Legal News & Views

In CIVIL APPEAL NO. 8430 OF 2018, VIJAY KUMAR JAIN vs STANDARD CHARTERED BANK & ORS., the appellants had originally approached the NCLT to be provided with all relevant documents by the RP and to attend the COC meeting. The NCLT dismissed the application with liberty to the appellant to attend CoC meetings but not to insist upon being provided information considered confidential either by the resolution professional or the committee of creditors. The Appellate Tribunal while recognising attendance rights, denied the appellant’s prayer to access certain documents, most particularly, the resolution plans. The Supreme Court rejected the contention of the defendants referring to Notes on Clauses to Section 24, and stated that the said clause which holds that members of suspended Board of Directors are permitted to participate in CoC meetings only for the purpose of giving information regarding the financial status of the debtor is misconceived since even assuming that the Notes on...

In CIVIL APPEAL NO. 1128 OF 2019, M/S TWENTY FIRST CENTURY MEDIA PRIVATE LIMITED vs NEW INDIA ASSURANCE COMPANY LTD., appeal was filed against the decision of the High Court both single bench as well as the division bench from interfering in the dispute on the ground that it was a contractual issue involving disputed question of facts only. The issue was the decision of the insurance company in deleting the expressions "floods, rains" from the policy issued by it. The insurer had earlier issued issued the policy  covering cricket matches to the appellant with the deleted expressions and the appellant had raised claim on the insurer on the said grounds.after the match at Kochi was abandoned. The insurer after settling the claim, apprehending that similar claims may be made in future qua other matches, unilaterally deleted from the policy, the expression “floods, rains, etc.”  The appellant initially approached the high court stating that the action of the insurance co...

In CIVIL APPEAL NO. 884 OF 2019, The State of Bihar & Anr. .vs Dr. Sachindra Narayan & Ors., suit was decreed in favour of the appellants wherein it was contended that as the State Government had provided funds for payment of pension for the last many years, the Anugraha Narayan Sinha Institute of Social Studies, Patna and the employees of the Institute have legitimate expectations to receive the amount of pension. The Supreme Court reversing the decision of the High Court held that the Doctrine of legitimate expectation states that legitimate expectation can be one of the grounds of judicial review but unless a legal obligation exists, there cannot be any legitimate expectation. The legitimate expectation is not a wish or a desire or a hope, therefore, it cannot be claimed or demanded as a right. The bench observed that legitimacy of an expectation can be inferred only if it is founded on the sanction of law or custom or an established procedure followed in regul...

In CIVIL APPEAL NO. 1291 of 2019, SWARAJ INFRASTRUCTURE PVT. LTD. vs KOTAK MAHINDRA BANK LTD., the Respondent Bank had granted loan to the Applicant which turned NPA and suit was filed before the DRT which was allowed and recovery certificated were issued. However while various attempts were made to auction the secured assets, each of these attempts has yielded no results. In the meanwhile, the respondent issued statutory notices under Sections 433 and 434 of the Companies Act, 1956. As no payments were forthcoming, a company petition was filed before the Bombay High Court and the said petition was admitted as the companies in question were said to be commercially insolvent. The borrower appealed before the Division Bench contending that once a secured creditor has obtained an order from the DRT, and a recovery certificate has been issued thereupon, such secured creditor cannot file a winding up petition as the Recovery of Debts Act is a special Act which vests exclusive jurisdiction ...

In CIVIL APPEAL NO. 4527 OF 2009, POONA RAM vs MOTI RAM (D) TH. LRS. & ORS., Moti Ram filed a suit came to be filed for declaration of title and for possession without any document of title to prove his possession, but claimed possessory title based on prior possession for a number of years. The Trial court decreed the suit. The First Appellate court reversed it holding that the defendants had proved their title and possession over the suit property. The High Court restored the Trial court decree and judgment.  Setting aside the High Court judgment, the Supreme Court referring to previous judgments opined that a person who asserts possessory title over a particular property will have to show that he is under settled or established possession of the said property. But merely stray or intermittent acts of trespass do not give such a right against the true owner. Settled possession means such possession over the property which has existed for a sufficiently long period o...

In Appeal (C) No(s). 31557/2018, BRILLIANT ALLOYS PRIVATE LIMITED vs MR. S. RAJAGOPAL & ORS., the corporate debtor, financial creditor and the operational creditor entered into a settlement. Based on the settlement, the corporate debtor submitted application for withdrawal. Relying on Regulation 30A of the Insolvency Code (IBC), the Chennai Bench of NCLT refused to permit withdrawal of application on the ground that Resolution Professional has already issued invitation of expression of interest. On appeal, the Supreme Court allowing the settlement decided that Regulation 30A has to be read subject to Section 12A of IBC, which does not impose the condition that withdrawal application has to be filed before the invitation of expression of interest. The Court further held that, this stipulation can only be construed as directory depending on the facts of each case.

In WA.No. 1737 of 2013, M/S LOURDES HOSPITAL vs DR.ABRAHAM MATHEW, the Division Bench of the Kerala High Court, held that whether an establishment made profit or not was immaterial. Following the SC precedent Management of Tata Iron and Steeel Co.Ltd vs Chief Inspecting Officer and others, the bench observed that if the activity is frequent, continuous and relating to business, whether it earns profit or not is irrelevant. Since the above ingredients were present in respect of the activities of the hospital, it was held as an establishment under Section 2(6) of the above Act. Going by the scheme of of Gratuity Act, the shops and commercial establishments, which were covered under the Shops Act at the time of introduction of Gratuity Act would continue to be so covered under the said Act, irrespective of any amendment, repeal or exemption brought under the Shops Act. It cannot be said that the amendment of the Shops Act, if not brought into the Gratuity act, would make the Gra...

In CIVIL APPEAL NO. 1039 OF 2019, Rajasthan Small Industries Corporation Limited vs M/s Ganesh Containers Movers Syndicate, appeal was filed before the Supreme Court against the decision of the High Court to appoint appointment of an independent arbitrator as requested by the defendant citing enormous delay in the arbitration process and the existing arbitrator hurried up to conclude the proceedings with a view to frustrate the arbitration application. The Supreme Court quoted from RUSSELL ON ARBITRATION, 20th Edition which reads as under:- “Mere neglect of an arbitrator to act, as distinct from refusal or incapacity, does not of itself give the court power to appoint another arbitrator in his place. It does, however, give the court power to remove him, whereupon there is a power to replace him.” The Supreme Court held that Section 15 deals with termination of the mandate and substitution of an arbitrator. Sub-section (1) of Section 15 states that in addition to the circumst...

In CIVIL APPEAL Nos. 1237­1238 OF 2019, Dr. H.K. Sharma vs Shri Ram Lal, the tenant had objected against the eviction suit filed by the landlord, claiming that the landlord-tenant relationship between them had ceased to exist by virtue of an agreement for sale entered between them and that he has already paid some money in advance based on the agreement. The tenant contented as the landlord-tenant relationship did not exist, the landlord cannot evict him. The matter went through various forums and finally landed before the Supreme Court in appeal. The Supreme Court referring to the judgment in Shah Mathuradas Maganlal & Co. vs. Nagappa Shankarappa Malage & Ors., held that in the instant case the lease agreement included no clauses on the fate of the tenancy. A fortiori, the parties did not intend to surrender the tenancy rights despite entering into an agreement of sale of the tenanted property. In other words, if the parties really intended to surrender their tenancy ...

In CIVIL APPEAL NO. 818 OF 2018, FORECH INDIA LTD. vs EDELWEISS ASSETS RECONSTRUCTION CO. LTD., the appellant was an operational creditor, which had filed an application in the High Court to wind up the corporate debtor under Section 433(e) of the Companies Act, 2013 in 2014. After the commencement of the IBC, the respondent, a financial creditor, filed application under Section 7 of the IBC against the corporate debtor, which was admitted by the NCLT. The appellant challenged before the NCLAT the admission of financial creditor's application, on the ground CIRP cannot be initiated when winding up proceedings were pending in HC. The NCLAT did not agree, and dismissed the appeal, holding that the application was maintainable as no winding up order was passed. Section 11 of IBC was cited by the NCLAT. The Supreme Court rejected the judgement of the the Madras High Court in M/s. M.K. & Sons Engineering v/s. Eason Reyrolle Ltd. and agreeing with the judgment of the Bomb...

In  CIVIL APPEAL NO. 116 OF 2019, SNEH LATA GOEL vs PUSHPLATA & ORS., considering an appeal against a Jharkhand High Court order that had set aside an executing court order which dismissed the objection as to territorial jurisdiction of the court which passed the decree in a partition suit. The High Court observed that the plea that the decree could not be executed on the ground that it had been passed by a court which had no territorial jurisdiction to entertain the partition suit could have been raised under Section 47 of the Code of Civil Procedure. The Supreme Court decided that the High Court had erred in its decision and referring to Vasudev Dhanjibhai Modi v Rajabhai Abdul Rehman among others wherein it was held that a court executing a decree cannot go behind the decree between the parties or their representatives it must take the decree according to its tenor, and cannot entertain any objection that the decree was incorrect in law or on facts. Until it i...

In Supreme Court, CIVIL APPEAL NO(s). 931 OF 201, LEELA BAI AND ANOTHER SEEMA CHOUHAN AND ANOTHER, the deceased was working as driver of a bus ferrying passengers from Indore to Burhanpur. The bus used to ferry passengers from Burhanpur at 6.30 am and reach Indore at 11 am. The return journey would commence from Indore at 3 pm and terminate at Burhanpur at 7.30 pm. Because of the nature of the duty, the deceased would stay with the bus for twenty-four hours and would not come home for as long as a week. On the fateful day, the deceased had returned to Burhanpur from Indore at 7.30 pm. He met with an accidental death while he was coming down the roof the bus after having his meal at about 8.30 pm. The short question for consideration before the Supreme Court was whether the death occurred during the course of, and arising out of the employment. The Court noted at the outset that the Act is a welfare legislation and has to be interpreted in the facts of each case and the...

In Civil Appeal No. 5158 of 2013, Mohammed Salim (D) through LRS. & Ors. Vs. Shamsudeen (D) through LRS. & Ors., the plaintiff had claimed his share in property of his Muslim father, who had married his Hindu mother. However, the defendants argued that the plaintiff’s mother was not the legally wedded wife of Mohammed Ilias and that she was a Hindu by religion at the time of marriage. She had not converted to Islam at the time of her marriage, and thus the plaintiff was not entitled to any share in the property in question. The Court, however, after considering that the marriage in question was an irregular marriage, held that the legal effect of a  fasid marriage is that in case of consummation, though the wife is entitled to get dower, she is not entitled to inherit the properties of the husband.  But the child born in that marriage is legitimate just like in the case of a valid marriage, and is entitled to inherit the property of the father. Based on the fi...

In CRIMINAL REVISION APPLICATION NO. 198 OF 2017, Amol @ Jolly Shrichand Kungwani,  vs The State of Maharashtra, while appealing before the High Court of Bombay, the accused submitted that evidence of complainant shows that he is doing money lending business. He has not produced any accounts book to show the loan transaction. Learned trial Court has wrongly recorded its finding that accused has not discharged his burden in respect of presumption under Section 139 of the Negotiable Instruments Act. Therefore the complainant has submitted that the complainant has proved that cheque was issued by the accused. The High Court referring to judgments in  K. Bhaskaran Vs. Sankaran Vaidhyan Balan and anr.,  Shanaz D'Souza Vs. Sheikh Ameer Saheeb and anr., Mahesh Chandaikar Vs. Dattaram S/o Tato Chandaikar and anr. and Nitin s/o Bapurao Mankar Vs. Vyankatesh Housing Agency, Nagpur. decided that the burden is to be discharged by the accused and not by the complainant.  The...

In CIVIL APPEAL NOS.8278-8279 OF 2018, Shivaraj vs Rajendra & Anr., the appellant while travelling as a coolie on a tractor insured only for agricultural purpose, met with an accident severely injuring the appellant. On application by the appellant, the Motor tribunal held that the appellant was travelling as a loader in the tractor and not as a gratuitous passenger and awarded compensation which as assailed before the High Court by the insurer. The High Court while agreeing with most of the conclusion of the tribunal decided that the evidence, however, is unambiguous that the appellant travelled in the tractor which was insured only for agriculture purposes and not for carrying goods. No additional insurance was taken in respect of the trailer rather presence of trailer is not shown or demonstrated in any of the documents and there was no evidence to demonstrate that the tractor was attached to a trailer. The tractor could accommodate only one person namely the driver of...

In FAO (OS) No. 272/2012, COASTAL ANDHRA POWER LIMITED vs ANDHRA PRADESH CENTRAL POWER DISTRIBUTION CO LTD & ORS., Date of decision: 15th January, 2019, the appellant Coastal Andhra Power Ltd had agreed to supply power to Andhra Pradesh Central Power Distribution Co.Ltd(APCPDL) under a PPA. The coal for power generation was to be imported from Indonesia. Meanwhile, there occurred change in Indonesian laws, which led to price rise of coal. In that backdrop, Coastal Andhra said that power generation will not be viable without renegotiation of prices. Not willing to renegotiate prices, APCPDL terminated the contract and sought for damages of Rs.400 crores from Coastal Andhra, for breach of contract. This led Coastal Andhra to file application under Section 9 of the Arbitration and Conciliation Act, seeking to restrain APCPDL from invoking the bank guarantee furnished by it for the claim of damages.The single judge initially granted a stay on Mach 20, 2012. Later, this stay was va...

In CRIMINAL APPEAL Nos. 26-27 OF 2019, M/S. SICAGEN INDIA LTD. vs MAHINDRA VADINENI & ORS., the three cheques issued by the accused were presented by the complainant, and after they were dishonoured, a notice was issued to the accused on 31.08.2009 demanding the repayment of the amount. Thereafter, these cheques were again presented, which were dishonoured again. The complainant issued a statutory notice on 25.01.2010 and later filed the complaint under Section 138 of the Negotiable Instruments Act based on the second statutory notice. The Madras High Court, allowed the petition filed by the accused on the ground that the complaint was not filed based on the first statutory notice dated 31.08.2009 and the complaint filed based on the second statutory notice dated 25.01.2010 is not maintainable. The Supreme Court while referring to a judgment of the court in MSR Leathers vs. S. Palaniappan and Another, held that applying the ratio of MSR Leathers (supra) the complaint f...

In Company Appeal (AT) (Insolvency) No. 346 of 2018, Dr. Vishnu Kumar Agarwal vs M/s. Piramal Enterprises Ltd., the borrowing by All India Society for Advance Education and Research was guaranteed by 2 corporate guarantors. On default, the lender raised notice on both the guarantors for exactly the same amount, then went to NCLT by filling 2 separate applications against the guarantors .The Adjudicating Authority admitted the application against both the guarantors. The Appellants raised questions on maintainability on two important issues:- 1) Whether the ‘Corporate Insolvency Resolution Process’ can be initiated against a ‘Corporate Guarantor’, if the ‘Principal Borrower’ is not a ‘Corporate Debtor’ or ‘Corporate Person’? 2)  Whether the ‘Corporate Insolvency Resolution Process’ can be initiated against two ‘Corporate Guarantors’ simultaneously for the same set of debt and default? The NCLAT, referring to the judgements of the Supreme Court in Bank of Bihar v. Damoda...

In CIVIL APPEAL No. 4453 OF 2009, Kamal Kumar vs Premlata Joshi & Ors., the Supreme Court dismissing a suit for specific performance, listed out the requirements to be answered in a specific performance suit. Those are: 1. Whether there exists a valid and concluded contract between the parties for sale/purchase of the suit property? 2. Whether the plaintiff has been ready and willing to perform his part of contract and whether he is still ready and willing to perform his part as mentioned in the contract? 3. Whether the plaintiff has, in fact, performed his part of the contract and, if so, how and to what extent and in what manner he has performed and whether such performance was in conformity with the terms of the contract? 4. Whether it will be equitable to grant the relief of specific performance to the plaintiff against the defendant in relation to suit property or it will cause any kind of hardship to the defendant and, if so, how and in what manner and the extent if ...

IN CIVIL APPEAL Nos.126­156 OF 2019, Manish S. Pardasani vs Inspector State Excise, some 'Liquor' licensees had approached the Bombay High Court challenging an ex-parte order passed by Commissioner State Excise that directed sealing of their liquor shops. The High Court allowed their petition and quashed the order passed by the Commissioner. It also made serious observations and passed adverse remarks in the manner in which the Commissioner State Excise had dealt with the case, particularly the manner in which ex- parte interim orders were passed, and oral directions issued to the subordinate officers. One of the directions passed by the High Court in this case read: "We direct that in the event the fourth respondent passes any orders adverse to the petitioners, then such orders shall not take effect for a period of four weeks from the date they are communicated to the petitioners." On appeal, the Supreme Court observed that a High Court cannot stay or/and qu...

In CRIMINAL APPEAL NO. 14 OF 2019, State of Madhya Pradesh vs Kalyan Singh & Ors., appeal was filed before the Supreme Court against the order of the Madhya Pradesh High Court quashing the criminal proceedings against the original Accused which were for the offences under Sections 307, 294 read with Section 34 of the IPC, solely on the ground that the original Complainant and Accused have settled the dispute and the original Complainant does not want to prosecute the accused and, therefore, there is no change of recording conviction against the accused persons. On appeal the Supreme Court agreeing with the State held that it is not in dispute that as per Section 20 of the Cr.PC offences under Sections 307, 294 read with Section 34 of the IPC are non­compoundable. It is also required to be noted that the allegations in the complaint for the offences under Sections 307, 294 read with Section 34 of the IPC are, as such, very serious. The court also referred to the decision of the...

In Contempt Case (Civil) No.1132 of 2018, M/s Lanco Amarkantak Power Ltd., vs South Eastern Coalfields Ltd., Order delivered on: 7-1-2019, the Chattisgarh High Court had earlier restored the award passed by the arbitral tribunal and directed SECL to make payment of the decretal amount to Lanco Amarkantak Power Ltd. As the amount was not paid by SECL, the company had approached the high court invoking contempt jurisdiction. The respondents raised the preliminary objection that since the execution application is maintainable under Section 36 of the Arbitration and Conciliation Act for executing the award passed by the Arbitral Tribunal, therefore, the contempt petition would not be maintainable. The High Court declared that the jurisdiction to punish for contempt is an inalienable attribute of and inheres in, every superior court of record. This is jurisdiction of necessity. The court also observed that merely because the alternative remedy of laying execution of arbitral aw...

In CIVIL APPEAL No.2530 OF 2012, Birla Institute of Technology vs The State of Jharkhand & Ors., filed before the Supreme Court against the order of the Jharkhand High Court wherein the High Court had allowed plea of a retired Assistant Professor, who worked Birla Institute of Technology, and held that he is entitled to claim gratuity amount from the Employer under the Payment of Gratuity Act, 1972. The High Court had opined that though, it was settled in Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer that a "Teacher" could not be regarded as an "employee" under Section 2(e) of the Act, the high court had distinguished it on the ground that it is applicable only to the primary teachers working in primary schools and since the case at hand is not a case of a primary teacher, it has no application to this case. On appeal, the Supreme Court allowing the appeal held that observed that the high court made a incorrect reading of the said j...

In CRIMINAL APPEAL NO. 170 OF 2009, BHARAT SANCHAR NIGAM LIMITED vs  SURYANARAYANAN & ANR. before the Supreme Court, four accused were charged for theft of 10,285 kg of copper wires and 62 lead sleeves from a BSNL godown. The accused had allegedly sold the material to Surya Metals. In the year 1992, interim custody of the seized alloy moulds was handed over by the magistrate to the BSNL in pursuance of the provisions of Section 451 of the Code of Criminal Procedure, 1973. After the accused were acquitted in 1999, the proprietor of Surya Metals filed an application under Section 452 of the CrPC seeking release of the alloy moulds. The magistrate declined to grant custody of the seized material and relegated him to prove its title before a competent civil court. The Sessions Court, in appeal, held that it was for the proprietor to assert its title and prove it before the civil court. These findings got reversed by the high court which held that though interim custody was...

In Panchu Gopal Mondal Vs. The State of West Bengal Education Department and Ors., W.P. 23637(W) of 2018 Decided On: 04.12.2018, the son of the writ petitioner has been denied admission in class XI in Mathurapur Arya Vidyapith (HS). It is to be noted that the son of the writ petitioner studied in the said school from class V to X and took his Madhyamik Pariksha, 2018 from the said school and successfully passed the said examination. For this the petitioners referred to judgments of Supreme Court in Principal, Cambridge School and Anr. Vs. Payal Gupta (Ms) and Ors. reported in (1995) 5 SCC 512 and Principal, Kendriya Vidyalaya & Ors. Vs. Sourabh Chaudhary & Ors. reported in 2009) 1 SCC 794. The Calcutta High Court decided that it is clear from the documents annexed to the writ petition that the son of the writ petitioner had passed the Madhyamik Pariksha, 2018 and, accordingly, he was very much eligible to join class XI. The judgments of the Hon'ble Supreme Court c...

In ICICI Bank Ltd. v. Vikas Kumar Thakur, RFA No. 901 of 2018, decided on 01-11-2018, appeal was filed before the Delhi High Court against the order of the trial court rejecting on the grounds that firstly, though the respondent/defendant during the pendency of the suit has made various payments, yet the appellant/plaintiff is not bringing the respondent/defendant to the Court and secondly, since the suit amount as claimed in the suit has vanished as by subsequent payment, cause of action as pleaded in the plaint has hence vanished. The Delhi High Court has decided that the trial court has completely erred in rejecting the plaint under Order VII Rule 11 CPC because a defendant in the suit always during pendency of the suit can keep on making payments towards the amounts claimed in the suit, however, that does not mean that cause of action in the suit will vanish, but in such circumstances the Court under Order VII Rule 7 CPC will take notice of the subsequent events of repayments ...

In CIVIL APPEAL NO.11932 Of 2018, GANGAPPA AND ANR. vs FAKKIRAPPA before the Supreme Court, trial court in Karnataka had impounded agreements to sell filed by the plaintiffs with direction to the plaintiff to pay deficit duty and penalty of at the rate of 2 times but on appeal the High Court directed the courts below to levy the penalty at 10 times of the deficit duty as per judgment of Karnataka High Court in Digambar Warty and others vs. District Registrar, Bangalore Urban District and another. The Supreme Court observed that there is no discretion vested with the authority impounding the document in the matter of collecting duty under Section 33 of the Act. It said that there is clear contradistinction between the power under Section 33 and that under Section 39. The bench said that the object and purpose for such contradistinction in the provision and power is not far to seek. Section 33 applies to every person having by law or consent of parties authority to...