Bombay High Court Flags 'Industrial Scale' Bank Recovery Proceedings Through Self-Chosen ODR Platforms

The Bombay High Court recently cautioned that banks conducting recovery proceedings “at an industrial scale” through self-chosen Online Dispute Resolution (ODR) platforms risk concentrating multiple disputes before the same arbitrator. The court held that banks cannot sidestep the requirement of independent arbitral appointments by offering borrowers a purported choice from a list of ODR platforms curated by the bank itself. “In any case, for a bank to conduct recovery proceedings at an...

Telangana High Court Dismisses MSME's Plea Against Arbitration Reference After Consent To Tribunal

The Telangana High Court has held that a company cannot challenge an MSME arbitration reference after consenting to the constitution of the arbitral tribunal and participating in the proceedings. “After giving consent to the constitution of the Arbitral Tribunal and thereafter having participated in the proceedings before it, the writ petitioner cannot subsequently challenge the reference of the dispute to arbitration on the ground of the dispute not amenable to arbitration,” the Court...

States Cannot Levy Local VAT On Inter-State Sales Even If Sale Is Deemed To Occur Within The State: Supreme Court

The Supreme Court on Friday held that a state cannot impose its own Value-Added Tax (VAT) on a transaction that qualifies as an inter-state sale merely because the Central Sales Tax Act deems the sale to have taken place within that state for the limited purpose of identifying which state may collect tax. A bench of Justice J.K. Maheshwari and Justice Atul S Chandurkar held that where the statutory provision defining an inter-state sale conflicts with the provision determining the deemed...

Telangana HC Upholds Sale of Mortgaged Property, Says 30-Day SARFAESI Notice Period Runs From First Valid Service

The Telangana High Court has upheld the auction sale of a mortgaged property by Bank of India, holding that the 30-day statutory period for an auction sale must be counted from the first valid service of the sale notice, not from a later supplementary communication. Explaining its reasoning, the Division Bench of Justices Moushumi Bhattacharya and Gadi Praveen Kumar observed: “Acceptance of the borrower's contention would result in uncertainty and enable manipulation of timelines, thereby...

MP High Court Sends Bharat Commerce Asset Sale Dispute Back To Company Court To Consider Post-Auction Higher Bid

The Madhya Pradesh High Court has sent back for fresh consideration a dispute over the sale of assets of Bharat Commerce and Industries Ltd., finding that the Company Judge did not consider a bidder's arguments for entertaining a higher post-auction offer. “Upon perusal of the said impugned order, we find that the aforesaid contentions were not considered by the company judge.” A Division Bench of Justice Vijay Kumar Shukla and Justice Alok Awasthi passed the order on April 23 in an...

Time Awaiting MCA Nod Cannot Extend Limitation For Companies Act Prosecution Where Law Mandates No Sanction: MP High Court

The Madhya Pradesh High Court at Gwalior has recently held that where the law does not require prior government sanction to prosecute, authorities cannot rely on time spent awaiting administrative instructions to extend the two-year limitation period for filing a criminal complaint. Justice Rajesh Kumar Gupta observed, “Administrative approvals, departmental communications, or internal procedures cannot override the mandate of Sections 468 and 469 Cr.P.C. Unless the statute specifically...

Section 138 Case Not Maintainable Against Director Once Liquidator Takes Control: Delhi High Court

The Delhi High Court on 4 May quashed cheque bounce proceedings against a director of P.R.J Enterprises Limited, holding that once a Provisional Liquidator is appointed and takes control of the company's affairs, the directors lose authority over its bank accounts and cannot be prosecuted under Section 138 of the Negotiable Instruments Act. Justice Vikas Mahajan observed that the petitioner-director could not be fastened with criminal liability since he was divested of control over the...

Calcutta High Court Upholds Rejection Of Suit For Skipping Mediation Under Commercial Courts Act

The Calcutta High Court on 5 May dismissed the appeal filed by Indian Explosives Pvt. Ltd., upholding the order rejecting its suit for non-compliance with Section 12A of the Commercial Courts Act, 2015. A Division Bench of Justices Debangsu Basak and Md. Shabbar Rashidi held that courts cannot permit parties to bypass the mandatory pre-institution mediation requirement on vague or unsupported claims of urgency, and that a dispensation once granted can be revisited where the circumstances...

Earlier Arbitration Clause Binds Developer, Society Members As Redevelopment Agreements Adopted All Terms: Supreme Court

The Supreme Court has recently referred a redevelopment dispute between a developer and five members of a co-operative housing society to arbitration, holding that an arbitration clause in an earlier development agreement became binding through later accommodation agreements that adopted all its terms. "This was, thus, not a case of mere reference to an earlier agreement but a case where the parties to the later contract clearly intended to import the Development Agreement, body and soul, into...

Bombay High Court Holds Arbitral Tribunal Cannot Rewrite EPC Contract Or Shift Contractual Risk

The Bombay High Court has partly set aside an arbitral award in favour of KEC International Ltd. in its dispute with Central Railway, holding that the Arbitral Tribunal went beyond the contract by treating increased earthwork quantities as a change in scope and granting additional payment. Justice Sharmila U. Deshmukh observed that a lump sum EPC contract places the risk of quantity variations and site conditions on the contractor. This risk cannot later be shifted to Central Railway through...

Delhi High Court Quashes Summons Against Compact Capital, Kalptaru Fincap In ₹539.37 Crore Sunstar PMLA Case

The Delhi High Court on Thursday set aside a September 25, 2024 cognizance order and consequent summons issued by the Additional Sessions Judge, Tis Hazari Courts, against Compact Capital Limited, Kalptaru Fincap Limited, and Naresh Aggarwal. The case arises from the Directorate of Enforcement's ₹539.37 crore money laundering case linked to Sunstar Overseas Ltd, a rice trading company. The Sessions Court, while taking cognizance under the Prevention of Money Laundering Act, had held that...

High Court Cannot Reopen Arbitration Maintainability In Award Challenge After Final Reference-Stage Ruling: Supreme Court

The Supreme Court has recently held that where a court has already conclusively ruled in proceedings under Section 11 of the Arbitration and Conciliation Act, 1996 that arbitration is maintainable and that finding has attained finality, the issue cannot be reopened later in a Section 37 challenge to the arbitral award. “When the Courts have ruled on the fact that application under Section 11 of the Act was maintainable and when such a decision has attained finality, revisiting the issue of...