In this case, the Court was considering a petition
under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“Act”) seeking
appointment of an arbitrator in an international commercial arbitration between
the petitioner and the respondent. The arbitration clause between the parties
provided that:
(i)
The contract was to be governed by the laws of
India;
(ii)
Disputes were to be resolved by arbitration, the
place of arbitration being Hong Kong; and
(iii)
Provisional or interim relief may be sought before
Courts of appropriate jurisdiction, before or during the arbitration
proceedings
The petitioner argued that the aforesaid clause
merely provided for Hong Kong to be the ‘venue’ of the arbitration proceedings,
and not the ‘seat’. Since the laws of India were made applicable, the Supreme
Court was empowered to exercise power of appointment under Section 11(6), it
was argued.
The respondent argued that the reading of the clause
in question revealed the intention of the parties for Hong Kong to be the
‘place’ of the arbitration, and not merely the venue.
The decision in Union of India v. Hardy
Exploration and Production (India) Inc. was relied on by the petitioner, and BGS
SGS Soma v. NHPC Limited was relied upon by the respondent. In BGS,
the decision in Hardy had been held not to be good law, and the
petitioner in the present case argued that both decisions being by benches of
equivalent strength, the only remedy was for reference to a larger bench. It
was argued that in BGS, the Court could not have declaredHardyas
having been incorrectly decided. [In view of the fact that the present case was
determined on the basis of reading of the clauses of the contract, the Court
found it unnecessary to deliberate on this argument of the petitioner].
The Court interpreted the clauses in the present
case to infer that the parties had chosen Hong Kong as the ‘seat’ of
arbitration, and not merely the ‘venue’. It was then held that the said choice
clearly entailed submission to the laws of the country chosen as the ‘seat’,
meaning thereby that the Supreme Court had no jurisdiction to appoint the arbitrator.
The petition thus came to be rejected.
New India
Assurance Co. Ltd. v. Hilli Multipurpose Cold Storage Pvt. Ltd.
[Civil Appeal
No. 10941-10942 of 2013 decided on 4.3.2020]
A Constitution Bench of the Supreme Court
(comprising of 5 Judges) answered two questions arising out of an
interpretation of the Consumer Protection Act, 1986 (“Act”), viz.:
(i)
Whether, in view of Section 13(2) of the Act, a
response to a consumer complaint may be filed beyond the extended period of 15
days?
(ii)
What was the commencing point of limitation for
calculation of the time referred to in Section 13(2)?
The reference was made by the Supreme Court in Bhasin
Infotech and Infrastructure Pvt. Ltd. v. Grand Venezia Buuyers Association
(Reg) upon noticing an apparent conflict between broadly two sets of
decisions of the Court: in Topline Shoes Limited v. Corporation Bank on
the one hand and J.J. Merchant &Ors. v. Shrinath Chaturvedi and NIA
v. Hilli Multipurpose Cold Storage Pvt. Ltd. on the other.
On the first question, the Court, upon reference to
the Statement of Objects and Reasons of the Act and the distinction between the
wording of Section 13(3A) of the Act (which provides for the period within
which the Consumer Fora shall endeavor to decide a complaint) and
Section 13(2)(a), it was held that the 30+15 day period in the latter provision
was mandatory. The provision was also juxtaposed with other provisions of the
Act and the regulations thereunder to arrive at the same finding.
The comparison with Order VIII Rule 1 of the Civil
Procedure Code, 1908 (“CPC”) was rejected while holding that the Act provided
specific consequences for inability to file response within the stipulated
time, while the CPC provided no such consequence, and left an element of
discretion with the Court.
Based, inter alia, on the above reasons, it
was held that the decision in J.J. Merchantwhich held the provision to
be mandatory, was correctly decided, and Topline Shoesdid not lay down
the correct position of law.
On
the second question, the Court referred to Sections 13(2)(a) and 13(2)(b) of
the Act and Regulation 10 of the Regulations framed thereunder to hold that the
time period for filing of response will commence from the date of service of
notice alongwith copy of complaint. The Court however clarified that
non-receipt of copy of complaint could be urged as an objection only on the
first date of hearing and not thereafter.
Bank
of Baroda v. Kotak Mahindra Bank Ltd.
[Civil
Appeal No. 2175 of 2020 decided on 17.3.2020
The
Court was called upon to decide as to what was the period of limitation for
filing of an execution petition seeking execution of a foreign decree in India.
The case arose out of an execution petition filed by the appellant against the
respondent in respect of a money decree for a sum of USD 1,267,909.26 passed by
the High Court of Justice, Queens Bench Division Commercial Court of London, UK
in favour of the appellant against the respondent. The decree was dated
20.2.1995, and the execution petition in terms of Section 44A read with Order
21 Rule 3 of the Code of Civil Procedure, 1908 (“CPC”) was filed in Bengaluru
on 5.9.2009, i.e. after more than 14 years.
The
Trial Court rejected the execution petition as being barred by time, by
applying Article 136 of the First Schedule of the Limitation Act, 1963 (“Act”)
which provides a time period of 12 years for execution of a decree.
The
appellant argued before the Supreme Court that Article 136 applied to Indian
decrees only, and that no provision fixing limitation for execution of decrees of
a reciprocating country was available in Indian law. In the alternative, it was
submitted that the cause of action for execution of a foreign decree arose only
once a petition under Section 44A of the CPC was filed, and therefore the
period of limitation of 12 years would commence only from the said date. Per
contra it was urged by the respondent that the English law of limitation,
which provided for a period of 6 years for execution of the decree, would apply
to the facts of the present case. In the alternative, it was argued that
Section 44A of the CPC provided for the treatment of a foreign decree as one
passed by an Indian Court and therefore Article 136 of the Act would apply to
such a decree.
The
Court rejected the submission to the effect that the Limitation Act would not
apply to decrees of foreign, reciprocating countries, by relying on Section 3
of the Act which referred to ‘applications’ which was broad enough to include
an application for execution of a foreign decree. The Court further rejected
the submission that the cause of action for filing an execution petition arose
upon filing of the foreign decree in an Indian court under Section 44A, by
holding that the concept of cause of action held relevance for suits and not
for execution proceedings.
After
examining various commentaries on the evolution of private international law,
the Court concluded that the limitation period applicable for the execution of
a decree of a Court of a foreign, reciprocating country was determined by the
limitation law of that country. Further, the starting point of limitation was
held to be the date of the decree itself, if no steps were taken for execution
of the decree. On the other hand, in a situation where steps in aid of
execution of the decree were taken in the country in which the decree was
passed, but the decree did not stand fully satisfied, it was held that the
starting point of limitation would be the conclusion of the execution
proceedings in that country. An application under Section 44A of the CPC could
thereafter be filed in India within 3 years, by applying Article 137 of the
Act. The appeals came to be dismissed based on these reasons.
M/s Nandan Biomatrix Ltd. vs. S.
Ambika Devi &Ors.
[Civil Appeal No. 7357-7376 of
2010 decided on 06.03.2020]
The Court in the
present matter dealt with the issue ‘whether the Respondent was excluded from
the purview of the definition of “consumer” under section 2 (d) of the Consumer
Protection Act, 1986 (“Act”) either
on account of the subject transaction amounting to resale, or on account of it
being for a commercial purpose’.
The Respondent, a
small landholder, had entered into a buyback agreement with the Appellantwhereby
the Appellant soldSafed musliseeds to
the Respondent and agreed to buy back the produce at a pre-fixed rate. The
Respondent had sowed seeds in terms of the agreement. Upon the Appellant’s
refusal to buyback the produce, the Respondent filed a consumer complaint which
was dismissed by the District Commission on the ground that the Respondent was
not a consumer, in view of the nature of the transaction.
This order was set
aside by the State Commission, holding that the Respondent was a consumer. The
Order of the State Commission was affirmed in revision by the National
Commission holding that the covenants entered into between the parties were in
nature of both sale of product and rendering of service. Respondent was a small
landholder, who had started cultivation of musli
for eking out a livelihood for herself. It could not be said that the agreement
was entered into for commercial purpose of the Respondent.
The Apex Court
held that the Respondent produces seeds to be marketed by the seed company. Thus,
the Respondent is not reselling any product but grows his own product by
utilizing the foundation seeds. It is purely for the purpose of earning his
livelihood by means of self-employment. On the aspect of whether by re-selling
the seeds, the Appellant acquired the status of a seller and therefore could
not be a consumer, the Court rejected the Appellant’s submission, relying on
the decision in National Seeds Corpn. Ltd. v. M. Madhusudan Reddy. A decision of the National Commission in Sakthi
Sugars Ltd., Orissa v. Sridhar Sahoo was overruled.
Union bank of India vs. Rajat
Infrastructure Pvt. Ltd. &Ors.
[Civil Appeal No. 1902 of 2020
decided on 02.03.2020]
The Supreme Court
was called upon to examine the correctness of a decision of the High Court of
Bombay, whereby the High Court had permitted a writ petitioner before it to
challenge an order (challenged in the writ) of the Debt Recovery Tribunal (DRT)
before the Debt Recovery Appellate Tribunal (DRAT) in terms of Section 18 of
the Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interests Act, 2002 (SARFAESI). While passing the said order, the High
Court had waived the pre-deposit mandated under the provision. A review of the
order was also rejected on the ground that the pre-deposit could be waived
since the challenge was by a guarantor to the price at which the mortgaged
property was sold to the auction purchaser.
The Court set
aside the order while relying on the decision in Narayan Chandra Ghosh v.
UCO Bank &Ors. wherein it was held that there was an absolute bar to
the entertainment of an appeal under Section 18 of the SARFAESI unless the condition
precedent of pre-deposit set out therein stood fulfilled. The Court reiterated
the position that the guarantor stood on the same footing as the borrower, and
therefore could not escape the liability to make pre-deposit.
The Court further
held that the High Court has no powers akin to powers vested in the Apex Court
under Article 142 of the Constitution, so as to waive the statutory
requirements.
The Joint Labour
Commissioner and Registering Officer and Anr. v. Kesar Lal
[Civil Appeal
No. 2014 of 2020 decided on 17.3.2020]
The Court was called upon to consider whether the
beneficiary of a statutory welfare scheme is entitled to remedies under the
Consumer Protection Act, 1986 (“Act”). The case arose in the context of a respondent-construction
worker who was registered under the Building and Other Construction Workers
(Regulation of Employment and Conditions of Service) Act, 1996. The State of
Rajasthan had framed Rules under the said enactment for constitution of a Board
for the welfare of the construction workers in the State. The respondent was a
beneficiary of the welfare scheme of such a board. The scheme provided for
contributions to be made by the construction workers for meeting the cost of
the same. The argument of the respondent, which had found favour with the
consumer fora, was that the respondent was a beneficiary of the Board and
therefore ‘consumer’ within the meaning of Section 2(d) of the Act.
The petitioner’s argument was that since the cost of
the scheme under the Act and the State Rules was not defrayed out of the
contributions made by the respondent, and since the same was met from Cess
collected by the State, it could not be said that the respondent was a
beneficiary of a ‘service’ provided by the Board. The scheme itself was in the
nature of a welfare scheme of the State.
The Court referred to the definitions in Section
2(1)(d) and Section 2(1)(o) [that of ‘service’] to conclude that the test was
not whether the amount paid by the beneficiary is sufficient to defray the
entire cost of the service availed by that beneficiary. The Court held that so
long as the service rendered is not rendered free of charge, and deficiency of
service was amenable to the jurisdiction of the consumer fora.
