Karnataka High Court Dismisses AVTEC Appeal, Holds Unilateral Appointment Of Sole Arbitrator Invalid

The Karnataka High Court on 29 April dismissed an appeal filed by AVTEC Limited and upheld the Commercial Court's order setting aside an arbitral award. A Division Bench of Justices Anu Sivaraman and T.M. Nadaf held that parties cannot permit unilateral appointment of a sole arbitrator under the Arbitration and Conciliation Act, 1996, and also ruled that a party which participates in arbitration without objection cannot later dispute jurisdiction. It observed: “The appellant having...

Karnataka High Court Holds KPIDFE Act, Like MPID, Has Priority Over SARFAESI Claims

The Karnataka High Court has held that secured creditors cannot claim priority under the SARFAESI Act over properties attached under the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPIDFE Act), and such attachment would prevail in determining the priority of claims. A coram of Justice Lalitha Kanneganti dismissed a writ petition filed by Canara Bank challenging the refusal of the Sub-Registrar to register a sale certificate issued in favour of an...

Karnataka High Court Dismisses Plagiarism Plea Against Dhurandhar-2, Says Remedy Lies Before Civil Court

The Karnataka High Court has recently dismissed a writ petition filed by Bengaluru-based filmmaker Santosh Kumar R.S., who had alleged that the Aditya Dhar-directed Hindi film Dhurandhar-2 was a plagiarised version of his original script titled D-Saheb. Justice K.S. Hemalekha held that the petition was not maintainable, observing that writ jurisdiction under Article 226 is discretionary and ordinarily not exercised when an efficacious alternative remedy is available, and directing the...

Consolidated GST Show Cause Notices Across Multiple Years Permissible: Karnataka High Court

The Karnataka High Court has recently ruled that GST authorities can issue a single show cause notice covering multiple financial years, settling a dispute over whether such notices must be confined to one year. The question before the court was, “Whether it would be permissible to issue consolidated/common show cause notice under Sections 73 and 74 of the Act covering multiple financial years or multiple tax periods?” Answering this, a bench of Justice S.G. Pandit and Justice K.V. Aravind...

Karnataka High Court Reiterates Part Cause Of Action Gives Bengaluru Jurisdiction In Crochet Case

On 28 April, the Karnataka High Court reiterated that a suit for specific performance can be filed where part of the cause of action arises, including where the agreement is executed or the company has its registered office. A Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Poonacha allowed an appeal by Crochet Industries and set aside a Commercial Court order that had returned a plaint for lack of territorial jurisdiction in a Rs. 42.5 crore share purchase dispute involving LN...

Karnataka High Court Upholds DICGC's Priority Right To Recover Depositor Payouts From Insured Banks

The Karnataka High Court has upheld the law allowing the Deposit Insurance and Credit Guarantee Corporation (DICGC) to recover amounts paid to depositors directly from a failed bank, with priority over other liabilities, ruling that the premium charged need not be proportionate to the insured amount. A Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Poonacha dismissed a writ appeal filed by a depositors' society (Sangha) arising from the collapse of Sri Guru Raghavendra Sahakara...

Search Under IT Act Is Person-Centric; Premises Don't Decide 'Searched Person': Karnataka High Court

Holding that a “searched person” under the Income Tax Act is determined by the person against whom statutory satisfaction is recorded and not by whose premises are searched, the Karnataka High Court on Friday ruled that a taxpayer cannot be treated as a searched person merely because a search was conducted at his premises.The ruling came in a case where the tax department initiated proceedings against the taxpayer under Section 153C based on documents seized during a search conducted at his...

Cheque Return Memo Need Not Bear Bank Seal Or Signature To Prove Dishonour: Karnataka High Court

The Karnataka High Court has recently held that a cheque return memo need not carry a bank's seal or signature to establish dishonour under Section 138 of the Negotiable Instruments Act, 1881, particularly where the process is handled through electronic clearing systems. “In view of the electronic clearance, the seal and signature is not mandatory and therefore, seal and signature, official mark etc., on Ex.P.2 cannot be a ground to reject the complaint,” a bench of Justice V Srishananda said. ...

GST Refund Limitation Mandatory; Delay Can Be Condoned Under Article 226 In Cases Of Genuine Hardship: Karnataka HC

The Karnataka High Court held that the two-year limitation under Section 54 of the CGST Act is mandatory, and cannot be relaxed by tax authorities. However, in cases of genuine hardship, delay in filing refund claims may be condoned by invoking writ jurisdiction under Article 226, subject to safeguards protecting the Revenue.The Division Bench comprising Justice S.G. Pandit and Justice K.V. Aravind made the ruling. Section 54 of the CGST Act provides provisions for claiming refunds of...

Mere Allegation Of Fraud Not A Bar To Arbitration: Karnataka High Court

The Karnataka High Court on 8 April held that mere allegations of fraud or prior monetary transactions do not oust arbitration where the dispute arises from agreements containing arbitration clauses. A Bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Poonacha held that Courts must refer parties to arbitration under Section 8 of the Arbitration and Conciliation Act unless a party shows that no prima facie arbitration agreement exists. It further noted the interplay with the...

Karnataka High Court Reserves Orders On Pleas Challenging CCI Probe Into Amazon, Flipkart-Linked Sellers

The Karnataka High Court on April 10 reserved its judgment in a batch of writ petitions challenging the scope of the Competition Commission of India's probe into alleged anti-competitive practices by Amazon and Flipkart, particularly the power of the Director General to array additional parties during the investigation.A single-judge bench of Justice M. Nagaprasanna, after hearing the parties, reserved the judgment.Senior Advocate K.G. Raghavan, appearing for Rocket Kommerce LLP and related...

Authorities Where Immovable Properties Are Located Duty-Bound To Enforce Other High Court Orders: Karnataka High Court

The Karnataka High Court has held that when a Constitutional Court issues directions concerning immovable properties situated in another State, authorities where such properties are located are duty-bound to implement them.Justice Sachin Shankar Magadum was hearing a petition filed by Kotak Mahindra Bank Limited, a secured creditor of Electrex (India) Limited, seeking implementation of directions issued by the Bombay High Court concerning certain sale transactions involving mortgaged properties...