IN THE HIGH COURT OF JUDICATURE AT BOMBAY
D.G. KARNIK, J.
The Municipal Corporation of Gr.Mumbai – Petitioner
Versus
Joint Venture Angerlehner Michell Bau GMBH - Respondent
ARBITRATION PETITION NO. 340 of 2007
DECIDED ON : 19-06-2008
Arbitration Act, 1996 - Court Fees - Article 3, Schedule I - Summary
Fact of the Case:
The court addressed the issue of proper court fee payable under the Bombay Court Fees Act, 1959 for petitions arising under section 34 of the Arbitration and Conciliation Act, 1996. The dispute arose from the differing interpretations of the applicable court fee, either ad valorem or fixed, by the office and the counsel for the respondents.
Finding of the Court:
The court appreciated the valuable assistance rendered by the counsel and considered the decision of the Division Bench in Maharashtra Industries Development Corporation v. Govardani Constructions Company. It found that the Division Bench held that court fee payable on an application filed under section 34 of the Arbitration Act, 1996 would be as prescribed under Article 1 of Schedule I to the Bombay Court Fees Act.
Issues: The main issue was whether the court fee payable on an application under section 34 of the Arbitration Act, 1996 should be ad valorem or fixed, and whether the provisions of section 8 of the General Clauses Act were considered by the Division Bench.
Ratio Decidendi: The court analyzed the applicability of section 8 of the General Clauses Act and the interpretation of Article 3 of the Bombay Court Fees Act in relation to the repeal and re-enactment of the Arbitration Act, 1940 by the Arbitration Act, 1996.
Final Decision: The court decided to exercise power conferred under Rule 28 of the Bombay High Court (Original Side) Rules, 1980 and referred the matter to a Bench of two or more Judges for appropriate orders, considering the differing interpretations and the need for reconsideration.
1. In all these petitions arising under section 34 of the Arbitration and Conciliation Act, 1996 (for short "the Arbitration Act, 1996"), an objection has been raised either by the office or by the learned counsel appearing for the respondents that proper court fee has not been paid. According to the office as also the counsel for the respondents, proper court fee payable would be advalorem as provided under Article 3 read with Article 1 of the Bombay Court Fees Act, 1959 on the value of the subject matter of the award. On the other hand, according to the counsel for the applicants, the court fee payable would be a fixed court fee as provided under Class-1(f) of Schedule II of the Bombay Court Fees Act.
2. At the outset, I must record my appreciation of the valuable assistance rendered by the counsel and in particular by Mr.Shyam Mehta, Mr.Andhyarujina and Mr.Dhanuka who presented their views with precision and clarity. Learned counsel submitted that the matter is covered by a decision of the Division Bench of this Court rendered in Maharashtra Industries Development Corporation v. Govardani Constructions Company - Appeal No.903 of 2006 decided on 7th March 2007 (Coram: R.M.S. Khandeparkar & Dr.D.Y. Chandrachud, JJ.) but may require reconsideration as provisions of section 8 of the General Clauses Act were not brought to its notice and also because the issue of court fee payable on an application under section 34 of the Arbitration Act was not specifically before the Division Bench and therefore the observations made therein were in the nature of "obiter dicta" and not the "ratio decidendi".
3. In M.I.D.C. v. Govardani Construction (supra), the relevant facts were that an award passed by an Arbitral Tribunal was challenged by the appellant before a Single Judge of this Court by an application under section 34 of the Arbitration Act, 1996. On dismissal of the application under section 34, the appellant filed an appeal under section 37 of the Arbitration Act, 1996. The appellant paid the fixed fee of Rs.25/- prescribed under clause (c) of Article 13 of Schedule II of the Bombay Court Fees Act. An objection was raised on behalf of the respondents that ad-valorem court fee was payable on the amount or value of the award under Article 3 read with Article 1 of Schedule I to the Bombay Court Fees Act. Dealing with the said objection, the Division Bench observed:-
"7. Plain reading of the above provisions of law in the said Act would therefore disclose that any award which is not passed or declared under the Arbitration Act, 1940 if challenged by way of petition or appeal with an intention to get it set aside or modified, the petitioner or the appellant will have to pay the court fee to be calculated on the amount or value of the award sought to be set aside or modified according to the scale prescribed under Article 1 of Schedule I of the said Act."
The Division Bench further observed:-
"10. It was also sought to be contended that in the Article 3 of Schedule I of the said Act, the Legislature in its wisdom has excluded the award passed under Arbitration Act, 1940 and the same principle should apply in case of award passed under the Arbitration an Conciliation Act, 1996. We are afraid, the contention cannot be accepted for the simple reason that the Arbitration and Conciliation Act came into force in the year 1996, specifically w.e.f. 22nd August, 1996. Prior to that, the Arbitration and Conciliation Ordinance, 1996 was promulgated on 16th January 1996. The Arbitration and Conciliation Act, 1996 replaced the said Ordinance and the Arbitration Act, 1940. Yet no amendment has been made since 1996 till this date to Article 3 of Schedule I of the said Act which clearly restricts the exclusion from its applicability the award under the Arbitration Act, 1940. In other words, the award passed under the Arbitration and Conciliation Act, 1996 is not excluded under Article 3 of Schedule I and for the same reason, the said Art
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