ARBITRATION
Shriram
Distribution Services Private Limited v. A.N Traders Private Limited [266
(2020) DLT 248 (DB)]
In
the present matter, the written agreement between the parties (which contained the
arbitration clause) expired in the year 2009 by efflux of time, however, the
parties continued business dealings until 2014 when the arbitration proceedings
were initiated.
The
claimant made claims with respect to the period post 2009 until 2014. This was
questioned on the following premise: (i) Since the agreement expired by efflux
of time in 2009 itself, neither the agreement nor the arbitration clause
contained thereunder survived for adjudication; (ii) There existed nothing on record to show that the
parties were ad idem on the aspect of extension of the said (expired
agreement).
The
claimant/appellant contented that despite expiry of the agreement, the parties
continued to deal with each other on the same terms as contained in agreement. Reliance
was placed by the claimant/appellant on the judgement of the Supreme Court
titled Bharat Petroleum Corporation Limited v. Great Eastern Shipping
Company Limited [AIR 2008 SC 357] to contend that an agreement (which has
expired by efflux of time) can be considered to have been extended by the
parties provided tacit consent and acceptance with regard to such extension is
shown.
The
agreement between the parties contained a clause which provided that the
parties were at liberty to extend the agreement by means of a written document.
Further, there existed another clause in the agreement which stated that any
modifications/amendments to the agreement could be done only by means of a
written instrument. The Delhi High Court, while placing reliance on the said
provisions, rejected the contentions of the claimant/appellant.
On
the aspect of survival of the arbitration clause, the claimant/appellant relied
upon the following judgements to contend that the arbitration clause would
continue to subsist despite the expiry of the principal agreement: (i) Reva
Electric Car Company Private Limited v. Green Mobil [AIR 2012 SC 739]; (ii)
Everest Holding Limited v. Shyam Kumar Shrivastava [2008 (16) SCC 774]. However,
the Delhi High Court, in the facts and circumstances of the present case, rejected
the contentions of the claimant/appellant and upheld the findings of the Single
Judge which observed that the contentions of the claimant could not be
sustained in the present matter in as much as arbitration clause could not be
pressed into service for adjudicating issues which have arisen post the expiry
of the agreement and were beyond the scope of the agreement.
During
the course of adjudication, the Delhi High Court also relied upon its previous
decision of Mahanagar Telephone Nigam Limited v. Finolex Cables Limited
[FAO (OS) 227/2017] to hold that interference by the court with arbitral awards
is limited and circumscribed.
Larsen
& Turbo Limited v. Experion Developers Private Limited
[266 (2020) DLT 70]
The
law relating to invocation of bank guarantees was discussed in the present
matter. In the present case, the Petitioner sought an interim injunction
against the Respondent under Section 9 of the Arbitration and Conciliation Act,
1996 restraining them from invoking the bank guarantees in view of pending
disputes between the parties regarding the main contract. The Delhi High Court
while placing reliance on various judgements of the Supreme Court of India,
including Mahatma Gandhi Sahakra Sakkare Karhane v. National Heavy Engg.
Coop. Ltd [(2007) 6 SCC 470] and Gujarat Maritime Board v. L&T
Infrastructure Development Projects Ltd. [(2016) 10 SCC 46] rejected the
contention of the Petitioner by holding that bank guarantees are unconditional
and irrevocable, and an injunction against them can be granted only in two situations,
viz egregious fraud and irretrievable injury/injustice; and neither of
the said grounds were pleaded or shown in the present case.
Further,
on the aspect of judicial discipline, the Delhi High Court held a court is
bound to follow a decision of a higher forum/court as against the decision of a
co-ordinate bench, if the said co-ordinate bench has taken a different view.
Sukhbir Singh v.
M/s Hindustan Petroleum Corporation Limited [266 (2020) DLT 612]
The
present petition was filed under Section 34 of the Arbitration and Conciliation
Act, 1996, by the Petitioner for setting aside an arbitral award dated
09.09.2014, passed by sole arbitrator.
The
brief facts of the case were that the Petitioner’s dealership for running a
outlet of petrol, diesel etc. was cancelled by the Respondent pursuant to a
show cause notice issued to him, calling upon him to answer as to why the
quality of the products was not maintained as per the prescribed standards. The
Petitioner questioned the show cause notice and invoked the arbitration clause.
Subsequently, an officer of the Respondent was appointed as the sole
arbitrator. During the course of the proceedings, the arbitrator declined the
Petitioner’s request to cross examine the witness and came to the conclusion
that the dealership was rightly terminated.
The
challenge in the present petition was against the refusal to cross-examine the
witness as it was against principles of natural justice and the procedure envisaged
under Section 24 of the Arbitration Act.
The
Delhi High Court held that a party (in absence of a prior agreement to the
contrary) has a right to cross examine a witness produced by the other party
and such right of cross examination can be denied in only rare and exceptional
circumstances. In the present case the Petitioner’s request for oral evidence
to be led on the veracity and contents of the letters of the Respondents was
reasonable and could not have been rejected in the manner reflected in the arbitral
award.
NEGOTIABLE INSTRUMENTS
Leena Kataria v. State & Another [266 (2020) DLT
630]
In
the present case it was alleged that the Respondent No. 2 had approached the
Petitioner for grant of a friendly loan of Rs. 3,15,000/- which was given by
the Petitioner in the year 2012. Thereafter, the Respondent No. 2 issued a
cheque dated 05.01.2014 for a sum of Rs. 2,95,000/- in favour of Petitioner
which was dishonoured. Consequently, the Petitioner initiated proceedings
against the Respondent No. 2 for dishonour of cheque. However, the trial court acquitted
the Respondent No. 2 by taking a view that the Respondent was successful in
rebutting the presumption (made against him under Section 118 (a) and 139 of
the Negotiable Instruments Act, 1881) on the basis of a receiving obtained from
the Petitioner on the cheque book and on a legal notice sent to the Petitioner
demanding blank cheques.
In
this context, the Delhi High Court held that once the Respondent is successful
in rebutting the presumption in favour of Petitioner, then the burden shifts
upon the Petitioner to prove her/his case beyond reasonable doubt. In the
present case the Petitioner had failed to establish that she had advanced a
loan of Rs. 3,15,000/- to the Respondent. Also, the Petitioner had also failed
to get the cheque book examined by a forensic expert to substantiate her stand
that her signatures on the cheque book were forged and fabricated.
Har
Sarup Bhasin v. M/s. Origo Commodities India Pvt Ltd. [266 (2020) DLT 578]
In the present case, an independent non-executive
director of the accused company had been arraigned by the complainant in the
Section 138 proceedings before the trial court (along with the whole time director
and other directors of the accused company). The said director sought quashing
of the complaint qua him before the Delhi High Court.
The Delhi High Court while deciding the issue in
favour of the Petitioner and placing reliance on its previous judgements in Bhardwaj
Thuiruvenkata Venkatavraghavan v. Ashok Arora and Kanarath Payattiyath
Balraj v. Raja Arora observed as follows:
(a) Petitioner
was an independent and a Non-Executive Director and no specific role was attributed
to him for his active participation in the day to day affairs of the company
and of taking all decisions of the company.
(b) Secondly,
since the Petitioner was not a signatory to the cheques in question, vicarious
liability could not be fastened on him, in the absence of any specific role
attributed to him.
(c) The
contentions raised by the Respondent about the Petitioner being a key
managerial personnel of the accused company and having participated in all
meetings of the company were not spelt out in the complaint filed by the
Respondent in the trial court.
(d) Further,
assuming arguendo that the Respondent was a key managerial personnel of the
accused company, even then, as per the version of the Respondent, he held the
said position until 31.03.2016 whereas the cheques in question were drawn and
issued at a later point in time.
BANKING AND SECURITISATION
Rahul Chaudhary v. Andhra Bank [WP (C)
657/2020, Delhi High Court]
The present matter pertained to proceedings under
SARFAESI Act, 2002. In the present case, the issue under consideration by the
Delhi High Court was whether the order of the Chief Metropolitan Magistrate
(CMM) by which an advocate was appointed as a receiver to take possession of
the secured asset was valid and in consonance with law. The provision under
contention was Section 14 (1A) of the SARFAESI Act which permits a District Magistrate
to appoint his subordinate officers to act as receivers of property.
The Delhi High Court held that the language of
Section 14(1A) of the SARFAESI Act uses the expression “may” and not “shall”
and the District Magistrate (DM)/CM is vested with an additional discretion to
appoint officers subordinate to him to take possession of the asset. The said
provision in no way creates any bar on appointment of advocates as receivers
under the Act.
COPYRIGHT
Fox
Star Studios v. Aparna Bhat [266 (2020) DLT 261]
In
the present matter, the plaintiff (a lawyer and legal representative of an acid
attack victim Ms. Laxmi Agarwal) had assisted the producers/directors of a
production house in the making of a Hindi film ‘Chhapaak’ which was based on
the above said Ms. Laxmi Agarwal). The said assistance of the plaintiff was
recorded in various correspondences and exchanges between the director of the
film and the plaintiff. However, the plaintiff’s contribution was not
recognised/acknowledged by the production house in the end-credits of the film.
The suit was preferred by the plaintiff seeking her inclusion in the list of
contributories to the film.
Reliance
placed on Monnet Ispat and Energy Limited v. Union of India [(2012) 11
SCC 1] which clarifies that to constitute promissory estoppel, there has to be
a clear and unequivocal promise, which is intended to create a legal
relationship and that such promise would be binding. The threshold to establish
promissory estoppel is very high. The said judgement also lists down various
principles which should guide the court where the issue of applicability of
promissory estoppel arises. Further reliance was also placed on Maneulsons
Hotels Private Limited v. State of Kerala [2016 (6) SCC 766] to bring our
the fundamental concepts pertaining to promissory estoppel.
The
Delhi High Court, while observing that the plaintiff had the right to be
recognised and acknowledged in the credits of the film, inter alia, made
the following observations:
(a) On
the aspect of injunctions, the Delhi High Court observed as follows: (i) The
general rule is to not to grant mandatory injunction. It can, however, be
granted to restore status quo ante or to remedy a situation at once;
(ii) The standard required for a mandatory injunction is higher than that of a
prohibitory injunction and the same can be granted where the injury cannot be
compensated in money. In this regard, reliance was placed on Dorab Cawasji
Warden v. Coomi Sorab Warden and Others [(1990) 2 SCC 117] and Halsbury
Laws of England.
(b) As
regards the issue of paternity rights, the High Court observed that no written
contract is required for recognition of any persons paternity rights. The
rights of paternity are an integral part of moral rights of a person who makes
any contribution. Reliance was placed on Neha Bhasin v. Anand Raaj Anand
[132 (2006) DLT 196] wherein the court recognised the right of the singer
therein to be credited as the lead female singer as against just a singer. Further
reliance was placed on another judgement of the Supreme Court titled Suresh
Jindal v. Rizsoli Corriere Della Sera Prodzioni T.A. Spa and Others [1991
Supp (s) SCC 3] (on somewhat similar facts) wherein a contributor to a film was
seeking an acknowledgement in the end credits of the said film. The court
upheld the right of such person to be recognised for his services in the title
shots of the film and passed necessary orders to this effect in so far as
exhibition of the film in India was concerned.
CIVIL PROCEDURE CODE
Cargill India Pvt Ltd. v. Deepayan
Mohanty [266 (2020) DLT 211 (DB)]
The present appeal arose out of the denial of leave
to defend and passing of the decree by the court in a suit instituted by the
Respondent under the provisions of Order XXXVII of the Civil Procedure Code,
1908 for recovery of Rs. 3,25,56,496/- along with interest. The suit of the
Respondent was based on a claim for bonus, which, as per him, was guaranteed to
him for the years 2006-2007, 2007-2008 and 2008-2009. A single judge of the
Delhi High Court had refused to grant leave to defend to the Appellant citing
absence of any triable issue. Broadly, the following triable issues had been
raised by the Appellant before the single bench of the Delhi High Court:
(a) The
Respondent had played fraud on the Appellant by concealing the fact of
establishing a competing company and directing business opportunities away from
the appellants towards the competing company, without the knowledge or approval
of any of the appellant companies.
(b) It
was further stated in the leave to defend that the Appellant became aware of
the said actions of the respondent after scanning the laptop on the basis of
e-mails, that the Respondent had established a company in the beginning of
2008.
The division bench of the Delhi High Court, by
placing reliance on the decision of the Apex Court in IDBI Trusteeship
Services Ltd. v. Hubtown Ltd. set aside the findings of the
single bench and granted a conditional leave to defend to the Appellant,
subject to a deposit of the claimed amount with the court.
