Case BriefsHigh Courts

Delhi High Court: Mukta Gupta, J., expressed that the issue of whether in the absence of a third party, the refundable security deposit can be claimed would be for the Arbitrator to determine.

The petitioner sought the appointment of an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

It was stated that the petitioner had purchased the ground 7th, 8th, 9th, 10th, 11th and 12th floors of New Tower, Bhikaji Cama Place, R.K. Puram, Delhi along with respective car parking areas at Hyatt Complex from respondent vide four registered Sale Deeds along with perpetual right to use the car parking area.

Further, the petitioner transferred and assigned all rights and title in the premises to IndusInd Bank Limited along with the perpetual right to use the car parking area.

Thereafter, the petitioner sought a refund of the security deposit of Rs 15 crores deposited by the petitioner pursuant to the Refundable Security Deposit Agreement entered between the petitioner and the respondent.

Since, the claim of the petitioner now was in terms of the Refundable Security Deposit Agreements, Clause 7 whereof provides for arbitration, the petitioner invoked arbitration and thereafter filed the present petition.

Analysis and Decision

The petitioner sought reference to arbitration in terms of Clause 7 of the Agreements. However, Clauses 2 and 3 of the Agreements were also integral parts which provide that only on the third party providing the Refundable Security Deposit to the respondent, the petitioner can claim Refundable Security Deposit and the third party is neither a party to the agreement nor party to the present petition.

Supreme Court’s decision in Cholro Controls India (P) Ltd. v. Severn Trent Water Purification Inc., (2013) 1 SCC 641, though dealing with an international arbitration under Section 45 of the Act, held that even third parties who are not signatories to the arbitration agreement can be joined in arbitration. It laid down categories where the third parties can be impleaded to the arbitration and held that the expression “claiming through them” should be construed strictly.

High Court observed that,

“The key rationale for holding that the courts’ review of the arbitration agreement should be limited to a prima facie standard is the principle of competence-competence.”

“The rule of priority in favour of the arbitrators is counterbalanced by the courts’ power to review the existence and validity of the arbitration agreement at the end of the arbitral process.”

The Bench held that,

“Once a valid arbitration agreement exists between the parties, the issue whether the petitioner is entitled to any relief in the absence of a third party to the agreement or that third party is required to be impleaded in the proceedings, is covered by the Doctrine of Competence-Competence and it will be for the Arbitrator to decide the said issue.”

Court requested Justice Usha Mehra, a former Judge of this Court to arbitrate the disputes between the parties.

In view of the above, the petition was disposed of. [Vistrat Real Estates (P) Ltd. v. Asian Hotels North Ltd., 2022 SCC OnLine Del 1139, decided on 22-4-2022]


Advocates before the Court:

For the Petitioner: Ms Ranjana Roy Gawai, Advocate.

For the Respondent: Mr Sidhant Kumar and Ms Manyaa Chandhok, Advocates.

Case BriefsHigh Courts

Delhi High Court: Whether the third party can be absolved from contempt if they are informed that their conduct would violate the Court order, Subramonium Prasad, J., reiterated the well-settled position that though broadly a person who is not a party to the proceedings cannot be proceeded against for violation of the order, but a third party cannot seek to absolve themselves if they are informed about the fact that their conduct amounts to a violation of the Court and that despite the information, they choose to willfully flout the mandate of the Court.

A contempt petition had been filed for wilful disobedience of this Court’s Order.

Factual Matrix

Petitioner had inherited a property from her late sister. The brother-in-law i.e., R.N. Kapur of the petitioner resided on the ground floor of that property along with his wife who was also the petitioner’s sister. On her death, R.N. Kapur filed a suit claiming to be the owner of the ground floor of the property.

It was stated that the above-stated suit was settled before and in terms of the said settlement, a joint application under Order XXIII Rule 1/3 read with Section 151 CPC was filed before this Court and a decree was passed in presence of the plaintiff and defendants. After the death of R.N. Kapur, the petitioner with directions of this Court took possession of the property.

Further, it was found that respondents 1,2 and 3 had trespassed the property in question. Consequently, the petitioner filed a complaint before the local police and an FIR was registered under Sections 448/34 IPC.

Respondents were also made aware of the undertaking given by R.N. Kapur and despite being made aware of the same, they did not vacate the premises which resulted in the present filing of contempt petition.

The question that arose in the present matter was:

Whether respondents committed contempt of Court or not?

Section 2(b) of the Contempt of Courts Act, 1971 defines “civil contempt” as wilful disobedience to any judgment, decree, direction, order, writ or other process of a court or wilful breach of an undertaking given to a Court. 

High Court expressed that the law of contempt had been brought primarily to secure public respect and confidence in the judicial process and provide a sanction for any act or conduct which is likely to destroy or impair such respect and confidence.

In U.N. Bora v. Assam Roller Flour Mills Assn., (2022) 1 SCC 101, after analysing the various principles of law on the point rendered, the Supreme Court itself has laid down the parameters as to when action under the Contempt of Courts Act should be initiated.

As per the facts of the case, respondent 1 claimed ownership of the property through Will given by R.N. Kapur which was executed before the decree was passed on 14-3-2012 which was passed in pursuance of the Settlement Agreement which was based upon the undertaking that had been given by R.N. Kapur.

The Bench stated that the undertaking given by R.N. Kapoor before this Court will take precedence over the Will executed by him prior to giving the said undertaking.

The Court opined that the undertaking given to the Court has to be respected and cannot be permitted to be circumvented by saying that the respondents were not parties to the suit and have not given the undertaking.

Hence, the contention that the respondent cannot be held liable for the contempt of the Court as they were not parties to the Suit and had not given the undertaking to the Court cannot be accepted.

The Court observed that,

Disobedience of an order of the Court, if permitted, will result in striking at the root of the rule of law on which our system of governance is based.

Therefore, the power to punish for contempt is necessary for the maintenance of an effective legal system and the Contempt of Court Act, 1971 had been legislated to prevent interference in the course of administration of justice.

Stating the assuming that respondent 1 was initially not aware of the consent decree, the moment she was informed about the undertaking given by R.N. Kapur, through whom respondent 1 derived title, she ought to have respected the same and not breached it, hence the High Court held that obstinate and wilful act on the part of the respondent not to obey consent decree amounted to civil contempt.

High Court decided that the respondents were liable for punishment under Section 12 of the Contempt of Courts Act, 1971. [Indra Pasricha v. Deepika Chauhan, 2022 SCC OnLine Del 1090, decided on 19-4-2022]


Advocates before the Court:

For the Petitioner:

Mr Ashutosh Lohia, Mr Soumya Kumar, Advocates

For the Respondents:

Mr Ravi P Mehrotra, Senior Advocate with Mr Vibhu Tiwari, Advocate for R-1 & R-3

Mr Gautam Narayan, ASC for GNCTD with Mr Aditya Nair, Advocate for SHO, Hauz Khas

Case BriefsForeign Courts

Information Commissioner’s Office,UK: Andy Curry, Head of Investigations, on noting serious contravention of regulations 21 and 24 of the Privacy and Electronic Communication Regulations 2003 (PECR) has issued Home2sense Limited with a monetary penalty under Section 55A of the Data Protection Act, 1998.

“Home2sense’s dismissive and troubling response, coupled with its failure to disclose any details of its CDRs or any other information which might assist the Commissioner’s investigation shows, in the Commissioner’s view, a complete disregard for the privacy rights of the individuals whom it sought to contact.”

Background

Home2sense is stated to have used a public electronic communication service for the purpose of making unsolicited calls for the purposes of direct marketing contrary to Regulation 21 of PECR.

What does Regulation 21 of PECR state? 

Regulation 21 applies to the making of unsolicited calls for direct marketing purposes. It means that if a company wants to make calls promoting a product or service to an individual who has a telephone number which is registered with the Telephone Preference Service Ltd (“TPS”), then that individual must have notified the company that they do not object to receiving such calls from it.

Further, Section 55A of the Data Protection Act, 1998 states that:

“(1) The Commissioner may serve a person with a monetary penalty if the Commissioner is satisfied that –

(a) there has been a serious contravention of the requirements of the Privacy and Electronic Communications (EC Directive) Regulations 2003 by the person,

(b) subsection (2) or (3) applies.

(2)  This subsection applies if the contravention was deliberate.

(3)  This subsection applies if the person –

(a)  knew or ought to have known that there was a risk that the contravention would occur, but

(b)  failed to take reasonable steps to prevent the contravention.

The PECR were enacted to protect the individual’s fundamental right to privacy in the electronics communication sector.

Commissioner on perusal of records was satisfied that 675,478 calls were transmitted by Home2sense for the purposes of direct marketing as defined by Section 122(5)DPA18.

Multiple breaches of Regulations 21 and 24 arose from the activities of Home2sense leading to unsolicited direct marketing calls being made to subscribers who were registered with the TPS and who had not notified Home2sense that they were willing to receive such calls and 62 complaints being made as a result.

What does Section 122(5) states?

“…direct marketing as “the communication (by whatever means) of advertising or marketing material which is directed to particular individuals”. This definition also applies for the purposes of PECR (see regulation 2(2) PECR and paragraphs 430 & 432(6) to Schedule 19 of the DPA18).”

Further the Commissioner also noted that deliberate contraventions of Regulations 21 and 24 of PECR were made.

The Commissioner notes Home2sense’s almost complete failure to engage with his investigation and its failure to provide any evidence to suggest it had taken any steps whatsoever to consider the privacy of the individuals who it sought to target. Home2sense’s failure to provide any such information suggests that no safeguards were implemented, and that Home2sense was more than simply negligent in its actions.

Elaborating further, it was also observed that, there were certain complaints which indicated that Home2sense provided misleading names to recipients of their calls and approached some individuals with false representations.

Commissioner has published detailed guidance for companies carrying out marketing explaining their legal requirements under PECR. The said guidance explained circumstances under which organisation can carry out marketing over the phone, by text, by email, by post or by fax.

Specifically the guidance states, that live calls must not be made to any subscriber registered with the TPS, unless the subscriber has specifically notified the company that they do not object to receiving such calls.

Another significant point that was noted was that Home2sense confirmed during the investigation that it did not obtain data from individuals directly and relied wholly on data purchased from third parties, although concerningly it failed to disclose details of its third party data providers or the sources of the data it used.

The Commissioner was highly concerned by Home2sense’s failure to engage with the Commissioner’s request for information about its third-party data providers, and inferred from that no due diligence into the veracity of the data was carried out.

In view of the volume of calls and complaints, it was clear that Home2sense failed to take any reasonable steps to prevent the contravention.

Monetary Penalty

While granting the monetary penalty, Commissioner took into account the following aggravating features:

  • Complaints evidence shows the calls were of a persistent nature and they were known to have caused distress, i.e. there were two recorded instances where Home2sense asked to speak to a named person whose relatives confirmed had passed away.
  • The Commissioner is satisfied that Home2sense carried out these calls, in the knowledge that its actions were likely to be in breach of PECR, with the intention of generating business to ultimately make a financial profit.
  • Home2sense appointed a Representative upon first contact from the Commissioner, however, that Representative was unreliable, dismissive, and uncooperative with the Commissioner’s investigation.
  • There is evidence of complaints continuing to be received regarding Home2sense following the Commissioner’s initial contact, which demonstrates that despite the concerns raised by the Commissioner, it continued to operate unabated.

Stating that making of unsolicited direct marketing calls is a matter of significant public concern, Commissioner decided the penalty in the sum of 200,000 Pounds, adding to this it was stated that if the full payment of the monetary penalty will be done by 2-3-2022, then the same will be reduced by 20%.[Home2sense Ltd. v. Ardeifi, decided on 31-1-2022]

Case BriefsSupreme Court

 Supreme Court: Holding that an award passed by Emergency Arbitrator is enforceable under the Arbitration and Conciliation Act, 1996, a Division Bench of R.F. Nariman and B.R. Gavai, JJ. has ruled in favour of Amazon in the infamous Future-Amazon dispute. It has been held that the interim award in favour of Amazon, passed by the Emergency Arbitrator appointed under the Arbitration Rules of the Singapore International Arbitration Centre is enforceable under the Indian Arbitration Act.

The Court declared that full party autonomy is given by the Arbitration Act to have a dispute decided in accordance with institutional rules which can include Emergency Arbitrators delivering interim orders. Such orders are an important step in aid of decongesting the civil courts and affording expeditious interim relief to the parties. Such orders are referable to and are made under Section 17(1) of the Arbitration Act. The Court also held that no appeal lies under Section 37 of the Arbitration Act against an order of enforcement of an Emergency Arbitrator’s order made under Section 17(2) of the Act.

Earlier, a Single Judge of the Delhi High Court had also decided in favour of Amazon, holding that the impugned award was maintainable. However, a Division Bench in appeal stayed the order of the Single Judge.

Two important questions arose in the appeals:

(i) Whether an “award” delivered by an Emergency Arbitrator under the Arbitration Rules of the Singapore International Arbitration Centre (“SIAC Rules”) can be said to be an order under Section 17(1) of the Arbitration and Conciliation Act, 1996;

(ii) Whether an order passed under Section 17(2) of the Arbitration Act in enforcement of the award of an Emergency Arbitrator by a Single Judge of the Delhi High Court was appealable.

Facts and Appeal

In 2019, certain agreements were entered into between and amongst the parties involved in this controversy. The position which emerged as a consequence of such agreements was that Future Coupons Private Limited (“FCPL”) was accorded extensive rights over the retails assets of Future Retail Limited (“FRL”). Subsequently, Amazon.com NV Investment Holdings LLC (“Amazon”) agreed to invest Rs 1431 crore in FCPL with express stipulation that this investment would “flow down” to FRL. As a result, FRL could not transfer its retail assets without FCPL’s consent which, in turn, could not be granted unless Amazon had provided its consent. Also, FRL was prohibited from encumbering/transferring/selling/divesting/disposing of its retail assets to “restricted persons”, being prohibited entities with whom FRL and FCPL could not deal. Mukesh Dhirubhai Ambani Group (“Reliance Group”) was one such restricted person.

The bone of contention between the parties was that within a few months of Amazon’s investment, Future Group entered into transactions with Reliance Group which envisaged amalgamation of FRL with Reliance Group. The consequence was cessation of FRL as an entity, and complete disposal of its retail assets in favour of Reliance Group.

In October 2020, Amazon initiated arbitration proceedings and filed an application seeking emergency interim relief under the SIAC Rules asking for injunctions against the aforesaid transaction. On 25 October 2020, the Emergency Arbitrator passed an interim award directing Future Group not to proceed with the disputed transaction. However, notwithstanding with such directions, Future Group went ahead with the disputed transaction.

Meanwhile, Amazon filed an application under Section 17(2) of the Arbitration Act seeking enforcement of the interim award passed by the Emergency Arbitrator. A Single Judge of the Delhi High Court passed an order of status quo restraining Future Group from going ahead with the disputed transaction. This order was followed by a detailed judgment where the Single Judge held that the interim award made by the Emergency Arbitrator was enforceable under the Arbitration Act. However, the operation of both these orders was stayed by a Division Bench of the High Court by two separate orders passed on FRL’s appeal. Aggrieved, Amazon approached the Supreme Court.

Analysis and Observations

Emergency Arbitrator’s award covered under Arbitration Act

Party autonomy and Emergency Arbitrator under SIAC Rules

The first question to be determined by the Supreme Court was whether an Emergency Arbitrator’s award can be said to be within the contemplation of the Arbitration Act, and whether it can further be said to be an order under Section 17(1) of the Act. It may be noted that Section 17(1) of the Arbitration Act makes provisions for interim measures ordered by arbitral tribunal during the arbitration proceedings.

The Court noted that the Arbitration Act gives freedom to the parties to authorise any person, including an institution, to arbitrate on issues arising between them. Party autonomy goes to the extent of an agreement which includes being governed by specified arbitration rules. Parties are also free to agree on the procedure to be followed by arbitral tribunal in conducting its proceedings. In the instant case, the parties agreed to be governed by the SIAC Rules.

Referring to Rule 3.3. of the SIAC Rules, the Court observed that arbitral proceedings in the instant case can be said to have commenced from the date of receipt of a complete notice of arbitration by the Registrar of SIAC, which would indicate that arbitral proceedings under the SIAC Rules commence much before the constitution of an arbitral tribunal under the said Rules. This being the case, the Court concluded that the expression “during the arbitral proceedings” used in Section 17(1) is elastic enough to include emergency arbitration proceedings, which only commence after receipt of notice of arbitration by the Registrar under Rule 3.3 of the SIAC Rules. The Court held that:

“A conjoint reading of these provisions coupled with there being no interdict, either express or by necessary implication, against an Emergency Arbitrator would show that an Emergency Arbitrator’s orders, if provided for under institutional rules, would be covered by the Arbitration Act.”

Reiterating the importance of party autonomy, the Court stated that by agreeing to the SIAC Rules and the award of the Emergency Arbitrator, the parties did not bypass any mandatory provision of the Arbitration Act. The Court observed:

“There is nothing in the Arbitration Act that prohibits contracting parties from agreeing to a provision providing for an award being made by an Emergency Arbitrator.  On the contrary, when properly read, various Sections of the Act which speak of party autonomy in choosing to be governed by institutional rules would make it clear that the said rules would apply to govern the rights between the parties, a position which, far from being prohibited by the Arbitration Act, is specifically endorsed by it.”

Provisions of SIAC Rules reflected in Sections 9 and 17

Contrasting relevant provisions of SIAC Rules with Section 9 (Interim measures, etc. by Court) of Arbitration Act, 1996, the Court found that in essence, what is provided by the SIAC Rules and the other institutional rules, is reflected in Sections 9(2) and 9(3) so far as interim orders passed by courts are concerned. These sub-sections were introduced in Section 9 by the 2015 Amendment Act. The Court stated:

“The introduction of Sections 9(2) and 9(3) would show that the objective was to avoid courts being flooded with Section 9 petitions when an arbitral tribunal is constituted for two good reasons – (i) that the clogged court system ought to be decongested, and (ii) that an arbitral tribunal, once constituted, would be able to grant interim relief in a timely and efficacious manner.”

Similarly, the 2015 Amendment Act substituted Section 17 (Interim measures ordered by Arbitral Tribunal) so that Section 17(1) would be a mirror image of Section 9(1), making it clear that an arbitral tribunal is fully clothed with the same power as a court to provide for interim relief. Also, Section 17(2) was added so as to provide for enforceability of such orders, again, as if they were orders passed by a court.

No going back after agreeing to institutional rules and participating in proceedings

Next, the Court opined that a party cannot be heard to say, after it participates in an Emergency Award proceeding, having agreed to institutional rules made in that regard, that thereafter it will not be bound by an Emergency Arbitrator’s ruling. It was observed:

“[H]aving agreed to paragraph 12 of Schedule 1 to the SIAC Rules, it cannot lie in the mouth of a party to ignore an Emergency Arbitrator’s award by stating that it is a nullity when such party expressly agrees to the binding nature of such award from the date it is made and further undertakes to carry out the said interim order immediately and without delay.”

The Court emphasised again at a later stage in the judgment that no party, after agreeing to be governed by institutional rules, can participate in a proceeding before an Emergency Arbitrator and after losing turn around and say that the award is a nullity or coram non judice when there is nothing in the Arbitration Act which interdicts an Emergency Arbitrator’s order from being made.

Arbitration and Conciliation Act, 1996 is not an ouster statute

Relying on Section 28 of the Contract Act, FRL argued that arbitration, conceptually, is an ouster of civil court’s jurisdiction and that, therefore, only what is expressly provided in the ouster provisions can be followed and there is no room for any implication in such a case.

To this, the Court answered that such argument may have found favour with the Court if it were dealing with the Arbitration Act, 1940. However, the Arbitration and Conciliation Act, 1996 is a complete break with the past and is no longer to be viewed as an ouster statute but as a statute which favours the remedy of arbitration so as to de-clog civil courts which are extremely burdened. Noting that Section 5 of the 1996 Act overrides all other laws for the time being in force and goes on to state that in matters governed by Part I of the Act no judicial authority shall intervene except where so provided in that Part, the Court observed:

“The Arbitration and Conciliation Act, 1996, therefore, turns the principle of ouster on its head when it comes to arbitration as a favoured means of resolving civil disputes.”

Conclusion

The Court, therefore, answered the first question by declaring that:

“[F]ull party autonomy is given by the Arbitration Act to have a dispute decided in accordance with institutional rules which can include Emergency Arbitrators delivering interim orders, described as “awards”. Such orders are an important step in aid of decongesting the civil courts and affording expeditious interim relief to the parties. Such orders are referable to and are made under Section 17(1) of the Arbitration Act.”

Maintainability of appeal against enforcement order made under Section 17(2)

Order made under Rule 2-A of Order 39 CPC by Single Judge is referable to Section 17(1)

FRL filed an appeal under Order 43 Rule 1(r) of CPC against the order passed by Single Judge of Delhi High Court under Section 17(2) of Arbitration Act whereby it was decided that the interim award passed by the Emergency Arbitrator in favour of Amazon is enforceable under the Indian Arbitration Act. The Single Judge also found that the Future Group deliberately flouted directions given by the Emergency Arbitrator, and issued a show cause notice under Order 39 Rule 2-A of CPC.  It is seemly note here that Order 43 Rule 1(r) under which appeal was filed by FRL provides that an appeal shall lie from an order made under Order 39 Rule 2-A. FRL’s contention was that the Single Judge exercised powers under Order 39 Rule 2-A of CPC and not under the Arbitration Act.

On this point, the Court referred to Section 17(1) of the Arbitration Act which makes provisions for interim measures ordered by arbitral tribunal during the arbitration proceedings. It was noted that under Section 17(1), an arbitral tribunal have the same power for making orders, as the court has for the purpose of, and “in relation to”, “any proceedings” before it. Relying on a catena of judicial precedents, the Court stated:

“It is well settled that the expression ‘in relation to’, which occurs in … Section 17(1), is an expression which is comprehensive in nature, having both a direct as well as an indirect significance. …

Coupled with this, the expression ‘any proceedings’, occurring in … Section 17(1), would also be an expression comprehensive enough to take in enforcement proceedings.”

The Court concluded that properly so read, the expressions “in relation to” and “any proceedings” would include the power to enforce orders that are made under Section 17(1). Thus, if an order under Section 17(1) is flouted by any party, proceedings for enforcement of the same are available to the arbitral tribunal making such orders under Section 17(1). These powers are, therefore, traceable directly to Section 17(1). The Court held:

“Thus, an order made under Order 39 Rule 2-A, in enforcement of an order made under Section 17, would also be referable to Section 17(1) of the Arbitration Act.”

It must be remembered here that answering the first question, the Court had already held that award of an Emergency Arbitrator was referable to Section 17(1) of the Arbitration Act. Thus, the order of the Single Judge of Delhi High Court in enforcement of Emergency Arbitrator’s award, including the issuing of show cause notice under Order 39 Rule 2-A, was also referable to Section 17(1).

Legal fiction under Section 17(2)

FRL stressed upon the language of Section 17(2) to indicate that an order passed under Section 17(1) is deemed to be an order of the court for all purposes and shall be enforceable under CPC in the same manner as if it were an order of the court, making it clear that enforcement is not under the Arbitration Act but only under CPC. As a corollary, the order of the Single Judge was appealable under Order 43 Rule 1(r) of CPC.

Rejecting the contention, the Court noted that there is no doubt that Section 17(2) creates a legal fiction, but this fiction is created only for the purpose of enforceability of interim orders made by the arbitral tribunal.  The Court held that:

“To extend it to appeals being filed under the Code of Civil Procedure would be a big leap not envisaged by the legislature at all in enacting the said fiction.”

The Court concluded the point by saying that a limited fiction for the purpose of enforcement cannot be elevated to the level of a genie which has been released from a statutory provision and which would encompass matters never in the contemplation of the legislature.

Appeal provision in the Arbitration Act

The Supreme Court finally noted that appeals from orders made under Arbitration Act are to be made within the four corners of Section 37 of the Arbitration and Conciliation Act, 1996. It was stated that there can be no doubt that Section 37 is a complete code so far as appeals from orders and awards made under the Arbitration Act are concerned. This has further been strengthened by the addition of the non-obstante clause by the Arbitration and Conciliation (Amendment) Act, 2019. Following the law laid down in BGS SGS SOMA JV v. NHPC, (2020) 4 SCC 234, the Court observed:

“This judgment is determinative of the issue before us as it specifically ruled out appeals under Order 43 Rule 1 of the Code of Civil Procedure when it comes to orders being made under the Arbitration Act.”

Next, the Court noted that Section 37 provides appeal only from an order granting or refusing to grant any interim measure under Section 17. There can be no doubt that granting or refusing to grant any interim measure under Section 17 would only refer to the grant or non-grant of interim measures under Section 17(1)(i) and 17(1) (ii). Whereas, it must be remembered that enforcement proceedings are under Section 17(2). Accordingly, the Court held:

“What is clear from this is that enforcement proceedings are not covered by the appeal provision.”

Case of affected third parties in enforcement proceedings

Senior Advocate Harish Salve, appearing for FRL, “painted a lurid picture of third parties” being affected in enforcement proceedings. The Court noted that no such third party was before the Court and left the question open to be argued on the facts of a future case.

Conclusion

The Court, therefore, answered the second question by declaring that:

“[N]o appeal lies under Section 37 of the Arbitration Act against an order of enforcement of an Emergency Arbitrator’s order made under Section 17(2) of the Act.”

Decision

In view of the law discussed above, the Supreme Court held that the impugned judgments of the Divisions Bench of  Delhi High Court must be set aside. Order was made accordingly. [Amazon.com NV Investment Holdings LLC v. Future Retail Ltd.,  2021 SCC OnLine SC 557, decided on 6-8-2021]


Tejaswi Pandit, Senior Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Information Commission (CIC): Neeraj Kumar Gupta (Information Commissioner) decide whether a legally wedded wife can seek the information regard to income tax returns of her husband under the Right to Information Act, 2005.

The instant application was filed before the CPIO, Income Tax Officer seeking the following information:

  1. “The copy of Form 16 issued by the company at Micro Focus Software Development, ‘LAUREL’, Block ‘D’, 65/2, Bagmane Techpark, C.V. Raman Nagar, Bengaluru for the year filed for 2016- 17, 2017-2018 & 2018-2019 of my husband Mr Suman Chatterjee.
  2. The relevant documents/papers relating to the Gross Annual Income of my husband Mr Suman Chatterjee.
  3. The relevant documents/papers relating to the Gross salary of my husband Mr Suman Chatterjee.”

The appellant filed the first appeal dated 11-01-2019 which was disposed of by the first appellate authority on 05-03-2019.

Thereafter, she filed a second appeal under Section 19(3) of the RTI Act before the Commission requesting to take appropriate legal action against the CPIO under Section 20 of the RTI Act, 2005 and also to direct him to provide the sought-for information.

Decision

Commission referred to the decision of Supreme Court in Girish Ramchandra Deshpande v. CIC, (2013) 1 SCC 212 with regard to the applicability of Section 8(1)(j) of the RTI Act, 2005.

Legal Issue to be decided

Whether the appellant claiming to be the legally wedded wife of Mr Suman Chatterjee is entitled to seek details of his income tax returns i.e. Form 16?

In regard to the above question, Commission referred to the Delhi High Court decision in Vijay Prakash v. UOI,2009 SCC OnLine Del 1731, wherein it was clarified that in a private dispute between husband and wife, the basic protection afforded by virtue of exemption from disclosure enacted under Section 8(1)(j) cannot be lifted or disturbed unless the petitioner is able to justify how such disclosure would be in ‘public interest’.

Bench noted that in the present matter, the appellant did not succeed in establishing the information sought was for a larger public purpose.

Commission decided that since the filing of income tax returns by an individual is not a public activity and rather it is in the nature of an obligation which a citizen owes to the State. The said information cannot be disclosed to the appellant in the absence of any larger public interest.

Further adding to the above analysis, Bench stated that according to Section 2(n) of the RTI Act, 2005 any person other than the citizen making a request for information can be termed as ‘third party’. Therefore, appellant being a person other than the RTI applicant surely comes within the definition of ‘third party’.

Bench did not find any public interest which outweighs the harm caused in its disclosure.

In light of several decisions of the Supreme Court and High Court, Commission opined that in the absence of any larger public interest in the matter, the appellant was not entitled to seek the details of the Income Tax returns filed by the third party, Mr Suman Chatterjee which is exempted under Section 8(1)(j) of the RTI Act, 2005.

Another significant point to be noted was that the appellant sought the disclosure of at least the ‘gross annual income’ of her husband so that she could defend her matrimonial case. Considering the said marital discord between the husband and wife vis-à-vis her right of maintenance, Commission opined that the respondent should consider providing the numerical figures of the gross annual income of her husband.

In light of the above observations, appeal was disposed of. [Amrita Chatterjee v. CPIO, Income Tax Officer; 2021 SCC OnLine CIC 40; decided on 08-01-2021]

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Information Commission (CIC): While reiterating that third party’s personal information held by the bank in fiduciary capacity involving commercial confidence is exempt from disclosure under Section 8(1)(d), (e) and (j) of the RTI Act, CIC disposed of an appeal seeking information from the State Bank of India (Mumbai) regarding the basis of giving huge loans to Gautam Adani Group along with the evidence that the loan was connected to the coal mines of Australia.

It was alleged by the appellant that the Group has taken loans worth about Rs. 77,000 crores from various banks and the Group’s financial position was not sound, therefore, he wanted the information. Earlier, appellant approached CPIO and the first appellate authority (FAA) of the Bank but was informed that the information being sought was commercial information and held by them in trust for the third party, therefore, it could not be provided. The contention of the appellant that larger public interest was involved in the matter as it was his duty to enquire into the documents submitted by the Group, was rejected by the Commission on the ground that appellant had not even mentioned any larger public interest in the matter let alone substantiate in his RTI application. “The Commission finds that the appellant had sought third party’s personal information held by the bank in fiduciary capacity involving commercial confidence. The Commission, therefore, holds that the information sought is exempt under Section 8(1)(d), (e) and (j) of the RTI Act,” noted the Commission while disposing of the appeal. [Ramesh Ranchordas Joshi v. State Bank of India, 2016 SCC OnLine CIC 15858, decided on October 4, 2016]