LAW IS EXPERIENCE DEVELOPED BY REASON AND APPLIED CONTINUALLY TO FURTHER EXPERIENCE.
ROSCOE POUND. DEAN EMERITUS.HARVARD LAW SCHOOL
ALTERNATIVE DISPUTE RESOLUTION
- IFGL Refractories Ltd v. Lindsay International Pvt. Ltd
The Court rules on Section 11 (Appointment of Arbitrators) of the Arbitration Act, 1996 -17 January 2019 (KOLKATA HIGH COURT JUDGEMENT)
The Petitioner, in the present case, has prayed for reference to Arbitration of disputes arising out of 12 purchase orders. The said purchase orders were issued prior to the filing of the suit and have remained unpaid. After amendment of the Arbitration and Conciliation Act, 1996 made with effect from 24th October, 2015, sub-section 6(A) has been incorporated into Section 11. Under this sub-section 6(A), the court is to confine its consideration only to existence of the Arbitration Agreement as laid down by the Hon’ble Supreme Court in the case reported in Duro Felguera.
The Court held that the argument that sub-section 6A of section 11 of the Act is ultra vires as it is opposed to the doctrine of separation of power and curtailed the role of the judiciary cannot be gone into at this stage and that the Supreme Court ruling in Duro Felguero where it considered the changes brought about by the Arbitration and Conciliation (Amendment) Act, 2015, amongst others, in relation to appointment of an Arbitrator under section 11 of the 1996 Act is binding on this Court. - Rajasthan Small Industries Corporation Limited v. M/s Ganesh Containers Movers Syndicate
Mere delay in passing the award by itself cannot be the ground to appoint another Arbitrator -23 January 2019 (SUPREME COURT JUDGEMENT)
The Supreme Court (SC) has reiterated that the Arbitration and Conciliation (Amendment) Act, 2015 (Amendment Act) cannot have retrospective operation in arbitral proceedings which commenced before the Amendment Act came into force, unless the parties otherwise agree.
The Court also clarified that mere neglect of an arbitrator to act, or delay in passing the award by itself cannot be a ground to appoint another arbitrator in deviation from the terms agreed to by the parties. - Union of India v. Khaitan Holdings (Mauritius) Limited & Ors
Delhi High Court (HC) refuses to stay Arbitration against India Government by Mauritius Company for refund of 2G license fee-29 January 2019
The Delhi High Court has refused to grant an ad-interim stay on the arbitral proceedings commenced by Khaitan Holdings (Mauritius) Ltd against the Union of India, seeking compensation for the cancellation of its Unified Access Services Licences in 2012.
The arbitral proceedings were invoked by Khaitan Holdings pursuant to the Bilateral Investment Treaty between India and the Republic of Mauritius for the promotion and protection of investments. The Centre therefore moved the High Court earlier this month seeking an anti-arbitration injunction. It challenged the arbitration proceedings on the ground that the decision to cancel the licenses was rendered by the Supreme Court (SC) in public interest and that the there was no expropriation in absence of due process.
It was also claimed that Khaitan Holdings is not a “genuine investor” as it is controlled by Indian citizens Ishwari Prasad Khaitan and Kiran Khaitan, and hence cannot invoke the BIT for initiating arbital proceedings. It also argued that the entire foreign investment, being through the automatic route, was subject to Indian laws under the UASL.
Rejecting the objections raised by the Centre for an ad-interim injunction, the Court observed that all the above grounds are those that can be decided by the Arbitral Tribunal.
“The Arbitration having been invoked in 2013 and the Tribunal having been constituted and being seized of the dispute, it is not for this Court to adjudicate on these issues. The above issues ought to be raised by the Republic of India before the Arbitral Tribunal, which under Article 21, would rule upon the same.”
The Court also noted that BITs, being sui generis in nature, do not depend on the applicability, interpretation and adjudication under domestic laws. - The State Trading Corporation of India Ltd v. J.K. International Pty. Ltd & Anr
Mere reason of not considering the minority award, does not vitiate the majority award-29 January 2019 (DELHI HIGH COURT JUDGEMENT)
An O.M.P. was filed by the State Trading Corporation (STC) of India Ltd. under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the award dated 3rd September, 2013 passed by a three-member Arbitral Tribunal by a 2:1 majority.
The Counsel for the Objector-STC argued that the majority award was passed without taking into consideration the minority award, which, in itself, renders the majority award inoperative and invalid. Once there is a dissenting/minority award, the majority award has to give reasons as to why the majority is differing from the minority.
It was further submitted that in view of the errors in the majority award the only option left for the Court is to set aside the award completely. Insofar as the calculation of damages is concerned, it was submitted, that the same was also erroneous as the Tribunal has added additional 10% to the quantity specified in contract without STC having accepted the said quantity or the addition of the 10%.
The Court observed that only when the court feels that the majority award does not inspire confidence that it has to see whether the majority award considers the minority award.
In the present case, the Court held that the majority award is broadly well-reasoned and has considered all the facts and legal propositions. Thus, the mere reason of not considering the minority award, does not vitiate the majority award.
In view of the above, the OMP was disposed of. - M/s Five Star Builders v. The State of Himachal Pradesh and Others
The Court holds that mandate of an Arbitrator shall terminate in case he fails to act without undue delay -29 January 2019 (HIMACHAL PRADESH HIGH COURT JUDGEMENT)
In the present case, filed under sections 14 and 15 of the Arbitration and Conciliation Act, 1996, a prayer has been made on behalf of the petitioner for terminating the mandate of the arbitrator and for appointment of an independent and impartial Arbitrator to adjudicate the dispute between the parties.
The Court observed that after a careful perusal of sections 14 and 15 of the Arbitration Act clearly provide that mandate of an Arbitrator shall terminate in case he fails to act without undue delay.
It was also held that when there is failure on the part of the Arbitral Tribunal to act and it is unable to perform its function either de jure or de facto, it is open to a party to the arbitration proceedings to approach the court to decide on the termination of the mandate.
The Court held that in the case at hand, it is quite apparent that Arbitral Tribunal failed to perform its functions and as such the prayer made in the instant application for termination of mandate and to appoint new arbitrator deserves to be accepted.
This court is in agreement with the contentions raised on behalf of the Petitioner that the learned arbitrator so appointed by the Respondents is not able to devote sufficient time for Arbitration and he is not able to complete the Arbitration proceedings within a reasonable time and hence, the mandate of the arbitrator deserves to be terminated. - Sashidhar v. Indian Overseas Bank & Ors
Insolvency Bankruptcy Code (IBC): National Company Law Tribunal (NCLT) has no jurisdiction to enquire into justness of rejection of the resolution plan-5 February 2019(SUPREME COURT JUDGEMENT)
The Supreme Court (SC) has observed that National Company Law Tribunal has no jurisdiction and authority to analyze or evaluate the commercial decision of the Committee of Creditors to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors.
The Judgement can be accessed at:
https://www.sci.gov.in/supremecourt/2018/39315/39315_2018_Order_05-Feb-2019.pdf - The Government of Haryana PWD Haryana (B and R) Branch v. G.F. Toll Road Pvt. Ltd & Ors
Former employee not disqualified from acting as an Arbitrator, even after 2015 Amendment-3 January 2019(SUPREME COURT JUDGEMENT)
The Supreme Court (SC) has held that the Arbitration and Conciliation Act, 1996, does not disqualify a former employee from acting as an Arbitrator, provided that there are no justifiable doubts as to his independence and impartiality. Even after 2015 Amendment, the position remains the same, as Entry 1 to 5th Schedule of the Act does not include “past/former employees.” The court said that the objection of reasonable apprehension of bias raised was wholly unjustified and unsubstantiated, particularly since the nominee Arbitrator was a former employee of the State over 10 years ago.
The Judgement can be accessed at:
https://www.sci.gov.in/supremecourt/2018/24650/24650_2018_Judgement_03-Jan-2019.pdf - Balkrishna Dattatraya Galande v. Balkrishna Rambharose Gupta respondents and another
Section 38 Specific Relief Act: Plaintiff has to prove his actual possession on the date of filing the suit-6 February 2019 (SUPREME COURT JUDGEMENT)
The Supreme Court (SC) has said: “In a suit filed under Section 38 of the Specific Relief Act, possession on the date of suit is a must for grant of permanent injunction. When the first respondent-plaintiff has failed to prove that he was in actual possession of the property on the date of the suit, he is not entitled for the decree for permanent injunction.”
The Judgement can be accessed at:
https://www.sci.gov.in/supremecourt/2016/31304/31304_2016_Judgement_06-Feb-2019.pdf
CORPORATE
- IDBI Bank Ltd v. Odisha Slurry Pipeline Infrastructure Ltd
Except financial creditor & corporate debtor, there is no requirement of hearing a third-party including Intervenor at the stage of admission of application-15 January 2019 (NCLAT ORDER)
In the present case, the ‘financial creditor’ filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 before the National Company Law Tribunal (NCLT), Kolkata Bench, but without any hearing the Adjudicating Authority adjourned the appeal number of times for one or other reason such as filing reply or filing of rejoinder.
In view of non-disposal of application, the appeal has been preferred by ‘Financial Creditor’ against the order of adjournment, which has been adjourned for 16th January, 2019.
The Court observed that if there is a ‘debt’ and ‘default’ and the record is otherwise complete, the application is to be admitted. On the other hand, if there is no ‘debt’ payable in law or in fact then it is to be rejected.
In view of the above, the Court said that as the matter will be taken up on 16th January, 2019, it expects that the National Company Law Tribunal, Kolkata will pass appropriate order either admitting or rejecting the application under Section 7 of the I&B Code.
Keeping in mind the decision of the Hon’ble Supreme Court, in ‘M/s. Innoventive Industries Ltd. Vs. ICICI Bank Ltd., the Court also specified that except the applicant (financial creditor) and the ‘corporate debtor’, there is no requirement of hearing a third-party including Intervenor at the stage of admission.
In accordance with the above, the appeal was dismissed.
The Order can be accessed at:
https://nclat.nic.in/Useradmin/upload/8074655405c3dcd4b72eb3.pdf
Alloysmin Industries v.Raman Casting Private Limited
If the demand notice u/s 8(1) is served on Corporate Debtor either on its Registered Office or its Corporate Office, it should be treated to be valid service of notice-21 January 2019 (NCLAT JUDGEMENT)
In the present case, the Appellant filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016 for initiation of Corporate Insolvency Resolution Process against the Respondent.
The National Company Law Tribunal (NCLT) through its order rejected the application under Section 9 on the ground that the demand notice under Section 8 of the Code was duly sent through courier to the registered office address but the same was returned to the Applicant with remark ‘S/A RTO’.
Inspite of service of notice on both the addresses i.e. in the Registered Office and at the Industrial Area Office nobody appeared on behalf of the Respondent.
The NCLAT held that if the demand notice under Section 8 (1) is served on Corporate Debtor either on its Registered Office or its Corporate Office, it should be treated to be valid service of notice under Section 8 and application under Section 9 on failure of payment, if filed after 10 days, is maintainable.
In accordance with the above, the impugned order passed by the NCLT was set aside.
The Judgement can be accessed at:
https://nclat.nic.in/Useradmin/upload/13500362635c458c2fe526a.pdf
Forech India Ltd v. Edelweiss Assets Reconstruction Co Ltd
Corporate Insolvency Resolution Process (CIRP) under Insolvency of Bankruptcy Code (IBC) can continue independent of winding up petition pending in High Court-22 January 2019
The Supreme Court has held that Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code can continue independent of any pending winding up process against the corporate debtor pending in the High Court under the Companies Act.
The Judgement can be accessed at:
https://www.sci.gov.in/supremecourt/2018/559/559_2018_Judgement_22-Jan-2019.pdf
Unitech Ltd v. Registrar of Companies Delhi & Haryana
Delhi High Court (HC) sets aside order summoning Unitech Officers for failing to re-pay deposit of 603 crore-22 January 2019 (DELHI HIGH COURT ORDER)
The Delhi High court quashed the summon issued to five officers of Unitech Ltd in connection with Unitech’s failure to re-pay deposits of ₹ 603 crore taken from 56,436 investors.
As per Section 74(1) of the Companies Act 2013, Unitech was obliged to repay the said deposits within the period prescribed. The Act also provides for enlargement of time for discharge of liability to pay by making an application before National Company Law Tribunal (NCLT) under Section 74(2). Any default in payment of the requisite amounts within the statutorily prescribed period or within the extension allowed by the Tribunal attracts penal clause contained in Section 74(3).
Unitech also challenged the order of the Tribunal dismissing its plea for enlargement of time before the National Company Law Appellate Tribunal (NCLAT)under Section 421 of the Companies Act, 2013.
The Appellate Tribunal on September 20, 2016, while entertaining the appeal, directed that no coercive steps shall be taken against Unitech and its officers pursuant to the order the Tribunal. Later, on October 26, 2016, the Appellate Tribunal also stayed the Tribunal’s request to the ROC to take action under Section 74(3).
In light of this development, Unitech and its Officers challenged the summoning order before the High Court.
Observing that the gravamen of the charge on which the prosecution under Section 74(3) is the Company’s failure to abide by its liability under Section 74(1) or within the extended period, the Court held that the time extended by the tribunal has to be construed along with modifications ordered in appeal by the appellate tribunal.
In the present case, since the Appellate Tribunal had entertained the appeal against the Tribunal’s order and also extended the deadline till December 31, 2016, even before the Court took cognizance of the criminal complaint, the Court held that the criminal complaint was rendered “premature or infructuous “.
The Court thus vacated and set aside the summoning orders passed by the Trial Court against Unitech and its Officers. It has, however, clarified that the ROC is not inhibited from initiating a criminal action in accordance with law in light of subsequent facts.
The Order can be accessed at:
http://lobis.nic.in/ddir/dhc/RKG/judgement/30-01-2019/RKG22012019CRLMM42842016.pdf
Anil Goel v. In the matter of Amar Remedies Limited (Corporate Debtor/ Corporate Applicant)
National Company Law Tribunal (NCLT) Rejects Insolvency Application Filed by Corporate Debtor Suppressing Liquidation Order with ₹ 10 Lakh Costs-29 January 2019 (NCLT ORDER)
The National Company Law Tribunal, Mumbai bench rejected an application filed by a corporate debtor under Section 10 of the Insolvency and Bankruptcy Code with ₹ 10 lakhs costs, on finding that it was filed suppressing winding up order passed against it by the High Court.
The Order can be accessed at:
https://nclt.gov.in/sites/default/files/Interim-order-pdf/AMAR%20REMEDIES%20MA%20524%20IN%20CP%201053-2017%20%2029.1.2019%20FINAL.pdf
Vijay Kumar Jain v. Standard Chartered Bank & Ors
Insolvency of Bankruptcy Code (IBC): Resolution Plans Should Be Given to Former Directors of Corporate Debtor to Attend CoC Meetings-31 January 2019(SUPREME COURT JUDGEMENT)
The Supreme Court (SC) has held that members of the erstwhile/ suspended Board of Directors of a Corporate Debtor, must be given copies of Insolvency Resolution Plan that may be discussed at meetings of the Committee of Creditors.
The Judgement can be accessed at:
https://www.sci.gov.in/supremecourt/2018/30947/30947_2018_Judgement_31-Jan-2019.pdf
National Company Law Tribunal (NCLT) restrains use of brand, trademarks of Servomax India -4 February 2019(NCLT ORDER)
The National Company Law Tribunal, in a first, has passed orders restraining others from using the brand name and trademarks of a corporate debtor — Servomax India — currently undergoing corporate insolvency resolution process. NCLT has stepped into the issue of brand protection and trademark enforcement responding to the plea of resolution professional seeking to restrain the suspended directors of the corporate debtor and others from using brand name and trademark.
The Order can be accessed at:
https://nclt.gov.in/sites/default/files/Interim-order-pdf/1_PDFsam_2.pdf
COMPETITION
Reliance Industries gets Competition Commission of India (CCI) nod to acquire Hathway, DEN -21 January 2019 (CCI ORDER)
Mukesh Ambani-owned Reliance Industries Limited (RIL) has received a go ahead from the Competition Commission of India to acquire majority stakes in two of India’s largest cable operators – DEN Networks and Hathway Cable & Datacom.
RIL informed stock exchanges that it has received approval from the Competition Commission of India on January 21 for the acquisition.
The acquisition will be carried out by six SPVs, 100% owned and controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited, a wholly-owned subsidiary of RIL is the sole beneficiary.
GSKCH India gets Competition Commission of India (CCI) approval for merger deal with HUL-25 January 2019
The Competition Commission of India has reportedly approved the scheme of amalgamation between GlaxoSmithKline Consumer Healthcare and Hindustan Unilever Limited, through an-all equity deal, valuing the total business of the latter at ₹ 31,700 crore.
Competition Commission of India (CCI) clears Zydus Wellness’ share sale of ₹ 2,575 Cr to Cadilla Healthcare, 3 others-25 January 2019 (CCI UPDATES)
The Competition Commission of India (CCI) has reportedly permitted Cadila Healthcare along with three other entities to acquire shares worth ₹ 2,575 crore in Zydus Wellness. Zydus Wellness will fund its acquisition of Heinz India Pvt Ltd through share sale.
INFORMATION TECHNOLOGY
Peoples Union for Civil Liberties & Anr v. Union of India & Ors
Surveillance Circular: Supreme Court (SC) issues notice in PUCL challenge to Telegraph Act, IT Act provisions-25 January 2019(SUPREME COURT ORDER)
The Supreme Court has issued notice in a Petition filed by People’s Union for Civil Liberties challenging provisions of the Telegraph Act and Rules and the Information Technology Act and Rules, which enabled the Central Government’s introduction of its December 2018 circular legitimizing electronic surveillance by ten Government agencies.
In particular, the petition brought by PUCL challenges the Constitutional validity of Section 5 (2) of the Indian Telegraph Act, 1885 read with Rule 419A of the Indian Telegraph Rules, 1951, in addition to Section 69 of the Information Technology Act, 2000, read with the Information Technology (Procedure for Safeguards for Interception, Monitoring and Decryption of Information) Rules, 2009.
The Order can be accessed at:
https://www.sci.gov.in/supremecourt/2019/1952/1952_2019_Order_25-Jan-2019.pdf
MISCELLANY
Shanti Conductors (P) Ltd. & Anr v. Assam State Electricity Board & Ors
Supreme Court (SC) explains the difference between retrospective and retroactive statutes -23 January 2019 (SUPREME COURT JUDGEMENT)
While holding that the Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertakings Act, 1993, is prospective in operation, the Supreme Court has delineated the difference in concepts of retrospective and retroactive operation of laws.
The bench considered the issue of whether the Act was applicable when the contract for supply was entered between the parties prior to enforcement of the Act i.e. 23.09.1992.
It held that the Act was clearly prospective in operation and it was not necessary to term it as retroactive in operation.
The bench observed that ‘retroactivity’ in the context of the statute consists of application of new rule of law to an act or transaction which has been completed before the Rule was promulgated.”’
The Judgement can be accessed at:
https://www.sci.gov.in/supremecourt/2013/1894/1894_2013_Judgement_23-Jan-2019.pdf
The Commissioner, Mysore Urban Development Authority v. S. S. Sarvesh
Don’t deprive Litigants of valuable rights just for their lawyer’s default-5 February 2019 (SUPREME COURT JUDGEMENT)
Emphasizing the need to do ‘substantial justice’, the Supreme Court (SC) observed that valuable right of a litigant to prosecute an appeal should not be deprived merely because of non-appearance of his lawyer.
The Judgement can be accessed at:
https://www.sci.gov.in/supremecourt/2018/27780/27780_2018_Judgement_05-Feb-2019.pdf
Union of India & Ors v. Shreya Sen & Anr
Linking Aadhaar with PAN card compulsory to file Income Tax (IT) returns-4 February 2019 (SUPREME COURT ORDER)
The Supreme Court (SC) has said that it was essential to link Aadhaar with the PAN card to file income tax returns. The court was hearing the Government’s plea against a Delhi High Court order allowing the Respondent, Shreya Sen, to file income tax returns for 2018-’19 without linking her Aadhaar and PAN numbers. In its judgement, the court said that the High Court’s verdict was based on the consideration that the decision on making Aadhaar-PAN linkage compulsory for filing returns was pending in the Supreme Court. “Thereafter, this court has decided the matter and upheld Section 139AA of the Income Tax Act,” the bench said. “In view thereof, linkage of PAN with Aadhaar is necessary.”
The court said that the respondent had filed her Income Tax returns for 2018-’19 based on the orders of the High Court, but will have to link her Aadhaar and PAN card to file them for the 2019-’20 financial year.
The Order can be accessed at:
https://www.sci.gov.in/supremecourt/2018/34292/34292_2018_Order_04-Feb-2019.pdf
Bigtree Entertainment Pvt. Ltd v. D Sharma & Anr
Delhi High Court (HC) refuses BookMyShow an injunction against BookMyEvent-21 January 2019(DELHI HIGH COURT JUDGEMENT)
Stating that ‘BOOKMY’ is a common English term, the Delhi High Court has refused to grant a temporary injunction in favour of online booking platform ‘BOOKMYSHOW’ against its competitor, ‘BOOKMYEVENT’.
The Judgement can be accessed at:
http://lobis.nic.in/ddir/dhc/JAN/judgement/22-01-2019/JAN21012019SC6092016.pdf
M/S Khushi Ram Behari Lal v. M/S Jaswant Singh Balwant Singh
Copyright of art work irrelevant for proving its use as Trademark-21 January 2019
The Delhi High Court has held that Copyright registration of an art work is irrelevant for the purpose of proving its use as Trade Mark.
The Judgement can be accessed at:
http://lobis.nic.in/ddir/dhc/SKT/judgement/24-01-2019/SKT21012019CW79832012.pdf
