“Banks Are Dealing With Public Money”: Karnataka High Court Calls for Strict Adherence To RBI Guidelines

The Karnataka High Court recently observed that banks dealing with public money must exercise utmost caution while conducting their business and strictly follow RBI guidelines and internal circulars. The court warned that departures from prescribed procedures can adversely affect a bank's financial operations, create chaos in the banking system, and ultimately impact the country's economy. A Division Bench of Justice D.K. Singh and Justice T.M. Nadaf made the observation while setting aside...

Oral Statements Cannot Alter Written Lease Terms, Karnataka HC Sets Aside Commercial Court Decree

The Karnataka High Court has set aside a Commercial Court decree directing the return of a cable TV network business, equipment, and subscribers and ordering payment of rent and damages. The court held that there was no evidence of any agreement extending a written lease beyond its stipulated term and that the claims were barred by limitation. The dispute concerned a cable TV network business operated under the name “New Satellite Video Visions” in Mysuru. A Division Bench of Chief Justice...

NCLT's Scrutiny Of Applicant's Standing To Invoke Personal Insolvency Process Is Not Adjudication: Karnataka HC

The Karnataka High Court has held that the National Company Law Tribunal (NCLT) is entitled to examine whether an applicant possesses the requisite locus standi to invoke the personal guarantor insolvency framework before permitting the process to proceed. The court held that such an exercise does not amount to an adjudication of the insolvency claim on merits. Justice Suraj Govindaraj observed: “Thus, when the National Company Law Tribunal examines whether an applicant possesses the...

Karnataka High Court Rejects Trademark Suit After Finding Reliefs Were Undervalued To Avoid Commercial Court

The Karnataka High Court has rejected a trademark infringement and passing-off suit filed by a Raichur-based rice trader after holding that the plaintiff had deliberately undervalued the suit reliefs and instituted the dispute before a civil court instead of the commercial court.Justice Ravi V Hosmani passed the order on June 1 while allowing a revision petition filed by Shri Prasanna Anjaneya Agrotech and setting aside an order of the XVIII Additional City Civil and Sessions Judge, Bengaluru,...

Karnataka High Court Remands Trademark Suit, Sets Aside Return Of Plaint For Non-Examination Of Specified Value

The Karnataka High Court has recently set aside an order returning a trademark infringement suit to a civil court. It held that the Commercial Court had failed to examine the value of the plaintiff's claimed trademark rights before concluding that it lacked pecuniary jurisdiction. Justice Tara Vitasta Ganju observed that the Commercial Court had not independently assessed the value of the rights asserted by Sarathi International Inc. The court noted that Sarathi International had taken...

'Criminal Prosecution Cannot Be A Frolicsome Act': Karnataka HC Quashes Fraud Case Against Ex-Vihaan Director

The Karnataka High Court has recently quashed criminal proceedings against chartered accountant M.N. Gunasheela, a former director of Vihaan Direct Selling (India) Pvt Ltd, in connection with a complaint concerning the affairs of the company. The Court also quashed a Look Out Circular issued against him. Justice M. Nagaprasanna held that the complaint did not disclose any specific role attributable to Gunasheela. The Court also noted that the company's business operations commenced after he...

Karnataka High Court Partly Sets Aside ₹79.58 Arbitral Award In Automotive Axles Housing Society Dispute

The Karnataka High Court on 1 June, partly set aside an arbitral award of Rs.79.58 lakh in favour of contractor K.S. Sridhar, holding that several claims allowed by the arbitrator lacked evidentiary support and were patently illegal. A Division Bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Poonacha partly allowed the appeal filed by Automotive Axles Employees Housing Co-operative Society Ltd., modifying the arbitral award while sustaining certain monetary components in favour of...

Banks Must Take Proactive Steps Against SIM Swap Fraud: Karnataka HC Upholds BSNL's Liability In Fraud Case

The Karnataka High Court has recently observed that banks must proactively strengthen safeguards against SIM swap fraud. It noted that measures such as multiple OTP delivery channels, delayed processing of high-value transactions following SIM swaps, alternate transaction alerts and customer awareness initiatives can help prevent such frauds. Justice Suraj Govindaraj made the observations while holding BSNL liable for a fraud that enabled unauthorised withdrawals of ₹87.70 lakh from the account...

Karnataka High Court Refuses Interim Relief To Unacademy Parent In Dispute With Former Educator

The Karnataka High Court has recently refused to grant interim protection to Unacademy parent Sorting Hat Technologies Private Limited against a former educator accused of making disparaging online statements. The Court held that it could not examine the same injunction request after the Commercial Court had already heard the matter and reserved orders. A division bench of Justices Sachin Shankar Magadum and Rajesh Rai K was hearing an appeal filed by the company against an order of the...

Karnataka High Court Refers To Larger Bench Whether Residential JDAs Fall Under Commercial Courts Act

The Karnataka High Court has referred to a larger bench the question of whether Joint Development Agreements (JDAs) for residential projects can be treated as "construction and infrastructure contracts" under the Commercial Courts Act. The referral came after the court held that a dispute arising from a Bengaluru residential apartment project was not a commercial dispute and could not be entertained by a Commercial Court. Justice Tara Vitasta Ganju held that the dispute arising from a Joint...

Karnataka High Court Sets Aside ED Attachment Order, Says Copy-Paste Of Statutory Language Not Enough

The Karnataka High Court has recently set aside an Enforcement Directorate (ED) provisional attachment order, holding that a copy-paste of statutory language, without demonstrating from the material on record why immediate attachment was necessary, does not satisfy the requirements of law. Justice S. Sunil Dutt Yadav observed: “In the guise of adherence to law mere copy-paste of statutory language to indicate compliance would not be sufficient. There must be application of mind to the...

Stock Broker Prima Facie Committed Criminal Breach Of Trust By Withholding Share Sale Proceeds Karnataka High Court

The Karnataka High Court on Tuesday dismissed a writ appeal filed by stock broker SIC Stocks and Services Pvt Ltd. The Court upheld a direction requiring the firm to pay over Rs 2.46 crore to a client whose shares were allegedly sold without its consent. The court observed that the sale proceeds belonged to the client and were held by the broker in trust. It added that the conduct prima facie, amounted to criminal breach of trust. A Division Bench of Chief Justice Vibhu Bakhru and Justice K S...