tag:blogger.com,1999:blog-70525097733531066682024-03-08T16:54:44.933-08:00satyasodhanaDr.Mohan b rao B.Sc., M.L., Ph.D., UGCNEThttp://www.blogger.com/profile/01503191252332509407noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-7052509773353106668.post-34745478635799003842010-11-20T14:56:00.000-08:002010-11-20T14:58:03.558-08:00Andhra Pradesh Tourism Development Corpn. Ltd. & Anr. Vs. M/s. Pampa Hotels Ltd.<pre><a href="http://courtnic.nic.in/supremecourt/temp/3272200752042010p.txt">http://courtnic.nic.in/supremecourt/temp/3272200752042010p.txt</a></pre><pre><o:p> </o:p></pre><pre><span style="color:black">ITEM <st1:street st="on"><st1:address st="on">NO.1A<span style="mso-spacerun:yes"> </span>COURT</st1:address></st1:street> NO.4<span style="mso-spacerun:yes"> </span>SECTION XIIA<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>S U P R E M E<span style="mso-spacerun:yes"> </span>C O U R T<span style="mso-spacerun:yes"> </span>O F<span style="mso-spacerun:yes"> </span>I N D I A<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>RECORD OF PROCEEDINGS<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>CIVIL APPEAL NO(s). 3272 OF 2007<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">ANDHRA PRADESH TOURISM DEV. COPRN.& ANR<span style="mso-spacerun:yes"> </span>Appellant (s)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>VERSUS<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">M/S PAMPA HOTELS LTD.<span style="mso-spacerun:yes"> </span>Respondent(s)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Date: 20/04/2010<span style="mso-spacerun:yes"> </span>This Appeal was called on for judgment today.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">For Appellant(s)<span style="mso-spacerun:yes"> </span>Mr. T.V. Ratnam,Adv.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">For Respondent(s)<span style="mso-spacerun:yes"> </span>Mr. G. Ramakrishna Prasad,Adv.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Hon'ble Mr. Justice R.V. Raveendran pronounced the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>judgment<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Bench<span style="mso-spacerun:yes"> </span>comprising<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>His<span style="mso-spacerun:yes"> </span>Lordship<span style="mso-spacerun:yes"> </span>and<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Hon'ble Mr. Justice H.L. Dattu.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Appeal is disposed of in terms of the signed<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>order.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>( <st1:place st="on">Ravi</st1:place> P. Verma )<span style="mso-spacerun:yes"> </span>( M.S. Negi )<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span><st1:street st="on"><st1:address st="on">Court Master<span style="mso-spacerun:yes"> </span>Court</st1:address></st1:street> Master<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>[Signed reportable judgment is placed on the file]<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Reportable<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>IN THE SUPREME COURT OF <st1:country-region st="on"><st1:place st="on">INDIA</st1:place></st1:country-region><o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>CIVIL APPELLATE JURISDICTION<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>CIVIL APPEAL NO.3272 OF 2007<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Andhra Pradesh Tourism Development<o:p></o:p></span></pre><pre><span style="color:black">Corpn. Ltd. & Anr.<span style="mso-spacerun:yes"> </span>... Appellants<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Vs.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">M/s. Pampa Hotels Ltd.<span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>... Respondent<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>J U D G M E N T<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">R.V.RAVEENDRAN, J.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre style="margin-right:-1.0in"><span style="color:black"><span style="mso-spacerun:yes"> </span></span><span style="font-size:12.0pt;font-family:"Times New Roman";color:black">The respondent is a company incorporated on 9.4.2003 under<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Companies<span style="mso-spacerun:yes"> </span>Act,<span style="mso-spacerun:yes"> </span>1956.<span style="mso-spacerun:yes"> </span>The<span style="mso-spacerun:yes"> </span>appellant<span style="mso-spacerun:yes"> </span>(Andhra Pradesh<span style="mso-spacerun:yes"> </span>Tourism<span style="mso-spacerun:yes"> </span>Development<span style="mso-spacerun:yes"> </span>Corporation<span style="mso-spacerun:yes"> </span>Ltd.,<span style="mso-spacerun:yes"> </span>for<span style="mso-spacerun:yes"> </span>short `APTDC') is a "government company" within the meaning of that expression in section 617 of the Companies Act, 1956.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">2.<span style="mso-spacerun:yes"> </span>According to the respondent, the parties had entered<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">into two agreements in regard to a property known as Hill<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">View Guest House, Alipiri, Tirupathi, measuring 1.08 acres.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">The first was a lease agreement under which APTDC granted a<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">lease of the said property to the respondent for a term of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">33 years; and the second was a development and management<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement under which APTDC entrusted to the respondent,<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the development of a Three-Star Hotel in Hill View Guest<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">House<span style="mso-spacerun:yes"> </span>property on<span style="mso-spacerun:yes"> </span>construction, operation and management<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">basis.<span style="mso-spacerun:yes"> </span>According<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>respondent,<span style="mso-spacerun:yes"> </span>both<span style="mso-spacerun:yes"> </span>agreements<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">contained a provision for disputes resolution (clause 17 of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the<span style="mso-spacerun:yes"> </span>lease<span style="mso-spacerun:yes"> </span>agreement<span style="mso-spacerun:yes"> </span>and<span style="mso-spacerun:yes"> </span>Article<span style="mso-spacerun:yes"> </span>18<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>management<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement) providing that in the event of disputes, best<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">efforts<span style="mso-spacerun:yes"> </span>shall<span style="mso-spacerun:yes"> </span>be<span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>made<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>resolve<span style="mso-spacerun:yes"> </span>them<span style="mso-spacerun:yes"> </span>by<span style="mso-spacerun:yes"> </span>mutual<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">discussions, amicably; and in the event of the parties not<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">finding an acceptable solution to the disputes within 30<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">days (60 days in the case of management agreement), the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">same shall be referred to arbitration in accordance with<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the procedure specified in the Act.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">3.<span style="mso-spacerun:yes"> </span>APTDC<span style="mso-spacerun:yes"> </span>claims<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>it<span style="mso-spacerun:yes"> </span>had<span style="mso-spacerun:yes"> </span>terminated<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>said<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreements on 21.4.2004 and took possession of the property<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">on 21.8.2004. The respondent filed Arbitration Application<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">No. 24/2005 in March, 2005 before the Andhra Pradesh High<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Court under section 11 of the Arbitration and Conciliation<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Act, 1996 [`Act' for short], alleging that certain disputes<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">had arisen between the parties in regard to the said Lease<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Agreement and Management Agreement, and the parties could<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">not arrive at a mutually acceptable solution in respect of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">those disputes. The respondent therefore sought appointment<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">of a sole arbitrator for adjudication of the disputes and<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">differences between the parties (respondent and APTDC) in<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">regard<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>lease<span style="mso-spacerun:yes"> </span>agreement<span style="mso-spacerun:yes"> </span>dated<span style="mso-spacerun:yes"> </span>30.3.2002<span style="mso-spacerun:yes"> </span>and<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">management<span style="mso-spacerun:yes"> </span>agreement dated 30.3.2002 entered between the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">parties.<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">4.<span style="mso-spacerun:yes"> </span>APTDC resisted the application. One of the contentions<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">urged by APTDC was that there was no arbitration Agreement<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">between them and therefore the question of appointing an<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Arbitrator under section 11 of the Act did not arise. It<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">was<span style="mso-spacerun:yes"> </span>pointed<span style="mso-spacerun:yes"> </span>out<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>according<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>respondent,<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitration<span style="mso-spacerun:yes"> </span>agreement<span style="mso-spacerun:yes"> </span>came<span style="mso-spacerun:yes"> </span>into<span style="mso-spacerun:yes"> </span>existence<span style="mso-spacerun:yes"> </span>on<span style="mso-spacerun:yes"> </span>30.3.2002,<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">when parties executed the Lease Agreement and Management<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Agreement on 30.3.2002 containing the arbitration clause;<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">that admittedly the respondent was not in existence on that<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">date, as it was incorporated more than a year thereafter<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">on 9.4.2003; and that when it is alleged that the parties<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">to the petition had entered into contracts which contained<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitration agreements on 30.3.2002, and one of the parties<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">thereof<span style="mso-spacerun:yes"> </span>had not<span style="mso-spacerun:yes"> </span>even come into existence on that date,<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">obviously there was no contract much less any arbitration<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement between the parties.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">5.<span style="mso-spacerun:yes"> </span>The Designate of the Chief Justice of Andhra Pradesh<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">allowed<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>application<span style="mso-spacerun:yes"> </span>filed<span style="mso-spacerun:yes"> </span>by<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>respondent<span style="mso-spacerun:yes"> </span>under<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Section<span style="mso-spacerun:yes"> </span>11<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Act<span style="mso-spacerun:yes"> </span>by<span style="mso-spacerun:yes"> </span>order<span style="mso-spacerun:yes"> </span>dated<span style="mso-spacerun:yes"> </span>16.8.2005<span style="mso-spacerun:yes"> </span>and<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">appointed<span style="mso-spacerun:yes"> </span>a<span style="mso-spacerun:yes"> </span>retired<span style="mso-spacerun:yes"> </span>Judge<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>said<span style="mso-spacerun:yes"> </span>High<span style="mso-spacerun:yes"> </span>Court<span style="mso-spacerun:yes"> </span>as<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Arbitrator, with the observation that the appellant herein<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">is entitled to raise all its pleas including the validity<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>arbitration<span style="mso-spacerun:yes"> </span>agreement<span style="mso-spacerun:yes"> </span>before<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Arbitrator.<span style="mso-spacerun:yes"> </span>He<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">however<span style="mso-spacerun:yes"> </span>noticed<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>contention<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>there<span style="mso-spacerun:yes"> </span>was<span style="mso-spacerun:yes"> </span>no<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitration agreement. He held that having regard to the<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">decisions<span style="mso-spacerun:yes"> </span>in<span style="mso-spacerun:yes"> </span>Konkan<span style="mso-spacerun:yes"> </span>Railway<span style="mso-spacerun:yes"> </span>Corporation<span style="mso-spacerun:yes"> </span>Ltd.<span style="mso-spacerun:yes"> </span>v.<span style="mso-spacerun:yes"> </span>Mehul<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Construction<span style="mso-spacerun:yes"> </span>Co.<span style="mso-spacerun:yes"> </span>[2000<span style="mso-spacerun:yes"> </span>(7)<span style="mso-spacerun:yes"> </span>SCC<span style="mso-spacerun:yes"> </span>201]<span style="mso-spacerun:yes"> </span>and<span style="mso-spacerun:yes"> </span>Konkan<span style="mso-spacerun:yes"> </span>Railway<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Corporation Ltd. v. Rani Construction Pvt. Ltd. [2002 (2)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">SCC 388], he had only a limited administrative role under<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">section 11 of the Act, that is, to appoint the<span style="mso-spacerun:yes"> </span>arbitrator<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">as per the agreed procedure, leaving all contentious issues<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">including whether there was any arbitration agreement or<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">not, to be decided by the Arbitrator. The said order is<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">challenged in this appeal by special leave.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">6.<span style="mso-spacerun:yes"> </span>On<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>contentions<span style="mso-spacerun:yes"> </span>urged,<span style="mso-spacerun:yes"> </span>two<span style="mso-spacerun:yes"> </span>questions<span style="mso-spacerun:yes"> </span>arise<span style="mso-spacerun:yes"> </span>for<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">consideration:<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">(i) where the party seeking arbitration is a company which<o:p></o:p></span></pre><pre><span style="color:black">was not in existence on the date of the signing of the<o:p></o:p></span></pre><pre><span style="color:black">contract containing the arbitration agreement, whether it<o:p></o:p></span></pre><pre><span style="color:black">can be said that there is an arbitration agreement between<o:p></o:p></span></pre><pre><span style="color:black">the parties ?<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">(ii) whether the question as to the existence or validity<o:p></o:p></span></pre><pre><span style="color:black">of<span style="mso-spacerun:yes"> </span>the arbitration<span style="mso-spacerun:yes"> </span>agreement, has to be decided by the<o:p></o:p></span></pre><pre><span style="color:black">Chief Justice/Designate when considering the petition under<o:p></o:p></span></pre><pre><span style="color:black">section 11 of the Act<span style="mso-spacerun:yes"> </span>or by the Arbitrator ?<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Re : Question (i) :<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">7.<span style="mso-spacerun:yes"> </span>Section 7 of the Act defines an arbitration agreement.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Sub-section<span style="mso-spacerun:yes"> </span>(1)<span style="mso-spacerun:yes"> </span>thereof<span style="mso-spacerun:yes"> </span>provides<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>an<span style="mso-spacerun:yes"> </span>arbitration<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement means an agreement<span style="mso-spacerun:yes"> </span>by the parties to submit to<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitration all or certain disputes which have arisen or<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">which may arise between them in respect of a defined legal<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">relationship, whether contractual or not. Sub-section (2)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">provides that an arbitration agreement may be in the form<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">of an arbitration clause in a contract or in the form of a<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">separate<span style="mso-spacerun:yes"> </span>agreement.<span style="mso-spacerun:yes"> </span>Sub-section<span style="mso-spacerun:yes"> </span>(3)<span style="mso-spacerun:yes"> </span>provides<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>an<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitration agreement shall be in writing. Sub-section (4)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">inter alia provides that an arbitration agreement is in<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">writing if it is contained in a document signed by the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">parties. The specific and clear case of the respondent is<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">that the arbitration agreement between the parties, is in<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">writing<span style="mso-spacerun:yes"> </span>contained<span style="mso-spacerun:yes"> </span>in<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Lease<span style="mso-spacerun:yes"> </span>Agreement<span style="mso-spacerun:yes"> </span>and<span style="mso-spacerun:yes"> </span>Management<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Agreement signed by them on 30.3.2002.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">8.<span style="mso-spacerun:yes"> </span>The<span style="mso-spacerun:yes"> </span>Lease<span style="mso-spacerun:yes"> </span>Agreement<span style="mso-spacerun:yes"> </span>was<span style="mso-spacerun:yes"> </span>made<span style="mso-spacerun:yes"> </span>on<span style="mso-spacerun:yes"> </span>30.3.2002<span style="mso-spacerun:yes"> </span>between<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">`APTDC'<span style="mso-spacerun:yes"> </span>(Lessor)<span style="mso-spacerun:yes"> </span>and<span style="mso-spacerun:yes"> </span>Pampa<span style="mso-spacerun:yes"> </span>Hotels<span style="mso-spacerun:yes"> </span>Ltd.<span style="mso-spacerun:yes"> </span>(Lessee).<span style="mso-spacerun:yes"> </span>The<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">opening<span style="mso-spacerun:yes"> </span>part<span style="mso-spacerun:yes"> </span>containing<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>description<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>parties<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">describes the lessee as follows:<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>"M/S<span style="mso-spacerun:yes"> </span>Pampa<span style="mso-spacerun:yes"> </span>Hotels<span style="mso-spacerun:yes"> </span>Limited,<span style="mso-spacerun:yes"> </span>a<span style="mso-spacerun:yes"> </span>company<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>incorporated<span style="mso-spacerun:yes"> </span>under the<span style="mso-spacerun:yes"> </span>provisions of<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Companies Act, 1956, and having its registered<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>office at 209, T.P.Area, Tirupati through its<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Managing Director Sri S. Jayarama Chowdary<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>hereinafter referred to as "Lessee", promoted<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>inter alia for the purpose of implementing the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>project by M/s Sudalagunta Hotels Limited the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>successful bidder, of the other part."<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Similarly the Management Agreement which was also made on<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">30.3.2002 between APTDC (the first party) and Pampa Hotels<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Ltd<span style="mso-spacerun:yes"> </span>(the<span style="mso-spacerun:yes"> </span>second<span style="mso-spacerun:yes"> </span>party).<span style="mso-spacerun:yes"> </span>described<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>second<span style="mso-spacerun:yes"> </span>party<span style="mso-spacerun:yes"> </span>as<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">follows:<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>"M/S Pampa Hotels Limited (promoted for the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>purpose of implementing the project by "the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Bidder" Sudalagunta Hotels Limited) a company<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>incorporated under the Companies Act, 1956,<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>having its registered office at 209, T.P.Area,<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Tirupati represented by Sri S.Jayarama Chowdary,<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Managing Director (hereinafter referred to as<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>"Company" which expression unless repugnant to<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>the context or meaning thereto include its<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>successors, administrators and assigns on the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>second part)."<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">It<span style="mso-spacerun:yes"> </span>is<span style="mso-spacerun:yes"> </span>not<span style="mso-spacerun:yes"> </span>disputed<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>both<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>agreements<span style="mso-spacerun:yes"> </span>contain<span style="mso-spacerun:yes"> </span>a<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">provision for arbitration. It is also not disputed that<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">both<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>them<span style="mso-spacerun:yes"> </span>were<span style="mso-spacerun:yes"> </span>signed<span style="mso-spacerun:yes"> </span>by<span style="mso-spacerun:yes"> </span>Mr.<span style="mso-spacerun:yes"> </span>C.Anjaneya<span style="mso-spacerun:yes"> </span>Reddy<span style="mso-spacerun:yes"> </span>as<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Chairman of APTDC and Mr. S.Jayarama Chowdary as Managing<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Director of Pampa Hotels Ltd.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">9. <span style="mso-spacerun:yes"> </span>Pampa Hotels Ltd., (with the registered office at 209,<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">TP Area, Tirupati, Chittoor District, represented by its<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Managing Director Shri Jayarama Chowdary), the applicant in<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the<span style="mso-spacerun:yes"> </span>application<span style="mso-spacerun:yes"> </span>under<span style="mso-spacerun:yes"> </span>section<span style="mso-spacerun:yes"> </span>11<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Act,<span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>was<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">incorporated<span style="mso-spacerun:yes"> </span>only<span style="mso-spacerun:yes"> </span>on<span style="mso-spacerun:yes"> </span>9.4.2003.<span style="mso-spacerun:yes"> </span>The<span style="mso-spacerun:yes"> </span>certificate<span style="mso-spacerun:yes"> </span>of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">registration issued by the Registrar of Companies shows the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">date of its incorporation as 9.4.2003. Section 34(2) of the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Companies Act, provides that from the date of incorporation<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">mentioned in the certificate of incorporation, such of the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">subscribers of the memorandum and other persons, as may<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">from time to time be members of the company, shall be a<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">body corporate by the name contained in the memorandum,<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">capable forthwith of exercising all the functions of an<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">incorporated<span style="mso-spacerun:yes"> </span>company.<span style="mso-spacerun:yes"> </span>Sub-section<span style="mso-spacerun:yes"> </span>(3)<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>section<span style="mso-spacerun:yes"> </span>149<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">provides<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>Registrar<span style="mso-spacerun:yes"> </span>shall,<span style="mso-spacerun:yes"> </span>on<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>filing<span style="mso-spacerun:yes"> </span>of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">declaration/statement as stated therein, certify that the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">company is entitled to commence business. Section 149(4) of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the Companies Act provides that any contract made by a<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">company (which is already registered) before the date at<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">which<span style="mso-spacerun:yes"> </span>it<span style="mso-spacerun:yes"> </span>is<span style="mso-spacerun:yes"> </span>entitled<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>commence<span style="mso-spacerun:yes"> </span>business<span style="mso-spacerun:yes"> </span>shall<span style="mso-spacerun:yes"> </span>be<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">provisional only, and shall not be binding on that company<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">until that date, and on that date it shall become binding.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">A certificate under section 149(3) of the Act was issued by<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the Registrar of Companies only on 6.6.2003 certifying that<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">respondent is entitled to commence business. It is thus<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">clear that the applicant in application under section 11 of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the Act was non-existent on 30.3.2002 when the arbitration<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement was entered into.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">10.<span style="mso-spacerun:yes"> </span>Section 7 of the Act as noticed above, defines an<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitration agreement as an agreement by the parties to<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">submit<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>arbitration.<span style="mso-spacerun:yes"> </span>The<span style="mso-spacerun:yes"> </span>word<span style="mso-spacerun:yes"> </span>`party'<span style="mso-spacerun:yes"> </span>is<span style="mso-spacerun:yes"> </span>defined<span style="mso-spacerun:yes"> </span>in<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">section<span style="mso-spacerun:yes"> </span>2(h)<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Act<span style="mso-spacerun:yes"> </span>as<span style="mso-spacerun:yes"> </span>a<span style="mso-spacerun:yes"> </span>party<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>an<span style="mso-spacerun:yes"> </span>arbitration<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement. An agreement enforceable by law is a contract.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">An<span style="mso-spacerun:yes"> </span>agreement<span style="mso-spacerun:yes"> </span>has<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>be<span style="mso-spacerun:yes"> </span>between<span style="mso-spacerun:yes"> </span>two<span style="mso-spacerun:yes"> </span>or<span style="mso-spacerun:yes"> </span>more<span style="mso-spacerun:yes"> </span>persons.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Therefore if one of the two parties to the arbitration<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement was not in existence when the contract was made,<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">then obviously there was no contract and if there was no<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">contract, there is no question of a clause in such contract<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">being an arbitration agreement between the parties. The two<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreements<span style="mso-spacerun:yes"> </span>dated<span style="mso-spacerun:yes"> </span>30.3.2002<span style="mso-spacerun:yes"> </span>categorically<span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>refer<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span><st1:city st="on"><st1:place st="on">Pampa</st1:place></st1:city><o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Hotels<span style="mso-spacerun:yes"> </span>Ltd.<span style="mso-spacerun:yes"> </span>as<span style="mso-spacerun:yes"> </span>an<span style="mso-spacerun:yes"> </span>existing<span style="mso-spacerun:yes"> </span>company<span style="mso-spacerun:yes"> </span>(promoted<span style="mso-spacerun:yes"> </span>for<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">purpose of implementing the project by Sudalagunta Hotels<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Ltd.) incorporated under the provisions of the Companies<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Act,<span style="mso-spacerun:yes"> </span>having<span style="mso-spacerun:yes"> </span>its<span style="mso-spacerun:yes"> </span>registered<span style="mso-spacerun:yes"> </span>office<span style="mso-spacerun:yes"> </span>at<span style="mso-spacerun:yes"> </span>209,<span style="mso-spacerun:yes"> </span>T.P.<span style="mso-spacerun:yes"> </span>Area,<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Tirupati and represented by its Managing Director Sri S.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Jayarama Chowdary. The agreements are not entered by the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">promoters of the company, but purportedly by the company<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">itself, represented by its Managing Director. Admittedly on<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">30.3.2002<span style="mso-spacerun:yes"> </span>there<span style="mso-spacerun:yes"> </span>was<span style="mso-spacerun:yes"> </span>no<span style="mso-spacerun:yes"> </span>such<span style="mso-spacerun:yes"> </span>company<span style="mso-spacerun:yes"> </span>in<span style="mso-spacerun:yes"> </span>existence.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Admittedly there was no such company having its registered<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">office<span style="mso-spacerun:yes"> </span>at<span style="mso-spacerun:yes"> </span>209,<span style="mso-spacerun:yes"> </span>T.P.<span style="mso-spacerun:yes"> </span>Area,<span style="mso-spacerun:yes"> </span>Tirupati<span style="mso-spacerun:yes"> </span>on<span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>date.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Admittedly,<span style="mso-spacerun:yes"> </span>S.<span style="mso-spacerun:yes"> </span>Jayarama<span style="mso-spacerun:yes"> </span>Chowdary<span style="mso-spacerun:yes"> </span>was<span style="mso-spacerun:yes"> </span>not<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Managing<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Director of any company of that name on that date. When one<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>parties<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Lease<span style="mso-spacerun:yes"> </span>Agreement<span style="mso-spacerun:yes"> </span>and<span style="mso-spacerun:yes"> </span>Management<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Agreement, was a non-existent imaginary party, there is no<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">contract. This is not a case of one of the parties being in<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">existence, but being under some legal disability to enter<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">into contracts. This is a case where there was no `party'<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">at all, but someone claiming that there was an existing<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">company capable of entering into contracts.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">11.<span style="mso-spacerun:yes"> </span>The<span style="mso-spacerun:yes"> </span>position<span style="mso-spacerun:yes"> </span>would<span style="mso-spacerun:yes"> </span>have<span style="mso-spacerun:yes"> </span>been<span style="mso-spacerun:yes"> </span>different,<span style="mso-spacerun:yes"> </span>had<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement been entered by the promoters of the respondent<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">company before its incorporation for the purposes of the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">company and such contract was warranted by the terms of<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">incorporation.<span style="mso-spacerun:yes"> </span>Section 15 of the Specific Relief Act, 1963<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">provides as follows:<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>"Except as otherwise provided by this Chapter,<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>the specific performance of a contract may be<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>obtained by x x x x x (h) when the promoters of<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>a company have, before its incorporation, entered<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>into a contract for the purposes of the company,<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>and such contract is warranted by the terms of<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>the incorporation, the company, provided that the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>company<span style="mso-spacerun:yes"> </span>has accepted the contract and has<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>communicated such acceptance to the other party<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>to the contract."<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">It is evident from section 15(h) of Specific Relief Act<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">that if the lease agreement and the management agreement<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">had<span style="mso-spacerun:yes"> </span>been<span style="mso-spacerun:yes"> </span>entered<span style="mso-spacerun:yes"> </span>into<span style="mso-spacerun:yes"> </span>by<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>promoters<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>company<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">stating that they are entering into the contract for the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">purpose<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>company<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>be<span style="mso-spacerun:yes"> </span>incorporated,<span style="mso-spacerun:yes"> </span>in<span style="mso-spacerun:yes"> </span>their<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">capacity as promoters and that such contract is warranted<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">by<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>terms<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>incorporation<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>company,<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement would have been valid; and the term regarding<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitration<span style="mso-spacerun:yes"> </span>therein<span style="mso-spacerun:yes"> </span>could<span style="mso-spacerun:yes"> </span>have<span style="mso-spacerun:yes"> </span>been<span style="mso-spacerun:yes"> </span>enforced.<span style="mso-spacerun:yes"> </span>But<span style="mso-spacerun:yes"> </span>for<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">reasons best known to themselves, the agreement was entered<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">not by the promoters of Pampa Hotels Ltd., on behalf of a<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">company proposed to be incorporated<span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>by them, but by a non-<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">existing company claiming to be an existing company. This<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">clearly<span style="mso-spacerun:yes"> </span>shows<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>there<span style="mso-spacerun:yes"> </span>is<span style="mso-spacerun:yes"> </span>no<span style="mso-spacerun:yes"> </span>arbitration<span style="mso-spacerun:yes"> </span>agreement<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">between the respondent (applicant in the application under<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">section<span style="mso-spacerun:yes"> </span>11<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Act)<span style="mso-spacerun:yes"> </span>and<span style="mso-spacerun:yes"> </span>APTDC<span style="mso-spacerun:yes"> </span>against<span style="mso-spacerun:yes"> </span>whom<span style="mso-spacerun:yes"> </span>such<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement is sought to be enforced.<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">Re : Question (ii) :<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">12.<span style="mso-spacerun:yes"> </span>Let us next consider the question as to who should<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">decide<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>question<span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>whether<span style="mso-spacerun:yes"> </span>there<span style="mso-spacerun:yes"> </span>is<span style="mso-spacerun:yes"> </span>an<span style="mso-spacerun:yes"> </span>existing<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitration agreement or not. Should it be decided by the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Chief Justice or his Designate before making an appointment<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">under section 11 of the Act, or by the Arbitrator who is<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">appointed under section 11 of the Act? This question is no<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">longer<span style="mso-spacerun:yes"> </span>res<span style="mso-spacerun:yes"> </span>integra.<span style="mso-spacerun:yes"> </span>It<span style="mso-spacerun:yes"> </span>is<span style="mso-spacerun:yes"> </span>held<span style="mso-spacerun:yes"> </span>in<span style="mso-spacerun:yes"> </span>SBP<span style="mso-spacerun:yes"> </span>&<span style="mso-spacerun:yes"> </span>Co.<span style="mso-spacerun:yes"> </span>v.<span style="mso-spacerun:yes"> </span>Patel<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Engineering Ltd. [2005 (8) SCC 618] and National Insurance<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Co. Ltd. v. Boghara Polyfab Pvt. Ltd. [2009 (1) SCC 267]<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">that the question whether there is an arbitration agreement<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">and whether the party who has applied under section 11 of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the Act, is a party to such an agreement, is an issue which<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">is to be decided by the Chief Justice or his Designate<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">under<span style="mso-spacerun:yes"> </span>section<span style="mso-spacerun:yes"> </span>11<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Act<span style="mso-spacerun:yes"> </span>before<span style="mso-spacerun:yes"> </span>appointing<span style="mso-spacerun:yes"> </span>an<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitrator. Therefore there can be no doubt that the issue<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">ought to have been decided by the learned Designate of the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Chief<span style="mso-spacerun:yes"> </span>Justice<span style="mso-spacerun:yes"> </span>and<span style="mso-spacerun:yes"> </span>could<span style="mso-spacerun:yes"> </span>not<span style="mso-spacerun:yes"> </span>have<span style="mso-spacerun:yes"> </span>been<span style="mso-spacerun:yes"> </span>left<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitrator.<span style="mso-spacerun:yes"> </span>But<span style="mso-spacerun:yes"> </span>as<span style="mso-spacerun:yes"> </span>noticed<span style="mso-spacerun:yes"> </span>above,<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>learned<span style="mso-spacerun:yes"> </span>Designate<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">proceeded on the basis that while acting under<span style="mso-spacerun:yes"> </span>section<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">11 of the Act, he was not acting under a judicial capacity<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">but only under an administrative capacity and therefore he<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">cannot<span style="mso-spacerun:yes"> </span>decide<span style="mso-spacerun:yes"> </span>these<span style="mso-spacerun:yes"> </span>contentious<span style="mso-spacerun:yes"> </span>issues.<span style="mso-spacerun:yes"> </span>He<span style="mso-spacerun:yes"> </span>did<span style="mso-spacerun:yes"> </span>so<span style="mso-spacerun:yes"> </span>by<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">following the two decisions in Konkan Railway (supra) which<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">were then holding the field.<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">13.<span style="mso-spacerun:yes"> </span>In<span style="mso-spacerun:yes"> </span>SBP<span style="mso-spacerun:yes"> </span>(supra),<span style="mso-spacerun:yes"> </span>a<span style="mso-spacerun:yes"> </span>seven-Judge<span style="mso-spacerun:yes"> </span>Bench<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>this<span style="mso-spacerun:yes"> </span>Court<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">overruled the two decisions in Konkan Railway. The decision<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">in SBP was rendered on 26.10.2005, a few weeks after the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">impugned<span style="mso-spacerun:yes"> </span>decision<span style="mso-spacerun:yes"> </span>by<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>Designate<span style="mso-spacerun:yes"> </span>on<span style="mso-spacerun:yes"> </span>16.8.2005.<span style="mso-spacerun:yes"> </span>Having<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">regard to the fact that several decisions rendered under<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">section 11 of the Act had followed the decisions in Konkan<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Railway, this court, when it rendered its decision in SBP,<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">resorted to prospective overruling by directing as follows:<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>"(x) Since all were guided by the decision of<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>this Court in Konkan Rly. Corpn. Ltd. v. Rani<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Construction (P) Ltd. [2002 (2) SCC 388] and<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>orders under Section 11(6) of the Act have been<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>made based on the position adopted in that<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>decision,<span style="mso-spacerun:yes"> </span>we<span style="mso-spacerun:yes"> </span>clarify<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>appointments<span style="mso-spacerun:yes"> </span>of<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>arbitrators or Arbitral Tribunals thus far made,<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>are to be treated as valid, all objections being<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>left to be decided under Section 16 of the Act.<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>As and from this date, the position as adopted in<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>this<span style="mso-spacerun:yes"> </span>judgment<span style="mso-spacerun:yes"> </span>will<span style="mso-spacerun:yes"> </span>govern<span style="mso-spacerun:yes"> </span>even<span style="mso-spacerun:yes"> </span>pending<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>applications under Section 11(6) of the Act."<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>(emphasis supplied)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">This Court in Sarwan Kumar v. Madan Lal Aggarwal [2003 (4)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">SCC 147] observed:<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>"The doctrine of "prospective overruling" was<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>initially made applicable to the matters arising<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>under the Constitution but we understand the same<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>has since been made applicable to the matters<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>arising under the statutes as well. Under the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>doctrine of "prospective overruling" the law<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>declared by the Court applies to the cases<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>arising in future only and its applicability to<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>the cases which have attained finality is saved<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>because the repeal would otherwise work hardship<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>to those who had trusted to its existence.<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>Invocation<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>doctrine<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>"prospective<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>overruling" is left to the discretion of the<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>court to mould with the justice of the cause or<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>the matter before the court."<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>(emphasis supplied)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">14.<span style="mso-spacerun:yes"> </span>Learned counsel for the appellants contended that the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">impugned<span style="mso-spacerun:yes"> </span>order<span style="mso-spacerun:yes"> </span>was<span style="mso-spacerun:yes"> </span>rendered<span style="mso-spacerun:yes"> </span>on<span style="mso-spacerun:yes"> </span>16.8.2005;<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>as<span style="mso-spacerun:yes"> </span>on<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">26.10.2005 when the decision in SBP was rendered, the time<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">for filing a special leave petition under Article 136 of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the Constitution had not expired; that the special leave<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">petition was filed by the appellant on 22.11.2005, which<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">has<span style="mso-spacerun:yes"> </span>been<span style="mso-spacerun:yes"> </span>entertained<span style="mso-spacerun:yes"> </span>by<span style="mso-spacerun:yes"> </span>granting<span style="mso-spacerun:yes"> </span>leave.<span style="mso-spacerun:yes"> </span>The<span style="mso-spacerun:yes"> </span>appellants<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">therefore contend that this appeal should be considered as<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">a continuation of the application under section 11 of the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Act or as pending matter to which the decision in SBP would<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">apply, even though the Designate had rendered the decision<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">on<span style="mso-spacerun:yes"> </span>16.8.2005.<span style="mso-spacerun:yes"> </span>The<span style="mso-spacerun:yes"> </span>appellants<span style="mso-spacerun:yes"> </span>submitted<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>a<span style="mso-spacerun:yes"> </span>pending<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">matter would refer not only to the original proceedings but<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">also<span style="mso-spacerun:yes"> </span>would<span style="mso-spacerun:yes"> </span>include<span style="mso-spacerun:yes"> </span>any<span style="mso-spacerun:yes"> </span>appeal<span style="mso-spacerun:yes"> </span>arising<span style="mso-spacerun:yes"> </span>therefrom<span style="mso-spacerun:yes"> </span>and<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">therefore any proceeding which has not attained finality is<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">a pending matter.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">15.<span style="mso-spacerun:yes"> </span>What<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>appellants<span style="mso-spacerun:yes"> </span>contend,<span style="mso-spacerun:yes"> </span>would<span style="mso-spacerun:yes"> </span>have<span style="mso-spacerun:yes"> </span>been<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">position if there was a statutory provision for appeal and<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">SBP had directed that in view of prospective overruling of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Konkan Railwa,y pending matters will not be affected. But<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">sub-section (7) of Section 11 of the Act makes the decision<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">of the Chief Justice or his designate final. There is no<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">right of appeal against the decision under Section 11 of<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">the Act. Further, the seven Judge Bench in SBP issued the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">categorical direction that appointment of Arbitrators made<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">till then are to be treated as valid and all objections are<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">to be left to be decided under Section 16 of the Act.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">16.<span style="mso-spacerun:yes"> </span>On account of the prospective overruling direction in<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">SBP, any appointment of an arbitrator under Section 11 of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the Act made prior to 26.10.2005 has to be treated as valid<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">and all objections including the existence or validity of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the<span style="mso-spacerun:yes"> </span>arbitration<span style="mso-spacerun:yes"> </span>agreement,<span style="mso-spacerun:yes"> </span>have<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>be<span style="mso-spacerun:yes"> </span>decided<span style="mso-spacerun:yes"> </span>by<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitrator under section 16 of the Act.<span style="mso-spacerun:yes"> </span>The legal position<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">enunciated in the judgment in SBP will govern only the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">applications to be filed under Section 11 of the Act from<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">26.10.2005 as also the applications under section 11(6) of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the Act pending as on 26.10.2005 (where the Arbitrator was<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">not yet appointed). In view of this categorical direction<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">in SBP, it is not possible to accept the contention of the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">appellant that this case should be treated as a pending<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">application.<span style="mso-spacerun:yes"> </span>In<span style="mso-spacerun:yes"> </span>fact<span style="mso-spacerun:yes"> </span>we<span style="mso-spacerun:yes"> </span>may<span style="mso-spacerun:yes"> </span>mention<span style="mso-spacerun:yes"> </span>that<span style="mso-spacerun:yes"> </span>in<span style="mso-spacerun:yes"> </span>Maharishi<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><st1:place st="on"><st1:placename st="on"><span style="color:black">Dayanand</span></st1:placename><span style="color:black"> <st1:placetype st="on">University</st1:placetype></span></st1:place><span style="color:black"> v. Anand Coop. L/C Society Ltd. & Anr.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">[2007 (5) SCC 295], this Court held that if any appointment<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">has been made<span style="mso-spacerun:yes"> </span>before 26.10.2005, that appointment has to<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">be treated as valid even if it is challenged before this<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">Court.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">17.<span style="mso-spacerun:yes"> </span>In view of the above, we are not in a position to<o:p></o:p></span></pre><span style="font-size:10.0pt;font-family:"Courier New";mso-fareast-font-family:"Times New Roman"; color:black;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA"><br /> </span><pre><span style="color:black">accept the contention of the appellant. But the arbitrator<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">will have to decide the issue as to whether there is an<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">arbitration agreement, with reference to the legal position<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">explained by us in regard to the existence of arbitration<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">agreement. Though such an exercise by the arbitrator will<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">only be an academic exercise having regard to our decision<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">in this case, such an exercise becomes inevitable in view<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>peculiar<span style="mso-spacerun:yes"> </span>position<span style="mso-spacerun:yes"> </span>arising<span style="mso-spacerun:yes"> </span>out<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>specific<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">direction contained in para 47 (x) of the decision in SBP<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">and<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>subsequent<span style="mso-spacerun:yes"> </span>decision<span style="mso-spacerun:yes"> </span>in<span style="mso-spacerun:yes"> </span>Maharishi<span style="mso-spacerun:yes"> </span>Dayanand<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">University.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">18.<span style="mso-spacerun:yes"> </span>We<span style="mso-spacerun:yes"> </span>accordingly<span style="mso-spacerun:yes"> </span>dispose<span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>appeal<span style="mso-spacerun:yes"> </span>without<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">interfering with the appointment but with a direction to<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">the<span style="mso-spacerun:yes"> </span>Arbitrator<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>decide<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>issue<span style="mso-spacerun:yes"> </span>in<span style="mso-spacerun:yes"> </span>regard<span style="mso-spacerun:yes"> </span>to<span style="mso-spacerun:yes"> </span>the<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">existence/validity<span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>of<span style="mso-spacerun:yes"> </span>the<span style="mso-spacerun:yes"> </span>arbitration<span style="mso-spacerun:yes"> </span>agreement<span style="mso-spacerun:yes"> </span>as<span style="mso-spacerun:yes"> </span>a<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">preliminary issue relating to jurisdiction in the light of<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black">what has been stated above.<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span>................J.<o:p></o:p></span></pre><pre><span style="color:black"><span style="mso-spacerun:yes"> </span><span style="mso-spacerun:yes"> </span>(R V Raveendran)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre><pre><st1:city st="on"><st1:place st="on"><span style="color:black">New Delhi</span></st1:place></st1:city><span style="color:black">;<span style="mso-spacerun:yes"> </span>................J.<o:p></o:p></span></pre><pre><span style="color:black">April 20, 2010.<span style="mso-spacerun:yes"> </span>(H L Dattu)<o:p></o:p></span></pre><pre><span style="color:black"><o:p> </o:p></span></pre> <p class="MsoNormal"><o:p> </o:p></p>Dr.Mohan b rao B.Sc., M.L., Ph.D., UGCNEThttp://www.blogger.com/profile/01503191252332509407noreply@blogger.com0tag:blogger.com,1999:blog-7052509773353106668.post-58869260502194513822010-09-25T19:03:00.000-07:002010-09-25T19:05:37.285-07:00Bar council of India exam<span class="Apple-style-span" style="font-family: verdana, georgia, Arial, Helvetica, sans-serif; color: rgb(51, 51, 51); font-size: 12px; "><div id="_mcePaste" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; font-weight: inherit; font-style: inherit; font-size: 14px; font-family: inherit; vertical-align: baseline; "><span class="Apple-style-span" style="font-family: 'times new roman'; font-size: 14px; line-height: 21px; ">The All India Bar Examination will have one hundred (100) multiple-choice questions spread across various subjects. The subjects are taken from the syllabi prescribed by the Bar Council of India for the three-year and five-year Ll.B. programmes at law schools in India (as set out under Schedule I to the Bar Council of India Rules).</span></div><div id="_mcePaste" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; font-weight: inherit; font-style: inherit; font-size: 14px; font-family: inherit; vertical-align: baseline; "><span class="Apple-style-span" style="font-family: 'times new roman'; font-size: 14px; line-height: 21px; ">These subjects are divided into two categories: the first comprises subjects that may be considered ‘foundational’ in nature, those that form the basis for large areas of law; the second comprises other subjects, which a new entrant to the legal profession must also have a basic understanding of. Schedule I to this document contains the list of subjects that would be tested in the All-India Bar Examination and the weightage ascribed to each of these areas.</span></div><div id="_mcePaste" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; font-weight: inherit; font-style: inherit; font-size: 14px; font-family: inherit; vertical-align: baseline; "><span class="Apple-style-span" style="font-family: 'times new roman'; font-size: 14px; line-height: 21px; ">The All India Bar Examination shall be structured with multiple-choice questions (that is, the correct answer would have to be marked out in the Optical Mark Recognition (‘OMR’) format answer sheet provided, and no writing of an answer would be required.) These questions will be divided into ‘knowledge-based’ and ‘reasoning’ questions, and advocates will be allowed a maximum of three hours and thirty minutes (3 hours 30 minutes) to complete the All India Bar Examination. The emphasis throughout is on assessing an advocate’s understanding of an area of law, rather than on the ability to memorise large texts or rules from different areas of law.</span></div><div id="_mcePaste" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; font-weight: inherit; font-style: inherit; font-size: 14px; font-family: inherit; vertical-align: baseline; "><span class="Apple-style-span" style="font-family: 'times new roman'; font-size: 14px; line-height: 21px; ">The All India Bar Examination will be ‘open-book’, which means that advocates may bring in any reading materials or study aids that they choose, such as the preparatory materials provided for the All India Bar Examination, textbooks and treatises, and even handwritten notes. Advocates may not bring in any electronic devices, such as laptop computers, mobile phones, or any device equipped with a radio transceiver (such as pagers) at the examination centre.</span></div><div id="_mcePaste" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; border-top-width: 0px; border-right-width: 0px; border-bottom-width: 0px; border-left-width: 0px; border-style: initial; border-color: initial; font-weight: inherit; font-style: inherit; font-size: 14px; font-family: inherit; vertical-align: baseline; "><span class="Apple-style-span" style="font-family: 'times new roman'; font-size: 14px; line-height: 21px; ">The results generated after the answer scripts are corrected will simply state whether an advocate has or has not qualified for practice (that is, whether the advocate has passed or failed the All India Bar Examination); no percentage, percentile, rankings, or absolute marks will be declared.</span></div></span>Dr.Mohan b rao B.Sc., M.L., Ph.D., UGCNEThttp://www.blogger.com/profile/01503191252332509407noreply@blogger.com0tag:blogger.com,1999:blog-7052509773353106668.post-20808420338466118072010-09-11T18:31:00.000-07:002010-09-11T18:32:21.915-07:00Federal Principle under the Indian Constitution – a perspectiveFederal Principle under the Indian Constitution – a perspective<br /><br />-Mohan Rao B. former Principal, Rajiv Gandhi Institute of Law, Kakinada <br /><br />[“ Indian Constitution is neither Federal nor Unitary, but it is a mixer of both ….”<br />-this paper attempts to comment on the statement and to suggest measures to strengthen the Federal principle under the Indian Constitution.]<br /><br />Constitution is the legal document in which various governing principles are established functions and procedural aspects of the government are specified under which different organs of the government are specified under which different organs of the government work .Constitution is the supreme law of the land which is ascertained by Kelsen as the “ Grund Norm“ in his Pure theory of law.<br /><br />American Constitution is the pioneer of all the federal constitutions followed by the Canadian and Australian constitution respectively. It may be traced that the Federal principal was adopted in the Government of India Act 1935 and the same was reinserted in the draft constitution by the Constitution Assembly Dr. B. R. Amedkar feels it convenient to describe Indian constitution as both Federal and Unitary. He opines that it works as a federal constitution under the normal condition and as Unitary during the war or crisis.<br /><br />Federal Principle:<br /><br />The principle may be understood as ‘the method of dividing powers , so that the general and regional governments are each within a sphere of co-ordinate and independent; and not sub-ordinate to each other- Professor Wheare . The existence of co-ordinate authorities independent of each other is the gift of the federal principal where as the supreme sovereign power is vested with the only central organ which ultimately controls the state in a unitary form of government. Federalism is not static but a dynamic concept. It is always in the process of evolution and constant adjustments. It is also recognized that federalism is one of the basic features of the Constitution in Kesavananda Bharathi’s case .<br /><br />Federal Features: <br />• There must be a written and rigid Constitution. Constitution being the supreme law of the land, it must be rigid so as to uphold its supremacy. <br />• Written constitution is essential if federal government is to work well.<br />• Distribution of powers, between the central Government and State governments is the most essential and ordained feature of a federal constitution. The distribution must be such that both the governments should exist in a co ordinate and independent in their own spheres. <br />• Independent and impartial judiciary is to uphold the supremacy of the constitution by interpreting the various provisions and settling the disputes between the laws made by the governments and the Constitution. <br />In order to be called federal it is not necessary that a Constitution should adopt federal principle completely. It is enough if the federal principle is the pre-dominant principle in the constitution. The mere presence of Unitary features in a constitution which may make the Constitution ‘quasi federal’ in law, does not prevent the Constitution from being pre-dominantly federal in practice. ( H.M.Seervai). Professor Whear described India as neither Federal nor Unitary but ‘Quasi Federal’.<br /><br />Indian Constitution came into existence on 26th January 1950 adopting the federal principle pre dominant. The doctrine of pre dominance as ascertained by HM Seervai does not hold good as the degree of pre dominance is negligible compared to that of other Federal Constitutions. According to M.C Setalvad, “ the constitution of India having been drawn in mid 20th Century presents a modified form of federation suitable to the special requirements of the Indian society.” <br /><br />Article 1 of the Constitution describes as a Union of States. Dr B.R. Ambedkar justifies it to be advantageous to describe India to be a union of States, though it is federal in nature. Accordingly, during the crisis it shall be Unitary in nature. <br /><br />Prof. Alexandrowitz says that India is supposed to have quasi federation mainly because of the articles 3, 249, 352 to 360 and 371. It may be aptly be stated that he supports Lord Ambedkar’s view. <br /><br />Power to alter the boundaries:<br /><br /> Article 3 empowers the Parliament to alter the boundaries of states even without the consent of the states which dilutes the federal principle. State of West Bengal in its memorandum submitted to the President of India compares article 3 to be a damocle sword hanging over the heads of the states. HM Seervai defends the power of the Parliament to alter the boundaries of the states that “ by extra constitutional agitations the states have forced parliament to alter the boundaries of States” In practice, therefore the federal principle has not been violated.” But, Seervai agrees that the power vested in the Parliament was a serious departure from the federal principle. History reveals that there has been no answer or rationale basis for such a serious departure. <br /><br />Distribution of powers: <br /><br />Distribution of powers is one of the pre requisites of a federation of states. The object for which federal state is formed involves a division of authority between the national government and the separate states- Prof. A.V.Dicey.<br /><br />Parliament can legislate with respect to a matter under the State List <br />a) in the national interest(Art . 249) or <br />b) if a proclamation of emergency is in force (A250). <br /><br />The provisions resolving inconsistency between central and state laws is also weighed in favour of the centre (A251 and 254)-AG Noorani. <br /> <br /><br />Gwyer C.J. observed that the conferment of residuary power upon the centre has been done following the Canadian constitution. The U.S and the Australian constitutions which are the indisputably federal confer the residuary power on the states. The non congress opposition parties conferences [held in 1986-87] resolved to demand for the conferment of residuary power on the states as a measure to strengthen the federal principle. <br />• Under the present provisions of our Indian Constitution the States are entitled to a share of the centers revenues derived from only a few taxes principally income tax and excise duties ( @ 45% approximately) <br />• Finance Commission constituted under Article 352 as the balance wheel of the Indian Federal financial relationship <br />• Article 365 dilutes the Federal Principle by imposing President’s Rule in the State which fails to comply with or direction of the Center. Seervai defends the power as it is open for judicial review. But it may be noted that the imposition of President’s Rule effects the independence of the States. However, practically speaking when once a democratically constituted government is de throned through such imposition of President’s Rule it is not only un- democratic but it costs burden on the exchequer of the State for conducting re-elections. The judicial review is a time consuming process and sometimes, by the time the decision is given the tenure of office of the government may expire. Therefore, conferment of such blanket power on the Center is undesirable as its effects the democratic process and dilutes the Federal Principle. <br /><br />• President is competent proclaim Emergency in any part or whole of the country under Article 352 if he is satisfied that grave emergency exists. The 44th Amendment to the Constitution replaced the words,” internal disturbance” and inserted “ armed rebellion”. The proclamation of Emergency in 1975 by the unilateral decision of the then Prime Minister of India Mrs Indira Gandhi, led to the Amendment of the Constitution and the power has been much mis used during the emergency. <br /><br />• In Rajasthan v Union of India the Supreme Court has re iterated its dictum in West Bengal v. Union that the extent of Federalism is largely watered down by the needs of progress and development of the country. <br /><br />• State of West Bengal submitted a memorandum suggesting certain changes in our Constitution to strengthen the Federal principle. Parliament’s power to alter the boundaries of a state under Article 3 should be subject to the State’s approval. Residuary power under Article 248 of the Constitution should be conferred upon the States. Deletion of Article 249 and Article 356 to 360 would likely to strengthen the federal Principle. <br /><br />• It is unfortunate to note that there has not been proper utilization of Article 263 of the Constitution. <br /><br />This is high time to re constitute the inter state council as an autonomous independent and high powered which must be entrusted with the responsible to deal with all the issues between the center and the states. Finance Commission and Planning commission should be made independent autonomous authorities and the appointments shall be made in consultation with the States. Adequate autonomy must be facilitated to the States through the conferment of power on the States and by suitable amending Articles 3, 249 and 346. Conferment of residuary power on the States is also desirable. Governors shall be appointed by the Inter state council. Disputes if any between the Center and the States shall be expeditiously decided through constitution of Special Constitutional Benches.Dr.Mohan b rao B.Sc., M.L., Ph.D., UGCNEThttp://www.blogger.com/profile/01503191252332509407noreply@blogger.com0tag:blogger.com,1999:blog-7052509773353106668.post-69723464373161384832010-05-11T02:53:00.000-07:002010-05-11T02:55:44.323-07:00Andhra Pradesh High court on appointment of D C for SEZIn Ahmed Ehtesham Kawkab, S/O Mr. ... vs The Government Of India, Ministry http://indiankanoon.org/search/?formInput=judgments+on+SEZs<br />Is the Director, Software Technology Parks of India (STPI), Hyderabad, (a Society registered under the Societies Registration Act, 1860), an officer of the Central Government not below the rank of Deputy Secretary? It is only if he is, would he be eligible, under Section 11(1) of the Special Economic Zones Act, 2005 (S.E.Z. Act), to be appointed as a Development Commissioner of one or more Special Economic Zones. The petitioner herein seeks a writ of quo warranto to quash and set aside the order of the first respondent, as published in the Gazette of India dated 12.11.2007, appointing the 5th respondent as the Development Commissioner of thirty Special Economic Zones in Andhra Pradesh.<br />Facts, in brief, are that the Government of India, by resolution dated 18.12.1986, announced its policy on software export, software development and training. The resolution provided for an inter-ministerial standing committee to function as an effective instrument for single point clearance and for coordination of all cases of software development and export. Thereafter, on 5.6.1991, STPI was registered as a Society under the Societies Registration Act, 1860. The Inter-Ministerial Standing Committee, constituted by the Department of Industrial Development, Ministry of Industry, Government of India issued notification dated 22.2.1992 delegating specific powers of the Committee to the jurisdictional Directors of STPI. Pursuant to the aforementioned resolution dated 18.12.1986 the Central Government, in exercise of its powers under Section 3(1) of the Foreign Trade (Development and Regulation) Act, 1992, (Act 22 of 1992), notified a Scheme on 22.3.1994 called the "Software Technology Parks (STP) Scheme". This 100% export oriented Scheme, for undertaking software development, was to be administered by the Department of Electronics through the Directors of the respective STPIs. By virtue of the said notification dated 22.3.1994, Directors of STPI were conferred the powers of Development Commissioner in respect of software related imports and exports. The Central Government issued notification dated 10.8.2000 appointing Directors of various STPIs, including the Director, STPI Hyderabad, as Designated officers for implementing the STP schemes. The Central Government issued notification dated 30.1.2006 appointing Designated officers, (including the Directors of STPI), to exercise powers of adjudication under Section 13 read with Section 11 of Act 22 of 1992. Under the impugned notification the Central Government, in purported exercise of its powers under Section 11 (1) of the S.E.Z. Act, appointed the Director, STPI, Hyderabad to be the Development Commissioner of thirty Special Economic Zones…The Court observed ’….The power conferred on the Central Government, under Section 11(1) of the SEZ Act, is to appoint any of its officers, not below the rank of Deputy Secretary to the Government of India, as a Development Commissioner…..’ ‘…….Section 11(1) of the SEZ Act uses the words "Its officers" with reference to the Central Government. The word "Its" means possessive or genitive of "it". The words "Its Officers" in Section 11(1) would, therefore, mean officers of, or belonging to, the Central Government. To be eligible, for appointment as a Development Commissioner of a Special Economic Zone, a person must satisfy the twin conditions stipulated in Section 11(1) of the SEZ Act. He should be (a) an officer of the Central Government; and (b) not below the rank of Deputy Secretary to the Government of India…..’<br />The 5th respondent was an employee of STPI society before his appointment as Development Commissioner of SEZ. Can such a person be held also to be an officer of the Government of India? Several tests have been laid down to determine when a person can be said to be an officer of the Central Government. There is a relationship of master and servant between the State and a person said to be holding a post under it. The existence of this relationship is indicated by the State's right to select and appoint the holder of the post, its right to suspend and dismiss him, the right to terminate the employment, the right to take other disciplinary action, the right to prescribe the conditions of service and the nature of duties to be performed by the employee, the right to control the manner and method of his doing the work, the right to issue directions, the right to determine the source from which wages or salary are paid and the payment by it of his wages or remuneration. (State of Assam v. Kanak Chandra Dutta5; State of Gujarat v. Raman Lal Keshav Lal Soni6, Mohanlal Kedia Mathuradas v. S.D. Munshaw7; Union Public Service Commission v. Girish Jayanti Lal Vaghela8). The Office or post must not only be under the control of the State, it must also be open to the State to abolish the post and regulate the conditions of service of the officer. (Lachmi v. Military Secretary to the Government of Bihar9). In view of the Constitutional Provisions, such as Articles 309 and 311, the position of a Government servant is different from a private employment. (Girish Jayanti Lal Vaghela8).<br />Once appointed to his post or office, the Government servant acquires a status and his rights and obligations, including his emoluments, are determined by the Statute or Statutory rules or rules made under Article 309 of the Constitution, which may be made and altered unilaterally by the Government. The legal position of a Government servant, and the legal relationship between the Government and its servant, is more one of status than of contract. The hall- mark of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement of the parties. (Roshan Lal Tandon v. Union of India10; Girish Jayanti Lal Vaghela8)<br />As the 5th respondent is an employee of STPI, (a society registered under the Societies Registration Act), there exists no master and servant relationship between the Central Government and himself. It is not even the case of the 5th respondent that the Central Government has the right to select and appoint the Director of STPI or that it has the right to terminate his services. The right to control the manner and method of work being done by the Director of STPI lies with the Governing Council of S.T.P.I and its Chairman and Vice Chairman. The salary and emoluments of the Director is paid by the Society. The Central Government has no power to take any disciplinary action against the 5th respondent as Director of S.T.P.I since such a power is conferred only on the Society. Similarly the right to prescribe the conditions of service of, and the nature of duties to be performed by, the 5th respondent as a Director lies only with S.T.P.I. The right to issue directions to him etc., are all exercised by the Society and not by the Central Government. Adoption of the C.C.S. (C.C.A) Rules, and other rules applicable to Central Government employees, by the Society makes such rules the rules of the Society. It does not make employees of the Society employees/officers of the Central Government. Nowhere is it suggested by the fifth respondent that the rules governing his service conditions, as a Director of S.T.P.I, Hyderabad, are those made under Article 309 of the Constitution of India. The 5th respondent is also not entitled for protection under Article 311 of the Constitution of India. The legal relationship between the 5th respondent and STPI is purely contractual and is not in the nature of status. There is no master and servant relationship between the Central Government and the 5th respondent.<br />Further, Section 11 (1) of the Special Economic Zones Act, 2005 stipulates that, in order to be eligible to be appointed to the post of Development Commissioner of a SEZ, the officer of the Central Government should not be below the rank of a Deputy Secretary. Merely because the pay scales of the Director of STPI is higher than that of a Deputy Secretary to the Government of India does not make him an officer of the Central Government higher in the rank than a Deputy Secretary. The word "rank", in its ordinary sense, means grade or status. (N.C. Dalwadi v. State of Gujarat11; P. Ramanatha Aiyer, The Law Lexicon reprint Edition-2002). An employee of a Society cannot be equated either with the grade or the status of an officer of the Central Government. If pay scales were to be the sole criterion for deciding equivalence in rank, nothing prevented Parliament from using the words "drawing a pay scale not lower than that of a Deputy Secretary to the Government of India" instead of the words "not lower in rank than that of a Deputy Secretary to the Government of India."<br />We are satisfied that a Director of STPI is neither an officer of the Central Government nor is he an officer not below the rank of a Deputy Secretary to the Government of India.<br /><br /><br />The High Court has examined the scope of the Writ of Quowarranto. It had observed”… A writ of quo warranto is a writ which lies against the person who, according to the relator, is not entitled to hold an office of a public nature and is only a usurper of the office. It is the person, against whom the writ of quo warranto is directed, who is required to show by what authority he is entitled to hold the office. The challenge can be made on various grounds including on grounds that the possessor of the office does not fulfill the required qualifications or suffers from any disqualification, which debars him from holding such office. (B.R. Kapur v. State of Tamilnadu1). Quo warranto proceedings afford a judicial enquiry in which the person, holding an independent substantive public office or franchise, is called upon to show by what right he holds the said office or franchise. If the inquiry leads to the finding that the holder of the office has no valid title to it, issue of a writ of quo waranto ousts him from that office. The procedure of quo warranto confers jurisdiction and authority on the judiciary to control executive action in the matter of making appointment to public offices against the relevant statutory provisions. These proceedings tend to protect the public from usurpers of public office and, if the jurisdiction of the Court to issue a writ of quo warranto is properly invoked, the usurper can be ousted.<br />Before a citizen can claim a writ of quo warranto he must satisfy the Court, inter alia, that the office in question is a public office and is held by an usurper without legal authority, and that necessarily leads to the enquiry as to whether appointment of the alleged usurper has been made in accordance with law or not. (University of Mysore v. Govinda Rao2). A writ of quo warranto can be issued when the holder of a public office has been appointed in violation of constitutional or statutory provisions. Quo warranto proceedings afford a judicial remedy for removal of the usurper, from the office which he holds without title, by a judicial order. The proceedings give a weapon to control the executive from making appointments to a public office against the law. (N. Kannadasan v S. Ajoy Khose3). If there is any complaint about appointment of an officer, who is not eligible under the statute/statutory rules to be appointed, the proper remedy is to make an application for the issue of a writ of quo warranto. (Mir Ghulam Hussain v. The Union of India4)....”<br />Grant of relief under Article 226 of the Constitution is based on the existence of a right in favour of the person invoking the jurisdiction of the High Court. The exception to the general rule is only in cases where the writ applied for is a writ of habeas corpus or a quo warranto or a writ filed in public interest, (Vinoy Kumar Vs. State of UP58), where the rule of locus standi is relaxed. (Jasbhai Motibhai Desai Vs. Roshan Kumar, Haji Bashir Ahmed59). In Quo- Warranto proceedings the applicant does not seek to enforce any right of his as such, nor does he complain of any non-performance of duty towards him. What is in question is the right of the non-applicant to hold the office and an order that is passed is an order ousting him from office. The legality of an appointment to high office can be challenged by any citizen. (M.S. Mahadeokar v. Chief Commissioner, Territory, Chandigarh60).<br />An information would lie even at the instance of a relator who has no personal interest in the matter. Information in the nature of quo warranto can be filed on the relation of private parties. It is open to a private individual to bring it to the notice of the Court that a person who is disqualified to hold an office is still holding it. A person who is not legally entitled to hold an office should not be permitted to hold it. (Venkataraya vs. Sivarama Prasad61). A writ petition, even at the instance of a busy body, for issuance of a writ of quo warranto would be maintainable. (N. Kannadasan3).<br /><br />The court also examined the status of a society under the Societies Registration Act, 1860. It has held, ’….A society, registered under the Societies Registration Act, 1860, is not a body corporate or a corporation having a distinct legal entity from the members constituting it in the sense of a company incorporated under the Indian Companies Act or a Society registered under the Cooperative Societies Act, yet it has its own identity, personality or entity which, for all purposes, is not identical with that of the members constituting it. A Society, when registered, comes into existence as a registered Society and has properties of its own. Although legal title in the properties may vest in the trustees or the Board of Governors yet the equitable title vests in the Society. (K.C. Thomas v. R.L. Gadeock12). Such a Society is independent of the Central Government even if it has been established by the latter.<br />On the legal status of statutory corporations, Denning L.J, in Tamlin v. Hannaford13, opined:-<br />"................In the eye of the law, the corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants, and its property is not Crown property. It is as much bound by Acts of Parliament as any other subject of the King. It is, of course, a public authority and its purposes, no doubt, are public purposes, but it is not a government department nor do its powers fall within the province of government.............." (emphasis supplied).<br />Accepting the submission that S.T.P.I is financially, functionally and administratively dominated by, or is under the pervasive control of, the Central Government, would merely bring it within the ambit of "State" under Article 12 of the Constitution of India. (Pradeep Kumar Biswas v. Indian Institute of Chemical Biology14). It would neither make it a department of the Government of India nor would employees of such a society become officers of the Central Government. Even if STPI is covered by the Central Vigilance Commission, or the Comptroller and Auditor General or even under the Right to Information Act, that would neither make S.T.P.I a department of the Central Government, nor its employees officers of the latter…..’<br />The court has gone into the rules of interpretation and examined the scope of having more than one constructions for Section 11(1) of the SEZ Act. It had held The primary rule of construction is that the intention of the Legislation must be found in the words used by the Legislature itself. (Unique Butyle Tube Industries Pvt. Ltd., v. Uttar Pradesh Financial Corporation15). Statutory language must always be given presumptively the most natural and ordinary meaning which is appropriate in the circumstances, (Chertsey Urban District Council v Mixnam's Properties Ltd16), and must be construed according to the rules of grammar. When the language is plain and unambiguous, and admits of only one meaning, no question of construction of a statute arises, for the Act speaks for itself. The meaning must be collected from the expressed intention of the legislature. (State of U.P. v. Dr Vijay Anand Maharaj17). If the words used are capable of one construction only, it would not be open to the Courts to adopt any other hypothetical construction on the ground that such hypothetical construction is more consistent with the alleged object and policy of the Act. The words used in the material provisions of the Statute must be interpreted in their plain grammatical meaning, (Kanai Lal Sur v. Paramnidhi Sadhukhan18), andmust be construed it in its ordinary sense as it is well recognised that the language used speaks the mind and reveals the intention of the framers. (C.I.T. v. T.V. Sundaram Iyengar (P) Ltd19). Itwould be impermissible to call in aid any external aid of construction to find out the hidden meaning. A statute should be construed according to the intention expressed in the Statute itself(D.D. Joshi v. Union of India20).<br /><br />Resort can be had to the legislative intent for the purpose of interpreting a provision of law, when the language employed by the legislature is doubtful or susceptible of meanings more than one. However, when the language is plain and explicit and does not admit of any doubtful interpretation Courts cannot, by reference to an assumed legislative intent, expand the meaning of an expression employed by the legislature and therein include such category of persons as the legislature has not chosen to do.(Ombalika das and another v. Hulisa Shaw21). Unless there is any ambiguity it would not be open to the Court to depart from the normal rule of construction which is that the intention of the Legislature should be primarily gathered from the words which are used. It is only when the words used are ambiguous that they would stand to be examined and construed in the light of surrounding circumstances and constitutional principles and practice. (CIT v. Sodra Devi22). A provision is not ambiguous merely because it contains a word which in different contexts is capable of different meanings. It would be hard to find anywhere a sentence of any length which does not contain such a word. A provision is ambiguous only if it contains a word or phrase which, in that particular context, is capable of having more than one meaning. (Kirkness (Inspector of Taxes) Vs.John Hudson & Co., Ltd.23).<br />It is only when the material words are capable of two constructions, one of which is likely to defeat or impair the policy of the Act whilst the other construction is likely to assist the achievement of the said policy, would Courts prefer to adopt the latter construction. It is only in such cases that it becomes relevant to consider the mischief and defect which the Act purports to remedy and correct (Kannai Lal Sur18). In the instant case, however, we find no reason to resort to any secondary canon.<br /><br /><br /><br /><br /><br />Even if the historical background, of appointment of Development Commissioners of S.E.Z, is borne in mind while interpreting Section 11 (1) of the SEZ Act, 2005, it is evident that Parliament, though conscious that Directors of STPI were being appointed from the year 1994 as Development Commissioners under Act 22 of 1992, or the schemes made or policies framed thereunder, has chosen to make a departure and has restricted eligibility under section 11(1) of the SEZ Act, for appointment as Development Commissioners of S.E.Z, only to officers of the Central Government not below the rank of Deputy Secretary to the Government of India.<br />In A.N. Shashtri56, and B. Srinivasa Reddy57 the Supreme Court held that a writ of quo warranto should be refused where it is the outcome of malice or ill will and that an imposter coming before the Court invoking a public law remedy at the hands of a Constitutional Court suppressing material facts has to be dealt with firmly.<br />On the other hand, in Dr.Kashinath G. Jalmi v. The Speaker62; and in N. Kannadasan3, the Supreme Court held that, while examining if a person holds a public office under valid authority or not, the Court is not concerned with technical grounds of delay or motive behind the challenge, since it is necessary to prevent continuance of usurpation of office or perpetuation of an illegality. A writ of quo warranto is a writ which merely asks the question as to whether there is a warrant of appointment for holding the office and the question of malafides is completely irrelevant to the matter. (P.L. Lakhanpal v. A.N Ray63; Malik v. P.P. Sharma64).<br />Be that as it may, if any other member of the public, to whom the oblique motive and conduct alleged against the petitioner in the present case could not be attributed, could file such a writ petition for the same relief, this disability on the ground of oblique motive and conduct would not attach to him. This being so, the relief claimed by the petitioner in the writ petition being in the nature of a class action, without seeking any relief personal to him, ought not to be dismissed merely on this ground, since this is a matter of public concern and relates to the good governance of the State itself. (Dr. Kashinath G. Jalmi62).<br />In "Mr. Gopal Singh Vs. Sri J. Parthasarthy"65 the Delhi High Court observed that, apart from relying upon the employment notice issued prior to coming into force of the Act, and also annexing a copy of the notification dated 08.08.2008, the petitioner had nowhere averred about the qualifications of the first respondent nor had he attempted to disclose that the said respondent was ineligible for consideration or appointment, that the writ petition merely extracted the provisions of the Act and the petitioner had only urged that the first respondent did not possess the required qualifications. The Delhi High Court dismissed the writ petition as not maintainable as the petitioner had rushed to the Court without verifying any details or particulars. Unlike the writ petition filed before the Delhi High Court, in the present writ petition the petitioner has established that the appointment of the fifth respondent, as Development Commissioner of SEZ, was contrary to Section 11(1) of the SEZ Act and that his continuance in office is illegal.<br />As we are of the opinion that the fifth respondent does not satisfy the conditions prescribed in Section 11(1) of the SEZ Act to be appointed as Development Commissioner of SEZ, and that he does not have any right to continue to hold the said office, we see no reason to non-suit the petitioner on the ground of locus standi as neither the strict rules of standing, nor the motives of the petitioner, would justify the fifth respondent continuing in office as his appointment falls foul of Section 11(1) of the SEZ Act, 2005.<br />As a result, the writ petition is allowed and the order of the first respondent, published in Gazette of India dated 12.11.2007, appointing the 5th respondent as Development Commissioner of thirty Special Economic Zones in Andhra Pradesh is, hereby, set aside. The 5th respondent shall henceforth not exercise any of the powers conferred, on the Development Commissioner of a Special Economic Zone, under the SEZ Act, 2005. Necessary action shall be taken by the first respondent to appoint a person, who fulfils the statutory qualifications prescribed under Section 11(1) of the SEZ Act, 2005, as the Development Commissioner for the thirty Special Economic Zones in Andhra Pradesh.Dr.Mohan b rao B.Sc., M.L., Ph.D., UGCNEThttp://www.blogger.com/profile/01503191252332509407noreply@blogger.com0tag:blogger.com,1999:blog-7052509773353106668.post-884529965843733512010-05-11T02:50:00.000-07:002010-05-11T02:53:04.244-07:00case comment relevant to SEZIn Reliance Industries Ltd Vs. Designated Authority and Ors. 11 September, 2006 Supreme Court of India www.LegalDuniya.com, imposition of Anti dumping duty was in question. The petitioner has challenged imposition of anti dumping duty on it for importing Pure Terephatalic Acid (for short `PTA'), from Japan, Malaysia, Spain and Taiwan . It is used for the manufacture of polyester yarn (which in turn is used for manufacture of textiles). Apart from the manufacture of PTA, the appellant, inter alia, has a captive power plant from which it draws electricity. The appellant also draws electricity from the Grid for the manufacture of PTA. The cost of electricity forms a significant part of the cost of production. For the electricity drawn from the Grid, the appellant has to pay a tariff rate at the market price of the electricity, while regarding electricity drawn from the captive power plant the appellant transfers electricity at the market rate to its PTA unit. <br />The court observed: After India became independent in 1947, the Government of Independent India headed by Prime Minister Jawahar Lal Nehru decided to industrialize India as it was realized that the country cannot escape from poverty, unemployment and other social evils unless there is industrialization. It was also known to them that a country cannot be really independent in modern times unless it is industrialized. Hence, the Industrial Policy Resolution was adopted by the Indian government in the early 1950s and encouragement was given to the growth of heavy industry and other industries so that India may become economically independent and a prosperous nation. <br /><br />The result was that an industrial base was created in India after independence and this has definitely resulted in some progress. The purpose of Section 9A can, therefore, easily be seen. The purpose was that our industries which had been built up after independence with great difficulties must not be allowed to be destroyed by unfair competition of some foreign companies. Dumping is a well-known method of unfair competition which is adopted by the foreign companies. This is done by selling goods at a very low price for some time so that the domestic industries cannot compete and are thereby destroyed, and after such destruction has taken place, prices are again raised. <br /><br />The purpose of Section 9A is, therefore, to maintain a level-playing field and prevent dumping, while allowing for healthy competition. The purpose is not protectionism in the classical sense (as proposed by the German economist Friedrich List in his famous book `National System of Political Economy' published in 1841) but to prevent unfair trade practices. The 1995 Amendment to Section 9A was apparently made in pursuance to Article VI of the General Agreement on Tariffs and Trade 1994 (GATT 1994) which permitted anti-dumping measures as an instrument of fair competition. <br /><br />The concept of anti-dumping is founded on the basis that a foreign manufacturer sells below the normal value in order to destabilize domestic manufacturers. Dumping, in the short term, may give some transitory benefits to the local customers on account of lower priced goods, but in the long run destroys the local industries and may have a drastic effect on prices in the long run. <br />The court has dealt with the relevant provisions under the Customs Act [Section 9A of the Customs Tariff Act, 1975, which was inserted by the Customs Tariff (Second Amendment) Act, 1982. Section 9A was substituted by the Customs Tariff (Amendment) Act, 1995 with effect from 1.1.1995, and now it reads as follows:- <br /><br />"SECTION 9A - Anti-dumping duty on dumped articles. - (1) Where any article is exported from any country or territory (hereinafter in this section referred to as the exporting country or territory) to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. ]<br />(2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under sub-section (2), unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to article imported by a hundred per cent export-oriented undertaking or a unit in a free trade zone or in a special economic zone. <br /><br />Explanation. - For the purpose of this section, the expressions "hundred per cent export-oriented undertaking", "free trade zone" and "special economic zone" shall have the meaning assigned to them in explanation 2 to sub-section (1) of Section 3 of the Central Excise Act, 1944 (1 of 1944). <br />The only interesting thing with respect to SEZs is that despite the injury caused due to the dumping of articles to the local industry as was aptly explained by the apex court in the instant case as above, 100% Export Oriented Units, Free Trade Zones and the SEZs are exempted from imposition of even the ‘anti dumping duty’ .<br />The case has no relevance with the SEZs excepting the incidental perusal of the provisions. In the instant case the petitioner is not an SEZ nor a 100% EOUnit.Dr.Mohan b rao B.Sc., M.L., Ph.D., UGCNEThttp://www.blogger.com/profile/01503191252332509407noreply@blogger.com0tag:blogger.com,1999:blog-7052509773353106668.post-5299149072174456242010-04-15T06:30:00.000-07:002010-04-15T06:40:18.953-07:00Let us analyse the education systemPlease note that <br />the Annual examination -English Paper I and II - so also the Science for class VIII are conducted on a single day i.e., morning and evening sessions. Does it sound good?<br />The English question paper contained a question to respond to 'Wanted Teacher' advertisement as part of letter writing. Instead the pupil at this stage may be required to write a letter to a friend as to the details of his visit to a new place of historic significance in the near by area.<br />Please respond<br />with warm friendly regards,<br />Satyasodhana-Mohan.blogspot.inDr.Mohan b rao B.Sc., M.L., Ph.D., UGCNEThttp://www.blogger.com/profile/01503191252332509407noreply@blogger.com0