S. 11 SARFAESI Act | DRT Can't Decide Disputes Between Banks Over Secured Assets; Must Be Referred To Arbitration : Supreme Court

In a significant ruling under the SARFAESI Act, 2002 (“Act”), the Supreme Court today (May 23) held that inter-creditor disputes (between secured creditors) must be resolved through arbitration under Section 11 of the Act read with the Arbitration & Conciliation Act, 1996 (“Arbitration Act”). Unlike the Arbitration and Conciliation Act, which requires a written agreement for reference, Section 11 of the Act creates a statutory mandate for arbitration, eliminating the need for any such...

Supreme Court Upholds Dual Taxation On Broadcasting, Says States Can Levy Entertainment Tax Alongside Centre's Service Tax

While upholding the State's authority to impose entertainment tax on broadcasting services like cable TV, digital streaming, and OTT platforms, the Supreme Court held that both the Centre and the State are empowered to levy service tax and entertainment tax, respectively, on assessees such as cable operators and entertainment service providers.The bench of Justices BV Nagarathna and N Kotiswar Singh held that broadcasting constitutes a form of communication, while entertainment falls under the...

Supreme Court Upholds Kerala's Luxury Tax On Cable TV As Constitutionally Valid

The Supreme Court today (May 22) upheld the constitutional validity of the Kerala luxury tax and allowed Kerala's appeal, affirming the state's power to tax cable TV services under Entry 62 of List II (State List) as “luxury.” The Court clarified that the service tax imposed by the Finance Act on broadcasting services under Entry 97 of List I (Union List) does not conflict with state taxes on entertainment, and therefore, no constitutional overlap exists between central and state levies. “in...

Income Tax Act | Supreme Court Clarifies Restriction Under S.80-IA(9) On Claiming Cumulative Deductions Under S.80IA & 80-HHC

Answering a reference, the Supreme Court held that deductions under Sections 80-IA/80-IB of the Income Tax Act need not reduce the gross total income before computing deductions under other provisions like Section 80-HH for export profits.The bench comprising Justices Abhay S Oka, Ahsanuddin Amanullah and AG Masih delivered the verdict while answering a reference after a matter was referred to the larger bench due to split verdict in Assistant Commissioner of Income Tax v. Micro Labs Limited...

Supreme Court Issues Notice On Plea Challenging Validity Of S. 50 & 63 Of PMLA On ED's Summoning Powers

A writ petition has been filed in the Supreme Court challenging the Constitutional validity of S.50 and S.63 of the Prevention of Money Laundering Act, 2002 (PMLA). The plea states that the impugned provisions are violative of Articles 14, 20,21 and 300A of the Constitution. Last week, a bench comprising Chief Justice of India BR Gavai and Justice AG Masih issued notice to the Union on the petition and tagged it with a similar matter (WP(Crl) 65/2023)Notably, S. 50 of the PMLA provides...

Chhattisgarh Liquor Scam | 'No Possibility Of Trial Commencing In Near Future' : Supreme Court Grants Bail To PMLA Accused

The Supreme Court on Monday(May 19) granted bail to Anwar Dhebar, businessman and brother of former Raipur Mayor Aijaz Dhebar, accused in a money laundering case arising out of the alleged Rs. 2,000 crore Chhattisgarh liquor scam.A bench of Justice Abhay S Oka and Justice Ujjal Bhuyan observed that the maximum sentence prescribed for the offence is seven years and that there is no possibility of the trial commencing in the near future.“Following the law laid down in the case of Senthil...

All Trademark Disputes Aren't Outside Arbitration; In Personam Issues Relating To License Agreement Arbitrable : Supreme Court

The Supreme Court recently held that a mere allegation of fraud or misconduct does not divest an arbitral tribunal of its jurisdiction to adjudicate in personam disputes stemming from contractual relationships governed by an arbitration agreement.“The law is well settled that allegations of fraud or criminal wrongdoing or of statutory violation would not detract from the jurisdiction of the arbitral tribunal to resolve a dispute arising out of a civil or contractual relationship on the basis of...

S. 31(7) Arbitration | Arbitral Tribunal Has Power To Award Different Rates Of Interest For Pre-Reference & Pendente Lite Period : Supreme Court

The Supreme Court held that under the Arbitration and Conciliation Act, 1996, an Arbitral Tribunal has the power to award different rates of interest for different phases.A bench comprising Justices Abhay S. Oka and Ujjal Bhuyan overturned the Delhi High Court's ruling, which had invalidated the tribunal's grant of interest on interest, deeming it impermissible under Section 31(7) of the Act. The bench heard the case where the dispute originated from a 1984 contract for the Thermal Power...

Supreme Court Deprecates 'Deliberate, Ambiguous' Drafting Of Arbitration Clauses; Calls For Suo Motu Action In Malafide Cases

Delivering a significant judgment on arbitration law, the Supreme Court today deprecated the practice of arbitration clauses being deliberately phrased "ambiguously" by members of legal fraternity and urged judicial forums across the country to throw out cases involving "shoddily drafted arbitration clauses" at the threshold.The Court said that such "malafide cases" are a "criminal wastage of judicial time" and have been allowed to go on for long. It called on the judicial forums to take...

Private Arbitration Clauses Cannot Override Statutory Mandates Under MSMED Act : Supreme Court

Reaffirming that the MSMED Act prevails over the Arbitration Act, as held in Gujarat State Civil Supplies v. Mahakali Foods, the Supreme Court set aside the Karnataka High Court's interference with MSMED proceedings in Delhi, despite the contract naming Bengaluru as the arbitration seat. The Court clarified that private contractual clauses cannot override the statutory mandate of the MSMED Act. Since the appellant-supplier was registered in Delhi, the Court noted that the Delhi Arbitration...

Supreme Court Upholds Constitutional Validity Of S.5A, Kerala General Sales Tax Act and S.7A, Tamil Nadu General Sales Tax Act

The Supreme Court recently upheld the constitutional validity of Section 5A of the Kerala General Sales Tax Act, 1963 and Section 7A of the Tamil Nadu General Sales Tax Act, 1959."The challenge to the constitutional validity must be rejected on the basis of the ratio elucidated by this Court in Kandaswami (supra), Hotel Balaji (supra) and Devi Dass (supra)...Hotel Balaji (supra) specifically upholds the constitutionality of the impugned provisions, disagreeing with the opinion/ratio expressed in...

High Court May Grant Article 227 Interim Relief In Arbitration Proceedings In Exceptional Cases : Supreme Court

aThe Supreme Court (May 7) held that while the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) mandates minimal judicial interference, a High Court may, in exceptional cases, exercise its supervisory jurisdiction under Article 227 of the Constitution to grant interim relief, particularly where denial of such protection would result in irreparable harm. “We are aware of the established legal principle that the Courts should refrain from interfering with the invocation of a bank...