w w w . L a w y e r S e r v i c e s . i n



Municipal Corporation of Gr.Mumbai v/s Joint Venture Angerlehner Michell Bau GMBH


Company & Directors' Information:- B B VENTURE PRIVATE LIMITED [Active] CIN = U52209CT2008PTC020645

Company & Directors' Information:- S A R VENTURE PRIVATE LIMITED [Active] CIN = U70102DL2015PTC275704

Company & Directors' Information:- N J VENTURE PRIVATE LIMITED [Strike Off] CIN = U70101MH2008PTC186387

    ARBITRATION PETITION NO.340 OF 2007 WITH ARBITRATION PETITION NO.341 OF 2007 WITH ARBITRATION PETITION (L) NOS.590, 591, 592 AND 593 OF 2007 WITH ARBITRATION PETITION NOS.2 AND 310 OF 2007

    Decided On, 19 June 2008

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE MR. JUSTICE D.G. KARNIK

    Mr.R.D. Dhanuka with Mr.H.C. Pimple, Mr.Ramchandra Yadav and Mr.Shirsekar i/b Mr. S.H. Ujjainwalla for the petitioner in A.P. (L) No.590/07 and for respondents in A.P. (L) No.593/07. Mr.Zal Andhyarujina with Mr.Rajeev Talasikar i/b Mr. Javed Gaya for respondents in A.P. (L) No.590/07 and for petitioner in A.P. (L) No.593/07. Mr.Uday Shankar Samudrala for the petitioner in A.P. No.2/07. Mr.Suresh Kumar for respondents in A.P. No.2/07. Mr.Shyam Mehta i/b J. Sagar Associates for the petitioner in A.P. No.310/07. Mr.Nitesh Bhutekar i/b Mr. Uday Warunjikar for respondents in A.P. No.310/07.



Judgment Text

ORAL ORDER


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 Article which specifically deals with the subject matter of setting aside or modifying any award either at the original stage by filling an application or a petition in that regard, and also at the appellate stage by presenting memorandum of appeal, would naturally be applicable to all such proceedings."


Plain reading of these observations show that the Division Bench has held that in respect of an application filed under section 34 of the Arbitration Act, 1996, court fee would be payable as prescribed under Article 1 of Schedule I to the Bombay Court Fees Act.


4.Learned counsel for the petitioners, however, submitted that the provisions of section 8 of the General Clauses Act were not brought to the notice of the Division Bench and have not been considered by the Division Bench and, therefore, the decision is per incuriam. He further submitted that the observations made in paras 7 and 10 of the judgment of the Division Bench that an application under section 34 of the Arbitration Act, 1996 would attract court fee under Article 1 of Schedule-I to the Bombay Court Fees Act were not the ratio decidendi but were in the nature of obiter dicta. The issue before the Division Bench was what would be the appropriate fee to be paid on an appeal under section 37 of the Arbitration Act and the issue of fee payable on an application under section 34 of the Arbitration Act, 1996 was not raised before the Division Bench. Therefore, any observations made by the Division Bench relating to payment of court fee on an application under section 34 of the Arbitration Act, 1996 must be held to be obiter dicta not binding.


5.The Division Bench has held that on an appeal under section 37 of the Arbitration Act, the court fee is payable under Article 1 of Schedule I to the Bombay Court Fees Act as the case was covered by Article 3 of Schedule I. It would therefore be appropriate to refer to the provisions of Articles 1 and 3 of Schedule I to the Bombay Court Fees Act, which reads thus:-


SCHEDULE I


Ad valorem fees

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Number Proper fee

(1) (2) (3)

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1.Plaint or memorandum When the amount or Two hundred

of appeal (not other- value of the subject rupees

wise provided for in of the subject matter

in this Act) or, of in dispute does not

cross objection exceed one thousand

presented to any Civil rupees.

or Revenue Court.


When such amount or Twelve rupees

value exceeds one

thousand rupees, for

every one hundred

rupees, or part

thereof, in excess of

one thousand rupees,

upto five thousand

rupees.


When such amount or Fifteen rupees

value exceeds five

thousand rupees, for

every hundred rupees,

or part thereof, in

excess of five

thousand rupees, upto

ten thousand rupees.


When such amount or Seventy-five

value exceeds ten rupees

thousand rupees, for

every five hundred

rupees or part thereof,

in excess of ten

thousand rupees, upto

twenty thousand

rupees.


When such amount or One hundred

value exceeds twenty rupees

thousand rupees, for

every one thousand

rupees or part there-

of, in excess of

twenty thousand rupees,

upto thirty thousand

rupees.


When such amount or One hundred

value exceeds thirty rupees

thousand rupees, for

every two thousand

rupees or part there-

of, in excess of

thirty thousand rupees,

upto fifty thousand

rupees.


When such amount or One hundred

value exceeds fifty and fifty

thousand rupees, for rupees

every five thousand

rupees or part there-

of, in excess of

fifty thousand rupees,

upto one lakh of

rupees.


When such amount or Two hundred

value exceeds one rupees

lakh of rupees, for

every ten thousand

rupees or part there-

of, in excess of

one lakh of rupees,

upto eleven lakh of

rupees.


When such amount or One thousand

value exceeds eleven and two

lakh of rupees, for hundred

every one lakh of rupees

rupees or part there-

of, in excess of

eleven lakh of rupees;


Provided that the

maximum fee leviable

on the plaint or

memorandum of appeal

or of cross objection

shall be three lakh

of rupees.


3. Plaint, application or ..... A fee on the amount

petition (including or value of the

memorandum of appeal), award sought to be

to set aside or modify set aside or modified

any award otherwise according to the

than under the scale prescribed

Arbitration Act, 1940. under Article 1.

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The court fee payable on a plaint or an application or petition (including memorandum of appeal) to set aside or modify any award otherwise than an award under the Arbitration Act, 1940 attracts court fee as prescribed under Article 1 which prescribes fee on the basis of amount or value of the subject matter. Article 3, however, exempts an application to set aside or modify an award under the Arbitration Act, 1940 from payment of fee as prescribed under Article 1. The Division Bench has held that Article 3 refers to the applications to set aside or modify an award under the Arbitration Act, 1940 and does not refer to Arbitration Act, 1996 and, therefore, an application for setting aside an award under section 34 of the Arbitration Act, 1996 is not excluded from operation of Article 3.


6.Learned counsel for the petitioners however submitted that the provisions of section 8 of the General Clauses Act were not brought to the notice of the Division Bench and had the provision been brought to its notice and considered by it, the Division Bench would not have held that an application under section 34 of the Arbitration Act, 1996 was not excluded under Article 3 of the Bombay Court Fees Act.


7.Sub-section of section 8 of the General Clauses Act reads thus:-


"8. Construction of references to repealed enactments enactments.- (1) Where this Act or any Central Act or Regulation made after the commencement of this Act, repeals and re-enacts with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted.


(2) Where before the fifteenth day of August, 1947, any Act of Parliament of the United Kingdom repealed and re-enacted, with or without modification, any provision of a former enactment, then references in any Central Act or in any Regulation or instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted."


8.In State of Punjab v. Sukh Deb Sarup Gupta -AIR 1970 SC 1641, the Supreme Court has held that the word "enactment" appearing in section 8 of the General Clauses Act would include any Act or a provision contained in any Act passed by the Union Parliament or even by the State Legislature. Section 8 of the General Clauses Act would therefore apply even in respect of Article 3 to the Bombay Court Fees Act.


9.Section 8(1) of the General Clauses Act provides that where any Central Act repeals and re-enacts with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted. Counsel for the petitioners submitted that the Arbitration Act, 1940 was repealed and re-enacted by the Arbitration Act, 1996 and therefore reference to the Arbitration Act, 1940 in Article 3 must be construed as a reference to the Arbitration Act, 1996 in view of section 8 of the General Clauses Act.


10.Counsel for the respondents submitted that the Arbitration Act, 1996 firstly does not repeal the Arbitration Act, 1940 in toto and secondly, in any event, the Arbitration Act, 1996 is not a re-enactment of the Arbitration Act, 1940. He submitted that though section 85(1) of the Arbitration Act, 1996 expressly repeals the Arbitration Act, 1940, sub-section (2) saves the Arbitration Act, 1940 to a certain extent. Clause (a) of sub-section 2 that the provisions of the Arbitration Act, 1940 shall continue to apply in relation to the arbitration proceedings which commenced before the Arbitration Act, 1996 came into force unless otherwise agreed by the parties. He, therefore, submitted that the Arbitration Act, 1940 is not repealed. In my view, the arguments cannot be accepted. Sub-section (1) of section 85 of the Arbitration Act, 1996 expressly repeals the Arbitration Act, 1940. It only saves the pending arbitration proceedings from the operation of the new Act. Such saving is also not absolute but the parties are at liberty to agree that the Arbitration Act, 1996 would be applicable even in respect of the pending arbitration proceedings. It is only where the parties do not agree for the continuation of the previously instituted proceedings in accordance with the provisions of the Arbitration Act, 1996 that a limited provision has been made for saving the existing pending arbitration proceedings. In my view sub-section (2) of section 85 of the Arbitration Act, 1996 is only a transitory provision and merely because the pending arbitration proceedings are saved from the application of the Arbitration Act, 1996, it cannot be said that the Arbitration Act, 1940 does not repeal by the Arbitration Act, 1996.


11.Buttressing his second contention that the Arbitration Act, 1996 is not a re-enactment of the Arbitration Act, 1940, learned counsel for the respondents invited my attention to the provisions contained in Part II and Part III of the Arbitration Act, 1996. He submitted that Part II of the Arbitration Act, 1996 contains a provision relating to foreign awards including New York Convention Awards and Geneva Convention Awards. Counsel submitted that the provisions contained in Part II and Part III are totally new provisions and were not contained in the Arbitration Act, 1940 and, therefore, the Arbitration Act, 1996 cannot be construed as a repeal and re-enactment of the Arbitration Act, 1940 so as to attract the provisions of section 8 of the General Clauses Act. I am unable to agree. In Ganjam Trading Co. Pvt. Ltd. v. Panther Investrade Limited - 2003 (1) Bom.C.R. 330, a Single Judge of this Court held that the Arbitration Act, 1996 repeals and re-enacts the Arbitration Act, 1940. I am in agreement with the view taken therein. The Parliament is competent to make laws in relation to any and all subjects contained in List-I of the Seventh Schedule to the Constitution of India. There is no restriction that on the power of the Parliament to make laws relating to more than one subjects in one enactment. In other words, in one enactment, the Parliament make laws relating to two or even multiple subjects. The title to the Act is merely by way of reference to the Act and it does not govern the contents of the Act or interpretation thereof.


For example, while making a provision for taxation of an income, the Parliament may make a provision for taxation of expenditure in the very enactment, if it is otherwise competent to pass law governing both the subjects. Similarly, while enacting the Arbitration Act, 1996, the Parliament could make provisions relating to different matters and accordingly has made provisions not only relating to domestic arbitration but also in relation to foreign awards and also relating to conciliation. There is nothing illegal about it. Part I of the Arbitration Act, 1996 contains provisions which re-enact the provisions of the Arbitration Act, 1940 with several modifications. Part II of the Arbitration Act, 1996 contains the provisions which were previously contained in the Foreign Awards (Recognition and Enforcement) Act, 1961. It is worthy to note that the Arbitration Act, 1996 not only repeals the Arbitration Act, 1940 but also repeals the Arbitration (Protocol and Convention) Act, 1937 and Foreign Awards (Recognition and Enforcement) Act, 1961. Merely because the Arbitration Act, 1996 re-enacts the provisions relating to two or three Acts, which were simultaneously repealed, it cannot be said that the Arbitration Act, 1996 is not a repeal and re-enacted the Arbitration Act, 1940. At best, it can be said that it repeals three Acts and re-enacts them in a single Act.


12.The argument of the learned counsel for the petitioners that the provisions of section 8 of the General Clauses Act have a bearing to the interpretation of Article 3 of the Bombay Court Fees Act cannot be brushed aside lightly. Since the provisions of section 8 of the General Clauses Act were not brought to the notice of the Division Bench, it appears to me that the judgment of the Division Bench requires reconsideration.


13.At this stage, a reference may be made to the decision of the Supreme Court in Municipal Corporation of Delhi v. Gurnam Kaur - 1989 (1) SCC 101, to which my attention was invited by the counsel for the petitioners. In para 11 of the judgment, the Supreme Court has observed:-


"11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who passed the order in Jamna Das case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the court on the question whether or not any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a pavement squatter. Professor P.J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn. explains the concept of sub silentio at p.153 in these words:


"A decision passes sub silentio, in the technical

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sense that has come to be attached to that phrase when the particular point of law involved in the decision is not perceived by the court or present to its mind. The court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio." 14.Recently, in Laxminarayan Vishwanath Arya v. State of Maharashtra - 2007 (2) Bom.C.R. 383, a Full Bench of this Court in para 7 of its judgment has observed:- "7. .... An order which is not in uniformity with the provisions of law or is beyond the scope of law would be per se in curiam as the decision given in ignorance in terms of the statutes or rule having force of statute or being not in conformity with the statutory provisions would not be a binding precedent as it is said to be given through inadvertence." 15.Be that as it may, in the facts and circumstances of this case, I consider it appropriate to exercise power conferred upon me under Rule 28 of the Bombay High Court (Original Side) Rules, 1980 which reads thus:- "28. If it shall appear to any Judge, either on the application of a party or otherwise that a suit or matter can be more advantageously heard by a bench of two or more Judges, he may report to that effect to the Chief Justice, who shall make such thereon as he shall think fit." Since the Division Bench of this Court has taken a view that even an application under section 34 of the Arbitration Act, 1996 could attract fee under Article 3 of Schedule I to the Bombay Court Fees Act, it would be appropriate that this matter be decided by a Bench of two or more Judges as the Hon'ble the Chief Justice may think fit. Accordingly, the papers may be placed before the Hon'ble the Chief Justice for appropriate orders.
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