Invocation of Arbitration Clause – After Final Settlement

In Nathani Steels Ltd. v. Associated Constructions, 1995 Supp (3) SCC 324, it was held as under:        

“Even otherwise we feel that once the parties have arrived at a settlement in respect of any dispute or difference arising under a contract and that dispute or the difference is amicable settled by way of a final settlement by and between the parties, unless that settlement is set aside in proper proceedings, it cannot lie in the mouth of one of the parties to the settlement to spurn it on the ground that it was a mistake and proceed to invoke the arbitration clause. If this is permitted the sanctity of contract, the settlement also being a contract, would be wholly lost and it would be open to one party to take the benefit under the settlement and then to question the same on the ground of mistake without having the settlement set aside.” WAPCOS Ltd. v. Salma Dam Joint Venture, (2020) 3 SCC 169.

Leave a comment

Filed under Invocation of Arbitration Clause After Final Sett;lement

Appointment of Substitute Arbitrator

The legal consequence is well taken care of by the provisions of Section 15(1) of the Arbitration and Conciliation Act, 1996 read with Section 2 of the Act which provides, where the Arbitrator withdraws from office for any reason, a substitute arbitrator should be appointed according to the Rules that were applicable to the appointment of the arbitrator being replaced.        Therefore in the first place a substitute arbitrator may be appointed in view of the clear provisions of law in that regard. Second as to the procedure to be followed, again there is no doubt that it would have to remain the same as had been followed at the time of appointment of the arbitrator who has rescued himself. M/s Manish Engineering Enterprises v. Indian Farmers Fertilizers Cooperative Ltd., 2020 (138) ALR 930.

Leave a comment

Filed under Appointment of Substitute Arbitrator

Right to Sue

The words “right to sue” mean the right to seek relief by means of legal proceedings. The right to sue accrues only when the cause of action arises. The suit must be instituted when the right asserted in the suit is infringed, or when there is a clear and unequivocal threat to infringe such right by the defendant against whom the suit is instituted. Dahiben v. Arvindbhai Kalyanji Bhanusali (Gajra) Dead through Legal Representatives and others, (2020) 7 SCC 366.

Leave a comment

Filed under Uncategorized

Validity of Notice Under Section 30 of – Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction), Act

In Dr. Babu Ram Sharma v. IVth Additional Judge, Saharanpur and others, (2006) 2 ARC 239 and Noor Mohd. and another v. IVth Additional District Judge , Kanpur Nagar and others, (2006)  1 ARC 550, the Hon’ble Allahabad High Court again took the view that when the entire rent due till the date of notice had already been validly deposited under Section 30 of the Act, the notice of demand is bad in law, and therefore, since at the time of notice, tenants were not defaulter in payment of rent for four months or more, the suit filed on the ground of default was liable to be dismissed. It was held that the suit for eviction was not maintainable as at the time of notice, the tenant was not defaulter since he had already validly deposited the rent under section 30 of the Act. It was further held that under the circumstances, the suit was not maintainable under section 20(2) (a) of the Uttar Pradesh Regulation of (Letting, Rent and Eviction) Act, 1972.      The default contemplated under section 20 (2) (a) should be in regard to rent for a period of not less than four months. The provision does not say that even if the tenant is in arrears of rent for less than four months he would be liable to be evicted under it on the mere ground that default had continued for more than four months. Even Notice of demand will be invalid and could not be considered to be a notice of demand under the said provision if the tenant was not in arrears of rent for more than four months.  Nand Lal Keshari v. Shashi Bhushan Agarwal, 2020 (2) AWC 1787.

Leave a comment

Filed under Validity of Notice Under Section 30

Rights of A Nominee – of A Shareholder

It is quite apparent from a bare reading of the provisions of section 72(1) of the Companies Act, 2013 that every holder of securities has a right to nominate any person to whom his securities shall “vest” in the event of his death. In the case of joint-holders also, they have a right to nominate any person to whom “all the rights in the securities shall vest” in the event of death of all joint holders. Sub-section (3) of section 72 contains a non-obstante clause in respect of anything contained in any other law for the time being in force or any disposition, whether testamentary or otherwise, where a nomination is validly made in the prescribed manner, it purports to confer on any person “the right to vest” the securities of the company, all the rights in the securities shall vest in the nominee unless a nomination is varied or cancelled in the prescribed manner. It is prima facie apparent that vesting is absolute, and the provisions supersede by virtue of a non-obstante clause any other law for the time being in force. Prima facie shares vest in a nominee, and he becomes absolute owner of the securities on the strength of nomination. Rule 19(2) of the Companies (Share Capital and Debentures) Rules, 2014 framed under the Act, also indicates to the same effect. Under Rule 19(8), a nominee becomes entitled to receive the dividends or interests and other advantages to which he would have been entitled to if he were the registered holder of the securities; and after becoming a registered holder, he can participate in the meetings of the company. Aruna Oswal v. Pankaj Oswal, (2020) SCC Online SC 570.

Leave a comment

Filed under Rights of A Nominee

Petition for Oppression and Mismanagement – Object of Qualifying Percentage of Shares

 In J.P. Srivastava & Sons Pvt. Ltd. and Ors. v. M/s. Gwalior Sugar Co. Ltd. and Ors. AIR 2005 SC 83, the Hon’ble Supreme Court considered the object of prescribing a qualifying percentage of shares to entertain petition under sections 397 and 398 of the Companies Act, 1956. It was held that the object is to ensure that frivolous litigation is not indulged in by persons, who have no legal stake in the company. If the Court is satisfied that the petitioners represents the body of shareholders holding the requisite percentage, the Court may proceed with the matter. It was held as under:

“The object of prescribing a qualifying percentage of shares in petitioners and their supporters to file petitions under sections 397 and 398 of the Companies Act, 1956 is clearly to ensure that frivolous litigation is not indulged in by persons who have no real stake in the company. However, it is of interest that the English Companies Act contains no such limitation. What is required in these matters is a broad commonsense approach. If the Court is satisfied that the petitioners represent a body of shareholders holding the requisite percentage, it can assume that the involvement of the company in litigation is not lightly done and that it should pass orders to bring to an end the matters complained of and not reject it on a technical requirement. Substance must take precedence over form. Of course, there are some rules which are vital and go to the root of the matter which cannot be broken. There are others where non-compliance may be condoned or dispensed with. In the latter case, the rule is merely directory provided there is substantial compliance with the rules read as a whole and no prejudice is caused. (See Pratap Singh v. Shri Krishna Gupta (AIR 1956 SC 140). Aruna Oswal v. Pankaj Oswal, (2020) SCC Online SC 570.

Leave a comment

Filed under Uncategorized

Will – Rule of Last Intention

A will may contain several clauses and the latter clause may be inconsistent with the earlier clause. In such a situation, the last intention of the testator is given effect to and it is on this basis that the latter clause is held to prevail over the earlier clause. This is regulated by the well known maxim ‘cum duo inter se pugnantia reperiuntur in testamento ultimum ratum est’ which means that if in a will there are two inconsistent provisions, the latter shall prevail over the earlier. (see Hammond, In re, Hammond v. Treharne, (1938) ALL ER 308).         It may, however, be pointed out that this rule of interpretation can be invoked only if different clauses cannot be reconciled. (See: Rameshwar Baksh Singh v. Balraj Kaur, AIR 1935 PC 187). M. S. Bhavani v. M.S. Raghu Nandan, (2020) 5 SCC 361.

Leave a comment

Filed under Uncategorized

Criminal Offence of – Defamation

The criminal offence of defamation under Section 499 Indian Penal Code is committed when a person makes a defamatory imputation which, as explained in Mohd. Abdulla Khan v. Prakash K., (2018) 1 SCC 615, is as under:

“To constitute an offence of defamation it requires a person to make some imputation concerning other person;

  • Such imputation must be made either
  • With intention, or
  • Knowledge, or
  • Having a reason to believe

that such an imputation will the reputation of the person against whom the imputation is made.

  • Imputation could be, by
  • Words, either spoken or written, or
  • By making signs, or
  • Visible representations
  • Imputation could be either made or published.

The difference between making of an imputation and publishing the same is:

If ‘X’ tells ‘Y’ that ‘Y’ is a criminal–‘X’ makes an imputation. If ‘X’ tells ‘Z’ that ‘Y’ is a criminal—‘X’ publishes the imputation.

The essence of publication in the context of Section 499 is the communication of defamatory imputation to persons other than the persons against whom the imputation is made. A publication, on the other hand, is made when the imputation is communicated to persons other than the persons about whom the defamatory imputation is conveyed. A person, who makes the defamatory imputation, could also publish the imputation and thus could be the maker and the publisher of a defamatory imputation. On the other hand, a person may be liable though he may not have made the statement but he publishes it. Google India Private Ltd. v. Visaka Industries, (2020) 4 SCC 162.

Leave a comment

Filed under Defamation

Penalty for Frauds – By an Officer of the Company

Under Section 241(2) of the Companies Act, 2013, the Central Government, if it is of the opinion that the affairs of the Company are being conducted in a manner prejudicial to public interest, may apply itself to the Tribunal for orders under the said Chapter, which is headed “prevention of Oppression and Mismanagement”. Apart from the vast powers that are given to the Tribunal under Section 242, powers under Sections 337 and 339 are also given in aid of this power, which will apply mutatis mutandis.         Section 337 of the Companies Act refers to penalty for frauds by an officer of the Company in which mismanagement has taken place. Likewise, Section 339 refers to any business of the company which has been carried on with intent to defraud creditors of that company. Obviously, the persons referred to in Section 339(1) as persons who are other than the parties “to the carrying on of the business in the manner aforesaid” which again refers to the business of the company which is being mismanaged and not to the business of another company or other persons. Usha Ananthasubramanian v. Union of India, (2020) 4 SCC 122.

Leave a comment

Filed under Companies Act, 2013, Penalty for Fraud

Management Shall Not Dismiss Any Teacher – Without Approval By The Board

Section 21 of U.P. Secondary Education Service Selection Board Act, 1982 provides that the management shall not, except with the prior approval of the Board, dismiss any teacher or remove him from service, or serve on him any notice of removal from service, or reduce him in rank or reduce his emoluments or withhold his increment for any period whether temporarily or permanently and any such thing done without such prior approval shall be void.

Section 21 of the U.P. Secondary Education Service Selection Board Act, 1982, has also been similarly interpreted by the Court in Hem Lata Agrawal v. District Inspector of Schools, 2003 (2) AWC 939. It was held as under: “The question whether the reversion of a teacher, who was appointed on temporary adhoc basis as Principal under Section 18 of the Act would amount to reduction in rank so as to require approval of the Board need not be considered here as whether or not it is a reduction in rank, it is clear that it amounts to reduction of emoluments. The petitioner is entitled to the salary for the post of Principal and reverting her, as a Lecturer would undoubtedly affect the emoluments to which she is entitled. The language of Section 21 of the Act is wide enough to cover within its scope the order impugned in this writ petition.”…. Kapil Deo Prasad V. Joint Director of Education 7th Region Gorakhpur, Writ – A No. – 442 of 2020, decided on 05.03.2020

Leave a comment

Filed under Dismissal of Teacher