Supreme Court of The United States
Case BriefsForeign Courts

Supreme Court of the United States (SCOTUS): In a 6-3 ruling, Court expressed that, Emotional distress damages are not recoverable in a private action to enforce either the Rehabilitation Act of 1973 or the Affordable Care Act, Roberts C.J., delivered the opinion of the Court, in which Thomas, Alito, Gorsuch, Kavanaugh and Barret, JJ., joined, whereas. Kavanaugh, J., filed a concurring opinion, in which Gorsuch, J., joined and Breyer, J., filed a dissenting opinion, in which Sotomayor and Kagan, JJ., joined.

Factual Background

Jane Cummings, who was deaf and legally blind, sought physical therapy services from Premier Rehab Keller and asked Premier Rehab to provide an American Sign Language interpreter for her sessions. Premier Rehab declined to do so, telling Cummings that the therapist could communicate with her through other means.

Later a lawsuit was filed seeking damages and other relief against Premier Rehab, alleging that its failure to provide an ASL interpreter constituted discrimination on the basis of disability in violation of the Rehabilitation Act of 1973 and the Affordable Care Act.

Premier Rehab was subject to the above statutes, which apply to entities that receive federal financial assistance, because it received reimbursement through Medicare and Medicaid for the provision of some of its services.

Further, the District Court determined that the only compensable injuries allegedly caused by Premier Rehab were emotional in nature. It held that damages for emotional harm are not recoverable in private actions brought to enforce either statute. The District Court thus dismissed the complaint, and the Fifth Circuit affirmed.

Whether emotional distress damages may be recovered under the Spending Clause statute?

Court noted that the statutes are silent with regard to the available remedies.

It was stated that there is no basis in contract law to maintain that emotional distress damages were “traditionally available in suits for breach of contract”.

Hence, emotional distress damages are not traditionally available in suits for breach of contract, for emotional distress, therefore, it was held that emotional distress damages are not recoverable under the Spending Clause anti-discrimination statutes.

None of the laws that protect against disability discrimination allows victims to recover for their emotional distress.

Concurring

Justice Kavanaugh and Justice Gorsuch said that the contract law analogy was imperfect and would reorient the inquiry to focus on a background interpretive principle rooted in the Constitution’s separation of powers.

Dissenting

Justice Breyer with whom Justice Sotomayor and Justice Kagan joined, with dissenting opinion that, compensatory damages under Civil Rights Act of 1964, Title VI, 42 U. S. C. §2000d; Education Amendments Act of 1972, Title IX, 20 U. S. C. §1681; Rehabilitation Act of 1973, §504, 29 U. S. C. §794; Patient Protection and Affordable Care Act (ACA), §1557, 42 U. S. C. §18116, cannot include compensation for emotional suffering.

Further, it was expressed that the Spending Clause statutes prohibit intentional invidious discrimination, and that kind of discrimination causes emotional disturbance. Hence, applying the contract analogy, victims of intentional violations of the anti-discrimination statutes can recover compensatory damages for emotional suffering.

Additionally, it was observed that the damages for emotional suffering have long been available as remedies for suits in breach of contract at least where the breach was particularly likely to cause suffering of that kind.

“Contract law treatises make clear that expected losses from the breach of a contract entered for nonpecuniary purposes might reasonably include nonpecuniary harms. So contract law traditionally does award damages for emotional distress “where other than pecuniary benefits [were] contracted for” or where the breach “was particularly likely to result in serious emotional disturbance.”

 [Cummings v. Premier Rehab Keller, 2022 SCC OnLine US SC 4, decided on 28-4-2022]

High Court Round UpLegal RoundUp

112 significant Reports from 22 High Courts


 

Allahabad High Court


 Right to Reputation


People using cyberspace to vent out anger and frustration by travestying key-figures holding highest office in country, is abhorrent and violates right to reputation

Sanjay Kumar Singh, J., expressed that,

“The internet and social media has become an important tool through which individuals can exercise their right to freedom of expression but the right to freedom of expression comes with its own set of special responsibilities and duties.”

Read full report here…

Corruption


Corruption is a termite in every system; a root cause of all problems but has to be put to account

While expressing that medical and legal fields are more a service than a profession especially the stream of oncology which deals with life and death, Krishan Pahal, J., held that “Corruption is a termite in every system.”

Read full report here…


Andhra Pradesh High Court


Bail


”…being an educated man and Software Engineer, he is not justified in making such irresponsible comments against the Judiciary and the High Court”, Bail denied

Cheekathi Manavendranath Roy J. dismissed the criminal petition and granted bail to the accused advocates and denied bail to accused software engineer.

Read full report here…

Reckless Driving


In the case of reckless driving, injured party will have to always prove that either side was negligent?

The Division Bench of Dr Kaushal Jayendra Thaker and Ajai Tyagi, JJ., while addressing a case of negligent driving, expressed that,

“…if the injury rather death is caused by something owned or controlled by the negligent party then he is directly liable.”

Read full report here…

Evidence


Prosecution must stand on its own legs basing its findings on the evidence that has been led by it

Siddhartha Varma, J., held that it is the bounden duty of the enquiry officer to have seen whether the charges were proved on the basis of the evidence which was led by it.

Read full report here…


Bombay High Court


Nomination of a Councillor


Can a nominated Councillor be appointed as Leader of the House under Maharashtra Municipal Corporation Act, 1949? 

“The term ‘elected Councillor’ in Section 19-1A would necessarily have to be read as an exclusion and bar to any other Councillor i.e ‘nominated Councillor’ to become the Leader of the House.”

Read full report here…

Negligence


When a person suffers injury without any negligence on his part, but result of combined effect of negligence of two other persons: Is it a case of composite or contributory negligence?

Expressing that, Negligence does not always mean absolute carelessness, but want of such a degree of care as required in particular circumstances, Vinay Joshi, J., held that no absolute standard can be fixed as to what constitutes negligence differs from case to case.

Read full report here…

License


To operate in State of Maharashtra, Uber and other unlicensed aggregators to apply for license before 16th March 2022

The Division Bench of Dipankar Datta, CJ and Vinay Joshi, J., directed UBER and other transport aggregators who have not obtained a license as per Section 93(1) of the Motor Vehicles Act to apply for the license before 16th March 2022 otherwise they shall not be able to operate in the State of Maharashtra.

Read full report here…

State Quota


If an aspirant has not completed her 10th and 12th standard from State of Maharashtra, can she still be covered under State Quota of Maharashtra for M.B.B.S?

The Division Bench of S.V. Gangapurwala and S.G. Dige, JJ., addressed a matter wherein an aspirant of M.B.B.S Course approached the Court praying that the petitioner be considered in State Quota from NRI Quota.

Read full report here…

IBC


Can Additional Sessions Judge or Sessions Judge try offences under Insolvency and Bankruptcy Code, 2016?

Sandeep K. Shinde, J., held that Special Court which is to try offences under the Insolvency and Bankruptcy Code, 2016 is the Special Court established under Section 436(2) (b) of the Companies Act, 2013 which consisted of Metropolitan Magistrate or Judicial Magistrate First Class.

Read full report here…

Parent’s Property


When parents are alive, can a son claim his share in the property of his parents?

The Division Bench of G.S. Patel and Madhav J. Jamdar, JJ., held that Asif i.e. son has no rights in his father’s flats.

Read full report here…

Film ‘83’


No stay on OTT Release of film ‘83’: Bom HC | Netflix and Star India already have antecedent rights, both digital and satellite for 10 years

While refusing to restrain Star India and Netflix from streaming the film ‘83’ on their respective broadcasting portals, R.I. Chagla, J., observed that, prospective owner of copyright in a future work may also assign to any person the copyright in the future work.

Read full report here…

Child in Conflict


When a Child in Conflict with Law is to be tried as an adult, an assessment under S. 15 of the Juvenile Justice (Care and Protection of Children) Act, 2015 is required to be done?

M.G. Sewlikar, J., held that, in terms of Section 15 of the Juvenile Justice (Care and Protection of Children) Act, 2015, Juvenile Justice Board has to make assessment into heinous offences to determine whether CCL is to be tried as an adult.

Read full report here…

Currency Notes


Can Currency Notes in police custody pre-demonetisation, be replaced with current valid tender?

The Division Bench of G.S. Patel and Madhav J. Jamdar, JJ., addressed a matter concerning currency notes pre-demonetisation and their replacement with current valid tender.

Read full report here…

Karta


Daughters and widow of a deceased would inherit properties of deceased as tenants in common or joint tenants?

Mangesh S. Patil, J., expressed that, by virtue of Section 19 it has been explicitly made clear that if two and more heirs succeed together to the property and in the estate, they take the property as tenants in common and not as joint tenants.

Read full report here…


Calcutta High Court


Rape


Penetration even of the slightest degree is necessary to establish the offence of rape; Court modifies order after 8 years of imprisonment

“It is settled law penetration even of the slightest degree is necessary to establish the offence of rape.”

Read full report here…

Tax


No intention of any evasion of tax; Court directs refund of penalty and tax paid on protest

Md. Nizamuddin, J. decided on a petition which was filed challenging the impugned order of the appellate commissioner confirming the original order passed by the adjudicating authority under section 129 of the West Bengal Goods and Services Act, 2017 for detention of the goods in question on the grounds that the e-way bill relating to the consignment in question had expired one day before, i.e. in the midnight of September 8, 2019, and that the goods was detained in the morning of September 9, 2019 on the grounds that the e-way bill has expired which is even less than one day and extension could not be made and petitioner submits that delay of few hours even less than a day of expiry of the validity of the tenure of the e-way bill was not deliberate and willful and was due to break down of the vehicle in question and there was no intention of any evasion of tax on the part of the petitioner.

Read full report here…

Repealed Acts


Whether the orders passed under a repealed Act be executed? Court discusses

Rajasekhar Mantha, J. disposed of a petition observing that the Supreme Court is the only authority to clarify  whether the orders passed under a repealed Act can be executed or not

Read full report here…

Breach of Contract


Parties to agreement of sale consciously changing their relationship cannot seek relief on the basis of previously established relationship

The Division Bench of Soumen Sen and  Ajoy Kumar Mukherjee, JJ., dismissed an appeal concerned with a breach of contract. The appeal arose out of a judgment in a suit for recovery of possession and injunction. Trial Court had decreed the suit on contest and dismissed the counter claim filed by the defendant.

Read full report here…

Detention Order


Detention order quashed due to lack of opportunity of hearing in the matter of S. 129 of the West Bengal Goods and Service Tax Act, 2017

Md. Nizamuddin, J. disposed of a petition which was filed challenging the impugned order passed by the Deputy Commissioner of Revenue on the ground that the said impugned order was bad in law for the reasons that the petitioners being the owner of the goods in question, which had been detained without giving any opportunity of hearing to the petitioners under the relevant provision of Section 129 of the West Bengal Goods and Service Tax Act, 2017.

Read full report here…

GST Act


The interest of revenue has been safeguarded; Order of detention against the State upheld in matter of GST Act

The Division Bench of T. S. Sivagnanam and Hiranmay Bhattacharyya, JJ., dismissed an appeal and connected application which was filed by the State against the order of detention passed by the authority detaining two trucks containing consignment of steel and other products in WPA 17611 of 2021 dated: 07-12-2021 wherein petitioner was the wife of late Mohit Madhogoria, who was a registered dealer under the provisions of the W.B.V.A.T. Act presently under the GST Act.

Read full report here…


Chhattisgarh High Court


Compassionate Appointment


Illegitimate child’s right to be considered for Compassionate appointment

Sanjay K. Agarwal, J., held that an illegitimate son would be entitled to consideration on compassionate ground and cannot be denied consideration on the ground that he is the illegitimate son of the deceased Government servant.

Read full report here…

Rape


In view of changed definition of rape under S. 375 (b) of  IPC pari materia to S. 3(b) of POCSO Act, whether sexual intercourse is necessary to attract ingredients of offence of rape or penetrative sexual assault?

Addressing a case wherein a minor girl was subjected to sexual, Deepak Kumar Tiwari, J., held that,

In view of the changed definition of rape under Section 375 (b) of the IPC pari materia to Section 3(b) of the POCSO Act, sexual intercourse is not necessary to attract the ingredients of offence of rape or penetrative sexual assault.

Read full report here…


Delhi High Court


Dishonour of Cheque


To prove that cheque amount was larger than debt due, can defence of Issuer be looked at stage of issuing summons?

While addressing a matter revolving around Section 138 of the Negotiable Instruments Act, 1881, Subramonium Prasad, J., held that Courts should primarily proceed on the averments in the complaint, and the defence of the accused cannot be looked at the stage of issuing summons unless it can be shown on admitted documents which the Supreme Court described as “unimpeachable in nature and sterling in quality” to substantiate that there was no debt due and payable by the person who has issued the cheque or that the cheque amount is large than the debt due.

Read full report here…

If a cheque is not honoured by issuer and even after a legal notice he doesn’t pay, he is bound to face criminal trial

Rajnish Bhatnagar, J., dismissed a matter revolving around the dishonour of cheque under Section 138 of the Negotiable Instruments Act.

Read full report here…

Yes Bank Loan Fraud


Public money under garb of Term loan siphoned off, resulting in generation of ‘proceeds of crime’ as well as its layering and ultimate projection as untainted money: Del HC while denying bail to Gautam Thapar

While addressing a matter wherein bail of Gautam Thapar accused in Yes Bank Loan Fraud case, was sought, Manoj Kumar Ohri, J., expressed that it is well settled that, economic offences constitute a class apart and need to be visited with a different approach, given their severity and magnitude. Albeit these offences are likely to adversely impact the economic fabric of the country, bail shall not be denied to a person accused of an economic offence in a routine manner.

Read full report here…

Jurisdiction


Can partners in dispute of an LLP or any other business entity carrying out business in different parts of country, file suit in any place where business is carried out?

Amit Bansal, J., expressed that an LLP or any other business entity can carry out business in different parts of the country, but that would not mean that a suit with regard to disputes between the partners, could be filed in any place where the business of the firm/LLP is carried out.

Read full report here…

Ownership of YouTube Channel


Who ‘owns’ a YouTube channel?: Del HC passes interim directions in dispute over channel ‘Shabad Kirtan Gurbani – Divine Amrit Bani’

Asha Menon, J., considered a very interesting case where the dispute between the parties is regarding the ownership of a YouTube channel. The Court has found a prima facie case in favour of the plaintiff and issued certain directions.

Read full report here…

Bail


On pretext of removing evil spirit from body of a woman who was bipolar in nature, a man lured woman and committed sexual intercourse, but ADJ granted bail: Will HC cancel his bail? Del HC analyses

Mukta Gupta, J., cancelled the bail of an accused who lured a female on the pretext of removing an evil spirit from her body and further committing sexual intercourse with her.

Read full report here…

Theft


Daughter-in-law thrown out of matrimonial home and accused of removal of letters from possession of matrimonial home: Whether Del HC will find her guilty under S. 380 IPC or not?

Chandra Dhari Singh, J., noted that instant dispute has arisen out of matrimonial discord between two people which had also, led to the filing of more than 50 criminal and civil cases between not only the husband and the wife but also their family members. It was found that for the sole purpose of harassing the other party such cases were filed by persons with no just cause or reason and substantial ground for allegations.

Read full report here…

Right of Residence


Right of residence under DV Act is exclusive to and isolated from any right that may arise under S. 9 of Hindu Marriage Act, 1955

“The existence of the strained relationship between the Petitioner and the Respondent has been well established by the fact that there are more than about 60 criminal and civil cases pending between the parties.”

Read full report here…

Desertion and Cruelty


Wife leaves matrimonial home and never returns after several requests and legal notice under S. 9 of HMA, alleges husband of several cruelties without any evidence: Would it amount to desertion and cruelty by wife?

Noting the separation of 12 years between the husband and wife, the Division Bench of Vipin Sanghi and Jasmeet Singh, JJ., found that the wife had subjected the husband to desertion and cruelty, hence decree of divorce be granted.

Read full report here…

Accusation of extra-marital relationship is a grave assault on character, status, reputation as well as health of spouse against whom such allegations are made: Would this come under ambit of cruelty?

While addressing a matter surrounding the issue of cruelty by wife, the Division Bench of Vipin Sanghi, ACJ and Dinesh Kumar Sharma, J., expressed that,

“It has repeatedly been held that accusations of unchastity or extra marital relationship is a grave assault on character, status, reputation as well as health of the spouse against whom such allegations were made.”

Read full report here…

Arbitration and Conciliation Act


Del HC dismisses appeal filed by Indiabulls Housing Finance in Zee Entertainment – Sony Pictures Scheme of Arrangement

Suresh Kumar Kait, J., addressed an appeal under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996 against the interim order passed by Arbitrator was preferred.

Read full report here…

Mere use of the word ‘Arbitration’ in the heading of an Agreement would mean existence of an arbitration agreement?

Mukta Gupta, J., decided that mere use of word ‘Arbitration’ in the heading of an Agreement would not mean the existence of an arbitration agreement.

Read full report here…

Religious Structure


State obligated to remove unauthorized constructions from public land, but if it is a religious structure, can State still be obligated to do so?

Expressing that, the mere fact that certain encroachments represent religious structure cannot possibly detract State from its obligation, Yashwant Varma, J., held that, State remains duty-bound to remove all unauthorized constructions which may exist on public land.

Read full report here…

Extraordinary Writ Jurisdiction


Extraordinary writ jurisdiction is to be exercised only in rare cases or certain contingencies in the interest of justice, including exceptional cases

Chandra Dhari Singh, J., expressed that it is settled law that the power to issue writ has its own well-defined limitations imposed by the High Courts, one of which was the availability of alternative efficacious remedy.

Read full report here…

Power to Transfer Cases


Can Chairman of CAT on his own motion, without any notice, transfer any case pending before one Bench for disposal to another Bench?

The Division Bench of D.N. Patel, CJ and Jyoti Singh, J., held that the Chairman of Central Administrative Tribunal has been conferred the power to transfer a matter from one Bench to another, on his own motion, without any application from any party.

Read full report here…

Right to Speedy Trial


Incarcerated for 8 years for an offence punishable with minimum 10 years imprisonment: Violation of Right to Personal Liberty and Right to Speedy Trial

Subramonium Prasad, J., remarked that,

“…achievement of universal equality before the law requires the tenets of personal liberty to be applicable to all similarly circumstanced individuals and must not be restricted unless according to procedure established by law.”

Read full report here…

Arms License


If you are found in possession of live ammunition along with a valid arms licence, can an offence under S. 25 of Arms Act still be registered against you?

Deciding a matter of whether an NRI person in possession of two live ammunitions with a valid license can be registered under Section 25 of Arms Act or not, Asha Menon, J., held that, prima facie no malafide intent was found and the licence found was a valid arms licence.

Read full report here…

Right of Putative Father


Right of Putative Father to visit minor child upheld: Del HC

Upholding the rights of the putative fatherV. Kameswar Rao, J., expressed that while determining and granting such rights, more so when the child is of less than 3 years of age, surely his well-being/welfare is of paramount importance

Read full report here…

Issuance of Notice


Section 292BB of Income Tax Act deals with failure of service of notice or failure to issue notice?

The Division Bench of Manmohan and Dinesh Kumar Sharma, JJ., addressed a matter wherein the decision of Income Tax Appellate Tribunal for the Assessment Year 2011-12 was challenged.

Read full report here…

RTI Act


Employees of a security establishment cannot be deprived of their fundamental and legal rights just because they work in an intelligence and security establishment

Expressing that, RTI Act is a tool that facilitates the employees and officers in airing their grievances systematicallythe Division Bench of Manmohan and Sudhir Kumar Jain, JJ., remarked that,

“…both service and RTI laws ‘act like a safety valve in the society’.”

Read full report here…

Maternity Leave


Can maternity leave benefits extend beyond the period when contractual period of an ad hoc employee comes to an end?

In a claim of maternity benefit by a contractual employee, the Division Bench of Rajiv Shakdher and Talwant Singh, JJ., expressed that, The Maternity Benefit Act, 1961 Act is a social legislation that should be worked in a manner that progresses not only the best interest of the women-employee but also of the child, both at the pre-natal and post-natal stage.

Read full report here…

Unmarried Daughters


Can unmarried daughters claim expenses of marriage from their parents under the Hindu Adoptions and Maintenance Act, 1956?

While stating that, in Indian society, normally expenses are required to be incurred for pre-marriage and also at the time of marriagethe Division Bench of Goutam Bhaduri and Sanjay S. Agrawal, JJ., held that unmarried daughters have a right to claim expenses of marriage from their parents under the Hindu Adoptions & Maintenance Act, 1956.

Read full report here…

SC Collegium December Meeting


 

Newspaper reports are of no evidentiary value and Courts would be transgressing their well settled limitation if cognizance were to be taken of such unsubstantiated and unverified reports

In a matter wherein, details were sought with regard to Supreme Court Collegium meeting held on 12-12-2018, Yashwant Varma, J., expressed that, newspaper reports are of no evidentiary value and Courts would be clearly transgressing their well-settled limitation if cognizance were to be taken of such unsubstantiated and unverified reports.

Read full report here…


Gujarat High Court


Reasoning in Judgment


Providing reasoning is to give it a value of precedent which can help in reduction of frivolous litigation; Court emphasises on recording reasons in judgments

“It is trite that in a delay application, sufficient cause is the paramount consideration and if sufficient cause is shown, the Court should generally condone the delay. However, if the sufficient cause is imbibed with the laxity on the part of the delayer despite due knowledge, then Court should restrain itself from encouraging such practice and condone the delay.”

Read full report here…

GSTR-6 Return


Court allows writ furnishing the GSTR – 6 return for recording and distributing the ISD credit

“Credit was a tax paid by the registered person on input transactions and such tax already paid to the credit of the Central Government was a vested right of the person. Such vested right cannot be defeated on account of any irregularity in the system evolved by the Government.”

Read full report here…

NDPS


No Conscious possession; Court upholds acquittal under NDPS Act

The Division Bench of S.H. Vora and Sandeep N. Bhatt, JJ., dismissed an application for special leave to appeal which was filed feeling aggrieved and dissatisfied with the judgment and order in NDPS Case whereby the trial Court acquitted the respondent 2 herein-original accused 2 of the offences punishable under Sections 8(c), 20(b) and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (“NDPS Act”).

Read full report here…

Detention Order


Simplicitor registration of FIR/s by itself cannot have any nexus with the breach of maintenance of public order; Detention order quashed

Rajendra M. Sareen, J. allowed a petition which was directed against the detention order passed by respondent–detaining authority in exercise of powers conferred under section 3(2) of the Gujarat Prevention of Anti Social Activities Act, 1985 (“the Act”) by detaining the petitioner-detenue as defined under section 2(b) of the Act.

Read full report here…


Gauhati High Court


Sexual offences against minor cannot be compromised by parents; HC rejects application to enforce compromise

Arun Dev Choudhury, J., held that sexual offences against minor cannot be compromised by parents.

Read full report here…


Himachal Pradesh High Court


Rape


Minor girl students raped and subjected to penetrative sexual assault by their teacher: Sanctity of Teacher-Student relationship polluted

Polluting the sanctity of the relationship of the teacher and students, a teacher committed rape and penetrative sexual assault with minor students, the Division Bench of Sabina and Satyen Vaidya, JJ., noting the harrowing incidents expressed that the said is a sad reflection of the present-day society where a most platonic relationship was exploited.

Read full report here…


Jharkhand High Court


Execution of a Will


Testamentary disposition of property is deviation from natural line of inheritance in lesser or greater degree: Can it result in complete disposition in favour of one heir or exclusion of any other heir?

Expressing that the due execution of a Will is to be proved as per the provisions of law as laid down in Evidence Act as well as that if Indian Succession Act,  Gautam Kumar Choudhary, J., remarked that, a probate court being a Court of conscience, the intention of the testator is paramount and it is the bounden duty of the Court to ascertain the real WILL of the testator if any.

Read full report here…


Karnataka High Court


Domestic Violence Act


Whether the maintenance awarded under the Domestic Violence Act can be sought to be enhanced under the CrPC?

“The language employed in Section 127 of the Cr.P.C. is unequivocal as on a proof of change in the circumstances of any person receiving allowance under Section 125 of Cr.P.C. can maintain a petition under Section 127 of the Cr.P.C.”

Read full report here…

Criminal Proceedings


SC-ST Act is prospective or retrospective? Kar HC quashes criminal proceedings for offences committed in the year 1975

Krishna S Dixit J. quashes the criminal proceedings as the SC-ST act is not retrospective in nature.

Read full report here…

Hijab Ban


16 pointer report on why wearing of Hijab is not a part of essential religious practice in Islam

“Dismayed as to how all of a sudden that too in the middle of an academic term the issue of hijab is generated and blown out of proportion, Court remarked that some ‘unseen hands’ are at work to engineer social unrest and disharmony in the way ‘hijab imbroglio’ unfolded.”

Read full report here…

The uniform can exclude any other apparel like bhagwa or blue shawl that may have the visible religious overtones

“The Holy Quran does not mandate wearing of hijab or headgear for Muslim women rather it was traditionally worn as a measure of social security” 

Read full report here…

POCSO


Whether victim under POCSO Act can be permitted to be cross-examined once she turns hostile?

M Nagaprasanna J. allowed the petition and quashed the impugned order and remitted the matter back to Sessions Judge for cross-examination

Read full report here…

Marital Rape


“Wanton lust, vicious appetite, depravity of senses, loathsome beast of passion, unbridled unleashing of carnal desire of demonish perversion” Kar HC discusses protection provided to husband by the institution of marriage

A man is a man; an act is an act; rape is a rape, be it performed by a man the “husband” on the woman “wife”

Read full report here…


Kerala High Court


Cruelty


At odd hours, if wife continues making discreet phone calls with another man even after a warning by husband, would it constitute matrimonial cruelty?

The Division Bench of A. Muhamed Mustaque and Dr Justice Kauser Edappagath, JJ., held that, despite a warning by the husband, if the wife continues to make discreet calls with another man that too at odd hours, it would amount to matrimonial cruelty.

Read full report here…

Medical Negligence


Do District and State Consumer Disputes Redressal Commissions do not have jurisdiction to take cognizance of medical negligence complaints?

Nagaresh, J., decided whether medical service would fall within the ambit of Section 2(42) of the Consumer Protection Act, 2019 unless of course the service is free of charge or is under a contract of personal service.

Read full report here…

Breach


Compensation payable under Ss. 73, 74 and 75 are only for loss or damage caused by breach or inclusive of mere act of breach as well?

The Division Bench of P.B. Suresh Kumar and C.S. Sudha, JJ., expressed that,

“…compensation payable under Sections 73, 74 as also under Section 75 is only for loss or damage caused by the breach and not account of the mere act of breach. If in any case the breach has not resulted in or caused any loss or damage to a party, person concerned cannot claim compensation.”

The words ‘loss or damage’ in the Sections 73 and 74 would necessarily indicate that the party who complains of breach must have really suffered some loss or damage apart from being faced with the mere act of breach of contract. That is because every breach of every contract need not necessarily result in actual loss or damage.

Read full report here…

Internal Complaints Committee


In the film industry, would production units have to constitute Internal Complaints Committee to deal with harassment against women?

While expressing that, any organisations, establishments, private institutions are employing workers whether for wages or not in contemplation of the provisions of the Act, 2013 coming under the definition of employer, employee and workplace, they are duty bound to constitute an Internal Complaints Committee,  the Division Bench of S. Manikumar, CJ and Shaji P. Chaly, J., held that, a production unit of each film industry is an establishment employing Actor Artists and other workers and therefore, such production units have to maintain an Internal Complaints Committee if they are engaging more than 10 workers

Read full report here…

Moral Policing


Man taking a lady from another community in his car, attacked by violent mob: Act of mob moral policing?

Calling it to be ‘moral policing’ K. Haripal, J., addressed a matter wherein a man had taken a lady from another community in his car due to which a mob attacked him with deadly weapons.

Read full report here…

Pre-arrest Bail


Trespassed in house, committed rape, misappropriated money, threatened: Kerala HC denied pre-arrest bail in view of such allegations

Shircy V. J., dismissed a bail application wherein a man committed rape with a woman and misappropriated her money after putting her under threat.

Read full report here…

Strikes


Bar on Government servants to engage in strikes?

While expressing that, it is the duty of the welfare Government to protect not only the citizens, but to continue with, all the Government work as expected, the Division Bench of S. Manikumar, CJ and Shaji P. Chaly, J., directed that Government servants should be prevented from engaging in a strike.

Read full report here…


Madras High Court


Central Information Commission


High Court cannot act as a post office to collect and exchange information

While stating that Central Information Commission has only made recommendations, which cannot by any stretch of imagination be taken as a statute so as to give effect, the Division Bench of Munishwar Nath Bhandari, CJ and D. Bharatha Chakravarthy, J., dismissed the petition.

Read full report here…

Promotion


Can an employee claim promotion as a matter of right?

S.M. Subramaniam, J., expressed that employees cannot seek any direction to fill up the post or claim a promotional post.

Read full report here…

Bribe


Every Advocate is a Court officer and part & parcel of justice delivery system: Madras HC found a Govt. Advocate demanding bribes at the cost of justice

The Division Bench of K. Kalyanasundaram and R. Hemalatha, JJ., expressed that, the Government advocate being the representative of the Government has to act in an honest manner. If he/she goes around with the intention to make money at the cost of justice, only chaos will prevail.

Read full report here…


Manipur High Court


Appointment/Promotion of High School Teachers


All resolutions passed at the emergency meeting will be subject to confirmation or revision at the next ordinary meeting; Court allows petition

“Rule 14 (b) of the Rules of 1975 provides that all resolutions passed at the emergency meeting will be subject to confirmation or revision at the next ordinary meeting, none of the respondents, either the State or the respondent 3 to 10 has brought on record that the resolution passed in the emergency meeting held on 21-02-2015 was confirmed or revised in the next ordinary meeting.”

Read full report here…


Madhya Pradesh High Court


Writ of Mandamus


A writ for mandamus cannot lie to direct the State to enact a law; Petition dismissed

The Division Bench of Ravi Malimath, CJ. and Dinesh Kumar Paliwal, J.dismissed a petition which was filed in public interest praying for a writ of mandamus to incorporate certain provisions in the law, namely, Section 14-A of the Madhya Pradesh Municipal Corporation Act, 1956 and Section 32-A of the Madhya Pradesh Municipalities Act, 1961.

Read full report here…

Election Dispute


Registrar exercising power of the election tribunal cannot pass interim directions of any nature; Court allows appeal

“…Registrar who was trying the election dispute was exercising the power of the election tribunal. Therefore, he could not have passed orders even though it was in the interest of society.”

Read full report here…

Custody


Technical objections cannot come in way of custody; Court allows 16-year-old to choose to live with father

The Division Bench of Subodh Abhyankar and Satyendra Kumar Singh, JJ., dismissed an appeal which was filed being aggrieved of the order passed by Single Judge wherein he quashed the earlier impugned order passed by the Sub-Divisional Magistrate whereby custody of the children of the appellant was given to her husband (respondent 4). The Single Judge had only partly granted relief by not giving any express direction restoring the custody of the children in favour of the appellant.

Read full report here…

Appointment Order


Cancellation of candidature on the ground of typographical error arbitrary and grossly disproportionate; Court allows petition

Pranay Verma, J., allowed a petition which was filed praying for a direction to consider petitioner’s candidature for the post of Office Assistant (Multi purpose) and to issue appointment order in her favour in light of offer letter.

Read full report here…


Meghalaya High Court


Family Pension


Court decides on eligibility of family pension under Rule 48 of Meghalaya Civil Services Pension Rules of 1983

“Rule 48, provides that an unmarried/widowed/divorced daughter, would be entitled to family pension and that a person would be entitled for family pension, only after other eligible family members in the first category have ceased to be eligible to receive it.”

Read full report here…

Companies Act


If an advertisement for petition filed under S. 433 of Companies Act, 1956 is not published, will entire matter be transferred to NCLT?

Sanjib Banerjee, CJ, addressed a petition wherein a creditor’s winding-up petition was instituted under Section 433 of the Companies Act, 1956 and the same was not yet advertised.

Read full report here…

Testimony


Court affirms trial court’s conviction on the basis of victim’s testimony in POCSO matter

The Division Bench of  Sanjib Banerjee and W. Diengdoh, JJ., while hearing an appeal which challenged the judgment of conviction of December 21, 2018, which convicted the appellant under Section 3(a) R/W Section 4 of the Protection of Children from Sexual Offences Act, 2012, upheld the same and stated that there was no good reason to interfere with the judgement of the trial court.

Read full report here…

Compromise Deed


Lower Courts to deal with entire process expeditiously after receipt of the application under S. 151 read with Or. 20 R. 6-A CPC

H.S. Thangkhiew, J. while hearing a revision application allowed the same and directed the lower court to deal with the entire process expeditiously immediately on receipt of the application under Section 151 read with Order 20 Rule 6-A CPC.

Read full report here…

Inherent Power


fraus et jus nunquam cohabitant; Ori HC analyses how does prohibition under S. 362 CrPC operate viz-a- viz the inherent power of the High Court

It is the oft-repeated and a salutary principle of law that fraud and justice never dwell together (fraus et jus nunquam cohabitant)

Read full report here…

Rape


If a man rubs his organ on vagina over victim’s underpants, would that amount to rape?

The Division Bench of Sanjib Banerjee, CJ and W. Diengdoh, J., addressed that, if the victim’s underwear was not taken down and the man merely rubbed himself on the victim’s crotch while she still wore her underpants, would that amount to commission of rape.

Read full report here…

POCSO


FIR and proceedings in Special POCSO Case quashed; Minor ‘victim’ gave birth to child while living with accused as his wife

Diengdoh, J. allowed a petition which was filed praying to quash the criminal proceedings pending in the Court of the Special Judge (POCSO) under Section 5(j)(ii)/6 POCSO Act, 2012.

Read full report here…


Punjab and Haryana High Court


Live-in Relationship


In ever-evolving society, evolving law with it, time to shift perspective from didactics of orthodox society, shackled with strong strings of morality to one that values an individual’s life

While dealing with a matter regarding protection to live-in relationship, Anoop Chitkara, J., held that, every person in the territory of India has an inherent and indefeasible fundamental right to life flowing from Article 21 of the Constitution of India and the State is duty-bound to protect life.

Read full report here…

Laws governing ‘Live-in-relationships’ is need of the hour; Court directs State to file response on the social predicament

‘Live-in-relationships’ has always been a debatable issue because of the absence of any law on the said practice. The Legislation has not yet consolidated any Act in this regard; on the other hand the Judiciary, through several decisions has made a clear stand to protect the various rights of such couples. Supreme Court in Lata Singh v. State of U.P., (2006) 5 SCC 475S. Khushbhoo v. Kanniammal(2010) 5 SCC 600, and Indra Sarma v. V.K.V. Sarma(2013) 15 SCC 755, has upheld the status of live-in-relationships and issued certain direction to protect life and liberty of the individuals.

Read full report here…

MBBS Course


Whether Court can issue directions for filling up the vacant seat for the MBBS Course?

S. Thangkhiew, J. allowed a petition in which he had to consider whether this Court can direct the respondents to consider the petitioner for filling up the vacant seat for the MBBS Course.

Read full report here…

Recission of Contract


Application for rescission of contract ‘mandatory’ to avail the relief, as S. 28, Specific Relief Act, 1963 doesn’t confer indefeasible right

Sudhir Mittal, J. dismissed the revision petition filed by the petitioners (in this case the judgment-debtors) against the action of the Executing Court for refusing to recall the impugned order. According to the petitioners, the execution order was passed, ex parte hence, the fundamental principle of natural justice was violated.

Read full report here…

Carnal Intercourse


Use of phrase “carnal intercourse” considered as a conscious act of the legislature reflecting the clear intent to engraft an offence under S. 377 IPC, conviction upheld

Vinod S. Bhardwaj, J. contemplated the revision petition filed by the accused/ children in conflict with the law, challenging the dismissal of appeal by Additional District and Sessions Judge along with the order of conviction and sentence passed by the Juvenile Justice Board, for the commission of offence punishable under Section 377 of Penal Code, 1860 and Section 10 Protection of Children from Sexual Offences Act, 2012.

Read full report here…

Cooling Off Period


Cooling off period under S. 13-B (2) HMA directory and not mandatory, court must waive off statutory period where marriage is irreconcilable

Rajbir Sehrawat, J., allowed the instant revision petition, filed against the order of Family Court, where the joint application for waving off the statutory period of 6 months for cooling off, had been dismissed.

Read full report here…

CBSE


Schools succeeded in hoodwinking CBSE, however, no fault can be attributed to the students; direction for issuance of class 12th result

Sudhir Mittal, J. allowed the writ petitions filed against the action of the Central Board of Secondary Education (CBSE) declaring petitioners ineligible for evaluation of class 12th and to issue the final result.

Read full report here…

Fundamental Rights vis a vis Judicial Review


Answer to the question on ‘fundamental rights vis-a-vis judicial review’ considered as ‘National Confusion’ as different interpretation possible

Rajbir Sehrawat. J., contemplated and answered the interesting question asked in the recruitment test on which the dispute of the petitioner revolves around. Thorough interpretation of judgments starting from Sankari Prasad to I.R. Coelho was analysed by the Court to formulate the correct answer asked in the recruitment test.

73. Which of the following schedule of the Constitution is immune from judicial review on the grounds of violation of fundamental rights?

  1. A) Seventh Schedule B) Ninth Schedule C) Tenth Schedule D) None of the above”

Read full report here…

Material Fact


Suppression of a ‘material fact’ of non-disclosure of pendency of bail application considered, subservient to the right of liberty granted to the petitioners; Guidelines issued

Three petitions are clubbed together where the petitioners intended to withdraw their bail applications as bail was already granted by the different trial courts. The main issue before Jasgurpreet Singh Puri, J. was effect of filing bail applications and passing of bail orders by the trial courts during the pendency of bail application before High Court by the same accused without disclosing such pendency and what safeguards should be adopted by the trial courts in this regard.

Read full report here…

Compensation


Entitlement to compensation on general principles for inordinate delay in receiving monies due; Interest on refund of excise duty granted

The Division Bench of Ajay Tewari and Pankaj Jain, JJ., contemplated the appeal where the interest on refund of excise duty was rejected by the authorities. The main question before the Court was whether the assessee was entitled to interest.

Read full report here…

Departmental Punishment


Departmental punishment of government servant is not a necessary and automatic consequence of conviction on a criminal charge

Jaishree Thakur, J. set aside and quashed the dismissal of the petitioner and remanded back the matter to the punishing authority for reconsideration. The Court directed that punishing authority to apply its mind and to form an opinion as to whether the conviction of the petitioner deserves the penalty of dismissal, removal or reduction in rank or any other lesser penalty.

Read full report here…


Patna High Court


Economic Offence


Entire community is aggrieved if economic offenders, who ruin economy of the State are not brought to book

Expressing that the entire community is aggrieved if the economic offenders, who ruin the economy of the State are not brought to bookAnjani Kumar Sharan, J., held that economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community.

Read full report here…


Rajasthan High Court


Whenever there is a conflict between substantial justice and hyper-technicality then substantial justice should be preferred to avoid defeat for the ends of justice: Raj HC observes in a case where candidature was rejected on a hyper-technical approach

A Division Bench of Anoop Kumar Dhand and Pankaj Bharadwaj, JJ., disposed of the petition and directed the Department to appoint the respondent.

Read full report here…

Cause Title


“..use of salutation and titles is prohibited in terms of Arts. 14 18 and 363A of the Constitution of India in public documents and public offices”; Raj HC observes in a case where hereditary title was mentioned in a cause title

“…any title awarded to the citizen of India by a Foreign State cannot be accepted nor used and no such title, other than the military or academic distinctions, can be conferred other than by the State. In terms of Article 363A of the Constitution of India, the heredity titles of nobility being in conflict with the principles of equality and contrary to Article 14 of the Constitution of India cannot be used as prefixes or suffixes.”

Read full report here…

Provisional Attachment


Order of provisional attachment cannot survive beyond a period of one year in terms of S. 83 (2) CGST Act; Provisional attachment order stayed

“Section 83 of the CGST Act pertains to provisional attachment to protect the revenue in certain cases. In sub-section (1) of Section 83 the commissioner is empowered to order provisional attachment of the property of the assessee including bank account where proceedings under Chapters XII, XIV and XV are pending and the commissioner is of the opinion that for the purpose of protecting the interest of government revenue it is necessary so to do.”

Read full report here…

Public Interest Litigation


“Citizen approaching Court in a public interest jurisdiction holds greater duty to make full research” PIL dismissed due to lack of necessary evidence presented

A Division Bench of Akil Kureshi, CJ and Rekha Borana, J. dismissed the petition and kept it open for the petitioners to file a fresh public interest petition.

Read full report here…

Private Entity


In absence of any factual foundation to show whether a particular entity is State or not, writ jurisdiction not maintainable

Mahendar Kumar Goyal J. dismissed the petition being not maintainable against a private entity. 

Read full report here…

Interim Maintenance


Raj HC dealt with whether husband can be absolved from his duty to pay interim maintenance if there is delay of 30+ years in filing application

“…an order under Section 125 of CrPC is in the nature of interim maintenance and husband, who admittedly earns Rs 40, 000/- per month cannot be absolved of his obligation to pay interim maintenance, merely because the respondent – wife has chosen to file the application after 36 years of marriage.”

Read full report here…

Transfer Petition


Transfer petition for trial of Salman Khan’s deer hunting case allowed; High Court to take charge

Pushpendra Singh Bhati, J., allowed a transfer petition in the infamous deer hunting case of actor Salman Khan.

Read full report here…

Bail


Economic offender should not be dealt as general offender because economic offenders run parallel economy; bail rejected

Narendra Singh Dhaddha rejected bail and dismissed the petition being devoid of merits.

Read full report here…

Sikkim High Court


Compromise


Handing out punishment is not the sole form of delivering justice; Court allows compromise

Bhaskar Raj Pradhan, J. allowed the compromise to bury the difference between parties and gives them their lives as good citizens.

Read full report here…

Tripura High Court


Disposal of Garbage


Court directs AMC to set up proper slaughterhouses and ensure garbage disposal in scientific manner

Court issued directions to the Corporation to prepare a long-term plan for not only setting up the abattoir/slaughter house but also for ensuring disposal of garbage in an appropriate scientific manner, rendering all authorities including the local police authorities for enforcing/assisting in carrying out its duties, considering application for licenses and disposing of at an early date so that people are not deprived of essential needs, maintaining hygienic conditions and carrying out inspection of all the license premises.

Read full report here…

Divorce


Unable to approve this kind of matrimonial conduct or filing a suit for divorce on such coloured narrative; Court dismisses appeal in matter of divorce

The Division Bench of S. Talapatra and S.G. Chattopadhyay, JJ. dismissed an appeal which was filed under Section 28 of the Hindu Marriage Act, 1955 from the judgment by the Additional District Judge declining to grant the divorce and consequently dismissing the suit. It was observed that case did not reflect any such situation which can demand the dissolution of marriage between the petitioner [the appellant and the respondent].

Read full report here…

Uttaranchal High Court


Personal Rights


Irrespective of the personal rights of a person or a community, it can under no set of circumstances, override the rights or need of the defence of the country; Petition dismissed

Sharad Kumar Sharma, J. dismissed a writ petition which involved the issue pertaining to regulating the frontier borders of the country, adjoining to the ‘Line of Actual Control’, which adjoins and shares the boundary lines of our neighbouring country, China, which is approximately about 20 to 25 Kms. only away from the land, in dispute, which is proposed to be acquired for the purposes of meeting out the defence need of the ITBPF, i.e. ITBP.

Read full report here…

Judgment of Acquittal


There have to be very substantial and compelling reasons for setting aside a judgment of acquittal; petition dismissed

The Division Bench of S.K. Mishra and A.K. Verma, JJ., dismissed the appeal for acquittal considering it to be devoid of substantial and compelling reasons.

Read full report here…

Hate Speech


Right to freedom, as granted under the Constitution is not an absolute right; Court rejects bail in Hate Speech matter

Ravindra Maithani, J., rejected a bail application which was filed by the applicant who was in judicial custody under Sections 153A, 298 Penal code, 1860.

Read full report here…

Public Service Commission


Public Service Commission directed to declare result of candidate who submitted late fees

The Division Bench of Sanjaya Kumar Mishra, CJ. and Ramesh Chandra Khulbe, J. allowed a petition which was filed by an aspirant seeking a direction to respondents to allow the petitioner to appear for the mains examination of the Assistant Conservator of Forest.

Read full report here…

Registration of Sikh Marriages


State directed to take steps to frame and notify Rules for Registration of Sikh Marriages

The Division Bench of Sanjaya Kumar Mishra, ACJ. and Ramesh Chandra Khulbe, J. took up a PIL filed by the petitioner commanding the respondent State to notify the Rules under Anand Marriage Act, 1909 and also to issue guidelines to register the marriage of people of Sikh Community under the Anand Marriage Act, 1909.

Read full report here…

Bail


Society has a vital interest in grant or refusal of bail because criminal offence is the offence against the society; Bail applications rejected in fraud case under Epidemic Diseases Act

Alok Kumar Verma, J. rejected three bail applications of the applicants who were in custody for the offence under Sections 188, 269, 270, 420, 467, 468, 471, 120B of IPC, Section 3 of the Epidemic Diseases Act, 1897 and Section 53 of the Disaster Management Act, 2005.

Read full report here…



Weekly Roundups from March


Stories of sexual assault of a minor, woman travelling in public transport experiencing inappropriate touch and how children below 12 years of age are ‘asexual’ | Read 7 Legal Stories of the week

9 Legal Stories of the Week | Unlicensed transport aggregators to Spanking back of a woman without her consent, read more such stories in this weekly roundup

From Hijab Ban to Bloomberg Privacy Case and more | 7 Legal Stories of the Week

Case BriefsSupreme Court

Supreme Court: Explaining the law on abandonment on contractual obligation, the bench of Hemant Gupta and V. Ramasubramanian*, JJ has held that the refusal of a contractor to continue to execute the work, unless the reciprocal promises are performed by the other party, cannot be termed as abandonment of contract. A refusal by one party to a contract, may entitle the other party either to sue for breach or to rescind the contract and sue on a quantum meruit for the work already done.

Relevant Facts

  • The appellant is a registered contractor with the Government of Maharashtra. In a tender for the execution of the work of Regional Rural Piped Water Supply Scheme for Dabhol-Bhopan and other villages in Ratnagiri District, the appellant became the successful tenderer and was issued with a work order on 03.07.1986, for the execution of the work.
  • The time for the completion of the work was stipulated as 30 months but the Respondents issued a letter   dated 28.07.1986 informing the appellant that the work order was kept in abeyance.
  • The respondents issued another letter dated 02.03.1987 instructing the appellant to stop the pipeline work and start the work at Panchanadi.
  • There were issues related to non-payment of bills and the work under the main contract did not start till the second bill was cleared in May, 1987.
  • The High Court of Bombay held this as the basis for abandonment of contract.
  • This finding was completely contrary to yet another finding that the period of the contract was up to June, 1989 and that the respondents themselves granted extension of time to complete the contract up to 31.12.1989, despite there being no request from the appellant.
  • Interestingly, the contract, that was originally to continue till June. 1989, was extended up to December, 1989.

Analysis

The Supreme Court found High Court’s finding erroneous and observed,

“We fail to understand as to how a person who abandoned the contract in May, 1987 could be granted extension of time up to December, 1989 on the very understanding of the respondents that the contract was up to June, 1989.”

The Court held that such a finding of abandonment of contract cannot co¬exist with the specific stand of the respondents that the period of contract was extended up to December, 1989.

The Court explained that the fundamental to the Law of Contract is that whenever a material alteration takes place in the terms of the original contract, on account of any act of omission or commission on the part of one of the parties to the contract, it is open to the other party not to perform the original contract. This will not amount to abandonment.

“Moreover, abandonment is normally understood, in the context of a right and not in the context of a liability or obligation. A party to a contract may abandon his rights under the contract leading to a plea of waiver by the other party, but there is no question of abandoning an obligation. In this case, the appellant refused to perform his obligations under the work-order, for reasons stated by him. This refusal to perform the obligations, can perhaps be termed as breach of contract and not abandonment.”

[Shripati Lakhu Mane v. Maharashtra Water Supply And Sewerage Board, 2022 SCC OnLine SC 383, decided on 30.03.2022]


*Judgment by: Justice V Ramasubramanian


Counsels

For appellant: Senior Advocate Vinay Navare

For Respondent: Advocate Sunil Muraka

Case BriefsHigh Courts

Calcutta High Court: The Division Bench of Soumen Sen and  Ajoy Kumar Mukherjee, JJ., dismissed an appeal concerned with a breach of contract. The appeal arose out of a judgment in a suit for recovery of possession and injunction. Trial Court had decreed the suit on contest and dismissed the counter claim filed by the defendant.

Plaintiff was the landlord in respect of the suit premises, he had filed a suit for eviction in the Small Causes Court at Calcutta for eviction of the defendant/appellant who was a tenant under the plaintiff in respect of the second floor of the suit premises. During the pendency of the eviction suit appellant expressed her willingness to purchase the second floor of the suit premises and purchased the same for a consideration of Rs 13 lakhs.

The parties thereafter executed an agreement for sale on 15th February, 2006 which contained the detailed terms and conditions for the sale. Under the said agreement it was agreed that the entire consideration amount of Rs.13 lakhs shall be paid in installments commencing from December, 2006 and ending with November, 2008. It was further agreed that a sum of Rs.5 lakhs shall be paid within March 2007 as a condition precedent. The purchaser/defendant/appellant also agreed to pay a sum of Rs.40,000/- at the time of execution of the agreement which she paid by an account payee cheque bearing no. 253304 dated December 11,2006.

The plaintiff/respondent received Rs.40,000/- by cheque as the first installment. It should be noted that the balance consideration money was not paid. The defendant/appellant had also failed to make the payment of Rs.5 lakh within March 2007 as agreed between the parties. In view of such breach the plaintiff/respondent rescinded the said agreement and sued the defendant/appellant for recovery of possession.

Ms Sabita Mukherjee Roy Chowdhury, the Counsel for the appellant submitted that the Trial Judge completely erred in arriving at a finding that by reason of the execution of the agreement for sale, the relationship of the plaintiff and defendant as landlord and tenant ceased to exist. She further submitted that the intention of the parties was to continue with the relationship of the landlord and tenant until the execution of the sale deed. The termination of the agreement does not, ipso facto, give right to the landlord to evict the tenant on the ground of surrender of tenancy.

Mr Sourav Sen, the Counsel for the respondent, submitted that it was interesting to note that the agreement for sale used the expression ‘occupancy charge’ as opposed to “rent” thereby giving a clear indication that the period for which the appellant would remain in possession she would pay occupancy charges. He further submitted that when the appellant was inducted as tenant it meant that both the parties agreed that their relationship was to be that of landlord and tenant, which position however altered later when the landlord decided to sell the suit property to the tenant.

The Court clearly inferred that the parties consciously entered into the agreement for sale thereby altering their respective status. The agreement for sale was entered to at a point of time when the earlier suit for eviction was pending.

The defendant/appellant did not deny the due execution of the said agreement. The Court noted that evidence showed that the said agreement was acted upon and parties have altered their position on the basis of the said agreement. Once the agreement was entered into and acted upon the old relationship of landlord and tenant came to an end.

The Court reiterated the relevant paragraph of the Supreme Court ruling in R. Kanthimathi v. Beatrice Xavier, (2000) 9 SCC 339 which stated:

“This decision clearly spells out that once there is agreement of sale between a land lord and a tenant, the old relationship as such comes to an end. It goes on to record that even after the cancellation of such agreement of sale the status of tenant is not restored as such. In other words, on the date of execution of the aforesaid agreement of sale their status as that of landlord and tenant changed into a new status as that of a purchaser and a seller.”

The Court in these circumstances dismissed the appeal holding that parties who have acted in terms of the agreement for sale and altered their relationship consciously cannot now go back to their old relationship and seek relief in terms of such relationship. There is a clear and conscious act on the part of the appellant to surrender her right as a tenant to acquire a superior right of an owner of the second floor of the suit premises. [Sashi Jain v. Sandip Sarkar, 2022 SCC OnLine Cal 388, decided on: 02-03- 2022]


Suchita Shukla, Editorial Assistant has reported this brief.

Case BriefsForeign Courts

United States District Court, North District of California: While issuing a permanent injunction, stating Apple could no longer prohibit developers linking to their own purchasing mechanisms, Yvonne Gonzalez Rogers, J., held that Epic Games failed to show how Apple Inc. was operating an illegal monopoly.

Violation of Federal and Anti-Trust Laws

Plaintiff Epic Game Inc. sued Apple Inc. alleging violations of federal and state antitrust laws and California’s unfair competition laws based upon Apple’s operation of its App Store.

Epic Games claimed that Apple is an antitrust monopolist over:

  • Apple’s own system of distributing apps on Apple’s own devices in the App Store and
  • Apple’s own system of collecting payments and commissions of purchases made on Apple’s own devices in the App Store.

Antitrust jurisprudence also evaluates both market structure and behavior to determine whether an actor is using its place in the market to artificially restrain competition.

Apple argued that it does not enjoy monopoly power, and therefore does not violate federal and state law.

Trial did show that Apple was engaging in anti-competitive conduct under California’s competition laws. Further, the Court concluded that Apple’s anti-steering provisions hide critical information from consumers and illegally stifle consumer choice.

Since Apple has created an ecosystem with interlocking rules and regulations, it is difficult to evaluate any specific restriction in isolation or in a vacuum. Thus, looking at the combination of the challenged restrictions and Apple’s justifications, and lack thereof, the Court found that common threads run through Apple’s practices which unreasonably restrains competition and harm consumers, namely the lack of information and transparency about policies that effect consumers’ ability to find cheaper prices, increased customer service, and options regarding their purchases.

Apple employs these policies so that it can extract supracompetitive commissions from this highly lucrative gaming industry.

Background

In 2010, Epic Games agreed to and signed a Developer Product Licensing Agreement (“DPLA”) with Apple. Epic International subsequently signed a Developer Agreement and DPLA (for the account associated with Unreal Engine). At the time of the signing of these contracts, Mr. Sweeney understood and agreed to key contractual terms including, that Epic Games (i) was required to pay a commission on in-app purchases; (ii) was prohibited from putting a store within the App Store; (iii) was prohibited from sideloading apps on to iOS devices; and (iv) was required to use Apple’s commerce technology for any payments. Knowing the terms, Epic Games chose to enter into those contracts.

Analysis

Apples’ product Market Theory

Court considered whether the App Store provides two-sided transaction services or as Epic Games argued “distribution services”.

The Supreme Court has seemingly resolved the question: two-sided transaction platforms sell transactions. In two-sided markets, a seller “offers different products or services to two different groups who both depend on the platform to intermediate between them.”

Court found that the relevant App store product is transactions, not services, but that providing transactions may include facilitating services.

Apps or Digital Game Transactions?

Whether to narrow the scope of the transactions in terms of defining the product market.

Court concluded that the appropriate submarket to consider is digital game transactions as compared to general non-gaming apps.

Further, the Court stated that there were nine indicia indicating a submarket for gaming apps as opposed to non-gaming apps:

  • the App Store’s business model is fundamentally built upon lucrative gaming transactions;
  • gaming apps constitute a significant majority of the App Store’s revenues;
  • both the gaming, mobile, and software industry, as well as the general public, recognize a distinction between gaming apps and non-gaming apps;
  • gaming apps and their transactions exhibit peculiar characteristics and users;
  • game app developers often employ specialized technology inherent and unique to that industry in the development of their product;
  • game apps further have distinct producers—game developers—that generally specialize in the production of only gaming apps;
  • game apps are subject to distinct pricing structures as compared to other categories of apps;
  • games and gaming transactions are sold by specialized vendors; and
  • game apps are subject to unique and emerging competitive pressures, that differs in both kind and degree from the competition in the market for non-gaming apps.

Between digital game transactions and all app transactions, the relevant product is game transactions.

All Gaming Transactions or Mobile Gaming Transactions?

Court observed that the appropriate submarket to consider is the mobile gaming transactions market.

On a careful consideration of the evidence, Court found that Apples’ app distribution restrictions do have some anti-competitive effects. Unlike the increased merchant fees in Amex, Apple’s maintenance of its commission rate stems from market power, not competition in changing markets

Apple has shown procompetitive justifications based on security and the corollary interbrand competition, as well as generally with respect to intellectual property rights.

Epic Games has not met its burden to show that its proposed alternatives are “virtually as effective” as the current distribution model and can be implemented “without significantly increased cost.

California’s Unfair Competition Law

Epic Games challenges Apple’s conduct under the “unlawful” and “unfair” provisions of the UCL.

Court found that Epic Games has the standing to bring a UCL claim as a quasi-consumer, not merely as a competitor.

Since Epic could not show a violation of law, the claim under the “unlawful” standard failed.

Remedies

While Apple’s conduct did not fall within the confines of traditional antitrust law, the conduct fell within the purview of an incipient antitrust violation with particular anti-competitive practices which have not been justified.

Apple contractually enforces silence, in the form of anti-steering provisions, and gains a competitive advantage. Moreover, it hides information for consumer choice which is not easily remedied with money damages.

 Apple’s business justifications focus on other parts of the Apple ecosystem and will not be significantly impacted by the increase of information to and choice for consumers.

 A nationwide injunction shall issue enjoining Apple from prohibiting developers to include in their:

Apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to IAP.

Nor may Apple prohibit developers from:

Communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.

The Court concluded that Epic Games has not shown that the DPLA is unconscionable. A contractual term is not unconscionable unless it is found to be both procedurally and substantively unconscionable. Here, the absence of substantive unconscionability is dispositive. A contractual term is not substantively unconscionable unless it so “one-sided so as to ‘shock the conscience”

Epic Games pointed to no other evidence or authority based upon which the Court could find that the provisions at issue “shock the conscience.”

These are billion and trillion dollar companies with a business dispute.  

Breach of Contract

 Under California law, “the elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011)

Further, it was contended that, Epic Games’ actions violated the DPLA provisions

(1) requiring developers not to “hide, misrepresent or obscure any features, content, services or functionality” in their apps and not to “provide, unlock or enable additional features or functionality through distribution mechanisms other than the App Store,”; and

(2) requiring Epic Games to pay Apple “a commission equal to thirty percent (30%) of all prices payable by each end-user” through the App Store.

For the above argument, Court concluded that Epic games breached the provisions of DPLA and that Apple was entitled to relief for the violations.

Breach of the Implied Covenant of Good Faith and Fair Dealing

Since Court had concluded that Apple was entitled to relief on its breach of contract claim, the Court denied relief to Apple as to its alternative claim for the breach of the implied covenant of good faith and fair dealing.

Unjust Enrichment

 Apple asserts a counterclaim for unjust enrichment against plaintiff based on its alleged failure to pay Apple the agreed-upon 30% commission under the DPLA, but it asserts this counterclaim only “[i]n the alternative” to its claim for breach of contract.

The above stated alternative claim was denied.

Indemnification

Under California law, “[a]n indemnity agreement is to be interpreted according to the language and contents of the contract as well as the intention of the parties as indicated by the contract.” Myers Bldg. Indus., Ltd. v. Interface Tech., Inc., 13 Cal. App. 4th 949, 968 (1993)

Apple contended that it is entitled to indemnification from Epic Games under the indemnification provision because plaintiff’s lawsuit involved claims arising from or related to its breaches of its certifications, covenants, obligations, representations, or warranties under the DPLA, and its use of the Apple Software or services, its licensed application information, its covered products, and its development and distribution of the foregoing.

No such express language was included in the indemnification provision at issue.

In light of the absence of such express language, and in light of the terms used in the indemnification provision that suggested that it covers only third-party claims, the Court found and concluded that Apple has not shown that it is entitled to recover attorneys’ fees and costs from Epic Games pursuant to Section 10 of the DPLA.

Conclusion

Apple sought a declaratory judgment that:

  • DPLA is valid, lawful, and enforceable contracts
  • Apple’s termination of the DPLA with Epic Games was valid, lawful and enforceable
  • Apple has the contractual right to terminate the DPLA with any or all of the Epic games’ wholly owned subsidiaries, affiliates, and/or other entities under its control; and
  • Apple has the contractual right to terminate the DPLA with any or all of the Epic Affiliates for any reason or no reason upon 30 days written notice, or effective immediately for any “misleading fraudulent, improper, unlawful or dishonest act relating to” the DPLA.

Epic Games had contended that Apple was not entitled to the above-stated judgment and Apple’s termination of the DPLA as to Epic Games was “unlawful” retaliation.

Bench stated that the present matter does not involve retaliation.

Epic Games never showed why it had to breach its agreements to challenge the conduct litigated.

In Court’s opinion, plaintiff’s challenges to Apple’s claim for declaratory relief failed as to the remaining requests.

Relief to which Apple was entitled is that to which Epic Games stipulated in the event that the Court found it liable for breach of contract, namely:

  • damages in an amount equal to (i) 30% of the $12,167,719 in revenue Epic Games collected from users in the Fortnite app on iOS through Epic Direct Payment between August and October 2020, plus (ii) 30% of any such revenue Epic Games collected from November 1, 2020, through the date of judgment; and
  • a declaration that (i) Apple’s termination of the DPLA and the related agreements between Epic Games and Apple was valid, lawful, and enforceable, and (ii) Apple has the contractual right to terminate its DPLA with any or all of Epic Games’ wholly owned subsidiaries, affiliates, and/or other entities under Epic Games’ control at any time and at Apple’s sole discretion.

Final Words

As a major player in the wider video gaming industry, Epic Games brought this lawsuit to challenge Apple’s control over access to a considerable portion of this submarket for mobile gaming transactions. Ultimately, Epic Games overreached.

Court did not find Apple as an antitrust monopolist in the submarket for mobile gaming transactions. Though, the Court did find Apple’s conduct in enforcing anti-steering restrictions to be anti-competitive.

In view of the above discussion, Court gave the verdict in favour of Apple except with respect to violation of California’s Unfair Competition Law and only partially with respect to its claim for declaratory relief.

Apple Inc. and its officers, agents, servants, employees, and any person in active concert or participation with them were hereby permanently restrained and enjoined from prohibiting developers from

  • including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and
  • communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.

Injunction which was previously ordered was terminated.[Epic Games Inc. v. Apple Inc., Case No. 4:20-cv-05640-YGR, decided on 10-09-2021]

'Lex Mercatoria' by Hasit SethExperts Corner

  1. Introduction

This article explores recent progress in the  law of lost profit damages by analysing a landmark Privy Council case Attorney General of the Virgin Islands v. Global Water Associates Ltd.[1]. Lost profit damages for breach of a contract are available but their recovery is circumscribed by the conditions of parties’ contemplation and remoteness. Claims for lost profit damages have to overcome the barrier of remoteness.

 

Starting from Hadley v. Baxendale[2], many cases for lost profits have arisen in the context of services by logistics providers. Lost profit cases have also arisen in context of resale of goods, professional services and land transactions among others. They frequently occur in this pattern: A promised to B to supply goods or perform services, and B in turn further contracted with C to supply goods to be received from A or services to be performed by A under A’s contract with B (broadly called as “linked contracts”). This pattern of linked contracts is extremely common since the earliest trading days to the modern, global supply chains. The challenge has always been to prove parties’ contemplation at the time of contracting to foresee the risk of consequential loss from the breach of contract. Risks contemplated by the parties can lead to recovery of lost profits (also called “loss of profits” by many authors) that are not too remote.

 

2. Architecture of the Remedy of Damages

In India and few other former British colonies that adopted the Contract Act, 1872, damages under Section 73 are termed as “compensation”. Damages for breach of contract are payable by a party which broke the contract to a party that suffers the breach. Quantum of damages is defined by the loss or damage suffered by the party minus any allowed reductions like mitigation.

 

A party suffering from a breach of contract is entitled to recover damages that either:

  1. Naturally arose in the usual course of things; or
  2. Which the parties knew at the time of contracting to likely result from a breach.

The scope of damages that can be recovered is controlled by the requirement in Section 73 that the damages must not be from remote and indirect loss or damage.

 

Section 73’s language can be traced to Alderson B’s dictum in the celebrated 1854 English case Hadley v. Baxendale[3] as:

Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. (emphasis supplied)

 

The core rule of damages seeks to place a contract party suffering the breach in a position she would be in if the contract had been performed. This has been aptly stated by Parke B in Robinson v. Harman[4] as:

… what damages is the plaintiff entitled to recover? The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.

 

Damages are available when a breach of contract is a proximate, direct cause(s) of a loss arising from such a breach. Damages are not recoverable when a breach of contract is a remote, indirect cause(s) for a loss arising from such a breach. Consequential damages are recoverable only if they were in the contemplation of the parties (or at least the defendant), otherwise such damages would be remote and hence not recoverable.

 

Allowing damages when such losses were in contemplation of parties is not an exception to the core rule of granting damages that arise naturally, but where a defendant has a notice of special circumstances, that notice enlarges the scope of the natural consequences of the breach[5].

 

Mayne[6] illustrates a common demand for lost profits that would have been made if the defendant had performed her contract promises as:

One very common instance in which damages are held to be too remote arises where the plaintiff claims compensation for the profits which he would have made, if the defendant had carried out his contract. It is by no means true, however, that such profits can never form a ground of damage … Loss of profits is recoverable so far as it is the natural result of the breach of contract, but not when it is founded on a special contract for resale, unknown to the defendant, which is frustrated by that breach.

Knowledge of the parties has to be objectively ascertained as to whether they contemplated certain events or losses to be within the scope of a contractual bargain. But this is not always easy to ascertain. Knowledge possessed by the contracting parties is classified into two types: imputed and actual. Imputed knowledge refers to the knowledge that the contracting parties ought to have of the loss consequent to a breach in ordinary course. But a defendant may possess actual knowledge outside the ordinary course which if the contract is breached in special circumstances will make the defendant liable[7][8].

Hadley v. Baxendale case’s ratio is considered an “orthodox” or “standard” approach, while the reformulated approach in Achilleas[9] case by two-Judges of the Bench is described as, “… defendant is only to be held liable for loss which it was the intention of the parties that he should bear i.e. loss for which he has ‘assumed responsibility’, or which falls within the scope of his duty”[10]. But Treitel considers Achilleas[11] case’s ratio is not any definite departure from the rule in Hadley v. Baxendale case and may be thought of as a requirement that the defendant has accepted or assented to the risk of loss over and above the contemplation in the foresight of the parties[12].

 

 3. Lost Profits (Loss of Profits) under the Contract Act, 1872

Lost profit (Loss of Profits) damages are available under Indian contract law. The only bar is remoteness. As noted above, the Indian contract law of damages tracks the English common law being firmly rooted in Hadley v. Baxendale rules that are enacted in statute’s Section 73.

 

There are illustrations to Section 73 that cover lost profits. For example, illustration (i) is a variation of Hadley v. Baxendale situation with damages being recoverable as lost profits in contemplation of the parties for normal operation but not for the loss of a remote government contract. Illustration (j) describes linked contracts where knowledge of a linked contract leads to lost profit damages. In Illustration (l), the builder has knowledge of the further linked contract and hence the builder is liable for lost profits. In illustrations (k, n, p, q and r), consequential damages are not being recoverable as being too remote. In all illustrations to Section 73 where parties had mutual knowledge of purpose of the contract liability for lost profits is shown to exist.

 

In a road construction project, when the Government breached the contract by improperly rescinding it, Supreme Court of India upheld grant of lost profits on the unfinished work[13]. But at times, the High Courts have rejected lost profits, because they were not proved[14][15]. Then there have been the courier related cases where if the defendant did not have knowledge of plaintiff’s special purpose or circumstances, lost profit damages have been disallowed[16][17]. Lost profits have had a long history in Indian contract law cases. But there is a dearth of lost profit judgments post-independence similar to the reduced count of contract damages decisions too. Hence, it is necessary to consider English law decisions on this point where the issue of contemplation has been refined over the years.

 

4. A Milestone: Attorney General of Virgin Islands v. Global Water Associates Ltd.

In a landmark recent decision Attorney General of the Virgin Islands v. Global Water Associates Ltd.[18] (2020), the Privy Council restated the law on lost profit (loss of profit) damages and remoteness of damages. In a decision that traces the law from Hadley v. Baxendale onwards,  the Privy Council undertook a comprehensive review of English law precedents on loss of  profit damages and remoteness of damages. The following discussion refers to the same case Attorney General of the Virgin Islands v. Global Water Associates Ltd. (2020).

 

D.1 The Two Contracts

The facts of the case involved two contracts that were to be operational in sequence: to build and then to operate a water plant. First contract was a design and build agreement (DBA). Second contract was a management operation and maintenance agreement (MOMA). Parties were Government of British Virgin Island (Government) and global water associates (GWA). The parties to the two contracts, DBA and MOMA, and the designated signatories were the same.  Both the DBA and MOMA were signed on the same day. Hence, the DBA was to be followed by MOMA with the same parties. The DBA and MOMA incorporated the common “design build documents”, which included the GWA’s proposal, Government’s approval and letter from a company pure stream stating that GWA were their authorised agents and their support for executing the project.

 

Government executed the DBA with GWA to build a water reclamation treatment plant. It also executed a MOMA with GWA to operate the same water plant from the commencement date, which was to be the first date on which the water plant produced specified quantity of water.

 

D.2 Breach of Contract

GWA claimed that the Government failed to provide a prepared site for the water plant, a requirement under the DBA. Hence, GWA could not build the water plant. GWA then issued a contractual remedy notice, which the Government failed to respond. Thereafter, GWA terminated the DBA. Due to this breach of DBA  by the Government, GWA claimed it had lost profits it could have earned from managing and operating the plant for 12 years under the MOMA. Hence, GWA claimed damages for the breach of an implied term under the MOMA that the Government would provide a prepared site under its DBA obligations.

 

D.3 Litigation

GWA initiated an arbitration for its claims for damages arising from the breach of the DBA and also the breach of an implied term of MOMA. The Arbitral Tribunal rejected GWA’s claim because there was no implied term in MOMA to provide a prepared site. Further, the damages claimed for lost profits to be earned under MOMA were too remote to be recoverable.

 

GWA’s challenged the award in the High Court for errors of law. A Single Judge Bench held in favour of GWA and remitted the award back to the arbitrators for assessment of damages.

 

In the Government’s appeal, the court of appeal rejected GWA’s claim on the ground that the damages were too remote to recover. The court of appeal reasoned that even if Government had breached the DBA, which led to GWA terminating the DBA, for the purpose of MOMA, Government could have got the plant built by some other contractor. GWA in such case could then have operated the plant for 12 years under the MOMA. Hence, the court of appeal held that the parties could not have reasonably foreseen that breach of DBA would lead to MOMA being non-operational. Further, the court of appeal also rejected the argument that MOMA had an implied term that DBA obligations would be fulfilled. The court of appeal based its decision on the implied term being that the Government will make a water plant available to operate at the commencement of MOMA. GWA appealed to the Privy Council.

 

D.4 Privy Council’s Analysis

Analysing the remoteness of damages issue, the Privy Council noted Hadley v. Baxendale’s formulation were apt for an age when juries decided such questions. But now when Judges give reasons, the formulations are subjected to “closer scrutiny and some expansion”. (emphasis supplied)

 

Considering Victoria Laundry (Windsor) v. Newman Industries Ltd.[19] decision, the Privy Council chose to focus on its later review in Heron II[20] case. The Privy Council said that unusual market volatility or understanding of market which were the focus of  Achilleas[21] case were not at issue here. The Privy Council favoured Lord Walker of Gesting Thorpe’s preference in Achilleas[22] case because:

78.… arguably a vague expression (such as “real possibility”) … because it is more flexible once it is understood that what is most important is the common expectation, objectively assessed, on the basis of which the parties are entering into their contract.

He preferred the “real possibility” expression over various probabilities of the parties contemplating the event of breach being considered in Heron II[23] case because, “In the context of contractual liability, the Court is not solely concerned with percentage chance of such an event occurring, although that is not irrelevant.”

 

The Privy Council also considered Lord Burrow’s formulation in his book[24] that a loss is too remote if such loss could not reasonably have been in defendant’s contemplation as “a serious possibility”.

 (emphasis supplied)

The Privy Council also agreed with the Single Judge Bench’s determination of inapplicability of Singapore Court of Appeal’s Burgundy[25] case on facts where parties had entered into an escrow and a drilling contract. The Singapore Court of Appeal in that case had held that damage caused by failure to fund the escrow account was only loss of security and driller could still have performed the contract. But here, the Government’s failure to perform DBA had prevented GWA from making profits under the MOMA.

 

The Privy Council[26] summarised the legal position of remoteness of damages as:

  1. First, in principle the purpose of damages for breach of contract is to put the party whose rights have been breached in the same position, so far as money can do so, as if his or her rights had been observed.

 

  1. But secondly, the party in a breach of contract is entitled to recover only such part of the loss actually resulting as was, at the time the contract was made, reasonably contemplated as liable to result from the breach. To be recoverable, the type of loss must have been reasonably contemplated as a serious possibility, in the sense discussed in paras 27 and 28 above.

 

  1. Thirdly, what was reasonably contemplated depends upon the knowledge which the parties possessed at that time or, in any event, which the party, who later commits the breach, then possessed.

 

  1. Fourthly, the test to be applied is an objective one. One asks what the defendant must be taken to have had in his or her contemplation rather than only what he or she actually contemplated. In other words, one assumes that the defendant at the time the contract was made had thought about the consequences of its breach.

 

  1. Fifthly, the criterion for deciding what the defendant must be taken to have had in his or her contemplation as the result of a breach of their contract is a factual one.

(emphasis supplied)

D.5 Application of the Law to Facts

Returning to the facts at hand, the Privy Council noted four facts: (i) contract parties were identical, and the contracts were executed simultaneously; (ii) government knew and intended that DBA’s performance would lead to MOMA; (iii) design build documents incorporated into the DBA were the same as the ones incorporated into the MOMA; and (iv) absence of an express or implied term in the DBA limiting the government’s liability for loss of earnings. Further Privy Council rejected the contention that he existence of two contracts itself is an, “implicit limitation on liability for breach of contract”, in the DBA because there could be several reasons why the contracts were separated.

 

The Privy Council rejected the court of appeal’s reasoning that the Government could have got the water plant built by another contractor and yet met its obligations under the MOMA. It did so because of: (i) incorporation of same design build documents into both DBA and MOMA; (ii) same entity GWA was contracted to build the plant under DBA and operate it under MOMA too; and (iii) definition of commencement date in both contracts indicates a “completion of DBA to lead seamlessly into the operation of the MOMA”. Hence, arbitrators were correct in their finding on fact that MOMA could commence only after the DBA was completed.

 

The Privy Council hence advised Her Majesty to allow the GWA’s appeal.

 

Conclusion

The Privy Council decision in Attorney General of the Virgin Islands v. Global Water Associates Ltd.,[27] (2020) case discussed above further strengthens the law of lost profit damages and remoteness of damages. In particular, the decision crystalises the standard of contemplation of parties to be objectively determined that either both or at least the defendant “reasonably contemplated as a serious possibility” the type of loss arising from the breach of the contract. This is also the standard mentioned in Professor Andrew Burrows’s  (now Lord Burrows) book referred above.

Lost profits (loss of profits) damages would be recoverable and not considered too remote if the parties or at least the defendant had contemplated as a serious possibility the type of loss arising from the breach of contract.

Milton said in his poem Paradise Lost:

Our torments also may in length of time

Become our elements

Similarly, may each step in the development of law of damages for the loss of profits and remoteness lead us to ever more precise standards to determine the contemplation of parties.

 

Advocate, practices as an independent counsel in the Bombay High Court and in arbitrations

[1] Attorney General of the Virgin Islands v. Global Water Associates Ltd., 2021 AC 23 : (2020) 3 WLR 584 : 2020 UKPC 18.

[2] Hadley v. Baxendale, 1854 EWHC Exch J70, [1854] 9 Ex. 341.

[3] Id. (Further citations to Hadley v. Baxendale are not repeated for brevity).

[4] Robinson v. Harman, (1848) 1 Exch 850, 855.

[5] William B. Hale, Handbook on the Law of Damages 78 (Roger W. Cooley, 2nd edn., 1912).

[6] John D. Mayne and Lumley Smith, A Treatise on the the Law of Damages: Comprising their Meausre, the Mode in Which they are Assessed and Reviewed, the Practice of Granting New Trials, and the Law of Set-off  55 (6th edn., 1899).

[7] Frederick Pollock and Dinshah Mulla, Indian Contract & Specific Relief Acts 1535 (13th edn., 2006).

[8] Victoria Laundry (Windsor) v. Newman Industries Ltd (1949) 2 KB 528.

[9] Transfield Shipping Inc.v Mercator Shipping Inc, 2009 AC 61 : 2008 UKHL 48.

[10] Treitel, The Law of Contract, §§ 20-109 (Edward Peel, 14th edn., 2015).

[11] Transfield Shipping Inc., (2009) 1 AC 61 : (2008) 3 WLR 345 : 2008 UKHL 48.

[12] Treitel, supra note 10,§§ 20-110.

[13] A.T. Brij Paul Singh  v. State of Gujarat, (1984) 4 SCC 59, 65.

[14] NTPC Ltd. v. Sri Avantika Contractors (I) Ltd., Delhi High Court, OMP (COMM) 428/2017, decided on 12-5-2020.

[15] National Highways Authority of India v. Ijm-Gayatri Joint Venture, Delhi High Court, OMP (COMM) 428/2017, decided on 12-5-2020.

[16] Madras Railway Company v. Govinda Rau, 1898 SCC OnLine Mad 4 : ILR (1898) 21 Mad 172.

[17] Dominion of India v. All India Reporter Ltd., 1951 SCC OnLine MP 35 : AIR 1952 Nag 32.

[18] Attorney General of the Virgin Islands, 2021 AC 23 : (2020) 3 WLR 584 : 2020 UKPC 18.

[19]Victoria Laundry (Windsor), (1949) 2 KB 528.

[20] Koufos v. C. Czarnikow Ltd., (1969) 1 AC 350 : (1967) 3 WLR 1491.

[21] Transfield Shipping Inc., (2009) 1 AC 61 : (2008) 3 WLR 345 : 2008 UKHL 48.

[22] Id.

[23] Koufos, (1969) 1 AC 350 : (1967) 3 WLR 1491.

[24] Andrew Burrows, A Restatement of the English Law of Contract 20 (2016).

[25] Burgundy Global Exploration Corpn v. v Transocean Offshore International Ventures Ltd., 2014 SGCA 24.

[26] Attorney General of the Virgin Islands, 2021 AC 23, 35-36.

[27] Id.

Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal for Electricity (APTEL): A Coram of Manjula Chellur, J. (Chairperson) and S.D. Dubey (Technical Member), allowed an appeal which was filed under Section 111 of the Electricity Act, 2003 against order passed by the Uttar Pradesh Electricity Regulatory Commission (State Commission) whereby the State Commission had rejected the petition of the Appellant seeking loss of fixed charges on account of the lower plant availability of 54.78% only, during the year 2017-18, which was directly due to the Appellant being not able to declare capacity to the full extent wholly and exclusively due to the persistent non-payment of the bills in accordance with the terms of Power Purchase Agreement (PPA) by the Respondent No. 2, Uttar Pradesh Power Corporation Limited (UPPCL) for the Electricity generated and supplied by the Appellant.

Facts:

The Appellant is a generating company within the meaning of Section 2(28) of the Electricity Act, 2003 having established a 3 x 660 MW power plant in villages, existing under the provisions of the Companies Act, 2013 in the State of Uttar Pradesh. The Respondent 1 – State Commission is the Electricity Regulatory Commission for the State of Uttar Pradesh exercising powers and discharging its functions under the provisions of the Electricity Act, 2003, it determined the tariff for the supply of electricity and also exercises the powers to adjudicate and decide on any disputes that arise between the Appellant and UPPCL. The Respondent 2 UPPCL is the Apex Body in the State of Uttar Pradesh which is overseeing the distribution and supply of electricity for and on behalf of the Distribution Companies (Respondents 3-6). They have authorized UPPCL to execute/sign the Power Purchase Agreements and also to carry out all necessary actions on their behalf in relation to the power purchase and supply. For the establishment of the generating station of the appellant, a Memorandum of Understanding (MoU) dated 22-04-2010 was entered into between the Government of Uttar Pradesh (GoUP) and a consortium of companies led by Bajaj Hindusthan Sugar Limited (BHSL) under a Special Purpose Vehicle (SPV), the Appellant which had already been incorporated by Respondent 2. The Appellant and UPPCL had entered into a PPA. The State Commission had allowed provisional tariff of Rs 1.88 towards fixed cost and Rs 2.95 as variable charge computed on capital expenditure of Rs 12,868 crores incurred. The said provisional tariff of fixed charges was further revised to Rs 2.24 with effect from 07-03-2018. The final tariff of the Appellant was pending determination from the date of commercial operation. The Appellant had been supplying the entire capacity of the generating station to UPPCL in terms of the PPA however UPPCL had been making substantial delays in making payment of the Appellant’s invoices as per the provisions of the PPA and not been providing and maintaining the payment security mechanism as per PPA. The Appellant had filed a petition before the State Commission seeking directions for payments of the outstanding dues. The State Commission had dismissed the petition based on the undertaking of UPPCL to clear all the dues forthwith and that the escrow mechanism would be created at the earliest. during the year for the purchase of coal and the Appellant was left with only a sum of Rs 2,833 crore out of which the Appellant had to meet its debt service obligations, working capital cost and O&M Charges including salary payment as essential and inevitable cash outgo prior to incurring any amount on procurement of coal. The Appellant kept on financing the coal purchase during the period from working capital facilities to the extent best possible and finally consumed the entire working capital facilities limits as available from time to time. Due to non-payment by UPPCL and the Appellant became a defaulter of its lenders with respect to working capital facilities also in addition to the default of payment of interest and installments of its term loans. This forced the Appellant in a financially stressed situation and the lenders started adjusting the entire money they received towards their dues, owing to which there was no or very little money available with the Appellant.

Arguments:

The Counsel for the appellant, submitted that due to default on the part of UPPCL the appellant has suffered financial misery and was required to pay the coal companies 100% of the cost of coal and also pay 100% of the railway freight in advance, for which the Appellant is required to be paid in time to ensure adequate working capital. The UPPCL have not disputed the fact that it has continuously defaulted in payment of the monthly bills of the Appellant for continuously 10 months in a row. The only defense of UPPCL was that the Appellant was compensated by Late Payment Surcharge (LPSC).

Issues:

  1. Whether the Appellant has changed its prayers during the course of the proceedings in the matter and if so, should the change of prayer be allowed?
  2. Whether Second Respondent has paid the outstanding amounts to the Appellant in accordance with the terms of the PPA and the Regulations specifically in light of the contention of UPPCL that the average payment made during the period was never more than 90 days;
  3. If not, whether the Appellant has actually suffered losses solely due to the non-payment of its outstanding dues in time;
  4. Whether the Regulations can be relaxed to allow the Appellant to recover its full fixed cost for the impugned period and as a consequence, can the PAF of Appellant be reduced to 54.78% from 85%;
  5. Whether late payment surcharge as envisaged in the Regulations and PPA are adequate to compensate the loss;
  6. Whether in facts and circumstances of the case, the Appellant is entitled to carrying cost?

Findings:

The Tribunal while setting aside the order of the State Commission allowed the appeal explaining all the issues at length. The Court relied on the principle founded in 1848 in Robinson v. Harman which supported innocent parties in the event of breach of contract. The Court further answered the issues at length as follows:

Issue No. 1: that the Appellant has not changed its prayer during the course of the proceedings either through its short Rejoinder Note or in Final Written submissions, as alleged by the Second Respondent.

Issue No. 2: that the second Respondent (UPPCL) has not paid the outstanding amounts to the Appellant in accordance with the terms of the PPA and the Regulations. We dismiss the concept of average payments introduced by R2 to justify its default of non-payment. We further observe that the outstanding of the Appellant remained substantial during most of the period in financial year 2017-18. Further, Respondent UPPCL has failed to establish Escrow/ Payment Security Mechanism as yet despite repeated categorical directions by the State Commission in its various orders.

Issue No. 3: Having established a clear correlation between delayed payments and coal shortage, we hold that the Appellant has actually suffered losses solely due to the non-payment of its outstanding dues in time by R-2. As a result, the applicant was not able to procure sufficient coal to declare full Capacity in spite of its generating units being technically available.

Issue No. 4: Having regard to various rulings of his Tribunal and the Hon’ble Apex Court, we are of the view that the instant case is a fit case to relax the Norms to allow the Appellant to recover its full fixed cost for the impugned period at actual PAF of 54.78% instead of normative 85% in the interest of justice and equity.

Issue No. 5: that in view of the facts& circumstances of the matter, late payment surcharge as envisaged in the Regulations and PPA is not meant for or otherwise, adequate to compensate the consequential loss suffered by the Appellant in full. Hence, it is entitled to further relief over and above LPSC.

Issue No. 6: that as per the settled principles of law, the Appellant is entitled to restitution and thus, to carrying cost from the date of capacity lost to date of actual payment at the prevailing rate of interest in accordance with UPERC Regulations.

[Lalitpur Power Generation Co. Ltd. v. Uttar Pradesh Electricity Regulatory Commission, 2020 SCC OnLine APTEL 82, decided on 28-09-2020]


Suchita Shukla, Editorial Assitant has put this story together

Canada SC
Case BriefsForeign Courts

Supreme Court of Canada: Full Bench comprising Wagner, C.J., Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer, JJ. allowed an appeal against a class action lawsuit claiming disgorgement from the Atlantic Lottery Corporation (ALC), a corporation which approves licenses for Video lottery terminals (VLTs).

The class action was instituted on behalf of any natural person who paid to play VLTs in the area in the six years preceding the lawsuit, which claimed that VLTs are deceptive and dangerous and contravene the Criminal Code’s (1985) prohibition of games similar to “three-card monte”. The plaintiffs claim that ALC breached its duty by not warning players of “the inherent dangers associated with VLTs, including the risk of addiction and suicide ideation.” The claim relies on three causes of action i.e., waiver of tort, breach of contract and unjust enrichment, to seek a gain-based award quantified by the profit ALC earned by licencing VLTs. ALC’s application against the claim before a certification judge failed, as did its appeal in the Court of Appeal, which allowed the plaintiff’s lawsuit to proceed to trial.

The Court, however, held that the plaintiffs’ plea is bound to fail since it does not disclose a reasonable cause of action. The bench opined that while disgorgement is a remedy against actionable misconduct, the plaintiffs seek to use it as an independent cause of action under an entirely new category of wrongful conduct, which is akin to negligence but does not require proof of damage. Denying relief on this ground, the Court asserted that “granting disgorgement for negligence without proof of damage would result in a remedy arising out of legal nothingness.” As for the argument concerning the similarity of VLTs to three-card monte, the Court rejected it since the prohibition was directed at the game’s attribute and not its feature of deception.

The Court opined that gain-based recoveries in cases of breach of contract require the consideration of the legitimate interest which such an award seeks to vindicate. Since the award sought by the plaintiffs is measured by the defendant’s gain, it seeks to serve a compensatory purpose which distinguishes it from disgorgement and that makes a gain-based remedy inappropriate. Moreover, the contract between ALC and the plaintiffs under which the plaintiffs paid to play on the VLTs cannot be said to have been vitiated since a benefit derived by a defendant from a valid contract is not unjustified. The plaintiffs failed in establishing a causal connection between the alleged breach of contract and the gain to be disgorged. However, four judges on the Bench dissented by allowing the appeal in part, striking down disgorgement and unjust enrichment as causes of action, instead suggesting that the lawsuit be focused on a breach of duty of care, the adequacy of ordinary remedies resulting from it and whether exemplary damages ought to be awarded. [Atlantic Lottery Corporation Inc. v. Babstock, 2020 SCC 19, decided on 24-07-2020]

Case BriefsForeign Courts

Supreme Court of the Democratic Socialist Republic of Sri Lanka: A Full Bench of Buwaneka Aluwihare, Priyantha Jayawardena and Murdu N. B. Fernando, JJ., dismissed an appeal which was filed on the ground that the High Court Judge had erred in attaching liability to the defendant to pay damages.

The original action in the High Court was filed in order to recover damages with legal interest from the defendant-appellant for breach of contract. The defendant had entered into an agreement with the Commissioner-General of the Department of Educational Publications in the Ministry of Education (hereinafter “Commissioner-General”) to print several school textbooks and the parties had agreed to print the whole order for a specific amount within a specified deadline. The contention of the Plaintiff was that the defendant had failed to meet the deadline and complete the order and whatever part of the order was complete even that was delivered after the specified deadline because of which the Commissioner General was compelled to commission three other printing agencies to print the remainder. Exercising rights stipulated in clauses (15), (21) and (23) of the Agreement the Commissioner-General, on behalf of the State, sought to recover the damages as it was the defendant’s default that had caused additional expenses. Having failed to secure the recovery by way of a letter of demand, the Attorney General had instituted an action in the High Court, where the Court had answered all the issues raised in favour of the plaintiff. The counsel for the defendant-appellant had submitted that the facts of the case were not disputed but he only wished to canvass the conclusions reached by the trial Judge, the defendant had contended that the Agreement was terminated by mutual consent and not pursuant to a breach basing their arguments on the conduct of the plaintiff such as not serving notice to show cause, not blacklisting the defendant, awarding subsequent contracts and making payments without any deductions in the form of a penalty but there was stark paucity of any evidence and the High Court had held that the defendant had failed to substantiate their position that they were not in breach of the agreement.

The Court while dismissing the appeal explained that they agreed with the Judgment of the High Court as the defendant-appellant had neither produced evidence establishing that they had not fulfilled their obligations nor had they controverted the evidence led by the Plaintiff to this effect. [Tisara Packaging Industries Ltd. v. Attorney General, SC CHC Appeal No. 17 of 2010, decided on 18-10-2019]

Case BriefsForeign Courts

Pakistan Supreme Court: The Bench of Gulzar Ahmed,  Faisal Arab and Ijaz UL Ahsan, JJ., dismissed the petition filed against a Judgment of the Lahore High Court through which the appeal filed by the petitioner regarding the termination of his services was dismissed.

The facts of the case were that the petitioner was appointed as an ECG Technician in District Headquarters Hospital, Rawalpindi in 2005 on a contract basis. In 2009, his services were terminated. He challenged his termination through a representation which was not decided. He, therefore, approached the High Court in its constitutional jurisdiction. The High Court directed the respondents to decide the petitioner’s representation. This was dismissed by the departmental authority. The petitioner challenged the said order which was allowed. The respondents, feeling aggrieved, challenged the said judgment through two separate Intra Court Appeals which were allowed; the above facts raised the current contention. The Counsel for the petitioner, Sardar Abdul Raziq Khan and Syed Rafaqat Hussain Shah submitted that the Division Bench of the High Court fell in error in reversing the findings of the Single Judge in a mechanical manner, ICA filed by the Rawalpindi Medical College , which was neither a party to the proceedings nor directly aggrieved of the order, was not competent and the ICA filed by the Government of Punjab was barred by time and the Division Bench erred in law in entertaining the appeals. The respondents defended this by raising the point of law that if two appeals against the same impugned judgment are filed, one of which is within time, the other appeal should also be entertained and decided on merit rather than being dismissed on technical grounds.

The Court held that the appeal filed by the RMC was within time and even if the appeal filed by the Government of Punjab was barred by time, the Division Bench had a legal basis and lawful justification to entertain and decide both appeals on merits. Further, the Court found that the order of petitioner’s appointment was void and no period of limitation runs against a void order. The second issue that was considered was that the dispute between the parties related to contract employment. The Court stated that it is settled law that a contract employee is debarred from approaching the High Court in its constitutional jurisdiction. The only remedy available to a contract employee is to file a suit for damages alleging breach of contract or failure to extend the contract. Therefore, it was held that the petitioner approached the wrong forum in the first place and the Single Judge had exceeded his jurisdiction by interfering in a purely contractual matter. The appeal was thus dismissed. [Qazi Munir Ahmed v. Rawalpindi Medical College and Allied Hospital, 2019 SCC OnLine Pak SC 3, Order dated 06-03-2019]

Telangana High Court
Case BriefsHigh Courts

Hyderabad High Court: While deciding the instant appeal under Section 483 of the Companies Act, 1956 read with Clause 15 of the Letters Patent against the admission of Company Petition No. 231 of 2015, filed for its winding-up under Section 433(e) read with Sections 434(1)(a) and 439 of the Companies Act, 1956, the Division Bench of Sanjay Kumar and Uma Devi, JJ., observed that it would not be true to say that a person who commits a breach of the contract incurs any pecuniary liability, nor would it be true to say that the other party to the contract who complains of the breach has any amount due to him from the other party. Thus no pecuniary liability arises till the Court has determined that the party complaining of the breach is entitled to damages.

The appellant company was awarded a contract by Surana Ventures Limited to set up a 35 MW per annum capacity photo-voltaic cell manufacturing plant at Fab City, Hyderabad. In turn, the appellant company engaged services of several sub-contractors and suppliers for discharging this contractual obligation. The respondent company was one of the sub contractors upon whom a Purchase Order dated 15.04.2011 was placed by the appellant company to manufacture and supply of certain water and waste-water plant components for use in the proposed manufacturing plant. The Purchase Order contained the terms and conditions of the contract as it contemplated that time was the essence of the work and all deliveries/works had to be completed. However Surana Ventures shelved the project in August, 2011 and the contract was frustrated thereafter. As a result the appellant company claimed that it could not proceed further thereafter, in so far as Purchase Order. The respondent company stated that it had invested its entire monies into the project and kept the plant ready and was at the disposal of the appellant company and thus requested them to pay the balance amount. With the appellant denying the liability to pay, the company petition for winding-up the appellant company was presented by the respondent on 01.05.2015. The Company Judge admitted the winding up petition stating that the appellant company’s defense of Surana Ventures shelving the project is unsustainable and did not make any observation on the issue as to whether there was breach of contract by the appellant company in respect of its obligation under the Purchase Order.

The Court observed that the Company Judge lost sight of such an important issue as to the presence of a breach of contract by the appellant company as this was a crucial aspect which was raised by way of a bonafide dispute by the appellant company and required to be addressed at the threshold to assess as to whether the respondent made out a prima facie case for admission of the winding-up petition. The Court also observed that when damages are assessed the Court in the firstly must decide that the defendant is liable and then it proceeds to assess what that liability is. But till that determination there is no liability at all upon the defendant. Noticing the existence of several debatable issues raised by the appellant which were ignored by the Company Judge, the Court thus set aside the order of admission dated 25.10.2017 and dismissed Company Petition No. 231 of 2015. [MW High Tech Projects India Pvt. Ltd. v. M/s. Grauer & Weil (India) Ltd., 2017 SCC OnLine Hyd 409, decided on 06.12.2017]