Supreme Court & High Courts
Arbitration Clause In Partnership Reconstitution Deed Not Enforceable Against Non-Signatory: Karnataka High Court
The Karnataka High Court has held that an arbitration clause contained in a partnership reconstitution deed cannot be enforced b a person who has not signed the deed, and that in such circumstances, the court cannot appoint an arbitrator under the Arbitration and Conciliation Act. Justice Lalitha Kanneganti made the observation in an order dated January 7 while hearing a petition filed by two outgoing partners of Shree Raghavendra Industries, seeking appointment of an arbitrator under an...
Financing Charges Under FIDIC Contract Must Be on Certified Claims: Delhi High Court Allows Jal Board Appeal
The Delhi High Court has held that financing charges under a FIDIC-based construction contract can be claimed only on amounts that are formally certified or have clearly become payable under the contract, and not on disputed or unverified claims. A Division Bench of Justice C. Hari Shankar and Justice Om Prakash Shukla partly allowed an appeal filed by the Delhi Jal Board against a Single Judge order that had upheld an arbitral award in favour of Mohini Electricals Ltd., setting aside the...
J&K High Court Sets Aside Interim Order Against Developer Passed By Special Tribunal Without Jurisdiction
The Jammu & Kashmir and Ladakh High Court has set aside a status quo order passed against a real estate developer by the Jammu and Kashmir Special Tribunal, which was functioning as the interim Real Estate Appellate Tribunal. Justice Rahul Bharti held that once a tribunal acknowledges that it lacks jurisdiction, it cannot issue or continue any interim or supplementary directions. Any such directions, the court said, are “nugatory in the eyes of law”. The petition was filed by Royal Omkar...
Calcutta High Court Sets Aside GST Demand Over Reliance On Undisclosed Back Portal Data
The Calcutta High Court recently set aside a GST demand raised against a transport company after holding that the tax department relied on undisclosed back-office data.Justice O.M. Narayan Rai held that the tax department relied on “data available in GST B.O. portal”, leaving the petitioner without an effective opportunity to respond. The court focused on the manner in which the demand was raised in this case. It noted that the show-cause notices were founded on figures drawn from the GST...
Director Not Party To Company's Articles of Association Cannot Invoke Arbitration Under the Articles: Delhi HC
The Delhi High Court has held that a director who has neither signed nor is a party to a company's Articles of Association cannot invoke an arbitration clause contained in those articles. A single judge bench of Justice Purushaindra Kumar Kaurav said that arbitration requires clear and demonstrable consent. The court observed that "Thus, the mere existence of a document, despite it containing an arbitration clause, and persons, even if they are party to it, would not qualify as an...
Court Can Extend Arbitrator's Mandate Even After Its Expiry: Calcutta High Court
The Calcutta High Court has reiterated that an arbitrator's authority does not end automatically on expiry of the time limit prescribed under the Arbitration and Conciliation Act, 1996. The court said that it retains the power to extend an arbitrator's mandate even after expiry of the time fixed and that in this case the parties had consented by their conduct. Applying this settled position, the court extended the mandate of the arbitrator in the case before it and refused to terminate the...
Directors Not Criminally Liable For Company's Contractual Breach Without Proof Of Fraud: Delhi High Court
The Delhi High Court has said that a company's inability to pay its dues because of financial distress is a civil issue, not a criminal offense. A director cannot be prosecuted for cheating unless there is clear proof of personal fraud or personal gain. Justice Neena Bansal Krishna quashed cheating charges against a former managing director of Creative Wares Limited, a manufacturing company that later ran into financial trouble and was declared a sick industrial company by the BIFR. The court...
Arbitrator Appointment Challenges Must Be Raised Before Tribunal, Not In Interim Appeals: Kerala High Court
The Kerala High Court has held that its role is limited when hearing an appeal against an interim order passed under the Arbitration and Conciliation Act. At this stage, the court cannot examine whether the arbitrator was properly appointed or has the authority to act. A Single Judge Bench of Justice S Manu said such objections must be raised before the arbitral tribunal itself. “Competency of the Arbitral Tribunal is a matter to be raised before the Tribunal by the party having a...
Realty Company's Sale of Long-Held Freehold Land Is Capital Gains Not Business Income: Madras Court
The Madras High Court has held that profits earned from the sale of decades-old freehold land must be taxed as capital gains and not as business income, rejecting the income tax department's attempt to treat the transaction as part of a real estate business. A division bench of Justices Anita Sumanth and Mummineni Sudheer Kumar said the record clearly showed that the land was held as a long-term asset and was sold without any development or trading activity. "The accounts reveal that the...
