Legal News & Views

In BELI RAM vs RAJINDER KUMAR & ANR., the sole question of law for consideration before the Supreme Court in the appeals was whether in case of a valid driving licence, if the licence has expired, the insured is absolved of its liability. The driver of a commercial vehicle met with an accident resulting in 20% permanent disability. The first respondent herein filed a petition under the Workmen’s Compensation Act, 1923 impleading the appellant and second respondent herein – the insurance company which had insured the vehicle. These proceedings resulted in an award by the Commissioner on 8.12.2004 granting Rs. 94,464/- for the injuries suffered and Rs.67,313/- towards medical expenses of the first respondent. The amounts awarded were to carry interest @ 9 per cent per annum from the date of filing of the application till the date of payment. The compensation amount was mulled on to the second respondent as insurer, while the interest was directed to be paid by the appellant herei...

In ACIT, New Delhi vs. Sidhavandan Enterprises, appeal was filed before the INCOME TAX APPELLATE TRIBUNAL by the revenue department against the order of the Commissioner of Income Tax CIT(A). The Assessee is a company and filed return of income showing loss of Rs.35,53,560. The Assessing Officer, (AO) noted that, in assessment year under appeal, the Assessee Company has received an amount of unsecured loan of Rs.2 crores from Varrenyam Securities Pvt. Ltd., The AO noted back ground of the case with regard to bogus accommodation entry provided by various entities controlled by S.K. Jain and V.K. Jain and Investigation conducted by Investigation Wing of the Department. The AO has given an opportunity to the Assessee to prove creditworthiness of the investor and genuineness of the transaction and required the Assessee to produce Director Director of Varrenyam Securities Pvt. Ltd., and C.A. who has arranged the funds in the matter. However, both the above persons were not produced...

 In The New India Assurance Company vs. Somwati, appeals were filed by three Insurance Companies, i.e., New India Assurance Company Limited, Cholamandalam MS General Insurance Company Ltd. and The Oriental Insurance Company Ltd. questioning the judgments of the High Courts arising out of the award by Motor Accident Claims Tribunal (MACT) with regard to the compensation awarded in favour of the claimants under two heads, i.e., “Loss of Consortium” and “loss of love and affection.” The only issue to be considered was with regard to award of compensation to the claimant under two heads, i.e., (a)loss of consortium and (b) loss of love and affection. With regard to ‘consortium’, the question was as to whether it is only the wife who is entitled for consortium or the consortium can be awarded to children and parents also. The appellants contended that the Constitution Bench of this Court in National Insurance Company Ltd. Versus Pranay Sethi and Others, (2017) 16 SCC 680, has laid ...

In M/S. PYARIDEVI CHABIRAJ STEELS PVT. LTD. vs  NATIONAL INSURANCE COMPANY LTD., complaint was filed before the NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION (NCDRC) against claim repudiated by the insurance provider. At the onset, the NCDRC observed that a preliminary point arises as to how this Consumer Complaint is maintainable before the NCDRC because the value of the consideration paid in the present case i.e. premium paid for taking the Insurance Policies was only Rs.3,20,525/- and Rs.1,23,037/- the total of which comes to Rs.4,43,562/- (Rupees Four Lac forty three thousand five hundred and sixty two only), which is less than the consideration paid of more than Rs.10,00,00,000/- (Rupees Ten crores) as provided under Section 58 (1) (a) (i) of the Act of 2019. The complainant had argued that though the above section restrict the consideration to Rs. 10 crores, but in the case of an insurance policy, a liberal view should be taken and the compensation sought or the insured amo...

In SIRI CHAND (DECEASED) THR. LRS. vs SURINDER SINGH, the appellant was a landlord of a shop measuring 14 sq. yds. Respondent took the shop on rent @Rs.2,000/- per month for running a hair cutting and dressing work. The respondent-tenant on 27.07.1993 executed an agreement/rent deed undertaking to pay a sum of Rs.2,000/- each month. The rent deed was to be applicable w.e.f. 28.07.1993. The house tax and electricity bills were undertaken to be paid by the tenant. Rent was to be paid up to 5th day in each month to the owner. In event, the tenant failed to make the payment of rent up to the prescribed date in advance, the owner shall have right to get the shop vacated. The shop owner, if is in need of the shop, can serve notice of one month and get the shop vacated from the tenant. The tenant also undertook to make the payment of rent money by increasing 10 per cent each year. Subsequently, the appellant/landlord filed application before the Rent Controller praying for eviction of the...

 In BHAGWAT SHARAN vs PURUSHOTTAM & ORS., one of the issues before the Supreme Court was whether the disputed properties mentioned are the properties of the joint family both the sides or whether the same are the self acquired properties as per the averments made by the defendants? The Supreme Court observed that the law is thus well settled that the burden lies upon the person who alleges the existence of the Hindu Undivided Family to prove the same. Reference in this behalf may be made to the judgments of this Court in Bhagwan Dayal vs. Reoti Devi. In this case this Court held that the general principle is that a Hindu family is presumed to be joint unless the contrary is proved. It was further held that where one of the coparceners separated himself from other members of the joint family there was no presumption that the rest of coparceners continued to constitute a joint family. However, it was also held that at the same time there is no presumption that because o...

 In TELANGANA STATE SOUTHERN POWER DISTRIBUTION COMPANY LIMITED vs M/S. SRIGDHAA BEVERAGES, a property was sold through E-Auction on 'as is where is, what is there is and without any recourse basis' and the auction notice listed electricity dues among the encumbrances on the property. Sale was done and after all formalities were completed when the new buyer applied for a connection to run the plant, the said application was denied by the Power Generation Company on the ground that there were previous electricity dues to the tune of Rs.50,47,715, as on 26.10.2017. Appellant No.1 asserted its right to recover this amount even from the new purchaser (i.e. respondent), based on a reading of Clauses 5.9.6 and 8.4 of the General Terms and Conditions of Supply of Distribution & Retail Supply Licensees in AP.  The buyer filed a writ petition before the AP High Cour seeking quashing of these demands arguing that as a subsequent purchaser. The High Court referring to judgments of th...

In Univalue Projects Pvt. Ltd. vs The Union of India, appeal was filed before the Calcutta High Court against an impugned order dated May 12, 2020 issued by the Registrar of the National Company Law Tribunal at its Principal Bench in New Delhi, that prime facie, appears to have been issued with the approval of the Hon’ble Acting President of the NCLT, New Delhi. In the impugned order, the NCLT had directed all concerned to file default record from Information Utility alongwith the new petitions being filed under section 7 of Insolvency and Bankruptcy Code, 2016 positively. No new petition shall be entertained without record of default under section 7 of IBC, 2016 and this order was applicable to pending applications as well. The appellant's contention was with the jurisdiction of NCLT, vires of the order itself. Referring to the judgment of the Supreme Court in  Engineering Mazdoor Sabha –v- Hind Cycles Ltd., AIR 1963 SC 874, the High Court observed that the Tribunals which are con...

In Bikramjit Singh v. State of Punjab, the Supreme Court has held that the right to default bail is not a mere statutory right under the first proviso to Section 167(2) CrPC, but is part of the procedure established by law under Article 21 of the Constitution of India, which is, therefore, a fundamental right granted to an accused person to be released on bail once the conditions of the first proviso to Section 167(2) are fulfilled. Explaining the law on grant of default bail, the Court said that so long as an application for grant of default bail is made on expiry of the period of 90 days, which application need not even be in writing, before a charge sheet is filed, the right to default bail becomes complete. It is of no moment that the Criminal Court in question either does not dispose of such application before the charge sheet is filed or disposes of such application wrongly before such charge sheet is filed. So long as an application has been made for default bail on expiry o...

In Power Finance Corporation Limited vs Mahendra Kumar Khandelwal, an Application was filed by the respondent IRP of the Corporate Debtor herein seeking to pass directions to the COC of the corporate debtor to reconsider their decision and to continue with the applicant as the RP. The NCLT observed that from a plain reading of section 22 of the I & B code which has been confirmed by several judgments of the Supreme Court, is clear that the CoC is conferred with the power of replacing the IRP with another resolution professional and no reason it's to be recorded by the CoC for effecting such replacements. It is the prerogative of the CoC whether to continue with the IRP as the RP or to replace the IRP with another RP.  The only pre-requisites to be made under section 22 of the code are as under :– 1) The CoC in its first meeting shall pass the resolution with at least 66% votes. 2) Written consent shall be obtained from the proposed RP in the specified form. 3) The CoC shall fil...

IN THE MATTER OF Bijay Kumar Agarwal, Ex-Director of M/s Genegrow Commercial Pvt. Ltd. Vs. State Bank of India and Anr., appeal was filed by the Applicant/Appellant on the ground that the Learned Adjudicating Authority while admitting the claim had failed to appreciate that the liability of the ‘Principal Borrower’ and the ‘Guarantor’ is co-extensive for the purpose of recovery. The NCLAT observed that it is not in dispute that the ‘Corporate Debtor’ (Being Corporate Guarantor of the Principal Borrower ‘Gee Pee Infotech Pvt. Ltd.) had executed the Guarantee Deed on 05.10.2011 in respect of overall Limit and sanctioned in favour of the ‘Financial Creditor’. Also that a supplementary Guarantee Deed was executed between ‘Corporate Guarantor’ & and the ‘Financial Creditor’. As per Section 145 of the Indian Contract Act, 1872 in every ‘contract of ‘Guarantee’, there is an implied promise by the ‘Principal Debtor’ to indemnify the ‘Surety’. This court pertinently points out that a ‘Finan...

IN THE MATTER OF Anup Sushil Dubey, Suspended Board Member Umarai Worldwide (P) Ltd. vs National Agriculture Co-operative Marketing Federation of India Ltd., one of the main issues which fall for consideration was whether dues, if any, arising from the ‘Leave and Licence Agreement’ is construed as an ‘Operational Debt’? The NCLAT observed that in order to prove a ‘Debt’ as an ‘Operational Debt’ the criteria that needs to be met is as follows;  (a) Claim in respect of provisions for goods and services (b) Employment or debt in respect of dues and (c) Such repayment of dues which should arise under any law in force at that time. In Sarla Tantia V/s. Ramaanil Hotels & Resorts Pvt Ltd., NCLAT while dealing with dues arising from the terms of the Leave and Licence Agreement held and observed it to be an ‘Operational Debt’.  The law has not gone into defining goods or services – hence, one has to rely on general usage of the terms so used in the law, with due regard to the conte...

IN THE MATTER OF Mr. K.C. Sanjeev vs Mr. Easwara Pillai Kesavan Nair, appeal was filed against order of NCLT alleging that the impugned order was passed by NLCT as the IRP did not duly move form F.A. for withdrawal. The Appellant stated that the Appellant had settled with the original Operational Creditor soon after the Application under Section 9 was admitted on 23.10.2019 and even filed the settlement with the IRP under Regulation 30 A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016 (Regulations in Short) requesting the IRP to place the settlement before the Adjudicating Authority. It is stated that the IRP asked for further Rs. 2 Lakhs claiming that it is required for closure of CIRP which the Appellant paid. The Learned Counsel for the Appellant states that documents regarding the settlement were handed over to the IRP on 08th November, 2019, and the same were required to be placed before the Adjudicating Au...

IN THE MATTER OF Sunil S. Kakkad vs Atrium Infocom Private Limited, the question before the NCLAT in appeal was whether the Resolution Professional, with the approval of CoC with 66% vote share, directly proceed for the liquidation of Corporate Debtor Company without taking any steps for Resolution of the Corporate Debtor. Appellant shareholder/promoter and erstwhile Director of the Corporate Debtor, „Atrium Infocomm Private Limited‟ has assailed the liquidation order passed under Section 33(2) of the I&B Code by the Adjudicating Authority. The Appellants contends that liquidation is the last resort and it cannot and should not be passed without following due process of Resolution of the Corporate Debtor. It is alleged that impugned order is passed in gross violation of the Principles of Natural Justice. It is further contended that the Learned Adjudicating Authority has failed to appreciate that the Committee of Creditors with 100% vote share took a decision to liquidate the Corpo...

IN THE MATTER OF Bharat Heavy Electricals Ltd. (Appellant/ Operational Creditor/Applicant) vs  Mr. Anil Goel,  in the appeal against the order of NCLT,  The NCLAT observed that the Appellant in Form ‘B’ and Form ‘C’ claimed that it has unpaid sellers’ lien under the Sale of Goods Act on the material supplied which is lying/stored at Corporate Debtor’s project site and a statutory charge under the Transfer of Property Act on the goods supplied that have since been erected. The Liquidator rejected this claim and held that the Appellant was not a Secured Creditor. The Adjudicating Authority also looked into this aspect and in Paragraphs – 21 to 30 referred to the provisions of IBC. It has also looked into the agreement between the parties and the contractual provisions at Paragraphs – 31 to 34 of the Impugned Order and held that the Appellant is not having security interest and consequently, cannot be considered as a Secured Creditor.  The NCLAT said -  "although w...