Kerala High Court
Case BriefsHigh Courts

   

Kerala High Court: In a case filed seeking the release of maintenance amount as in the instant set of facts when the respondent filed a petition before the Family Court to get the amount released, the same was objected to by the revision petitioner, A Badharudeen, J., directed all Family Court Judges to release the amount deposited towards arrears of maintenance under the orders of the Court or otherwise to the claimants at the earliest.

The Court noted that that when arrears of maintenance being deposited before the Family Courts in obedience to the order/interim order or otherwise, Family Courts are reluctant to release the amount deposited to the claimants and unwantedly insist for orders from this Court to release the amount.

The Court remarked that it appears to be a bad practice which is detrimental to the interest of the claimants. In fact, it is the duty of the Family Courts to release the amount deposited within no time to the respondents, to help them survive.

Thus, the Court directed the Family Court to release the amount deposited in this case, within three days of receipt of the copy of this order, without fail, and report compliance.

Thus, the Court concluded that that when amounts are deposited, being part of arrears of maintenance, the Family Court shall immediately secure the presence of the claimant/claimants, after contacting them through their lawyers or in the telephone numbers of the claimants, and shall release the amount directly to the parties, without effecting deposit of the same in the treasury.

However, the Court opined that if any amount is deposited towards arrears of maintenance, with the rider not to release the amount, such amount alone shall not be released in view of this direction.

[Manikandan v. Raveena, R P (FC) No. 302 of 2022, decided on 01-12-2022]


Advocates who appeared in this case :

Ms. Gouri Meempat, Ms. Deepa Narayanan, K Sujai Sathian and Sangeetha Sreekumar, Advocates for the Petitoner;

Mr. K.R. Vinod and M.S. Letha, Advocates for the Respondent.


*Arunima Bose, Editorial Assistant has reported this brief.

Bombay High Court
Case BriefsHigh Courts

Bombay High Court: In a commercial division summary suit instituted by Aziz Amir Ali (‘plaintiff’) who is former employee of a registered partnership firm (‘defendant 1’) which is engaged in the business of selling umbrellas for more than a century and has acquired goodwill in the market., for recovery of a sum of Rs. 1,20,00,000/- along with interest at the rate of 24% p.a. on the principal sum of Rs. 1 Crore, N.J. Jamdar, J. held the summary suit to be maintainable on confirmation of accounts through deposit receipt presented before Court.

The plaintiffs invested their lifetime savings with the defendants under the Collective Investment Scheme and invested a total sum of Rs. 1 Crore by cross payee cheques drawn in favor of defendant 1. In turn, the defendants issued credit notes and kept paying the money until January 2020 however stopped payment of interest from the month of February 2020. Thus, letters and legal notices were sent but to no response, present summary suit was filed.

Defendant 2 assailed the tenability of the suit under Order XXXVII Civil Procedure Code, contending that there is no contract between the plaintiffs and the defendants as alleged credit notes/deposit receipts do not constitute written contract.

The Court noted that the claim of the plaintiff is substantiated by the statements of bank accounts which evidence the transfer of amount to the account of defendant 1 through cheques. Particulars of the cheques are mentioned in the credit notes/deposit receipts, thus giving credence to the receipt of the amount of Rs. 1 Crore.

On the contention raised by the counsel for defendant that the transaction allegedly evidenced by credit notes does not partake the character of ‘deposit’, the Court placed reliance on Basant Lal Agarwal v. Lloyds Finance Ltd., 2003 SCC OnLine Bom 1129, to explain the distinction between ‘loan’ and ‘deposit’.

The Court observed that the credit note/receipt clearly acknowledges the receipt of the amount thereunder and the legal notices sent constitute a specific and unequivocal demand of the said amount.

On the thrust of the defense regarding absence of stipulation as to the ‘term of deposit’ implying no contract to repay the amount, the Court opined that the very acknowledgment of the receipt of the amount evidenced by the credit note/receipt gives rise to a contract to repay the said amount and the obligation becomes enforceable upon demand, e-ven in the absence of stipulation as to period of payment.

Placing reliance on Jyotsna K. Valia v. TS Parekh and Co., 2007 SCC OnLine Bom 413, wherein it was observed that a summary suit on the accounts duly confirmed by the defendants would be maintainable, thus, the Court did not accede to the challenge to the tenability of the suit on the ground that it is not based on a written contract.

The Court held that the defendants cannot be granted an unconditional leave to defend the suit when there is material to show that the receipt of the principal amount of Rs. 1 Crore is incontestable and borders on an admitted liability.

The Court directed defendants to repay a sum of Rs. 1 Crore within a period of six weeks from the date of this order, failing which the plaintiffs shall be entitled to apply for an ex-parte decree against the defendants after obtaining a non-deposit certificate from the Prothonotary and Senior Master of this Court.

[Aziz Amirali Ghesani v. Ibrabim Currim, 2022 SCC OnLine Bom 2300, decided on 14-09-2022]


Advocates who appeared in this case:

Mr. Rashmin Khandekar, a/w Ms. Karishni Khanna, i/b Amit Tungare, Ms. Jill Rodricks, Vinit Jain and Deep Dighe, Advocates, for the Plaintiffs;

Mr. Zain Mookhi, a/w Janhavi Doshi, i/b Maniar Srivastava Asso., Advocates, for the Defendant no. 2;

Mr. Jamshed Master, i/b Natasha Bhot, Advocates, for the Defendant no. 3;

Mr. Siddha Pamesha, a/w Declan Fernandes, i/b Purazar Fouzdar, Advocates, for the Defendant no. 4.


*Arunima Bose, Editorial Assistant has put this report together.

Case BriefsSupreme Court

Supreme Court: Explaining the scope of Section 51 of the Consumer Protection Act, 2019, the bench of MR Shah* and BV Nagarathna, JJ has held that National Commission can pass an order to deposit the entire amount and/or any amount higher than 50 per cent of the amount in terms of the order of the State Commission while staying the order passed by the State commission.

However, at the same time, while considering the stay application against the order passed by the State Commission and while passing the order to deposit the entire amount and/or any amount higher than 50 per cent of the amount, the National Commission has to assign some reasons and pass a speaking order why the conditional stay is being granted on condition of deposit of the entire amount and/or any amount higher than 50 per cent of the amount. Such an order on the stay application is not to be passed mechanically.

Issue

Whether in an appeal under Section 51 of the Consumer Protection Act, 2019 and while considering the stay application to stay the order passed by the State Commission, the National Commission can pass an order to deposit the entire amount and/or any amount higher than 50 per cent of the amount in terms of the order of the State Commission?

Analysis

Section 51 of the Consumer Protection Act, 2019 – Explained

As per Section 51 of the Act, 2019, more particularly, second proviso to Section 51, the appellant(s) in an appeal against the order passed by the State Commission may prefer an appeal, however, before the appeal is entertained by the National Commission, the appellant(s) has to deposit 50 per cent of the amount.

It is the pre-condition to deposit 50 per cent of the amount as ordered by the State Commission before his appeal is entertained by the National Commission. However, that does not take away the jurisdiction of the National Commission to order to deposit the entire amount and or any amount higher than 50 per cent of the amount while considering the stay application to stay the order passed by the State Commission.

“Rules for entertainment of an appeal on deposit of 50 per cent of the amount ordered by the State Commission, which is a statutory pre-deposit and the grant of interim order on the stay application subject to deposit of further amount are distinct and different. Pre-deposit condition as per second proviso to Section 51 has no nexus with the grant of interim order of stay by the National Commission subject to deposit of the amount awarded by the State Commission.”

Speaking order

In Shreenath Corporation v Consumer Education and Research Society, (2014) 8 SCC 657, the Court considered the Order XLI Rule 5 and Order XXXIX Rule 1 of the CPC alongwith the object and purpose of the deposit of the amount as a pre-deposit before the appeal is entertained under Section 19 of the Act, 1986 and held that,

“The order passed by the State Commission directing the appellant to refund the amount and/or pay any amount higher than 50 per cent can be said to be akin to a money decree. Even as per Order XLI Rule 5, the general rule is that normally there shall not be any unconditional stay of a money decree, however, at the same time, the Appellate Court may pass an appropriate conditional order while staying the impugned decree depending upon the facts of the case and by giving cogent reasons.”

Hence, if the National Commission after hearing the appeal of the parties in its discretion wants to stay the amount awarded by the State Commission, it is open to the National Commission to pass an appropriate interim order including a conditional order of stay.

However, the National Commission has to pass a speaking order giving some reasons why in the facts of the particular case the conditional stay of the order passed by the State Commission is to be passed subject to deposit of the entire amount and/or any amount higher than 50 per cent of the amount awarded by the State Commission and that too after giving an opportunity to the appellant as well as to the respondent.

“The order on the stay application is not to be passed mechanically. It must reflect an application of mind by the National Commission why the order passed by the State Commission is to be stayed on condition of deposit of the entire amount and/or any amount higher than 50 per cent of the amount awarded by the State Commission.”

However, at the same time, there is no discretion at all to stay the order passed by the State Commission subject to deposit of any amount less than 50 per cent of the amount which is required to be deposited as a pre-deposit before the appeal is entertained as per second proviso to Section 51 of the Act, 2019.

Conclusion

  • Pre-deposit of 50 per cent of amount as ordered by the State Commission under second proviso to Section 51 of the Consumer Protection Act, 2019 is mandatory for entertainment of an appeal by the National Commission;
  • the object of the said pre-deposit condition is to avoid frivolous appeals;
  • the said pre-deposit condition has no nexus with the grant of stay by the National Commission;
  • while considering the stay application in staying the order passed by the State Commission, the National Commission can grant a conditional stay directing the appellant(s) to deposit the entire amount and/or any amount higher than 50 per cent of the amount in terms of the order of the State Commission;
  • however, at the same time, the National Commission has to assign some cogent reasons and/or pass a speaking order when the conditional stay of the order passed by the State Commission is passed subject to deposit of the entire amount and/or any amount higher than 50 per cent of the amount either as an ex parte order or after hearing both sides and considering the facts and circumstances of the case.
  • Thus, the National Commission can grant a conditional stay of the order passed by the State Commission on deposit of the entire amount and/or any amount higher than 50 per cent of the amount as ordered by the State Commission.

[Manohar Infrastructure and Constructions Pvt. Ltd. v. Sanjeev Kumar Sharma, 2021 SCC OnLine SC 1182, decided on 07.12.2021]


Counsels

For appellants: Senior Advocate Sidharth Dave and Advocate Kanika Agnihotri


*Judgment by: Justice MR Shah

Know Thy Judge | Justice M. R. Shah

Case BriefsSupreme Court

Supreme Court: In the case where a Notice Inviting Tender had a clause asking the parties invoking arbitration to furnish a “deposit-at-call” for 10% of the amount claimed, the bench of RF Nariman and Vineet Saran, JJ struck down the said clause on the premise that:

“Deterring a party to an arbitration from invoking this alternative dispute resolution process by a pre-deposit of 10% would discourage arbitration, contrary to the object of de-clogging the Court system, and would render the arbitral process ineffective and expensive.”

The Court was hearing the matter where the Punjab State Water Supply & Sewerage Board Bhatinda had issued notice inviting tender for extension and augmentation of water supply, sewerage scheme, pumping station and sewerage treatment plant for various towns mentioned therein on a turnkey basis. Clause 25(viii) of the Notice inviting Tender was challenged before the Court which read

“It shall be an essential term of this contract that in order to avoid frivolous claims the party invoking arbitration shall specify the dispute based on facts and calculations stating the amount claimed under each claim and shall furnish a “deposit-at-call” for ten percent of the amount claimed, on a schedule bank in the name of the Arbitrator by his official designation who shall keep the amount in deposit till the announcement of the award.”

Noticing that a 10% deposit has to be made before any determination that a claim made by the party invoking arbitration is frivolous, the Court said that such a clause would be unfair and unjust and which no reasonable man would agree to.

The Court said that since arbitration is an important alternative dispute resolution process which is to be encouraged because of high pendency of cases in courts and cost of litigation, any requirement as to deposit would certainly amount to a clog on this process. It also said:

“it is easy to visualize that often a deposit of 10% of a huge claim would be even greater than court fees that may be charged for filing a suit in a civil court.”

Striking down the said clause, the Court said that unless it is first found that the litigation that has been embarked upon is frivolous, exemplary costs or punitive damages do not follow.

“Clearly, therefore, a “deposit-at-call” of 10% of the amount claimed, which can amount to large sums of money, is obviously without any direct nexus to the filing of frivolous claims, as it applies to all claims (frivolous or otherwise) made at the very threshold.”

[ICOMM Tele Ltd. v. Punjab State Water Supply & Sewerage Board, 2019 SCC OnLine SC 361, decided on 11.03.2019]