Co-operative Bank Can Initiate Arbitration Without Specific Managing Committee Authorisation: Kerala High Court

The Kerala High Court has held that a co-operative society's failure to produce a Managing Committee resolution before the Arbitrator does not invalidate arbitration proceedings initiated by the society. The court ruled that the requirement under Rule 67(2) of the Kerala Co-operative Societies Rules, 1969, is directory and not mandatory“However, I am of the opinion that, though the word 'shall' is used in Rule 67(2) of the 1969 Rules, the provision cannot be construed as mandatory, and it can...

Kerala High Court Sets Aside Income Tax Assessment Treating PG Student's Stipend As Salary

The Kerala High Court on 17 August set aside an income tax assessment order treating the stipend received by a postgraduate medical student as salary, holding that the Assessing Officer failed to consider his claim that stipend paid to a student is exempt from income tax. A Division Bench comprising Justices Devan Ramachandran and Basant Balaji allowed the appeal filed by Nahas Kakkattummal and set aside both the Single Judge's judgment and the assessment order, directing the Assessing Officer...

MSME Borrower Can't Raise Revival Framework Defence In Subsequent SARFAESI Case: Kerala High Court

The Kerala High Court on 1 September held that an MSME borrower cannot invoke the MSME revival and rehabilitation framework for the first time in subsequent litigation to challenge SARFAESI proceedings when the borrower failed to raise the issue in the first round of litigation. A Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M. upheld the dismissal of a writ petition filed by Soubhagye Road Builders and its proprietors against recovery proceedings initiated by Canara Bank...

Recovery Officer Cannot Attach SARFAESI Statutory Pre-Deposit U/S 28(4) RDB Act: Kerala High Court

The Kerala High Court on 31 August held that a Recovery Officer cannot attach a statutory pre-deposit made by a borrower under the second proviso to Section 18 of the Securitisation and Reconstruction of Financial Assets Enforcement of Security Interest Act, 2002 (SARFAESI Act), by invoking Section 28(4) of the Recovery of Debts and Bankruptcy Act, 1993. A Division Bench of Chief Justices Soumen Sen and Syam Kumar V.M. set aside the Recovery Officer's order attaching E.T. Firoz's Rs....

Executing Court Cannot Reject Award Where Parties Mutually Nominated Arbitrator: Kerala High Court

The Kerala High Court on 4 August held that an executing court cannot refuse to enforce an arbitral award on the ground of unilateral appointment of the arbitrator when the parties themselves had mutually nominated the arbitrator in their agreement. Justice Easwaran set aside an order of the Additional District Court, Kozhikode, which had dismissed an execution petition filed by Hedge Finance Limited to enforce an arbitral award for Rs. 3.47 lakh with 18% interest against Sangeetha A.V. The...

Official Liquidator Gets 3 Years From Winding Up Order To File Claim: Kerala High Court

The Kerala High Court on 31 August held that a claim instituted by an Official Liquidator under Section 446 of the Companies Act, 1956, in respect of a legally enforceable claim is governed by the three year limitation period under Article 137 of the Limitation Act, 1963, reckoned from the date of the winding up order, with the benefit of the additional one year period under Section 458A of the Companies Act. Justice Harisankar V Menon rejected the respondent, Miny Zachariah's objection that...

Kerala High Court Sets Aside Rejection Of Regional Sports Centre's Building Tax Exemption Claim

The Kerala High Court on 18 August set aside the Kerala Government's rejection of the Regional Sports Centre, Kochi's claim for exemption from building tax and directed it to reconsider the claim afresh. Justice Harisankar V. Menon passed the order after finding that the Government had failed to properly consider material showing that the Centre provided free sports coaching to several students and trainees. He held: "The Government to reconsider the claim for exemption raised by the...

Kerala High Court Holds MRF Eligible For Tax Exemption On 'Compound Rubber'

The Kerala High Court on 14 August held that MRF Limited is entitled to tax exemption under S.R.O. No. 1729/1993 for “compound rubber” manufactured by the company. It stated exemption cannot be denied by treating the product as covered by the negative list introduced through S.R.O. No. 38/1998 Justice Harisankar V. Menon allowed MRF's petition challenging the State Level Committee on Sales Tax Exemption's decision, which had denied the company exemption in respect of compound rubber. He held: ...

1% Construction Cess Only On Actual Construction Cost, Not Entire Contract Value: Kerala High Court

The Kerala High Court on 19 August held that 1% cess under the Building and Other Construction Workers Welfare Cess Act, 1996 can be levied only on the portion of a composite works contract attributable to the actual “cost of construction” and not on the entire contract value. A Division Bench comprising Chief Justice Soumen Sen and Justice Syam Kumar V.M. passed the ruling while disposing of a batch of 18 writ appeals filed by Class A registered work contractors of the Kerala Water Authority...

Kerala High Court Denies AVT McCormick's ₹49.54 Lakh Refund Claim Over Transitional ITC

The Kerala High Court on 20 August held that a claim for refund of transitional input tax credit can be allowed only if the taxpayer establishes that the disputed credit stood in its Electronic Credit Ledger as on 1 July 2017. Justice Johnson John dismissed AVT McCormick Ingredients Pvt. Ltd.'s writ petition challenging the assessment order passed by the Assistant Commissioner of Central Tax and Central Excise, which had rejected its claim for refund of Rs. 49.54 lakh. He observed: "...As per...

Once Commercial Courts Designated, Civil Courts Can't Decide Specified-Value Disputes: Kerala High Court

The Kerala High Court on 10 August held that a civil court cannot adjudicate a commercial dispute of specified value that falls within the jurisdiction of a designated Commercial Court. Justice Easwaran S allowed an appeal filed by BRD Finance Limited, a kuri company, against the dismissal of its recovery suit by the Munsiff Court, Chavakkad. He held: “Without transferring the same, the act of the Munsiff Court in proceeding to consider the suit on merits is clearly unsustainable and without...

DRT Registrar Cannot Suo Motu Refer Applications To Presiding Officer: Kerala High Court

The Kerala High Court has held that the Registrar of a Debts Recovery Tribunal (DRT) cannot suo motu place an unnumbered securitisation application (SA) before the Presiding Officer to decide questions of maintainability or locus standi. The Registrar's role is limited to scrutinising applications for defects, giving applicants an opportunity to cure them and, where defects remain, declining registration through a reasoned order.“The Rule does not give any power to the Registrar to place the...