Case BriefsHigh Courts

Delhi High Court: Najmi Waziri, J., while addressing the present matter considered the following issues:

Whether elections to the Board of Directors of a company; allegations of oppression and mismanagement; wrongful appointment of an Ombudsman in violation of Articles of Association could be adjudicated by a civil court

OR

Whether jurisdiction vests exclusively with the National Company Law Tribunal?

Background

Appeal under Sections 104 and 151 read with Order XLIII Rule 1 CPC, impugns an order of the ADJ, Tis Hazari Courts, New Delhi whereby the appellant’s two applications were dismissed and the interim injunction sought by the plaintiff was granted.

Contention of the appellant

Appellant submits that the suit is not maintainable before a Civil Court because of the bar placed on Civil Courts by Section 430 of the Companies Act, 2013.

Section 430 of the Companies Act, 2013

Civil court not to have jurisdiction:

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate.” The effect of the aforesaid provision is that in matters in respect of which power has been conferred on the NCLT, the jurisdiction of the civil court is completely barred.

Appellant also relied on the decision of this Court in SAS Hospitality Pvt. Ltd. v. Surya Constructions Pvt. Ltd., 2018 SCC Online Del 11909, wherein it was observed that,

“The bar contained in Section 430 of the 2013 Act is in respect of entertaining “any suit”, or “any proceedings” which the NCLT is “empowered to determine”.”

Appellant also relied on the decision of Madras High Court in Viji Joseph v. P. Chander, 2019 SCC OnLine Mad 10424 wherein the Court examined an election dispute under Section 20 of the Companies (Management and Administration) Rules, 2014, involving the maintainability of the election of the Board of Directors through electronic means.

After analyzing Section 242 and other circumstances pertaining to the case, Madras High Court concluded that only the Tribunal had powers to deal with the issue raised in the suit and the civil court had no jurisdiction to entertain the suit.

Issues raised in the present matter

Challenging matters relating to the AGM, the Board of Directors of the appellant company, the appointment of an ombudsman and other related issues.

The Madras High Court Decision as referred above has also discussed the expanse of Section 430 of the Companies Act, 2013.

Senior Advocate for the appellant submits that the Companies Act and the National Company Law Tribunal Rules, 2016, are together a complete code. Ample power has been provided to the NCLT – akin to a civil court – to deal with all issues for which powers have been conferred upon the Tribunal.

Further, the appellant submitted that, in the present case, the process of election to the Board of Directors/Members of the Apex Council, has been challenged because of it being allegedly contrary to the procedure laid down in the AoA and the notice calling for the AGM, and that the elections were held on the basis of a voice vote instead of paper ballot, contrary to what was mentioned in the AGM notice.

Hence, the High Court on perusal of the above stated that Sections 241, 242 and 244 of the Companies Act deal with the issues raised in the present suit.

NCLT has been specifically conferred powers to address grievances relating to the affairs of the company, which may be prejudicial or oppressive to any member of the company, or for issues of appointment of directors.

The appointment of an Ombudsman, would also form a part of the conduct and management of the affairs of the company.

Supreme Court in its’ decision in Shashi Prakash Khemka v. NEPC Micon, 2019 SCC Online SC 223 discussed the scope of Section 430 and stated the same to be vast and the jurisdiction of the civil court to be completely barred when the power to adjudicate vests in the Tribunal.

Therefore, the lis and grievances raised in the present suit can be agitated only before the NCLT as the civil court would have no jurisdiction.

The appeal was allowed. [Delhi & District Cricket Association v. Sudhir Kumar Aggarwal, FAO No. 92 of 2020, decided on 21-09-2020]

Case BriefsHigh Courts

Delhi High Court: J.R. Midha, J., while addressing the present petition observed the principle laid down by the Supreme Court of India with regard to Industrial Disputes.

Challenge in the Present petition

Trade Union of PTI Employees and Federation of four PTI Employees’ Unions have challenged the retrenchment of 297 employees by the Press Trust of India.

Permanent and regular workmen have been retrenched while contractual workers have been retained. The principle of ‘last come first go’  has not been followed.

Reasons why retrenchment is violative of certain provisions of the Industrial Disputes Act

Further, it has been stated that retrenchment is violative of Section 25-N of the Industrial Disputes Act as PTI employs more than 100 employees and has not taken the prior permission from the State Government before retrenchment;

retrenchment is violative of Section 25-N of Industrial Disputes Act as three months notice/three months wages in lieu of notice has not been given;

retrenchment is violative of Sections 25-F and 25-G of the Industrial Disputes Act as one month notice indicating the reasons for retrenchment and the retrenchment compensation has not been given;

retrenchment is violative of Section 9A of the Industrial Disputes Act read with Clauses 10 and 11 of the Fourth Schedule as the service conditions of the employees relating to rationalization/technique were altered without notice;

the retrenchment is violative of Section 16A of the Working Journalists Act, 1955 as the reason for retrenchment was the liability for payment of wages and mandating promotional grades as per Clause 18(f) of Majithia Award;

the retrenchment is violative of Section 25-G of the Industrial Disputes Act as there is the substantial short payment of retrenchment compensation to the employees;

closure of Attendees, Transmission and Engineering departments is violative of Section 25-O of the Industrial Disputes Act as the closure was without permission and the retrenchment is illegal and mala fide to sabotage the continued disbursement of Majithia Award benefits and to discourage the employees to pursue their remedies under the Wage Board.

retrenchment constitutes an unfair trade practice as set out in clauses 5(a), (b) and (d) of the Fifth Schedule of the Industrial Disputes Act;

large number of employees have not yet received individual notice of their retrenchment; and the plea of “No work” of PTI is false and contrary to PTI work registers.

Analysis and Decision

Whether the writ petitions should be entertained in view of the statutory remedy available to the retrenched employees under the Industrial Disputes Act?

Bench while deciding the present matter observed that,

The law is well settled by the Supreme Court that a writ petition should not be entertained in respect of industrial disputes for which a statutory remedy is available under the Industrial Disputes Act unless ‘Exceptional circumstances’ are made out.

Writ jurisdiction is a discretionary jurisdiction and the discretion should not ordinarily be exercised if there is an alternative remedy available to the petitioner.

Sum and Substance:

  • If the writ petition discloses ‘Exceptional circumstances’ and does not involve disputed questions of fact, the writ petition in respect of an industrial dispute may be entertained.
  • If the writ petition discloses ‘Exceptional circumstances’ but the facts are disputed, the writ petition should not be entertained and the petitioner has to invoke the statutory remedies available as per law.
  • If the writ petition does not disclose ‘Exceptional circumstances’, the writ petition should not be entertained irrespective of whether the facts are disputed or not.
  • Writ jurisdiction is a discretionary jurisdiction and the discretion is ordinarily not exercised, if an alternative remedy is available to the petitioner. The powers conferred under Article 226 of the Court are very wide but these are extraordinary remedies subject to self-imposed restrictions.

With regard to ‘exceptional circumstances’ Court referred to the decision of Delhi High Court, Hajara v. Govt. of India, 2017 SCC OnLine Del 7982.

In the present matter, there are no exceptional circumstances for the exercise of the writ jurisdiction under Article 226 of the Constitution.

Bench stated that the present matter is squarely covered by the principles laid down by the Supreme Court in U.P. State Bridge Corporation Ltd. v. U.P. Rajya Setu Nigam Karamchari Sangh,2004 (2) L.L.N. 93 wherein the Court held that,

“We are of the firm opinion that the High Court erred in entertaining the writ petition of the respondent Union at all. The dispute was an industrial dispute both within the meaning of the Industrial Disputes Act, 1947 as well as U.P. IDA, 1947. The rights and obligations sought to be enforced by the respondent Union in the writ petition are those created by the Industrial Disputes Act.”

High Court observed that,

“The principles of uniformity and predictability are very important principles of jurisprudence.”

Most of the retrenchment cases are simpler than the present case but the writ jurisdiction is not exercised as the law is clear and well settled that the rights under the Industrial Disputes Act have to be agitated before the Industrial Tribunal.

In the present matter, Court declines to exercise the writ jurisdiction in view of the statutory remedy available to the retrenched employees under the Industrial Disputes Act.

Court noted there is no averment in that in any of the retrenched employees authorized the petitioners to espouse their cause. There is no averment that shows the authority of the petitioners to file the petitions.

Held

Bench held that the petitions are being dismissed on the ground that the retrenched employees have a statutory remedy under the Industrial Disputes Act and no ‘Exceptional circumstances’ have been made out by the petitioners.

Post Script

In view of the well-settled law by the Supreme Court that the writ petition relating to an industrial dispute can be entertained only if there are ‘Exceptional circumstances’, it is mandatory for the writ petitioner to disclose the ‘Exceptional circumstances’ in the Synopsis as well as in the opening paras of the writ petition.

Hence, if the writ petitioner does not disclose the “Exceptional circumstances” in the writ petition, the Registry shall return the writ petition under objections to enable the writ petitioner to disclose the “Exceptional circumstances” in the Synopsis as well as in the opening paras of the writ petition.[PTI Employees Union v. Press Trust of India Ltd., WP(C) No. 10596 of 2018, decided on 18-09-2020]

Case BriefsHigh Courts

Bombay High Court: Anil S. Kilor, J., while addressing the present petition observed that,

“Unless and until the lapse on part of the trustee is proved to be actuated by dishonestly, the drastic action under Section 41-D of the Bombay Public Trust Act, 1950 may not be warranted.”

The present appeal questions the dismissal of proceeding under Section 41-D(5) of the Bombay Public Trust Act, 1950 upholding the removal of appellants from posts of President, Secretary and Trustees of the Trust by the Joint Charity Commissioner, Nagpur.

Respondents 1 to 7 are claiming to be trustees whereas the appellants dispute the same. An application was filed under Section 41-D against the appellants and respondent 8 for removal of them from their respective posts.

Allegations against appellants and respondent 8 were of misappropriation of non-salary grant and amount of fees of the students and procurement of hand loan without any resolution of the Managing Committee and in violation of Section 36(A) of the Act, 1950.

Counsel for the appellants Shambharkar, Counsel for respondent’s 1, 2, 5 and 7 Jibhkate, Senior Advocate R.L. Khapre, assisted by D.R. Khapre, counsel for the respondent 3 and 4, A.G.P for respondent 9.

Analysis and Decision

Section 41D(1)(c) makes it clear that the Charity Commissioner may either on the application of a trustee or any person interested in the trust, or on receipt of a report under Section 41B or suo motu suspend, remove or dismiss any trustee of public trust, if he, continuously neglects his duty or commits any mal-feasance or misfeasance, or breach of trust in respect of the trust under clause (c) of Sub-Section 1 of Section 41-D of the Act, 1950.

Bench had considered the scope of inquiry under Section 41D of the Bombay Public Trust Act in the case of Mukund Waman Thatte v. Sudhir Parshuram Chitale, 2012 SCC OnLine Bom 392.

Court states that “Misfeasance” as used in Clause (c) of Section 41D is more than mere negligence of the trustee to perform his duty.

“Misfeasance” includes breach of duty by the trustee which would result into loss to the trust or would cause unlawful gain to such a trustee, charged with the act of misfeasance.

Further, the above Judgment makes it clear that imputation reflecting on the integrity of trustees has to be fortified by proof of high degree which will have to be higher than the standard of proof required in civil proceedings.

Unless and until the lapse on part of the trustee is proved to be actuated by dishonestly, the drastic action under Section 41-D of the Act, 1950 may not be warranted.

Courts below have committed error in holding that the appellants have committed malfeasance and misfeasance or breach of trust in respect of Trust.

Bench also held that the orders and judgments passed against appellant 2 by both Courts below are without jurisdiction.

Hence, the Court does not want to go into the issue raised by the counsel for the appellants that the respondents 1 to 7 are removed from the trusteeship of the Trust, as an answer, either way to the said issue will not change the result of the present proceeding because even if they are held to be removed as trustees, they are ‘persons having an interest in the Trust’ which is sufficient to maintain the application under Section 41-D of the Act, 1950. [Eknath Tukaramji Pise v. Rama Kawaduji Bhende, First Appeal No. 182 of 2014, decided on 17-09-2020]

Case BriefsHigh Courts

Calcutta High Court: Ravi Krishan Kapur, J., while addressing an issue pertaining to Employees’ State Insurance Act, 1948, observed that,

The ESI Act provides for certain benefits to employees in case of sickness, maternity and employment injury and makes provisions for certain other matters in relation thereto. A perusal of the various sections of the Act would reveal that the Act is made applicable to all factories.

Present petition was filed challenging an order passed under Section 85B of the Employees’ State Insurance Act, 1948 whereby the Employees’ State Insurance Authorities levied penal damages of nearly Rs 60 lakhs under Section 85B of the Act on the petitioner establishment for the delay in making payment of its contributions for the period from September 2002 to March 2010.

By a conversion agreement between the owner of Jute Mill and petitioner 1, petitioner 1 was allowed to utilize the entire production capacity of the jute mill for the production of jute goods.

Further, the ESI authorities claimed that a sum of Rs 3,73,04,297 was in arrears out of which only a sum of Rs 1,10,97,511 was on account of ESI contributions and the rest represented damages and interest.

Petitioners contended that the above-stated dues said to be payable by the petitioners were primarily for the period prior to the agreement which had been executed between the owners of the jute mill and petitioner 1.

An impugned order came to be passed inter alia holding the petitioner company liable for a sum of Rs 59,61,588 on account of damages for the delayed payment of contributions for the period from September, 2002 to March, 2010.

Petitioner contended that the said order was liable to be set aside and quashed on the ground that the same was an unreasoned order.

Decision

Bench opined that the question as to whether the damages imposed under Section 85B of the Act are justiciable or not or whether the quantum of damages is in accordance with the principles for computing damages is certainly a dispute which would fall within the ambit of clause (g) of Section 75 (1) of the Act.

Court further added that, under Section 75(1)(g) of the Act, the Insurance Court would ordinarily have jurisdiction to decide the question as to whether damages imposed under Section 85B of the ESI Act are justifiable or not.

Bench referred to the Supreme Court decision in B.M. Laxmanamurthy v. Employees’ State Corporation, Bangalore (1974) 4 SCC 365, wherein it was held that

“the Act is a beneficial piece of social security legislation in the interests of labourers in factories at the first instance with the power to extend to other establishments”.

Thus, the Act is a welfare measure meant to provide certain benefits to the employees in certain cases of sickness, maternity and employment injury. It is also a well-settled principle of statutory interpretation that socio-economic legislation should be interpreted liberally with an end to promote the scheme of the Act and avoid the mischief which it seeks to control.

Crux of the dispute in this petition pertains to the applicability and imposition of the damages by the ESI authorities under Section 85B of the Act.

What is the intention behind the insertion of Section 85B of the ESI Act?

To deter the employer who makes any default or delay in depositing the contribution amount.

In the present matter, there was a delay of 8 years on the part of the establishment in making payment of their ESI dues.

Delayed payment, which means untimely payment gives rise to a breach of the obligations under the Act and for such failure and omission (if not explained) the employer exposes itself to recovery of damages.

Hence, the levy of damages as per Section 85B of the Act was fully justified and warranted.

In view of the admitted indisputable and unassailable fact of delay for more than 8 years in making payment of the ESI contributions, no reasonable or prudent person apprised of these facts could take a different view on the question of whether such non-payment on the part of the petitioners was intentional or not.

Petitioner failed to show any mitigating factors or offer any cogent explanation.

Court further added that in the absence of any prescribed special period of limitation for levy of damages under the Act, the levy of damages or penalty for defaults beyond the period of 3 years cannot be rejected as being beyond the jurisdiction of the respondent Corporation.

Section 93A of the Act clearly provides that both the employer and the person to whom the factory or establishment has been transferred remain jointly and severally liable to pay the amounts due in respect of any amount under the Act.

In view of the above-stated Section, Court stated that a transferee cannot claim that he being the transferee of an establishment is not liable to pay the dues accruing before the transfer.

Court found no aspect of limitation insofar as damages were concerned.

Therefore, failure on the part of the establishment to carry out their statutory obligations was in conscious and wilful disregard of their lawful obligations.

“An the absence of any prescribed special period of limitation for levy of damages under the Act, the levy of damages or penalty for defaults beyond the period of three years cannot be rejected as being beyond the jurisdiction of the respondent Corporation.”

Respondent authorities were directed to take all available steps in accordance with law for expeditious recovery of the balance amount payable under the impugned order by the petitioner.[Premchand Jute & Industries (P) Ltd. v. Employees State Insurance Corporation, 2020 SCC OnLine Cal 1574, decided on 18-08-2020]

Case BriefsForeign Courts

Supreme Court of the United Kingdom: While deciding the instant appeal raising questions important to the international market in telecommunications such as –

  1. Whether a court in the United Kingdom has jurisdiction and may properly exercise a power, without the agreement of both parties to grant an injunction to restrain the infringement of a UK patent where the patented invention is an essential component in an international standard of telecommunications equipment, which is marketed, sold and used worldwide, unless the implementer of the patented invention enters into a global licence of a multinational patent portfolio.
  2. Whether a UK Court can determine royalty rates and other disputed terms of such a global licence
  3. The circumstances in which it is appropriate for English court to grant a prohibitory injunction or to award damages.

 Answering the aforesaid questions, the Full Bench of Lord Reed, Lord Hodge, Lady Black, Lord Briggs and Lord Sales, JJ., unanimously held that English courts have the power to require telecoms companies and smartphone makers to take out a global patents licence or face a UK Court injunction. It was further observed that the contractual arrangements European Telecommunications Standards Institute (ETSI) has created under its IPR Policy give the English courts jurisdiction to determine the terms of a global license of a multi-national patent portfolio.

The instant matter consisted of 2 appeals which concern actions for infringement of UK patents said to be essential to the implementation of international standards for mobile telephony, such that it is not possible to make, sell, use or operate mobile phones and other equipment that is compliant with the standards without infringing the patents. Patents of this kind are called Standard Essential Patents (SEPs). The international standards in question are those set by the ETSI for 2G (GSM), 3G (UMTS) and 4G (LTE). Under its IPR Policy, ETSI requires the SEP owner to give an irrevocable undertaking to license their patented technology on terms that are “fair, reasonable and non-discriminatory” (FRAND). The first appeal concerns an action brought by Unwired against Huawei for infringement of five UK patents which Unwired claimed to be SEPs. The second appeal concerns an action brought by Conversant against Huawei and ZTE for infringement of four of its UK patents.

Acknowledging the importance of the issues raised in the instant appeal vis-à-vis international market in telecommunications, the Full Court meticulously addressed the questions-

  • Regarding Jurisdiction and Forum Conveniens – It was contended that properly construed, ETSI’s IPR Policy only permits the English courts to determine the terms of a license of UK SEPs. Dismissing the contention, the Bench held that English courts have jurisdiction and may properly exercise their powers of granting injunctions etc. Questions as to the validity and infringement of a national patent fall to be determined by the courts of the state which has granted the patent. It was observed that the IPR Policy envisages 2 things namely- the courts may decide whether or not the terms of an offered licence are FRAND and that the courts should look to and draw on commercial practice in the real world while making this assessment. Regarding the issue of proper Forum, the Court noted that Chinese courts currently do not have the jurisdiction needed to determine the terms of a global FRAND licence, unless all parties agree that they should do so.
  • Regarding Royalty- upon perusing the contention that Unwired should have offered Huawei a licence with a worldwide royalty rate because non-discrimination limb of the FRAND undertaking means that ‘like situations must be treated alike and different situations differently’, the Court observed that non-discriminatory part of the undertaking indicates that, to qualify as FRAND, a single royalty price list should be available to all market participants. This must be based on the market value of the patent portfolio, without adjustment for the characteristics of individual licensees.
  • Regarding Injunctions and Damages- it was contended by Huawei that, even if it is infringing Unwired and Conversant’s SEPs, the more appropriate and proportionate remedy would be for the Court to award the claimants damages. Rejecting the argument, the Bench held that an award of damages would not be an adequate substitute for an injunction. It was observed that there is no risk that Unwired or Conversant could use the threat of an injunction as a means of charging exorbitant fees, since they cannot enforce their rights unless they have offered to license their SEPs on terms which the Court is satisfied are FRAND.

[Unwired Planet International Ltd. v. Huawei Technologies (UK) Co Ltd., [2020] UKSC 37, decided on 26-08-2020]


Sucheta Sarkar, Editorial Assistant has put this story together

Case BriefsHigh Courts

Sikkim High Court: Bhaskar Raj Pradhan, J.has framed an eminent question for determination which will have an impact on the dispensation of justice to complainants under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the “POSH Act”).

The High Court will determine whether the broad interpretation of the “workplace” under Section 2(o)(vi) of the POSH Act would bring within its ambit attending a private marriage function in a private hotel.

The applicant sought direction upon the respondents not to take any step on the basis of the show-cause notice dated 10-06-2019 and the order of termination pursuant to the report of the respondent 4. 

Petitioner sought to allow him to join the post of a professor of the Department of Mass Communication, appoint him as the Head of the Department and pay his regular salary including his arrears.

Kalol Basu, Counsel represented the applicant and Karma Thinlay Namgyal, Senior Advocate assisted by K.T. Gyatso, on behalf of the respondents.

Applicant’s counsel urged that the entire enquiry conducted by respondent 4 was without jurisdiction as the alleged incident of sexual harassment purportedly had taken place at a hotel during a marriage function and the same does not fall within the definition of “workplace” as per the existing law.

Decision

Bench stated that admittedly the alleged incident took place at a marriage function in a private hotel.

Section 2(o) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 defines the workplace.

In view of the said definition of “workplace”, it seems that the petitioner does have a strong arguable point on the jurisdiction or the lack of it.

Whether the broad interpretation of “workplace” would bring within its ambit attending a private marriage function in a private hotel, is a question which may have to be examined.

In the stated circumstances, High Court is of the considered view that during the pendency of the writ petition before this court, the respondents 1 to 3 should not give any further effect to the termination order dated 28-06-2019.

The application was disposed of in the above view. [Silajit Guha v. Sikkim University, 2020 SCC OnLine Sikk 99, decided on 20-08-2020]

Case BriefsHigh Courts

Punjab and Haryana High Court: The Division Bench of Dr S. Muralidhar and Avneesh Jhingan, JJ., dismissed the instant petition upon discovery of availability of alternate remedies to the petitioner.

In the present case, the petitioner has questioned the demand for concession fees to the tune of Rs 2,19,10,897 sought from the Petitioner by the Respondent/Airport Authority of India, through minutes of meeting dated 25-05-2020 and letter dated 01-07-2020.

During the course of the proceedings, Article 22.1 of the Concessionaire Agreement (CA) dated 11-12-2019, caught the attention of the Court which affirmed the liability of the petitioner to pay the respondent for actual advertisement area made available to it at Amritsar Airport. The Dispute Resolution clause is reproduced below for reference-

“22.1 – Dispute Resolution – Any dispute, difference or controversy of whatever nature howsoever arising under or out of or in relation to this Concession Agreement (including its interpretation) between the parties, shall be governed and regulated in accordance with the provisions contained at Clause 5.16 of the RFP and in accordance with the provisions of Arbitration and Conciliation Act, 1996 as amended from time to time.”

On perusal of the above stated Clause 22.1 along with Clause 5.16 of the Request For Proposal (RFP), the Court was successful in grasping that any grievance under the CA has to be resolved via a two-tier mechanism. The mechanism includes submission of a written application before the Dispute Resolution Committee (DRC) and later, resolution under the Arbitration and Conciliation Act, 1996, if the same remains unresolved.

The petitioner invoked the dispute resolution mechanism subsequent to which a meeting of DRC was held on 25-05-2020. Counsel for the respondent, Vivek Singla has asserted that the petitioner ought to have availed all the further remedies in terms of the CA.

When the counsel for the petitioner, Varun Singh was catechized over the maintainability of the present petition, he referred to a plethora of cases such as Harbanslal Sahnia v. Indian Oil Corpn. Ltd., (2003) 2 SCC 107, Hindustan Petroleum Corpn. Ltd. v. Super Highway Services, (2010) 3 SCC 321 and Union of India v. Tantia Construction (P) Ltd., (2011) 5 SCC 697. However, unfortunately, the Court found all of them to be of no assistance in the petitioner’s case. The Court was not content with the arguments advanced by the petitioner with respect to the maintainability of the present petition.

Thus, the Court declined to exercise its jurisdiction under Article 226 of the Constitution of India since an “efficacious and effective alternative remedy” is available to the petitioner in view of the CA. In the event of a dispute, the parties could also plead for interim relief under the Arbitration and Conciliation Act, 1996.

Given the circumstances, the Court declined to examine the factual dispute leaving it open for the parties to avail other remedies under the law.

In view of the above, the petition has been dismissed by the Court.[Proactive In and Out Advertising (P) Ltd. v. Airport Authority of India, 2020 SCC OnLine P&H 1172, decided on 11-08-2020]

Case BriefsHigh Courts

Delhi High Court: Jyoti Singh, J., refused to entertain a writ petition filed by a member of All India Services holding that the remedy lies with Central Administrative Tribunal.

Petitioner qualified the Civil Services Examination in the year 1986 and was allocated Indian Police Service (IPS) and assigned Haryana Cadre.

Petitioner assailed the empanelment dated 18-02-2019 made by UPSC and the subsequent appointment of respondent 4 as DGP, State of Haryana vide appointment order dated 18-02-2019.

Appointment of respondent 4 was initially challenged by the petitioner in the Supreme Court which was disposed of with the order that petitioner may approach the jurisdictional High Court.

UPSC Counsel raised an objection to maintainability and submitted that this Court has no jurisdiction to entertain the petition.

He contended that, IPS is an All India Service, and thus petitioner is amenable to the jurisdiction of Central Administrative Tribunal.

Senior counsel for the petitioner further submitted that the present petition had been filed in terms of the liberty granted by the Supreme Court and thus it is not open to respondents to raise any objection to its maintainability.

Decision

Petitioner is a member of an All India Service, which is covered under Section 14(1)(b)(i) of the Administrative Tribunals Act, 1985

Section 14(1)(b)(i) of the Act provides that, save as otherwise expressly provided in the Act, the Central Administrative Tribunal shall exercise on and from the appointed day, all the jurisdiction, power and authority exercisable immediately before that day, by all Courts in relation to all service matters concerning a member of any All India Service.

Section 3(q) of the Act defines ‘Service Matters’ as all matters relating to conditions of a service and includes matters with respect to tenure, confirmation, seniority, promotion etc.

Constitution Bench of Supreme Court observed in the case of L. Chandra Kumar v. Union of India, (1997) 3 SCC 261, that the Tribunals created pursuant to Article 323-A or under Article 323-B of the Constitution of India are competent to hear matters entrusted to them and will continue to act as only Courts of ‘first instance’ in respect of the areas of law for which they have been constituted.

Insofar as the jurisdiction of the High Courts is concerned, Supreme Court further observed that the jurisdiction conferred upon the High Courts under Articles 226/227 and upon the Supreme Court under Article 32 of the Constitution of India, is a part of the inviolable basic structure of the Constitution.

While this jurisdiction cannot be ousted, other Courts and Tribunals may perform a supplemental role in discharging the powers conferred on the High Courts and the Supreme Court.

Thus, in view of the above stated Supreme Court decision, High Court cannot entertain the present petition and remedy of the petitioner lies only before the CAT. [Prabhat Ranjan Deo v. UPSC, 2020 SCC OnLine Del 738 , decided on 13-07-2020]

Case BriefsHigh Courts

Allahabad High Court: The Division Bench of Shashi Kant Gupta and Saurabh Shyam Shamshery, JJ., allowed the plea by the wife seeking  the approval of being appointed as the guardian of her husband lying in vegetative state.

The Court while acknowledging the fact that there was no legislative enactment providing appointment of a guardian for a person lying in a comatose state considered the fact that they have been called to discharge ‘parens patriae’ jurisdiction. However under Article 226 of the Constitution of India they can pass orders and given directions as are necessary for subserving the ends of justice when no remedy is provided in any statute in respect to persons lying in comatose condition.

The petitioner had approached the High court praying to be appointed as the guardian of her husband who had been lying in a vegetative state in order to protect his interest and administer his investments, business, bank accounts etc. and utilize them when in need to meet expenses towards medical treatment and family welfare. Petitioner’s Counsel, Bidhan Chandra Rai, submitted that petitioner’s husband had been in comatose state for past one and a half years and the Doctors’ had advised that he would remain so until his eventual demise and now the petitioner has the sole responsibility of meeting the medical expenses and marrying her two daughters. It relied on the decision of the Kerala High Court in the case of Shobha Gopalakrishnan v. State of Kerala, 2019 SCC Online Ker 739, whereby a division bench appointed the legal heir of the victim as the guardian, reliance was also placed on the judgment of Delhi High Court, in the case of Vandana Tyagi v. Government of National Capital Territory of Delhi, 2020 SCC Online Del 32, which followed the suit.

The Court while allowing the petition further observed the case of Shobha Gopalakrishnan (supra) wherein certain broad guidelines with regard to appointment of guardian qua a person lying in a comatose state were laid, since no specific provision was available in any statute in this regard. The guidelines framed appear to be formidable and sound and, therefore, can be used as framework for formulating guidelines that need to be implemented in the State of Uttar Pradesh till such time, the legislative enactments are framed and specific provisions are made as to how guardians are to be appointed qua persons in a comatose state. [Uma Mittal v. Union of India, 2020 SCC OnLine All 777 , decided on 15-06-2020]

Case BriefsHigh Courts

Delhi High Court: Rajnish Bhatnagar, J., while addressing petition in regard to matrimonial discord resulting into husband committing suicide held that,

“…deceased/husband appears to be a weak character who was not in a position to face the ups and downs of life and he adopted the short cut method in order to bring an end to his agony and worldly affairs.”

On the rise of matrimonial disputes between the husband and wife i.e. deceased and petitioner/accused, respectively, petitioner left and started residing with her parents at Sikkim.

Allegations such as — gold jewellery and cash all worth 18 Lakhs was taken by the petitioner which actually belonged to the deceased.

After the said allegations were made, a complaint was filed by the police and deceased filed two cases including a petition under Section 9 of Hindu Marriage Act for Restitution of Conjugal Right.

Deceased suffered with stress and depression due to the pertaining circumstances and faced continuous threats from the petitioner resulting into committing suicide.

Deceased left a suicide note stating that the petitioner and his family members were responsible for his death.

Ramesh Gupta, Senior Counsel, for the petitioner submitted that there was no direct and proximate link between cruelties allegedly inflicted by the petitioner.

The alleged Gold Jewellery was petitioner’s Stridhan and all the other allegations are vague and false.

“…court should not act as a mouthpiece of the prosecution.”

Further, the Senior Counsel adding the following to his submissions:

Court has undoubted power to sift and weigh the evidence for finding out whether or not a prima facie case is made out against the accused.

He further urged that for the invocation of Section 306 of Penal Code, 1860, ingredients of Section 107 of the IPC have to be satisfied and it has to be established that there was instigation, provocation, incitement, or encouragement from the side of the petitioner to the deceased who committed the act of such a desperate nature.

It is further urged that the deceased was of hypersensitive nature, who failed to cope up with the hardships of life.

Analysis and Decision of the Court

Scope of this Court

At the time of framing of charge, the Court is not supposed to look into the evidence of the case in detail and is only to consider whether there is a strong suspicion against the accused on the basis of the material that comes before it. The court has the power to sift the evidence for the limited purpose of finding out, whether or not a prima facie case is made out against the accused.

However, the Court is not supposed to delve deeply into the merits of the matter and start a roving expedition into the evidence.

There is no one fixed definition that may be ascribed to the term prima facie’ nor can the term strong suspicion have a singular meaning.

Trial Court charged the petitioner for the offence under Section 306 IPC for abetting the murder of her husband.

What did the suicide note contained?

“…I am unable to face the present circumstances for which my wife Reena Prasad is responsible. Due to her false allegations against me, I am committing suicide. I wish that after my death, my dead body be handed over to my in laws. I love my wife very much but she loves money.”

“… I do not have enough means to fight court cases against Reena. Whatever cases she has filed against me are all false.”

“… I can not think clearly ever since my wife has left me. It is my desire that after my death, the money which has been taken away by my wife be utilized to pay my debts.”

Bench on perusal of the facts and the suicide note placed stated that the ingredients of abetment are totally absent in the instant case for an offence under Section 306 IPC.

Taking the totality of material on record, tone and tenor of the suicide note and facts and circumstances of this case into consideration, it leads to the irresistible conclusion that it is the deceased and he alone and none else is responsible for his death.

Deceased appeared to be hypersensitive to ordinary petulance, discord and differences in domestic life quite common to the society to which the victim belonged and such petulance, discord and differences were not expected to induce a similarly circumstanced individual in a given society to commit suicide.

In High Court’s opinion, Trial Court had failed to apply the law properly to the facts of the present case and committed an error in reading the suicide note which is shorn of ingredients of Section 306 IPC.

Reading of the suicide note clearly shows that the petitioner at no point of time instigated, goaded, incited and encouraged the deceased with such an intention that he should commit suicide.

Thus High Court found trial court’s Order to be of complete non application of the law in the right perspective and allowed the present revision petition. [Reena v. State (NCT of Delhi), 2020 SCC OnLine Del 630  , decided on 08-06-2020]

Op EdsOP. ED.

Amid the din against the CAA-NRC combine, a fresh challenge under a seldom employed and much less provocative provision of the Constitution of India has emerged. As per ­­the ostensible remit of Article 131 of the Constitution, the challenge has emerged in the form of Governments of constituent States of the Indian Union challenging the constitutional validity of a lawfully enacted statute by Parliament. In challenging the validity of a law that has sharply divided public and political opinion, the move throws up some interesting questions as to the invocation of such a remedy under the scheme of our federal Constitution.

Ambit of Article 131

Article 131 is in many respects an anathema to the Government’s oft-quoted catchphrase ‘cooperative federalism’. The Constitution Framers were well aware that disputes between the Union and the constituent States is an inevitability for any federal polity and therefore provisioned for either the Government of India or a State Government to by-pass the judicial hierarchy and directly approach the Supreme Court under its original and exclusive jurisdiction. However, the remit of Article 131 is tempered on certain counts and the same assumes great significance vis-à-vis the issue at hand.

A bare perusal of Article 131 manifests that (1) exclusive jurisdiction vests in the Supreme Court of India to the exclusion of any other court, (2) there must exist a ‘dispute’, (3) said dispute must be between either the Government of India i.e. the Central Government and one or more constituent State or States or between two or more of such constituent States of the Union of India, and most importantly (4) the dispute must involve a question of law or a question of fact upon which the extent or the very existence of a legal right is predicated. Two integral constituents of Article 131 i.e. ‘dispute’ and ‘legal right’ must therefore be emphasised.

Maintainability of the Suit

The  Supreme Court, vide its law settling judgments in State of Rajasthan  v. Union of India[1]  as well as State of Jharkhand v. State of Bihar[2] have authoritatively established that ‘dispute’ must involve the assertion and/or vindication of a legal right of the Government of India and/or that of a constituent State of the Union. A caveat in that regard is that a genuine legal right must have been asserted by way of the suit concerned and any issue merely touching upon political concerns would be outrightly rejected by the Supreme Court.

It becomes absolutely fundamental to take into consideration that any invocation of Article 131 must concern itself with the rights, obligations, duties, powers, immunities and liberties only insofar as the parties to the suit are concerned. The Supreme Court has further established, vide the above cited judgments, that an original suit under Article 131 must not and cannot be likened to a civil suit in terms of the Code of Civil Procedure, 1908 (CPC) and therefore in the matter at hand it is not necessary that the plaintiff States must assert the ‘legal right’ unto themselves.

Evidently, Article 131 has been manifested to not be encumbered with any such narrow expositions and a suit thereof would be maintainable so far as it brings into question any dispute centred around the legal or constitutional right asserted by the defendant Government of India not in consonance with such rights and powers asserted by the plaintiff States. However, this is precisely where the plaintiff States’ suit falters for nowhere in the respective plaints, have the States of Kerala as also Rajasthan challenged or brought into question the constitutional power of the Government of India to enact the Citizenship (Amendment) Act, 2019. In fact, vide the respective plaints it has been submitted that by virtue of Article 256, the constituent States of the Union shall be constitutionally obligated and duty bound to implement the provisions of the Amendment Act, 2019 unless the Supreme Court deems it unconstitutional.

It is no one’s case that the validity of a Central legislation cannot be challenged by the Government of a State under Article 131. However, the same has to be tempered by way of the Constitution Bench judgment in State of Rajasthan[3]whereby two conditions were laid out as already exhibited hereinabove. For invoking Article 131 therefore, there has to be a dispute between the legal/constitutional right or authority or power asserted by the defendant vis-à-vis the plaintiff. The constitutional power of the Central Government to enact the Amendment Act, 2019 as per List I (Union List) of the VIIth Schedule having nowhere been challenged, the pre-requisite conditionalities under Article 131 are not satisfied.

In fact, the  Supreme Court, vide its judgment in State of Jharkhand[4]  furthered the abovecited position of law and came to the conclusion that there isn’t any bar to a test of constitutional validity of a statute under the original jurisdiction of the Supreme Court. However, the same has to concern a disputed question of law/fact that impinges, erodes, diminishes or even outrightly strips the legal right asserted by a ‘party to the proceedings’.

Notably, the plaintiff States have predicated the ‘dispute involving questions of law and fact’ on the alleged violation of the fundamental rights of their inhabitants. This is erroneous on two primary grounds; one, the Amendment Act, 2019 does not in any manner deem to take away or abridge the rights of Indian citizens for it is merely an enabling provision to speed up the grant of Indian citizenship for certain religious communities and two, the said averment is grossly dehors the constitutional scheme of our federal polity wherein the constitutional power to regulate affairs pertaining to ‘Citizenship, naturalisation and aliens’, ‘Extradition’ and ‘Admission into, and emigration and expulsion from, India; passports and visas’, vests with Parliament to the absolute exclusion of State Legislatures. Evidently thus, the State Governments are merely manufacturing a ‘dispute’ where none exists as per the scheme of the Constitution of India.

In conclusion, the reader must be apprised of the fact that the question pertaining to invocation of jurisdiction under Article 131 insofar as it concerns a challenge to the constitutional validity of a statute has in fact been referred to a larger Bench of the Supreme Court in light of the apparent conflict between the two judgments in State of Madhya Pradesh v. Union of India[5] and the abovecited State of Jharkhand v. State of Bihar[6]. Regardless, the same doesn’t alter or dilute the ambit and scope of Article 131 as laid out by State of Rajasthan[7]  judgment.


*Authors are practising Advocates in Delhi.

[1] (1977) 3 SCC 592

[2] (2015) 2 SCC 431

[3] State of Rajasthan v. Union of India, (1977) 3 SCC 592

[4] State of Jharkhand v. State of Bihar, (2015) 2 SCC 431

[5] (2011) 12 SCC 268

[6] (2015) 2 SCC 431

[7] State of Rajasthan v. Union of India, (1977) 3 SCC 592

Case BriefsForeign Courts

Court of Appeal of the Democratic Socialist Republic of Sri Lanka: A Division Bench of Vasantha Kodagoda and Arjuna Obeyesekere, JJ., dismissed an appeal filed against the Judgment of the Commissioner-General of Inland Revenue.

The petitioner had stated that he was a building contractor and his business was registered with the Department of Inland Revenue (the Revenue) for the payment of Value Added Tax (VAT). He had admitted that he had delayed the filing of the VAT returns due to which the Revenue had disallowed the claims he had made for VAT refunds. The Revenue had served the Petitioner a Certificate of Tax in default in a sum of Rs 11,137,283. Further, the petitioner had appealed and the penalty on the sum had been waived and the sum in default had been reduced to Rs 6,405,616. The revenue had filed a case against the petitioner in the district court to recover the specified sum. The petitioner stated that he had faced many difficulties while carrying out several projects in 2009 in the district of Mannar and that he was discriminated by public servants on the basis of his ethnicity due to which payments due to the Petitioner for work had been delayed disrupting the smooth functioning of his business which is why the petitioner had made an application to the revenue. The Court after going through the application observed that even though the petitioner had explained the difficulties faced but was unable to produce any document in support of his facts and it was concluded that an exemption cannot be granted to him aggrieved by which the petitioner had appealed to the Commissioner-General of Inland Revenue but his appeals had been rejected, thus the instant application, as well as a Writ of Mandamus compelling the Revenue to grant an exemption, was filed. 

The Court while dismissing the appeal explained that there was considerable delay in invoking the jurisdiction of this Court as the application was filed almost six years after the appeal was rejected, it observed that the Petitioner had not offered any explanation for the delay and further the petitioner was not alleging that the decision of the Commissioner-General of Inland Revenue was illegal, thus the application deserves to be dismissed. [Hitibandara Attapattu Mudiyanselage Ananda Parakrama Kumara Aigama v. Nadun Guruge, CA (Writ) Application No: 108 of 2019, decided on 02-12-2019]

Case BriefsHigh Courts

Uttaranchal High Court: Lok Pal Singh, J., addressed an application that sought to quash criminal proceedings under Sections 420, 468, 471 of Penal Code, 1860 and Section 66(D) of Information Technology Act pending in Judicial Magistrate Court.

In the present matter, a complaint was lodged against the applicant that he committed forgery for purpose of cheating by using as genuine the forged and fraudulent document with the intention to cause damage to the Trust and hacked the information stored in the computer.

A charge-sheet was submitted by against the applicant in respect of selfsame offences. Further, Magistrate took cognizance and summoned the applicant to face the trial in respect to the mentioned offences.

Siddhartha Singh, applicant for the counsel submitted that the applicant was an old trustee and was appointed as the President of Kailashanand Mission Trust. He submitted that proceedings against the applicant are nothing but the outcome of the revengeful activity of the complainant and his associates. Complainant concealed the fact of the applicant being the President of the Trust and went on to lodging an FIR against him in the name of him being an “Unknown Hacker”.

According to the applicant’s counsel, the entire proceedings are nothing but an abuse of process of law and Court.

Senior Advocate, Rakesh Thapliyal on behalf of the complainant due to nefarious activities of the applicant, Swami Kailashanand was annoyed with him and by way of a resolution of trust, he cancelled all rights of the applicant and even removed him from the post of Manager of Trust.

He further submitted that various complaints were filed against the applicant for forging Trust’s letter pad, seals and receipt book and resolutions.

Applicant’s Counsel while relying on the Supreme Court case in, International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) v Nimra Cerglass Technics (P) Ltd., (2016) 1 SCC 348, argued that in order to bring a case for offence of cheating, it is not merely sufficient to prove that a false representation was made, but it is further necessary to prove that the representation was false to the knowledge of accused and was made in order to deceive complainant.

According to the ruling in Supreme Court case of Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460, in which certain principles in respect of exercise of jurisdiction under Section 482 CrPC are laid down, one of the principles which hold significance in the present matter is following:

“…Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not.”

Thus, in the present matter, High Court stated that in view of the above, a bare perusal of FIR as well as the charge sheet, it is apparent that foundation of criminal offence is laid against the applicant. Jurisdiction under Section 482 CrPC should not be exercised to stifle or scuttle the legitimate prosecution. Court stated that in the present case, this is not the stage to quash the charge sheet.

Hence, Since, prima facie case is made out against the applicant, the Magistrate has rightly taken cognizance and summoned the applicant to face the trial in respect of the offences complained of against him. [Vijay Kumar Gupta v. State of Uttarakhand, Criminal Misc. Application No. (C-482) No. 1087 of 2016, decided on 18-12-2019]

Case BriefsForeign Courts

United Kingdom Supreme Court: A Full Bench of Lord Carnwath, Lady Black, Lord Briggs, Lady Arden and Lord Kitchin, JJ. dismissed the instant appeal on the ground that the license conferred a possessory right and there is no basis on which Court should interfere with the Judgment of lower court of appeal.  

The appellant was the owner of the Manchester Ship Canal and adjacent riparian land. Vauxhall Motors Ltd, the respondent, bought the land adjacent to the riparian land to construct a vehicle manufacturing plant. The respondent needed to discharge surface water and treated industrial effluent from the planned manufacturing complex into the canal, and acquired a small part of the riparian land for the same from the appellant, leaving a small strip of land between the canal and the factory site across which the respondent acquired the right to discharge the surface water and industrial waste by the means of a license. The license was terminated when Vauxhall failed to pay its annual rent. Vauxhall then claimed equitable relief from forfeiture which was granted by the lower court. 

Katherine Holland on behalf of the appellant argued that only a tenant and not licensee may ask for relief against forfeiture as a lease confers proprietary interests in the land while a license does not. She also submitted that possessory rights define the boundary of equitable relief from the forfeiture of rights in relation to chattels and the same can’t be applied to rights over a land. 

William Norris on behalf of the respondent argued that a better boundary than one which merely accommodated possessory rights would be one which extended the equitable jurisdiction in relation to all forms of rights to use property, provided only that the right of termination is intended to secure the payment of money for the performance of other obligation.  

The Court rejected the claim that possessory rights in relation to chattels and other personality equates to something more akin to ownership, and therefore a proprietary interest in relation to land. It was held that the lower court was right to conclude that the rights granted by the license fell within that possessory class to which the jurisdiction to grant relief extends.[Manchester Ship Canal Ltd. v. Vauxhall Motors Ltd., [2019] 3 WLR 852, decided on 23-10-2019]

Case BriefsHigh Courts

Tripura High Court: Arindam Lodh, J. dismissed a writ petition by the petitioner challenging the show cause notice issued against him whereby the dealership of his fair price shop was threatened to be cancelled. 

The counsel appearing for the petitioner is K. Nath and learned Additional GA appearing for the State-respondent is D. Sharma.

Petitioner was appointed as a dealer of a fair price shop in 1968. A show-cause notice was issued upon him in 2018 stating that he had violated the guidelines provided under Tripura Foodgrains Dealers Licensing Order, 1964 for his personal gain. The petitioner replied to the show cause stating that he was aged 86 years and suffering from Parkinson’s disease due to which he could not move independently. As a result, he had to appoint one person or employee for the smooth functioning of the fair price shop licensed to him. Thus, he urged that the person in whose favour he had executed a power of attorney (one Ratan) for running the dealership of shop, not be treated as a proxy dealer. 

The Court noted that it was evident from the Power of Attorney that the petitioner had bestowed the responsibilities and the liabilities upon Ratan and that he has no involvement with the running of the shop. Thus, it was true that the petitioner has not been running the business for which the dealership was provided to him. Further, it was also admitted by the petitioner that he has nominated a person (apart from his family members) to run his fair price shop. 

The Court also took note of a memorandum dated 18-03-2011 issued by the Director, Food, Civil Supplies & Consumer Affairs, Government of Tripura wherein it was clearly mentioned that “no F.P. Shop shall be allowed to run by any person other than the original licensee (i.e. in favour of whom the license has been issued by the Licensing Authority) for an unlimited or unreasonable period”. 

In view of the above, it was held that the petitioner was running his business of contradictory to the directives of the government, and the court had no jurisdiction to invade or replace the decision of the government. Thus, due to lack of merit, the petition was dismissed.[Sachindra Chandra Das v. State of Tripura, 2019 SCC OnLine Tri 500, decided on 20-11-2019]

Case BriefsHigh Courts

Bombay High Court: K.R. Shriram, J., dismissed a criminal appeal filed against the order of the Metropolitan Magistrate whereby he had acquitted the accused-respondent for the absence of the complainant-appellant and his advocate at the stage when the case was placed for evidence.

It may be noted that the matter was listed before the trial court on 31 occasions, out of which, the complainant (appellant herein) was absent 11 times. On the 31st occasion as well, when the matter was placed for evidence, the complainant and his advocate were absent. Consequently, the trial Magistrate passed the impugned order mentioned above. In the instant appeal, it was submitted by the complainant that it was due to inadvertence of his counsel, who misheard the next date of hearing, that the complainant was not able to present himself before the trial court on the day the impugned order was passed.

On facts, the High Court found that the pleas made by the appellant were unsubstantiated and no relief could be given to him.

Explaining the mandate of Section 256 CrPC, the Court observed:

“Section 256 mandates that if the complainant does not remain present on the appointed day after the summons has been issued on the complaint and unless attendance of complainant has been dispensed with, the Magistrate shall acquit the accused. If the Magistrate feels that the order of acquittal should not be passed on that date, the Magistrate has to give reasons.”

Reiterating that speedy trial is a fundamental right of the accused, the Court noted that the Magistrate cannot allow a case to remain pending for an indefinite period.

The Court observed that “the Magistrate in terms of sub-section (1) of Section 256 exercises wide jurisdiction”. In the present case, it was noted, the Magistrate had acquitted the accused as provided under Section 256 because he did not find any reason to adjourn the hearing of the case to some other day. As noted above, out of the 31 dates, on 11 dates the complainant was absent but still the Magistrate did not dismiss the complaint on those dates.

In such a situation, the High Court was of the opinion that there was no illegality in the impugned order so as to require any interference. The appeal was, therefore, dismissed. [Champalal Kapoorchand Jain v. Navyug Cloth Stores, 2019 SCC OnLine Bom 4805, decided on 26-11-2019]

Cyril Amarchand MangaldasExperts Corner

Background

Section 9-A was inserted in the Code of Civil Procedure, 1908 (“the Code”) as an amendment specific to the State of Maharashtra by the Code of Civil Procedure (Maharashtra Amendment) Act, 1970 and by way of abundant caution, was reintroduced in the Code vide the Code of Civil Procedure (Maharashtra Amendment) Act, 1977. The insertion of Section 9?A in the Code was guided by peculiar circumstances, i.e. at such time, the practice was followed to initiate declaratory suits without giving valid notice to the government under Section 80 of the Code. The plaintiff would undertake to issue such notice and would pray for ad interim injunction. After the expiry of the period for issuance of such notice, the plaintiff would withdraw the suit and file a fresh one praying for and successfully obtaining fresh ad interim reliefs from the Court. This vicious cycle was sought to be avoided by the introduction of Section 9-A in the Code in 1970.

Thereafter, in 2018, the Code of Civil Procedure (Maharashtra Amendment) Act was notified. The Statement of Objects and Reasons of this amendment inter alia, noted that Section 9-A was leading to judicial bottlenecks in the form of the application for interim relief being pending and as a consequence, the interim relief was being continued as final relief in most cases. Further, the orders passed under Section 9-A was amenable to their own challenge, leading to a multiplicity of proceedings without any consideration of the matter on merits.

Section 9-A was accordingly deleted by the above amendment. However, by a second amendment in 2018, it was provided that the proceedings pending under Section 9-A on the date of the introduction of the amendment and any preliminary issue framed under Section 9-A would be decided at the time of final determination of the other issues framed under Order XIV of the Code, and that any ad-interim relief granted under Section 9-A may be confirmed, vacated or modified at the stage of final hearing of the interim application.

The Judgment in Nusli Neville Wadia v. Ivory Properties

In Nusli Neville Wadia v. Ivory Properties[1] (“Nusli Wadia case”), the correctness of Foreshore Cooperative Housing Society Limited v. Praveen D. Desai (Dead) through Legal Representatives[2] (“Foreshore”) was considered to determine the scope of the term “jurisdiction of the court” in Section 9-A of the Code.

In Foreshore (supra), it had been held that the term ‘jurisdiction’ in Section 9A was wide enough to include the issue of limitation and that the term could not be read in a restricted sense to include only territorial, pecuniary or subject matter jurisdiction. In order to determine whether the position taken in Foreshore (supra) was correct in law, the Supreme Court discussed a plethora of judgments passed by the Supreme Court itself as well as various High Courts to determine whether jurisdiction was an issue of law and fact, whether limitation could be included within the ambit of jurisdiction, and the scope of Section 9-A vis-à-vis Order XIV, Rule 2 of the Code.

Whether Jurisdiction includes limitation in its ambit

Foreshore (supra) held that although the plea of limitation was a mixed question of law and fact, Section 9-A was a self-contained scheme with a non-obstante clause that mandates the court to follow the provision. Further, it held that the question of limitation was synonymous with jurisdiction, and if the same was raised, it had to be tried as a preliminary issue by the Court.

In the Nusli Wadia case (supra), during the course of arguments before the Supreme Court, Mr Fali S. Nariman contended that no issue which was a mixed question of fact and law could be tried as a preliminary issue under the Code and that the plea of limitation is always a mixed question of fact and law, and therefore cannot be decided without reference to the starting point of the limitation period which will be purely factual.

Eventually, in the Nusli Wadia case (supra), it was held that the “jurisdiction to entertain” in Section 9-A could not be understood within the wide ambit that was held in Foreshore (supra) and had to be interpreted in the narrow sense. The case drew the distinction between jurisdiction and limitation by holding that in the event that the Court does not have the jurisdiction to entertain the suit, it means that the Court does not have the power to entertain the suit. When a suit is barred by limitation, it means that it is not possible for the Court to grant the relief as prayed for. While the difference between the two is subtle, the Nusli Wadia case (supra) has clarified that the scope of Section 9-A is limited to the maintainability and the competence of the Court to receive the suit for adjudication.

Jurisdiction under Section 9-A v. Order XIV, Rule 2

Order XIV, Rule 2, which was amended in 1977, mandates that the Court has to pronounce judgment on all issues, and sub-rule (2) states that the Court may try the issue of jurisdiction of the Court or a bar to the suit created by an law before the settlement of other issues, only if the preliminary issues are based on law.

While the Supreme Court, in the Nusli Wadia case (supra), held that Section 9-A was not repugnant to Order XIV, Rule 2, it also clarified that the scope of Section 9-A was limited as compared to the same of Order XIV, Rule 2. Pertinently, it held that the jurisdiction to entertain can be contemplated under Section 9-A only if it is a pure question of law, and not a question of law and fact. It also emphasized that no evidence can be recorded to decide the preliminary issue of jurisdiction under Section 9-A of the Code as the Code does not contemplate two full-fledged trials being held to decide preliminary issues as well as the other issues.

By holding the above, the Supreme Court has effectively reconciled Section 9-A of the Code with Order XIV, Rule 2. Consequently, while jurisdiction may be tried as a preliminary issue, for all the remaining cases under Section 9-A, the Court will also have to adhere to the principles of Order XIV, Rule 2. In other words, only issues of law can be treated as preliminary issues.

Jurisdiction under the Arbitration and Conciliation Act, 1996

While the Nusli Wadia case (supra) did not specifically deal with the scope of jurisdiction in arbitration proceedings, the judgment in Indian Farmers Fertilizer Cooperative Limited v. Bhadra Products[3] (“Indian Farmer’s case”) has been referred to in the judgment. The Indian Farmers case was referred to in order to understand the meaning of jurisdiction in different legislation and the interpretation of the same in case law.

In the Indian Farmers case (supra), it was observed that limitation did not fall under the ambit of jurisdiction under Section 16 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) and accordingly held that when a jurisdictional challenge is upheld, it is an appealable order under Section 37 of the Arbitration Act. While the Indian Farmers case sought to clarify the scope of jurisdiction in arbitration proceedings, since the Nusli Wadia case (supra) has not opined on it, it is probable that the judgment in the Nusli Wadia case (supra) will have an effect on the interpretation of the term in the future.

Conclusion

With the repeal of Section 9-A applicable to the State of Maharashtra, there has been certain ambiguity regarding the treatment of the cases in which issues were formed under Section 9-A before the repeal. However, the judgment in the Nusli Wadia case (supra) has clarified not only the interpretation of the term “jurisdiction” in Section 9-A but also the context in which it has to be read. While the term “jurisdiction” has been mentioned in the Code in several places, as the title of this article suggests, each occurrence of the term is a different colour, a different meaning.

Since Section 9-A refers to the “jurisdiction of the court to entertain such a suit”, it is clear that the Court should have the inherent jurisdiction to receive the suit in order to consider the merits of the same. The Court has indicated that “jurisdiction” under Section 9-A will be limited to territorial, pecuniary and subject-matter jurisdiction, and can be treated as a preliminary issue only when it may be resolved solely based on law and admitted facts. The judgment in the Nusli Wadia case (supra) may have helped to clarify the position of law in the cases that are still under the old regime of Section 9-A, however, challenges to the 2018 Amendment, especially the sunset clause, continue to be heard in the High Court of Bombay and have been referred to a larger bench.


 † Ankoosh Mehta (Partner), Dhvani Shah (Senior Associate) and Sanika Gokhale (Associate), Cyril Amarchand Mangaldas.

[1]  (2015) 6 SCC 412.

[2]  (2015) 6 SCC 412.

[3]  (2018) 2 SCC 534.

Legislation UpdatesNotifications

S.O.3955(E).— In exercise of the powers conferred by sub-sections (1) and (2) of Section 396 of the Companies Act, 2013 (18 of 2013), the Registrar of Companies Jammu shall have jurisdiction in respect of Union territory of Jammu and Kashmir and Union territory of Ladakh, for the purpose of registration of companies and discharging the functions under the aforesaid Act.

2. This notification shall come into force with effect from 31-10-2019.


Ministry of Corporate Affairs

[Notification dt. 30-10-2019]

Case BriefsHigh Courts

Bombay High Court: S.S. Shinde, J. dismissed a petition while reiterating the decisions of the Supreme Court in the case, Nikita v. Yadwinder Singh, Criminal Appeal No. 1096 of 2019, wherein it was held that,

“At the place where the wife takes shelter after leaving or driven away from the matrimonial home on account of acts of cruelty committed by the husband or his relatives, would, dependent on the factual situation, also have jurisdiction to entertain a complaint alleging the commission of offences under Section 498-A of Indian Penal Code.”

In the present case, the petitioner and respondent married each other and Respondent 2 thereafter migrated to North Carolina, USA with the petitioner. On shifting to Carolina, in a matter of few years, Respondent 2 gave birth to a child with whom she left petitioner’s home and went to her brother’s place in Columbus. Petitioner after meeting Respondent 2 in Columbus filed a divorce and custody petition in the Supreme Court of California.

Further, it has been stated that, while the Supreme Court attempted to serve summons to Respondent 2, she deliberately evaded the service and shifted to Meerut in India. In the year 2015, Petitioner gave divorce to the Respondent 2 after which, Respondent 2 field permanent custody petition in Family Court, Bandra.

In 2016, Respondent 2 filed a Domestic Violence Case under Section 12 of Protection of Women from Domestic Violence Act, 2005 before the Metropolitan Magistrate Court, Mulund, that passed the maintenance order and in the year 2017, Sessions Court dismissed the Criminal Appeal filed by the petitioner.

Submissions of the parties

Counsels for the Petitioner, Prashant Pandey, Vijayalaxmi Shetty, Darshit Jain, Irfan Unwala and M.A. Khan, submitted that there was more than two years delay in filing the complaint by Respondent 2 before the Magistrate’s Court. When there was a delay, on the said ground alone, the Magistrate ought to have dismissed the complaint. Further, it was submitted that Magistrate has no jurisdiction to entertain the complaint since the alleged domestic violence is not committed in India.

Counsel appearing on behalf of the Respondent 2, Shaheen, submitted that Respondent 2 is residing at Mumbai with her brother, and therefore, she has instituted proceedings before Magistrate’s Court at Mumbai.

Petitioner was constantly threatening Respondent 2 and when Respondent 2 asked the petitioner about the renewal of visa, the petitioner flatly refused for such renewal. Petitioner relied on the Supreme Court case of Nikita v. Yadwinder Singh, Criminal Appeal No. 1096 of 2019 in respect to the jurisdiction of complaint received in regard to the commission of offences under Section 498A of Penal Code, 1860.

What the High Court held?

The bench in light of the Supreme Court decision stated above and along with the observations of the Courts below held that, there is no substance in the contention of counsel for the petitioner that, Magistrate’s Court at Mumbai has no jurisdiction to entertain the complaint.

In respect to the question of limitation for filing proceedings under Section 12, the Court relied on Supreme Court decision in Krishna Bhattacharjee v. Sarathi Choudhury, (2016) 2 SCC 705, wherein it was held that,

“…regard being had to concept of “continuing offence” and demands made by the wife, application made by appellant wife under Section 12 of the 2005 Act after about 2 years of judicial separation, not barred by limitation.”

Another point that the Court noted in respect to the alleged harassment was that the Courts below made prima facie observations about the same. Since the order passed by Magistrate directed the petitioner to pay interim maintenance is an interim order and the proceedings for the same are still pending, the Court stated that it would not be appropriate to give elaborate reasons about the allegations on harassment and domestic violence.

Thus, the Court in view of the above rejected the writ petition. [Mohammad Zuber Farooqi v. State of Maharashtra, 2019 SCC OnLine Bom 2295, decided on 25-09-2019]

Case BriefsHigh Courts

Delhi High Court: Vibhu Bakhru, J. dismissed a writ petition filed by a serving officer of the Indian Army seeking to quash an FIR registered against him in Imphal, Manipur.

At the relevant time, the petitioner was posted at Dimapur, Nagaland, and was the Commanding Officer of 50 Coy ASC (Supply). It was alleged that during his tenure, he accepted illegal gratification from a local contractor engaged in supplying edible oil and pulses to 50 Coy ASC (Supply). An FIR was registered against him by the CBI Anti-Corruption Branch at Imphal.

Ripu Daman Bhardwaj, Special Public Prosecutor appearing for the Central Bureau of Investigation, at the outset, raised objections regarding the jurisdiction of the Delhi High Court to entertain the instant petition. Per contra, Lovkesh Sawhney, Durgesh Kumar Pandey and Deepak Kumar, Advocates, representing the petitioner, contended that the petition was maintainable.

The Court was of the view that the principal question for consideration was whether the Court should exercise its jurisdiction in the facts of the case. It was noted: “Undeniably, a substantial part of the offence alleged against the petitioner was committed outside the jurisdiction of this Court. As noticed above, the petitioner was posted in Dimapur and the allegation is regarding his conduct of receiving illegal gratification while serving as the commanding officer of 50 Coy ASC (Supply). Whilst it may be correct that the funds are stated to have been received by the petitioner; the allegation is that the same was done at the instance of the petitioner, who was, at the material time, posted in Dimapur.”

In such view of the matter, the High Court was of the view that it would not be apposite for the Court to entertain the instant petition. It was also observed: “Insofar as the principle of forum conveniens is concerned, the said principle has to be applied keeping in view the place where the substantial cause has arisen and where the substantial evidence for adjudicating the cause is available.”

Resultantly, it was held that trial in the instant matter was required to be conducted within the jurisdiction of another High Court. The petition was therefore dismissed.[Amit Sharma v. CBI, 2019 SCC OnLine Del 10129, decided on 13-09-2019]