R. K. Construction India Pvt. Ltd. , through its Chairman-cum-Managing Director v. Hindustan Steel Works Construction Ltd.
2022-09-20
RAJESH BINDAL, RAJNISH KUMAR
body2022
DigiLaw.ai
ORDER : 1. Vide order dated August 24, 2022, the learned Single Judge has referred the following questions to be answered by Larger Bench : (i) Whether amended Section 11, as per Amendment Act, 2019 has come into force keeping in view the notification dated 30.08.2019 issued by the Ministry of Law and Justice (Department of Legal Affairs), New Delhi? (ii) If the answer of question no. (i) is in affirmative, whether the appointment of arbitrator is to be made by the arbitral institution or in absence thereof, whether a panel of arbitrators has been made by the Hon'ble Chief Justice for discharging the functions and duties of arbitral institution? (iii) In case the panel of arbitrators has not been made, whether the High Court can appoint an arbitrator? 2. This is how the matter has been placed before this Court. The main issue which requires consideration is question no. (i) as the rest two questions are consequential. 3. Mr. Mathur, learned Senior Counsel appearing for the applicant, submitted that certain amendments were carried out in the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'Principal Act') vide Arbitration and Conciliation (Amendment) Act, 2019 (Act No. 33 of 2019) (hereinafter referred to as 2019 Amendment Act'). The 2019 Amendment Act contains 16 Sections. Section 1(2) of the 2019 Amendment Act provides that save as otherwise provided in this Act, it shall come into force on such date as the Central Government by notification in the Official Gazette appoints and different dates may be appointed for different provisions of this Act. Amendment to Section 11 of the Principal Act is proposed in terms of Section 3 of the 2019 Amendment Act. Notification No. S.O. 3154 (E) dated August 30, 2019 has been issued by Ministry of Law and Justice in exercise of powers conferred under Section 1(2) of the 2019 Amendment Act vide which August 30, 2019 has been fixed as the date for coming into force of Sections 1, 4 to 9, 11 to 13 and 15 of the 2019 Amendment Act. Submission is that Section 3 of the 2019 Amendment Act having not been enforced as yet, the reference to the Larger Bench was not called for. He further referred to the judgment of Hon'ble the Supreme Court in Bharat Sanchar Nigam Ltd. Vs.
Submission is that Section 3 of the 2019 Amendment Act having not been enforced as yet, the reference to the Larger Bench was not called for. He further referred to the judgment of Hon'ble the Supreme Court in Bharat Sanchar Nigam Ltd. Vs. M/s Nortel Networks India Pvt. Ltd., AIR 2021 SC 2849 wherein also this fact has been noticed that amendment to Section 11 of the Principal Act has not yet been notified, hence, Section 11(6A) of the Principal Act still remains in force. 4. Learned counsel for the respondents, when confronted, fairly admitted that position of law is same as submitted by learned Senior Counsel appearing for the applicant. He further submitted that the entire confusion has been created by wrong publication of the Bare Acts by various reputed law book publishers. 5. Heard learned counsel for the parties. 6. As we have already noticed above, the main issue, which requires consideration, is question-(i), namely, whether amendment to Section 11 of the Principal Act has come into force with the 2019 Amendment Act vide Notification dated August 30, 2019. In our view, for the purpose of answering this question, reference has to be made to the following provisions of the 2019 Amendment Act; and, Notification dated August 30, 2019: “1. (1) This Act may be called the Arbitration and Conciliation (Amendment) Act, 2019. (2) Save as otherwise provided in this Act, it shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. x x x x 3.
x x x x 3. In section 11 of the principal Act,— (i) after sub-section (3), the following sub-section shall be inserted, namely:— “(3A) The Supreme Court and the High Court shall have the power to designate, arbitral institutions, from time to time, which have been graded by the Council under section 43-I, for the purposes of this Act: Provided that in respect of those High Court jurisdictions, where no graded arbitral institution are available, then, the Chief Justice of the concerned High Court may maintain a panel of arbitrators for discharging the functions and duties of arbitral institution and any reference to the arbitrator shall be deemed to be an arbitral institution for the purposes of this section and the arbitrator appointed by a party shall be entitled to such fee at the rate as specified in the Fourth Schedule: Provided further that the Chief Justice of the concerned High Court may, from time to time, review the panel of arbitrators.”; (ii) in sub-section (4), in the long line, for the portion beginning with “the appointment shall be made” and ending with ‘‘designated by such Court”, the following shall be substituted, namely:–– “the appointment shall be made, on an application of the party, by the arbitral institution designated by the Supreme Court, in case of international commercial arbitration, or by the High Court, in case of arbitrations other than international commercial arbitration, as the case may be”; (iii) in sub-section (5), for the portion beginning with ‘‘the appointment shall be made” and ending with ‘‘designated by such Court”, the following shall be substituted, namely:–– “the appointment shall be made on an application of the party in accordance with the provisions contained in sub-section (4)”; (iv) in sub-section (6), in the long line, for the portion beginning with ‘‘party may request” and ending with ‘‘designated by such Court”, the following shall be substituted, namely:–– “the appointment shall be made, on an application of the party, by the arbitral institution designated by the Supreme Court, in case of international commercial arbitration, or by the High Court, in case of arbitrations other than international commercial arbitration, as the case may be”; (v) sub-sections (6A) and (7) shall be omitted; (vi) in sub-section (8), for the words “The Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court”, the words, brackets and figures “The arbitral institution referred to in sub-sections (4), (5) and (6)” shall be substituted; (vii) in sub-section (9), for the words “the Supreme Court or the person or institution designated by that Court”, the words “the arbitral institution designated by the Supreme Court” shall be substituted; (viii) sub-section (10) shall be omitted; (ix) for sub-sections (11) to (14), the following subsections shall be substituted, namely:— “(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to different arbitral institutions, the arbitral institution to which the request has been first made under the relevant sub-section shall be competent to appoint.
(12) Where the matter referred to in sub-sections (4), (5), (6) and (8) arise in an international commercial arbitration or any other arbitration, the reference to the arbitral institution in those sub-sections shall be construed as a reference to the arbitral institution designated under subsection (3A). (13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the arbitral institution within a period of thirty days from the date of service of notice on the opposite party. (14) The arbitral institution shall determine the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal subject to the rates specified in the Fourth Schedule. Explanation.—For the removal of doubts, it is hereby clarified that this sub-section shall not apply to international commercial arbitration and in arbitrations (other than international commercial arbitration) where parties have agreed for determination of fees as per the rules of an arbitral institution.” xxxx MINISTRY OF LAW AND JUSTICE (Department of Legal Affairs) NOTIFICATION New Delhi, the 30th August, 2019 S.O. 3154 (E).-In the exercise of powers conferred by sub-section (2) of section 1 of the Arbitration and Conciliation (Amendment) Act, 2019 (33 of 2019), the Central Government hereby appoints the 30th August, 2019 as the date on which the provisions of the following sections of the said Act shall come into force:- (1) section 1; (2) section 4 to section 9 [both inclusive]; (3) section 11 to section 13 [both inclusive]; (4) section 15 [F.No. H-11018/2/2017-Admn.-III (LA)] Dr. RAJIV MANI, Jt. Secy. And Legal Adviser” (emphasis supplied) 7. A perusal of the 2019 Amendment Act shows that the amendment of Section 11 of the Principal Act was proposed in Section 3 of the 2019 Amendment Act. From a perusal of Notification dated August 30, 2019 issued for enforcement of various provisions of the 2019 Amendment Act, it is evident that amendment to Section 11 of the Principal Act in terms of Section 3 of the 2019 Amendment Act has not been enforced. No subsequent Notification in this regard has been referred to by either of the learned counsel for the parties. 8. The issue came up for consideration before Hon'ble the Supreme Court in Bharat Sanchar Nigam's case (supra), wherein also this fact has been noticed by Hon'ble the Supreme Court in para27 and 29. The same are extracted below :- “27.
No subsequent Notification in this regard has been referred to by either of the learned counsel for the parties. 8. The issue came up for consideration before Hon'ble the Supreme Court in Bharat Sanchar Nigam's case (supra), wherein also this fact has been noticed by Hon'ble the Supreme Court in para27 and 29. The same are extracted below :- “27. The 2019 Amendment to Section 11 Section 11 has been further amended by the Arbitration and Conciliation (Amendment) Act, 2019 to promote institutionalization of arbitration in India. The 2019 Amendment Act has deleted sub-section (6A) in Section 11. However, the amended to Section 11 is yet to be notified. Consequently, sub-section (6A) continues to remain on the statute book, and governs the scope of power under Section 11 for the present. x x x x 29. After the amendment by the 2019 Amendment to Section 11 is notified, it will result in the deletion of sub-section (6A), and the default power will be exercised by arbitral institutions designated by the Supreme Court, or the High Court, as the case may be. It is relevant to note that sub-section (6B) in Section 11, has not been amended by the 2019 Amendment Act. Sub-section (6B) provides that the designation of any person, or institution by the Court, shall not be regarded as a delegation of “judicial power”. Consequently, it would not be open for the person or institution designated by the Court to exercise any judicial power, and adjudicate on any issue, including the issue of validity of the agreement, or the arbitrability of disputes. The amendment to sub-section (8) of Section 11 by the 2019 Amendment [which is also yet to be notified], provides that the arbitral institution will be empowered to: (a) seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of Section 12, to secure the appointment of an independent and impartial arbitrator; and (b) ensure that the arbitrator has the qualifications required by the arbitration agreement.” (emphasis supplied) 9. Considering the language of the 2019 Amendment Act, the contents of the Notification dated August 30, 2019 and also the observation made by Hon'ble the Supreme Court in Bharat Sanchar Nigam's case (supra), in our opinion, the provisions of Section 11 of the 2019 Amendment Act have not yet been enforced for its application, the question-(i) is answered accordingly.
Considering the language of the 2019 Amendment Act, the contents of the Notification dated August 30, 2019 and also the observation made by Hon'ble the Supreme Court in Bharat Sanchar Nigam's case (supra), in our opinion, the provisions of Section 11 of the 2019 Amendment Act have not yet been enforced for its application, the question-(i) is answered accordingly. Two other questions need not be answered being consequential. 10. However, before parting, we find it appropriate to place on record our extreme displeasure and dissatisfaction towards the casual and irresponsible manner in which the statute books of the Central or State Acts are being published by the renowned and reputed publishers. This is really unfortunate that the statute books are being published without comprehending and realizing the serious and far-reaching effects, impacts and consequences of wrong publication thereof. 11. It may be added here that with regard to the issue of wrong publication of Bare Act, noticing similar kind of mistake in publication of Societies Registration Act, 1860 by Universal LexisNexis, this Court earlier also while sitting at Allahabad in Special Appeal No. 23 of 2022 (C/M Arya Vidya Sabha Budhana Muzaffarnagar and another Vs. State of U.P. and others), vide order dated February 18, 2022 issued notices to the concerned publisher to show cause as to why appropriate action be not taken against it for misleading the Court as well as members of the Bar. In response whereof, an affidavit was filed by the aforesaid publisher assuring that the publisher will be more careful in future and an exercise has been started for updating of the Bare Acts. On such assurance, the proceedings initiated against the publisher were closed by this Court vide order dated April 12, 2022. 12.
In response whereof, an affidavit was filed by the aforesaid publisher assuring that the publisher will be more careful in future and an exercise has been started for updating of the Bare Acts. On such assurance, the proceedings initiated against the publisher were closed by this Court vide order dated April 12, 2022. 12. Similar type of mistakes were noticed by this Court sitting at Lucknow in its judgment dated September 20, 2022 passed in First Appeal From Order No. 614 of 2019 in publication of Motor Vehicles Act, 1988 by Eastern Book Company, Professional Book Publishers and Universal LexisNexis finding that in the Bare Acts published by Eastern Book Company and Professional Book Publishers some of the provisions, which have not yet been deleted, as the date of their enforcement had not been notified, have been deleted from the Act and some of the provisions, which were existing in the Act, such as Sections 163A and 163B have not been published/printed, while in the Bare Act published by Universal LexisNexis and Professional Book Publishers, the date of Notification/coming into effect of Chapter-X and XI has wrongly been mentioned in respect whereof notice has been issued to the concerned Publishers and the matter is fixed for October 20, 2022 for consideration of the reply as to why action may not be taken against them for misleading the counsel as well as the Courts and wasting their precious time. 13. Despite taking the stern view, this Court is still constrained to face the similar situation on regular basis yielding no improvement. This is really a very sorry state of affairs. 14. So far as the mistake noticed in the present case, i.e., showing Section 11(6A) of the principal Act as omitted without any date being notified therefor, is concerned, this Court has already issued notice to the concerned Publishers vide order dated August 25, 2022 passed in Civil Misc. Arbitration Application No. 39 of 2022 wherein the reply is still awaited. Hence, so far as the issue of the wrong publication of Bare Acts in the case in hand is concerned, we leave it open to be dealt with in the aforesaid case itself, i.e., Civil Misc. Arbitration Application No. 39 of 2022. 15. As far as the present matter is concerned, let it now be placed before the learned Single Judge for hearing, on October 10, 2022, as per roster.