Legal News & Views

In M/S VED PRAKASH MITHAL AND SONS vs UNION OF INDIA, an Arbitral Award was delivered on 30.10.2015 and received by the respondent on 07.11.2015. An application to correct the said aforesaid Award was made by the respondent on 16.11.2015. A similar application to correct the Award was also made on behalf of the respondent on 20.11.2015. Both these applications were decided by the learned Arbitrator together and dismissed on 14.12.2015.  On 11.03.2016, objections and application objecting to the Award was filed under Section 34 of the Arbitration Act, 1996 by the respondent. The only question that arises is whether the aforesaid Section 34 application could be said to be within the time mentioned in Section 34(3) of the Act. The learned Additional District Judge, by order dated 30.05.2017, found that the application was time-barred, reasoning that the application should have been made on and from the first date as, in fact, there was no correction made to the Awar...

In M/S EMKAY GLOBAL FINANCIAL SERVICES LTD. vs GIRDHAR SONDHI,  the questions before the Supreme Court was the issue of 'Exclusive Jurisdiction' & 'Furnishing of proof in a appeal against an arbitration award' The Respondent, a client of the appellant who is a registered broker with the National Stock Exchange, had initiated an arbitration proceeding against the Appellant, claiming an amount of Rs.7,36,620/-, which was rejected by the Sole Arbitrator vide an Arbitration Award dated 08.12.2009.  The Respondent then filed a Section 34 application under the Arbitration and Conciliation Act, 1996 on 17.03.2010 before the District Court, Karkardooma, Delhi. By a judgment dated 22.09.2016, the learned Additional District Judge referred to the exclusive jurisdiction clause contained in the agreement, and stated that he would have no jurisdiction to proceed further in the matter and, therefore, rejected the Section 34 application filed in Delhi. In an appeal filed befo...

In PR Commissioner of Income Tax-6, New Delhi v. Monnet Ispat & Energy Limited, the Supreme Court while referring to judgment in Dena Bank vs Bhikhabhai Prabhudas Parekh and Co. & Ors., made it clear that income-tax dues, being in the nature of Crown debts, do not take precedence even over secured creditors, who are private persons and therefore Section 238 of the Insolvency and Bankruptcy Code, 2016, it is obvious that the Code will override anything inconsistent contained in any other enactment, including the Income-Tax Act.

In K Kishan vs. Vijay Nirman Company Pvt Ltd., the appeals before the Supreme Court raised an important question as to whether the Insolvency and Bankruptcy Code, 2016 ('The Code') can be invoked in respect of an operational debt where an Arbitral Award has been passed against the operational debtor, which has not yet been finally adjudicated upon. The background of the matter was that a contract was entered into between the parties for a project during the course of which disputes and differences arose between the parties and the same were referred to an Arbitral Tribunal, which delivered its Award on 21.01.2017. At this stage, a notice  under Section 8 of the Code dated 06.02.2017 was sent by the Respondent to KCPL to pay an amount of Rs. 1,79,00,166/-. Within 10 days, by a letter dated 16.02.2017, KCPL disputed the invoice that was referred to in the said notice, stating that the said amount was, in fact, the subject-matter of an arbitration proceeding, and as...

While by an ordinance in June, the Government has brought in the home buyers into the fold of the Insolvency Code by giving them the status of a financial creditor, a very interesting observation has beeb made by the NCLT Allahabad Bench which may lead to arguments to and fro in future. In Ajay Walia vs M/s. Sunworld Residency Private Limited (Corporate Debtor), the Petitioner/Financial Creditor booked an Apartment from the Corporate Debtor and also entered into a supplementary agreement with the Corporate Debtor to invest in the Apartment under the housing loan scheme with an option to cancel the purchase of the Apartment on completion of 24 months from the date of disbursement of the bank loan amount to Corporate Debtor. Also as per the agreement, financial creditor was not liable to pay pre-EMI interest on the bank loan amount to the concerned bank, for a period of 24 months, from the date of disbursement of the bank loan amount, and the corporate debtor had ...

In Smt. Birwati Chaudhary & Ors. vs The State of Haryana & Ors., appeal was filed against the judgment of the Punjab & Haryana High Court rejecting the application for stay filed by the appellants herein. By impugned order, the High Court declined to grant the ad­interim stay observing: “As the required land is lying vacant, we do not find any reason to grant any stay.” The Supreme Court allowed the appeal and remanded the matter back to the High Court to decide the application again and held that the reason to remand the case has occasioned due to the fact that firstly, no adequate reason is given in the impugned order for not granting stay; and secondly, the reason given does not in itself justify the rejection having regard to the nature of controversy involved in the writ petition. In short, justifiable reason(s) to support either the grant or rejection need(s) to be stated keeping in view the facts and the law applicable to the controversy involved. It is no...

In Anant v. Pratap, while rejecting the judgment of the High Court in a claim against permanent disability, the Supreme Court while referring to various judgments held that in cases of motor accidents leading to injuries and disablements, it is a well settled principle that a person must not only be compensated for his physical injury, but also for the non­pecuniary losses which he has suffered due to the injury. The Claimant is entitled to be compensated for his inability to lead a full life, and enjoy those things and amenities which he would have enjoyed, but for the injuries. The purpose of compensation under the Motor Vehicles Act is to fully and adequately restore the aggrieved to the position prior to the accident. The court referred to Yadav Kumar v. The Divisional Manager, National Insurance Company Ltd and also to Sarla Verma and Ors. v. Delhi Transport Corporation and Ors. to calculate the multiplier and also to Raj Kumar v. Ajay Kumar, where the Court held that...

In Shamanna vs. Divisional Manager, The Oriental Insurance Co. Ltd., appeal came before the Supreme Court against the order of the Karnataka High Court revering the award passed by the Tribunal for “pay and recover” holding that the owner of the vehicle is liable to pay the compensation to the appellants/claimants. In this matter the Motor Accident Claim Tribunal had decided that the fault lay with the owner of the offending vehicle and directed the insurer to pay compensation to victim's family and recover the same from the insured who is the owner. On appeal the High Court referring to Oriental Insurance Co. Ltd. v. K.C. Subramanyam held that the discretion under Article 142 of the Constitution to direct the insurance company to make payment to the claimants and to recover the same from the owner of the vehicle is vested only with the Supreme Court,The High Court held that only the owner of the offending vehicle is liable to make the payment of the compensation amount awarded by...

In Rajesh S/O. Mukundsingh Thakur vs State Of Maharashtra, an application moved by the investigating officer for sending muddemal property consisting of mobile phones and memory card for forensic examination, has been allowed. The principal grievance of the petitioners is that the said property was seized on 14.09.2012 when the petitioners were arrested and that after about more than five years, such an application for sending the property for forensic examination could not have been entertained by the trial Court, particularly when one panch witness had been already examined and part of the examination-in-chief of the complainant was already over that prejudice would be caused to them if the same was allowed. The Bombay High Court referring to judgments in  C.B.I. .vs. R.S. Pai  & Amrutbhai Shambhubhai Patel .vs. Sumanbhai Kantibhai Patil and ors, decided that that the investigating officer/agency, has the power at any stage of trial, to place bef...

In Nandbala Nathala Mayani vs Jaswantrai Chhaganlal Mayani & Ors, advocate appearing on behalf of the judgment debtor submitted that there was a clear distinction in the use of the lower case ‘court’ in Section 36(1) of the Arbitration and Conciliation Act (amendment) 2015 as opposed to the capitalised ‘Court’ in sub-sections 2, 3 and in Section 34 of the Act. Section 2(1)(e) contains a definition of only the latter use, i.e., Court with the upper case’C’. According to him, under the definition of ‘Court’ in Section 2(1)(e), only the high court on its original side had the jurisdiction to hear the present matter. Rejecting the argument,  the Bombay High Court held that this Act (like many others) is replete with punctuation and other errors and we are best advised to read the statutes for what they intend, and what their objects and purposes are, rather than to interpret for what a punctuation may or may not convey. There is always a time and a place for that level of ...

In M/S POPAT & KOTECHA PROPERTY vs ASHIM KUMAR DEY, the question before the Supreme Court was whether a tenant who defaults in payment of his/her share of municipal tax as apportioned by the landlord would be in default of rent rendering him/her liable to eviction under the  West Bengal premises Tenancy Act as amended in 2001. The rent agreement between the parties stipulated that the rent would include all municipal taxes payable and that as and when such taxes are enhanced rent should be proportionately raised. The amendment 2001, the sub-section of section 5, cast the obligation to pay the taxes specifically on the occupier/tenant. When the property tax was enhanced, the landlord apportioned the tax between the tenants and issued a notice upon the respondent-tenant to pay his share of the municipal taxes. The respondent-tenant in reply requested reconsideration/review of the matter. The trial court dismissed the eviction suit filed by the landlord for non-paymen...

In Saima Maqbool Vs. Omkar Raina and Ors, High Court of Jammu and Kashmir has held that it is well settled that, no employee has a right of promotion but has only right to be considered for  promotion according to the Rules. Chances of promotion are not condition of service and, therefore, defeasible in accordance with law. Unless, there is statutory mandate to fill up a vacancy within a prescribed period, it is always left to the wisdom and discretion of the employer to fill up the vacancy as and when it deems fit and proper and the employee who has a right of consideration for promotion cannot dictate to his employer that available vacancy should be filled up immediately on occurrence. 

In United India Insurance Co. Ltd. vs Hyundai Engineering and Construction, the insurance policy in clause 7 stipulated arbitration in case of dispute but subject to acceptance of the liability by the insurer. When the claim was filed, the surveyor appointed by the insurer found the accident to be entirely due to the fault of the insured and under such circumstances the loss not being payable under the policy, the insurer by letter categorically repudiated the claim in its entirety. Subsequently the insured went to the High Court for appointment of arbitrator claiming dispute which was resisted by the insurer that the matter cannot be arbitrated. The High Court agreeing with allowed the application while referring to judgments in Duro Felguera, S.A. Vs. Gangavaram Port Limited, and  Jumbo Bags Ltd. Vs. New India Assurance Co. Ltd. On appeal the Supreme Court found that the judgements referred to by the High Court are 2 judge benches while the more relevant judgments being ...

In Sonell Clocks and Gifts Ltd vs. New India Assurance Co Ltd, claim was repudiated by the insurer on violation of terms of the policy specifically clause 6 of the general terms, the report of the surveyor as well as delay in informing the insurer. The appellant approached the Supreme Court which decided that the singular question involved in these appeals is whether the respondent (insurer) had waived the condition relating to delay in intimation, by appointing a surveyor. The appellants had referred to Galada Power and Telecommunication Ltd. Versus United India Insurance Co. Ltd. and Another, wherein the court had rejected the repudiation of claim by the insurer on the ground of delay in intimation under Clause 5 of Marine Insurance Policy as the insurer had appointed a surveyor. The Supreme Court however held that the clause of the present policy was materially different from and incompatible with the clause referred to the in the Galada matter. The policy does not ...

In Samir Narain Bhojwani vs. Aurora Properties and Investments, in a dispute between relating to a property wherein several agreements have been signed between the parties and relief was sought on various grounds, the ingle judge of the high court, at an interlocutory stage of a suit, directed the defendant to hand over keys and possession of eight flats to the plaintiff along with 16 parking spaces, recording that he had moulded the reliefs originally sought by the plaintiff in the changed circumstances of the case and in order to shorten the litigation and do complete justice. The high court had relied on the judgment of the apex court in Gaiv Dinshaw Irani and Others vs. Tehmtan Irani and Others, holding that courts ought to mould the relief in accordance with the changed circumstances for trying the litigation or to do complete justice. The division bench upheld the single bench order.  The apex court bench observed that in Gaiv Dinshaw Irani (supra), the court h...

In ANTHONIYARPICHA vs MV MAYUREE NAREE, the petitioner had approached the Kerala High Court after their fishing boat and accessories, including fishing nets, were destroyed by a foreign ship off the coast of Kochi. They had prayed for detaining the ship under subsection (1) of Section 443 of the Merchant Shipping Act, 1958. The petitioner's Advocate contended that a part of the cause of action arises within the jurisdiction of the Kerala High Court and, hence, it has territorial jurisdiction to maintain the plea, though the ship is berthed in port in Odisha. The high court noted that Sub-Section (1) of Section 443 of the Act only provides that the high court may detain a foreign ship which caused damage to the Government or to a citizen of India or to an Indian company by reason of the specific acts mentioned therein, when it is found within Indian jurisdiction and it does not provide which High Court in India should exercise the jurisdiction. However if the argument adva...

In BL Udaykumar v. State of Karnataka, the issue in the petition filed by the accused before the Karnataka High Court was whether the prosecution can be allowed to produce fresh documents after the commencement of the trial. The magistrate’s order allowing the prosecution’s application under Section 242(3) CrPC was assailed before the high court. It was contended by the accused that the documents so collected during further investigation could only be produced before the court along with a supplementary report and only after further investigation as specified under Section 173(8) of the Code of Criminal Procedure. The Court however observed that the language of section 242(3) of the Code is wide enough to invest power in the Magistrate to take all the evidence produced by the prosecution in support of its case and therefore decided that the documents which are not the part of the charge-sheet could be received in evidence for prosecution after the commencement of tri...

The Government by a notification dated 17th August 2018, has amended the Insolvency and Bankruptcy Code to keep a surety in a contract of guarantee to a corporate debtor out of the ambit of the Moratorium declared under Section 14 of the Code. It is interesting to note that in STATE BANK OF INDIA vs V. RAMAKRISHNAN decided on 14th August 2018, the Supreme Court had already stated that the moratorium should not apply to  such guarantors. The said judgment made some important observations.  The Court said that the scheme of Section 60(2) and (3) is thus clear – the moment there is a proceeding against the corporate debtor pending under the 2016 Code, any bankruptcy proceeding against the individual personal guarantor will, if already initiated before the proceeding against the corporate debtor, be transferred to the National Company Law Tribunal or, if initiated after such proceedings had been commenced against the corporate debtor, be filed only in the National...

In  R.Parimala Bai v. Bhaskar Narasimhiah, the complaint was filed with respect to dishonour of a cheque issued for returning the amount collected by the accused as consideration for securing a job . The complainant alleged that he had paid a sum of ten lakhs rupees to the accused on his promise that he will secure job for the son of the complainant at HAL Factory. When the promise was not kept, the complainant demanded the amount back, and a cheque for rupees ten lakhs was issued by the accused, which got dishonoured for lack of sufficient funds, leading to filing of the complaint. The accused opposed the complaint referring to judgments of the Supreme Court in Virender Singh v. Laxmi Narayain and Kuju Collieries Ltd v. Jharkhand Mines Ltd., which held that Sec. 138 NI Act was not attracted for dishonour of a cheque issued for recovery of bribe paid for securing job. The High Court of Karnataka agreed with the arguments of the accused, and held that there was no lega...

In National Insurance Co. Ltd. vs M/S. Mehta Jewellers, claim lodged by the jewellers after burglary in their shop. The insurer referred to the policy which stated said, "Warranted that all property including cash and currency notes whilst at the premises specified in the schedule shall be secured in locked safe of standard make at all times out of business hours" and in view of the policy term, the claim was  repudiated by the insurer  on the ground that the 'ornaments in the shop at the material time of burglary were kept in a steel safe of local make and not in burglar resistant safe'.  The repudiation of claim of the complainant was intimated after a gap of two years from the incident. Aggrieved, the complaint filed a consumer complaint before the State Commission. Learned counsel for the appellant argued that the surveyor has clearly reported that the jewellery was kept in an almirah with single lever.  Even in the FIR the complainant has mentioned...

In Ram Chandra Singh vs Rajaram, singular question involved in the appeal against the judgment and order of the High Court of Judicature at Allahabad was whether the Motor Accident Claims Tribunal,  was right in holding that the insurer was not liable as the driver had a fake licence. In this matter, a claim was filed against death due to negligent driving was filed before the MACT which partly allowed the claim petition but absolved the insurer, Oriental Insurance Company Ltd. on the finding that the driver of the offending vehicle did not have a valid driving licence. The Tribunal, however, directed the insurer to pay the compensation amount as determined in terms of the award with liberty to recover the same from the vehicle owner (appellant herein) and the driver (respondent No.6) jointly and severally. The appellant, being the vehicle owner, alone filed an appeal before the High Court of Judicature at Allahabad which was dismissed on the finding that th...

In Union Bank Of India vs C.G. Ajay Babu, the question before the Supreme Court was whether forfeiture of gratuity, under The Payment of Gratuity Act, 1972 is automatic on dismissal from service. Background: The respondent was an employee of the appellant-Bank. While serving as a Branch Manager, disciplinary proceedings were initiated against him on the following charges: a) Failure to take all steps to ensure and protect the interest of the Bank. b) Failure to discharge his duties with utmost devotion, diligence, honesty and integrity. c) Doing acts unbecoming of an Officer Employee Subsequently the respondent was dismissed from service and was issued a show-cause notice as to why the gratuity should not be forfeited on account of proved misconduct involving moral turpitude. His explanation was rejected and the gratuity was forfeited. The dismissal and forfeiture was challenged before the High Court which did not interfere with the dismissal; however, it was h...

In M/S Alagu Pharmacy vs N Magudeswari, the appellants doing business in the name and style of M/s Alagu Pharmacy claim to be tenants in the suit property owned by the respondent herein since 1998 and around 2012 a lease agreement was entered between extending/renewing the period of lease. The respondent had issued legal notices calling upon the appellants to vacate the suit property alleging inter alia that the lease agreement was a forged document. After hearing the appellants, an ad interim injunction was granted by the District Munsif, Coimbatore. Subsequently an eviction order was issued by the Rent Controller against a compromise deed presented wherein apparently a compromise has been entered into between the appellant and the respondent. The said deed which was resisted by the appellant before the appellate court claiming the same was signed by them under pressure from the respondents and the local police. The said court found favour with the appellants whence the resp...

In Vilas Dinkar Bhat vs State Of Maharashtra, the question arises in this appeal was about the caste of the appellant­whether the appellant belongs to a caste, known as “Thakar”­ a Schedule Tribe, or not. According to the appellant, he by birth belongs to “Thakar” caste which is a Schedule Tribe and, therefore, he is entitled to claim a declaration to that effect in his favour and for this the appellant had filed as many as 50 documents in support of his case to prove that he belongs to a caste “Thakar” but unfortunately neither the Committee and nor the High Court examined the documents in their proper perspective in their respective jurisdiction and, therefore, the matter needs to be reconsidered by the Committee afresh. The Supreme Court on appeal held that the Committee though considered some documents filed by the appellant but did not consider all the documents on which the appellant had placed reliance. The High Court in its writ jurisdiction declined to go into the merits ...

In ROMA SONKAR vs MADHYA PRADESH STATE PUBLIC SERVICE COMMISSION, in a writ petition pertaining to a service matter, the single bench granted the petitioner consequential benefits on appointment and seniority. The division bench, on the writ appeal filed by the State Public Service Commission, did not agree with the relief moulded by the single judge. The matter was thus remitted to the single judge in the matter of moulding the relief. On appeal, the Supreme Court expressed ‘serious reservation’ about a division bench of a high court remitting a matter to single bench for moulding relief and observed that the single judge is not subordinate to the division bench. The bench further observed that it is only to avoid inconvenience to the litigants, another tier of screening by the division bench is provided in terms of the power of the high court but that does not mean that the single judge is subordinate to the division bench and being a writ proceeding, the Division Bench was ...

In Amit Puri & 3 Ors. vs M/S. Imperia Structure Ltd., the Developer had failed to deliver a flat on time and had offered an alternate accommodation which the buyer had refused to accept and filed complain before the consumer forum. The Developer had objected under two ground. They had alleged  in their Affidavit of evidence that that the Complainant is not a 'consumer' as the subject flat was purchased for commercial purpose.  The Commission rejecting the argument referred to Sai Everest Developers & Anr. Vs. Harbans Singh, which laid down the principle of law that when the plea that the said flat has been purchased for commercial purpose is raised by the Developer, the onus of proof shifts to the Developer to establish whether the Complainant has purchased the subject flat for trading/dealing in real estate which they failed to do. Secondly the developer's other contention that the buyer had refused to accept the offer of an alternate arrangement, the Commis...

In The Corporation of Madras vs M. Parthasarathy & Ors., the trial court had allowed the respondent company to file evidence in the form of photocopies and had dismissed all the four suits filed by the respondents with costs as the evidence were in the form of photocopies and were objected to by the respondents. On appeal the Additional District Judge allowed the respondents to file additional evidence in the form the original documents of the earlier admitted photocopies and based on the same allowed the appeal. In its turn the High Court also dismissed the appeal filed by the appellants who in turn approached the Supreme Court. The Supreme Court decided that the first Appellate Court committed two jurisdictional errors in allowing the appeals.  Referring to earlier judgements of the Supreme Court in Land Acquisition Officer, City Improvement Trust Board vs. H. Narayanaiah & Ors., , Shalimar Chemical Works Ltd. vs. Surendra Oil & Dal Mills (Refineri...

In National Insurance Company Ltd. vs Hukam Bai Meena, the insurer repudiated on the ground that the claim was delayed as the same ought to have been submitted within one month from the date of the death of the depositor. The National Commission (NCDRC) referred to Circular No. IRDA/HLTH/MISC./CIR/216/09/2011 dated 20.9.2011, issued by Insurance Regulatory and Development Authority (IRDA) wherein it has been stated that the Authority has been receiving several complaint that claims are being rejected on the ground of delayed submission of intimation and documents. The IRDA then directed through the circular that the insurers' decision to reject a claim shall be based on sound logic and valid grounds.  It may be noted that such limitation clause does not work in isolation and is not absolute.  One needs to see the merits and good spirit of the clause, without compromising on bad claims.  Rejection of claims on purely technical grounds in a mechanical fashion will...

In Vijay Kumar Jain vs Resolution Professional,  applicant was a suspended director of a corporate debtor who sought documents and information placed before the CoC and sought the tribunal to direct that all documents and information be provided to him for setting aside the CIRP process. The  CoC and the RP were apprehensive that doing so will be detrimental to the interest of the creditors in maximization of the value of the assets of the company. He said being the suspended director of the corporate debtor, he had the right to participate in the CoC meetings and to receive all documents tendered before the CoC which are pertinent to the issues that come up in its meetings as well as CIRP proceedings of the corporate debtor. The Mumbai bench of National Company Law Tribunal (NCLT) while rejecting the application referred to the Code and held that as per this code as well as the CIRP regulations, either the suspended director or any other person other than the CoC wil...

The Bombay High Court in Lavasa Corporation Limited vs Jitendra Jagdish Tulsiani has held that that provisions of the Real Estate (Regulation and Development) Act, would apply in case of agreements styled as ‘Agreement to Lease’ when the lease period is long (say 999 years) and when the ‘lessee’ has paid a substantial amount as consideration, thereby dismissing second appeals filed against orders passed by the Maharashtra Real Estate Appellate Tribunal that held that though the ‘Agreements’ between the parties are titled as ‘Lease Agreements’, in effect, they are the agreements of “absolute sale” and, therefore, the provisions of the RERA will be applicable. The High Court found that though the agreement has been termed as lease and RERA precludes from its ambit lease agreements and/or rented spaces, this agreement was for a period of 999 years, the rent charged is only Rs. 1/- per annum and the lessee has paid more than 80% of the consideration and decided the reading in...

In SHIVAJI vs UNITED INDIA INSURANCE CO. LTD., before the Supreme Court, the insurer had raised the defence of negligence of the driver (victim) before the Karnataka High Court which had held that protection is extended only to the injured person or to the legal heirs of the deceased victim, and not to the driver who is responsible for causing the said accident. Therefore compensation could not have been awarded since the deceased driver, in this case, was the tortfeasor and responsible for causing the accident. On appeal the three judge bench of the Supreme Court setting aside the order of the High Court and  referring to the judgment of the court in another 3 judge bench in United India Insurance Co. Ltd. v. Sunil Kumar & Anr.,  held that grant of compensation under Section 163-A of the Act on the basis of the structured formula is in the nature of a final award and the adjudication thereunder is required to be made without any requirement of any proof of negli...

In Life Isurance Corporation Of India vs Mahaveer Prasad Regar, the insured suffered injuries in an accident which resulted in his left hand below elbow being amputated.  His leg also developed a defect.  The claim submitted by him was rejected by the petitioner Corporation on the ground that the injuries suffered by him did not constitute permanent disability. Being aggrieved, the complainant approached the concerned District Forum by way of a consumer complaint. NCDRC while referring to various decisions including Cholamandalam MS General Insurance Co. Ltd., Vs. Suresh Chand Yadav & Ors., K. Janardhan Vs. United India Insurance Company Ltd. & Anr., Mohan Soni Vs. Ram Avtar Tomar & Ors, Jakir Hussein Vs. Sabir & Ors. , held that when the insured cannot be employed in the same or similar work for which he is educated or trained or have experience in which he was employed at the time of accident, then the injury should be terme...