Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal for Electricity (APTEL): A Division Bench of Manjula Chellur, J. (Member) and S.D. Dubey, (Technical Member) passed an order for implementation of the Tribunal’s order for the payment of the sum of money due with interest.

An application for the implementation of the order was made by the appellant when after a reasonable time the respondent didn’t pay any heed towards the order against them.

Aman Anand, Aman Dixit, counsels for the appellant submitted that the order was received for the payment after increasing the recovery of interim transfer of lignite to 85 percent in place of 70 percent. It was submitted by the appellant that no appeal was pending against the said order. Hence, this application.

R.K. Mehta, Himanshi Andley, P.N. Bhandari, counsels for the respondents, submitted that the matter related to the increase in the tariff was pending in the Commission and that the appellant had rushed to the tribunal prematurely in order to prejudice the pending decision of the Commission.

The Tribunal after submission by the parties held that although the matter is pending in the Commission the payment due is for the previous year and thus the same is to be made by the respondent as per the order of the Tribunal. It was further reiterated that, the said order was passed by this Tribunal at the premise of financial hardship to the generator which was being allowed considerably at less transfer price than they actually claimed. The Court concluded that, the maintenance of judicial discipline is a part of our judicial process. Thus, the order was made for the implementation of the order of the Tribunal in its true spirit.[Barmer Lignite Mining Co. Ltd. v. Rajasthan Electricity Regulatory Commission, 2019 SCC OnLine APTEL 27, decided on 17-05-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Securities and Exchange Board of India: The Board comprising G. Mahalingam as  Whole Time Member, allowed Oil India’s application seeking exemption/relaxation from strict enforcement of the requirement contained under Regulation 24(i)(e) of the Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018.

The aforesaid application was necessitated on account of the transfer of 333,20,401 equity shares held by the promoter of the company, i.e., Government of India to the Asset Management Company (AMC) of Central Public Sector Enterprise Exchange Traded Fund (CPSE–ETF). This activity was carried out as a part of the government’s disinvestment process.

Oil India submitted that the proposed buy–back inter alia will help in optimizing its capital structure and improve its key financial ratios and would also lead to a reduction in outstanding shares, improvement in earnings per share and enhanced return on invested capital.

The Board noted that as per Regulation 28 of the Buy–back Regulations, SEBI may, in the interest of investors and the securities market, relax the strict enforcement of any requirement of aforesaid Regulations except the provisions incorporated from the Companies Act, if it is satisfied that the requirement is procedural in nature or the requirement may cause undue hardship to investors.

It opined that the strict enforcement of Regulation 24(i)(e) of Buy–Back Regulations against Oil India, at this point in time, may result in undue hardship to investors including shareholders of the company who may seek to participate in the proposed buyback. In view thereof, the exemption/relaxation sought for by Oil India was allowed.[Buy-back of securities in Oil India Ltd., In re, WTM/GM/CFD/87/2018–19, Order dated 31-01-2019]

Case BriefsHigh Courts

Madras High Court: A Single Judge Bench comprising of N. Seshasayee, J., allowed an appeal on the ground that the respondent gave up his interest in the Order that he had obtained in his favour. 

The facts of this case are that respondent is the biological father of the child and the appellant is the maternal grand father of the child. Seeking custody of the minor child, the respondent filed a petition before the Additional District Court, and the same was ordered in his favour. Challenging the order of the lower Court, the appellant preferred the present appeal.

The counsel for petitioner, Advocate R.Shivakumar, argued that the respondent had gotten married and settled down and did not turn up to see his daughter. It was also reported that the child was 17 years and she does not remember to have seen her father.

The counsel for the respondent, Advocate N.U. Prasanna submitted that the respondent had no interest to take immediate custody of the child since the child was only few months to attain majority and that she had not been in his care through out the duration of this litigation.

This Court allowed the appeal on the ground that the respondent gave up his interest in the order that he had obtained in his favour. [R. Venkatesan v. J. Gunasekaran, 2017 SCC OnLine Mad 35492, Decided on 10-11-2017]

Case BriefsHigh Courts

Calcutta High Court: A Single Judge Bench comprising of Arijit Banerjee, J. disposed of a writ petition by granting payment of interest to a retired employee on the amount of delayed payment of pension.

The petitioner was retired in 2007 while working as a teacher in a higher secondary school. The first payment order was issued in 2007 itself. Under ROPA Rules, 2009 there was a revision of pensionary and gratuity amount payable to the petitioner which order was made in 2012. The arrear revised pension was disbursed in 2013. The petitioner claimed interest on delayed payment of revised pension.

The High Court, at the outset, observed that the Limitation Act in terms does not apply to writ petition. Furthermore, it is a settled law that a retired employee is entitled to some amount of interest on delayed payment of pension. In the present case, it was a bounden duty of the State to disburse the due date. If it failed to do so and released such amount after an unexplained delay, it was obliged to pay interest to the retired employee. In such view of the matter, the Court directed the Director of Pension, Provident Fund and Group Insurance to pay interest to the writ petitioner at the rate of 9% per annum on the arrear of revised pension calculated on and from 1 June 2009 till actual date of payment. The petition was disposed of in the terms above. [Purna Chandra Mondal v. State of W.B.,2018 SCC OnLine Cal 7366, dated 03-10-2018]

Case BriefsHigh Courts

Delhi High Court: A Single Judge Bench comprising of Valmiki Mehta, J. dismissed an appeal filed by the appellant-tenant impugning the judgment of the trial court whereby mesne profits were awarded to the respondent-landlord.

The appellant was a tenant in the subject premises. The tenancy commenced in 1986 and was terminated in 1998 vide legal notice. The appellant in the meanwhile, during the pendency of suit for possession and mesne profits, handed over the possession of the tenanted premises to the landlord in 1999. Therefore, the mesne profits were calculated from May 1998 to August 1999 (date of filing the suit to date of handing over of possession). Against the award of mesne profits, the appellant filed the present regular first appeal under Section 96 CPC.

The High Court noted that the trial court relied on the rent paid by another tenant to calculate the mesne profits. It was also observed that some amount of honest guess work is always involved in calculation of mesne profits, therefore, once the rent paid on similar premises on same area was taken as the basis, there was no illegality in the award of the mesne profits passed by the trial court. Furthermore, the definition of mesne profits in Section 2(12) CPC provides that mesne profits include the interest payable thereon. Holding that the judgment impugned did not require any interfere, the learned Judge went on to observe that there is no inherent right in citizens of this country, who are tenants, to violate the law by overstaying in the premises where the tenancy stands dismissed. The appeal was dismissed. [Hindustan Motors Ltd. v. Seven Seas Leasing Ltd.,2018 SCC OnLine Del 11391, decided on 19-09-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal (NCLAT): A two-member bench comprising of Justice S.J. Mukhopadhaya, Chairperson and Justice Bansi Lal Bhat, Member (Judicial), dismissed an appeal filed by the Operational Creditor against the judgment of the National Company Law Tribunal, Mumbai whereby appellant’s application under Section 9 I&B Code was dismissed.

The appellant had filed an application for initiation of Insolvency Resolution Process against the Corporate Debtor. Before the NCLT, the respondent submitted that the principal amount of debt due was already paid. The NCLT dismissed the application of the appellant. Aggrieved thus, the present appeal was filed. The appellant, placing reliance on Section 3(11) of the Code which defines debt, contended that debt means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. It was submitted that the debt as defined in the Code, includes the interest due on the principal amount as well.

The Appellate Tribunal was of the view that such submission was untenable. It is NCLT, not every interest that can be treated as a debt. If in terms of the agreement, interest is payable to the Operational or Financial Creditor, then the debt will include interest; otherwise, the principal amount is to be treated as debt which is the liability in respect of the claim that can be made from the Corporate Debtor. The Court noted that in the present matter, the principal amount had already been paid, and as per the agreement, no interest was payable. As such, the application under Section 9 on the basis of entitlement of payment of interest was not maintainable. The appeal was accordingly dismissed. [Krishna Enterprises v. Gammon India Ltd.,2018 SCC OnLine NCLAT 360, dated 27-07-2018]

Case BriefsHigh Courts

Delhi High Court: A Division Bench comprising of G.S Sistani and V Kameswar Rao, JJ., dismissed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter “Arbitration Act”) read with Section 10 of the Delhi High Court Act, 1966 and Section 13 of the Commercial Courts Act, 2015 against the order of a Single Judge wherein the appellants had raised objections against the award of the arbitrator under Section 34 of the Arbitration Act.

The crux of the argument of the appellants was that the arbitrator failed to follow the principles of natural justice by not making a full and fair disclosure that he had been appointed as an arbitrator by the respondent in as many as 43 cases prior to the present case. The appellants pleaded that on this ground alone, the award rendered by the arbitrator should be set aside. The appellants, admittedly, had not urged this argument before the Single Judge.

The Court noticed that the arbitrator had issued a notice to the parties, wherein the following relevant sentence was quoted, “….currently adjudicating on multiple claims filed by the claimant company.” The order-sheet reflected that the hearing was attended by counsel for both parties. Consequently, the Court found no grounds for interfering with the order passed by the Single Judge for two reasons. The first being that the argument urged before the Court was not raised in front of the Single Judge, and secondly, the judgment in Aditya Ganapa v. Religare Finvest Ltd. (OMP No. 1038 of 2014, decided on 30.01.2015) relied on by the appellants did not fit in the factum of the present case where the arbitrator had indeed, disclosed his interest to the parties. Appeal dismissed. [Sidhi Industries v. M/s Religare Finvest Ltd.,  2017 SCC OnLine Del 12685, decided on 11.12.2017]

Case BriefsHigh Courts

Kerala High Court: A Division Bench comprising of Antony Dominic and Dama Seshadri Naidu, JJ. heard appeals dealing with the issue as to whether interest accrued from donations received by a charitable institution are taxable or not. The respondent-assessee, a charitable institution, entitled to exemption under Section 11 of the Income Tax Act of 1961 (which deals with exemption from tax on income from property held for charitable or religious purposes), was receiving contributions from donors with express directions that the contributions were to be added by the assessee to its corpus which was exempt from tax.

However, the Revenue rejected this contention and the interest earned from the contributions was brought to tax. In appeal, the interest was exempted and the Income Tax Appellate Tribunal confirmed the order. The Revenue then approached the High Court in appeal. Perusing the conditions laid down in Section 11(1)(d) of the Income Tax Act, the Court came to the conclusion that “interest earned on the contributions already made by the donors would also partake the character of income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust”. Therefore, the interest so earned would qualify for exemption under Section 11(1) of the Income Tax Act. [Commissioner of Income Tax, Kochi v. Mata Amrithanandamayi Math, 2017 SCC OnLine Ker 17573, dated  22.08.2017]

Case BriefsHigh Courts

Calcutta High Court: The petition has been filed by the primary school assistant teacher asking for interest on the gratuity amount which was released to his account after a long delay. The petitioner retired from the position of primary school assistant teacher on 31.7.2002, and his gratuity amount which is his statutory right was released on 19.04.2004, thereby he claimed interest on the delayed payment.

Various orders of the court have settled that if there is any delay on the payment of gratuity to a retired employee, then he is absolutely liable to claim interest on the delay. Arijit Banerjee, J., by taking the reference of the Hon’ble Supreme Court in Union of India v. Tarsem Singh, (2008) 8 SCC 648, stated that gratuity is not a bounty to be handed out by the State at its whim. If there is any delay in his payment of gratuity he is entitled to get interest on that delay. Therefore, the Director of Pension, Provident Fund and Group Insurance, Government of West Bengal as also the Treasury Officer concerned were directed to pay interest at the rate of 9% per annum on the calculated gratuity amount from August 1, 2002 till the actual payment date. [Ramchandra Majumdar v. State of West Bengal, 2017 SCC OnLine Cal 10043, decided on 19.07.2017]