2021 SCC Vol. 6 Part 2

In this part a read a very interesting decision delivered by the Supreme Court running into over 120 pages which has been expertly analysed by our editors. While analysing various provisions under the Negotiable Instruments Act, the Supreme Court concluded that the proceedings under Section 138 are “quasi-criminal” in nature.

The Court observed that

“a Section 138/141 proceeding against a corporate debtor is covered by Section 14(1)(a) of the IBC.”

[P. Mohanraj v. Shah Bros. Ispat (P) Ltd., (2021) 6 SCC 258]

Short Notes: 18


Arbitral award: The subject of this article is whether an arbitral award could be signed under Section 31(4) of the A&C Act, 1996 at the place where the sole arbitrator or Presiding arbitrator is staying, though it is not the agreed place (seat) of arbitration under Section 20 of the A&C Act, 1996, and if it can be sent to the parties by courier or post? Arbitral award need not be signed only at place (seat) of arbitration by Justice M. Jagannadha Rao [(2021) 6 SCC (J-33)]

Civil Procedure Code, 1908 — Ss. 47, 51, Or. 11 R. 14, Or. 21 R. 22, Or. 21 R. 97 and Or. 21 R. 104 — Execution — Delay and obstruction: To avoid delay and obstruction while settling issues and adjudicating the suit itself, where there are controversies and multiple issues emanating due to rights claimed by third parties, trial court must play an active role in deciding all such related issues during adjudication of suit itself and ensure that a clear, unambiguous, and executable decree is passed in any suit. [Rahul S. Shah v. Jinendra Kumar Gandhi, (2021) 6 SCC 418]

Criminal Procedure Code, 1973 — S. 439 — Bail on ground of parity with co-accused — Parity — Manner in which to be determined: While applying principle of parity, court cannot exercise its powers in a capricious manner and has to consider totality of circumstances before granting bail. Parity while granting bail must focus upon role of accused, and not only on weapon carried by accused. Merely observing that another accused who was granted bail was armed with similar weapon is not sufficient to determine whether bail can be granted on basis of parity. In deciding aspect of parity, role attached to accused, their position in relation to incident and to victims is of utmost importance. [Ramesh Bhavan Rathod v. Vishanbhai Hirabhai Makwana, (2021) 6 SCC 230]

Criminal Procedure Code, 1973 — S. 482 — Quashment in cheque dishonour cases: Plea of time-barred debt, as basis for quashment of complaint, rejected when the contention urged requires in-depth examination, it being a mixed question of law and fact and can be examined only during trial. [S. Natarajan v. Sama Dharman, (2021) 6 SCC 413]

Insolvency and Bankruptcy Code, 2016 — S. 14 r/w Ss. 7 to 9 — Moratorium under S. 14 —Applicability of: Proceedings under Ss. 138/141 NI Act against corporate debtor itself, held, fall within the ambit of the expression “proceedings” in S. 14 IBC. Hence, moratorium under S. 14 would not apply in respect of Ss. 138/141 NI Act proceedings against persons in charge of and responsible for the conduct of the business of the corporate debtor, even though moratorium under S. 14 applies to Ss. 138/141 NI Act proceedings against corporate debtor itself. Rules of construction noscitur a sociis and ejusdem generis are not applicable to curtail the meaning of the expression “proceedings” in S. 14 IBC. [P. Mohanraj v. Shah Bros. Ispat (P) Ltd., (2021) 6 SCC 258]

Insolvency and Bankruptcy Code, 2016 — S. 238-A r/w Ss. 7 to 10 — S. 18 of the Limitation Act i.e. acknowledgment by corporate debtor of liability to pay the debt: S. 18 of the Limitation Act gets attracted the moment acknowledgment in writing signed by the party against whom such right to initiate resolution process under S. 7 IBC enures. S. 18 of the Limitation Act would come into play every time when the principal borrower and/or the guarantor, as the case may be, acknowledge their liability to pay the debt. Such acknowledgment, however, must be before the expiration of the prescribed period of limitation including the fresh period of limitation due to acknowledgment of the debt, from time to time, for institution of the proceedings under S. 7 IBC. Further, the acknowledgment must be of a liability in respect of which the financial creditor can initiate action under S. 7 IBC. [Asset Reconstruction Co. (India) Ltd. v. Bishal Jaiswal, (2021) 6 SCC 366]

Insolvency and Bankruptcy Code, 2016 — S. 7 — Proceedings under: Stage at which attain in rem status, held, is only when adjudicating authority, having applied its mind in accordance with law, has recorded a finding of default and admitted petition under S. 7. It is only upon admission of the petition that third-party rights are created in all creditors of the corporate debtor in question, and which will have erga omnes effect. Mere filing of petition and its pendency before admission, held, cannot be construed as triggering of a proceeding in rem. Trigger point for determining in rem status of the proceedings is not filing of application under S. 7 but admission of the same on determination of default. [Indus Biotech (P) Ltd. v. Kotak India Venture (Offshore) Fund, (2021) 6 SCC 436]

Land Acquisition Act, 1894 — S. 23 — Acquisition and development of land in phases: For determination of compensation in respect of land acquired for Phases II, III and IV of Industrial Model Township, Manesar, Gurgaon in 2002, order in Wazir v. State of Haryana, (2019) 13 SCC 101 as modified by order dt. 8-2-2019 in Hukam Singh v. State of Haryana, (2019) 13 SCC 123, further modified. [HSIIDC Ltd. v. Rameshwar Dass, (2021) 6 SCC 355]

Power of High Courts: This article explores the scope of the powers of High Court to do complete justice. Power of the High Courts to do Complete Justice by V. Lakshminarayanan [(2021) 6 SCC (J-39)]

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