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High Court of Judicature at Bombay
R.D. DHANUKA, J.
Marwadi Shares & Finance Ltd.
Versus
Miral Kanaksinh Thakore & Another
Arbitration Petition Nos. 485 of 2013 & 486 of 2013
Decided On: 07-01-2014
ARBITRATION - AMENDMENT OF BYE-LAWS AND REGULATIONS - RETROSPECTIVE EFFECT - VESTED RIGHTS - LIMITATION - CONDONATION OF DELAY - SECTION 6 OF THE GENERAL CLAUSES ACT, 1897 - APPLICABILITY.
Fact of the Case:
Petitioner challenged the awards passed by the appellate bench dismissing the appeals filed by the petitioner on the ground of limitation. The petitioner had filed an application for correction of the award under section 33 of the Arbitration and Conciliation Act, 1996, which was allowed by the arbitrator. The petitioner filed an appeal before the appellate bench along with an application for condonation of delay, which was rejected. The petitioner filed the present petitions under section 34 of the Arbitration and Conciliation Act, 1996, impugning the awards passed by the appellate bench.
Finding of the Court:
The court held that the amendments to the bye-laws and regulations of the Bombay Stock Exchange, which deleted the provisions of the Limitation Act, 1963, and took away the power of the appellate bench to condone delay, did not apply retrospectively. The court held that the petitioner had a vested right to file an appeal and to seek condonation of delay, which could not be taken away by the amendments. The court also held that the appellate bench had failed to exercise its power to condone the delay once the petitioner had shown sufficient cause for delay in filing the appeal by 3 days.
Issues: 1. Whether the amendments to the bye-laws and regulations of the Bombay Stock Exchange, which deleted the provisions of the Limitation Act, 1963, and took away the power of the appellate bench to condone delay, applied retrospectively? 2. Whether the petitioner had a vested right to file an appeal and to seek condonation of delay, which could not be taken away by the amendments?
Ratio Decidendi: 1. The court held that the amendments to the bye-laws and regulations of the Bombay Stock Exchange, which deleted the provisions of the Limitation Act, 1963, and took away the power of the appellate bench to condone delay, did not apply retrospectively. The court relied on the principle that a vested right cannot be taken away by a subsequent enactment unless it is shown clearly intended by the amendment to make it applicable with retrospective effect. 2. The court held that the petitioner had a vested right to file an appeal and to seek condonation of delay, which could not be taken away by the amendments. The court relied on the judgment of the Supreme Court in Garikapati Veeraya v. N. Subbiah Choudhry, AIR 1957 Supreme Court 540, which held that the right of appeal is a substantive right and cannot be taken away by a subsequent enactment unless it is so provided expressly or by necessary intendment.
Final Decision: The court allowed the petitions and set aside the awards passed by the appellate bench. The appeals filed by the petitioner along with the application for condonation of delay were restored to file. The appellate bench was directed to hear the application for condonation of delay by exercising powers of condonation of delay on its own merits expeditiously.
1. By these two petitions, filed under section 34 of the Arbitration and Conciliation Act, 1996 the petitioner seeks to impugn the awards dated 1.11.2011 in both the matters dismissing the appeals filed by the petitioner on the ground of limitation. By consent of the parties, both the matters were heard together and are disposed of by a common Judgment.
2. Since facts of both the matters are identical, I am summarizing the facts of Arbitration Petition No.485 of 2013.
3. The Petitioner is a member of National Stock Exchange of India and Bombay Stock Exchange Ltd. The respondent No.1 was the constituent of the petitioner. Disputes arose between the parties in respect of some of the transactions. Since the impugned award is challenged only on the ground of limitation, this Court need not summarize all the facts considering the merits of the claim.
4. On 1.11.2011 the learned Arbitrator appointed under the rules, bye laws and regulations of the Bombay Stock Exchange Ltd rendered an award in the claims filed by the petitioner herein against the respondent no.1 thereby rejecting the claims. The petitioner received copy of the said award on 4.11.2011. On 12.11.2011 the petitioner made an application under section 33 of the Arbitration and Conciliation Act, 1996 before the learned Arbitrator inter alia praying for corrections in the said award. The said application was received by the Stock Exchange on 14.11.2011. On 5.3.3012 the learned Arbitrator found that there were some inadvertent errors crept in the said award which were capable of correction under section 33 of the Arbitration and Conciliation Act, 1996 and passed an order on 5.3.2012 allowing the said application partly and also by exercising the jurisdiction under bye-law No.258 (1) (a) of the Bombay? Stock Exchange bye laws and directed the office to correct the award to the extent mentioned therein and granted the prayers of the petitioner. A copy of the said correct award was received by the petitioner on 10.3.2012. On 12.4.2012, the petitioner filed an appeal before the appellate bench under the rules and bye laws and regulations of Bombay Stock Exchange Ltd. The petitioner also prayed for condonation of delay of 3 days in filing the appeal. By an order dated 15.11.2012 the appellate bench of Bombay Stock Exchange Ltd rejected the said appeal on the ground that there was a delay of 3 days in filing the said appeal and on the ground that SEBI circular and subsequent amendments by Bombay Stock Exchange to the bye-laws and regulations stating clearly that the Appeal bench of the concerned Regional Arbitration centre cannot take cognisance of any appeal unless the same had been received by the concerned Regional centre within a period of thirty days and therefore application for condonation of delay was not maintainable and the appeal therefore stood rejected.
5. The petitioner filed this petition under section 34 of the Arbitration and Conciliation Act, 1996 impugning the said decision of the appellate bench and filed this petition on 27.2.2013 that is within three months from the date of receipt of the award of the appellate bench.
6. For the purpose of appreciating the arguments advanced by both the sides, it will be necessary to refer to some of the bye laws and regulations of the Bombay Stock Exchange unamended and amended which provides for arbitration and limitations.
7. Prior to the amendment, Bye law 252 (1) (b) provided for time to make a claim against a member who was declared a defaulter. Bye law No.252 (2) provided that the Arbitrator shall not take cognisance of any claim/complaint/difference or dispute unless the same had been received by the Exchange within six months from the date of transaction or from the date on which the client claimed to have given instructions/order to buy or sell or recovery or from the date of which the client claimed to have paid or given a security whichever was earlier. Bye law 252 (3) provided that subject to clauses 1 (a) to
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