Legal News & Views

In Ajoy Khanderia vs Barclays Bank, the Respondent bank while approaching the DRT for recovery of loan from a borrower, also impleaded the Plaintiff as Pawnee/pledgor contending that as he had been as the Managing Director of the borrower, the signatory to the loan documents and had personally pledged shares of the borrowing company held by him as collateral security for the loan, he was personally liable to pay the outstanding amount to the bank. Therefore the question before the High Court was whether by virtue of Section 176 of the Indian Contract Act, 1872, the pawnor, even if different from borrower or the principal debtor, becomes liable for payment of entire debt, even if has not furnished any guarantee for repayment of the entire debt i.e. over and above the value of the pawned goods. The Bank referring to M/S Transcore vs Union of India & Anr., Appeal (civil) 3228 of 2006, argued as per Section 2(f) of the SARFAESI Act  that borrower includes a pledgor.  In the pr...

In M/s Orator Marketing Pvt. Ltd vs M/s Samtex Desinz Pvt. Ltd, the short question involved in this Appeal is, whether a person who gives a term loan to a Corporate Person, free of interest, on account of its working capital requirements is not a Financial Creditor, and therefore, incompetent to initiate the Corporate Resolution Process under Section 7 of the IBC. M/s Sameer Sales Private Limited (Original Lender), advanced a term loan of Rs.1.60 crores to the Corporate Debtor for a period of two years, to enable the Corporate Debtor to meet its working capital requirement. The Original Lender has assigned the outstanding loan to the Appellant. 4. According to the Appellant the loan was due to be repaid by the Corporate Debtor in full within 01.02.2020. The Appellant claims that the Corporate Debtor made some payments, but Rs.1.56 crores still remain outstanding. 5. The Appellant filed a Petition under Section 7 of the IBC in the NCLT for initiation of the Corporate Resolution Process....

In Bhimrao Ramchandra Khalate (deceased) Through Lrs vs Nana Dinkar Yadav, brief facts leading rise to the present appeal are that the plaintiff was the owner of 20 gunthas of agricultural land (For short, the suit land) situated in Village Khunte. The plaintiff was in need of money so he borrowed Rs.3,000/- from defendant No. 1 on 22.2.1969 by executing a document titled conditional sale deed as a security for the loan amount. The plaintiff requested defendant No. 1 to reconvey the suit land by accepting the loan amount of Rs.3,000/- but defendant No. 1 refused to do so. On 25.2.1989, defendant No. 1 transferred the suit land in favour of his brother (defendant No. 2). The plaintiff filed a suit against the defendants on 5.4.1989 under the Transfer of Property Act, 1882 for redemption of mortgaged property and possession. The claim of the plaintiff is that the transaction dated 22.2.1969 was in the nature of mortgage even though it was titled as the conditional sale. The entire disput...

In PRABHA SURANA vs JAIDEEP HALWASIYA, the Calcutta High Court settled the difference between Temporary Injunctions and Attachment before judgment  The court observed that a distinction should be drawn between the provisions of Order XXXIX Rule 1 (Temporary Injunctions) and Order XXXVIII Rule 5 (Attachment before judgment). Order XXXIX Rule 1 contemplates temporary relief to a petitioner on an imminent risk to the property in dispute in the suit being wasted by certain acts of the respondent. If the Court finds from the materials before it, that the respondent intends to cause injury to the petitioner in the interregnum including by causing damage to, alienating, selling or removing the property, the Court is empowered to pass orders to prevent the property from being dealt with in such manner or in any way which is prejudicial to the petitioner until the suit is disposed of or until further orders are passed by the Court. The Court has the option to pass orders as it deems fit and...

In M.m. Aqua Technologies Ltd vs Commissioner Of Income Tax, on 28th November, 1996, the Appellant filed a return of income declaring a loss of Rs.1,03,18,572/- for the assessment year 1996-1997. In the return filed by it, the Appellant claimed a deduction of Rs.2,84,71,384/- under Section 43B based on the issue of debentures in lieu of interest accrued and payable to financial institutions. By an order dated 29th October, 1998, the Assessing Officer rejected the Appellants contention by holding that the issuance of debentures was not as per the original terms and conditions on which the loans were granted, and that interest was payable, holding that a subsequent change in the terms of the agreement, as they then stood, would be contrary to Section 43B(d), and would render such amount ineligible for deduction. The Commissioner of Income Tax (Appeals) [CIT] allowed the appeal which was overturned by the High Court. The Supreme Court first looked into the section of the act which said - ...

In Gemini Bay Transcription Pvt. Ltd vs Integrated Sales Service Ltd., appeal was filed against the order of the arbitrator in USA initially before a single judge of the Bombay High Court, subsequently and appeal before the Division bench against the single judge's order and finally the Supreme Court. The principal objections before the SC - 1) the order of the arbitrator is not applicable against non-signatories to the agreement in the dispute. 2) commission of a tort would be outside contractual disputes that arise under the Arbitration Agreement. The SC held that a reading of Section 44 of the Arbitration and Conciliation Act, 1996 would show that there are six ingredients to an award being a foreign award under the said Section. First, it must be an arbitral award on differences between persons arising out of legal relationships. Second, these differences may be in contract or outside of contract, for example, in tort. Third, the legal relationship so spoken of ought to be cons...

In Pratap Technocrats (p) Ltd. & Ors vs Monitoring Committee Of Reliance Infratel Limited, the appellants alleged that the treatment of the COC towards operational creditors on the ground that it has not been fair and equitable. That the decision of the CoC must reflect that it has taken into account the need to: (i) Maximize the value of assets of the CD; and (ii) Adequately balance the interest of all stakeholders, including of operational creditors. The Supreme Court observed that in K Sashidhar vs India Overseas Bank (2019) 12 SCC 150 (K Sashidhar) it has been emphasized that the Adjudicating Authority is circumscribed by Section 31 to scrutinizing the resolution plan as approved by the CoC under Section 30(4). Moreover, even within the scope of that enquiry, the grounds on which the Adjudicating Authority can reject the plan is with reference to the matters specified in sub-Section (2) of Section 30. Similarly, the Court notes that the jurisdiction of the Appellate Authority t...

In M/s Laureate Buildwell Pvt. Ltd vs Charanjeet Singh, the allotment letter dated 16.10.2012 assured the original allottee that the possession of the flat would be handed over within 36 months i.e. on or before 15.10.2015. The original allotee made payment to the tune of Rs. 1,55,89,329/-, towards the first seven instalments as and when demanded. She sold the flat and an agreement to sell was executed between the parties on 17.02.2016. The original allottee thereafter approached the builder, informing it that the purchaser had stepped into her shoes and would continue with the obligations, and was therefore entitled to possession. Significantly, the builder endorsed and even required the purchaser to execute the letter of undertaking, which he did. With this development, the builder acknowledged that the rights and entitlements of the original allottee relation to the flat were assumed by the purchaser, and signified its obligations, correspondingly to the purchaser, as the consumer....

  https://gmbalegal.blogspot.com/2021/08/insolvency-no-bar-to-amendment-of.html

 https://gmbalegal.blogspot.com/2021/08/insolvency-no-bar-to-amendment-of.html

In Dena Bank (Now Bank Of Baroda) vs C. Shivakumar Reddy, the order of the NCLAT dismissing the Petition filed by the Appellant Bank under Section 7 of the IBC, holding that the said application was barred by limitation.   The relevant dates and documents were - 1) Loan sanction - 23rd December, 2011 and execution of by the Corporate debtor (CD) various documents including Demand Promissory Notes, Letters of General Lien, etc. in favour of the Appellant Bank 2) Date of default - 20th September, 2013 3) Declared Non Performing Asset (NPA) on 31 st December 2013 4) Letter requesting restructuring the Term Loan by CD - 24th March 2014 (not accepted by bank) 5) Bank issued legal notice - 22nd December 2014 6) Application filed before DRT - 1st January 2015 7) Reply to legal notice - 5th January 2015 8) Proposal from CD for one time settlement - 3rd March 2017  (not accepted by bank) 9) Final judgment by DRT against CD - 27th March 2017 10) DRT issued a Recovery Certifica...