Orders and Judgments Duration March 23, 2021- April 07, 2021

Whatever you say, say it with conviction

MARK TWAIN

ALTERNATIVE DISPUTE RESOLUTION

  • N Vijayakumar v. State of Tamil Nadu
    Mere recovery of currency notes from public servant does not constitute offences under Section 7 of Prevention of Corruption Act-3 February 2021
    The Supreme Court (SC) on has observed that mere recovery of currency notes is not sufficient to be considered as an offence under section 7 of the Prevention of Corruption Act (PCA). A bench of Justice Ashok Bhushan, Subash Reddy, and M.R. Shaw observed that to prove the charge, it should be proved beyond a reasonable doubt that the accused has voluntarily accepted money knowing it to be a bribe.
    The Judgement can be accessed at:
    https://www.livelaw.in/pdf_upload/nvijayakumar-vs-state-of-tamil-nadu-ll-2021-sc-59-388602.pdf
  • Surender Kumar Singhal & Ors v. Arun Kumar Bhalotia & Ors
    Jurisdictional objection Under Sec. 16 of Arbitration and Conciliation Act has to be raised at inception with sense of Alacrity-25 March 2021
    The Delhi High Court (HC) has observed that a jurisdictional objection under sec. 16 of the Arbitration and Conciliation Act by its very nature would be one which has to be raised at inception, at the earliest stage. The Court also observed that under the scheme of the Act, such an objection has to be raised with a "sense of alacrity" which must be decided by the Arbitral Tribunal with a "sense of urgency".
    The Judgement can be accessed at:
    https://indiankanoon.org/doc/152581058/?type=print

COMPETITION & UNFAIR TRADE PRACTICE

  • Competition Commission of India (CCI) directs probe, terms new WhatsApp policy ‘exploitative’-24 March 2021
    The Competition Commission of India (CCI) has launched an investigation into WhatsApp’s new privacy policy, which was already under judicial scrutiny. The antitrust body has taken a prima facie view that Facebook-owned WhatsApp’s new policy is in contravention of India’s Competition Act “through its exploitative and exclusionary conduct…in the garb of policy update”. It has also asked the director general to launch an anti-trust investigation under Section 26 (1) of the Competition Act and submit a report within 60 days.
    The Order can be accessed at:
    https://www.livelaw.in/pdf_upload/whatsapp-privacy-policy-cci-competition-commission-of-india-391022.pdf
  • Air Cargo Agents Association of India v. International Air Transport Association
    Competition Commission of India (CCI) closes a nine-year-old case against IATA-31 March 2021
    The Competition Commission of India (CCI) has closed a nine year old case against the International Air Transport Association (IATA), which counts about 290 global airlines including Air India, IndiGo, SpiceJet and Vistara, as its members, after finding no violation of competitive norms. The complaint filed by Air Cargo Agents Association of India (ACAAI) in December 2012 alleged a number of anti-competitive practices related to IATA’s Cargo Agency Conference and the Cargo Tariff Conference. Allegations were also made that IATA was determining the rate of cargo agents' commission in an unfair manner and that rules of the agency's Cargo Accounts Settlement Systems (CASS) were anti-competitive.
    The Order can be accessed at:
    https://indiankanoon.org/doc/87494048/

CORPORATE

  • M/S A G Construction Co v. Food Corporation of India and Ors
    Partner can’t call firm’s experience as his-10 February 2021
    In a significant judgment liable to end controversy over the experience of a contractor executing the works of the state, the Punjab and Haryana High Court (HC) has made it clear that jointly created experience of a partnership firm cannot be claimed by one of its partners in his independent capacity.
    The Judgement can be accessed at:
    https://indiankanoon.org/doc/62510065/
  • M/s Kripa Cashew Exports v. M/s Royals International Trade and Allied Products Pvt Ltd
    Only Debts covered under definition of ‘Operational Debt’ can file application under Section 9 of Insolvency and Bankruptcy Code-18 March 2021
    The National Company Law Tribunal (NCLT), Kochi Bench ruled that only debts covered under the definition of ‘Operational Debt’ can file an application under Section 9 of Insolvency and Bankruptcy Code (IBC). It clarified that any amount claimed as due by a person representing as ‘Operational Creditor’ should demonstrate that the said amount in default falls within the definition of ‘claim’ as defined in Section 3(6). “Such a claim, should be capable of being treated as a ‘debt’ as defined under Section 3(11) of I&B Code, 2016 and finally the ‘debt’ should fall within the confines of Section 5(21) of I&B Code, 2016 (i.e.) it should be capable of being treated as an ‘Operational Debt’ and such an operational debt must be owed by the Corporate Debtor to a creditor who can then be considered as an Operational Creditor as defined under Section 5(20) of IBC, 2016,” the NCLT added. The Tribunal while dismissing the application for Resolution Process against the Corporate Debtor observed that the claim of the Operational Creditor is not based on an operational debt, because no goods/services were to be rendered by the Corporate Debtor. The Operational Creditor is not relating to the goods/services including employment or the debt in respect of the repayment of the dues, but it is related to non-payment of the advance money paid to the Corporate Debtor on behalf of M/s. Thankam Cashew Factory. Therefore, the same is not covered under the definition of the “Operational Debt” as provided under Section 5(21) of the Code.
    The Order can be accessed at:
    https://www.livelaw.in/pdf_upload/iba-38-kob-2020-391192.pdf
  • Sesh Nath Singh & Anr v. Baidyabati Sheoraphuli Co-operative Bank Ltd and Anr
    Section 14 Limitation Act applies to application Under Section 7 Insolvency and Bankruptcy Code (IBC)-22 March 2021
    In an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), the applicant may invoke the protection of Section 14 of the Limitation Act in proceedings under the SARFAESI Act, according to the Supreme Court (SC). The time spent litigating before the wrong forum is exempted from the limitation period under Section 14 of the Limitation Act of 1963. The Supreme Court held that Section 14 applies to an application under Section 7 of the IBC, and that there is no provision that the exclusion of time under Section 14 is available only after the proceedings before the wrong forum have concluded. The court also ruled that SAFAESI trials are "civil proceedings" under Section 14 of the Limitation Act. In this case, the National Company Law Appellate Tribunal rejected Corporate Debtor's argument that since the Corporate Debtor's account was declared NPA on March 31, 2013, and since the application under Section 7 of the IBC was filed on August 27, 2018, almost five years and five months after the date of accrual of the cause of action, the application filed by fiduciary was filed in good faith. The NCLAT found that the claimant, a financial creditor, had properly commenced proceedings against the Corporate Debtor under the SARFAESI Act within the statute of limitations and was hence entitled to time exclusion under Section 14(2) of the Limitation Act. The corporate debtor argued that in an application under Section 7 of the IBC, the claimant is not entitled to the benefit of Section 14 of the Limitation Act, 1963 in respect of proceedings under the SARFAESI Act, citing an NCLAT decision in Ishrat Ali v. Cosmos Cooperative Bank Limited and Anr. The bench pointed out that Section 238A of the IBC states that the Limitation Act applies to proceedings before the Adjudicating Authority (NCLT) and the NCLAT, to the extent possible. The bench also stated that the IBC does not exclude the application of Sections 6, 14, and 18 of the Limitation Act, as well as any other clause of the Limitation Act, to IBC proceedings in the NCLT/NCLAT. To the degree possible, all aspects of the Limitation Act apply to proceedings in the NCLT/NCLAT, it said.
    The Judgement can be accessed at:
    https://main.sci.gov.in/supremecourt/2019/43226/43226_2019_40_1501_27085_Judgement_22-Mar-2021.pdf
  • Laxmi Pat Surana v. Union Bank Of India
    Principal Borrower need not be ‘Corporate Person’ for Insolvency Process to be initiated against Corporate Guarantor-26 March 2021
    The Supreme Court (SC) ruled that the Insolvency Process is maintainable against Corporate Guarantors even if the principal borrower is not a ‘Corporate Person’. Action to initiate Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) can be initiated by the financial creditor (Bank) against a corporate person concerning guarantee offered by it in respect of a loan account of the principal borrower, who had committed default, even if the principal borrower is not a ‘corporate person’. “For, the obligation of the guarantor is coextensive and coterminous with that of the principal borrower to defray the debt, as predicated in Section 128 of the Contract Act. As a consequence of such default, the status of the guarantor metamorphoses into a debtor or a corporate debtor if it happens to be a corporate
    person, within the meaning of Section 3(8) of the Code,” the Court noted.
    The Judgement can be accessed at:
    https://indiankanoon.org/doc/12052125/

INFORMATION TECHNOLOGY

  • Toman Lal Sahu v. State of Chhattisgarh & others
    Phone tapping violates Article 21 unless permitted by Procedure Established by Law-26 March 2021
    The pleas of the Petitioners who were dismissed from service without there being any departmental enquiry, merely on the basis of CD transcriptions of the conversation (with a criminal). Significantly, the orders of dismissal were passed in the back-drop of involvement of the Petitioners with a hardcore criminal and the Petitioners were in a telephonic conversation with him to extend some favour and the said conversation was converted in a CD. The court stated that “since the services were terminated on the basis of the telephonic/mobile conversations by invoking power under Article 311(2) Clause (b), as such, no departmental inquiry was held.” Further, when the said dismissal order was subject to departmental appeal, the same was also affirmed in the appeal. The challenge in the Petitions before the Court, therefore, was to the dismissal orders passed by the respondent State Respondents. It was alleged by the Petitioners that the source of CD was not disclosed and the alleged telephonic conversation, which was converted into CD, which recorded the conversation was also not supplied to the Petitioners. The court observed that the “orders didn’t disclose the fact as to how the voices of the Petitioners were identified and it was clarified as to whether proper assistance of any officer was taken to identify the voice of the Petitioners or the criminal in question. The Court also noted that the compact disk was not sent for examination to any expert or to any Forensic Science Laboratory and that the telephones or the mobiles in which the voice of conversation was recorded were not produced in original.” Noting that Section 65-B of the Evidence Act lays down certain procedure to be followed about the admissibility of the electronic record, the Court remarked, “When a question comes to fore that whether any valid procedure or statutory mandate was followed to dispense with the departmental enquiry which proceeded on the premises of a telephonic recorded statement, the obvious answer would be in negative.”
    The Order can be accessed at:
    https://highcourt.cg.gov.in/Afr/courtJudgementandAFR/2021/mar/WP(S)5287_12(26.03.21).pdf

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