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Ca Final New Syllabus Elective Paper 6D Economic Laws: Summary of Significant Case Laws
Ca Final New Syllabus Elective Paper 6D Economic Laws: Summary of Significant Case Laws
Competition Act,2002
Case Law 1: Mahindra Electric Mobility Limited & Ors vs. CCI & Another
Key takeaway: It is about the violation of section 3 and 4 of the Act and whether CCI can
expand its scope of inquiry or not. The answer is yes, it can expand. the Delhi HC held that
CCI is well within its power to expand the scope of inquiry to include other issues and
parties.
Competition Act,2002
Case Law 5: Re: House of Diagnostics LLP and Esaote Asia Pacific
Diagnostic Pvt. Ltd (IMPORTANT)
Key takeaway: CCI found the relevant market to be the ‘market for dedicated
standing/tilting MRI machines in India’ (‘Relevant Market’). Although CCI passes an
order by a majority of two out of three members and imposed penalty on Esaote but there is
a dissenting opinion of CCI Chairperson .The opinion is based on how the term “Relevant
Market is defined” as it was important to decide whether Esaote has abused its dominance
in market or not.
Dissenting Opinion: The CCI Chairperson wholly disagreed with the majority’s view on
the delineation of the Relevant Market. The dissent note observes that the market
cannot be narrowed to standing/ tilting MRI machines alone as any market
delineation would have to necessarily include all MRI machines. Once the market is
defined in this manner, the behavior of Esaote stands constrained by the presence of many
other players as Esaote is a small player in the market of all MRI machines. Therefore,
there was no question of dominance or abuse of dominance.
Case Law 7: In Re: Fx Enterprise Solutions India Pvt. Ltd. and Hyundai
Motor India Limited
Key takeaway: It was alleged that Hyundai forces its customers to purchase passenger cars
tied with CNG Kits, Lubricants and Oils, and Insurance Services from specified vendors.
(Tie-in arrangements). Exclusive supply and refusal to deal: The CCI observed that
merely because the requirement of prior consent before entering a dealership for a
competitor brand, did not amount to exclusivity.
While the CCI delineated the upstream market as the market of sale of passenger cars, the
downstream market was delineated as the market for dealership of Hyundai cars alone.
As such it is not clear from the analysis on the relevant market by the CCI, the reasons
behind not considering the substitutability of different passenger cars by the dealers.
The NCLAT has set aside the order of CCI as the ‘Commission’ has failed to appreciate
the evidence and the impugned order not based on any specific evidence and has been
passed merely on the basis of opinion of ‘DG’.
Competition Act,2002
Case Law 8: In Re: Samsher Kataria v. Honda Siel Cars India Ltd. & Ors
Key takeaway: The complaint was filed against various automobile manufacturers or original
equipment manufacturers (OEMs) – concerns were restriction of availability of genuine spare
parts of automobiles manufactured by them in open market. It was found that the relevant
market would be market for spares of automobiles,each automobile manufacturer was
dominant in respect of its respective spares and a customer who purchases a car, cannot
substitute spares of a different manufacturer, are ‘locked into’ certain aftermarket suppliers.
OEMs were abusing their dominant position. Each OEM is directed to file an individual
undertaking, within 60 days of the receipt of their order, about compliance to cease and
discontinue from the present anti-competitive conduct, and initiation of action in compliance
of the other directions.
(c) The consumer has no choice to buy one of the products: tying or tied;
(d) The tying is capable of restricting/foreclosing in the market.
Tested on these parameters, the CCI observed that the first two conditions along with the
dominance of the entity were met, especially when WhatsApp Messenger and WhatsApp
Pay are distinct products offering different services to the users. However, with regard to the
other two conditions, the CCI ruled in favour of WhatsApp.
Due to the voluntary installation of WhatsApp messenger (stated by WhatsApp)
coupled with (i) no explicit coercion on the user to use WhatsApp Pay exclusively or
(ii) influencing the consumer choice implicitly in any other manner, the third condition
was not met.
iii) Conclusion : CCI ruled out the unwarranted and implausible apprehensions of the
Informant on WhatsApp using its dominant position in the first relevant market to gain
leverage in the second relevant market. CCI did not find any contravention of the provisions
of Section 4 of the Act against WhatsApp or Facebook and directed closure under Section
26(2) of the Act.
ii) Important Key Points- Mr. Samir Agrawal (“Appellant/Informant”), an independent law
practitioner filed information with the Commission alleging contravention of Section 3 of the
Act by a “hub and spoke cartel” formed between the cab aggregator brands (being the hub),
namely; Ola and Uber and the drivers (being the spokes) using these cab aggregators’ mobile
application and sought investigation. The Commission, vide its order dated 06.11.2018,
observed that no agreement, understanding or arrangement appeared to exist either
between the cab aggregators and their respective drivers or between the drivers inter se
regarding the price-fixing.
iii) Conclusion: The locus standi (right to move to court) to approach Competition
Commission of India under the Competition Act, 2002 lies only with a person “who is either
a consumer of the goods/services in question or a beneficiary of healthy competitive practices
in a given market”. Moreover, NCLAT confirmed opinion of the Commission in regard to
non-existence of a prima facie case warranting closure of the information cannot be
faulted on any ground. There being no merit in this appeal, it is accordingly dismissed.
Case Law 12: Monsanto Holdings Pvt. Ltd. and Ors. vs.CCI
Delhi HC, W.P.(C) 3556/2017 and CM Nos. 15578/2017, 15579/2017 &35943/2017 dated
20.05.2020
Key takeaway:
i)Issue – Violation of Section 3 and 4 of the Act and jurisdiction of CCI
ii) Important Key Points- The Informants had accused the Petitioner of abusing its role as the
dominant participant inside the marketplace of Bt Cotton Seeds by means of charging
unreasonably high trait (liecnese) fees.Monsanto is the enterprise here.Section 3(5) says
Nothing contained in this section shall restrict-
(i) the right of any person to restrain any infringement of, or to impose reasonable conditions,
as may be necessary for protecting any of his rights which have been or may be conferred upon
him under Patents ,copyrights etc.
It means that Monsanto can charge fees from agencies and CCI has follow-on jurisdiction.Refer
Bharti Airtel Case Law 9 .
Sections 60 and 62 of Competition Act give the Competition Act an overriding
effect and provide the Act to be in addition to and not in derogation of other Acts.
This Court in Telefonaktiebolaget L.M. Ericsson v Competition Commission of
India & Another provided that Section 60 would not reduce the weight of the
Patents Act and Section 62 makes it clear that Competition Act is in addition to
other laws.
iii) Conclusion: The Hon’ble Judge upholding the jurisdiction of CCI and disregarding the
writ petition of the Petitioners, held that an order surpassed by using the CCI below Section
26(1) of the Competition Act is an administrative order and, consequently, unless its
unreasonable ,the court won’t interfere.
Case Law 1: M/s M3M India Pvt. Ltd. & Anr. v. Dr. Dinesh Sharma & Anr
(IMPORTANT)
Key takeaway: The court concluded that "remedies available to the respondents herein
under Consumer Protection Act,1986 and RERA are concurrent, and there is no ground
for interference with the view taken by the National Commission in these matters.
“Concurrent here means simultaneous or joint. It means that home buyers can
commence proceedings under CPA,1986 against developers even after
commencement of RERA.
Case Law 4: Neelkamal Realtors Suburban Pvt. Ltd. and anr vs UOI
Key takeaway: “RERA is not a law relating to only regulating concerns of the
promoters, but its object is to develop the real estate sector, particularly the
incomplete projects, across the country.” The requirement to pay interest under section
18 is not a penalty as the payment of interest is compensatory in nature in the light of the
delay suffered by the allottee that has paid for his apartment but has not received possession
of it. The obligation imposed on the promoter to pay interest till such time as the apartment
is handed over to him is not unreasonable. The interest is merely compensation for use
of money.” Hence, all such provisions which were in question are held to be
constitutional, valid and legal.”
Case Law 5: Simmi Sikka v. M/s Emaar MGF Land Ltd. (IMPORTANT)
Key takeaway: The obligations of the promoter’s post expiry of the validity of the
registration provided in the Act are applicable to even the real estate projects exempted
from registration. The RERA Act, mentions nowhere that it is applicable only for the
registered projects. The RERA Act, provides certain categories of projects which are not
required to be registered but these are within the ambit of the Act. These projects
mentioned in section 3(2) have been taken out of the registration requirement but not out
of the purview of other provisions of the Act. All real estate projects are covered for
land title defect liability.
Case Law 6 : Keystone Realtors Pvt. Ltd. vs. Anil V Tharthare & Ors.
Citation : SC, Civil Appeal No.2435 of 2019 dated 03.12.2019
Key takeaway:
i)Issue – The construction area of the Project was expanded from 32,395.17 square meters to
40,480.88 square meters, the Developer did not comply with the procedure under para 7(ii) of
the Environmental Impact Assessment (“EIA”) Notification but rather sought an amendment
to the earlier environmental clearance.
ii) Important Key Points- . It was further noted that as on the date of the order construction
at the project site had already been completed. A core tenet underlying the entire scheme of the
EIA Notification is that construction should not be executed until ample scientific evidence
has been compiled so as to understand the true environmental impact (Pollution effects
on environment) of a project. The NGT had already directed the appellant to deposit Rupees
one crore and has set up an expert committee to evaluate the impact of the appellants project
and suggest remedial measures.
iii) Conclusion: The court confirmed the directions of the NGT and directed that the committee
continue its evaluation of the appellants project so as to bring its environmental impact as close
as possible to that contemplated in the EC dated 2 May 2013 and also suggest the compensatory
exaction to be imposed on the appellant.
i)Issue –
1. Whether digital portals “introduce” seller with buyer in sale of real estate?
2. Whether digital portals negotiate in sale of real estate?
3. Whether digital portals “facilitate” sale of real estate sale?
4. Whether digital portals collect charges/ fees/ renumerations/ commission?
5. Whether digital portals can be exempted from the definition of real estate agent, they
being intermediary under the IT Act.
Issue 1:
Portals when they collect the details of the viewer and share them with advertiser/seller and
also disclose the information of promoters to buyers, they introduce the parties to the sale
transaction.
Issue 2:
If the portal simply provide the information about the real estate project, its offering for sale to
the public at large, then they are simply the agencies engaged for advertisement and when
an individual is targeted by contacting and persuading him by the portals for sale and purchase
of listed properties they come under the legal definition of negotiation.
Issue 3:
Web Portals introduce the buyer and seller with each other, they provide the information of the
project to the buyer, they arrange virtual tour of the project and also provide other
information useful for taking an informative decision. Hence, they facilitate the sale of the
real estate project.
Issue 4:
Once any monetory gain is derived for the purpose of performing any act of the real estate
agent by whichever name it amounts the receipt of the fees under the RERA.
Issue 5:
The Parliament has not carved out any exceptions to the applicability of the provisions of
RERA, Hence, we hold that RERA overrides section 79 (Exemption for liability in case
of intermediaries) of the IT Act.
iii) Conclusion:
2. Other portals which carry the function of real estate agent as explained above
need registration. Such portals are directed to register with MahaRera within two
months, if their activities are spread within the territorial jurisdiction of it.
3. Portals will have to register themselves with real estate regulatory authority of a
state where their activities are going on until the registration at national level is
made permissible.
i)Issue –
Note : Adverse possession means when someone acquires ownership of property of movable
or immovable property by continuous use of it and have intention to acquire it without
information to the real owner.
A person in possession cannot be ousted by another person except by due procedure of law and
once 12 years’ period of adverse possession is over, even owner’s right to eject him is lost
and the possessory owner acquires right, title and interest possessed by the outgoing
person/owner as the case may be against whom he has prescribed. Once the right, title or
interest is acquired it can be used as a sword by the plaintiff as well as a shield by the defendant
within ken of Article 65 of the Act and any person who has perfected title by way of adverse
possession, can file a suit for restoration of possession in case of dispossession.
iii) Conclusion: Article 65 of Limitation Act, 1963 not only enables a person to set up a
plea of adverse possession as a shield as a defendant but also allows a plaintiff to use it as
a sword to protect the possession of immovable property or to recover it in case of
dispossession.
Case Law 9 : Bikram Chatterji & Ors. vs. Union of India &
Ors.(IMPORTANT)
Citation : SC, Writ Petition Civil No.940/2017, dated 23.07.2019
Key takeaway:
i)Issue – Amrapali Group of Companies proposed to construct 42,000 flats by assuring delivery of
possession in 36 months to the home buyers on the land which was given on lease by
Noida/Greater NOIDA Authority (“Authorities”). Later, Amarpali group were found in serious breach
of their obligation to deliver the projects and the payment due to the Authorities andthe Banks.
1. Whether the charges levied by officials, banks, home purchasers and development
agencies are valid?
2. Whether the Amrapali Group’s RERA registration be cancelled?
The Supreme Court ordered a forensic audit to look into the affairs of the Amrapali Group. The
forensic report confirmed that
(i) there had been diversion of funds by the Group by incorporating shell/dummy companies;
(ii) the promoters had created a web of more than 150 companies for routing of funds and
creating assets;
(iii) the homebuyer’s funds along with the loans from the banks were diverted to other
companies/directors, such funds were used by the promoters to acquire personal assets,
properties and applied towards other business ventures.
The RERA registrations of the various projects of the Group were cancelled and the
National Building Construction Corporation (NBCC) was assigned the task of
completing the projects. The Supreme Court further directed that the Authorities
and the banks will have to recover their dues from other properties and assets of the
Group which have been attached.
iii) Conclusion:
The charges levied by officials, banks, home purchasers and development agencies are
valid.RERA Amrapali Group registration under RERA Act shall be revoked and NBCC
(India) Ltd is finalizing various projects.
The separate lease agreements issued for projects under consideration in favour of Amrapali
Group Authorities are revoked and all the rights will now be vested in the Court Receiver who
has authority to alienate, lease out or take any decision to raise funds. The Court Receiver will
pay money raised to NBCC will complete the project with 8% profit margin (senior Adv.,
ShriR. Venkataramani).
i)Issue –
1. Whether this is a fit case for invoking Rule 11 of the NCLAT Rules to allow the parties to
settle the dispute?
2. Whether the application filed by the homebuyers under Section 7 of the I&B Code was not
maintainable?
ii) Important Key Points- The application under CIRP can be withdrawn only before the
constitution of Committee of Creditors.The NCLAT refused to invoke Rule 11 and held that
while the committee of creditors had not been constituted, invoking such settlement would
be detrimental to the interests of the other claimants including the other allottees and would not
be in consonance with the object of the I&B Code. The NCLAT held that in a case where
interests of the majority of stakeholders are in serious dilemma, it would be inappropriate to
allow settlement with only two (2) creditors which may amount to perpetrating of injustice.
iii) Conclusion:
The NCLAT held that on their own showing, the homebuyers were decree holders (Recovery
Certificates they received from RERA ) seeking execution of money due under the recovery
certificate which is impermissible within the ambit of Section 7 of the I&B Code. Clearly the
Case Law 2: Pioneer Urban Land and Infrastructure Ltd and Anr vs
Union of India
Key takeaway: The expression "borrow" is wide enough to include an advance given by
the home buyers to a real estate developer for "temporary use" i.e. for use in the
construction project so long as it is intended by the agreement to give "something
equivalent" to money back to the home buyers. It would be treated a financial lending.
Such advance amount would be subsumed within Section 5(8)(f) as the sale agreement
between developer and home buyer would have the "commercial effect" of a
borrowing, in that, money is paid in advance for temporary use so that a
flat/apartment is given back to the lender. Referring to Section 88 of the RERA Act,
the Court said that it was an additional remedy, which will not bar other remedies
available to a homebuyer.
contained in Section 9(3)(c) of the Code is not mandatory for initiating insolvency proceedings.
Section 9 (3) would have to be construed as being directory in nature. An
advocate/lawyer can issue a notice under Section 8 on behalf of the operational creditor.
Supreme Court set aside the view of NCLT.
Case Law 4: B.K. Educational Services Pvt. Ltd. vs. Parag Gupta
and Associates
Key takeaway: The Bench observed that since the Limitation Act is applicable to
applications filed under Sections 7 and 9 of the Code from the inception of the Code,
Article 137 of the Limitation Act gets attracted.
“The right to sue”, therefore, accrues when a default occurs. If the default has occurred
over three years prior to the date of filing of the application, the application would be barred
under Article 137 of the Limitation Act, save and except in those cases where, in the facts
of the case, Section 5 of the Limitation Act may be applied to condone the delay in filing
such application. “Hence, the Limitation Act is applicable to applications filed under
Section 7 and 9 of Insolvency and Bankruptcy Code from the inception of the Code.
i)Issue – 1.Whether a landlord by providing lease, will be treated as providing services to the
corporate debtor, and hence, an operational creditor within the meaning of Section 5(20) read
with Section 5(21) of the Insolvency and Bankruptcy Code, 2016?
2. Whether the petition filed under Section 9 of the Insolvency and Bankruptcy Code 2016
is not maintainable on account of ‘pre-existing dispute’?
ii) Important Key Points- It was stated that if there is a debt, other than a financial debt or
an operational debt, the creditor will not qualify to make an application under Section 7
or Section 9, as the case may be and therefore, the determination of nature of claim/type of
debt is an important step while considering the admission of an application under the Code.
The NCLAT noted that even though the Bankruptcy Law Reforms Committee recommended
the treatment of lessors/landlords as operational creditors, the same was not included in the
Code and only the claims in respect of goods and services had been retained in the definition
of operational creditor and operational debt under Sections 5(20) and 5(21) of the Code. The
NCLAT held that definition of operational creditor does not give scope to interpret rent
dues as operational debt.
iii) Conclusion: Landlord being a lessor is not a operational creditor. The code does not define
gooods or services,the general meaning has to be checked.The NCLAT stated that for a debt to be
classified as an operational debt under Code, the following conditions should be satisfied:
I. The debt amount should fall within the definition of "claim" as defined under
Section 3(6) of the Code;
II. Such a claim should fall within the confines of the definition of a "debt" as defined
under Section 3(11) of the Code, meaning thereby that it should arise out of a
liability or an obligation due from any person; and
III. Such a "debt" should fall strictly within the scope of an "operational debt" as
defined under Section 5(21) of the Code, i.e. the claim should arise either in respect
of provision of goods or services including employment or in respect of the
repayment of dues arising under any law for the time being in force and payable
either to the Central Government, any State Government or local authority.
The petition filed under Section 9 of the Insolvency and Bankruptcy Code 2016 is not
maintainable on account of ‘pre-existing dispute’ as the lessor is not an operational
creditor.
i)Issue – 1.Whether the scheme of the Insolvency and Bankruptcy Code, 2016 ("Code")
contemplates that the sum forming part of the resolution plan should match the liquidation
value?
2. Whether Section 12-A is the applicable route through which a successful Resolution
Applicant can retreat (Move back)?
It has been held that the Adjudicating Authority cannot interfere on merits with the commercial
decision taken by the Committee of Creditors. The COC should make sure that the corporate
debtor needs to keep going as a going concern. The court observed that resolution of the
corporate debtor should be given preference over liquidation of the corporate debtor.
The scope of interference by the Adjudicating Authority in limited judicial review.
iii) Conclusion: There is no provision in the Code, or regulations which prescribe that the bid
of any resolution applicant has to match the liquidation value arrived at, in the manner provided
in Clause 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process
for Corporate Persons) Regulations, 2016.
The Supreme Court held that the exit route prescribed in Section 12A is not applicable to a
Resolution Applicant. The procedure envisaged in the said provision only applies to applicants
invoking Sections 7, 9 and 10 of the Code.
i)Issue – Whether a financial creditor is permitted to initiate CIRP proceedings under Section 7 of the
IBC against the principal debtor as well as the guarantor, for the same set of claims?
ii) Important Key Points- There is no bar in the ‘I&B Code’ for filing simultaneously two
applications under Section 7 against the ‘Principal Borrower’ as well as the ‘Corporate
Guarantor(s)’ or against both the ‘Guarantors’. However, once for same set of claim
application under Section 7 filed by the ‘Financial Creditor’ is admitted against one of
the ‘Corporate Debtor’ (‘Principal Borrower’ or ‘Corporate Guarantor(s)’), a second
application by the same ‘Financial Creditor’ for same set of claim and default cannot be
admitted against the other ‘Corporate Debtor’ (the ‘Corporate Guarantor(s)’ or the
‘Principal Borrower’).
iii) Conclusion: It is clarified that a creditor cannot sue the principal borrower and claim
the guarantor’s insolvency at the same time.
Case Law 11 : Flat Buyers Association, Winter Hills – 77, Gurgaon vs.
Umang Realtech Pvt. Ltd. and Ors.
Citation NCLAT, Company Appeal (AT) Insolvency No. 926 of 2019 dated 04.02.2020
Key takeaway:
i)Issue – Whether CIRP proceedings initiated by a flat buyer in relation to one project
of a real estate company will affect the other group projects of the company?
ii) Important Key Points- A secured creditor such as ‘financial institutions/banks’ cannot be
provided with flats/apartments being the assets of the Corporate Debtor by preference over the
allottees (unsecured financial creditors) for whom the project has been approved.
The prayer of allottees asking for refund cannot be allowed by the NCLT or NCLAT. However,
after offering allotment, it is open to the allottee to request the IRP/RP/Promoter, whoever is
in-charge to find a third party to purchase the allotted flat/apartment and thus, receive back the
money invested by the said allottee.
iii) Conclusion: CIRP against a real estate company is limited to a project as per the resolution
plan approved by the competent authority, and not to other projects which are separate at other
places for which separate resolution plans have been approved. It was stated that if the same
real estate company has any other project, all such projects cannot be clubbed together.
ii) Important Key Points- The NCLAT held that the provident fund, the pension fund and the
gratuity fund, do not come within the purview of 'liquidation estate' for the purpose of
distribution of assets under Section 53 of the Code. The NCLAT stated that pension fund,
gratuity fund and provident fund cannot be utilised, attached or distributed by the liquidator, to
satisfy the claim of other creditors.
It has also held that the liquidator has no domain to deal with any other property of the
corporate debtor, which does not form a part of the liquidation estate.
iii) Conclusion: The PF, pension fund and the gratuity fund do not form part of the liquidation
estate and therefore, the liquidator, who holds liquidation estate in fiduciary(trust) capacity,
has no authority to deal with such funds.
The NCLAT opined that even in a case where no fund is created by a company, in violation of
the statutory provision of Section 4 of the Gratuity Act, the liquidator cannot be directed to
ensure payment of gratuity to the employees, since the liquidator does not have the power to
deal with properties of the corporate debtor, which do not form part of the liquidation estate.
Case Law 13 : JSW Steel Ltd. Vs. Mahender Kumar Khandelwal & Ors.
Citation NCLAT, Company Appeal (AT)(Insolvency) No. 957 of 2019, dated 17.02.2020
Key takeaway:
i)Issue – Whether after approval of a resolution plan under Section 31 of the Code, it is
open to the Directorate of Enforcement to attach the assets of a corporate debtor on the
alleged ground of money laundering by erstwhile promoters of the corporate debtor.
ii) Important Key Points- The NCLAT observed that a plain reading of Section 32A (1) and
(2) clearly suggests that the Directorate of Enforcement/ other investigating agencies do not
have the powers to attach assets of a corporate debtor, once the resolution plan stands approved
and the criminal investigations against the corporate debtor stands abated.
The NCLAT held that the intent and purpose behind insertion of Section 32A is to provide
certainty to the resolution applicant that the assets of the corporate debtor, as represented to
him, and for which he proposes to pay value/ consideration in terms of the resolution plan,
would be available to him in the same manner as at the time of submission of the resolution
plan.
iii) Conclusion: Upon a perusal of Section 32A(1) (a) read with the definition of “Related
Party” Section 5(24) of the Code, it is an evident that JSW is not an associate company/ related
party of the Corporate Debtor. The Union of India had stated that after the completion of the
corporate insolvency resolution process, there cannot be any threat of criminal
proceedings against the Corporate Debtor or attachment or confiscation of its assets by
any investigating agency after approval of the resolution plan. NCLAT stayed the order
of attachment passed by the ED and also prohibited it from attaching property of
Corporate Debtor without seeking prior approval of the NCLAT. NCLAT also directed
the that the property already attached by the ED be realised in favour of the resolution
professional immediately.
Case Law 14 : Sagufa Ahmed Vs. Upper Assam Plywood Products Pvt.
Ltd.
Citation SC, Civil Appeal Nos.3007-3008 of 2020 dated 18.09.2020
Key takeaway:
i)Issue – 1. The counsel for the appellants, Mr Gunjan Singh, contended that the limitation
for filing an appeal ( 45 days) would only start from the day when a party receives the order of
a court.
2. Mr Gunjan Singh also contended that due to the COVID 19 pandemic and in accordance
with SC order 23.03.2020 which was “limitation prescribed under the general law or Special
Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order”
so their application for condonation of delay should be allowed.
ii) Important Key Points- The law of limitation finds its root in two latin maxims, one of
which is Vigilantibus Non Dormientibus Jura Subveniunt which means that the law will
assist only those who are vigilant about their rights and not those who sleep over them.
The expression “prescribed period” appearing in Section 4 of the Limitation Act, 1963 cannot
be construed to mean anything other than the period of limitation. Any period beyond the
prescribed period, during which the Court or Tribunal has the discretion to allow a person to
institute the proceedings, cannot be taken to be “prescribed period”.
From 19.12.2019, the date on which the counsel for the appellants received the copy of the
order, the appellants had a period of 45 days to file an appeal. This period expired on
02.02.2020. The appellants did not file the appeal on or before 18.03.2020, but filed it on
20.07.2020. To get over their failure to file an appeal on or before 18.03.2020, the appellants
relied upon SC order dated 23.03.2020.
iii) Conclusion: The Hon’ble SC held that the Appellate Tribunal did not err in computing the
period of limitation from the date of the order of NCLT and that it was the failure of
appellants themselves to file an appeal on or before the stipulated period of time got over.
With respect to the second contention, SC held that the order passed by the SC on 23.03.2020
was only for extension of period of limitation and not the extension of period upto which
delay can be condoned .
Case Law 2: M/s. PMT Machines Ltd. vs The Deputy Director, Directorate
of Enforcement, Delhi (IMPORTANT)
Key takeaway: Before the provisional attachment order was passed by the ED, NCLT
Mumbai had already initiated Corporate Insolvency Resolution Process (CIRP) against
PMT Machines under the Insolvency and Bankruptcy Code, 2016 (IBC), which is still
under process. It was noted that the attachment order was passed in relation to mortgaged
properties in favour of banks, which were not purchased from "proceeds of crime", as they
were purchased and mortgaged with the banks prior to the crime period. ED is not
precluded to attach other private properties and all other assets of the alleged accused.
The Appellate Authority of the Prevention of Money Laundering Act, 2002 (PMLA)
has upheld the prevalence of the IBC over the provisions of PMLA.
Case Law 4: Chhagan Chandrakant Bhujbal vs. Union of India and Ors
(IMPORTANT)
Key takeaway: The Petitioner being former PWD Minister of Maharashtra was accused of
generating huge illicit funds to the tune of Rs.840.16 crores that were money laundered.
The Assistant Director's power to arrest under section 19 does not depend upon the
question as to whether offence is cognizable or non-cognizable. The only conditions,
which are laid down under Section 19 of the Act, pertain to the reasonable belief of the
authority, which is on the basis of the material in its possession. As far as Directors,
Deputy Directors and Assistant Directors are concerned, no authorization of the Central
Government is required; whereas, in respect of other officers, such authorization
may be necessary. The enlisted officers have also been authorised to arrest and initiate
proceedings for attachment of property and to launch prosecution in the designated Special
Court for the offence of money laundering.
discriminatory, unconstitutional and offending Articles, 14, 20, 21 and Article 300 of the
Constitution of India and is ultra-vires.The above challenge proceeds on several assumptions.
The petition lacks merit and therefore dismissed
( by the law itself) would not offend the public policy of India. Contravention of any
provision of an act is not equal to contravention of fundamental policy of Indian law.
Hence, foreign arbitral award (Foreign arbitral awards refer to the decision of an arbitral
tribunal of a foreign nation i.e. London here in the case ) can be enforced in India. It clearly
means that contravention of any provision of law in India wouldn’t amount to
contravention of public policy in India and defense party can’t use it to defer or cancel any
foreign award.
Case Law 3: NTT Docomo Inc. v. Tata Sons Ltd
Key takeaway: The primary issue in dispute before the Delhi High Court was the
legitimacy of RBI’s objections to the Award’s enforcement. The Court opined that there
were no provisions in FEMA that absolutely prohibited a contractual obligation from being
performed. If an arbitral tribunal has given an award, RBI is bound by it and it can’t
challenge it. The compromise was enforceable by law. The court also emphasized to give
due importance to contracts entered by Indian Parties as to attract international investors
and also to build goodwill in the global market.
The principles of natural justice do not require supply of documents upon which no
reliance has been placed by the Authority to set the law into motion. Hence, he is not
entitled to demand to furnish all the documents in possession of the Adjudicating
Authority including those documents upon which no reliance has been placed. Supply
of relied upon documents would serve the purpose of principles of natural justice.
offence under the repealed Act……after expiry of a period of two years from the date of
coming into force of FEMA.”
The Supreme Court held that “taking cognizance” does not involve any formal action of any
kind. It occurs as soon as a Magistrate applies his mind to the suspected commission of an
offence. Cognizance is taken prior to commencement of criminal proceedings. Taking of
cognizance is thus a sine qua non (an essential condition )for holding a valid trial. Although
in this case process was issued on Feb 3,2003 which is after 2 years the FERA was repealed
i.e. 01.06.2000 but cognizance of offence took place on May 24,2002 .Hence, the High court
was not right in equating the process and cognizance as same as cognizance is an essential
condition before issuing process under criminal law, therefore the complaint was not
barred by law and criminal proceedings were not liable to be rejected.
Case Law 5: Sh. Amar N. Gugnani Vs. Naresh Kumar Gugnani (Through
Legal Heirs)
Key takeaway: It bears note that benami transactions were very much legal within this
country before the passing of the Benami Act and the relationship of a Benamidar to the
owner was in the nature of a trust/fiduciary relationship because it was the Trusts Act
which contained the provisions of Sections 81, 8 2 and 94 giving statutory recognition
to the benami ownership of the properties being in the nature of trust."The expression
“fiduciary relationship” and a relationship of a trustee cannot be so interpreted so as to in
fact negate the Benami Act itself.
Case Law 9: Niharika Jain W/o Shri Andesh Jain Vs Union of India
(IMPORTANT)
Key takeaway: Whether amendments in section 3 of Prohibition of Benami
Transaction are “retrospective” or “prospective” in nature?
While holding the said sub-section (3) as prospective, the Rajasthan High Court observed that-
Unless a contrary intention is reflected, a legislation is presumed and intended to be
prospective;Where an amendment affects rights or imposes obligations or castes a new
duties or attached a new disability is to be treated as prospective; Accordingly, the
Rajasthan High Court threw the entire transactions entered by the petitioner before
amendment out of the purview of Benami Act.