Delhi High Court sets time limit for oral arguments in commercial suit

Outstation lawyers

The Delhi High Court recently passed an order effectively limiting the time for making oral arguments by the parties to a case under the Commercial Courts Act.

In the case of Roland Corporation v. Sandeep Jain, the plaintiff sought a limit on the time for making oral arguments during the Case Management Hearing. The suit is already listed for final arguments on April 10, 2019, and the counsel for the defendant were appearing on advance notice.

On Justice Rajiv Sahai Endlaw’s enquiry, the counsel for the plaintiff told the Court that they would need 45 minutes for making opening arguments and 30 minutes for rejoinder submissions.

The Court observed that Order XV-A, Rule 5 of the Civil Procedure Code allows the Court to hold a Case Management hearing at any point during the trial. Rule 2 empowers the Court to limit the time for oral arguments made by the lawyers of both parties.

However, the Court enquired if the phrase “during the trial” would include the stage where the recording of evidence has concluded and only final arguments remain to be heard.

It was submitted that the scope of the phrase can be decided after considering the object of the said provision. The Order notes,

“It was reasoned, that the word ‘trial’ is of wide import and in its widest sense would include the proceedings right from institution of suit to the final determination by a judgment or decree.”

The Court took note of Rule 3 of Order XV-A, which provides for time-bound completion of a trial and for the trial to be concluded within six months from the date of institution of the suit.

The Court, therefore, concluded that the present stage of the case would be included in the interpretation of the phrase “during the trial” for the purpose of setting up of time limits for making oral arguments.

“Rule 3 of Order XV-A titled “Time limit for completion of trial” provides that in fixing dates and setting time limits for the purpose of Rule 2, the Court shall ensure that arguments are closed not later than six months from the date of the first Case Management Hearing. The same indicates that, at least for the purpose of Order XV-A of the CPC, trial would include this stage as well.”

Justice Endlaw thus disposed of the application, holding that the counsel for the plaintiff will be bound to the aforementioned time limits. The order also states that the Court may, if it finds the need to, set a similar time limit for defendant’s lawyers as well.

The plaintiff company was represented by a team from Anand and Anand headed by Managing Partner Pravin Anand, along with Pundreek Dwivedi and Vibhav Mittal.

The defendant was represented by Advocates Vihan Dang and Kavya Mammen.

 Read the Order:

 

Roland Corporation vs Sandeep Jain-watermark

Investigation conducted by informant: Division Bench of SC expresses doubts over three-judge decision

Will the investigation of a criminal case stand automatically vitiated if the same is carried out by a police officer who is himself the informant?

A Division Bench of the Supreme Court recently expressed doubts over the correctness of a three-judge decision holding that such an investigation would be vitiated on grounds of bias.

Consequently, the Bench of Justices UU Lalit and MR Shah has referred the three-judge Bench decision in Mohan Lal v State of Punjab to a bench of at least three judges for reconsideration.

We may prima facie express that we find it difficult to accept the view taken in Mohan Lal (Supra). Some of the decided cases have maintained a distinction in that where the investigation was conducted by the informant himself, appropriate weightage was given while appreciating the evidence.

In a given case, where the complainant himself had conducted investigation, such aspect of the matter can certainly be given due weightage while assessing the evidence on record but it would be completely a different thing to say that the trial itself would be vitiated for such infraction. But Mohan Lal (Supra) has ruled that the trial itself would stand vitiated on that count.

Since we are in respectful disagreement with the view taken in Mohan Lal (Supra), this matter may require consideration by a Bench of atleast three Hon’ble Judges. We, therefore, direct the Registry to place the papers before the Hon’ble the Chief Justice of India to constitute a Bench of appropriate strength to consider the matter.

In the case before the Division Bench, the petitioner had claimed that he deserved to be acquitted in the criminal case against him, given that his case was investigated by the same police officer who was the informant in the FIR.

He referred to the Mohan Lal case to argue that when the investigating officer in a criminal case is also the informant in the case, the investigation would stand vitiated. In the Mohan Lal case, a Bench of Justices Ranjan GogoiR Banumathi and Navin Sinha had held,

“…a fair investigation, which is but the very foundation of fair trial, necessarily postulates that the informant and the investigator must not be the same person. Justice must not only be done, but must appear to be done also. Any possibility of bias or a predetermined conclusion has to be excluded. This requirement is all the more imperative in laws carrying a reverse burden of proof.”

However, while deciding the Mohan Lal case itself, the Bench headed by CJI Gogoi referred to several cases where it was held that a criminal investigation would not stand automatically vitiated merely because the investigation was conducted by the informant. Inter alia, such verdicts include those in Bhaskar Ramappa Madar and Others v. State of Karnataka and Surender Alias Kala v. State of Haryana, both of which were delivered by a Division Bench.

Further, the Division Bench in the instant case also took note of the law laid down in Police, Vigilance & Anti Corruption, Tiruchirapally, Tamil Nadu v. V Jayapaul, in which the Court had held that a police officer who is an informant in a case does not forfeit his right to investigate the case. There needs to bias on the part of the investigating officer to vitiate the same, and such bias would depend on the facts and circumstances of the case, it was held.

In this backdrop, the Division Bench has referred the question of whether the law in Mohan Lal is correct to another Bench, opining that the issue should be settled at the earliest. The order states,

“…we express that reliance has been placed on Mohan Lal (Supra) in some other cases as well. The instant matter and the questions raised herein therefore need to be resolved at an early date.

Read the Order:

 

Mukedh Singh v State - SC order

“Always wanted to be like Justice YK Sabharwal”, CJI Ranjan Gogoi

Chief Justice of India Ranjan Gogoi earlier this week unveiled the book titled ‘Beyond the Name: Justice YK Sabharwal, A Fulfilling Journey’ in honour of former Chief Justice of India YK Sabharwal.

Also present at the launch was Justice AK Sikri of the Supreme Court. Both Sikri J and CJI Gogoi reminisced their fond memories of Sabharwal J, with CJI Gogoi revealing that he always wanted to be like Justice Sabharwal.

“I’m truly honoured today. Secretly, I have been a great fan (of Justice Sabharwal) and let me tell you why. He is just the kind of lawyer I wanted to be – sharp and precise… Make an argument to which there is no reply. A judge with the flow and the flair of language, the precision and clarity of thought”, CJI Gogoi said.

Former Chief Justice of India YK Sabharwal

Recounting the judgment in the IR Coelho’s case, CJI Gogoi said that Justice Sabharwal is remembered in the Supreme Court everyday for the reiteration of the Basic Structure principle and also praised Justice Sabharwal’s “push to environmental jurisprudence” in the TN Godavarman case.

CJI Gogoi made a special mention of Justice Sabharwal’s role in the journey of decriminalization of Section 377, stating that Justice Sabharwal differentiated between “academic questions” and issues of infringement of fundamental rights. CJI Gogoi recounted that when the Delhi High Court had refused to hear the plea in the Naz Foundation case averring that it was an academic question, it was Justice Sabharwal who insisted that the case be heard on merits.

“Justice Sabharwal requested the (Delhi) High Court to hear the case on merits by highlighting that questions of infringement of fundamental rights cannot be academic questions. This petition took a long journey, which ultimately resulted in reading down Section 377 of IPC by the Supreme Court very recently.”

Justice Sabharwal’s works cannot be encapsulated in a brief speech, CJI Gogoi said, adding that the former CJI’s judgments are an indicator of his “fearless attitude” in questions of “upholding the rule of law, constitutional visions, independence of the Judiciary, and the supremacy of the Constitution.”

Justice Sikri also remembered Justice Sabharwal fondly and spoke of the long association the two shared. He said that not only was Justice Sabharwal was perfect in every role of his life, but was also a “friend of friends”.

Senior Counsel and Former Attorney General Mukul Rohatgi, who began his career in Justice Sabharwal’s chamber, also shared his experience of working with the former CJI, remembering him as a tough taskmaster but a great human being.

The book release was attended by Chief Justice of the Jammu and Kashmir High Court Gita Mittal, the Supreme Court’s Justice Sanjay Kishan Kaul, as well as various members of the Bar.

  • January, 19th, 2019
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Column: Playing Politics over Sedition

Satvik Varma

The timing of the charge sheet filed by the Delhi Police, earlier this week, relating to certain acts alleged to have taken place at Jawaharlal Nehru University (JNU) in 2016 has been questioned by many. The former president of the JNU Student’s Union, Kanhaiya Kumar and many other student activists including Umar Khalid and Anirban Bhattacharya have been charged with Sedition for having supposedly raised ‘anti-national’ slogans.

Notably, in 2016 itself a Magistrate had conducted an inquiry and concluded that in fact, no anti-national slogans were raised and the videos relied upon were doctored/morphed. This raises many questions regarding what new evidence and information has become available for the Police to file the charge sheet and why it took three years to do so. It also raises many questions about the law relating to Sedition, its constitutional validity, the circumstances under which it can be invoked and whether it should still occupy a place on our statute books. 

Real Also: Delhi Police files charge sheet against Kanhaiya Kumar, Umar Khalid, eight others in JNU sedition case

JNU Sedition Case: Court refuses to take cognizance of chargesheet filed by Delhi Police

JNU attendance

JNU Campus

Sedition is not defined in Indian statutes. It appears only in the marginal notes to Section 124A of the Indian Penal Code. The Section mandates two requirements. First, the accused must bring or attempt to bring into hatred or contempt or excite or attempt to excite disaffection towards the Government of India. No disturbance or outbreak is actually required to be caused, the offence is committed if the accused attempted to excite rebellion or hatred. Secondly, such act or attempt should be done by words, spoken or written, or by signs or visible representation. 

Periodically, Sedition laws are used to quell political dissent. And each time that happens, it throws up a fresh debate about free speech and the State’s ability to impose reasonable restrictions to curtail such freedom. Questioning Government action and criticising its inaction is important, necessary and an essential part of democratic functioning. In fact, the explanations to the statutory provision provides exemptions for criticism and comments on Government actions, however strongly worded, provided they are within reasonable limits. It is only when the words or visible representation cross the limits of fair criticism and has the tendency or intention of creating public disorder or disturbance of law that Sedition comes into play.

The legal provision of Sedition has withstood the test of judicial scrutiny by a Constitution Bench of the Supreme Court which held it to be intra-vires i.e. Constitutional, albeit noting that “the freedom has to be guarded against becoming a licence for vilification and condemnation of the Government.” In fact, the Constitution Bench notes that “a citizen has a right to say or write whatever he likes about the Government, or its measures, by way of criticism or comment, so long as he does not incite people to violence against the Government established by law or with the intention of creating public disorder.” In doing so, the Court has sought to balance the freedom of speech with the security of the State and public order. 

In our current socio-political milieu, it may help to recall what else the Constitutional Bench observed “comments, however strongly worded, expressing disapprobation of actions of the Government, without exciting those feelings which generate the inclination to cause public disorder by acts of violence, would not be penal. In other words, disloyalty to Government established by law is not the same thing as commenting in strong terms upon the measures or acts of Government, or its agencies, so as to ameliorate the condition of the people or to secure the cancellation or alteration of those acts or measures by lawful means, that is to say, without exciting those feelings of enmity and disloyalty which imply excitement to public disorder or the use of violence.”

One may recall that the last time Sedition related cases made it to the headlines was in 2012 when Aseem Trivedi had been charged and arrested for his distasteful and offensive cartoons. Basis the opinion of the Advocate General of Maharashtra, the Mumbai Police dropped charges against him under Section 124A and the final judgment of the Bombay High Court in 2015 notes certain guidelines issued to the Police department while invoking the provisions under this Section. Similar guidelines have previously been issued by the Constitution Bench and one really wonder if all of those have been followed while charging Kanhaiya Kumar and other student activists? 

One may also recall that almost immediately after the JNU incident, Shashi Tharoor had moved a Private Members Bill to amend Section 124A. This Bill suggested that only those actions and words which directly result in the use of violence or incitement to violence should be termed seditious. Well intentioned, but unfortunately this amendment didn’t see the light of day. 

Statistics from the National Crime Records Bureau published in 2017 reveal that in 2016 the Police disposal of cases relating to Sedition was in single digit and the Court disposal of cases for the same period was less than a handful. This may partly be because to bring a charge under Section 124A requires the prosecution to prove beyond reasonable doubt that the intention of the speaker or author of the Seditious material was with a view to excite disaffection against the Government of India. This is almost impossible to achieve. The quintessence of Sedition is intention and in determining one’s intention the Courts have held that the speech has to be taken as a whole and has to be reviewed freely and fairly without giving undue weight to isolated passages.  It is also for the accused to show that his words were harmless and his motives innocent. 

Interestingly, the United Kingdom, from where we derive this colonial legislation, has itself deleted Sedition from its Statute books and one of the reasons for such deletion is on account of the fact that the British legislators felt that “having an unnecessary and overbroad common law offence of sedition, when the same matters are dealt with under other legislation, is not only confusing and unnecessary, it may have a chilling effect on freedom of speech and sends the wrong signal to other countries which maintain and actually use sedition offences as a means of limiting political debate.” The United States still has Sedition as an offence although it is very narrowly construed.

Perhaps taking note, in August 2018, the Law Commission of India issued a Consultation Paper on Sedition soliciting suggestions from a cross-section of society with a view to examine the pros and cons of the legal provision. Some notable questions on which responses are solicited include, the extent to which we citizens enjoy the right to offend and at what point does the right to offend qualify as hate speech? Response is also sought on whether all the existing Statutes cover the various offences against the individual and/or the offences against the society and therefore will reducing the rigour of Section 124A or repealing it be detrimental or beneficial, to the nation? 

Given these developments and till such time that Sedition is on our Statute books, India needs to follow an effect-based, which examines the effects of the Seditious text, rather than a content-based test, which reviews the text alone. Following this principle, along with ways and measures to check the enforceability, sometimes wrongful, and implementation of the law of Sedition is the current call of duty. Jai Hind!

Satvik Varma is a counsel based in New Delhi. A graduate of Harvard Law School, he’s also licensed to practice in New York. 

JNU Sedition Case: Court refuses to take cognisance of Chargesheet filed by Delhi Police

2G

The Patiala House Court at Delhi today refused to take cognizance of the sedition case filed against former Jawaharlal Nehru University (JNU) Student Union President Kanhaiya Kumar, students Umar Khalid, Anirban Bhattacharya and seven others, citing the absence of approval from the Delhi government to file the chargesheet.

Judge Deepak Sahrawat questioned the Delhi Police after noting that the chargesheet against the accused was filed without prior sanction from the legal department of the Delhi government.

The Delhi Police, which comes under the jurisdiction and control of the Central government, has told the Court that appropriate sanction will be taken within a period of ten days.

The chargesheet in question was filed by the police on Monday, in the case pertaining to the alleged “Anti-National” sloganeering and connected events of February 2, 2016.

The Delhi Police claims to have based its findings on the basis of documentary evidence, CCTV footage, and eye-witness accounts of approximately 90 persons. Apart from Kumar, Khalid and Bhattacharya, the seven other accused, hailing from Kashmir, are Aquib Hussain, Mujeeb Hussain, Muneeb Hussain, Umar Gul, Rayeea Rasool, Bashir Bhat and Basharat.

Apart from the ten named above, Delhi Police has mentioned 36 others in the chargesheet as well, without naming them as accused due to lack of evidence.

Kanhaiya was granted interim bail by the Delhi High Court in the matter in March 2016, almost three weeks after being arrested on charges of sedition. Soon after, an Additional Sessions Judge granted interim bail to Khalid as well as Bhattacharya in the case.

What the Delhi HC held on information related to corruption, human rights violations under the RTI Act

Right to Information

The Delhi High Court has held that information regarding allegations of corruption and human rights violations in respect of Section 24(1) of the Right to Information Act (RTI Act), need not be mandatorily disclosed by the concerned authorities under the Act, if the information is struck by Section 8 of the Act.

Section 24(1) excludes intelligence and security organisations from the application of the Act, however the proviso to the Section carves out an exemption in case of information in respect of allegations of violation of human rights or corruption. Section 8 of the Act grants exemption from disclosure to certain categories of information such as information received in confidence from foreign government, etc.

Therefore, before sharing such information which is in possession of intelligence agencies, the concerned authority would have to determine its feasibility in terms of Section 8 of the RTI Act, the Court has stated.

The judgment was passed by a Single Judge Bench of Justice Vibhu Bakhru in a petition preferred by a person convicted by Special Maharashtra Control of Organised Crime Act (MCOCA) Court in relation to the Mumbai Train Blast case of July 2006.

The petitioner claimed that during investigation by various agencies, it was revealed that members of the Indian Mujahideen were involved in the case and that the Intelligence Bureau (IB) had collected information about their involvement. The IB then prepared a report, which was placed before the Home Minister in the year 2009.  It was submitted that the said report suggested a review of the evidence in the case and indicated that the Indian Mujahideen, and not the petitioner, was responsible for the blasts.

The petitioner therefore filed an application under Section 6(1) of the RTI Act before the Central Public Information Officer (CPIO), Intelligence Bureau, seeking a true copy of the IB report. The application was rejected by the concerned CPIO on the ground that by virtue of Section 24(1), the IB is excluded from the purview of the RTI Act.

Aggrieved by the reply, the petitioner filed an appeal under Section 19(1) of the Act before the First Appellate Authority (FAA). In his appeal, the petitioner claimed that Section 24(1) of the RTI Act was inapplicable in the present case, as the information being sought fell within one of the exceptions carved out under Section 24(1) of the Act, i.e allegation of violation of human rights.

The FAA upheld the decision of the CPIO and turned down petitioner’s request on the same ground. The second appeal before the Central Information Commission under Section 19(3) of the Act was also rejected.

The Commission held that the information sought by the petitioner did not relate to either the two exceptions in the proviso to Section 24(1) of the Act, i.e. allegations of human rights violation or corruption.

Aggrieved by the order, the petitioner moved the Delhi High Court.

Holding that the CIC’s conclusion was erroneous, the Court held that there could be “little doubt” that the petitioner’s application seeking the IB Report pertained to an allegation of human rights violation.

There can be no dispute that the human rights would include life and liberty. It is the petitioner’s case that he is deprived of his liberty on the basis of false evidence and the information available in the report placed before the Home Minister would indicate the same”, the Court observed.

Since the expression “human rights” is not defined in the RTI Act, the Court stated that the same could be understood in terms of Section 2(1)(d) of the Protection of Human Rights Act, 1993 or the Universal Declaration of Human of 1948.

The Court then clarified that any information in terms of the second proviso to Section 24(1) of the Act, can be provided to the petitioner only on the approval of the CIC after examining if such information is “relevant and material”.

If the CIC, on examination of the material, finds that it is not so, the approval for disclosure of such information would not be granted, it stated.

The Court further iterated that before disclosing such exempted information in terms of proviso to Section 24(1), the concerned authority must be ascertain whether or not the disclosure would be hit by the protection under Section 8 of the Act.

“..it is also necessary to observe that merely because such information regarding allegations of corruption and human rights violation is not excluded from the purview of Section 24(1) of the Act, does not necessarily mean that the said information is require to be disclosed…

…Section 8 of the RTI Act provides for certain exemptions from disclosure of information and the said provisions would be equally applicable to information pertaining to allegations of corruption and human rights violation. Thus, the concerned authorities would have to examine whether the information sought for by the petitioner is otherwise exempt from such disclosure by virtue of Section 8 of the RTI Act.”

The Court thus decreed,

In view of the above, the impugned order is set aside and the matter is remanded to the CIC to consider afresh having regard to the observations made in this order. The petition is disposed of in the above terms.”

The petitioner was represented by Advocate Arpit Bhargava. IB was represented by Advocates Rahul Sharma and CK Bhatt.

Read the Judgment:

 

EHTESHAM QUTUBUDDIN SIDDIQUE vs CPIO, IB-watermark

CJI Gogoi, Justice (Retd.) Lokur attend swearing-in ceremony of Pakistan Chief Justice Asif Saeed Khan Khosa

As Asif Saeed Khan Khosa took oath as the 26th Chief Justice of Pakistan on Friday, it is reported that among other foreign dignitaries, Chief Justice of India Ranjan Gogoi and former judge of the Supreme Court, Madan B Lokur were present for the swearing-in ceremony.

Justice Lokur is reported to have sat on a bench along with newly sworn-in Chief Justice Khosa and his fellow judge, Justice Mansoor Ali Shah, while it heard a few matters after the ceremony.

Also sitting with the Bench were Narin Ferin Sefik, President of the Supreme Court of the Turkish Republic of Northern Cyprus; Kashim Zannah, Chief Judge of the State of Borno, Nigeria; and Sandra E Oxner, former judge and founding President of Commonwealth Judicial Education Institute, Canada.

Reports had surfaced earlier this month that Justice Lokur would attend the swearing-in ceremony for Justice Khosa, given their long-standing friendship. Justice Khosa and Justice Lokur are said be friends since 2004, when Justice Khosa was in the Lahore High Court and Justice Lokur was a judge of the Delhi High Court.

Justice (Retd.) Madan Lokur with the newly sworn-in Chief Justice of Pakistan (Source – Indian Express)

When asked whether he considers his attendance for the ceremony an extraordinary gesture, Justice Lokur told the Indian Express that “Justice knows no boundaries”. Accompanying Justice Lokur in yesterday’s swearing in ceremony was his wife, Savita Lokur.

It is also reported that this is not the first time that Justice Lokur has attended the swearing-in ceremony of a Pakistani Chief Justice. Justice Lokur was in attendance five years ago when former Pakistan Chief Justice Tassaduq Hussain Jillani was administered the oath of office.

Justice Asif Saeed Khan Khosa succeeds Chief Justice Saqib Nisar. Notably, Justice Khosa was one of the judges sacked during the tenure of General Pervez Musharraf in November 2007, when the Pakistani Constitution was suspended and a state of Emergency was declared. After Justice Khosa refused to retake an oath in tune with the Provisional Constitutional Order introduced at the time, Musharraf suspended him from office along with then Chief Justice Iftikhar Muhammad Chaudhry and other senior judges.

Justice Khosa was reinstated as a judge of the High Court in August 2008, following a lawyers’ movement to restore deposed judges. In 2010, he was elevated as judge of the Supreme Court. Among other high-profile cases, Justice Khosa also sat on the Bench which passed the acquittal judgment in the Asia Bibi blasphemy case which captured international attention. His appointment as the 26th Chief Justice of Pakistan was approved by President Arif Alvi on January 2. Justice Khosa’s tenure as the Chief Justice will end on December 20, this year.

What the Supreme Court held on Instigation and Abetment of Suicide

For an offence of abetment to suicide to be made out, there must be an active role played by the accused in the act of instigation or facilitation of the same, the Supreme Could held in a judgment passed on Friday.

“In order to bring a case within the purview of Section 306 IPC, there must be a case of suicide and in the commission of the said offence, the person who is said to have abetted the commission of suicide must have played an active role by an act of instigation or by doing certain act to facilitate the commission of suicide.”

While delivering its judgment in a criminal appeal, the Bench of Justices L Nageswara Rao and MR Shah clarified that an allegation of harassment under Section 306 of the Indian Penal Code (IPC) cannot be sustained without a positive action proximate to the commission of suicide.

“Conviction under Section 306 IPC is not sustainable on the allegation of harassment without there being any positive action proximate to the time of occurrence on the part of the accused, which led or compelled the person to commit suicide.”

This appeal was filed against the judgment of the High Court of Punjab & Haryana, which had upheld the conviction of the appellant, who was sentenced to five years’ rigorous imprisonment for abetment to suicide.

The Facts

The complaint was filed by the father of the deceased. The son had left behind a suicide note attributing the taking of his own life to the behaviour of his father-in-law, sister-in-law, and the appellant, his brother-in-law.

The suicide note stated that the three persons falsely alleged that the deceased had made dowry demands;  on the basis of these allegations, a Panchayat was held in the village where they lived in September 2001. The appellant, in addition to making the said allegations, also slapped the deceased at the Panchayat.

The note went on to state that the deceased received continual threats from the accused persons, who also threatened to falsely implicate his family for the offence of demanding dowry. Unable to endure the threats, the deceased took the extreme step of committing suicide, the note stated. The suicide was committed in February 2002.

The trial court convicted the appellant, his father, and his sister under Section 306 of the IPC, awarding five years’ imprisonment to the two men and a three-year term to the appellant’s sister.

Aggrieved by the judgment, the accused persons approached the High Court, which acquitted the father and the sister, but upheld the appellant’s conviction. This judgment was appealled before the Supreme Court.

The Verdict

The Supreme Court examined the scope of the provisions relating to abetment of suicide, more particularly, the definition of “instigation”. Relying on a precedent, the Court observed,

“Words uttered in a fit of anger or omission without any intention cannot be termed as instigation.”

The Court also noted that the Panchayat and the commission of suicide were five months apart, and there is no proximity between what transpired at the Panchayat and the suicide. The Court also mentioned that a sole incidence of slapping cannot be held to be a valid ground for instigation and abetment.

It was also observed that the evidence does not show that the accused instigated the deceased to commit suicide. Therefore, the appellant cannot be held guilty of abetting the suicide, the Court held.

Therefore, the appeal was allowed and the conviction of the appellant set aside.

Read the Judgment:

 

Rajesh vs State of Haryana

Delhi HC sets aside arbitration award directing DMRC to pay over Rs 2700 crore to Reliance Infra unit

The Delhi High Court has partly set aside an arbitration award directing state-owned Delhi Metro Rail Corporation (DMRC) to pay over Rs 2700 crore to a unit of Reliance Infrastructure Ltd for breach of an agreement between them.

We would, therefore…completely set aside the Award except to the extent we have upheld the conclusion of the Arbitral Tribunal on the question of waiver”, the Court has held.

The matter will be adjudicated afresh if either the DMRC or the Reliance Infratel Unit invoke and initiate arbitration proceedings on their dispute.

The judgment was pronounced by a  Division Bench of (now Supreme Court Judge) Justice Sanjiv Khanna and Justice Chander Shekhar in an appeal preferred by DMRC against an order of a Single Judge Bench upholding the said award.

In March 2018, a Single Judge Bench of Justice Sanjeev Sachdeva had dismissed DMRC’s objections under Section 34 of the Arbitration and Conciliation Act, 1996 and upheld a May 2017 arbitration award which directed DMRC to pay over Rs 2700 crore to Reliance Infrastructure’s Unit, along with interest, for breach the agreement between them for construction, operation and maintenance of the Airport Metro Express Line project.

This agreement was terminated by the Reliance Infra’s Unit, Delhi Airport Metro Express Pvt. Ltd (DAMEPL), on October 8, 2012. The company’s grievance was that DMRC failed to honour its obligation to cure defects in the civil structure of the project, which in turn severely affected the performance of DAMEPL under the agreement.

Subsequently, DAMEPL invoked Article 29.5.1 of the agreement and called upon DMRC to pay the “termination amount”.

As the dispute escalated and the conciliation attempt failed, the matter was referred to arbitration. Through its award, the tribunal directed DMRC to compensate DAMEPL for hindering its performance in the Airport Express project as per the agreement.

The said award was challenged by DMRC before the Delhi High Court, and was upheld by the Single Judge Bench. Aggrieved by the order, DMRC moved the High Court in appeal.

Setting aside the award, the Division Bench observed,

….we would hold that the impugned Award suffers from perversity, irrationality and patent illegality in the face of the Award in the form of confusion and ambivalence as to the termination notice and the date of termination.

The Court further recorded that the arbitral tribunal had “ignored and did not consider vital evidence” while deciding the question of “civil structure faults” and in holding that no effective steps to cure the defects were taken by DMRC.

Finding that the award had “shocked the conscience of the Court”, it was decreed,

Findings of the Arbitral Tribunal on “Termination for DMRC’s Event of Default” under Article 29.5 of the CA (the agreement) are set aside and quashed…In view of the above, Award of Rs.2782.33 crores to DAMEPL under Article 25.2 as termination payment under Article 29.5.2 on “DMRC Event of Default” including the finding of Rs.611.5 crores should be treated as equity in adjusted equity, is set aside and quashed.”

The Court, however, refused to interfere with the tribunal’s finding that DAMEPL’s conduct during the dispute was inconsequential and did not amount to waiver of the right to terminate the agreement.

DMRC was represented by Additional Solicitor General PS Narasimha and Senior Advocates Parag Tripathi and Ajit Kumar Sinha, along with Advocates Tarun Johri, Ankit Saini, Srinivasan Ramaswamy and Athira G Nair.

DAMEPL  was represented by Senior Advocate P Chidambaram with Advocates Rishi Agrawala, Megha Mehta Agrawal and Nishant Rao.

Read the Judgment:

 

DMRC vs DAMEPL-watermark

Subordinate Judiciary: Amicus highlights irregular fund distribution, shortage of accommodation in SC

The Supreme Court yesterday took up the suo motu case concerning vacancies and infrastructure in the subordinate judiciary. The Court was apprised of certain issues concerning the disbursal of funds to different states for the purpose of developing court infrastructure, as well as the provision of accommodation for judicial officers.

Amicus Curiae, Senior Advocate Vijay Hansaria, was assisted by Advocate Sneha Kalita in respect of the States of Madhya Pradesh, Tamil Nadu, Puducherry and Bihar, and by Advocate Avnish Pandey for Punjab, Haryana, Chandigarh and Odisha.

Hansaria apprised the Court that the states and High Courts have expedited the filling of vacancies and infrastructure activities for the subordinate judiciary only after the order passed by the Court on December 5, last year.

He also submitted to the Court that vide a policy decision dated December 15, 2012, the Central government had designed a scheme wherein the fund sharing pattern between the Centre and the States was revised from the year 2015-16 in the ratio of 60:40 for development of infrastructure facilities for the judiciary. 

Regarding disbursal of funds under the scheme, Hansaria highlighted that the Centre was not distributing the funds uniformly to all states.  For example, Bihar received Rs. 204.03 crore in the last four years, whereas Odisha did not receive any funds in the last five years.

In view of this submission, Solicitor General Tushar Mehta was called upon by the Court, and asked to personally look into the matter as to why such a difference existed, thereby affecting the administration of justice due to lack of infrastructure. Mehta assured the Court that he would look into the matter with the Amicus and take necessary action. 

Another issue highlighted by Hansaria was regarding the acute shortage of residential accommodation in the States.

While most states reimburse full rent to the judicial officers in case of non-availability of government accommodation, the states of Bihar and Odisha only reimburse 10% to 20% of basic pay towards rent. Therefore, a request was made by the Amicus to direct these states to reimburse full rent to the judicial officers. Accordingly, the Apex Court has directed the High Courts of Bihar and Orissa to do the needful.

The case is being heard by a Bench of Chief Justice of India Ranjan Gogoi and Justices L Nageswara Rao and Sanjay Kishan Kaul.

See the status report filed concerning the measures taken to fill subordinate court vacancies in Madhya Pradesh, Tamil Nadu, Puducherry, Bihar, Punjab and Haryana, Chandigarh and Odisha:

 

Status Report - Subordinate Judiciary

Read the Policy Decision dated December 15, 2012:

 

Central Government GO dt.15.12.2015- Subordinate Judiciary

Collegium declines approval for names proposed to J&K HC, Allahabad HC [Read Resolutions]

As per a resolution dated January 16, the Supreme Court Collegium has not approved the appointment of three names proposed for elevation to the Jammu & Kashmir High Court.

Further, another resolution passed the same day intimates that the Collegium has recalled its earlier proposal to elevate Advocate Amit Negi as a judge of the Allahabad High Court.

The proposal for the elevation of Amit Negi was first made by the High Court Collegium on April 11, 2016. It was then cleared by the Supreme Court Collegium twice, first on August 30, 2016 and again on November 15, 2016.

However, in June 2017, the recommendation was withheld after inputs of an FIR against him came to the Collegium’s notice.

This FIR was, however, quashed by the High Court and no appeal was preferred against it by the State of Uttar Pradesh. Subsequently, the Collegium, on August 1 2018, decided that the proposal for the elevation of Amit Negi “needs to be processed further most expeditiously”.

The file was then sent to the Law Ministry. However, the proposal was referred back by the government to the Chief Justice of India for reconsideration. Thereafter, in December 2018, the Collegium had reiterated once more that Negi ought to elevated to the Allahabad High Court Bench.

However, as per the resolution passed on Wednesday, his name was again referred back to the Chief Justice of India for reconsideration in view of certain material on record, including the observations made by the Department of Justice and other fresh inputs.

After reconsidering the Negi’s file, the Collegium has found it appropriate to recall its recommendation to elevate Advocate Negi. The resolution states,

The file referred to the Chief Justice of India along with fresh inputs has been placed before the Collegium. Having regard to all the relevant factors, and the material placed on record, the Collegium considers it appropriate to recall its recommendation for elevation of Shri Amit Negi, Advocate. The Collegium, therefore resolves to recommend that the above proposal need not be processed any further.

For the Jammu and Kashmir High Court, the three advocates in line for consideration were Wasim Sadiq Nargal, Nazir Ahmad Beig, and Showkat Ahmad Makroo. The names of Nargal and Beig had been initially approved by the Collegium on April 6, 2018. However, their names were thereafter referred back to the Chief Justice of India for reconsideration in light of “observations made in the file.”

Upon reconsideration, the Collegium has concluded that the proposed elevation of Advocate Nargal should be deferred for the present. The Department of Justice has been requested to furnish detailed information on the basis of which the proposal for his elevation was referred back for reconsideration by the Collegium.

However, the Collegium has denied to recall its earlier recommendation to elevate Advocate Ahmed Beig as a judge, “having regard to all relevant factors and material placed in the file.

As regards the elevation of Advocate Showkat Ahmad Makroo, the Collegium has remitted his name back to the Chief Justice of Jammu and Kashmir citing similarly phrased reasoning.

Read the Resolution concerning the Allahabad HC:

 

All HC - Collegium Resolution - Jan 16, 2019

Read the Resolution concerning the Jammu and Kashmir HC:

 

JK HC - Collegium resolution - Jan 16, 2019

  • January, 18th, 2019
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Supreme Collegium recommends One Advocate, One Judicial officer for elevation to Calcutta HC

senior designations

The Supreme Court Collegium has decided to recommend two names – one Advocate and one Judicial Officer – for elevation to the Calcutta High Court.

The Collegium of Calcutta High Court, in its resolution of November 30, 2017, had recommended several names that included names of Advocate Sandipan Ganguly and Manojit Mondal, who is a Judicial Officer. The Supreme Court Collegium, however, had deferred decision on Mondal’s recommendation while approving the proposal for Ganguly’s elevation in September 2018.

The proposal with respect to Ganguly, however, was withheld by the Department of Justice and was referred back to the Chief Justice of India.

After scrutinising all the material placed on record, the Supreme Court Collegium has resolved to reiterate Ganguly’s recommendation.

“Since the Collegium does not find any fresh material in the file referred back to it for reconsideration of the above proposal, the Collegium is of the considered view that Shri Sandipan Ganguly deserves to be elevated to the High Court Bench. The Collegium accordingly reiterates its recommendation dated 11th September, 2018 for appointment of Shri Sandipan Ganguly, Advocate as a Judge of the Calcutta High Court.”

As regards Mondal’s candidature, the Collegium found Mondal suitable to be elevated as a judge of the Calcutta High Court, and has resolved to recommend his name.

“Having regard to all relevant factors, the Collegium is of the considered view that Shri Manojit Mondal, Judicial Officer, is suitable for being appointed as Judge of the Calcutta High Court.”

Read the Resolution:

 

Collegium Resolution - Calcutta - Jan 16

  • January, 18th, 2019
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SC Collegium remits names of seven advocates proposed to be elevated as Judges, Punjab & Haryana High Court

Punjab Haryana High Court

The Supreme Court Collegium has remitted the names of seven advocates proposed to be appointed as judges of the Punjab & Haryana High Court.

These seven advocates are:

  1. Sukant Gupta
  2. Sanjay Vashisth
  3. Jasdeep Singh Gill
  4. Mansur Ali
  5. Sunil Kumar Singh Panwar
  6. Deepinder Singh Nalwa
  7. Harsh Bunger

The recommendation to elevate these seven advocates was made by the Collegium of the Punjab & Haryana High Court on November 24, 2017. The proposal was considered by the Supreme Court Collegium on September 4, 2018 when it was decided to defer consideration of the proposal.

After considering all relevant factors, the material on record, as well as the observations made by the Department of Justice, the Supreme Court Collegium in its meeting dated January 16 deemed it appropriate to remit the proposal for the elevation of the above-named seven advocates to the the Punjab and Haryana High Court.

For purpose of assessing merit and suitability of the above-named recommendees for elevation to the High Court, we have carefully scrutinized the material on record as well as the observations made by the Department of Justice in the file. Having regard to all relevant factors and the material on record, the Collegium is of the considered view that the proposal for elevation of S/Shri (1) Sukant Gupta, (2) Sanjay Vashisth, (3) Jasdeep Singh Gill, (4) Mansur Ali, (5) Sunil Kumar Singh Panwar, (6) Deepinder Singh Nalwa, and (7) Harsh Bunger, Advocates, deserves to be remitted to the Punjab and Haryana High Court. The Collegium resolves to recommend accordingly.”, the Collegium Resolution reads.

Read the Resolution:

 

P&H HC- Collegium Resolution Jan 16-watermark

SC Collegium recommends one judicial officer for elevation to Bombay High Court, remits another

The Supreme Court Collegium has recommended the elevation of one judicial officer to the Bombay High Court, while remitting the proposal regarding the elevation of another judicial officer to the High Court.

The High Court Collegium had recommended six judicial officers for elevation on November 28, 2017. The Supreme Court Collegium had, in September last year, decided to defer the consideration.

After perusing the complaints made against the judicial officers and the observations of the Department of Justice, the Collegium has seen it fit to elevate judicial officer PV Ganediwala as a judge of the Bombay High Court.

However, the recommendation for elevation of judicial officer SB Agrawal has been remitted to the Chief Justice of the Bombay High Court.

Read the resolution:

 

Collegium resolution Bombay HC Jan 16

Collegium defers elevation of two advocates to Delhi HC, remits two proposals

visually impaired

The Supreme Court Collegium, while considering the elevation of four advocates to the Delhi High Court, has deferred the elevation of two, and remitted proposals for elevation of the other two back to the High Court.

A total of nine advocates were recommended for elevation by the Delhi High Court Collegium on October 13, 2017. In September, the Supreme Court Collegium had deferred the proposals with respect to four advocates – Krishnendu Datta, Saurabh Kirpal, Priya Kumar, and NLSIU graduate Sanjoy Ghose.

Krishnendu Datta (left) and Saurabh Kirpal

The Collegium has now deferred the proposal for elevation of Krishnendu Datta and Saurabh Kirpal for another “2/3 weeks”.

The proposals calling for the elevation of Kumar and Ghose have been remitted to the Chief Justice of the Delhi High Court.

Read the resolution:

 

Collegium resolution Delhi HC JAn 16

Bombay HC upholds arbitration award in favour of Matrix Partners

The Bombay High Court has indicated that foreign investments in India are well protected by the courts. A single judge bench of Justice BP Colabawalla has upheld an arbitral tribunal order in favour of Matrix Partners, which required one of its investee companies to deposit Rs. 190 crore, or to provide a bank guarantee till a final order was passed.

Matrix Partners had invested a sum of Rs. 190 crore in Maharana Infrastructure and Professional Services Pvt. Ltd. (MIPS) Ltd. for 41.37% equity. As per the terms of the Shareholders Agreement (SHA), if MIPS’ Initial Public Offer (IPO) did not fructify, Matrix would be allowed to exit from its investment in MIPS at a pre-determined price.

Despite the IPO not having fructified, Matrix was not allowed to exit. At the same time, there were several other allegations against the conduct of the MIPS and others, including allegations that monies were being diverted from MIPS to another entity. These allegations were further substantiated by a forensic audit report by PricewaterhouseCoopers.

Since disputes arising from the SHA were subject to arbitration, an arbitral tribunal passed an interim order under Section 17 of the Arbitration and Conciliation Act, 1996 requiring the MIPS and other accused, to deposit a sum of Rs. 190 crore, or in the alternative, provide a bank guarantee. The tribunal further passed orders of injunction from creating third party rights or alienating any properties. MIPS challenged this order of the tribunal at the Bombay High Court.

While the appeal was pending , Matrix was able to get a chamber summons for execution of the award passed by the tribunal. This summons was also challenged before a bench of Justice BP Dharmadhikari and Justice Colabawalla. The Division Bench upheld the summons and ruled that such an order was not appealable under provisions of the Commercial Courts Act, 2015. However, this order will be subject to the final outcome of the arbitration proceedings, the Court held.

In the (present) appeal against the interim relief granted by the tribunal, since one of the allegations pertained to siphoning of funds, an important question with respect to impleading of parties to arbitration proceedings was answered. While MIPS and two others were signatories to the arbitration agreement, the entity to which the monies (and some others) were siphoned, were not signatories to the arbitration agreement. The High Court found that the arbitral tribunal was correct in granting injunctive reliefs against the parties who were not signatories to the arbitration agreement.

MIPS  further argued that the injunction granted  was excessive and that the relief at an interim stage should be limited only to the deposit of Rs. 190 crore. The Court took note of the pleadings made by Matrix and the order passed by the tribunal to rule that the relief granted was not excessive, and dismissed the appeal.

I do not think that the Tribunal was in any way unjustified in granting the injunction order against the Respondents restraining them from disposing of any of their properties. Without disclosing the value of their properties, I do not see how the Respondents can contend that the injunction granted is excessive.

Sharan Jagtiani appeared for Matrix; he was briefed by Partner Nitesh Jain of Shardul Amarchand Mangaldas. Senior Counsel SU Kamdar and Counsel Zal Andhyarujina, briefed by Jayakar and Partners, appeared for the MIPS.

Read the judgment:

 

ordjud(28)

Sabarimala: SC directs Kerala to provide security for two women who entered Temple

Sabarimala

The Supreme Court today directed the State of Kerala to provide adequate security to the two women who had entered the Sabarimala Temple on January 2.

The petitioners – Bindu A and Kanaka Durga – fearing violence from protesters, had sought round-the-clock police protection, among other prayers.

The Bench of Chief Justice of India Ranjan Gogoi and Justices L Nageswara Rao and Dinesh Maheshwari observed that ensuring the protection of these women was the state’s responsibility.

“They should be given adequate security and you’re responsible for their life and security”, CJI Gogoi said.

The Bench disposed of the petition, stating that the Court was not inclined to entertain any other prayers. At this point, counsel for the petitioners Senior Advocate Indira Jaising sought to get this petition tagged with the review petitions filed in the case.

However, the Court reiterated that the petition stands disposed of, and that it would not look into other issues raised in the petition besides the question of protection to the petitioners.

Apart from 24/7 police protection, the petitioners had sought action against protestors indulging in violence, both physical and mental, and on social media.

The other prayers included a direction from the Court to the state authorities to allow women enter the Sabarimala Temple without any hindrance. It was also prayed that the ‘purification’ rite carried out at the Temple after the entry of women be dispensed with, as it diminishes the dignity of women as human beings and violates their fundamental rights under Articles 14, 15, 17, 21 and 25.

Kanaka Durga and Bindu Ammini had entered the Sabarimala temple on January 2, triggering outrage and leading to widespread protests in the State. The committee appointed by the Kerala High Court to monitor the pilgrimage and administration of Sabarimala temple in Kerala, had in its report, stated that the two women who entered the temple on January 2 passed through a door which is not open for “ordinary devotees and other persons”.

Earlier this month, a contempt petition was filed in the Supreme Court calling into question the ‘purification process’ carried out at Sabarimala after women between the ages of 10-50 entered the Temple.

DMK challenges Economic Reservation in Madras High Court [Read Petition]

plastic ban

The Constitution (One Hundred and Third Amendment) Act, 2019 (‘Economic Reservation Act’), which introduces the 10% reservation for those belonging to economically weaker sections of society, has been challenged before the Madras High Court by the the Dravida Munnetra Kazhagam (DMK).

This is the second such challenge being faced by the Economic Reservation Act. A similar petition by the NGO Youth For Equality is currently pending before the Supreme Court.

The crux of DMK’s challenge is that introducing reservation on economic criteria alone is not permitted by the Constitution. The DMK goes on to point out that the new scheme of economic reservation was introduced while disregarding the social context in which reservation for historically oppressed communities was introduced in the first place. As stated in the petition,

The concept of reservation, being an exception to the equality clause, is only justified when it is used for the purpose of upliftment of communities which have suffered discrimination and oppression like the OBC, SCs and STs. Economic criteria alone cannot be the basis of reservation since reservation is not a poverty alleviation scheme.”

The petition goes on to elaborate,

Naturally [owing to caste-based discrimination]…over the centuries, people belonging to these ‘lower castes’ were segregated from the academic circles, were not permitted to be employed where ‘higher’ castes worked and as a result, their entire families rotted in poverty and exclusion, while the ‘upper’ castes educated and enriched themselves.

The effect of this systemic discrimination was not just economic. It was social and psychological as well. Even if one person from the ‘lower’ caste became rich, he was not permitted to enter the social circles of the ‘upper’ castes. If an ‘upper’ caste member came into contact with a ‘lower’ caste person, he had to undergo a ‘purification’ ritual. In some cases, the ‘lower’ caste person was beaten to death for ‘daring’ to touch the ‘upper’ caste person or even his property…

…a parallel nation of ‘untouchables’ was created. All the jobs and seats in educational institutions were made the sole preserve or ‘birth right’ of the ‘upper’ castes…

In this backdrop, the petition points out that caste-based reservation for historically oppressed communities was introduced by the Constitution makers in view of the fact that a vast section of Indians were subject to centuries of injustice. On the other hand, reservation was never intended to benefit persons merely on economic criteria alone.

…It has never been the intention of the framers of the constitution to make reservations based on economic status of an individual.

This aspect also finds mention in the case of Indira Sawhney v. Union of India, in which it was held that economic status cannot be the sole criterion for reservation.

It is judicially recognized that reservations are not poverty alleviation programmes but rather are more in the nature of social justice programmes to uplift communities which have not had access to education or employment and consequently do not have representation in the services of the State or in upper echelons of society. 

Therefore, essentially, the exception to the equality clause is only available to those communities which were ostracized for centuries in matters of education and employment.  Economic criteria has been however used as a filter to exclude the ‘creamy layer’ i.e. persons belong to the backward classes but who are economically advanced.

It is also pointed out that the state of Tamil Nadu in particular already has reservation amounting to 69%, due to the operation of the Tamil Nadu Backward Classes, Schedules Castes and Scheduled Tribes (Reservation of Seats in Educational Institutions and of Appointments or Posts in the Services under the State) Act, 1993. This is also recognised in Entry 257A of Schedule XI of the Constitution.

In addition to the above, a further 10% reservation for ‘Economically Weaker Sections’ (EWS) would lead to reservation in the state rising to 79%. This, in turn, would also violate the law laid down in M Nagaraj v Union of India, which caps the maximum reservation limit at 50% of the available seats or posts at a given point in time.

The absence of a precise definition to limit the number of persons belonging to the EWS category is another concern that has been flagged.

It can be seen from reports that the 1st Respondent is attempting to define economically weaker sections as those families with income of less than Rs.8 lakhs per annum.  Such a definition would encompass about 97% of the total population of the country, and  therefore, is arbitrary. 

No study has been carried out by the 1st Respondent to identify economically weaker sections in general category and there is no scientific data or analysis as to whether this reservation would indeed benefit the economically weaker sections category.  Hence, conferring such wide, unfettered and unguided discretion to the States, that too, by way of Constitution amendments, offends the basic structure, as it would lead to different States adopting different standards…”

Such economic reservation would also violate the law laid down in the cases of IR Coelho v. State of Tamil Nadu and Ashok Thakur v. Union of Indiathe petition argues.

Over and above these concerns, the DMK has also registered concern about the hurried manner in which the Economic Reservation scheme was passed in Parliament.

It is to be noted that the introduction of the Bill was not part of the agenda of the Lower House of Parliament. Hence, it is not an exaggeration to say that the Bill was foist on the Lok Sabha. It is on the records of the House that the copies of the Bill were not even furnished to the Hon’ble Members sufficiently in advance so as to enable the Hon’ble Members to go through it, have a meaningful deliberation and consult with their constituents.

The said Bill was “rushed through” the Lok Sabha and subsequently sent to the Rajya Sabha on 09.01.2019. In fact, it is pertinent to note that originally, there was no sitting of the House on the 9th of January. However, the Parliamentary session was extended by one day to enable the Rajya Sabha to pass the Bill on the same day. It can be seen from the records of the House that barely any time was allocated for discussion on the Bill by the Hon’ble Members opposing it. Even on 09.01.2019 the Business of the House doesn’t include the constitution 124th Amendment bill.

In view of these grounds, the DMK has prayed that the  Constitution (103rd) Amendment Act, 2019  be declared unconstitutional and void.

The matter was mentioned today by Senior Advocate P Wilson before a Bench of Justices S Manikumar and Subramonium Prasad. It is likely to be taken up on Monday.

The Economic Reservation Bill was passed by both Houses of Parliament within a span of two days. Three days after it was approved by the Parliament, the President accorded his assent for the same. However, even as Presidential assent was pending, the NGO Youth for Equality moved the Supreme Court challenging the legislation.

Two days after it was assented to, on January 14, the Economic Reservation Act came into force.

Read DMK’s petition:

 

EWS - DMK Petiton - Madras HC

Justices Dinesh Maheshwari, Sanjiv Khanna sworn-in as Supreme Court judges

sanjiv khanna

Justices Dinesh Maheshwari and Sanjiv Khanna have been sworn-in as judges of the Supreme Court. They were administered the oath by Chief Justice of India, Ranjan Gogoi.

Justices Maheshwari and Khanna were proposed for elevation by the Supreme Court Collegium on January 10 while the recommendations were approved and notified on January 16.

The decision of the Collegium to propose the two Judges for elevation was not free from controversy. Various people, including sitting and retired judges of the Supreme Court raised questions on the supersession of several other Senior Judges while recommending Justice Sanjiv Khanna’s name.

Former Judge of the Delhi High Court Justice Kailash Gambhir expressed his displeasure over the recommendations in a letter addressed to the President of India. Justice Sanjay Kishan Kaul also communicated his opinion against these recommendations to CJI Gogoi.

However, despite the controversy, the Central Government had acted swiftly and notified the appointments within a period of six days.

Justice Dinesh Maheshwari was the Chief Justice of Karnataka High Court before being elevated to the Supreme Court. He began his career as an Advocate in 1981 where he practiced largely in the area of Civil and Constitutional Law. Justice Maheshwari was appointed judge of the Rajasthan High Court in 2004 and was transferred to Allahabad High Court after ten years, in 2014. In 2016, Justice Maheshwari was appointed Chief Justice of the Meghalaya High Court before taking over as the Chief Justice of the Karnataka High Court in 2018.

Justice Sanjiv Khanna began his practice 1983 in the areas of taxation, arbitration, commercial and environmental matters among other things. Justice Khanna was appointed as an Additional Judge of the Delhi High Court in 2005 and was made permanent judge one year later.

With the appointment of Justices Dinesh Maheshwari and Sanjiv Khanna, the working strength of the Supreme Court now stands at 28 as against the sanctioned strength of 31.

Madras High Court on determining the validity of foreign decrees under IBC

section 122

Recently, the National Company Law Tribunal (NCLAT) had ruled that the adjudicating authority, while hearing an application under the Insolvency and Bankruptcy Code (IBC), is not required to determine the validity of a foreign decree. This stance taken by the NCLAT was upheld by the Supreme Court as well. The Commercial Division of the Madras High Court recently dealt with a petition that required it to determine the validity of such a foreign decree.

In two cases, the NCLAT held that the NCLT, while hearing an application under the IBC,  is only required to be satisfied that there is a ‘debt’ and that default has occurred. Both cases were filed by creditors who relied upon decrees passed by foreign courts, as proof of debt. The NCLAT ruled that in applications filed for commencement of the Corporate Insolvency Resolution Process (CIRP), the NCLT is not required to get into the merits of such a foreign decree, because the ‘adjudicating authority’ under the IBC does not have the powers of a Civil Court. Accordingly, the appropriate forum to determine the question of validity of a decree would be a Civil Court.

Read: NCLAT on NCLT’s power to determine legality of a foreign decree

An appeal filed against the NCLAT judgment was dismissed by the Supreme Court, which held,

We do not find any reason to interfere with the impugned order dated 29.08.2018 passed by the NCLAT“.

Based on the NCLAT ruling which found that a Civil Court would be the appropriate authority to determine the legality of a foreign decree, two (suspended) directors of Rajkumar Impex Private Limited (RIPL) filed a petition before the Madras High Court seeking to challenge the legality of the foreign decree, the basis on which RIPL was admitted into CIRP. RIPL was admitted into the CIRP as the guarantor that defaulted for its subsidiary based in Ghana. Stanbic Bank, the creditor that triggered the CIRP, did so on the basis of a decree obtained in a UK Court. There were two broad questions which the High Court had to answer in this case:

1. Whether NCLT would be the appropriate forum for determining legality of a foreign decree and;

2. Who is the appropriate person for instituting proceedings for determination of the foreign decree.

On the point of the correct forum for determining the issue at hand, the High Court applied the doctrine of merger to rule that the order of the NCLAT has merged with that of the Supreme Court. It observed that when the NCLAT ruled against NCLT’s power to determine the legality of a foreign decree, and when the Supreme Court refused to interfere with the NCLAT order, both the orders were merged and the Supreme Court’s order on the subject would be binding. Accordingly, a Civil Court would be the appropriate forum for determining the legality of a foreign decree.

Read also: Can you proceed against the Corporate Guarantor before proceeding against the Corporate DebtorNCLAT answers in this Judgment

On the second point, the petitioners claimed that this was a derivative action brought by them, in the interest of the corporate debtor. The derivative claim argument was made to avoid Section 14(1)(a) of the IBC, which prevents institution of suits against the corporate debtor while under CIRP. The Bench, however, noted the Foss v. Harbottle principle, where it was held that the company is the right person to sue if any wrong is done to it.

The principle has three basic exceptions:

a) when an act is ultra vires the company or it is illegal;

b) when an act constitutes a flaw against the minority and the wrongdoers themselves are in control of the company; or

c) when a resolution that requires to be passed by a qualified majority, has been passed by a simple majority.

The Bench noted that in the instant case, both plaintiffs collectively held the entire shareholding of the corporate debtor, and thus this could not be treated as derivate action.

Based on a reading of Section 25 of the IBC, the High Court further found that the appropriate person to take any action in the present situation would be the Resolution Professional (RP) of RIPL. However, the RP argued that it did not have locus to bring about such an action.

The Bench then went into the legislative intent behind inclusion of this provision, and found that the RP should be allowed to proceed against any party to protect the corporate debtor. It, however, left this question open for the NCLT to decide,

“ this Commercial Division deems it appropriate to leave it open to the corporate debtor to assail the stand of the RP that she does not have the locus standi, authority or power to challenge or initiate proceedings before a Court. This can be done by the corporate debtor by taking resort to Section 60(5) of the IBC ”.

Senior Advocate Arvindh Pandian, briefed by S Aravindan of Fox Mandal & Associates, appeared on behalf of two plaintiffs. Anirudh Krishnan appeared for Ghana-based Stanic Bank, while Venkatavaradhan appeared for the RP.

Read Judgment

 

Mrs.Jai Rajkumar vs Stanic Bank

Calcutta HC stalls Senior Designations pending challenge to HC Guidelines [Read Order]

senior designations

The Calcutta High Court has “very strongly” requested the committee for designation of Senior Advocates to refrain from making any further Senior designations till a petition challenging the Constitutionality of the High Court guidelines for conferment of Senior gown is decided.

A Bench of Justices IP Mukerji and Amrita Sinha passed this order after an advocate, Debasish Roy challenged the Calcutta High Court’s Senior designation process as being unconstitutional, violative of the Advocates Act, 1961 and contrary to the judgment in Indira Jaising v. Supreme Court of India & Ors as well as the Supreme Court Guidelines to Regulate Conferment of Designation of Senior Advocates, 2018.

As  directed in the order passed on Wednesday,

… the committee for designation of senior advocates is very strongly requested by this court not to take any further steps in making any further recommendation of names for designation as senior advocates.

…This order will continue till the judgment is pronounced of this court.

Following the Indira Jaising judgment in October 2017, which called for the framing of guidelines to ensure a more objective and transparent system for designating Senior Advocates, the Calcutta High Court had notified new guidelines for Senior designations on July 12, 2018.

However, as per Roy, these guidelines are arbitrary, vague and violative of Article 14 and Article 21 of the Constitution.  Inter alia, the petitioner has raised objection with respect to the following:

  • The guidelines only allow advocates having regular practice before the Calcutta High Court to apply for Senior designation, effectively excluding trial court advocates who are otherwise qualified for being designated as Senior Advocates. No such embargo is contemplated in the Advocates Act or the Indira Jaising judgement. Such discrimination is unconstitutional, argues the petitioner.
  • Applicant advocates are required to disclose their income while applying for the gown. However, the Indira Jaising judgment had done away with the income criterion when it comes to conferring Senior designations. Further, no such criterion is contemplated in the Advocates Act.
  • The Calcutta High Court guidelines restrict the classes of persons who are defined as ‘stakeholders’ eligible to send in their views on whether the applicant advocates ought to be appointed.
  • When it comes to giving weightage to the pro bono services rendered by an advocate applicant, the guidelines only recognise pro bono services rendered by those empanelled with the State Legal Services. Thereby, pro bono work rendered otherwise by advocates who are not empanelled with the State Legal Services are discounted.
  • Ordinarily, applicant advocates are required to obtain at least 60 points out of a possible 100 to qualify for Senior designations. The Calcutta High Court guidelines, however, confer Senior Designation Committee the discretion to relax this threshold by 10 percent for “deserving candidates”. However, in the absence of any definition as to who a “deserving candidate” is, there is scope for favouritism and arbitrariness when it comes to relaxation of marks, the petitioner argues.

On July 25, 2018, another notification was published inviting applications from those interested in being conferred with Senior gown. By the said notification, applicant advocates were given a week to apply for Senior designation. The pace at which the process was carried out has also been objected to by the petitioner as being unduly hasty.

It seems that the process of designating Senior Advocates by the Hon’ble High Court at Calcutta is being speedily concluded and in purported accordance with the Calcutta High Court guidelines, which are evidently opaque, arbitrary and detrimental to the proper and transparent functioning of the legal profession.

The petitioner had also made RTI applications to discern whether advocates who were related to judges or Senior Advocates were given an advantage in the Senior designation process. Further, a letter was addressed to the Calcutta High Court Chief Justice, raising the above concerns.

When these representations failed to yield any constructive response, Roy moved the Supreme Court. The Supreme Court, however, directed that Roy approach the High Court with his petition.

The Calcutta High Court in turn has concluded that there are serious questions raised in the petition which require consideration. Therefore, it opined that the Senior designation process ought to be halted until a judgment on the issue is pronounced.

During the pendency of the matter, the High Court was also informed that at least three candidates had been recommended by the Senior Designations Committee for appointment as Senior Advocates, subject to Full Court approval.  However, since the High Court has now taken up the main challenge to the Senior designation process itself, it has also directed that this process be stalled for the present. Accordingly, its order states,

Furthermore, the Registry/Secretariat of this Court is directed not to take any steps for placing the 3 names recommended by the committee for being designated as senior advocates with the Hon’ble the Acting Chief Justice for obtaining approval in a Full Court.

Read the Order dated January 16, 2019:

Jan 16, 2019 - Calcutta HC order

Read the Petition:

Cal HC - Debasish Roy - Senior Designation Guidelines Petition

The B&B Causelist #31: Cases we track today

causelist

A summary of important cases from the causelist of the Supreme Court of India, the Delhi High Court and the Madras High Court.

The causelist will be updated in the evening to reflect the developments in court today.

SUPREME COURT OF INDIA

  • Bindu A And Anr vs The State of Kerala

Item no 48 in Court No. 1 - WP (C) No. 66/2019

Bench: CJI Ranjan Gogoi, L Nageswara . . .

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NCLAT upholds insolvency proceedings against Alok Industries subsidiary

NCLAT

The Mumbai Bench of NCLT had admitted insolvency proceedings against Alok Infrastructure, a subsidiary of Alok Industries, while Corporate Insolvency Resolution Process (CIRP) against Alok Industries is still underway. In an appeal filed against the said order, the NCLAT has upheld the admission order passed by the NCLT.

CIRP was initiated against Alok Infrastructure in October 2018, while its parent company Alok Industries has been under CIRP since July 2017. Alok Industries happens to be one of the dozen companies referred for insolvency by the Reserve Bank of India in June 2017. Alok Industries by itself has had an eventful CIRP. While it was due to be liquidated for not having secured 75% votes, the IBC Ordinance 2018 lowered the voting threshold to 66%, and after being given a second chance, the resolution plan was approved.

The admission proceedings against Alok Infrastructure were challenged on the grounds that since CIRP for its parent company has not yet been completed, admission against the subsidiary is not allowed under the IBC. In the proceedings before the NCLT, Alok Infrastructure relied on Section 60(5) of the IBC according to which, “any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India” will vest with the NCLT.  While proceedings against the parent are pending before the Ahmedabad Bench, admission against the subsidiary was passed by the Mumbai Bench.

Alok Infrastructure, therefore, further argued before the NCLT that 1) only Ahmedabad Bench would have the jurisdiction to determine any claim against itself and; 2) an admission order cannot be passed against the subsidiary of a parent that is under CIRP, in view of Section 60(5) of the IBC. The Mumbai Bench, however, noted Section 60(1) of the IBC to rule it has territorial jurisdiction to entertain the application against Alok Infrastructure and initiated CIRP against it.

On hearing the same arguments in an appeal filed by the director of Alok Infrastructure, the NCLAT held,

” Such submission cannot be accepted as a separate Corporate Insolvency Resolution Process has been initiated against another Corporate Debtor which is separate from the Corporate Insolvency Resolution Process initiated against ‘Alok Infrastructure Ltd.’, of which the Appellant is the Director “

Both, the NCLT and NCLAT have ruled that since the subsidiary is an entity distinct from its parent, the moratorium provisions under IBC will not apply to the subsidiary and it can be proceeded against separately.

Trilegal team, comprising of Padmaja Kaul, Yugank Goel and Aishwarya Choudhary along Krishnendu Datta, had represented Alok Infrastructure.

(Read NCLAT judgment)

Order dated 16 January 2019

My elevation to Supreme Court has come as a big surprise, Justice Sanjiv Khanna

sanjiv khanna

“It (elevation as a Supreme Court Judge) has come as a big surprise and I am still dazed”, said Justice Sanjiv Khanna of Delhi High Court, who is set to take oath as a Supreme Court judge tomorrow.

He was speaking at a Full Court Reference held in Delhi High Court today, to bid him farewell. The ceremony was attended by Judges of the High Court, Senior members of the Bar, Justice Khanna’s family and several others.

The last time the High Court witnessed such a jam-packed gathering was when it bid farewell to the then Acting Chief Justice of the High Court, Justice Gita Mittal.

Delhi High Court is my karma bhoomi, Justice Gita Mittal bids farewell

Sharing the “principle of his life”, Justice Khanna said that he always avoided “fault finding” and remained positive throughout his life.

One must compete with oneself, and not one’s colleagues, he remarked while he acknowledged that “there is always some room for improvement”.

Justice Khanna who started his legal career as a lawyer, also recollected his days at the Bar.

In the cradle of the Bar, I found my family”, he stated.

He also confessed that his name was re-considered several times before he was finally appointed as an Additional Judge of the Delhi High Court in 2005, but he has “no regrets”.

As a judge, Khanna said, his philosophy is to be a “keeper of law” and not create law.

Enthusiasm is not a virtue of a Judge.”, he said.

Fair, impartial justice” requires a Judge to resolve a dispute sans bias, prejudice or outside influence, keeping in mind the facts of the case, Justice Khanna explained.

Justice Khanna also took the opportunity to speak on the three problems in the legal system – delay in disposal of cases, high cost of litigation and the impression that without “falsehood” a case cannot be won.

In the end, Justice Khanna confessed,

Sometime it is frightful and defenseless to be a judge.”

He concluded his address by reciting an excerpt from one of Robert Frost’s most popular works, which he stated Pt. Jawaharlal Nehru kept next to his pillow.

The woods are lovely, dark and deep, But I have promises to keep,

And miles to go before I sleep, And miles to go before I sleep.

The welcome address was given by Chief Justice of the High Court, Justice Rajendra Menon who extended his “warmest congratulations” to Justice Khanna on his elevation.

Justice Khanna is hardworking, sincere in all endeavors and a gentleman par excellence, Justice Menon stated as he remarked that Justice Khanna and Justice S Ravindra Bhat were his pillars of strength.

Referring to Justice Khanna as a “tax guru”, Additional Solicitor General Maninder Acharya stated in her address that Justice Khanna would be best remembered for his “command over taxation and contribution to the evolution of tax law”.

Standing Counsel for Delhi Government, Rahul Mehra hoped that Justice Khanna would carry forward the legacy of his uncle, Justice HR Khanna. Chairperson of Bar Council of Delhi, KC Mittal said that it was a moment of pride that a judge from the Delhi High Court will become the Chief Justice of India for the third time.

Mittal also spoke on the “feeling that senior judges should have been given their due”. Stating that the Collegium system should be transparent, accountable and objective, Mittal said that it is high time to streamline the system to obviate any kind of grievance or discomfort.

President of the Delhi High Court Bar Association, Kirti Uppal lightened the mood of the gathering as he exclaimed that Justice Khanna reminded him of cricketer Rahul Dravid.

Consistent, never showed any emotions!”, Uppal said.

He further remarked that the word “prejudice” was not in Justice Khanna’s dictionary.

Pursuant to a Collegium Resolution passed on January 10, Justice Khanna was appointed Supreme Court Judge by the Centre on January 16.  Since there were strong indications that the Collegium had decided on December 12 last year to elevate Justices Rajendra Menon and Pradeep Nandrajog to the Supreme Court, Justice Khanna’s elevation resulted in a huge controversy with several former Judges questioning the reasons behind the supersession.

  • January, 17th, 2019
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PIL in Punjab & Haryana HC seeks uniform guidelines for Magistrate’s exercise of Section 156(3) CrPC powers, PIL in Punjab & Haryana HC

section 156(3)

A Public Interest Litigation (PIL) petition has been filed in the Punjab and Haryana High Court calling for the issuance of uniform guidelines to be followed by Magistrates before ordering police investigation under Section 156(3) of the Code of Criminal Procedure (CrPC).

The PIL filed by advocate, Kanika Ahuja, submits that in the absence of any uniform procedure, the discretion conferred on the Magistrate when it comes to ordering investigation under Section 156(3) is being exercised without any judicial application of mind.

An application under Section 156(3) may be moved before the concerned Magistrate when the Police refuses to register an FIR under Section 154, CrPC. In such a scenario, the jurisdictional Magistrate is empowered to direct the police to register the FIR and initiate investigation.

However, Courts have warned against using this discretionary power without any application of mind in various cases including Priyanka Srivastava & Anr v State of Uttar Pradesh, Suresh Chand Jain v State of Madhya Pradesh, Madhao v State of Maharashtra and Mohd. Salim v State.

All the same, the petition points out that in the absence of any uniform procedure in applying Section 156(3), it may not be possible to guard against a Magistrate invoking the provision without applying his judicial mind.

This is particularly so given that at the stage of hearing a Section 156(3) application, the Magistrate does not hear both parties to the case. Since only the applicant will be heard at this stage, there is also the possibility that the Magistrate may be misled by the applicant/complainant by suppressing or distorting material facts. As stated in the petition,

Thus in this scenario where only the applicant/complainant has to be heard and further there is no such procedure prescribed by the Code as to how the Magistrate will come to the conclusion after application of mind,there can be situations where the power under 156(3) of the Code will be misused resulting into unnecessary harassment to a party whose liberty and property may be put to peril and jeopardy for nothing.

Apart from unnecessary harassment to persons against whom the Section 156(3) application may be frivolously moved, the petitioner also points out that when a Magistrate exercises this power, it also curbs certain discretionary powers otherwise vested with the police.

… once the Magistrate orders an investigation u/s 156 (3) Cr.P.C., the Police Officer is bound to investigate the matter and there is no question of his deciding not to investigate. Hence, by an order of the Magistrate under 156 (3), the discretion given to the Police Officer under section 157 (1) (b) of the Code is taken away. Thus it becomes very important for the Magistrate to apply his mind to the alegations made….

…if every complaint/application filed is referred to the police under 156(3) without application of mind about the disclosure of an offence, there is every likelihood of unscrupulous complaints being filed in order to harass the alleged accused named by them in their complaint making bald allegations just to see that the alleged accused are harassed by the police who have no other option but to investigate as ordered by the magistrate.

In view of these concerns, the petitioner has proposed that it be made mandatory for the concerned Station House Officer (SHO) to submit an Action Taken Report before the Magistrate when an application under Section 156(3) is moved.

“… in order to facilitate the Magistrate for proper application of mind in order to finally decide the application under156(3), it must be made a mandatory procedure that before exercising its discretion, the Status Report in the form of an Action Taken Report must be called from the concerned police station/S.H.O. to ascertain whether the applicant/complainant had actually availed the remedy under 154 (1) and 154(3) of Cr.P.C. and as to what action had been taken thereupon by the SHO or concerned Senior Officer in that regard.

This could serve to inform the Magistrate if the police has acted on the complaint made or whether they have shirked their duties in refusing to register an FIR.

Accordingly, the Magistrate may be informed whether it is appropriate that he pass an order directing police investigation under Section 156(3). Similar directions have already been passed earlier by the Delhi High Court in the 2010 case of Subhkaran Laharku & Another v State And Anr.

The petition goes on to note,

“…calling [for] the Status Report in the form of an Action Taken Report from the concerned Police Station/S.H.O. before exercising the discretionary power and passing any final order u/s156(3) Cr.P.C. qua directing the police for registration of FIR, will not only facilitate the Magistrate but will also bring some sort of transparency and light to the facts stated by the applicant/complainant.

The plea came up before a Bench presided by Chief Justice Krishna Murari yesterday. After hearing initial arguments made by advocate Kirti Ahuja on behalf of the petitioner, Chief Justice Murari posted the matter before another Bench considering the fact that the High Court is a respondent in the case.

Read the PIL:

PIL - Section 156 guidelines - Punjab and Haryana HC

RERA 2018: A Work in Progress

Amit H Wadhwani

As far as the real estate sector is concerned, the year 2018 will go down in history as the year that almost brought the sector to a standstill with minimal sales and financial assistance caused majorly by to the so-called four tsunamis viz. demonetization, RERA, GST and IBC.

Home buyers no more seem interested in under construction flats due to the uncertainties surrounding these laws, and prefer ready to move in flats, thereby leaving the promoters with no option but to rely on project finance for competing their projects.

As far as the Real Estate (Regulation and Development) Act [RERA] is concerned, 2018 will be looked upon as the year that brought about major reforms in the real estate sector, marked a significant rise in consolidation, weeded out inefficiencies, and changed the manner in which a promoter goes about developing its real estate projects.

Since the implementation of RERA in its entirety on May 1, 2017, the journey for real estate promoters has by no means been smooth, to say the least. Many fly-by-night promoters have looked for consolidation. Investors and lenders have withdrawn their financial assistance to promoters until they feel confident that the promoter is capable of being RERA compliant and possesses the vision and determination to complete the project within the time period declared under RERA.

Expect a series of writs: Avikshit Moral on the RERA Act, 2016

Considering the historical manner in which a real estate project is being administered and developed, it was an uphill task for the promoters to change their strategies and methods of operation and development of a real estate project under RERA regime. The promoters had, in fact, started looking at business under the RERA regime as a normal course of life and the sector had even shown signs of revival around August 2018.

Amidst these sentiments, in came another tsunami – the Non-Banking Financial Company (NBFC) liquidity crunch in October 2018, which further derailed the revival process. The representatives from NBFCs and housing finance companies have even met the Prime Minister and given suggestions on how to revive the sector.

Presently, the general public sentiment is that the sector is still reeling under the shadow of uncertainty; the days are numbered for real estate developers who have underperformed.

However, all stakeholders – buyers, promoters, investors and lenders – have a common belief amongst themselves that sooner or later, the sector will revive and be regulated as never before, buyers will have faith in the accountability and transparency of a promoter or his project, and promoters will receive optimal co-operation and assistance from financial institutions. It is also believed that government authorities will soon implement the single window clearance mechanism for issuing development permissions and approvals.

To achieve the above, the only major driver is RERA. Though these are early days, RERA will soon have to accelerate its performance and achieve success similar to its peers in other sectors It is hope that the way authorities like SEBI, CCI, IRDAI and TRAI have brought success and regulated their respective sectors, RERA will also follow suit and revive the sector on which the economy of the country is dependent the most.

This article highlights certain issues/embargoes faced by the stakeholders under RERA. These issues may be addressed by May 1, 2019. According to Section 91 of the Act,

“If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty. Provided that no order shall be made under this section after the expiry of two years from the date of the commencement of this Act.

It is imperative to note that Section 91 of the Act was notified on May 1, 2016 and the entire Act came into force a year later. The confusion here is whether Section 91 is time-barred and two years have expired as of May 1, 2018, or the provision continues to be valid until May 1, 2019.

Below are some of the issues surrounding the Act.

Ongoing Projects

As per the Act, ongoing projects are projects that are ongoing on the date of commencement of the Act and for which completion certificate has not been issued. The Act has merely defined an ongoing project to this extent and provided three months to all such ongoing projects to register their projects with the Real Estate Regulatory Authority (the Regulatory Authority) from the date of commencement of the Act.

The State rules prescribed under RERA gives another chance to a promoter to mention a proposed date of completion of the project.

The promoters had no option but to assess the present situation of their ongoing projects and register their projects with a proposed date of completion. One cannot deny that certain ongoing projects have genuinely been delayed due to certain vested interests. However, one also needs to bear in mind that there are certain ongoing projects which are held up due to various external factors which are not beyond the reasonable control of the promoters.

The following are certain external factors as a result of which certain ongoing projects may not have seen the light of the day:

  • Implementation of ease of doing business and a single window clearance mechanism for all project related approvals is still ongoing and it may take some more time to achieve this feat which will be a major booster for all the real estate projects thereby saving cost and time. There are about 100 or more development permissions and approvals a promoter has to obtain across 20 or more departments/planning authorities. A single window clearance is long desired, and will expedite and fast track the development of projects.
  • Change from the UPA Government to NDA Government after the General Elections in 2014 had further derailed the progress of ongoing projects as there were various portfolio changes within the statutory authorities, as a result of which the approvals were delayed.
  • In Maharashtra, the development control regulation and the development plans have been time and again revised and/or modified since the last 3-4 years, thereby leaving the promoters and even the municipal authorities confused as to selection of a prudent policy or scheme for the projects.
  • From November 2016 till date, there has been a tug of war between the Union Ministry of Environment and Forest and NGT on increasing the construction limit and empowering the municipal authorities to issue environmental clearances. The promoter of a real estate project is a major sufferer in the midst of this bureaucratic tussle.

Between all these complications and hurdles being faced by the promoters, in came RERA, or more particularly, Section 18 of the Act. Section 18 of the Act states that in case a promoter delays in handing over possession of an apartment, the allottee shall be entitled to either:

(i) withdraw from the project and seek refund of his amount invested together with interest as may be prescribed, or

(ii) to continue in the project and claim interest for every month of delay till possession of the apartment is handed over.

One would desire clarity on whether in case of ongoing projects, this section would be applicable from the date of the proposed date of completion of the ongoing project declared by the promoter before the Regulatory Authority.

Instead, this section came to be applied retrospectively, as a result of which many errant home buyers preferred complaints under Section 18, thereby burdening the promoter further to arrange for refund of booking amounts/advances to such allottees. Section 18 should have rather provided an opportunity or a last chance to the promoter to complete the ongoing project within the declared proposed date of completion, and thereafter, in case of further delays, complaints under Section 18 should have been entertained.

On the other hand, Section 18 became an easy tool even for those allottees who had a change of mind and wanted to voluntarily withdraw from the project and claim refund of their booking amount and also earn interest on such amounts. While contesting these complaints before the Regulatory Authorities, the promoters, whether rightly or wrongly, cited the above external factors which delayed their projects to some extent. However, the Regulatory Authorities put the onus on the promoters and termed such delays due to external factors as a “business risks” which a promoter should have ordinarily foreseen before committing a time line to its allottees for completion of the project.

One does agree with the Regulatory Authorities decisions to term such reasons for delay as a business risk which a promoter should have foreseen, but at the same time, one must also be mindful of the fact that promoters are also humans. If these reasons for delay due to external factors arrive one after the other at the same time, then you cannot reasonably expect a promoter to foresee these events coming all together and derailing the entire development of the project at one go.

Real Estate Appellate Authority

 The Appellate Authorities in several States are not yet fully functional, thereby denying speedy disposal of appeals filed by the allottees or promoters against the order of the Regulatory Authorities.

 70% Separate Account – Lenders

Under the Act, a promoter is required to deposit 70% of the amounts received from the allottees in a separate account which is to be maintained with a scheduled bank. Withdrawals of the receivables from this account are regulated and amounts can be withdrawn in proportion to completion of construction of the project after producing certificates from Chartered Accountants, Structural Engineers and Architects.

In case of project finance, a promoter receives the cost of its project upfront from the lenders and the lenders direct the promoter to deposit the amounts withdrawn from the 70% separate account into a designated escrow account maintained on behalf of the lender for securing the repayment of the finance advanced by the lender. In such an event, although the 70% separate account is a no lien account, lenders prefer to direct the promoter to open and maintain such 70% account in the banks suggested by the lenders as the same may enable the lender to keep a close watch on the account.

Now, there are instances where a promoter has availed more than one project finance for the same project and has mortgaged certain additional units/wings/towers of the project in favour of such other lenders. In such cases, even such other lenders would prefer to have the 70% separate account in a bank of their choice. However, there is already a 70% separate account being maintained with the bank of the first lender.

The question that arises here is whether a promoter can open two or more separate 70% accounts as per the choice of the lenders and the 70% received from the respective units/wings/towers mortgaged with such lenders will be deposited in the respective 70% separate account in order to secure the interest of each lender and administer such accounts. The Act or the State rules are silent on this aspect and it would be interesting to see whether such a mechanism can be possible in future.

Society – Whether a Promoter or an Allottee

In case of redevelopment of a property belonging to a Society wherein the members of the Society are entitled to receive new flats/units in the new building free of cost, the position is still unclear on whether the Society and its members will be treated as promoters along with the developer who is actually undertaking development of the property or whether they will be treated as allottee. The definition of ‘Allottee’ under the Act does not cover members of a Society. Hence such members may not be able to file their complaints before the Regulatory Authority for any delays committed by the developer in constructing and handing over the Society component to the members.

Forum Shopping

Last but not least, at present, complaints against promoters are being taken up before three different forums viz. RERA, NCLT and the Consumer Forum, as a result of which a promoter has to face multiple litigation on the same issue. Instead, a complaint should first be filed before Regulatory Authority, thereby reducing the backlog of the Consumer Forum. If the Authority fails to resolve the complaint, then the dispute may be referred to NCLT for adjudication. Recently, even NAREDCO has suggested to the Union Ministry of Housing and Urban Affairs to maintain uniformity in the implementation of this provision across the country.

Amit H Wadhwani is a practicing Advocate and a Legal Counsel to Radius Developers.

Justice Lingappa Narayana Swamy appointed Acting Chief Justice of Karnataka High Court [Read Notification]

lingappa narayana swamy

Justice Lingappa Narayana Swamy has been appointed Acting Chief Justice of the Karnataka High Court following the elevation of the incumbent Chief Justice Dinesh Maheshwari to the Supreme Court.

In the notification issued today, the President of India Ram Nath Kovind has given his assent under Article 223 of the Constitution of India to appoint Swamy J as the Acting Chief Justice of the Karnataka High Court.

Justice L Narayana Swamy

Justice Lingappa Narayana Swamy is the senior most Judge of the Karnataka High Court. He began his career as an Advocate in 1987 and practiced in the Karnataka High Court. He worked as a Government Pleader for four years between 1995 and 1999. Justice Narayana Swamy was appointed as an Additional Judge of the Karnataka High Court in 2007 and was made a permanent judge in 2009.

Read the notification:

Acting CJ of Karnataka HC notification

Manish Choudhury appointed Additional Judge of Gauhati High Court [Read Notification]

manish choudhury

The Central government has notified the appointment of advocate Manish Choudhury as Additional judge of Gauhati High Court.

Choudhury’s name was first recommended by the Chief Justice of the High Court in May 2017 and was considered by the Supreme Court Collegium in April 2018. However, at that point, the Collegium has decided to defer the proposal stating that having regard to the material on record, his elevation can wait.

Subsequently, the Collegium had found Choudhury suitable for elevation after carefully scrutinizing the material placed before it by the Department of Justice.

Hence, through a resolution dated December 4, the Supreme Court Collegium had decided to recommend Choudhury’s name for elevation as a judge of the Gauhati High Court.

Read the Notification below.

Manish Choudhury notification

The recent Collegium decision and how it affects the future of the Judiciary

arun mishra

Amit George

At a jam-packed farewell for Justice Kurian Joseph at the Supreme Court lawns in November of last year, Chief Justice of India Ranjan Gogoi spoke eloquently on a wide range of issues. What was most notable was perhaps his expression of dismay at the perceived inability of the higher judiciary to attract bright young minds to its fold, resulting in a serious crisis of institutional continuity as an increasing number of remarkable judges retired and demitted office. He said,

 “[g]ood judges are going away. We need replacements…I am afraid. I am apprehensive. The younger lot in the bar are not willing to become judges.”

The Chief Justice would attribute this unwillingness to the higher judiciary losing its aura and majesty’.

Bar also has to maintain independence, not just the Judiciary, Justice Madan Lokur bids farewell

Less than a month later, the Chief Justice would preside over yet another farewell; this time for Justice Madan B Lokur. As the Supreme Court lost yet another respected judge, the importance of finding replacements – both in the short term and for the wider future – grew even more pronounced. However, as the recent controversial developments immediately following the retirement of Justice Lokur have demonstrated, this unwillingness and reluctance on the part of many to join the higher judiciary is very much a result of a flawed system of finding ‘replacements’; more so than esoteric and conveniently arms-length formulations of a fall in ‘aura and majesty’.

Context and Conceptual Clarification

First, for some context. There is no point in repeating in detail the developments that have been the subject matter of frenzied debate in the past few days. Pithily put, the Supreme Court Collegium, consisting of Justices Ranjan Gogoi, Madan B Lokur, AK Sikri, NV Ramana and SA Bobde met in the last week of December, 2018 and apparently approved the names of Justice Rajendra Menon, currently Chief Justice of the High Court of Delhi, and Justice Pradeep Nandrajog, currently Chief Justice of the Rajasthan High Court, for elevation to the Supreme Court of India.

However, before this decision was formally announced, Justice Lokur retired from the Supreme Court. Upon his retirement, the Collegium stood reconstituted, with Justice Arun Mishra becoming a part thereof. This reconstituted Collegium met in the second week of January 2019 and proceeded to discard the decisions taken just a week prior thereto. The reconstituted Collegium decided, as reflected in the Collegium recommendation dated 10.01.2019, to recommend Justice Dinesh Maheshwari, currently Chief Justice of the Karnataka High Court, and Justice Sanjiv Khanna, a senior Judge of the High Court of Delhi, for elevation to the Supreme Court, superseding various other judges.

Now, a conceptual clarification to add to the context. It may be clarified, at the outset, that an out-of-turn elevation to the Supreme Court, or a supersession of more senior judges, is neither inherently condemnable nor representative of something being necessarily amiss. There is enough precedent, including in the recent case of the elevation of Justice KM Joseph, where judges who were comparatively junior in the all-India hierarchy have been elevated to the Supreme Court superseding those senior to them.

A supersession might, in the appropriate context, be a validation of outstanding merit as opposed to relatively mechanically construed seniority or as an instrument to avoid the elevation of someone perceived as unsuitable. However, a supersession is still a significant departure from the general norm as recognized in the Second Judges’ Case, as also entailing an element of stigma for those so superseded, and therefore there is a fundamental requirement to ensure that such a decision originates in, is deliberated upon in, and is operationalized in, a fair, considered and transparent manner.

When Justice HR Khanna was superseded during the Emergency days, what was most galling about the decision was the background and manner in which it was engineered and the obvious reason that was behind it. Therefore, the process by which any such decision is arrived at, particularly one of supersession, is required to be free of any suspicion, de-hors the merit of the candidate in question.

This last caveat is important inasmuch as Justice Sanjiv Khanna has had an unblemished career as a judge in the Delhi High Court and his independence and integrity are unquestioned. At the risk of summarizing a long judicial career by reference to a single judgment, a recent decision of Justice Sanjiv Khanna, while heading a Division Bench of the High Court of Delhi, wherein he set aside the Election Commission’s singularly unsustainable order disqualifying several Aam Aadmi Party MLA’s without following due process, comes to mind.

The Problem with the Collegium recommendation

Considerations of individual merit aside, the recent decision of the Collegium is shrouded in secrecy and intrigue. As the facts would demonstrate, within a space of one week, there has been an abrupt shift in consensus with wide-ranging effect. As to the reason for this drastic change, what is offered as an explanation is the pith elaboration that it was on the basis of having taken “a fresh look” in the light of the purported “additional material that became available”.

While such an explanation is not only cryptic, it further raises the problematic aspect of the source and contents of this apparently rushed information which came to light in the brief period of a few days. Yet further, as any lawyer practicing on the writ-side before a High Court would know, if any administrative authority were to base its decision, no matter how minor, on an alleged unspecified input sans any other reasoning, the High Court would immediately strike down the same, or at the least demand production of the relevant material upon which such an administrative decision was based.

What further rankles is that the four individual judges, common to the original and re-constituted Collegium, who apparently agreed on an original consensus, just a few days later seemed to discard that consensus for totally unspecified reasons.

In Justice Khehar’s majority opinion in the NJAC case, it was held that the eventual recommendation made by the Chief Justice of India is based on the ‘collective wisdom’ of a Collegium of judges.

As reflected in the majority opinion of Justice JS Khehar in the NJAC Case, the eventual recommendation made by the Chief Justice of India is based on the ‘collective wisdom’ of a Collegium of judges. In the same way, the Collegium, as a whole, is representative of, and required to reflect, the collective wisdom of the institution of the Supreme Court as a whole. In fact, the very composition of the Collegium being based purely on the seniority of the judges concerned within Supreme Court demonstrates that it is intended to reflect the collective wisdom and experience of the institution as a whole, and is not intended to serve as a fiefdom of the individuals that constitute it. Considered in the aforesaid light, the Collegium recommendation dated 10.01.2019 falls woefully short.

A Question of (In)Justice

This brings us to the question of justice, and the difficulty with convincing bright young minds to join the higher judiciary. For any successful lawyer, an offer of judgeship marks a fork in the road. It’s an agonizing decision for most, and one that is not made lightly. When a young lawyer decides to accept judgeship, he or she does it with the hope, if not a conviction, that in a long career ahead while dispensing justice he or she would not be personally subjected to injustice of any kind.

As a lawyer, or as any other normal citizen, an individual is free to ventilate his or her views and opinions, and to seek redress for any grievance or injustice that befalls him or her. When one becomes a judge, the avenues for expression as also redressal of instances of personal injustice are significantly curtailed. Just as judges are known to speak only through their judgments, any injustice or slight suffered by a sitting judge is expected to be resolved by the person concerned within the administrative hierarchy of the judiciary. The only other option is resignation; either to one’s fate or from judgeship itself.

To situate this reality in the present context, if we consider the cases of the judges who were apparently in consideration for elevation to the Supreme Court prior to the latest Collegium recommendation viz. Justice Pradeep Nandrajog, Justice Rajendra Menon, Justice Gita Mittal and Justice S Ravindra Bhat (with the latter three being first-generation lawyers), after several years of hard work and toil, and the emotional and physical toll that it has inflicted upon them, they are now being superseded through a process that is extremely problematic, and on the basis of reasoning which can be described as middling, at best, and practically non-existent, at the worst.

Justice Gita Mittal, one of the judges who have been superseded by Khanna J

One wonders whether any of these judges would have consented to joining the Bench if they had foreseen the turn of events in the present day. This is not to say that a judge’s career is worthwhile or fulfilling only when one makes it to the highest Court in the land or assumes any particular post. Goodwill, reputation and legacy are not prisoners to a perceived setback in career progression.

In the Delhi High Court, in recent memory, one remembers Justice BD Ahmed, about whom the universal opinion seems to be that the Supreme Court was left poorer without his presence. Justice SK Kaul, who currently graces the Supreme Court, is similarly considered to have been a very deserving prospect for the post of Chief Justice of India, both on merits and seniority, though his delayed elevation to the Supreme Court put paid to the said possibility.

Justice BD Ahmed, “about whom the universal opinion seems to be that the Supreme Court was left poorer without his presence.”

The question, therefore, is not one of personal ambition, or the fulfillment thereof, but of institutional justice and fairness. Every instance of a deserving individual not given his or her due within the judiciary, is not only an abrogation, at a normative level, of all that the judiciary stands for, but more crucially, on a deeply personal level, is a cautionary tale to all those who contemplate an entry into its hallowed, but evidently unpredictable, precincts.

To borrow the words of Justice Rajiv Shakdher, spoken with stoicism and grace despite the monumental injustice that he had been subjected to, during his farewell address in the Delhi High Court on the verge of his transfer to the Madras High Court,

Life holds many surprises and sometimes surprises hurt…

Too many hurtful surprises, however, and an institution is perceived as not worth being a part of, or worth fighting for.

Post-Script

Every decision of the Chief Justice of India, and the Collegium headed by him/her, in matters of appointment, directly impacts, at an institutional level, the ability of the judiciary to replenish its dwindling ranks, and even more fundamentally, it impacts the very standing of the legal profession itself.

The worry that the current Chief Justice of India reflected about a lack of enthusiasm to join the Bench, is in many ways foreshadowed by the reluctance of fresh law graduates to enter the rough and tumble of litigation. At successive National Law School convocations, University Chancellors who are Chief Justices of the High Court concerned make it a point to extol students – many of them first-generation law graduates – to enter the field of litigation by assuring them of a fulfilling career that is ostensibly awaiting them in the future, and of the profession giving them their due.

What a tragedy indeed, when the very person giving the assurance cannot be sure that this assurance will reflect in his or her own career in the future!

Amit George is an Advocate at the Delhi High Court.

Shortlist candidates for Lokpal by end of February 2019, Supreme Court

lokpal

The Supreme Court today laid down a time frame for shortlisting candidates who are to be considered for appointment to the post of Lokpal.

The Court directed the Search Committee to finish its deliberations and submit the names of shortlisted candidates by the end of February this year.

The Bench of Chief Justice of India Ranjan Gogoi with Justices L Nageswara Rao and Sanjay Kishan Kaul also directed the Government of India to ensure that requisite infrastructure and manpower is provided to the Search Committee to commence its deliberations and finish them within the time frame laid down.

Advocate Prashant Bhushan, appearing for the petitioner, expressed his reservations about the process of deliberations and requested the shortlisted names to be published on the website once. CJI Gogoi, however, in lighter vein told Bhushan to view the developments positively.

“Is there a reason to believe that the search committee would do something that is not appropriate. Don’t look at things from a negative point of view. Look at things positively and the world would be a better place. We are trying to make the world a better place.”

CJI Gogoi also highlighted that the need of the hour is for the Search Committee to begin its deliberations that have been on hold due to some obstacles that were pointed out by Attorney General KK Venugopal. Publishing the names on the website is not a requirement at the moment, CJI Gogoi remarked.

“Mr. Bhushan, please do not ask the court to pass orders that are not required. At the moment the requirement is for the search committee to complete the task, and we have laid down the timeline for that.”

The Court has set the next date for hearing in the case on March 7. The panel of shortlisted names for Lokpal and its members is required to be submitted by the end of February.