development agreements;
(xvii) intellectual property rights relating to registered and
unregistered trademarks, copyright, patent, design, domain
names, geographical indications and semiconductor integrated
circuits;
(xviii) agreements for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural
resources including electromagnetic spectrum;
(xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and
(xxii) such other commercial disputes as may be notified by the
Central Government.
Explanation.- A commercial dispute shall not cease to be a
commercial dispute merely because-
(a) it also involves action for recovery of immovable property
or for realisation of monies out of immovable property given as
security or involves any other relief pertaining to immovable
property;
(b) one of the contracting parties is the State or any of its
agencies or instrumentalities, or a private body carrying out
public functions."
25. The ambit of the Ordinance subsumes within its fold diverse issues
and also incidentally impinges upon the field of arbitral disputes by enacting
certain provisions, such as Section 10 that have been discussed by us earlier.OMP (Comm.) No.16/2015 Page 14 of 19
26. Merely because the Ordinance, which is indisputably later in time,
happens to trench upon the subject of arbitral disputes does not lead to the
inescapable conclusion that the same impliedly repeals or derogates the
conflicting provisions contained in the Arbitration and Conciliation Act,
1996 concerning the right of appeal vested by Section 37 of the said Act.
27. In the decision reported as [1922] 1 A.C. 284 Eileen Louise Nicolle v.
John Winter Nicolle, the Judicial Committee of the Privy Council observed:-
"It is no doubt a sound principle of all jurisprudence that a
prior particular law is not easily to be held to be abrogated by
a posterior law, expressed in general terms and by the apparent
generality of its language applicable to and covering a number
of cases of which the particular law is but one. This as a matter
of jurisprudence, as understood in England, has been laid down
in a great number of cases, whether the prior law be an express
statute as in Hawkins v. Gathercole; Seward v. Vera Cruz; or
be the underlying common or customary law of the country..."
28. Even earlier, similar views have been expressed in the decision
reported as [1898] A.C. 748 Barker v. Edger & Others, wherein it was
observed by Lord Hobhouse that when the Legislature has given its attention
to a separate subject, and made provision for it, the presumption is that a
subsequent general enactment is not intended to interfere with the special
provision unless it manifest that intention very clearly.
29. In the decision reported as (1978) 4 SCC 16 The U.P. State Electricity
Board & Anr. v. Hari Shankar Jain & Ors., the Supreme Court observed as
under:-
"9. The reason for the rule that a general provision should yield
to a specific provision is this: In passing a special Act,
Parliament devotes its entire consideration to a particular
subject. When a general Act is subsequently passed, it is logical OMP (Comm.) No.16/2015 Page 15 of 19
to presume that Parliament has not repealed or modified the
former Special Act unless it appears that the Special Act again
received consideration from Parliament. Vide London and
Blackwall Railway v. Limehouse District Board of Works [26
LJ Ch 164 : 69 ER 1048] , and Thorpe v. Adams [(1871) LR 6
CP 125] . In J&K. Cotton Spinning and Weaving Mills Co.
Ltd. v. State of U.P. [AIR 1961 SC 1170 : (1961) 3 SCR 185 :
(1961) 1 LLJ 540 : (1960-61) 19 FJR 43] , this Court observed
(at p. 1174):
“The rule that general provisions should yield to specific
provisions is not an arbitrary principle made by lawyers
and Judges but springs from the common understanding
of men and women that when the same person gives two
directions, one covering a large number of matters in
general and another to only some of them his intention is
that these latter directions should prevail as regards
these while as regards all the rest the earlier direction
should have effect.”
30. In the decision reported as (1998) 3 SCC 495 A.B. Krishna & Ors. v.
State of Karnataka & Ors., while placing reliance on treatises of eminent
authors and the celebrated pronouncement in Vera Cruz case, the Supreme
Court repelled the argument regarding implied supersession. The Court also
reiterated the views expressed earlier in its decision reported as AIR 1966
SC 1931 Maharaja Pratap Singh Bahadur v. Thakur Manmohan Dey,
wherein, it had been held that earlier special law cannot be abrogated by
mere implication.
31. Further, in its decision reported as (1974) 2 SCC 323 as Vasudev
Ramchandra Shelat v. Pranlal Jayanand Thakar & Ors., the Supreme Court
held:-
"... But, this certainly does not mean that a provision of one Act
could be nullified by any provision of the other Act. It means OMP (Comm.) No.16/2015 Page 16 of 19
that the provisions of the two Acts should be read consistently
with each other so far as it is reasonably possible to do so. We
think that this end can be best achieved here by examining the
objects and the subject-matter of each enactment and by
viewing each relevant provision as a limb of an integrated
whole meant to serve the underlying purposes. In this way, their
separable spheres of operation will be clarified so as to avoid
possibilities of conflict between them or any unnecessary
overflow of what really appertains to one field into another."
(Emphasis supplied)
32. We would be failing not to bring to fore certain provisions integrally
enmeshed in the Ordinance itself that are plainly repugnant to the hypothesis
of implied repeal of Section 37 of the Arbitration and Conciliation Act, 1996
owing to the introduction of Section 10 of the Ordinance.
33. Section 13 of the Ordinance reads:-
"CHAPTER IV
APPEALS
13. (1) Any person aggrieved by the decision of the Commercial
Court or Commercial Division of a High Court may appeal to
the Commercial Appellate Division of that High Court within a
period of sixty days from the date of judgment or order, as the
case may be:
Provided that an appeal shall lie from such orders passed by a
Commercial Division or a Commercial Court that are
specifically enumerated under Order XLIII of the Code of Civil
Procedure, 1908 as amended by this Ordinance and section 37
of the Arbitration and Conciliation Act, 1996." (Emphasis
supplied)
34. A bare perusal of the above highlighted proviso to sub-Section 1 of
Section 13 of the Ordinance strongly rebuts any speculation arising from
Section 10 of the Ordinance with regard to the intent harboured by the law OMP (Comm.) No.16/2015 Page 17 of 19
makers to even impliedly repeal Section 37 of the Arbitration and
Conciliation Act, 1996.
35. It would also be profitable to take note of sub-Section 1 of Section 15
of the Ordinance which reads as under:-
" CHAPTER V
TRANSFER OF PENDING SUITS
15. (1) All suits and applications, including applications under
the Arbitration and Conciliation Act, 1996, relating to a
commercial dispute of Specified Value pending in a High Court
where a Commercial Division has been constituted, shall be
transferred to the Commercial Division."
36. A simple analysis of the above extracted provision lends support to
the conclusion that all applications under the Arbitration and Conciliation
Act, 1996 relating to a Commercial dispute of the specified value has to be
adjudicated by a Commercial Division and not the Commercial Appellate
Division. The said provision, unlike Section 10 of the Ordinance, does not
mandate adjudication of applications under the Arbitration and Conciliation
Act, 1996 by Commercial Appellate Division and thus, the valuable remedy
of appeal as envisaged under Section 37 of the Arbitration and Conciliation
Act, 1996 does not stand immutably foreclosed.
37. We may also take cognizance of amendments effected in the
Arbitration and Conciliation Act, 1996 vide 'The Arbitration and
Conciliation (Amendment) Ordinance, 2015' promulgated on October 23,
2015. Section 2 of the said Amendment Ordinance has retained Section 37
of the Arbitration and Conciliation Act, making minor amendments as
under:-OMP (Comm.) No.16/2015 Page 18 of 19
"20. In Section 37 of the principal Act, in sub-section (1), for
clauses (a) and (b), the following clauses shall be substituted,
namely:-
(a) refusing to refer the parties to arbitration under section 8;
(b) granting or refusing to grant any measure under section 9;
(c) setting aside or refusing to set aside an arbitral award
under section 34."
38. The inescapable conclusion is that the law makers consciously chose
to retain Section 37 of the Arbitration and Conciliation Act, 1996 despite
affecting numerous amendments in the said Act recently goes a long way to
negate the hypothesis of its implied repeal.
39. Furthermore, there exists a strong presumption against ouster of
jurisdiction of superior Courts.
40. It would be pertinent to highlight the luminous observations in this
regard contained in Maxwell on The Interpretation of Statutes, 12th Edition
by P. St. J. Langan [Pg. 153]:-
"A STRONG leaning exists against construing a statute so as to
oust or restrict the jurisdiction of the superior Courts... "the
well-known rule that a statute should not be construed as taking
away the jurisdiction of the Courts in the absence of clear and
unambiguous language to that effect" now rests on a reluctance
to disturb the established state of the law or to deny to the
subject access to the seat of justice..."Any one bred in the
tradition of the law," said Viscount Simonds, "is likely to regard
with little sympathy legislative provisions for ousting the
jurisdiction of the Court, whether in order that the subject may
be deprived altogether of remedy or in order that his grievance
may be remitted to some other tribunal."
41. Thus, we have no hesitation in concluding that the Ordinance can by
no stretch of imagination be construed as a special enactment concerning the
subject matter of arbitral disputes. Rather the said Ordinance is a law giving
birth to a class of ordinary Courts of the land exclusively reserved for the
adjudication of commercial disputes of the specified value. The fact that
incidental reference to arbitral disputes has been made therein does not
clothe the said Ordinance with the status of a special law qua arbitration.
This would require sub-Section 1 and sub-Section 2 of Section 10 of the
Ordinance to be read down and the words ‘Commercial Appellate Division’
to be read as ‘Commercial Division’ concerning applications or petitions
against which an appeal lies under Section 37 of the Arbitration and
Conciliation Act, 1996.
42. The above captioned OMPs would now be placed for consideration
before the Commercial Division as per Roster on December 16, 2015 and as
directed hereinabove the respondent is permitted to file a reply to the
petition within further three days from today.
43. Copy of this decision be given dasti to learned Additional Solicitor
General of India.
(PRADEEP NANDRAJOG)
JUDGE
(MUKTA GUPTA)
JUDGE
DECEMBER 10, 2015
No comments:
Post a Comment