Orders and Judgments Duration August 23, 2020- September 07, 2020

“Justice denied anywhere diminishes justice everywhere.”

MARTIN LUTHER KING JR

ALTERNATIVE DISPUTE RESOLUTION

  • Deccan Paper Mills Co Ltd v. Regency Mahavir Properties & Ors
    [Cancellation of Written Instruments] Action instituted under Specific Relief Act is
    Arbitrable as it is not an action in Rem-19 August 2020
    In the present case, Deccan contended before the Apex Court in appeal, that since the prayer in the suit is for cancellation of three "written instruments", the proceeding under section being a proceeding in rem, would fall within one of the exceptions made out in Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532. Referring to Muppudathi Pillai v. Krishnaswami Pillai, AIR 1960 Mad 1, the Apex Court bench observed that the expression "any person" in Section 31 does not include a third party, but is restricted to a party to the written instrument or any person who can bind such party. It said: "The principle behind the section is to protect a party or a person having a derivative title to property from such party from a prospective misuse of an instrument against him. A reading of section 31(1) then shows that when a written instrument is adjudged void or voidable, the Court may then order it to be delivered up to the plaintiff and cancelled – in exactly the same way as a suit for rescission of a contract under section 29. Thus far, it is clear that the action under section 31(1) is strictly an action inter parties or by persons who obtained derivative title from the parties, and is thus in personam. " An action that is started under section 31(1) cannot be said to be in personam when an unregistered instrument is cancelled and in rem when a registered instrument is cancelled. The suit that is filed for cancellation cannot be in personam only for unregistered instruments by virtue of the fact that the decree for cancellation does not involve its being sent to the registration office – administerial action which is subsequent to the decree being passed. Overruling Alien Developers, the bench dismissed the appeals and further observed: "The proceeding under section 31 is with reference to specific persons and not with reference to all who may be concerned with the property underlying the instrument, or "all the world". Clearly, the cancellation of the instrument under section 31 is as between the parties to the action and their privies and not against all persons generally, as the instrument that is cancelled is to be delivered to the plaintiff in the cancellation suit. A judgment delivered under section 31 does not bind all persons claiming an interest in the property inconsistent with the judgment, even though pronounced in their absence".
    The Judgement can be accessed at:
    https://main.sci.gov.in/supremecourt/2015/16545/16545_2015_34_1502_23471_Judgement_19-Aug-2020.pdf
  • Avitel Post Studioz Limited & Ors v. HSBC PI Holdings (Mauritius) Limited
    [Supreme Court (SC) lays sown tests to determine 'Fraud Exception' to the Arbitrability of Disputes-19 August 2020
    The issue considered by the Court thus was whether, in the section 9 proceeding, HSBC could be said to have a strong prima facie case in the enforcement proceedings under section which are pending before the Bombay High Court? In light of the above, the Supreme Court has laid down the tests to determine "serious allegations of fraud"exemption to arbitrability of disputes. Referring to the final award, the bench noted that that there is no such fraud as would vitiate the arbitration clause in the SSA entered into between the parties as it is clear that this clause has to be read as an independent clause. It also held the impersonation, false representations made, and diversion of funds are all inter parties, having no "public favour" so as to attract the "fraud exception". Thus the court held that HSBC has made out a strong prima facie case necessitating that USD 60 million, being the principal amount awarded to them, is kept apart in the manner indicated by the learned Single Judge of the Bombay High Court.
    The Judgement can be accessed at:
    https://main.sci.gov.in/supremecourt/2014/28591/28591_2014_34_1501_23471_Judgement_19-Aug-2020.pdf
  • Government of India v. Vedanta Limited (Formerly Cairn India Ltd) & Ors
    Supreme Court (SC) on application of Malaysian law-24 August 2020
    A special three-judge Bench appointed Banerji as amicus curiae in the Petition filed by the Union Ministry of Petroleum and Natural Gas against Vedanta over enforcement of a 2011 foreign award. The dispute pertained to a production sharing contract (PSC) between Cairn India and the Indian Government with respect to the exploration of the Ravva oil fields in the Krishna-Godavari basin. This contract was for a period between 2000 and 2007. When the dispute arose in the year 2008, a foreign award was passed by a Tribunal in Malaysia which ruled in favour of the company. This award was challenged by the Indian Government before Malaysian courts, but to no avail. When Cairn moved the Delhi High Court for enforcement of the award, the same was allowed, prompting the Ministry to approach the Supreme Court in appeal. The Court said, "Whether the Malaysian Courts were justified in applying the Malaysian law to determine the challenge to the foreign award, particularly since the Production Sharing Contract dated 28.10.1994 was governed by Indian Law, and the PSC contained a negative covenant that the Respondent Companies were not entitled to exercise its power under the PSC in a manner which would contravene the laws of India. The Malaysian Courts have decided the objections by applying the Malaysian law, while the Indian courts are required to examine whether the award is in conflict with the public policy of India at the enforcement stage. This would create an anomalous situation." Therefore, the Court sought the assistance of Banerji as amicus curiae in the case, on this limited issue.
    The Order can be accessed at:
    https://main.sci.gov.in/supremecourt/2020/11594/11594_2020_37_301_23555_Order_24-Aug-2020.pdf

COMPETITION & UNFAIR TRADE PRACTICE

  • Harshita Chawla v. WhatsApp Inc & Facebook Inc
    Competition Commission of India (CCI) rejects Petition alleging WhatsApp using clout to enter payment space-18 August 2020
    The Competition Commission of India (CCI) has dismissed a Petition against WhatsApp which alleged that the Facebook-owned instant messaging app is using its dominant market position to launch payment services in India. Even though the CCI observed that the two entities “undeniably deal with customer sensitive data which is amenable to misuse and may raise potential antitrust concerns among other data protection issues”, it said in its order that “the UPI digital payments market consists of various established  players competing vigorously and that users of WhatApp Pay were less than 1 per cent in India. It’s actual conduct is yet to manifest in the market,”. On allegations of WhatsApp and Facebook having access to data for targeted advertising the anti-trust regulator said, “There is neither any concrete allegation, nor any specific information to support the competition concern of the Informant.” The commission also noted that given the fact that the WhatsApp ecosystem does not involve paid services as such for normal users, it seems unlikely that the consumer traffic will be diverted by WhatsApp using its strength in the messenger market. It also said that while WhatsApp Pay is embedded in WhatsApp messenger app when it is downloaded by users on their smartphones, the consumers are at freewill to use the app or any other UPI enabled digital payments app in India to make instant inter-bank transfers. It therefore does not raise issues of compulsion or coercion on users, CCI added.
    The Order can be accessed at:
    https://www.livelaw.in/pdf_upload/pdf_upload-380295.pdf

CORPORATE

  • Cygnus Investments and Finance Pvt Ltd & Anr v. The Union of India & Ors
    High Court (HC) strikes down National Company Law Tribunal (NCLT) order on fin info-18 August 2020
    A single bench of the Calcutta High Court (HC) struck down an order of the National Company Law Tribunal (NCLT), which imposed a mandatory condition to all financial creditors to submit certain financial information as a record of default before information utility as a mandatory before filing any new application under Section 7 of the Insolvency& Bankruptcy Code (IBC) 2016. The Court examined in detail the extent of the powers granted to and available with the NCLT and NCLAT and stated, “..while both the NCLT and NCLAT have been conferred with powers to regulate their own procedure, such use of its power is circumscribed and subject to inter alia, the principles of natural justice as well as the provisions of CA, 2013 or the IBC, 2016, inclusive of any rules/ regulations made under the IBC, 2016 by the regulatory body, IBBI.” The Court further noted that in view of various provisions of IBC, Regulation 8 (2)(b) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and the observations of the Supreme Court in Swiss Ribbons case, it was clear that apart from the financial information of the Information Utility, there were as many as eight classes of documents that could be considered to be sources that evidence a “financial debt”. The Court then considered Section 215 IBC on "Procedure for submission, etc., of financial information" and held that submitting data to the Information Utility was not mandatory for all classes of people.
    The Judgement can be accessed at:
    https://www.ibbi.gov.in/uploads/order/c2408a81f80576fadd8d0b4220955f58.pdf
  • Mrs Rita Kapur v. Invest Care Real Estate LLP  and Others
    No corporate insolvency proceedings once debt converted into capital-2 September 2020
    The National Company Law Appellate Tribunal (NCLAT) has said that insolvency proceedings cannot be triggered on the basis of debt which has been converted into capital such as equity of a company. The appellate tribunal also said that any investment cannot be "financial debt" and the provisions of Section 7 of the Insolvency & Bankruptcy Code provide for initiation of CIRP by a financial creditor only and that too, if there is "debt" and "default".
    The Judgement can be accessed at:
    https://nclat.nic.in/Useradmin/upload/13359909205f4f784f19d43.pdf

INFORMATION TECHNOLOGY

  • Halvi K S v. The State of Kerala and Others
    Kerala High Court (HC) dismisses
    Public Interest Litigation (PIL) calling for rules to restrict media trials- 20 August 2020
    The Kerala High Court (HC) has dismissed a Public Interest Litigation (PIL) Petition seeking to frame guidelines to restrict the media from conducting media trial in matters of public interest.
    The Judgement can be accessed at:
    https://www.livelaw.in/pdf_upload/pdf_upload-380284.pdf
  • Gujarat Cooperative Milk Marketing Federation Ltd & Anr v. Amul Franchise.in & Ors
    Amul gets legal protection from fraudulent websites- 28 August 2020
    The Delhi High Court (HC) has issued a blanket injunction restraining all registrars of domain names from selling domain name “Amul” as a prefix or suffix in any combination. For more than a year, the Gujarat Co-operative Milk Marketing Federation (GCMMF) that markets brand Amul – has been receiving complaints from victims who fall prey to online frauds through which fake websites impersonate “Amul” and offer jobs, franchise and/or dealerships. In its interim order, the court restrained domain registrars like GoDaddy, Name Cheap, Freenom, Big Rock among others from selling or offering for sale domain names with “Amul” as suffix or prefix, in any combination.
    The Order can be accessed at: ReadMore
  • Netflix Entertainment Services India LLP v. Sahara India & Ors
    Barring use of Sahara group chief’s name: Go to appropriate court, Supreme Court (SC) tells Netflix- 2 September 2020
    The Supreme Court (SC) has refused to entertain a plea by Netflix against an order by a lower court in Bihar, which restrained the online streaming service from using Sahara Group chief Subrata Roy’s name in its web series Bad Boy Billionaires. The Court also asked Netflix why it had come directly to the SC against a lower court order.
    The Order can be accessed at:
    https://main.sci.gov.in/supremecourt/2020/18359/18359_2020_31_11_23754_Order_02-Sep-2020.pdf

CONTRACTS

  • Cdr. Arifur Rahman Khan and Aleya Sultana and Ors v. DLF Southern Homes Pvt Ltd (now Known as BEGUR OMR Homes Pvt Ltd)
    Flat buyers entitled to just & reasonable compensation for gross delay by builders in handing over possession: Supreme Court (SC)
    The Supreme court (SC) has observed that failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a 'deficiency'. In cases where there is a gross delay in the handing over of possession beyond the contractually stipulated period, the jurisdiction of the consumer forum to award just and reasonable compensation is not constrained by the terms of a rate in builders Agreement, the bench said. The Court also said it cannot be oblivious to the one-sided nature of Apartment Buyers Agreements which are drafted by and to protect the interest of the developers. It also observed that execution of the Deed of Conveyance by a flat purchaser does not preclude a consumer claim being raised for delayed possession.
    https://www.livelaw.in/pdf_upload/pdf_upload-380403.pdf

PROPERTY

  • Nazir Mohamed  v. J Kamala and Others
    The Presumption 'Possession Follows Title' arises only where there is no definite proof of possession by anyone else: Supreme Court (SC)
    The Supreme Court (SC) has observed that the presumption based on the maxim 'possession follows title' that possession must be deemed to follow title, arises only where there is no definite proof of possession by anyone else. A person claiming a decree of possession has to establish his entitlement to get such possession and also establish that his claim is not barred by the laws of limitation, the bench said.
    https://www.livelaw.in/pdf_upload/pdf_upload-380542.pdf

MOTOR VEHICLES

  • State of M P v. Rakesh Sethi
    State Governments entitled to prescribe fee for reserving certain numbers to be assigned as registration numbers for Motor Vehicles: Supreme Court (SC)
    The Supreme Court (SC) has held that the State Governments have the authority to prescribe a fee for reserving certain numbers or distinguishing marks to be assigned as registration number. The bench observed that the assignment of "distinctive marks" i.e. registration numbers to motor vehicles (which includes the power to reserve and allocate them, for a specific fee) is a distinct service for which states or their authorities (such as the registering authorities, in this case) are entitled to charge a prescribed fee.
    https://www.livelaw.in/pdf_upload/pdf_upload-380488.pdf

Disclaimer “This information has been gathered from various sources. Nothing herein is or may be construed as legal advice”.