HINDUSTAN CONSTRUCTION COMPANY LIMITED & ANR.DIA & ORS. versus UNION OF INDIA

Citation: [2019] 17 S.C.R. 331 · Decided: 27-11-2019 · Supreme Court of India · Bench: R.F. NARIMAN, SURYA KANT, V. RAMASUBRAMANIAN · Disposal: Disposed off

Cited by 4 judgment(s) · cites 11 · see the full citation network in Lexace

Judgment (excerpt)

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HINDUSTAN CONSTRUCTION COMPANY LIMITED & ANR.
v.
UNION OF INDIA & ORS.
(Writ Petition (Civil) No. 1074 of 2019)
NOVEMBER 27, 2019
[R. F. NARIMAN, SURYA KANT AND
V. RAMASUBRAMANIAN, JJ.]
Arbitration and Conciliation Act, 1996: ss.34 to 36 –
Automatic stay of award – Held: s.36 when read with s.35 states
that enforcement of a final award will be under the CPC, and in
the same manner as if it were a decree of the Court – The raison
d’etre for s.36 is only to make it clear that when an arbitral award
is not susceptible to challenge, either because the time for making
an application to set it aside has expired, or such application
having been made is refused, the award, being final and binding,
shall be enforced under the CPC, as if it were a decree of the court
– To read s.36 as inferring something negative, namely, that where
the time for making an application under s.34 has not expired and,
therefore, on such application being made within time, an
automatic-stay ensues, is to read something into s.36 which is not
there at all – Automatic stay of award is, therefore, not a rule –
Also, this construction omits to consider the rest of s.36, which
deals with applications under s.34 that have been dismissed, which
leads to an award being final and binding when read with s.35
which then becomes enforceable under the CPC, the award being
treated as a decree for this purpose – This is also supported by
the language of s.9 of the Arbitration Act, 1996, which specifically
enables a party to apply to a Court for reliefs “…after the making
of the arbitration award but before it is enforced in accordance
with s.36.” – These words in s.9 have not undergone any change
by reason of the 2015 or 2019 Amendment Acts – Further, s.36,
even as originally enacted, was not meant to do away with
Art.36(2) of the UNCITRAL Model Law, but is really meant to do
away with the two bites at the cherry doctrine in the context of
awards made in India, and the fact that enforcement of a final
award, when read with s.35, is to be under the CPC, treating the
award as if it were a decree of the court – The amended s.36, being
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SUPREME COURT REPORTS
[2019] 17 S.C.R.
clarificatory in nature, merely restates the position that the
unamended s.36 does not stand in the way of the law as to grant
of stay of a money decree under the provisions of the CPC.
Arbitration and Conciliation (Amendment) Act, 2019: s.13 –
Removal of basis of *BCCI judgment by Amendment Act, 2019 –
Whether 2019 Amendment Act removes the basis of *BCCI
judgment of Supreme Court – Held: Argument that the question of
removing the basis of a judgment cannot arise unless and until the
judgment is present in the mind of the legislature and expressly
referred to in the concerned Statement of Objects and Reasons is
rejected – What is important is to see whether in substance, the
basis of a particular judgment is in fact removed, and not whether
that judgment is referred to in the Statement of Objects and Reasons
of the amending act which seeks to remove its basis – Further
argument that s.87 is nothing but a rehash of s.26 is also rejected
– The scheme of s.87 is different from that of s.26, and is explicit
in stating that court proceedings are merely parasitical on arbitral
proceedings – It is, therefore, clear that only arbitral proceedings
have to be looked at to see whether the 2015 Amendment Act kicks
in – Argument that in the instant case there was a direct assault
on a judgment of this Court without first removing its basis is,
therefore, rejected – Legislative competence – Arbitration and
Conciliation Act, 1996.
Arbitration and Conciliation Act, 1996: s.87 – Constitutional
validity of introduction of s.87 into the Arbitration Act, 1996, and
deletion of s.26 of the 2015 Amendment Act by the 2019 Amendment
Act – Held: The law on s.26 of the 2015 Amendment Act was laid
down in *BCCI with great clarity – After construing s.26, the Court
cautioned the Government that the immediate effect of enacting the
proposed s.87 would be directly contrary to the Statement and
Objects and Reasons of the 2015 Amendment Act, which made it
clear that the law prior to the 2015 Amendment Act resulted in
delay of disposal of arbitral proceedings and an increase in
interference by courts in arbitration matters which tends to defeat
a primary object of the Arbitration Act, 1996 – To thereafter delete
this salutary provision and introduce s.87 in its 

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