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| ARBITRATION AND CONCILIATION ACT, 1996 | JUNE, 2022 |
| WHETHER A DISPUTE CAN BE BARRED FROM BEING REFERRED TO ARBITRATION UPON AN ALLEGATION OF EXISTENCE OF FRAUD? Recently, the Hon’ble Bombay High Court in BSI-JDN Joint Venture v. The Board of Trustees of the Jawaharlal Nehru Port Trust, held that existence of mere allegation of fraud would not categorize a dispute as not to be referred to arbitration. In the present case, the letters from Ministry of Shipping that mentioned an ongoing investigation into the contract award and claimed non-disclosure by the applicants, in their bid materials, were publicly disclosed. The court relied on the grounds that the contract was fully complete and bills were raised, and there was no problem and/or illegality in the awarding of the contract to the petitioners. Because the investigation was launched at the request of the Ministry by the CVC and is currently being conducted by the CBI, the respondent was not free to argue that the current case was "not arbitrable" on the basis of fraud "merely referring to the letters of the Ministry of Shipping." Thus, even if there had been any illegality in the contract's award, the court believed that such circumstances would not qualify the subject matter as one involving an arbitral determination of fraud, which should be maintained outside the scope of arbitration. If a problem arises while an investigation is underway or if criminal charges are being considered that have anything to do with the arbitral decision, it may be brought up before the arbitral tribunal at the proper time and an adequate defence may be made. Read More... |
| INSOLVENCY AND BANKRUPTCY CODE, 2016 |
| WHETHER FORUM SHOPPING BE PERMISSIBLE UNDER THE AMBIT OF INSOLVENCY AND BANKRUPTCY CODE? Recently, the division bench of Hon’ble NCLAT, New Delhi comprising of Justice M. Venugopal and Justice Ashok Kumar Mishra in case titled ‘Partha Paul v. Kotak Mahindra Bank Ltd.’, held that Insolvency and Bankruptcy Code (hereinafter referred to as “IBC”) cannot be used for forum shopping. The Bench noted that the loan facility was granted to a trust by a bank. Hereunder, the demand notice was issued on 29.12.2016 under SARFAESI Act, 2002 to the Corporate Debtor, the Corporate Guarantor and Borrower. Additionally, the Bank had approached Hon’ble High Court of Calcutta seeking leave under the provision of public charities by showing alleged breach of any express constructive trust created for public purpose. However, the Calcutta High Court dismissed the suit and the same was appealed before the division bench of Hon’ble Calcutta High Court but the earlier order was upheld. Thereafter, the bank also approached under Section 19 of RDB Act, 1993 for issuance of certificate of recovery against borrowers and guarantors. After being refused from various forums and courts, the bank preferred an application under section 7 IBC but an ex parte order was passed by the Adjudicating Authority on account of absence of Corporate Debtor at multiple hearings whereby the matter was reserved. Subsequently, Insolvency process was initiated by virtue of the order passed by Adjudicating Authority in favour of the bank. Thus, the erstwhile management of the Corporate Debtor challenged the said order before Hon’ble NCLAT primarily on the grounds of misconduct of the Bank and forum shopping by engaging in multiplicity of proceedings. The Hon’ble NCLAT overturned Adjudicating Authority’s decision and ordered that the case be sent back with a request that the Adjudicating Authority provides the Corporate Debtor through ex-management with a patient hearing. Read More... |
| WHETHER A REAL ESTATE COMPANY HAS TO GO THROUGH THE STANDARD CIRP PROCESS? Recently, the NCLAT Bench of New Delhi in Ram Kishor Arora Suspended Director of M/s Supertech Ltd. v. Union Bank of India addressed the concept of Reverse CIRP that was first given recognition through the landmark case of Essar Steel. This appeal was preferred by suspended director of the Corporate Debtor in response to the Adjudicating Authority's (NCLT, New Delhi, Court-VI) decision allowing the Union Bank of India's Section 7 Petition, thereby initiating CIRP against M/s. Supertech Limited. The Principal bench of NCLAT observed that Secured Creditors, such as financial institutions or banks, may not be given precedence over the project's authorised Unsecured Financial Creditor being the allottees when it comes to receiving the asset (a flat or apartment). It was further held that in the interest of allottees, the survival of the Real Estate Infrastructure Companies, and to guarantee project completion, this Tribunal affirmed that Reverse CIRP can be followed in the instance of Real Estate Infrastructure Companies. The Bench further clarified that in the instant case, one of the promoters will work with the Interim Resolution Professional (IRP), to disburse the money as an outside lender rather than a promoter, and further directed project's completion in phases while also directing the payment of financial institutions and banks simultaneously. The Bench noted that in CIRP Process, Project-wise Resolution should be started as a test to find out the success of such Resolution of real estate companies. Read More... |
| HIGHLIGHTS OF THE 5TH REPORT OF INSOLVENCY LAW COMMITTEE REPORT In fifth report, the Insolvency Law Committee made significant suggestions for improving India's bankruptcy laws. The principal suggestions are provided hereunder:
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| INTELLECTUAL PROPERTY RIGHTS |
| WHETHER THE PLEA OF PASSING-OFF CAN BE NEGATED ON THE GROUND THAT THE PLAINTIFF HAD ASSERTED TRADEMARK RIGHTS IN REGISTERED DESIGNS? Recently, the Hon’ble Delhi High Court in Havells India Limited v. Panasonic Life Solutions India Pvt Ltd & Anr., held that the Plaintiff's assertion of trademark rights in the registered designs cannot be used to reject a passing-off claim. It is feasible to file a composite lawsuit claiming compensation for both design infringement and passing off. The present case deals with a lawsuit for alleged design infringement and passing off filed by Plaintiff against Defendant over its new series of ceiling fans called VENICE PRIME, which, according to Plaintiff, was a blatant copy of Plaintiff's design. Plaintiff claims to have conceptualised a design for ceiling fans called the ENTICER. It was contended that the type of consumers buying the competitor's items were naive buyers with average intellect and faulty memory. Therefore, Plaintiff claimed that it was qualified for an interim injunction against Defendant. The Court observed that a registered design per se is subject to revocation if it is utilised as a trademark. However, since a passing-off claim can include but also goes further than a trademark infringement claim, where the design elements are used as part of a larger trade dress, get-up, presentation of the product through its packaging, etc. rather than as a trademark, a passing-off action would be appropriate. Because Plaintiff had claimed trademark rights in the registered designs, the passing-off claim could not be rejected solely on this basis and was to be evaluated on its own merits. Read More... |
| Miscellaneous |
| WHETHER THE PROVISIONS OF THE CODE OF CIVIL PROCEDURE AND EVIDENCE ACT APPLICABLE TO PROCEEDINGS BEFORE THE COMMISSIONER UNDER WORKMEN’S COMPENSATION ACT, 1923 Recently, the Hon’ble Delhi High Court in Maha Laxmi Hosiery vs Govind Singh & Anr, held that the Code of Civil Procedure and Evidence Act's rules did not apply to proceedings before the Commissioner under the Workmen's Compensation Act. The Commissioner may establish his or her own methods and may depend on the materials presented to it in order to determine the truth. In this regard, the Delhi High Court placed reliance on the judgment of Hon’ble Supreme Court of India titled ‘Om Prakash Batish v. Ranjit alias Ranbir Kaur and Ors., (2008) 12 SCC 212’. Read More... |
| WHETHER INCOME IS THE ONLY FACTOR TO BE TAKEN INTO CONSIDERATION WHILE GRANTING CHILD CUSTODY? Recently, the Hon’ble Supreme Court in Swaminathan Kunchu Acharya vs the State of Gujarat, held that income, age, and bigger family cannot be sole criteria in child-custody matters. In this instance, the kid's paternal grandparents filed a writ petition before the High Court, claiming that the boy's maternal aunt is refusing to let them into the home of his son and daughter-in-law and that he is not even allowed to meet the boy. The High Court granted the maternal aunt custody after deciding the petition. The grandfather contacted the High Court after being enraged by this. The appellant-grandfather argued before the Apex Court that it cannot be assumed that the paternal grandparents would not be able to care for the grandson better just because they are older—the appellant-grandfather is 71 years old and his wife is 63 years old. The respondent argued that the paternal grandfather of the appellant would be less qualified to care for and watch over the kid than the boy's maternal aunt. The Hon’ble Supreme Court concluded that, between the two, "the balance would lean in favour of the paternal grandparents," but added that this judgement should not be interpreted to imply that the maternal aunt cannot care for her nephew. Beyond this claim, the Supreme Court made no justification for why grandparents could be a better fit. Last but not least, it stipulated that both parties should work cooperatively and amicably for the benefit of the minor kid, particularly in light of the fact that he is only five years old and has already lost both parents. In this instance, the Supreme Court has decided that emotional security is more important than financial security. Read More... |
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