Bombay High Court
Enercon Gmbh vs Wind World (India ) Ltd And 2 Ors on 3 March, 2017
Bench: G.S. Patel
Enercon GmbH v Wind World (India) Ltd & Ors
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SHEPHALI
REPORTABLE
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
CHAMBER SUMMONS (L) NO. 19 OF 2017
IN
EXECUTION APPLICATION (L) NO. 8 OF 2017
Ajay Mehra ...Applicant
In the matter of
Enercon GmbH ...Orig Applicant
~ versus ~
1. Yogesh Mehra
2. Ajay Mehra ...Respondents
WITH
CHAMBER SUMMONS (L) NO. 20 OF 2017
IN
EXECUTION APPLICATION (L) NO. 10 OF 2017
Wind World (India) Ltd ...Applicant
In the matter of
Enercon GmbH ...Orig Applicant
~ versus ~
1. Wind World (India) Ltd
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2. Yogesh Mehra
3. Mr Ajay Mehra ...Respondents
WITH
CHAMBER SUMMONS (L) NO. 21 OF 2017
IN
EXECUTION APPLICATION (L) NO. 9 OF 2017
Ajay Mehra ...Applicant
In the matter of
Enercon GmbH ...Orig Applicant
~ versus ~
1. Yogesh Mehra
2. Ajay Mehra ...Respondents
WITH
CHAMBER SUMMONS (L) NO. 22 OF 2017
IN
EXECUTION APPLICATION (L) NO. 8 OF 2017
IN
ARBITRATION AWARD DATED 8th SEPTEMBER 2016
Yogesh Mehra ...Applicant
In the matter of
Enercon GmbH ...Orig Applicant
~ versus ~
1. Yogesh Mehra
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2. Ajay Mehra
3. Wind World (India) Ltd ...Respondents
WITH
CHAMBER SUMMONS (L) NO. 23 OF 2017
IN
EXECUTION APPLICATION (L) NO. 9 OF 2017
IN
ARBITRATION AWARD DATED 8th SEPTEMBER 2016
Yogesh Mehra ...Applicant
In the matter of
1. Enercon GmbH
2. Wobben Properties
GmbH ...Orig Applicants
~ versus ~
1. Yogesh Mehra
2. Ajay Mehra ...Respondents
WITH
CHAMBER SUMMONS (L) NO. 7 OF 2017
IN
EXECUTION APPLICATION (L) NO. 10 OF 2017
Wind World (India) Ltd ...Applicant
In the matter of
Enercon GmbH ...Orig Applicant
~ versus ~
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1. Wind World (India) Ltd
2. Yogesh Mehra
3. Ajay Mehra ...Respondents
WITH
CHAMBER SUMMONS (L) NO. 8 OF 2017
IN
EXECUTION APPLICATION (L) NO. 9 OF 2017
1. Enercon GmbH
2. Wobben Properties
GmbH ... Applicants
In the matter of
1. Enercon GmbH
2. Wobben Properties
GmbH ...Orig Applicants
~ versus ~
1. Yogesh Mehra
2. Ajay Mehra ...Respondents
A DDRESSES OF PARTIES
ENERCON GMBH
a company incorporated under the law of Germany with its
registered place of business at Dreekamp 5, 26605 Aurich,
Germany.
Wobben Properties GmbH
a company incorporated under the laws of Germany and
having its registered office at Dreekamp 5, D26605, Aurich
Germany.
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Wind World (India) Ltd
a company incorporated under the laws of India and having its
registered office at Plot No. 33, Daman-Patalia, Bhimpore,
Daman 396 210, India.
Yogesh Mehra
being Indian Inhabitant residing at 201, Hare Krishna
Presidency Society, North South Road No. 8, JVPD Scheme,
Vile Parle (West), Mumbai 400 048.
Ajay Mehra
being Indian Inhabitant residing at 301, Hare Krishna
Presidency Society, North South Road No. 8, JVPD Scheme,
Vile Parle (West), Mumbai 400 048.
A PPEARANCES
FOR ENERCON GMBH
Applicant in CHSCDL/7/17 Mr JD Dwarkadas, Senior Advocate,
and Respondents in with Mr SH Jagtiani
CHSCDL/20/17
Applicant in CHSCDL/8/17 Mr SU Kamdar, Senior Advocate,
and Respondents in with Mr S Bharucha,
CHSCDL/21/17 and
CHSCDL/23/17
Respondents in Mr Aspi Chinoy, Senior Advocate,
CHSCDL/19/17 and with Mr K Tamboly
CHSCDL/22/17
With them in all matters: Mr J
Jeejeebhoy, Mr VA Vashi, Ms K
Sharma & Ms S Madraswala,
i/b Bharucha & Partners.
FOR WIND WORLD Mr RM Kadam, Senior Advocate,
(INIDA) LTD with Mr ZT Andhayarujina, Mr S
in all matters Kapadia, Ms A Sharma, Mr AA
Mazgaonwala,
i/b Kartikeya & Associates.
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FOR YOGESH MEHRA Mr VR Dhond, Senior Advocate,
Applicant in with Dr BB Saraf, Mr R Carvalho,
CHSCDL/22/17 & Mr V Trivedi, Ms S Dadachanji,
CHSCDL/23/17 and Mr A Sreenivas & Ms A Dubey,
Respondent No. 1 in i/b Manilal Kher Ambalal & Co.
CHSCDL/8/17 and
Respondent No. 2 in
CHSCDL/7/17
FOR AJAY MEHRA Mr Shyam Mehta, Senior Advocate,
Applicant in with Mr R Kelkar, Mr A Mehta, Ms
CHSCDL/19/17 B Kannan, Mr V Unnikrishnan,
Ms Manasa S & Ms O
Lumepereira,
i/b Cyril Amarchand Mangaldas.
CORAM : G.S.Patel, J.
DATED : 2nd March 2017 &
3rd March 2017
ORAL JUDGMENT:
STRUCTURE
A. INTRODUCTION ...............................................................7
B. ARRAY OF PARTIES ...........................................................8
C. BRIEF LITIGATION HISTORY AND
THE ARBITRAL AWARD ...................................................9
D. THE APPLICATIONS FILED IN COURT........................ 13
E. INTERPRETATION OF SECTION 26 OF
THE AMENDING ACT: THE GROUP A CHAMBER
SUMMONSES FOR DISMISSAL OF THE
EXECUTION APPLICATIONS:........................................ 16
(I) Re: Effect of Section 26 of the Amending Act .................... 17
(II) The Doctrine of Binding Precedent .................................. 35
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F. WHO MAY EXECUTE THE AWARD/DECREE .............50
G. GROUP B CHAMBER SUMMONSES IN EXECUTION.58
H. ORDER ...............................................................................59
2nd March 2017
A. INTRODUCTION
1. This order will dispose of several Chamber Summonses. I will
set out the various arrays of parties in each, but they are broadly
divisible in two groups: one group seeks a dismissal of execution
applications, and the second group seeks orders in execution.
2. This judgment itself falls in two parts or sections. The first
part deals with an interpretation of Section 26 of the Arbitration and
Conciliation (Amendment) Act 2015. Here, the question specifically
is this: one of the parties to the arbitration in question has
challenged the award under Section 34 of the Arbitration &
Conciliation Act, 1996 ("the Arbitration Act"). That petition was
filed after the effective date of the amending Act, 23rd October
2015. No separate application for stay of the award is made. The
petitioner in the challenge petition says the filing of that petition is a
continuation of the arbitral proceedings that commenced before the
amending act came into force; the provisions of the Arbitration Act
before the amendment will apply; and this means that the mere
filing of the challenge petition results in an automatic stay of the
award. Hence the Chamber Summonses for dismissal of the
execution applications.
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3. The second part deals with the opposition to the Chamber
Summonses in execution, and here the submission is that, in
addition to the case on 'automatic stay', the execution application is
itself not maintainable because the award is not executable at the
instance of the party who has put it into execution.
B. ARRAY OF PARTIES
4. Before approaching the applications themselves and the rival
considerations, it is necessary to understand how the parties are
arrayed. Before a three-member arbitral tribunal of Lord Hoffmann,
(the presiding Arbitrator), Mr Justice RV Raveendran (Retd, former
Judge of the Supreme Court) and Mr VV Veeder, QC, the claimants
were Enercon GmbH ("Enercon") and Wobben Properties GmbH
("Wobben"). There were three Respondents and counter-
claimants: Wind World (India) Ltd ("WWIL"), Yogesh Mehra
("Yogesh") and Ajay Mehra ("Ajay"; collectively, "the Mehra
Brothers"). WWIL is an unlisted public company. It is a joint
venture between Enercon and the Mehra brothers' group (which
includes their families and family-controlled entities). Enercon holds
56% of WWIL's issued share capital. The Mehra brothers and their
family hold the remaining 44%. Yogesh is, or at any rate, at the
relevant time was WWIL's Managing Director. Ajay is or was a
Director on WWIL's board. Both individually were shareholders of
WWIL.
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C. BRIEF LITIGATION HISTORY AND THE
ARBITRAL AWARD
5. The disputes between these parties arrived at their arbitral
destination after a long and tortuous journey that began in this court
and the erstwhile Company Law Board, before wending its way to
the Supreme Court. There, a reference to arbitration came to be
made. The parties were at loggerheads in regard to windmills or
Wind Turbine Generators ("WTGs") and certain intellectual
property rights in relation to those WTGs. There were several
agreements between the parties including shareholders' agreements,
technical know-how agreements, intellectual property licensing
agreements and so on. I am not concerned with any of these.
Litigation seems to have begun in August or September 2007 in this
Court and the Company Law Board. There were parallel
proceedings in Daman and London. Ultimately, on 14th February
2014, the Supreme Court made an order referring parties to
arbitration.
6. There is some controversy about the actual date of the final
award that came to be made, or whether it has one or more dates, or,
as Mr Dhond says from one corner of an exceptionally crowded
courtroom, whether it has any date at all. It seems not to be in
dispute, however, that the Award was communicated to the
respondents' lawyers on 8th September 2016. I will take that as a
convenient date.
7. Before the Arbitral Tribunal were several claims by Enercon.
Part XVIII of the Award (captioned "Disposition") contains the
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final operative portions of the Award. All counter claims by WWIL
and the Mehras stood dismissed. This is how Part XVIII reads:
331. We, Leonard, Lord Hoffmann, Justice RV
Raveendran and Mr VV Veeder QC, having read the
parties' written evidence, pleadings and submissions and
having heard the oral evidence and submissions, and having
carefully considered the same and for the reasons stated
above (save for the matters as to which Mr RV Raveendran
expresses a minority opinion in Appendix A), make our
Final Award as follows:
(1) The Tribunal declares:
(a) The IPLA executed by the parties thereto on
30 September 2006 was intended to create
legal relations and was a valid and binding
contract;
(b) The Mehra directors caused WWIL to
repudiate liability under the IPLA and to
commit breaches of the IPLA amounting to a
repudiation thereof;
(c) The Claimants accepted the repudiation and
terminated the IPLA on 8 December 2008;
(d) WWIL was indebted to Enercon in respect of
(a) royalties due under the IPLA until its date
of termination and (b) damages for wrongful
use of its intellectual property and technology
after termination until 8 September 2015 in
the sum of €55.2 million and interest;
(e) Pursuant to clause 13(1)(b) of the IPLA,
WWIL is not entitled to use or exploit the
confidential Technology disclosed by the
Claimants to WWIL during or before the
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subsistence of the IPLA and is obliged to
return to Enercon documents or materials
which contain such Technology;
"(f) WWIL is indebted to Enercon for
components and materials sold and delivered
before May 2008 in the sum of
€19,025,296.38 and interest:
(2) The Tribunal orders WWIL--
(a) To pay to Enercon-
(i) €55,200,000 in respect of royalties due
under the IPLA together with interest
thereon in the sum of €7.9 million until
8 September 2015 and thereafter at the
rate of 3% over European Central Bank
rate until the date of this Award;
(ii) €19,025,296.38 in respect of
components and materials sold and
delivered together with interest in the
sum of €5.9 million until 31 March
2016 and thereafter at the rat of 3%
over European Central Bank rate until
the date of this Award;
(b) To return to Enercon the documents and
other materials containing the confidential
Technology (as defined in the IPLA)
disclosed to WWIL pursuant to the TKHA
and IPLA;
(c) To allow Enercon, pursuant to clause 6.1(b)
of the IPLA, to inspect its books and records
and take relevant copies.
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(3) The Tribunal orders the Second and Third
Defendants:
(a) Not to prevent or obstruct Enercon or its
nominated directors from exercising their
rights under the SHA or as directors to--
(i) Receive notice of board and company
meetings;
(ii) Obtain information about the affairs of
the company;
(iii) Secure the appointment of auditors by
the company in general meeting;
(b) Jointly and severally--
(i) to pay to WWIL the sum of INR
6,772,456,570, being the profit made by
Vish Wind on the sale of allotment
rights to WWIL in the years ending 31
March 2011 and 2012 together with
interest thereon at the rate of 3% over
European Central Bank rate from those
dates until the date of this Award.
(ii) To pay to the Claimants their legal and
other costs in the sum of €3,794,970."
4. All other claims and counterclaims are dismissed.
5. From the date of the award, all sums payable will
carry interest in accordance with section 31(7)(b) of
the Indian Arbitration & Conciliation Act, 1996"
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D. THE APPLICATIONS FILED IN COURT
8. Enercon has put into execution Clauses (f )(2)(a)(i) and (ii) of
the award under Execution Application (L) No. 10 of 2017. WWIL
has challenged this portion of the Award in its Commercial
Arbitration Petition No. 17 of 2017 filed under Section 34. WWIL
has also filed Chamber Summons (L) No. 20 of 2017 seeking a
dismissal of Enercon's Execution Application in relation to this part
of the order. For its part, Enercon has filed Chamber Summons (L)
No. 7 of 2017 requiring a disclosure of assets as a step in aid of
execution of the money decree.
Continued on 3rd March 2017 at 3.00 pm
9. Similarly, in relation to that portion of the award that directs a
payment to WWIL, i.e. clause (3)(b)(i), and which represents an
amount said to be profits made by rival company ("Vish Wind") set
up by the Mehras on sale of allotment rights to WWIL for two years
and accompanying interest, Yogesh has filed Chamber Summons
(L) No. 22 of 2017 and Ajay has filed Chamber Summons (L) 19 of
2017. These seek a dismissal of Enercon's and Wobben's Execution
Application No. 8 of 2017. Yogesh also challenges this portion of the
award in Commercial Arbitration Petition No.196 of 2013 filed
under Section 34. The third part of the award, an order of costs in
the amount of €3,794,970, is sought to be executed by Enercon in
Execution Application No. 9 of 2017. It is challenged by Ajay in
Commercial Arbitration Petition No. 205 of 2016. Here, Yogesh and
Ajay have respectively filed Chamber Summons (L) No. 23 of 2017
and 21 of 2017 for dismissal of the Execution Application while
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Enercon and Wobben have filed Chamber Summons (L) No. 8 of
2017 for an order of disclosure.
10. There is, thus, a complex web of interlocking and interlinked
applications, more than a little dizzying. The following chart might
conceivably be useful:
SET I
Commercial Arbitration Execution Application (L) No.
Petition No. 17 of 2017 10 of 2017
Filed by: Enercon
Filed by: WWIL
Filed for: Execution of award
Challenges: Award for for Royalties
payment of royalties
Ch/S (L) No. 7 of 2017 Ch/S (L) No 20 of 2017
[GROUP B] [GROUP A]
Filed by: Filed by:
Enercon WWIL
Filed For: Filed for:
disclosure For dismissal of
execution application
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SET II
Commercial Arbitration Execution Application (L) No.
Petition No. 196 of 2016 8 of 2017
Filed by: Yogesh Mehra Filed by: Enercon
Challenges: (1) Award for Filed for: Vish Wind Sums
payment of Vish Wind
amounts and (2) Costs
Ch/S (L) No 22 of 2017 Ch/S (L) No 19 of 2017
[GROUP A] [GROUP A]
Filed by: Yogesh Mehra Filed by: Ajay Mehra
Filed for: For dismissal Filed for: For dismissal of
of execution application execution application
SET III
Commercial Arbitration Execution Application (L) No.
Petition No. 205 of 2016 9 of 2017
Filed by: Ajay Mehra Filed by: Enercon and Wobben
Challenges: (1) Award for Filed for: Execution of decree
payment of Vish Wind of costs
amounts and (2) Costs
Ch/S (L) No. 8 Ch/S (L) No 23 of Ch/S (L) No 21 of
of 2017 2017 2017
[GROUP B] [GROUP A] [GROUP A]
Filed by: Filed by: Yogesh Filed by: Ajay
Enercon
Filed for: Filed for:
Filed for For dismissal of For dismissal of
For disclosure exec application exec application
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11. In Group A there are five Chamber Summonses for dismissal
of three separate Execution Applications. In Group B there are two
Chamber Summonses for disclosure. I am not concerned with the
merits of the three Arbitration Petitions under Section 34.
12. I propose to first take up the five Group A Chamber
Summonses for dismissal of the execution applications. All share a
common argument. The same argument used in support of these
five Group A dismissal Chamber Summonses is also invoked in
opposition to the two Group B Chamber Summonses for disclosure
by Enercon.
E. INTERPRETATION OF SECTION 26 OF THE
AMENDING ACT: THE GROUP A CHAMBER
SUMMONSES FOR DISMISSAL OF THE
EXECUTION APPLICATIONS:
13. The principal argument is this: the arbitration commenced
well before 23rd October 2015 when the Arbitration and
Conciliation Amendment Act 2015 (Act 3 of 2015; "the Amending
Act") came into force. The three Petitions under Section 34 of the
Arbitration Act are all part of, and a continuance of, the "arbitral
proceedings". Therefore, according to the Applicants in Group A
Chamber Summonses, on a reading of Section 26 of the Amending
Act, no part of the amended Act will apply to those Section 34
Petitions. Those challenge Petitions will all be governed by the
unamended provisions of Section 34 and 36. The immediate result
is, according to the Applicants, that on filing of those sections 34
Petitions, the award or its operative portion is stayed because of the
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un-amended provisions of Section 36. There can be no execution.
The Execution Applications are therefore not maintainable, or at
least premature. The award has not attained finality and it is not
made a decree of the Court. This argument is canvassed by both Mr
Kadam and Mr Dhond appearing for WWIL and Yogesh.
14. Mr Shyam Mehta for Ajay, while adopting these arguments,
supplements them with a second, that there is no executable award
or decree in the hands of Enercon. Enercon is not a "decree holder"
properly so called and at least as far as that portion of the award that
directs payment by the Mehras to WWIL is concerned, in an
amount of Indian Rs.6,772,456,570/-, it is not Enercon that can put
this portion of the award into execution at all. The award directs
payment to be made by the Mehras to WWIL. It is WWIL that is
therefore the "decree holder". For this reason too the Execution
Applications are not maintainable. I will consider that argument
separately.
(I) Re: Effect of Section 26 of the amending Act
15. There is no doubt that all three section 34 Arbitration
Petitions were filed well after the amending Act came into force on
23rd October 2015. They had to be. It is nobody's case that any
portion of the award was made known or published at any time prior
to that date. Section 34 of the Arbitration Act was substantially
amended inter alia by the introduction of sub-section 2-A, 5 and 6.
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16. What is however material is the change that is effected to
section 36 in Chapter VIII of the Arbitration Act. This was entirely
substituted. Prior to the amendment, Section 36 read thus:
"36. Enforcement.-- Where the time for making an
application to set aside the arbitral award under section 34
has expired, or such application having been made, it has
been refused, the award shall be enforced under the Code
of Civil Procedure, 1908 (5 of 1908) in the same manner as
if it were a decree of the Court."
After the 2015 Amendment, it now reads:
"36. Enforcement.-- (1) Where the time for making an
application to set aside the arbitral award under Section 34
has expired, then, subject to the provisions of sub-section
(2), such award shall be enforced in accordance with the
provisions of the Code of Civil Procedure, 1908 (5 of 1908),
in the same manner as if it were a decree of the Court.
(2) Where an application to set aside the arbitral
award has been filed in the Court under Section 34, the
filing of such an application shall not by itself render
that award unenforceable, unless the Court grants an
order of stay of the operation of the said arbitral award
in accordance with the provisions of sub-section (3), on
a separate application made for that purpose.
(3) Upon filing of an application under sub-section
(2) for stay of the operation of the arbitral award, the
Court may, subject to such conditions as it may deem
fit, grant stay of the operation of such award for reasons
to be recorded in writing:
Provided that the Court shall, while considering the
application for grant of stay in the case of an arbitral award
for payment of money, have due regard to the provisions for
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grant of stay of money decree under the provisions of the
Code of Civil Procedure, 1908 (5 of 1908)."
(Emphasis added)
17. Sub-section 2 thus makes it clear that unlike the position prior
to the amendment the mere filing of an application under Section 34
is not an automatic stay of the operation of arbitral award. A
separate application must be made for that purpose.
18. The question is, as canvassed by Mr Kadam and Mr Dhond,
can this amended provision ever apply to a challenge petition that
emanates from an arbitration which started (I use this word in its
broadest possible sense to avoid any ambiguity with other
expressions such as 'commence' etc.) well before the amendment
came into force? For this one needs to turn to Section 26 of the
amending Act:
"26. Act not to apply to pending arbitral
proceedings.-- Nothing contained in this Act shall apply
to the arbitral proceedings commenced, in accordance with
the provisions of section 21 of the principal Act, before the
commencement of this Act unless the parties otherwise
agree but this Act shall apply in relation to arbitral
proceedings commenced on or after the date of
commencement of this Act."
19. There are three principal judgments that are cited, although
valiant attempts have been made to cite very many more. I will turn
to each of these, but before that it is I think necessary to note, at the
cost of restating the obvious, that Section 26 is in two parts. I have
set it out about that I will proceed now to separate these two parts.
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The separator word is but and if we segregate the two clauses, this is
how section 26 would read:
"26. Act not to apply to pending arbitral
proceedings.--
(1) Nothing contained in this Act shall apply to the
arbitral proceedings commenced, in accordance with the
provisions of section 21 of the principal Act, before the
commencement of this Act unless the parties otherwise
agree
-- but --
(2) this Act shall apply in relation to arbitral
proceedings commenced on or after the date of
commencement of this Act."
(Emphasis added)
20. Part 1 uses the phrase "to the arbitral proceedings". Part 2
uses the phrase "in relation to arbitral proceedings". Part 1 speaks of
an agreement between parties, viz., their consent. Part 2 does not.
21. First, as to the distinction, if any, between the competing
phrases "to the arbitral proceedings" and "in relation to arbitral
proceedings". The section uses both expressions. Mr Kadam, Mr
Dhond and Mr Mehta would have it that there is no distinction --
none that is material at any rate -- between the two expressions.
Both mean the same thing. I understood them to attribute the
differentiated use to cause or causes unknown -- mostly linguistic
infelicity or, as they put it, a case of an 'unhappily worded' clause.
There is no dispute, they say, about the meaning of 'arbitral
proceedings', a phrase common to both parts. This must mean the
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entire 'gamut' of everything to do with the arbitration from its
commencement to satisfaction of the decree, if any, or some other
form of final disposition of the arbitration. Any other view, they
submit, inevitably results in a completely artificial dismembering of
a holistic, unified concept into discrete or distinct components. A
challenge petition under Section 34 does not cease to be an 'arbitral
proceeding' because it is filed in Court, runs the argument; nor does
an application under Section 36.
22. What the two parts therefore mean is simply this and no
more: where arbitration commenced before the Amending Act came
into force, parties can agree to apply to themselves and to their
arbitration the amended provisions. Where the arbitration
commenced after the Amending Act, parties to the arbitration
agreement have no such choice. The amended Act will apply with
all its vigour.
23. This construct is seductive in its simplicity, clarity and
elegance. But it also makes one enormous demand, that I must
accept the two expressions "to arbitral proceedings" and "in
relation to arbitral proceedings" to mean exactly the same thing.
This is the fulcrum of the argument. I must, therefore, read into the
first part the words 'in relation to' or read those words out of the
second part -- I should either add words to the first part or ignore
words in the second. To paraphrase the Bard in Hamlet: ay, there's
the rub; for in that endeavour of interpretation, what results may come
when we have shuffled such meanings must give us pause.
24. Is another approach possible, one that preserves a distinction
between the two expressions? Both are used, after all; and Mr
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Dwarkadas, Mr Chinoy and Mr Kamdar insist every principle of
statutory interpretation demands each distinct expression be given
its fullest permissible meaning. The opposing arguments posit
legislative ineptitude, that the legislature did not know that which it
set out to do when it framed the two parts like this. They offer an
alternative interpretation, and the clue, they say, lies in the two
competing phrases themselves. "To arbitral proceedings" is a
reference to that which goes on before an arbitral tribunal. "In
relation to arbitral proceedings" is more expansive: it includes
everything before the arbitral tribunal, but also includes post-award
actions such as challenge petitions under Section 34 or enforcement
applications under Section 36. Before the arbitral tribunal, parties
can opt-in to make the amended provisions of the Arbitration Act
applicable. But (1) for any arbitration that starts after the Amending
Act came into force; or (2) any court proceeding in relation to that
arbitration, such as challenge petition or an enforcement application
after the Amending Act came into force, only the amended
provisions will apply. The answer, counsel say, is not in some
artificial carving up of 'arbitral proceedings', but is one suggested
directly by the legislature's use of distinctly different phrases in the
two parts of Section 26.
25. This has considerable judicial authority backing it. First, to
the decision of the Supreme Court in Thyssen Stahlunion GmbH v
Steel Authority of India Ltd.1 This was a decision rendered very
shortly after the Arbitration Act of 1996 was brought in to force
replacing the old arbitration Act of 1940. The 1996 Act also had a
repeal clause. This was in Section 85 of 1996 Act. Unlike the present
1 (1999) 9 SCC 334.
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Section 26, that repeal clause only used the single expression "in
relation to arbitral proceedings". Section 85 was reproduced at the
head of the Thyssen decision, in paragraph 2:
2. This Section 85 of the new Act we reproduce at the
outset:
"85. Repeal and savings.--(1) The Arbitration (Protocol
and Convention) Act, 1937 (6 of 1937), the Arbitration Act,
1940 (10 of 1940) and the Foreign Awards (Recognition and
Enforcement) Act, 1961 (45 of 1961) are hereby repealed.
(2) Notwithstanding such repeal,--
(a) the provisions of the said enactments shall
apply in relation to arbitral proceedings which
commenced before this Act came into force unless
otherwise agreed by the parties but this Act shall
apply in relation to arbitral proceedings which
commenced on or after this Act comes into force;
(b) all rules made and notifications published,
under the said enactments shall, to the extent to
which they are not repugnant to this Act, be deemed
respectively to have been made or issued under this
Act."
(Emphasis added)
26. The question before the Thyssen Court was inter alia whether
this expression was limited to proceedings before the arbitrator, and
should receive a narrow construction limiting it to proceedings
ending with the arbitral award, or whether it extended further. In
paragraph 22, the Supreme Court in terms rejected this submission.
It said the phrase "in relation to arbitral proceedings" would cover
not only proceedings pending before the arbitrator but would also
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cover proceedings before the Court and any proceedings required to
be taken under the old (i.e. 1940 Act) to make the award a decree, as
also to appeals. In paragraphs 22 and 23, the Thyssen Court said:
The conclusions
22. For the reasons to follow, we hold:
1. The provisions of the old Act (Arbitration
Act, 1940) shall apply in relation to arbitral
proceedings which have commenced before the
coming into force of the new Act (the Arbitration
and Conciliation Act, 1996).
2. The phrase "in relation to arbitral
proceedings" cannot be given a narrow meaning
to mean only pendency of the arbitration
proceedings before the arbitrator. It would cover
not only proceedings pending before the
arbitrator but would also cover the proceedings
before the court and any proceedings which are
required to be taken under the old Act for the
award becoming a decree under Section 17 [ "17.
Judgment in terms of award.--Where the court sees
no cause to remit the award or any of the matters
referred to arbitration for reconsideration or to set
aside the award, the court shall, after the time for
making an application to set aside the award has
expired, or such application having been made, after
refusing it, proceed to pronounce judgment
according to the award, and upon the judgment so
pronounced a decree shall follow, and no appeal shall
lie from such decree except on the ground that it is in
excess of, or not otherwise in accordance with the
award."] thereof and also appeal arising
thereunder.
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3. In cases where arbitral proceedings have
commenced before the coming into force of the
new Act and are pending before the arbitrator, it
is open to the parties to agree that the new Act be
applicable to such arbitral proceedings and they
can so agree even before the coming into force of
the new Act.
4. The new Act would be applicable in
relation to arbitral proceedings which
commenced on or after the new Act comes into
force.
5. Once the arbitral proceedings have
commenced, it cannot be stated that the right to
be governed by the old Act for enforcement of the
award was an inchoate right. It was certainly a
right accrued. It is not imperative that for right to
accrue to have the award enforced under the old
Act some legal proceedings for its enforcement
must be pending under that Act at the time the
new Act came into force.
6. If a narrow meaning of the phrase "in relation
to arbitral proceedings" is to be accepted, it is likely
to create a great deal of confusion with regard to the
matters where award is made under the old Act.
Provisions for the conduct of arbitral proceedings are
vastly different in both the old and the new Act.
Challenge of award can be with reference to the
conduct of arbitral proceedings. An interpretation
which leads to unjust and inconvenient results
cannot be accepted.
7. A foreign award given after the
commencement of the new Act can be enforced only
under the new Act. There is no vested right to have
the foreign award enforced under the Foreign
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Awards Act [Foreign Awards (Recognition and
Enforcement) Act, 1961].
23. Section 85(2)(a) of the new Act is in two limbs:
(1) provisions of the old Act shall apply in relation to
arbitral proceedings which commenced before the new
Act came into force unless otherwise agreed by the
parties, and (2) the new Act shall apply in relation to
arbitral proceedings which commenced on or after the new
Act came into force. The first limb can further be bifurcated
into two: (a) provisions of the old Act shall apply in relation
to arbitral proceedings commenced before the new Act
came into force, and (b) the old Act will not apply in such
cases where the parties agree that it will not apply in
relation to arbitral proceedings which commenced before
the new Act came into force. The expression "in relation
to" is of the widest import as held by various decisions of
this Court in Doypack Systems (P) Ltd. [(1988) 2 SCC 299],
Mansukhlal Dhanraj Jain [(1995) 2 SCC 665] , Dhanrajamal
Gobindram [AIR 1961 SC 1285 : (1961) 3 SCR 1020] and
Navin Chemicals Mfg. [(1993) 4 SCC 320] This expression
"in relation to" has to be given full effect to,
particularly when read in conjunction with the words
"the provisions" of the old Act. That would mean that
the old Act will apply to the whole gamut of arbitration
culminating in the enforcement of the award. If it was
not so, only the word "to" could have sufficed and
when the legislature has used the expression "in
relation to", a proper meaning has to be given. This
expression does not admit of restrictive meaning. The first
limb of Section 85(2)(a) is not a limited saving clause. It
saves not only the proceedings pending at the time of
commencement of the new Act but also the provisions of
the old Act for enforcement of the award under that Act.
(Emphasis added)
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27. The emphasized words make all the difference. The Supreme
Court, even when it did not have a clause or expression as we do
today -- "to arbitral proceedings" as against "in relation to arbitral
proceedings" -- clearly said (as we can see from the underlined and
emphasized words above) that if the meaning was to be restricted,
"only the word 'to' could have sufficed". The words "if it was not
so" in Thyssen refer to an unrestricted meaning. In other words, had
the legislature intended a restricted meaning and to limit the
application of the expression to proceedings before the arbitral
tribunal alone it would have said "to arbitral [or arbitration]
proceedings", not "in relation to arbitral proceedings".
28. Section 26 of the Amending Act of 2015 is different in two
key respects. It studiedly uses a quite distinct expression. In its
second part, it uses the same expression as the Thyssen Court had
before -- it speaks of matters "in relation to arbitral proceedings".
In the first part, however, it uses an expression that Thyssen said
should receive a limited or restricted meaning: "to arbitral
proceedings".
29. Thus, the "Thyssen Expansion", if I may be permitted to coin a
phrase, (a) says the expression "in relation to arbitral proceedings"
covers the entire gamut of arbitration from invocation to
enforcement; and (b) the expression "to arbitral proceedings"
carries the narrower meaning, limited to proceedings before the
arbitral tribunal.
30. This Section of the Amending Act, an understanding of
Thyssen and the distinction between the two clauses in Section 26
came up before a learned Single Judge of this Court (Mrs RP
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SondurBaldota J as she then was) in Rendezvous Sports World v Board
of Control for Cricket in India.2 This is an elaborate discussion that
covers very many aspects. The distinction between the Thyssen
clause and the present Section 26 was highlighted.3 The argument in
Rendezvous Sports was that Section 26 does not provide for post-
award proceedings. As a repealing Section, it is not exhaustive.
Section 6 of the General Clauses Act would apply since Section 26
leaves unattended or uncovered a situation where the arbitration
commenced before the Amending Act came into force but the
challenge petition to that award was filed after the amendment. The
Rendezvous Sports Court rejected the submission that the General
Clauses Act would apply.4 Both sides cited Thyssen.5 The learned
single Judge noticed the Thyssen Court's distinction between the
phrases "to arbitral proceedings" and "in relation to arbitral
proceedings".6 There was then an extended discussion on whether a
party to an arbitral Award has "a vested right" to file an appeal and
whether a challenge under Section 34 is indeed in the nature of an
appeal, and whether there is any vested right to impeach an award's
validity. This argument was also rejected.7 There follows, in
Rendezvous Sports, a discussion on the mischief sought to be avoided
by the Amending Act,8 and whether the amendment is
retrospective.9 The learned single Judge noticed the 246th report of
2 2016 SCC OnLine Bom 6064.
3 Paragraphs 11 and 12 of the SCC report.
4 Paragraphs 17, 18, 23 and 31 of the SCC report.
5 Paragraph 22 of the SCC report.
6 Paragraph 26 of the SCC report.
7 Paragraphs 32 to 45, 53, 56, 60, 62, 64 to 66 of the SCC report.
8 Paragraphs 30 and 79 of the SCC report. This invokes the mischief rule
in Heydon's case.
9 Paragraphs 67 to 77 of the SCC report.
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the Law Commission, and, in particular, the reasons for the
proposed amendment to Section 36.10 In this report of the Law
Commission, there is also a note below paragraph 19 in Chapter III
(where the amendments proposed are set out):
[NOTE: This amendment is to ensure that the mere filing
of an application under section 34 does not operate as an
automatic stay on the enforcement of the award. The
Supreme Court in National Aluminium Co Ltd v Pressteel &
Fabrications (P) Ltd & Anr, (2004) 1 SCC 540, recommends
that such an amendment is the need of the hour.]
31. Ultimately, after considering all these submissions, in
paragraph 78, the learned single Judge concluded:
"78. Coming to the facts of the present case, in view of
the above position in law, application of amended Section
36 to the existing matters i.e. the applications under
Section 34 of the Arbitration Act, that are pending as on
23rd October, 2015 is giving prospective effect to the
amendment and not retrospective effect. The most
relevant consideration for applying it to the existing matters
is the nature, ambit and scope of the Amending Act. Under
the original Section 36, filing of an application under
Section 34 had the effect of casting shadow upon the
executability of the award. This act of the award-debtor
disabled the award-holder from executing the award in his
favour irrespective of the merit in the challenge. In this
circumstance, there could be no question of any right
accruing to the award-debtor by filing the application under
Section 34. The Amended Section 36 lifts the shadow
over the right of the award holder. His disability gets
removed. At the same time, the application under
Section 34 of the award-debtor remains intact. The
10 Paragraph 30 of the SCC report.
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removal of disability is not complete. It is partial. The
provision enables the award-debtor to apply to the Court
for make the award inexecutable pending his application.
His right to apply for interim relief during the pendency of
the application under Section 34 is not affected in any way.
In this way in fact the Amending Act brings in balance
between the rights and liabilities of both the sides. The
ambit and scope of the Amended Section 36, is to cure the
defect by removing the imbalance. Thus the application of
the provision on the petitions under Section 34 pending on
23rd October, 2015, is prospective. It makes no difference
if the application under Section 34 filed by the award-
debtor was prior to 23rd October, 2015. Removal of
shadow over the rights of the award-holder cannot be said
to be prejudicial to the award-debtor. He has to now only
file an application for interim reliefs, which may or may not,
be subject to imposition of condition."
(Emphasis added)
The most critical portion of this paragraph for our purposes is the
following sentence:
"It makes no difference if the Application under Section 34
filed by the Award Debtor was prior to 23rd October 2015".
In other words, the Rendezvous Sports Court held that the
amendment would apply to all arbitral proceedings.
32. Mr Kadam invites my attention to a Division Bench judgment
of the Delhi High Court in Ardee Infrastructure Pvt Ltd v Ms
Anuradha Bhatia.11 There again Section 26 of the Amending Act,
and the rival clauses in it fell for consideration. In my understanding
11 237 (2017) DLT 140 : FAO (OS) No. 221 of 2016 and FAO (OS) No.
222 of 2016 decided on 6th January 2017.
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of it, the Division Bench took the view that the Thyssen expansion
applied to both parts of Section 26. It makes no difference, the
Division Bench seemed to say, whether the phrase says "shall apply
to arbitral proceedings" or "shall apply in relation to arbitral
proceedings". Both carry exactly the same meaning.
33. I find it very difficult to accept this. The 2015 amendment is
well after the decision in Thyssen. The Supreme Court's
interpretation of the more expansive phrase, and the distinction it
drew between the two phrases, must be presumed to have been to
the mind of the legislature. I do not think that any principle of
construction permits a Court to completely obliterate words that
exist or to insert other words to arrive at some other meaning then
was possibly intended. There are two different phrases used in
Section 26, as we have seen. The legislature must be presumed to
have been aware that each of these phrases would and must
necessarily receive a separate meaning. The later phrase, "in
relation to arbitral proceedings" was clearly the same phrase that
was before the Thyssen Court. The other, first phrase in Section 26,
"to the arbitral proceedings", was the one that Thyssen itself says
must receive a narrower meaning. I do not see how the Division
Bench could overlook this.
34. The illustration given by the Delhi High Court Division
Bench in paragraphs 27 and 28 is also, in my view, somewhat
misplaced. Its finding that the first part of Section 26 would only
cover a case where both the award and the Section 34 petition were
after 23rd October 2015, but that nothing in Section 26 dealt with
alternative scenarios (petition and award both before 23rd October
2015, or award before 23rd October 2015 and petition after that
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date), seems to me to be unwarranted. Where the petition is filed
after the effective date of 23rd October 2015, the second part of
Section 26 of the Amending Act would apply, and the petition
would be covered by the amended Section 36 of the Arbitration Act.
35. Mr Kadam's focuses on the remaining scenario: where the
award and the petition challenging it are both before the effective
date of 23rd October 2015. Would the amended Section 36 apply to
such a petition, he asks, one that was pending before Court on that
date? If not, then there is simply no warrant for making a distinction
between 'to arbitral proceedings' and 'in relation to arbitral
proceedings': that petition, 'commenced before' and pending on
23rd October 2015, would be covered by the first limb of Section 26
of Amending Act, making the un-amended act applicable, and
therefore, the words 'to arbitral proceedings' cannot take a
restricted meaning. If, on the other hand, the second limb of Section
26 applies to such pending (and already filed) challenge petitions --
on the basis that a challenge petition only falls within the Thyssen
expansion 'in relation to arbitral proceedings' -- then the
amendment is retrospective, or the repeal clause in Section 26 is not
exhaustive, and that automatically brings into play the General
Clauses Act. These, he says, are questions not addressed in
Rendezvous Sports at all. Its finding that "It makes no difference if the
Application under Section 34 filed by the Award Debtor was prior to 23rd
October 2015" is clearly erroneous. Not only does it make a
difference, he submits, but it makes a world of a difference.
36. The difficulty with my entering into this debate is simply this:
it does not arise before me at all. I have no call, need or occasion to
address this. In Rendezvous Sports, the arbitral awards were dated
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28th January 2015 (amended a few days later) and 22nd June 2015.
The challenge petitions under Section 34 were filed on 16th
September 2015 and 19th October 2015. All this was thus before the
Amending Act came into force. In the present case, the three
challenge petitions filed by WWIL or the Mehra Brothers are all
after the Amendment Act came into force on 23rd October 2015.
Therefore, the question Mr Kadam raises just does not fall for
determination. I do not see how (or even why) I should attempt to
distance myself from Rendezvous Sports on an issue that does not
arise. WWIL and the Mehra Brothers cannot hope to derive
advantage by attempting an association with a wholly different fact
situation.
37. There is another reason not to accept this submission. The
first limb of Section 26 tells parties what they may do to make the
amended sections apply to proceedings pending before an arbitral
tribunal. The second part of Section 26 gives no such choice. But it
is also circumscribed in its application to those arbitral proceedings,
defined by the Thyssen expansion, that commenced after 23rd
October 2015. Therefore, the situation Mr Kadam contemplates is
possibly untouched by the amendment. After all, on a filing before
23rd October 2015, an automatic stay followed, and nothing in the
Amending Act suggests a lifting of that automatic stay. This seems
to me to be what Rendezvous Sports suggested, and the sentence
preceding the emphasized portions makes this clear:
Thus the application of the provision on the petitions under
Section 34 pending on 23rd October 2015, is prospective.
38. Mr Dwarkadas points out that the difference between what
was before the Thyssen Court, a solitary expression, and what
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Section 26 contains was also noticed by a Division Bench of the
Calcutta High Court in Sri Tufan Chatterjee v Sri Rangan Dhar.12
There, a Section 9 proceeding was initiated after the amendment in
an arbitration that had commenced before the amendment. The
lower court held the amended Act would apply. The decision was
confirmed by the Division Bench in appeal. The Calcutta Division
Bench view broadly accords with Rendezvous Sports.
39. There is perhaps another perspective on this. The first part of
Section 26 speaks of consent -- of the parties agreeing by contract
to make applicable certain provisions of the amended Act. To my
mind, this could only apply to those portions of the arbitral
proceedings that could be controlled by inter partes contractual
arrangements. The arbitral tribunal is itself created by contract.
Parties may, in the arbitration, agree on very many things: venue,
situs, governing law, jurisdiction, composition, rules of procedure
and so on. They could, therefore, agree to have the amended
provisions of Section 17 for interim awards apply to an arbitration
that commenced before the amendment. For this reason, too, the
first part of Section 26, which applies "to the arbitral proceedings",
must receive a narrower meaning, and must be restricted to
proceedings pending before the arbitral tribunal. It is only those that
can be a matter of consent or contract between the parties. This is a
view completely consistent with Thyssen. No such consent can ever
be required (or even permitted) for matters before a Court. Parties
cannot by consent tell a Court to use an older Act or an unamended
provision. What powers a Court will exercise is dictated by statute,
not by the contract between the parties.
12 AIR 2016 Cal 213 : 2016 SCC Online Cal 483.
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(II) The Doctrine of Binding Precedent
40. Rendezvous Sports is a decision by a bench of coordinate
strength. Both Mr Kadam and Mr Dhond laboured long and hard to
persuade me to conclude that Rendezvous Sports was, as they put it,
"wrongly decided". I should, they urged, allow them to agitate over
again all the questions and issues that case decided. I should not
take a contrary view, but I must conclude, they said, that Rendezvous
Sports is incorrect. I should then direct this matter and the questions
in issue to be placed before the Hon'ble the Chief Justice for her
decision as to whether it should be referred to a larger Bench.
41. I confess I find this a most disconcerting approach. It does not
matter whether I am in agreement with the view of Mrs
SondurBaldota J in Rendezvous Sports (broadly speaking, and on the
key issues I have identified above, I am). That apart, we are in a very
different situation from the one before the Rendezvous Sports Court.
There the Section 34 Petition was filed before the amendment came
into force. That is not a situation that arises before me. Any
discussion here on that aspect of the matter would be clearly obiter:
it does not arise at all. What I have before me is a set of three
Section 34 Petitions all filed after the Amendment Act came into
force. There can be no question of any consent being accorded to
the procedure to be followed in those Section 34 Petitions. It is the
new Act and the new Act alone that would apply. To that extent, and
that is the only extent that concerns me, I see no reason to disagree
with that decision.
42. I think though as a matter of judicial discipline, and on
principle, I should refuse to allow them to invite me down any such
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path. That way seems to me to lie only jurisprudential misadventure.
The well-established doctrine of binding precedent will not permit
me to make any such attempt. That doctrine, and its companion
doctrine, stare decisis, have much troubled our Courts. There is
considerable learning on each. One should stand by decisions and
not lightly disturb what is settled: stare decisis et non quieta movere. A
view that has held the field for a long time should not be disturbed
only because another view is possible.13 The doctrine of binding
precedent tells us that a bench is bound by a decision of another
bench of equal or greater strength. There can be disagreement or
doubt, and the law is well-settled of what is to be done in that
situation. But when and in what circumstances should a later bench
decline to follow an earlier decision of a bench of equal or greater
strength? There are at least four five-judge bench decisions of the
Supreme Court on this: Union of India & Anr v Raghubir Singh;14
Then there are the three further decisions in Pradip Chandra Parija
& Ors v Pramod Chandra Patnaik & Ors;15 Chandra Prakash & Ors v
State of UP & Anr;16 and Central Board of Dawoodi Bohra Community
& Anr v State of Maharashtra & Anr.17 There is also valuable
commentary in Halsbury's Laws of England and Corpus Juris
Secundum.
43. Some passages from Raghubir Singh are instructive:
7. India is governed by a judicial system identified
by a hierarchy of courts, where the doctrine of binding
13 Shanker Raju v Union of India, (2011) 2 SCC 132.
14 (1989) 2 SCC 754.
15 (2002) 1 SCC 1.
16 (2004) 4 SCC 234.
17 (2005) 2 SCC 673.
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precedent is a cardinal feature of its jurisprudence. It
used to be disputed that Judges make law. Today, it is no
longer a matter of doubt that a substantial volume of the law
governing the lives of citizens and regulating the functions
of the State flows from the decisions of the superior
courts....
8. Taking note of the hierarchical character of the
judicial system in India, it is of paramount importance
that the law declared by this Court should be certain,
clear and consistent. It is commonly known that most
decisions of the courts are of significance not merely
because they constitute an adjudication on the rights of the
parties and resolve the dispute between them, but also
because in doing so they embody a declaration of law
operating as a binding principle in future cases. In this
latter aspect lies their particular value in developing the
jurisprudence of the law.
9. The doctrine of binding precedent has the merit
of promoting a certainty and consistency in judicial
decisions, and enables an organic development of the
law, besides providing assurance to the individual as to
the consequence of transactions forming part of his
daily affairs. And, therefore, the need for a clear and
consistent enunciation of legal principle in the decisions
of a court.
10. But like all principles evolved by man for the
regulation of the social order, the doctrine of binding
precedent is circumscribed in its governance by
perceptible limitations, limitations arising by reference
to the need for readjustment in a changing society, a
readjustment of legal norms demanded by a changed
social context. This need for adapting the law to new urges
in society brings home the truth of the Holmesian aphorism
that "the life of the law has not been logic, it has been
experience" [ Oliver Wendell Holmes : The Common Law,
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p. 5] , and again when he declared in another study [ Oliver
Wendell Holmes : Common Carriers and the Common
Law, (1943) 9 Curr LT 387, 388] that "the law is forever
adopting new principles from life at one end", and
"sloughing off" old ones at the other. Explaining the
conceptual import of what Holmes had said, Julius Stone
elaborated that it is by the introduction of new extra-legal
propositions emerging from experience to serve as
premises, or by experience-guided choice between
competing legal propositions, rather than by the operation
of logic upon existing legal propositions, that the growth of
law tends to be determined [ Julius Stone : Legal Systems &
Lawyers Reasoning, pp. 58-59].
13. Not infrequently, in the nature of things there is a
gravity-heavy inclination to follow the groove set by
precedential law. Yet a sensitive judicial conscience often
persuades the mind to search for a different set of norms
more responsive to the changed social context. The
dilemma before the Judge poses the task of finding a new
equilibrium prompted not seldom by the desire to reconcile
opposing mobilities. The competing goals, according to
Dean Roscoe Pound, invest the Judge with the
responsibility "of proving to mankind that the law was
something fixed and settled, whose authority was
beyond question, while at the same time enabling it to
make constant readjustments and occasional radical
changes under the pressure of infinite and variable
human desires". [ Roscoe Pound : An Introduction to the
Philosophy of Law, p. 19] The reconciliation suggested by
Lord Reid in The Judge as Law Maker [ Pp. 25-6] lies in
keeping both objectives in view, "that the law shall be
certain, and that it shall be just and shall move with the
times". An elaboration of his opinion is contained in Myers
v. Director of Public Prosecutions [LR 1965 AC 1001 : (1964) 3
WLR 145 : (1964) 1 All ER 877] , where he expressed the
need for change in the law by the court and the limits within
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which such change could be brought about. He said: [Ibid.
at p. 1021]
"I have never taken a narrow view of the
functions of this House as an appellate
tribunal. The common law must be
developed to meet changing economic
conditions and habits of thought, and I
would not be deterred by expressions of
opinion in this House in old cases. But
there are limits to what we can or should
do. If we are to extend the law it must be by
the development and application of
fundamental principles. We cannot
introduce arbitrary conditions or
limitations: that must be left to legislation.
And if we do in effect change the law, we
ought in my opinion only to do that in cases
where our decision will produce some
finality or certainty."
16. In the examination of this question it would perhaps
be appropriate to refer to the response of other
jurisdictions, specially those with which the judicial system
in India has borne a historical relationship. The House of
Lords in England provides the extreme example of a judicial
body which until recently disclaimed the power to overrule
itself. It used to be said that the House of Lords did never
overrule itself but only distinguished its earlier decisions.
An erroneous decision of the House of Lords could be set
right only by an Act of Parliament. (See Street Tramways v.
London County Council [1898 AC 375] and Radcliffe v. Ribble
Motor Services Ltd. [1939 AC 215, 245] ) Apparently bowing
to the pressure of a reality forced upon it by reason of a
rapidly gathering change in the prevailing socio-economic
structure, on 26-7-1966, Lord Gardiner L.C., made the
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following statement on behalf of himself and the Lords of
Appeal in Ordinary:
"Their Lordships regard the use of
precedent as an indispensable foundation
upon which to decide what is the law and
its application to individual cases. It
provides at least some degree of certainty
upon which individuals can rely in the
conduct of their affairs, as well as a basis
for orderly development of legal rules.
Their Lordships nevertheless recognise
that too rigid adherence to precedent may
lead to injustice in a particular case and
also unduly restrict the proper
development of the law. They propose
therefore to modify former present practice
and, while treating former decisions of this
Houses as normally binding, to depart from a
previous decision when it appears right to do
so.
18. The High Court of Australia, the highest court in the
Commonwealth, has reserved to itself the power to
reconsider its own decision, but has laid down that the
power should not be exercised upon a mere suggestion
that some or all the members of the later court would
arrive at a different conclusion if the matter were res
integra. In the Tramways case [(1914) 18 CLR 54] , Griffith,
C.J., while doing so administered the following caution:
"In my opinion, it is impossible to maintain as
an abstract proposition that court is either
legally or technically bound by previous
decisions. Indeed, it may, in a proper case,
be its duty to disregard them. But the Rule
should be applied with great caution, and
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only when the previous decision is
manifestly wrong, as, for instance, if it
proceeded upon the mistaken assumption
of the continuance of a repealed or expired
statute, or is contrary to a decision of
another court which this Court is bound to
follow; not, I think, upon a mere
suggestion, that some or all of the members
of the later court might arrive at a different
conclusion if the matter was res integra.
Otherwise there would be grave danger of
want of continuity in the interpretation of
law."
In the same case, Barton, J. observed at p. 69:
"...I would say that I never thought that it was
not open to this Court to review its previous
decisions upon good cause. The question is
not whether the court can do so, but
whether it will, having due regard to the
need for continuity and consistency in the
judicial decision. Changes in the number of
appointed Justices can, I take it, never of
themselves furnish a reason for review.... But
the court can always listen to argument as to
whether it ought to review a particular
decision, and the strongest reason for an
overruling is that a decision is manifestly
wrong and its continuance is injurious to the
public interest."
21. These cases from England, Australia and the United
States were considered by this Court in Bengal Immunity
Co. Ltd. v. State of Bihar [AIR 1955 SC 661 : (1955) 2 SCR
603 : (1955) 6 STC 446], perhaps the first recorded instance
of the Supreme Court in this country being called upon to
consider whether it could overrule an earlier decision
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rendered by it. A Bench of seven Judges assembled to
consider whether the majority decision of a Constitution
Bench of five Judges in State of Bombay v. United Motors
(India) Ltd. [AIR 1953 SC 252 : 1953 SCR 1069 : (1953) 4
STC 133] should be reconsidered. Four Judges of the Bench
of seven said it should and voted to overrule the majority
decision in the United Motors [AIR 1953 SC 252 : 1953 SCR
1069 : (1953) 4 STC 133]. The remaining three voted to the
contrary. Das, Acting C.J., speaking for himself and on
behalf of Bose, Bhagwati and Jafar Imam, JJ. preferred the
approach adopted by the United States Supreme Court
since, in the view of that learned Judge, the position in India
approximated more closely to that obtaining in the United
States rather than to the position in England, where
Parliament could rectify the situation by a simple majority,
and to that in Australia, where the mistake could be
corrected in appeal to the Privy Council. The learned Judge
observed: (SCR pp. 627-28)
"There is nothing in our Constitution which
prevents us from departing from a previous
decision if we are convinced of its error and
its baneful effect on the general interests of
the public."
22. Since then the question as to when should the
Supreme Court overrule its own decision has been
considered in several cases. Relying on the Bengal
Immunity case [AIR 1955 SC 661 : (1955) 2 SCR 603 : (1955)
6 STC 446] , Khanna, J. remarked that certainty in the law,
which was an essential ingredient of the rule of law, would
be considerably eroded if the highest court of the land
lightly overruled the view expressed by it in earlier cases.
One instance where such overruling could be permissible
was a situation where contextual values giving birth to the
earlier view had altered substantially since. In Maganlal
Chhaganlal (P) Ltd. v. Municipal Corpn. of Greater Bombay
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[(1974) 2 SCC 402 : (1975) 1 SCR 1], is explained: (SCC pp.
425-26, para 22)
"Some new aspects may come to light and it
may become essential to cover fresh grounds
to meet the new situations or to overcome
difficulties which did not manifest themselves
or were not taken into account when the
earlier view was propounded. Precedents
have a value and the ratio decidendi of a
case can no doubt be of assistance in the
decision of future cases. At the same time
we have to, as observed by Cardozo, 'guard
against the notion that because a principle
has been formulated as the ratio decidendi
of a given problem, it is therefore to be
applied as a solvent of other problems,
regardless of consequences, regardless of
deflecting factors, inflexibly and
automatically, in all its pristine generality'
(see Selected Writings, p. 31). As in life so in
law things are not static."
23. In Lt. Col. Khajoor Singh v. Union of India [AIR 1961
SC 532 : (1961) 2 SCR 828], the majority of this Court
emphasised that the court should not depart from an
interpretation given in an earlier judgment of the court
unless there was a fair amount of unanimity that the
earlier decision was manifestly wrong. In Keshav Mills
Co. Ltd. v. CIT [AIR 1965 SC 1636 : (1965) 2 SCR 908, 921 :
(1965) 56 ITR 365] , this Court observed that a revision of
its earlier decision would be justified if there were
compelling and substantial reasons to do so. In Sajjan Singh
v. State of Rajasthan [AIR 1965 SC 845 : (1965) 1 SCR 933,
947-948], the court laid down the test: "[I]s it absolutely
necessary and essential that the question already
decided should be reopened?", and went on to observe:
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"The answer to this question would depend
on the nature of the infirmity alleged in the
earlier decision, its impact on public good and
the validity and compelling character of the
considerations urged in support of the
contrary view."
There can be no doubt, as was observed in Girdhari Lal
Gupta v. D.N. Mehta [(1971) 3 SCC 189 : 1971 SCC (Cri)
279 : (1971) 3 SCR 748] that where an earlier relevant
statutory provision has not been brought to the notice of
the court, the decision may be reviewed, or as in Pillani
Investment Corpn. Ltd. v ITO [(1972) 1 SCC 122 : (1972) 2
SCR 502] if a vital point was not considered. A more
compendious examination of the problem was undertaken
in Keshav Mills Co. Ltd. v. CIT [AIR 1961 SC 532 : (1961) 2
SCR 828] where the Court pointed out: (SCR p. 922)
"It is not possible or desirable, and in any case
it would be inexpedient to lay down any
principles which should govern the approach
of the Court in dealing with the question of
reviewing and revising its earlier decisions. It
would always depend upon several relevant
considerations: What is the nature of the
infirmity or error on which a plea for a
review and revision of the earlier view is
based? On the earlier occasion, did some
patent aspects of the question remain
unnoticed, or was the attention of the
Court not drawn to any relevant and
material statutory provision, or was any
previous decision of this Court bearing on
the point not noticed? Is the Court hearing
such plea fairly unanimous that there is
such an error in the earlier view? What
would be the impact of the error on the
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general administration of law or on public
good? Has the earlier decision been
followed on subsequent occasions either by
this Court or by the High Courts? And,
would the reversal of the earlier decision
lead to public inconvenience, hardship or
mischief? These and other relevant
considerations must be carefully borne in
mind whenever this Court is called upon to
exercise its jurisdiction to review and
revise its earlier decisions. These
considerations become still more significant
when the earlier decision happens to be a
unanimous decision of the Bench of five
learned Judges of this Court."
24. Much importance has been laid on observing the
finality of decisions rendered by the Constitution Bench of
this Court, and in Ganga Sugar Corpn. Ltd. v. State of U.P.
[(1980) 1 SCC 223 : 1980 SCC (Tax) 90 : (1980) 1 SCR 769,
782], the Court held against the finality only where the
subject was "of such fundamental importance to national
life or the reasoning is so plainly erroneous in the light
of later thought that it is wiser to be ultimately right
rather than to be consistently wrong."
(Emphasis added)
44. Closer home, there is the Full Bench decision in Vinayak Hari
Kulkarni v the State of Maharashtra. There, one of the three judges
of the Full Bench (SC Dharmadhikari J) in his dissenting opinion (I
believe I can safely refer to this because there seems to have been no
disagreement between the three judges at least on these principles)
said that the doctrine of binding precedent is required to maintain
consistency and certainty. Previous decisions of benches of
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coordinate strength should ordinarily be followed. The rule is not
absolute, but departures are not to be made for the asking. As the
passages from Raghubir Singh tell us, those departures must be
careful, in extreme circumstances, and where the previous decision
is plainly, or facially, wrong. A foolish consistency may be the
hobgoblin of little minds, but an imprudent inconsistency is the
fickle friend of mindlessness. Inconsistency is the implacable enemy
of the rule of law, to which certainty is fundamental. People must
know where they stand in the eyes of the law if they are not to 'take
their chances' and gamble on litigation.
45. In Commissioner of Income-Tax v Thana Electricity Supply Ltd,18
a Division Bench of this Court set out the governing principles:
20. From the foregoing discussion, the following
propositions emerge:
(a) The law declared by the Supreme Court being
binding on all courts in India, the decisions of the Supreme
Court are binding on all courts, except, however, the
Supreme Court itself which is free to review the same and
depart from its earlier opinion if the situation so warrants.
What is binding is, of course, the ratio of the decision and
not every expression found therein.
(b) The decisions of the High Court are binding on the
subordinate courts and authorities or Tribunals under its
superintendence throughout the territories in relation to
which it exercises jurisdiction. It does not extend beyond its
territorial jurisdiction.
18 (1994) 206 IT 727 : 1993 SCC Online Bom 591.
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(c) The position in regard to the binding nature of the
decisions of a High Court on different Benches of the same
court may be summed up as follows:
(i) A single judge of a High Court is bound by
the decision of another single judge or a Division
Bench of the same High Court. It would be
judicial impropriety to ignore that decision.
Judicial comity demands that a binding decision
to which his attention had been drawn should
neither be ignored nor overlooked. If he does not
find himself in agreement with the same, the
proper procedure is to refer the binding decision
and direct the papers to be placed before the
Chief Justice to enable him to constitute a larger
Bench to examine the question (see Food
Corporation of India v. Yadav Engineer and
Contractor, (1982) 2 SCC 499 : AIR 1982 SC 1302).
(ii) A Division Bench of a High Court should
follow the decision of another Division Bench of
equal strength or a Full Bench of the same High
Court. If one Division Bench differs from another
Division Bench of the same High Court, it should
refer the case to a larger Bench.
(iii) Where there are conflicting decisions of
courts of co-ordinate jurisdiction, the later decision
is to be preferred if reached after full consideration
of the earlier decisions.
(d) The decision of one High Court is neither binding
precedent for another High Court nor for courts or
Tribunals outside its own territorial jurisdiction. It is well-
settled that the decision of a High Court will have the force
of binding precedent only in the State or territories on
which the court has jurisdiction. In other States or outside
the territorial jurisdiction of that High Court it may, at best,
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have only persuasive effect. By no amount of stretching of
the doctrine of stare decisis, can judgments of one High
Court be given the status of a binding precedent so far as
other High Courts or Courts or Tribunals within their
territorial jurisdiction are concerned. Any such attempt will
go counter to the very doctrine of stare decisis and also the
various decisions of the Supreme Court which have
interpreted the scope and ambit thereof. The fact that there
is only one decision of any one High Court on a particular
point or that a number of different High Courts have taken
identical views in that regard is not at all relevant for that
purpose. Whatever may be the conclusion, the decisions
cannot have the force of binding precedent on other High
Courts or on any subordinate courts or Tribunals within
their jurisdiction. That status is reserved only for the
decisions of the Supreme Court which are binding on all
courts in the country by virtue of article 141 of the
Constitution.
(Emphasis added)
46. Social, moral, philosophical, political inclinations or
preferences do not permit a legitimate distancing from decided and
binding precedent. Judicial discipline and comity demand require
personal penchants or predilections be suborned to certainty and
consistency. Departures from decided, binding views are to be done
in a prescribed manner, and in that manner only, and they may be
done only in a narrowly defined band of cases: where there is
manifest or plain error, etc. The causes may vary greatly. But, at the
very least, I should imagine there should be such an overwhelming
case made out that the second judge cannot but possibly say the
previous case was wrongly decided. It is impermissible for a later
court to hold that an earlier decision of a bench of coordinate or
greater strength is incorrect on the basis of arguments previously
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made, considered and decided, merely because some other view is
possible. Another view does not need to be taken only because it
might be taken. A differing view should be taken only when it must
be taken.
47. I say this because I will not -- I believe I cannot --permit Mr
Kadam to even attempt to persuade me to reopen any of the
arguments that were before Mrs RP SondurBaldota J in Rendezvous
Sports. As far as I am concerned, that decision binds me. It may be
tested in a higher Court. I believe the question is already pending
before the Supreme Court. That is no reason to adjourn these
matters and it is certainly no ground for me to disagree or to add
more fuel to this jurisprudential fire. Mr Kadam and Mr Dhond say
that another learned single judge of this Court, NM Jamdar J too
followed Rendezvous Sports in Maharashtra Airport Development
Company Ltd v PBA Infrastructure Ltd19 and that the order was
stayed by the Supreme Court.20 This submission is misplaced. The
Supreme Court did not 'stay' the judgment in Rendezvous Sports. It
noticed there were conflicting decisions between this Court and the
Delhi High Court -- there are, and I have noted them -- and stayed
attachment Jamdar J ordered. That is a very different thing and it
does not assist Mr Kadam and Mr Dhond in their labours.
48. I have no doubt at all that I must reject outright the
submission from Mr Kadam and Mr Dhond that I should, or even
can, conclude that Rendezvous Sports was wrongly decided. That
invitation does not meet the prescribed standards. It does not fall
19 Notice of Motion (L) No. 16 of 2017 in Arbitration Petition No. 1483 of
2015, decided on 31 January 2017.
20 Order dated 21st February 2017 in SLP (C) No. 5021 of 2017.
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within the narrow band of exceptions that permit this. It merely asks
me to reopen the entire debate because it suits their clients'
purposes.
49. I also do not accept their interpretation on Section 26. The
challenge petitions are all filed after 23rd October 2015 when the
Amending Act came into force. All three challenge petition
necessarily require that an application be made for stay of the
operation of the award; there is no automatic stay. The provisions of
the amended Arbitration Act apply to all these challenge Petitions.
F. WHO MAY EXECUTE THE AWARD/DECREE
50. This takes me to the second argument, the one canvassed by
Mr Mehta. This is based on a closer reading paragraph (3)(b)(i) of
Part XVIII of the award:
(3) The Tribunal orders the Second and Third
Defendants:
(a) ...
(b) Jointly and severally--
(i) to pay to WWIL the sum of INR
6,772,456,570, being the profit made by
Vish Wind on the sale of allotment
rights to WWIL in the years ending 31
March 2011 and 2012 together with
interest thereon at the rate of 3% over
European Central Bank rate from those
dates until the date of this Award.
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51. Mr Mehta's argument is straight forward. This portion of the
Award, he says, is a direction to the Mehras jointly and severally to
pay a certain amount to WWIL. That, in his submission, is a decree
in favour of WWIL. It is WWIL that is, therefore, the "Decree
Holder".
52. Mr Mehta draws attention to the definition of Decree Holder
in Section 2(3) of the Code of Civil Procedure 1908:
"2. Definitions.--
(3) "decree-holder" means any person in whose favour
a decree has been passed or an order capable of execution
has been made."
53. This, he says, is supported by a plain reading of Sections 39
and 51 of the CPC and Order XXI Rule 11(2) and Order XXI Rule
15, all of which provide for what a 'decree-holder' may do in
execution.
54. Mr Mehta's submission is that this portion of the Award is
not in favour of Enercon at all. It is in favour of WWIL. It is only
WWIL, therefore, that can put it into execution. It makes no
difference whether WWIL ever sought such a relief. A decree could
be passed even in favour of a stranger. The definition of Decree
Holder itself refers not to a party but to a person and it must be a
person in whose favour an executable order is made. He relies on the
decision of the Division Bench of this Court in Kirtilal Jivabhai v
Chunilal Manilal,21 and in particular this passage:
21 AIR (33) 1946 Bom 27.
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"As we have pointed out, the application for execution on
which the order of attachment was made by the Ahmedabad
Court on August 31, 1931, was made by Kantilal on
February 10, 1931. The most important question we have to
consider is : in what capacity did Kantilal make this
application? The scheme of the Civil Procedure Code is
that it is only a decree-holder who can ordinarily apply for
execution of the decree. If there are more than one decree-
holders, then under Order XXI, Rule 15, it is competent to
one of the joint decree-holders to apply for execution. If the
decree is transferred either by assignment in writing or by
operation of law, the transferee can also apply for execution
under Order XXI, Rule 16, of the Civil Procedure Code.
......
Now, in the first place, there is nothing on the face of the
record to show that Jivabhai was suing the firm of Vadilal
Manilal in his capacity as the karta in respect of a joint
family debt. Jivabhai is described in the title of the plaint as
Jain Hindu inhabitant, a commission agent and shroff
carrying on business as such at Pydhonie outside the Fort.
But there is nothing to suggest in the plaint that the
business he was carrying on was an ancestral business. In
the second place, in our opinion a decree-holder entitled to
execute the decree as such must appear to be a decree-
holder on the face of the decree. Whether the decree-holder
applies under Order XXI, Rule 10, or under Order XXI,
Rule 15, the executing Court can only execute the decree
provided his name appears as a decree-holder on the face of
the decree itself. The executing Court cannot look to
anything outside or beyond the decree in order to satisfy
itself that the person who is applying for execution is the
decree-holder.
......
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To the extent that Mr. Justice Shah held that Balvant could
present the application as one of the assignees by operation
of law on the death of Vishnu under Order XXI, Rule 15,
read with Order XXI, Rule 16."
55. I do not see how this assists Mr Mehta in any way. If one
looks at the decree in the Award, it is clearly not one in favour of
WWIL at all. As we have seen. that is a joint venture company and a
preceding paragraph of the Award, to which I will presently turn,
makes it clear that the portion in question of the award was a
moulding or re-fashioning of Enercon's claim. It is Enercon itself
which benefits from this award.
56. Mr Mehta also cites the decision of a Single Judge in Bajirao
Domaji Shreerang & Ors v Kashirao Ajabrao Deshmukh.22 The
relevant paragraphs are 14 and 16:
"14. Reference may now be made to some of the
decisions in which the question was raised and decided. I
will firstly refer to the decision in Baddisetti Rangayya Setti
v. Guduru Venkata Subba Reddi. In that case the Petitioner
was a judgment-debtor. Decree-holder was a judgment-
debtor of the Petitioner in another suit. The judgment-
debtor Petitioner and the decree-holder in that suit arrived
at an understanding on the 17th Aug., 1933 and adjusted
their mutual decrees which had been obtained by them
against each other. Prior to that on the 5th July 1933, the
Petitioner decree-holder had already assigned his decree in
favour of a third person. By reason of the adjustment which
was recorded on the 17th of Aug., 1933, the Petitioner's
debt due under the decree which was passed in his favour,
and the debt due from him under the decree which was
22 AIR 1978 Bombay 350.
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obtained against him by the judgment-debtor in that suit
was settled. Subsequently, that is, after about a year later,
the transferee of the decree which the Petitioner had
obtained in another suit took out execution of that decree.
An objection was raised to that execution application that
the decree had been fully adjusted. This objection
succeeded and it was held by his Lordship Mr. Justice
Cornish who delivered the judgment of the Court that--
"The present definition of "decree-holder"
is more limited. It means the person in whose
favour a decree has been passed. This is the
meaning which the word must bear in Order
21 Rule 2, providing for the recording of
satisfaction or adjustment of decree between
the decree-holder and the judgment-debtor.
Until the transferee has taken steps under
Order. 21, Rule 16, for sanction to execute the
decree, the executing Court cannot recognize
any other person than the decree-holder on
record."
It was held, therefore, referring to the change of the
definition of the term 'decree-holder', as obtained in the
Civil P. C. 1882 and that of the year 1908, that a transferee
of the decree is excluded from the definition of 'decree-
holder' in the 1908 Code. Therefore, as long as the
transferee was not recognised under Order 21 Rule 16, a
decree could be executed by such person in whose favour
the decree was passed.
16. The expression "a person in whose favour the
decree has been passed" appearing in the definition of the
term "decree-holder" in Civil P. C. not only includes a
Plaintiff, but in a case like any decree for specific
performance also includes a Defendant. It is settled law that
such a decree can be executed even at the instance of the
Defendant judgment-debtor (see Section 28 of the Specific
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Relief Act and decrees in partnership suits.) Therefore, the
only basis for finding out as to who is the decree-holder is to
ask the question as to in whose favour the decree is passed.
If the answer has to be that the decree-holders in this case
were Narayan and others, then there can be no dispute that
on 30th March 1970 the decree being still in favour of
Narayan and others, they could make an application.
Besides they could also and could have also executed the
decree if the execution of the decree had not been stayed by
the M. P. Temporary Postponement of Execution of
Decrees Act on that date."
57. Indeed if the question before the Bajirao Shreerang court is
asked, the proper answer in our case would necessarily have to be
that the decree is passed not in favour of the person to whom
payment is directed to be made -- that is surely an over
simplification -- but the person at whose instance that application
was made and who directly benefits from that order of payment.
58. The decision in Govindagouda Narayangouda Patil v Madhava
Rao Narasinga Rao Patil,23 also cited by Mr Mehta, is clearly
distinguishable. There, the constituted attorney of the guardian of a
minor plaintiff sought to execute the decree when this objection was
taken. That is hardly the kind of case from which we can draw any
useful parallel. This is also true of the decision in Ajudhia Prasad v
UP Government.24
59. Mr Chinoy for Enercon is, in my view, correct in asking me
not to go behind the decree to see if it was validly passed. He only
invites my attention to one portion of the award to gain context and
23 1964 ILR Mysore 125.
24 1947 ILR All 191.
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understanding of the final form of the decree. We find this in
paragraph 298 at page 61 of the Award.
"298. Enercon's claim is first pleased as damages payable
by the Mehra directors directly to Enercon. It also pleads an
alternative claim for such further or other relief as the
Tribunal considers appropriate (paragraph 18 f the
application of 13 December 2015 and paragraph 323.4 of its
closing written submission dated 13 May 2016, as also its
Statement of Claim of 30 September 2014, at paragraph
102(M).) In the Tribunal's view, given that WWIL is only
part owned by Enercon (hence Enercon's pecuniary
disadvantage resulting from the Mehra directors'
wrongdoing is not the same as that of WWIL) and further
that the WWIL remains the person most immediately
affected by such wrongdoing, the liability of the Mehra
directors is best discharged b y requiring them to deciding
upon such relief in favour of WWIL (as distinct from direct
relief in favour of Enercon), the Tribunal sees no material
disadvantage to Enercon, and, as for the Mehra directors,
no possible prejudice or other unfairness, whether as a
matter of pleading, the form of relief or otherwise."
60. All counterclaims and other claims were expressly dismissed.
In this portion, the Arbitral Tribunal took up Enercon's claim for
damages on its case that profits had been diverted to a rival
company set up precisely for that purpose. The reference to the
generic alternative prayer "for such further and other relief" shows
that the Arbitral Tribunal chose to mould the principal relief it was
inclined to grant. It accepted (a) Enercon's plea that there was
wrongdoing in the first place; (b) that WWIL was the entity most
immediately affected by that wrongdoing; and (c) that the Mehras
were liable to make good any advantage they obtained from this
wrongdoing, which was of their making. This is what the Arbitral
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Tribunal sought to set right. It did so by conferring a relief in favour
of WWIL as opposed to merely granting a direct decree in favour of
Enercon. It saw no possible prejudice or unfairness to any party nor
any material disadvantage to Enercon.
61. These last words are important. If what Mr Mehta says is
correct and the decree was in favour of WWIL and not Enercon,
that necessarily posits a rejection of Enercon's claim for damages
and, therefore, a material disadvantage to Enercon. But this is not
what the Arbitral Tribunal did at all. It accepted Enercon's plea. It
accepted its argument that the Mehras were guilty of wrongdoing. It
accepted that the Mehras were liable to make good any advantage or
benefit they have received. The Arbitral Tribunal merely changed
the vehicle or direction by which that recompense, restitution or
recovery was to be made. The nomenclature is immaterial. Given
the nature of disputes, indeed, WWIL could never put this decree
into execution. It never sought this relief. It could not have. This is
not in fact, as paragraph 298, says a relief in favour of WWIL at all
although WWIL may benefit from it. It is a relief and a decree in
favour of and only of Enercon.
62. The second and only remaining plank of argument in support
of the Group "A" Chamber Summonses, i.e., those assailing the
Execution Applications thus also fails.
63. Consequently, all five Group A Chamber Summonses,
namely, Chamber Summons (L) No. 20 of 2017, 22 of 2017, 19 of
2017 and 21 of 2017 and 23 of 2017 are dismissed.
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G. GROUP B CHAMBER SUMMONSES IN
EXECUTION
64. There are two Chamber Summonses in this group. Both are
filed by Enercon. Chamber Summons (L) No. 7 of 2017 relates to
the first part of the Award, i.e., the payment of royalties covered by
paragraph 331(f )(2)(a)(i). The prayer in that Chamber Summons is
to direct Wind World to disclose all particulars of all assets and
properties wherever held and whether through its subsidiaries or
other companies in which Wind World or the Mehras have any
right, title or interest. Given the foregoing discussion and since
there is evidently no stay on execution, this prayer must be granted.
65. The Affidavit of disclosure will be filed by either of the
Mehras on behalf of WWIL, and it will be filed on or before 17th
April 2017. I will not dispose of this Chamber Summons at this stage
and keep it pending since prayer (b) asks for further reliefs under
various Rules of Order XXI and under Section 51 of the CPC in the
event that the Respondents default.
66. A similar disclosure is sought in Chamber Summons No. 8 of
2017 but against the Mehras and this is in relation to the portion of
the Award that grants costs to Enercon. I must note that these costs
are quite substantial -- in excess of €3.7 million, and that is after the
Arbitral Tribunal assessed the rival statements of costs, analysed
them, found some inflated and others unnecessary, and reduced
these to an amount it considered more modest (a somewhat relative
term in this context). The prayer in this Chamber Summons is for a
disclosure against the two Mehras of all their assets and properties
including of course their bank accounts whether held singly or
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jointly. All assets and properties necessarily include all movable and
immovable properties. This order must also follow and in the same
time frame.
67. Mr Dwarkadas is correct in pointing out that these disclosures
must be as on today, the date of this order, and not of some
historical or hypothetical date. Again this Chamber Summons will
have to be kept pending since prayer (b) seeks reliefs in an event of
default.
68. This takes care of the two Chamber Summonses in Group B.
H. ORDER
69. The five Group A Chamber Summonses for dismissal of the
execution applications are all dismissed. The two Group B Chamber
Summonses will take an order in the foregoing terms, requiring
disclosure. They are kept pending, and will be listed on 21st April
2017. There will be no order as to costs.
70. Mr Kadam wants a stay of this order. Mr Dwarkadas, Mr
Chinoy and Mr Kamdar all oppose the application. As regards the
Group A Chamber Summonses, there is nothing to stay. For the
remaining two, I have given a longer time than usual for making the
disclosures, and that will have to suffice. The application is rejected.
(G.S. PATEL, J.)
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