- Apprentice Lawyer
With its vast and varied case-docket, the High Court of Delhi has occasion to pronounce verdicts on diverse subjects and myriad areas of law. This two-part monthly column attempts to offer a brief over-view of the important pronouncements of the High Court of Delhi over the period of the relevant month in review.
While an attempt has been made to ensure the widest possible coverage of the various judgments rendered, comprehensive analysis and critique of the individual judgments is eschewed for the sake of brevity.
In Amazon.com NV Investment Holdings LLC v. Future Coupons Private Limited, the Court reiterated that even a non-signatory party to an arbitration could be bound thereto by the ‘Group of Companies’ doctrine when a clear intention of the parties to bind both the signatory as well as the non-signatory parties, who were part of the group of companies, could be clearly demonstrated. The Court further noted that the order of the emergency arbitrator is legal, valid and enforceable as an order of the Court and could be enforced under the provisions of Section 51 and Order XXI Rule 32(5) of the Code of Civil Procedure, 1908 (“CPC”). The Court observed that refusing to implement an order of the emergency arbitrator would render the entire mechanism of emergency arbitration redundant. The Court summarized the position in relation to the ‘Group of Companies’ doctrine and its application in the context of arbitration proceedings as under:
“163. Summary of Principles laid down by the Supreme Court on the Group of Companies doctrine
163.1 As the law has evolved, it has recognised that modern business transactions are often effectuated through multiple layers and agreements. There may be transactions within a Group of Companies. The circumstances in which they have entered into them may reflect an intention to bind both signatory and non-signatory entities within the same group.
163.2 The Group of Companies doctrine is essentially intended to facilitate the fulfilment of a mutually held intent between the parties, where the circumstances indicate that the intent was to bind both signatories and non-signatories. The effort is to find the true essence of the business arrangement and to unravel from a layered structure of commercial arrangements, an intent to bind someone who is not formally a signatory but has assumed the obligation to be bound by the actions of a signatory.
163.3 Group of Companies doctrine can be invoked to bind a non-signatory entity where a Group of Companies exist and the parties have engaged in conduct, such as negotiation or performance of the relevant contract or made statements indicating the intention assessed objectively and in good faith, that the non-signatory be bound and benefited by the relevant contracts.
163.4 The Group of Companies doctrine will bind a non-signatory entity where an arbitration agreement is entered into by a company, being one within a group of companies, if the circumstances demonstrate that the mutual intention of all the parties was to bind both the signatories and the non-signatory affiliates.
163.5 A non-signatory party can be subjected to arbitration where there was a clear intention of the parties to bind both, the signatory as well as the non-signatory parties who are part of Group of Companies. In other words, "intention of the parties" is a very significant feature which must be established before the scope of arbitration can be said to include the signatory as well as the non-signatory parties.
163.6 Direct relationship to the party signatory to the arbitration agreement, direct commonality of the subject-matter and the agreement between the parties being a composite transaction. The transaction should be of a composite nature where performance of the mother agreement may not be feasible without aid, execution and performance of the supplementary or ancillary agreements, for achieving the common object and collectively having bearing on the dispute. Besides all this, the Court has to examine whether a composite reference of such parties would serve the ends of justice.
163.7 Where the agreements are consequential and in the nature of a follow-up to the principal or mother agreement, the latter containing the arbitration agreement and such agreements being so intrinsically intermingled or interdependent that it is their composite performance which shall discharge the parties of their respective mutual obligations and performances, this would be a sufficient indicator of intent of the parties to refer signatory as well as non-signatory parties to arbitration. The principle of ―composite performance‖ would have to be gathered from the conjoint reading of the principal and supplementary agreements on the one hand and the explicit intention of the parties and the attendant circumstances on the other.
163.8 While ascertaining the intention of the parties, attempt should be made to give meaning and effect to the incorporation clause and not to invalidate or frustrate it by giving it a literal, pedantic and technical reading.
163.9 Tests laid down by the Supreme Court to bind a non-signatory of an arbitration agreement on the basis of Group of Companies doctrine:
163.9.1 The conduct of the parties reflects a clear intention of the parties to bind both the signatory as well as the non-signatory parties.
163.9.2 The non-signatory company is a necessary party with reference to the common intention of the parties.
163.9.3 The non-signatory entity of the group has been engaged in the negotiation or performance of the contract.
163.9.4 The non-signatory entity of the group has made statements indicating its intention to be bound by the contract.
163.9.5 A direct relationship between the signatory to the arbitration agreement and the non-signatory entity of the group; direct commonality of the subject-matter and composite nature of transaction between the parties.
163.9.6 The performance of the agreement may not be feasible without the aid, execution and performance of the supplementary or ancillary agreement for achieving the common object.
163.9.7 There is tight group structure with strong organizational and financial links so as to constitute a single economic unit or a single economic reality.
163.9.8 The funds of one company are used to financially support or restructure other members of the group.
163.9.9 The composite reference of disputes of fresh parties would serve the ends of justice.”
In Voith Hydro LTDA v. NTPC Limited, the Court reiterated that the date on which the challenge to an arbitral award was finally rejected would be the relevant date for determining the applicable foreign exchange rate for an award concerned with foreign currency. The Court further observed that Tax Deducted at Source (TDS) was not liable to be deducted on the amounts payable under an arbitral award.
In Raksha Vigyan Karamchari Sahkari Awas Samiti Limited v. Proto Developers and Technologies Private Limited, the Court observed that the scope and ambit of objections of under Section 12(1) read with Section 13 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) are distinct from those under Section 12(5) read with Section 14 of the Arbitration Act and, therefore, merely because objections had not been filed before the arbitrator under Section 13 of the Arbitration Act, the same would not amount to a waiver of the right to file objections under Section 12(5) of the Arbitration Act before the Court.
In Hero Electric Vehicles Private Limited v. Lectro E-Mobility Private Limited, while construing the arbitrability of a dispute which might include the determination of intellectual property rights, the Court observed that unless the same could be said to be ex-facie evident, reference to an arbitration could not be refused. The Court also distilled the following aspects as to the exercise of determination of arbitrability:
“(iv) The arbitrability of the dispute forming subject matter of the suit, and the arbitrability of the claim, are different. A claim may be non-arbitrable because of the scope of the arbitration agreement, not because the subject matter of the claim is essentially not amenable to arbitration. On the other hand, the subject matter of the suit is normally non-arbitrable only if it is not amenable to resolution by arbitration, in law.
(v) Non-arbitrability may be said to exist
(a) where the cause of action, and the subject matter of the dispute, related to actions in rem, which do not pertain to subordinate rights in personam arising from rights in rem,
(b) where the cause of action and subject matter of the dispute affects third party rights, or has erga omnes effect, i.e., affects rights owed to all,
(c) where the cause of action and subject matter of the dispute require centralised adjudication, and for which mutual adjudication would not be appropriate or enforceable,
(d) where the cause of action and subject matter of the dispute relate to inalienable sovereign and public interest functions of the State, not amenable to adjudication by the arbitral process, or
(e) where the subject matter of the dispute is non arbitrable by mandatory statutory fiat. These principles are, however, not watertight, and have to be applied with care and caution.
(vi) Specific instances of non-arbitrable disputes are
(a) insolvency disputes,
(b) internal company disputes which have to be addressed by a centralised forum, which would be more efficient and have complete jurisdiction to dispose of the entire matter, being actions in rem,
(c) grant and issue of patents and registration of trademarks being exclusive matters falling within the sovereign or government function, having erga omnes effect, conferring monopoly rights,
(d) criminal cases, as they relate to sovereign functions of the State,
(e) violations of criminal law, as they are offences against the State and not just against the victim,
(f) matrimonial disputes relating to dissolution of marriage, restitution of conjugal rights, etc., which have no commercial or economic value and have erga omnes effect, and
(g) matters relating to probate or testamentary disposition, which are actions in rem, resulting in a declaration to the world at large.
(vii) Landlord-tenant disputes to be decided as per the Transfer of Property Act, 1882, are arbitrable, as they
(a) pertain to subordinate rights in personam arising from rights in rem,
(b) do not normally affects third party rights, or have erga omnes effect, requiring centralised adjudication,
(c) do not relate to inalienable sovereign functions of the State,
(d) are not excepted from resolution by arbitration, by the provisions of the Transfer of Property Act, and
(e) result in a resolution which can be executed and enforced like a decree of a civil court.
(viii) The scope of examination by the Court exercising jurisdiction under Section 8 or under Section 11 of the Arbitration Act, is prima facie in nature. The Court is not to enter into the merits of the case between the parties. It is only to examine whether the dispute is prima facie arbitrable under a valid arbitration agreement. This prima facie examination is intended to weed out manifestly and ex facie non-existent or invalid arbitration agreements or non-arbitrable disputes, thereby cutting the deadwood and trimming off the side branches, in cases where the litigation cannot be permitted to proceed. The proceedings are preliminary and summary in nature and should not result in a mini-trial.”
In United Insurance Company Limited v. Worldfa Exports Private Limited, the Court held that it was entitled to award interest on the awarded amount in exercise of jurisdiction under Section 34/37 of the Arbitration Act when denial thereof was ex-facie unsustainable and contrary to the overall reasoning contained in the arbitral award itself, and this would not amount to reappreciating the evidence or disturbing the findings of the arbitral tribunal.
In Guru Gobind Singh Indraprastha University v. Engineering India Limited, the Court held that an arbitrator was required to apply the same yardstick with regard to the rate of interest for the claim as also the counterclaim. The Court further held that instead of forcing the parties to undertake a fresh adjudication with regard to the rate of interest, a limited modification pertaining to the ambit of non-grant of interest could be affected by the Court in exercise of jurisdiction under Section 37 of the Arbitration Act.
In Indian Highways Management Company Limited v. Mukesh Associates, the Court held that it could not be said that the mandate of the conciliator or arbitral tribunal under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act”), would stand automatically terminated on expiry of a period of 90 days from the date of the reference in terms of Section 18(5) of the MSMED Act inasmuch as the said provision does not provide for any consequence of failure to decide the reference within the said period.
In Diva Enterprises Private Limited v. Institute of Medico Legal Publications Private Limited, the Court reiterated that disputes pertaining to intellectual property rights would not be arbitrable in nature.
In Indiana Travels Private Limited v. Insion Private Limited, the Court cautioned against the grant of final reliefs, ultimately to be sought in an arbitration, being granted in exercise of jurisdiction under Section 9 of the Arbitration Act and noted the prejudice that it would cause to the respondent inasmuch as it could be said to have lost at the preliminary stage without having any effective right to set out a case before the arbitral tribunal.
In Karthike Enterprises v. Delhi Jal Board, the Court reiterated that Section 42 of the Arbitration Act would not apply to the execution proceedings initiated under Section 36 of the Arbitration Act.
In Surender Kumar Singhal v. Arun Kumar Bhalotia, the Court reiterated that a Court could interfere, in exercise of jurisdiction under Article 227 of the Constitution of India, against an order passed by an arbitrator only in exceptional cases of gross perversity or patent lack of jurisdiction.
In BBR (India) Private Limited v. Shapoorji Pallonji & Company Limited, the Court reiterated that even a non-signatory to the arbitration agreement may also be included in the arbitral proceedings, if the interests of the party concerned are affected or the inclusion is otherwise necessary in the interest of justice.
In Green Edge Infrastructure Private Limited v. Magic Eye Developers Private Limited, the Court held that if the arbitrability of the dispute itself was a vexed issue then it would not be appropriate for the Court to examine the said aspect in exercise of jurisdiction under Section 11 of the Arbitration Act and it would be appropriate to leave the said issue for determination by the arbitrator.
In GTL Infrastructure Limited v. Bharat Sanchar Nigam Limited, the Court reiterated that a party would lose its right to appoint an arbitrator if it did not do so before the counter-party had preferred an application under Section 11 of the Arbitration Act before the Court.
In Hindustan Construction Company Limited v. IRCON International Limited, the Court refused to direct the holding of a further oral hearing after the award stood reserved while extending the time under Section 29A(5) of the Arbitration Act inasmuch as it noted that from the relevant communication issued by the arbitral tribunal it was evident that the award was on the cusp of pronouncement.
In B.R. Sethi v. Raajt Kapoor, the Court held that in light of the recent pronouncement of Supreme Court Judgment in N.N. Global Mercantile Private Limited v. Indo Unique Flame Limited [2021 SCC OnLine SC 13], the consequence of non-stamping of the agreement should be left to be determined by the arbitral tribunal.
In Minesh Chopra v. Delhi Metro Rail Corporation, the Court held that it was not open to a party which had its unilateral appointment of the sole arbitrator set aside by the Court, to suggest that the substitute arbitrator should be chosen from amongst a panel maintained by it.
In a similar vein, in Alok Narang v. Kayaan Marketing & Distribution Private Limited, the Court observed that in the absence of a provision, in this regard, in the contract, the respondent could not seek to forward a panel of names to the petitioner and to insist that the petitioner should choose the arbitrator from the said panel.
In India bulls Housing Finance Limited v. Ambience Projects and Infrastructure Private Limited, the Court reiterated that in the case of a money claim, in order to be held entitled to the relief of securing of the amount in an application under Section 9 of the Arbitration Act, it was not enough for the petitioner to state that certain monies were owed to it by the respondent but it was also required to further aver and substantiate that if the interim protection being sought for was not granted, then the claim would stand frustrated even before relief could be obtained under Section 17 of the Arbitration Act.
In Delhi Development Authority v. Varindera Construction Limited, the Court reiterated that sufficient cause for seeking condonation of delay for the period of 30 days beyond the period of three months under Section 34(3) of the Arbitration Act has to be understood in a reasonable and pragmatic manner and in the absence of dilatory tactics or deliberate negligence or want of bona-fides, the prayer for condonation of delay was liable to be allowed.
In Oriental Structural Engineers Private Limited v. Seven Hills Project Private Limited, the Court reiterated that a Court hearing an application under Section 11 of the Arbitration Act was only concerned with there being an arbitrable dispute in existence and was not required to go into the question as to whether the dispute itself was bona-fide or germane.
In Hoya Medical India Private Limited v. Everest Vision, the Court held that even though the arbitration clause uses the words “propose to the other”, when, they were immediately followed by the phrases “shall be referred to” and “finally resolved by arbitration”, then, the use of the term “shall” and not “may” would indicate that the clear intention of the parties was to make reference to the arbitration mandatory in nature.
In Roem Infrastructure and Construction Limited v. Air Force Naval Housing Board, the Court reiterated that the mere participation in proceedings before an arbitrator would not be construed as a waiver of the right to object under Section 12(5) of the Arbitration Act and such a waiver was required to be by means of an express agreement in writing.
In Road Construction Department, Bihar v. BLA-S&P(JV), the Court held that it could not be said that the majority award was invalid merely because it did not incorporate the opinion of the dissenting arbitrator, when clear reasons were provided in the majority award that the omission was due to the dissenting arbitrator’s indisposition as also his differing views in respect of the ultimate conclusion in the award. The Court held that the said reasoning could be said to demonstrate compliance with Section 31(2) of the Arbitration Act and would amount to a valid final award. The Court further observed that it could not be accepted as a general proposition that the petitioner could insist as a matter of right that the limitation for challenging the arbitral award under Section 34(3) would only begin once the dissenting opinion had also been published and delivered to it.
In RWL Health World Limited v. Escorts Heart Institute and Research Centre, the Court held that a set-off in the form of a counter-claim could not be claimed before the arbitrator when the amounts of which set-off was claimed had neither arisen out of the same transaction between the parties nor was even otherwise connected to the specific controversy between them.
In Ahlcon Parenterals India Limited v. Scan Biotech Limited, the Court reiterated that even if there was a certain evidence to demonstrate that the contention of the petitioner was not insubstantial, ultimately a Court hearing a petition under Section 34 of the Arbitration Act would not act as an appellate forum and would not reappreciate the evidence to come to a different conclusion.
In Balancehero India Private Limited v. Arthimpact Finserve Private Limited, the Court reiterated that the Court where the seat of arbitration was located would exercise exclusive jurisdiction in respect of the arbitration proceedings notwithstanding a general exclusive jurisdiction clause in the agreement.
In Unison Hotels Private Limited v. Value Line Interiors Private Limited, the Court observed that when the petitioner had itself charted a course to obstruct the arbitral proceedings through various means, instead of participating in the same, then, it could not be heard to contend that it was “otherwise unable to present its case” so as to be entitled to the benefit under Section 34(2)(a)(iii) of the Arbitration Act in challenge to the award.
In Delhi Development Authority v. Eros Resorts and Hotels Limited, the Court interfered with a part of the arbitral award which had awarded a certain amount as compensation without any indication or rationale as to how the arbitrator had arrived at the said figure.
In Indian Oil Corporation Limited v. The Great Eastern Shipping Company Limited, the Court reiterated that while there was no dispute that Section 14 of the Limitation Act,1963, would be applicable in respect of claims filed before the arbitral tribunal as well; the requirement that a party had prosecuted the earlier proceedings with due diligence and in good faith was a necessary pre-condition.
In Laxmi Civil Engineering Services Limited v. GAIL (India) Limited, the Court rejected a prayer to refer certain claims from the sub-contractors to arbitration when the arbitration clause was admittedly contained in the main agreement between the contractor and the employer, to which agreement the sub-contractors were admittedly not party. The Court observed that the assigning of the work in the work order placed by the contractor on the sub-contractors would not be binding on the employer and even otherwise would be restricted to assignment of the execution of the work and not of the contract itself.
In National Highways Authority of India v. Afcons Infrastructure Limited, the Court observed that there was no perversity in an interpretation of the relevant contractual clause to the effect that once a rate had been found to be inapplicable on account of a quantity variation beyond the stipulated limit then then the new rate which would be applicable would not be limited only to the quantities executed in excess of the stipulated limit.
In T. K. Engineering Consortium Private Limited v. The Director (Projects) RITES Limited, the Court held that a term in the arbitration agreement which provides that no person other than the one appointed by the appointing authority of one of the parties should act as an arbitrator and in absence of the same, the disputes would not be referred to arbitration at all, must be held contrary to the basic principles on which an arbitration agreement is founded and, therefore, is liable to be ignored.
In Union of India v. NCC Limited, the Court upheld the view of the arbitral tribunal that a party which was obliged to issue a certain certificate upon the happening of a certain eventuality, could not seek to prejudice the other party by withholding the same unilaterally.
In Hindustan Petroleum Corporation Limited v. Delhi Transport Corporation, the Court reiterated that the cause of action to invoke an arbitration would only arise in the case of a dispute existing between parties and the existence of a dispute would entail a positive element of denial of an entitlement and not a mere inaction to accede to a claim.
In C & C Constructions Limited v. IRCON International Limited, the Court observed that considering the fact that an arbitral tribunal is not bound by the procedure prescribed in the CPC or the Evidence Act, 1872, it could not be said as an absolute principle that an opportunity to lead evidence had to be granted necessarily even when it was ex facie evident from the pleadings and documents that the claim was evidently barred.
BANKING AND FINANCE
In Jammu and Kashmir Bank Limited v. Trans Asian Industries Exposition Private Limited, the Court observed that there is undoubtedly a fixed time period of 30 days (extendable by a further period of 60 days) under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (“SARFAESI Act”) for executing the Order of the Chief Metropolitan Magistrate concerning the taking over of physical possession of the properties by the bank. However, the Court held that in a scenario where the Court-appointed Receivers did not cooperate with the bank in taking over the possession of the said properties within that time-frame, it could not be said that the Court was powerless to pass any further directions in this regard beyond the period stipulated under Section 14 of the SARFAESI Act.
In AMR BBB Consortium v. Bharat Cooking Coal Limited, the Court reiterated that even though fraud has been recognized as one of the exceptions for grant of the relief of injunction in the case of an unconditional Bank Guarantee (“BG”), however the fraud which has to be demonstrated has to be of an egregious nature which would vitiate the very foundation of the BG.
While interpreting Regulation 9(3) of the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004, the Court in Reserve Bank of India v. Jindal Steel and Power Limited, observed that the same does not contemplate any third party or agency, least of all an investigative agency, providing any approval or prior-approval thereunder.
In State Bank of India v. Lucky Exports, the Court reiterated that the interests of the Bank are also required to be kept in mind and protected by a Court while granting an interim order of stay of encashment of a bank guarantee.
In Gurmeet Singh Sethi v. Harsharan Kaur Batra, the Court reiterated that a decree passed by a Court which lacks territorial jurisdiction would not be liable to be reversed purely on the said technical ground unless it was demonstrated that there had been a failure of justice, as a result thereof. The Court, however, advised the District Courts in Delhi to clearly publish the demarcation of various areas which fall within their criminal and civil jurisdiction/ considering the peculiar situation in Delhi where the jurisdiction of the District Courts was dependent on various notifications; thereby resulting in confusion.
In Aakash Educational Services Private Limited v. Nitin Jain, the Court observed that once an issue had been framed and ordered to be treated as a preliminary issue and the said Order had become final without challenge by either of the parties, then, the principle of res-judicata would come into operation and a subsequent belated application effectively seeking a variation of the said Order would not be maintainable.
In Archana Mittal v. Shika Mittal, the Court reiterated that while adjudicating upon an application under Order 7 Rule 11 of the CPC, it was not permissible to examine passages or portions of a plaint in isolation and it is the substance and not the form of the case set up by the plaintiff which has to be looked at.
In Veena Devi v. Praveen Kumar Gupta, the Court held that even when the provisions of Section 144 of the CPC may not be strictly attracted to the facts of a case, the Court was empowered to exercise powers of restitution under Section 151 of the CPC to provide substantial justice to the parties. The Court further held that inasmuch as Sections 96 and 100 of the CPC do not specify as to who can file an appeal, a second appeal would be maintainable at the behest of any party that was aggrieved by the impugned decision.
In Chand Sharma v. Om Prakash Gulati, the Court rejected the challenge to an Order closing the right of a defendant to file a written statement and observed that the reason given by the defendant that he had been advised by his Counsel to not enter appearance in the suit was reflective of the patently casual manner in which the defendant had treated the litigation.
In Deepshree Singh v. Rishi Pratap Singh, the Court observed that an application under Section 151 of the CPC would not be maintainable to challenge an ex-parte decree and the appropriate remedy would be either in the form an application seeking review or in the form of an application under Order IX Rule 13 of the CPC seeking to set aside an ex-parte decree or in the form of an appeal under Section 96(2) of the CPC.
In Chander Kanta v. Government of NCT of Delhi, the Court held that in a suit challenging a notice issued to the plaintiffs to vacate certain booths / kiosks from their position could not be said to be one which was not claiming any urgent or immediate relief, and therefore, the benefit of Section 80(2) of the CPC, waiving the notice otherwise required under Section 80(1) of the CPC, should have been extended to the plaintiffs. The Court further observed that the remedy of appeal under Order XLIII Rule 1 of the CPC is not applicable where the plaint is returned under the proviso to Section 80(2) of the CPC.
In Jaswant Kaur Soor v. Kishan Lal Gulati, the Court reiterated that while considering an application under Order XVA of the CPC, a mini trial of the suit was not to be conducted, and the principle of preponderance of probabilities on the basis of the material on record had to be adopted. While overturning the refusal by the Trial Court to grant relief under Order XVA of the CPC, the Court observed that the petitioner had made out a prima-facie case, on the question of the title to the property inasmuch as the lease deed, though unregistered, was an admitted document and was accordingly admissible in nature for proving the status under which the respondent was occupying the suit property.
In Anil Kumar Jain v. Pooja, the Court reiterated that when the material aspects relevant to the controversy had been admitted by the defendant, then the defendant could not seek to lead evidence contrary to these admissions and an Order declining such an opportunity and decreeing the claim petition in the exercise of power under Order XII Rule 6 of the CPC did not call for any interference.
In Rakesh Katyal v. Uma Pati Sood, the Court held that a compromise between two parties to a litigation could not affect the right of an entity which was not a party to the compromise. It was observed that such an aggrieved entity could file a suit seeking appropriate relief disregarding the compromise and the said suit could not be said to be barred on the principles of res judicata or estoppel. While elaborating upon the doctrine of lis pendens as a way of preventing circumvention of the jurisdiction of the Court by actions which have the effect of removing immovable property which is subject matter of the litigation, the Court observed that this principle would not apply where the transaction in question dealing with the property was entered into prior to the filing of the suit.
In Rohit Sharma v. A. M. Market Place Private Limited, the Court reiterated that in case of any conflict between the provisions of the CPC and Delhi High Court (Original Side) Rules, 2018 (“Delhi High Court Rules”). the Delhi High Court Rules would prevail.
The Court in Natures Essence Private Limited v. Protogreen Retail Solutions Private Limited, observed that inasmuch as in a suit governed by the Commercial Courts Act, 2015 (“Commercial Courts Act”) the defendant was required to file all relevant documents with its written statement, therefore it would not be permissible to rely upon certain additional documents filed through an interim application while adjudicating on the injunction application.
In Sathish Seth v. Indu Kapoor, the Court held that inasmuch the Commercial Appellate Division under Section 13 of the Commercial Courts Act was authorized to hear only appeals against the orders of the Commercial Court, an Order of rejection of a plea under Order VII Rule 11 of the CPC in an ordinary (non-commercial suit) would have to be challenged through a petition under Article 227 of the Constitution of India.
In Parsvnath Developers Limited v. Vikram Khosla, the Court held that once the plaint had been verified and supported with an affidavit / Statement of Truth on behalf of the plaintiff, then, if the defendant had been proceeded ex-parte, it was not mandatory to require the plaintiff to lead an ex-parte evidence and the Court could proceed to adjudicate the suit forthwith.
In Kent RO Systems Limited v. Jaideep Kishnani, the Court rejected an application for filing of additional documents much after the filing of the written statement, framing of issues and filing of affidavits of evidence by plaintiff inasmuch as it noted that permitting the same would entirely set at naught the scheme under the Commercial Courts Act to require the defendant to file all relevant documents along with the written statement.
In Mukul Taneja v. Metro Lifestyles India Private Limited, the Court reiterated that the maximum period for filing a written statement under the Commercial Courts Act was 120 days.
COMPANY LAW AND INSOLVENCY
In RE-Gwalior Transmissions System Limited, the Court observed that though the terms of a lease deed would ordinarily govern the parties in the manner of making of payments, however, when during the pendency of the company petition before the Court, the party concerned had agreed to waive off the element of interest in a manner at variance with the terms of the lease deed and the property in question was accordingly permitted to be disposed-off and sold to the auction purchaser, then, subsequently, the party concerned could not resile from the given concession.
In Deepak Khosla v. National Company Law Appellate Tribunal, the Court held that the forums such as the National Company Law Tribunal (‘NCLT’) and National Company Law Appellate Tribunal (‘NCLAT’) which have a high quantum of work should be permitted to regulate their own procedure for the conduct of virtual hearings so long as the same was not arbitrary.
In Jaiveer Singh Virk v. Sir Sobha Singh & Sons Private Limited, while reiterating that matters pertaining to the management of a company were within the exclusive domain of the NCLT, the Court further held that though a board resolution serves as a formal and accurate record of the decisions taken by the Board of Directors of a company, there was no bar to the company changing its decisions from time to time subject to the same being in accordance with law.
In Union of India v. Vedanta Limited, the Court held that when the State enters into a contract in relation to natural resources, the State effectively performs the role of a trustee under a constitutional mandate and in such a scenario, public interest and constitutional imperatives will outweigh contractual stipulations as also the doctrines of promissory estoppel and legitimate expectation.
While noting that the absence of a National Health Policy for rare diseases was depriving patients of the necessary treatment and thereby violating their fundamental rights, the Court in Master Arnesh Shaw v. Union of India, directed for the urgent finalization and notification of the National Policy for Rare Diseases and issued a slew of directions to better effectuate the said policy.
In Ehtesham-ul-Haque v. Union of India, the Court reiterated that a writ of quo-warranto would be maintainable when it could be demonstrated that the person holding the public office was either ineligible for the same or that the process followed for the appointment was in violation of the applicable statutory rules.
In Sunil Singh v. South Delhi Municipal Corporation, the Court reiterated that writ jurisdiction could not be invoked to entertain a private civil dispute involving disputed questions of fact.
In Jagdish v. NHPC Limited, the Court observed that when there was a detailed mechanism for settlement of disputes contained in the contract, including for the appointment of an adjudicator and subsequent reference to an arbitration, then invocation of the writ jurisdiction would not be appropriate.
In R Subramanian v. Union of India, the Court observed that the directions issued by Supreme Court in the case of Madras Bar Association v. Union of India & Anr. [2020 SCC OnLine SC 962] including the setting up of a National Tribunals Commission, and in the interregnum, the measure of setting up of a separate ‘Tribunals Wing’ in the Ministry of Finance, should be implemented at the earliest.
In Ram Bharose. v. Delhi Urban Shelter Improvement, the Court observed that an application for alternative accommodation could not be entertained after a very long period of time after the dispossession from the erstwhile accommodation, and that the petitioner could not seek to capitalize upon the allotment at a belated stage after having settled elsewhere with his own resources.
In Dr. N. Bhaskara Rao v. Union of India, the Court refused to entertain a Public Interest Litigation (“PIL”) seeking implementation of the National Litigation Policy, 2010, while observing that in the absence of any specific instances of violation, a generalized petition could not be entertained.
While rejecting a PIL seeking demolition of alleged illegal construction, the Court in Prem Pal Singh v. Union of India, observed that inasmuch as there is no presumption pf illegality attached to any construction, specific averments substantiating the alleged illegality in the construction have to be made in the petition.
In Rajender Singh v. Union of India, the Court held that in a writ petition, a petitioner could not be heard to urge that coordinate bench judgments of the Court were arbitrary or violative of Article 14 of the Constitution of India.
In Shiv Narayan Balai v. Union of India, the Court reiterated that the National Commission for Scheduled Castes is not an adjudicatory body which can issue binding directions or injunctive orders, and that it is not intended as an alternative to the hierarchical judicial system existing in the country.
In Guru Nanak Institute of Management and Information Technology v. Ravleen Kaur, the Court observed that a mere prima-facie observation would not amount to a judgment, and that a Letters Patent Appeal would not lie against the same.
CONSUMER PROTECTION AND REAL ESTATE REGULATION
In Manish Kumar v. All India Institute of Medical Sciences, the Court observed that the National Consumer Dispute Redressal Commission (‘NCDRC’) could not condone the delay in a filing of the written statement on the mere asking of the party concerned, without any reasoning or application of mind. The Court further observed that such an Order would be completely without jurisdiction and, therefore, the availability of an alternative remedy would not be a bar to the Court interfering with the same in exercise of jurisdiction under Article 227 of the Constitution of India.
In Manish Gulati v. State of NCT of Delhi, the Court noticed the large-scale vacancies in the District Consumer Disputes Redressal Commission (‘DCDRC’) which was adversely impacting their function and directed that appointments be made at the earliest to ensure the continued functioning of the Commissions.
In Mithun Radhakrishnan v. Aastha Sahdev, the Court reiterated that though a party which had breached an undertaking to participate in a petition under Section 13B of the Hindu Marriage Act, 1955 (‘HMA’), could not be compelled to so participate; however, in the case of breach of an undertaking given to the Court or made part of a consent decree, the defaulting party could be proceeded against for civil contempt and be directed to restore the status quo ante and to disgorge all the benefits that the defaulting party had received.
While interpreting Section 38(3) of the Multi-State Cooperative Society Act, 2002 (“MSCS Act”), the Court in Narender Singh v. V. V. Pankajakshan held that the requirement of obtaining authorization from the Board of the cooperative society was only binding on the individuals who were members of the Board and that the said requirement was not binding on office bearers such as the Chairperson, President or Chief Executive. The Court further held that Section 43(1) of the MSCS Act determined the eligibility of the member society in question inasmuch as the purpose of the provision was to secure the attendance of the societies forming a part of the general body of a multi-state cooperative, and not that of the individual persons who are members of the societies concerned.
In Veeravalli Raju Solomon v. Union of India, the Court directed the reconsideration of Petitioner’s application for an Indian Commercial Pilot License (‘ICPL’), in terms of satisfying the ‘recency’ requirement, and noted that the default at his end was on account of the delay in the declaration of results of the Radio Telephone Operator (restricted) Certificate (‘RTR’) examination, and which delay was squarely attributable to the pandemic.
CRIMINAL LAW AND PROCEDURE
In Sheetal v. The State Government of NCT of Delhi, the Court held that the rigors of Section 25 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (‘NDPS Act’), would apply only in cases when the owner permits usage of his premises, house, room, enclosure, space, place, animal or conveyance, for the commission of an offence. The Court observed that the usage of the words “used for” makes it amply clear that the concerned premises, place, conveyance etc. should be demonstrated to have an active and direct involvement with the commission of the crime in the form of being used as instruments for executing the offence or in a manner substantially facilitating the commission of an offence punishable under the NDPS Act. However, an incidental or inconsequential use by the person committing an offence punishable under the NDPS Act would not be sufficient to attract the applicability of Section 25 of the NDPS Act. The Court further observed that considering the wide range of the punishment which could be imposed for the offence of possession of contraband under the provisions of the NDPS Act, it was essential for the Court to award the proper punishment while keeping in mind both the punitive and the reformative element.
In Arun Kumar v. State (Government NCTD), the Court held that merely because the accused did not give the requisite desired answers to an investigating agency, could not be the sole ground for issuance of non-bailable warrants against him inasmuch as every accused is entitled to the right against self-incrimination in terms of Article 20(3) of the Constitution of India.
In Prabhat Kumar Srivastava v. Serious Fraud Investigation Office, the Court while denying bail to the accused observed that fictitious surgeries had been shown on the record by the accused and fictitious bills had been created in connivance with the co-accused persons.
In Atul Bidhuri v. The State, Government of NCT of Delhi, the Court summarized the factors and parameters that need to be taken into consideration while dealing with a plea for anticipatory bail as under:
“(a) The nature and gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made;
(b) The antecedents of the applicant including the fact as to whether the accused has previously undergone imprisonment on conviction by a court in respect of any cognizable offence;
(c) The possibility of the applicant to flee from justice;
(d) The possibility of the accused's likelihood to repeat similar or other offences;
(e) Where the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her;
(f) Impact of grant of anticipatory bail particularly in cases of large magnitude affecting a very large number of people;
(g) The courts must evaluate the entire available material against the accused very carefully. The court must also clearly comprehend the exact role of the accused in the case. The cases in which the accused is implicated with the help of Sections 34 and 149 of the Indian Penal Code, 1860 the court should consider with even greater care and caution, because over implication in the cases is a matter of common
knowledge and concern;
(h) While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors, namely, no prejudice should be caused to free, fair and full investigation, and there should be prevention of harassment, humiliation and unjustified detention of the accused;
(i) The Court should consider reasonable apprehension of tampering of the witness or apprehension of threat to the complainant;
(j) Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as to the genuineness of the prosecution, in the normal course of events, the accused in entitled to an order of bail.”
In Anoop Singh v. State, the Court held that though Section 311 of the Code of Criminal Procedure, 1973 (‘Cr. P. C.’) is couched in very wide terms and does not limit the discretion of the Court in any way, such discretion is circumscribed by the underlying principle that the evidence which is sought to be obtained under the same must be essential to a just decision of the case.
In Business Standard Private Limited v. Lohitaksha Shukla, the Court while reiterating that a magistrate can take cognizance of an offence of defamation only upon receiving a complaint by a person who is aggrieved in terms of Section 199(1) of the Cr.P.C, observed that the complainant, who claimed to be a member of the Rashtriya Swayamsevak Sangh (‘RSS’), had failed to establish as to how an article critical of the RSS had resulted in any harm to his reputation or lowering of moral and intellectual character. The Court further observed that the complainant had not been able to establish that he was a part of an ‘identifiable class’ or definite ‘association or collection of persons’ as enumerated in Explanation (2) to Section 499 of the IPC.
While rejecting the challenge to an Order framing charges under Sections 120B read with Sections 420 and 471 Indian Penal Code,1860 (‘IPC’) and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (‘PCA’), the Court in Jagdish Kumar Arora v. CBI, noted that there was evidently prima-facie material demonstrating the substantial loss to the exchequer occasioned on account of the prescribed procedure for placing of orders and receiving of materials being violated as also forgery of the authorizations.
In Sumit Bhasin v. State of NCT of Delhi, while refusing to quash proceedings under Section 138 of the Negotiable Instruments Act, 1881 on the prayer made by a Director in the company who had not signed the cheque in question, the Court noted that all the accused persons, including the petitioner before the Court, belonged to the same family and were running the affairs of the accused company together, and hence the culpability of the petitioner could not be completely ruled out.
In Surjeet Munda v. State, the Court observed that the non-examination of independent witnesses would not be material when the incident in question had admittedly taken place inside the house and that too late at night when it was unlikely for any outsider to be present there.
In Sai Chandrasekhar v. Directorate of Enforcement, the Court observed that the twin conditions for bail as occurring in Section 45 of the Prevention of Money laundering Act, 2002 (‘PMLA Act’) which had been struck down by the Supreme Court had not been revived nor reintroduced by the amending Act i.e., the PMLA Amendment Act, 2019 and, therefore, bail applications would be considered without applying the rigor of the two erstwhile conditions.
In Suhail Ahmed @ Arhan v. State of NCT of Delhi, the Court granted bail to the accused in a case under Sections 376/506/509/342/323/34 IPC inter-alia on the ground that there was a significant delay in the lodging of the First Information Report (‘FIR’) as also it was clearly evident that the parties had engaged in sexual intercourse over a period of several years in the past.
In Mandeep Gandhi v. State NCT of Delhi, the Court reiterated that in exercise of power under Section 482 of the Cr.P.C while dealing with a prayer for quashing of a charge, the Court would refuse to interfere unless it could be categorically demonstrated that there was no material on record to establish the involvement of the petitioner in the offence in question.
In Mohammad Azam Ansari v. State of NCT of Delhi, the Court upheld the view in the impugned order that referring to the petitioner as a ‘dishonest’ lawyer would not come within the scope and ambit of obscenity, and accordingly Section 294 of the IPC could not be said to be attracted.
In Ishika v. State, the Court refused bail in a matter under the NDPS Act and rejected the argument of the petitioner that on account of the fact that contraband was recovered separately as also that the accused persons were apprehended separately, there was no element of criminal conspiracy while noting that the Call Data Records (CDR) indicated that all the accused were in constant touch on the day that they were apprehended.
In Pinki Kaushal v. State, NCT of Delhi, the Court reiterated that though at the stage of summoning of the accused, the Court is only required to arrive at a prima-facie view, however, the same does not mean that mechanical orders without application of mind should be passed.
In Liyakat Ali v. State NCT of Delhi, while granting bail to the petitioners in a matter relating to the Delhi Riots of 2020, the Court observed that neither were they named in the FIR nor any Police Control Room (‘PCR’) call nor Daily Dairy (‘DD’) entry was made by the police official concerned who was an eye-witness to the incident nor was there any evidence such as CCTV footage, photographs etc. to connect the petitioners with the incident in question.
In Nasir Khan v. State of NCT of Delhi, the Court noted that though an FIR should not ordinarily be quashed in a case involving a heinous crime like rape, however, in cases where the prosecutrix herself comes forward and states that the complaint was lodged as a result of some misunderstanding and that she wants to give a quietus to the same, then there will be no purpose in continuing with the trail which would ultimately result in acquittal with substantial public resources being wasted in the process.
In Jitender Bhati v. Narcotics Control Bureau, the Court reiterated that the procedural requirements laid down under Sections 35 and 54 of the NDPS Act are required to be strictly complied with.
While rejecting a challenge to an Order dismissing the petitioner’s application under Section 167(2) of the Cr.P.C. and Section 36A(4) of the NDPS Act, the Court in Mehabub Rehman @ Empha v. State, reiterated that a charge-sheet could not be held to be incomplete because of the pendency of a Forensic Science Laboratory (‘FSL’) report over voice sample, as preparation of a report on a voice sample was not in the hands of the Investigating Officer.
While releasing the accused on bail in proceedings under the NDPS Act, the Court in Mohit Agarwal v. Narcotics Control Bureau observed that since no recovery had been made from his person or his shop, the prosecution could only attempt to prove its case on the basis of circumstantial evidence, and even the disclosure statements of the co-accused had been retracted by them at the first available opportunity.
In Dinesh Sharma v. State, the Court refused to quash an FIR in exercise of the power under Section 482 of the Cr.P.C. in a matter involving offences under the Protection of Children from Sexual Offences Act, 2012 (‘POCSO Act’), on the ground of compromise between the prosecutrix and the accused inasmuch as it noted that the same would go against the intention of the special enactment which had been framed to protect the interests of children.
In Dr. Sandeep Maurya v. State, the Court granted bail to the petitioner in a case relating to offences under Section 376 and Section 328 of the IPC while noting the shifting stand of the prosecutrix and observing that there was no material on record to demonstrate that there was any promise of marriage by the accused and that the issue as to whether a sexual relationship was established on the promise of marriage or not was a matter of trial.
In Edwin Emeka Igbokwe v. Narcotics Control Bureau, while rejecting an application for bail in a matter involving offences under the NDPS Act, the Court observed that the manner of transporting the drugs in an extremely organized manner while being deftly packed and concealed in shock absorbers would show that it was a meticulously planned operation and that various material recoveries including professional tools, same make of shock absorbers, weighing machines etc. were recovered from the house of the accused.
In Mohammad Umair v. State (Government NCT of Delhi), the Court observed that though the offence under Section 376 of the IPC is a serious one and cannot be quashed in exercise of the power under Section 482 of the Cr.P.C., merely on the asking of the parties after a compromise is arrived between them, however, in appropriate circumstances such as the relative youth of the accused and lack of any criminal antecedents as also of the offence having been committed in the heat of the movement, the Court could exercise the said power in the interests of justice.
In Neelam v. Yashpal, the Court refused to interfere with the determination of the quantum of maintenance directed to be paid to the estranged wife and noted that a few isolated entries of higher value in the bank statement would not be sufficient to dislodge the overall view taken in the impugned Order.
In Pawan Guar v. State (NCT of Delhi), the Court held that the offence of rape under Section 376 of the IPC being a serious one, could not be quashed in exercise of jurisdiction under Section 482 of the Cr.P.C. merely on the ground of amicable settlement between the parties.
However, in Vikash Kumar v. The State, the Court observed that when there were certain exceptional circumstances such as the accused and the prosecutrix having gotten married subsequently and also having had a child together; then, in the interest of the child and the considering the future of the prosecutrix, the power under Section 482 of the Cr.P.C could be exercised.
In Prahalad Singh v. The State, the Court reiterated that the accused was required to lead evidence to rebut the presumption which arose against him once the cheque was admittedly signed by him.
In Saleem v. State of NCT, the Court reiterated that the High Court, while exercising revisional jurisdiction under Section 397 read with Section 401 of the Cr.P.C, cannot lightly substitute its conclusion in place of the one arrived at by the Trial Court.
In Salman v. State, the Court reiterated that the mere fact that a simply injury had been sustained by the victim could not be the sole reason for discharging the accused from an offence under Section 308 of the IPC inasmuch as an attempt of that nature may or may not actually result in grievous injury. The Court observed that the relevant criteria was whether the act of the accused was with the intention or knowledge that under such circumstances, death could have been caused or not.
In Sapana v. State (NCT of Delhi), it was reiterated that after two Courts had duly acquitted the accused, the Court while exercising its jurisdiction under Section 397/401 of the Cr.P.C. would not substitute its own conclusion for the said determination unless the impugned Orders were demonstrated to have taken a completely implausible view.
In Raghvender Singh v. The State (NCT) of Delhi, the Court denied bail to the accused in a case involving offences under Sections 302/201/120B read with Section 34 of the IPC on the ground there was an allegation of the commission of a double murder and that there have been recoveries at the instance of the petitioner as also the petitioner was demonstrated to be in constant touch with the prime accused.
INSURANCE AND MOTOR VEHICLES ACT
In Chander Prakash v. Ramlali, the Court reiterated that the execution of requisite transfer documents under the Motor Vehicle Rules, 1989, was essential to demonstrate transfer of ownership and mere execution of a gift deed in this regard would not suffice.
In Reliance General Insurance Company Limited v. Smt. Raj Bala, the Court reiterated that no amount can be awarded separately under the head of ‘loss of love and affection” in addition to award of compensation under the head of “loss of consortium”.
In Suman v. Shyamveer Singh, the Court reiterated that deletion of Section 166(3) of the Motor Vehicle Act, 1988, would not mean that claims could be filed with the Motor Accident Claims Tribunal (‘MACT’) with gross delay and at any juncture after the accident had taken place. The Court held that the aggrieved party was required to approach the MACT within a reasonable time.
In Smt. Mina Devi v. Shresth Jain, the Court held that the refusal by the MACT to permit the petitioner to withdraw the sum deposited in advance of the period mentioned in the fixed deposit receipt was unsustainable considering the advanced age, poor medical condition and precarious finances of the petitioner which would defeat the entire purpose of the deposit in her favor.
In Saddam Hussain v. Ram Prasad, the Court held that the MACT should have allowed the application for restoration when the petition had earlier been withdrawn by the Counsel for the aggrieved party under the evidently erroneous impression that the MACT concerned did not have the requisite territorial jurisdiction.
In National Board of Examination v. Dr. Rajani Sinha, the Court held that an examining body is required to function and to be held accountable as per its rules and regulations and not as per the ipse-dixit decisions taken by the officials and any consequential relaxations granted by them. The Court further observed that an examining body holding examinations for a huge number of applicants could not be expected to minutely examine each and every application and refute the same, at the very outset of the process, if found contrary to the rules. Therefore, the Court held that an absence of rejection at the initial stage cannot act as an estoppel against cancellation of candidature in the future once the ineligibility in question was discovered.
In Aditya Ayurved College and Research Centre v. Union of India, the Court held that the New Medical College, Opening of New or Higher Course of Study or Training and Increase of Admission Capacity by a Medical College Regulations, 2019, providing for an online inspection method would not be applicable for establishment of new colleges, commencement of new courses and for enhancement in admission capacity. It was observed that the said regulations are only applicable to annual approvals / permissions for admission to existing colleges in existing courses and on existing strength.
In Modern College v. National Council for Teacher Education, the Court observed that it was difficult to accept the explanation offered by the educational institution in question for the delay of almost twenty months in filing an appeal under Section 18 of the National Council for Teacher Education Act, 1993, before the appellate committee, on the sole ground that the Chairman of the society which had established the concerned institution had been involved in a road-accident and had been incapacitated as a result thereof. The Court observed that an education institution could not be reduced to a ‘one-man show’ and there must be sufficient administrative leadership to be able to carry on the responsibilities and functions in the unforeseen absence of the principal officer.
In Dr. Angela Ann Joseph v. Union of India, the Court prima-facie observed that the non-recognition of a Ph.D. Degree in the field of clinical psychology by the Rehabilitation Council of India was absurd when even diploma courses were being so approved for the purpose of recognition under the Rehabilitation Council of India Act, 1992.
In Parth Sarthi Yadav v. All India Council of Technical Education, the Court reiterated that even though a student is entitled to due sympathy and consideration, the same cannot extend to compelling an authority to do something beyond its rules and regulations.
In Meenakshi v, All India Institute of Medical Sciences, the Court observed that even though it may be an unfortunate situation that on account of delay in the conduct of examination by a university its students might be denied the opportunity for applying for further admission, however, that could not be a ground to direct the educational institution to which the application for admission was being made to overlook or give a go-by to its own admission schedule.
Dr. Amit George is an Advocate practicing before the High Court of Delhi.
The author would like to place on record his appreciation for the assistance provided by Advocates Amol Acharya, Bharat Rayadurgam and Piyo Harold Jaimon.