Amounts Deposited Pursuant To Court Orders Remain Assets Of The Corporate Debtor: Bombay High Court

The Bombay High Court on 6 April held that amounts deposited in Court under judicial orders remain assets of the corporate debtor, even if they arise from encashment of a bank guarantee after the commencement of insolvency proceedings. A Division Bench of Justices Anil L. Pansare and Nivedita P. Mehta directed the release of the deposited amount to the Resolution Professional of Morarjee Textiles Ltd, rejecting the claim of D.C. Weaving Mills Pvt Ltd, which had sought withdrawal of the amount...

IBC Moratorium For Guarantors Won't Shield Borrower Without Pending CIRP: Bombay High Court

The Bombay High Court on Monday held that moratoriums under the Insolvency and Bankruptcy Code (IBC) in favour of guarantors cannot be used to block recovery proceedings against a principal borrower. The court allowed IL&FS Financial Services Ltd.'s Rs 203.66 crore suit to proceed against Serveall Constructions Pvt Ltd in a case involving HDIL promoters Rakesh Wadhawan and Sarang Wadhawan. “Therefore, the benefit of the interim moratorium under Section 96 in the IRP proceedings for the...

Preservation Of Arbitration Subject Matter Was More Important: Bombay HC Condones 258-Day Delay In Arbitration Plea

The Bombay High Court has condoned a 258-day delay in filing a plea for appointment of an arbitrator, holding that efforts taken by a developer to prevent acquisition of a redevelopment project by the Maharashtra Housing and Area Development Authority (MHADA) constituted sufficient and exceptional cause. A bench of Justice Sandeep V. Marne allowed INFRA Poonam Developers LLP to initiate arbitration against Jasbir Singh and other partners, observing that the cause to seek arbitration arose only...

PSCC Act Doesn't Bar Arbitration Where License To Enter Property for Development Is Incidental: Bombay HC

The Bombay High Court has recently held that a developer cannot avoid arbitration by claiming tenancy protection under the Small Causes Courts Act when its right to use the property is only incidental to a development agreement.A single-judge bench of Justice Somasekhar Sundaresan was hearing a petition under Section 34 of the Arbitration and Conciliation Act filed by Shri Mahavir Developers and its partners challenging an arbitral award in a dispute with Shri Mahavir Jaina Vidyalaya, a public...

Buyers Need Not Form Separate Societies For Each Tower In Multi-Phase Project: Bombay High Court

The Bombay High Court on 1 April held that while each tower in a real estate development may qualify as a separate “project” under the statutory framework, flat purchasers are not mandatorily required to form separate co-operative housing societies for each tower. Justice Amit Borkar upheld the formation of a single unified co-operative housing society by flat purchasers despite the project being multi-phased and governed under different statutory regimes, after noting that the developer had...

Bombay High Court Grants Interim Injunction To Sun Pharma, Restrains Zawadi From Using “PANTOZED-40”

The Bombay High Court on 1 April, granted an interim injunction in favor of Sun Pharma Laboratories Limited, restraining Zawadi Healthcare Limited from using the trademark “PANTOZED-40” for pharmaceutical preparations. Justice Sharmila U. Deshmukh held that Zawadi's mark was structurally, phonetically, and visually similar to Sun Pharma's registered mark “PANTOCID”, which has been in use since 1998. The Court observed: “The Defendants cannot claim balance of convenience in their favour as the...

Bombay High Court Sets Aside ITC Block On Suspicion Of Ineligible Credit, Says It Ceases After One Year

The Bombay High Court has recently set aside the blocking of Input Tax Credit (ITC) of NZS Traders Pvt. Ltd., holding that such a restriction made on apprehension of fraud cannot continue beyond one year and ceases to operate by law. A Bench of Justice G. S. Kulkarni and Justice Aarti Sathe explained that Rule 86A empowers GST authorities to block a taxpayer from using the credit available in its electronic credit ledger if they have reasons to believe that the credit has been wrongly or...

Bombay High Court Sets Aside GST Order Passed Before Scheduled Date Of Hearing

The Bombay High Court has set aside a GST adjudication order passed even before the scheduled date of hearing, holding that it was vitiated by a breach of natural justice. A bench of Justices G S Kulkarni and Aarti Sathe held that the order was passed before the scheduled hearing date fixed in the show cause notice. “The impugned order, however, was passed on 30 March 2022 in regard to which, admittedly, no hearing was granted to the petitioner as also no opportunity to file reply to the said...

Bombay High Court Sets Aside Awards Against Stock Broker For Ignoring Claimant's Statements

The Bombay High Court recently set aside concurrent arbitral awards, holding that ignoring vital evidence, including the claimant's own statements, rendered the findings perverse.Justice Somasekhar Sundaresan heard a petition by Kantilal Chhaganlal Securities Pvt Ltd. The firm had challenged an arbitral award dated October 23, 2013 and an appellate award dated April 8, 2014 in favour of its client. Setting aside the awards, the court said: “That vital evidence that cuts to the root of the...

Service Of Notice On One Partner Deemed Service On All Under Presidency Towns Insolvency Act: Bombay HC

The Bombay High Court has held that service of an insolvency notice on a firm or any one of its partners amounts to valid service on all partners under the Presidency Towns Insolvency Act, 1909. The court rejected the argument that limitation should be counted from the last date of service on each partner. A single-judge bench of Justice Jitendra Jain was hearing an insolvency petition where the judgment debtors challenged its maintainability under Section 12(1)(c) of the Presidency Towns...

Refusal To Produce Audited Financials Justifies Adverse Inference: Bombay High Court Upholds Arbitral Award

The Bombay High Court has recently refused to interfere with an arbitral award, holding that refusal by a party to produce audited financial statements justifies the drawing of an adverse inference by the arbitral tribunal. The court remarked that a party cannot selectively rely on tax returns while withholding audited financial statements and books of account. A bench of Justice Somasekhar Sundaresan observed: “As such, every business enterprise would have both sets of financial information...

Bombay HC Quashes Rs. 1.26 Crore Service Tax Demand For Failure To Comply With Pre-SCN Process

The Bombay High Court on 12 March, quashed a service tax show cause notice, holding that failure to conduct mandatory pre-show cause notice (pre-SCN) consultation, as required under CBEC circulars, vitiates the entire proceedings. A Bench of Justices G. S. Kulkarni and Aarti Sathe held that pre-SCN consultation, mandated by circulars issued under Section 37B of the Central Excise Act, is a binding requirement and cannot be bypassed merely because summons were issued to the taxpayer. The Bench...