Legal News & Views

IN THE MATTER OF M/s. Vistara ITCL (India) Ltd. vs Mr. DinkarVenkatasubramanian, appeal was filed against the order of the NCLT rejecting the claim of the appellants for inclusion as Secured Creditors on the basis of pledge of shares by the Corporate Debtor. The NCLAT rejecting the appeal observed that Appellants have not lent any money directly to the Corporate Debtor and the Corporate Debtor did not owe any financial debt to the Appellants except that the pledge of shares was to be executed. There can be no dispute with the preposition of law that creation of pledge of shares by the Corporate Debtor does not tantamount to a guarantee or indemnity.The debt along with interest disbursed against time value of money constitute the basic ingredients of the financial debt as defined in I&B Code and since the same is lacking as regards any transaction between the Appellant and the Corporate Debtor, pledge of  shares would not fall within the concept of guarantee and indemnity so as ...

 IN THE MATTER OF Smt. Andal Bonumalla vs Tomato Trading LLP., the primary question raised in the appeal before NCLAT against the order of the NCLT was whether an advance amount for supply of goods can be considered as an Operational Debt under Section 5(20) of the I&B Code? The NCLAT observed that this is admitted fact that the Corporate Debtor has agreed to deliver 130 Matric Tons of Sugar to the Operational Creditor, for the same, the Operational Creditor paid an advance amount total Rs. 34,90,180/- to Corporate Debtor and Corporate Debtor has issued Proforma Invoice dated 08.02.2017. The Corporate Debtor refunded Rs. 9 Lakhs only, balance principal amount of Rs. 25,90,180/- and interest Rs. 4,92,634/- total as on 07.03.2018 a sum of Rs. 30,82,814/- is due from the Corporate Debtor. We have considered whether this amount is come within the definition of Operational Debt under Section 5 (21) of I&B Code. The Respondent No. 1 has not supplied any goods or provided any serv...

IN THE MATTER OF Invent Assets Securitization and Reconstruction Pvt. Ltd. vs Xylon Electrotechnic Pvt. Ltd.,  the Appellant – Financial Creditor’s application filed under Section 7 of the I&B Code against ‘Xylon Electrotechnic Pvt. Ltd.’ (Corporate Debtor) for having committed default came to be dismissed in terms of the impugned order dated 28th May, 2020 passed by the Adjudicating Authority (National Company Law Tribunal) on the ground that the claim in respect of the ‘financial debt’ was barred by limitation and the Applicant/Appellant had not submitted any proof of continuous acknowledgement of debts by the Corporate Debtor. Aggrieved thereof the Appellant (Financial Creditor) filed the instant appeal assailing the impugned order on the ground that the debt was payable in law as the same had been acknowledged by the ‘Corporate Debtor’ in its balance-sheet of financial years commencing from 2010 to 2016 which for purpose of Section 18 of the Limitation Act amounted to ackno...

IN THE MATTER OF Sh. Sushil Ansal vs Ashok Tripathi, appeal was filed before the NCLAT against the order of the NCLT admitting an application filed by the Respondents under Section 7 of the Insolvency Code. The Respondents have been awarded decree for recovery of their money paid to the Corporate Debtor by the ‘Uttar Pradesh Real Estate Regulatory Authority’ (“UP RERA”). As per Adjudicating Authority, the decree proved the existence of financial debt and liability of Corporate Debtor. The Adjudicating Authority noted that the Corporate Debtor has failed to pay the principal amount along with penalty as decreed by the “UP RERA”. The Adjudicating Authority had passed the impugned order based on the Judgment of the Appellate Tribunal in “M/s. Ugro Capital Limited v. Company Appeal (AT) (Insolvency) Bangalore Dehydration and Drying Equipment Co. Pvt. Ltd.-Company Appeal (AT) (Insolvency) No. 984 of 2019” wherein the Appellate Tribunal had observed that the definition of ...

IN THE MATTER OF M/s. Vipul Limited vs M/s. Solitaire Buildmart Pvt. Ltd., the application under Section 7 filed by the appellant was rejected by the Adjudicating Authority of NCLT holding that this Bench is of the opinion that the issue involved herein arises out of breach of a Contract and therefore initiation of CIRP against the Respondent is not justified. The Petition is devoid of the essential ingredients of the Section 5(8) of IBC, 2016 and is therefore Rejected. On appeal, the NCLAT observed that the two litigants had entered into a Joint Venture as partners and the appellant had addressed itself as an ‘Operational Creditor’ and called upon the Respondent to pay the ‘unpaid Operational debt’. The Appellant has admitted that it is a ‘Joint Partnership Agreement’. This emphasizes that the parties have a mutual right to control the enterprise involving mutual duties and obligations. Further, this Tribunal whiledealing with a Joint Venture in a real estate Project, in Mamatha V...

In Jagdish Prasad Sarada vs Allahabad Bank, appeal was filed against the order of NCLT admitting Insolvency Resolution Petition against M/s. Sarda Agro Oils Limited and initiating ‘Corporate Insolvency Resolution Process’ and appointed ‘Interim Resolution Professional’ . The Adjudicating Authority has admitted the case based on some payments made by the Appellant- Corporate Debtor M/s. Sarda Agro Oils Limited, Hyderabad - into the current account of the Respondent Bank and the last payment being on 19.02.2016 for an amount of Rs.49,50000/- reflected in the ‘Statement in the Account’ of the Corporate Debtor in the books of the Respondent Bank inspite of NPA on 30.09.2015. The Appellant prayed for allowing the Appeal and setting aside the ex-parte order dated 27.08.2019 as stated above apart from stay of Insolvency Proceeding against the Corporate Debtor etc primarily on the issue of limitation and the date from which the limitation period should be counted. The Respondent Bank had argue...

 In PUNJAB STATE POWER CORPORATION LIMITED vs EMTA COAL LIMITED & ANR, while dismissing the appeal against order of the High Court observed the Supreme Court has clearly held in Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd. & Anr. (2019), that an appeal under Articles  226/227  of the Constitution from a section 16 application being dismissed by the Arbitrator can only be if the order passed is so perverse that the only possible conclusion is that there is a patent lack in inherent jurisdiction. A patent lack of inherent jurisdiction requires no argument whatsoever – it must be the perversity of the order that must stare one in the face. Ordering a cost of Rs. 50000/- to be paid by the petitioner, the Supreme Court also observed that the High Court had dismissed the writ application on the grounds of delay when the application should have been dismissed with heavy cost as there is no perversity in the order which leads to a patent lack of ...

 In MOTILAL vs. THE DISTRICT COLLECTOR, the petitioner approached the Supreme Court seeking the transfer of their writ appeal filed in Telangana High Court to the High Court of Delhi under Section 25 of the CPC. The issue involved in the writ appeal pertains to land acquisition proceedings, initiated by the erstwhile state of Andhra Pradesh(now the State of Telangana). The petitioners claimed that he has lost everything and that despite his best efforts, he is unable to have the case taken up by the High Court of Hyderabad for final disposal.  Section 25 of the Code of Civil Procedure empowers the Supreme Court if satisfied that an order under this section is expedient for the ends of justice, direct that any suit, appeal or other proceeding be transferred from a High Court or other Civil Court in one State to a High Court or other State. The Apex court held that the reason for petitioners seeking transfer, cannot be accepted. Every court has its own limitations. Therefore, no...

In TRUSTEES OF H.C. DHANDA TRUST vs STATE OF MADHYA PRADESH & ORS., appeal was filed against the judgment of learned Single Judge of the High Court of Madhya Pradesh as well as the judgment  of the Division Bench dismissing the Writ Appeal filed by the appellant against the judgment of the learned Single Judge. A resolution was passed by a Executors/Trustees of certain immovable properties to transfer and vest area by executing a Deed of Transfer with a site plan from the trustees to beneficiaries by registering the same. Subsequently a Deed of Assent was executed this Trust and several other parties. By Deed of Assent the Trustees/Executors gave assent to complete the title of the immovable properties in favour of the Legatees and vest absolutely and forever in their favour. A notice was issued by the Collector of Stamps stating that in Deed of Assent proper stamp duty has not been paid. The notice further stated that why deficit stamp duty of Rs. 1,62,82,150/- on the document...

In PAPPU DEO YADAV vs  NARESH KUMAR AND ORS, the insured appealed against the decision of the High Court in reducing the amount awarded for loss of future prospect based on the High Court's interpretation of the decision of the Supreme Court in National Insurance Company Ltd. v. Pranay Sethi & Ors. and Jagdish v. Mohan & Ors. The Supreme Court decided that the High Court is technically correct in holding that Pranay Sethi8 involved assessment of compensation in a case where the victim died. However, it went wrong in saying that later, the three-judge bench decision in "Jagdish" was not binding, but rather that the subsequent decision in "Anant" to the extent that it did not award compensation for future prospects, was binding. This court is of the opinion that there was no justification for the High Court to have read the previous rulings of this court, to exclude the possibility of compensation for future prospects in accident cases involving serious in...

In SRI V.N.KRISHNA MURTHY vs SRI RAVIKUMAR & ORS, a property was sold by the recorded owner of the land in dispute to a society and a general power of attorney was also signed by the sellers in favour of the office bearers of the society. On the strength of General Power of Attorney, sale deeds in respect of land in dispute was executed by the Attorneys in favour of appellants on various dates.  Suits were filed on the allegations that suit property is ancestral property and the plaintiffs were co-owner and thus defendant had no right to execute the agreement of sale ignoring the interest of the plaintiff. It was also pleaded that since the agreement of sale did not culminate into a sale transaction, the same are barred by law of limitation and are thus unenforceable.  The Trial Court passed decree in favour of the said plaintiffs. However the sale deeds executed in favour of appellants herein by the attorneys of the recorded land holder were not questioned in the suit and...

In Wg. Cdr. Arifur Rahman Khan vs DLF Southern Homes Pvt Ltd., appeal was filed against the order of dismissal by the National Consumer Disputes Redressal Commission on a consumer complaint filed by 339 flat buyers, accepting the defence of DLF Southern Homes Pvt. Ltd. and Annabel Builders and Developers Pvt. Ltd. that there was no deficiency of service on their part in complying with their contractual obligations and, that despite a delay in handing over the possession of the residential flats, the purchasers were not entitled to compensation in excess of what was stipulated in the Apartment Buyers agreement. The primary grounds on which compensation have been sought before the NCDRC were: (i) Delay in handing over possession of the flats; (ii) Reimbursement of taxes and interest charged to the flat purchasers under clause 1.10 of the ABA; (iii) Deficiency in providing amenities; (iv) Levy of electricity charges by the developer; and (v) Failure to construct the club house The NCDRC d...

  In Wg. Cdr. Arifur Rahman Khan vs DLF Southern Homes Pvt Ltd., appeal was filed against the order of dismissal by the National Consumer Disputes Redressal Commission on a consumer complaint filed by 339 flat buyers, accepting the defence of DLF Southern Homes Pvt. Ltd. and Annabel Builders and Developers Pvt. Ltd. that there was no deficiency of service on their part in complying with their contractual obligations and, that despite a delay in handing over the possession of the residential flats, the purchasers were not entitled to compensation in excess of what was stipulated in the Apartment Buyers Agreement. The primary grounds on which compensation have been sought before the NCDRC were: (i) Delay in handing over possession of the flats; (ii) Reimbursement of taxes and interest charged to the flat purchasers under clause 1.10 of the ABA; (iii) Deficiency in providing amenities; (iv) Levy of electricity charges by the developer; and (v) Failure to construct the club house The N...

In Wg. Cdr. Arifur Rahman Khan vs DLF Southern Homes Pvt Ltd., appeal was filed against the order of dismissal by the National Consumer Disputes Redressal Commission on a consumer complaint filed by 339 flat buyers, accepting the defence of DLF Southern Homes Pvt. Ltd. and Annabel Builders and Developers Pvt. Ltd. that there was no deficiency of service on their part in complying with their contractual obligations and, that despite a delay in handing over the possession of the residential flats, the purchasers were not entitled to compensation in excess of what was stipulated in the Apartment Buyers Agreement. The primary grounds on which compensation have been sought before the NCDRC were: (i) Delay in handing over possession of the flats; (ii) Reimbursement of taxes and interest charged to the flat purchasers under clause 1.10 of the ABA; (iii) Deficiency in providing amenities; (iv) Levy of electricity charges by the developer; and (v) Failure to construct the club house The NCDRC d...