Monthly Archives: May 2017

Arbitration – Independence and Impartiality are two different concepts

Independence and impartiality are two different concepts. An arbitrator may be independent and yet, lack impartiality, or vice versa. Impartiality, as is well accepted, is a more subjective concept as compared to independence. Independence, which is more an objective concept, may, thus, be more straightforwardly ascertained by the parties at the outset of the arbitration proceedings in light of the circumstances disclosed by the arbitrator, while partiality will more likely surface during the arbitration proceedings.
The United Kingdom Supreme Court has highlighted this aspect in Hashwani v. Jivraj, (2011) 1WLR 1872 in the following words:
“the dominant purpose of appointing an arbitrator or arbitrators is the impartial resolution of the dispute between the parties in accordance with the terms of the agreement and, although the contract between the parties and the arbitrators would be a contract for the provision of personal services, they were not personal services under the direction of the parties.” Voestalpine Schienen GMBH v. Delhi Metro Rail Corporation Ltd., (2017) 4 SCC 665.

Leave a comment

Filed under Arbitration, Impartiality

Legal Right – Meaning of

The meaning of the expression ‘person aggrieved’ will have to be ascertained with reference to the purpose and the provisions of the Statute. One of the meanings is that person will be held to be aggrieved by a decision if that decision is materially adverse to him. The restricted meaning of the expression requires denial or deprivation of legal rights. The expression ‘person aggrieved’ means a person who has suffered a legal grievance, i.e. a person against whom a decision has been pronounced which has lawfully deprived him of something or wrongfully refused him something.
A “legal right”, means an entitlement arising out of legal rules. Thus, it may be defined as an advantage or a benefit conferred upon a person by the rule of law. The expression “person aggrieved” does not include a person who suffers from a psychological or an imaginary injury; a person aggrieved must therefore, necessarily be one, whose right or interest has been adversely affected or jeopardised. A person aggrieved, means a person who is wrongly deprived of his entitlement which he is legally entitled to receive and it does not include any kind of disappointment or personal inconvenience. “Person aggrieved” means a person who is injured or he is adversely affected in a legal sense. Naval Kishore v. State of U.P., 2017 (122) ALR 121.

Leave a comment

Filed under Civil Law, Legal Right

Appointment of an Impartial Arbitrator

It is settled that in exercise of jurisdiction under Section 11 of the Arbitration and Conciliation Act, the Court is to enforce terms of agreement for securing appointment of arbitrator. However, it is not denuded of jurisdiction to follow a different course, for justifiable cause, by giving reasons. Different contingencies requiring such departure have clearly been noticed. The ultimate object is to secure appointment of an impartial arbitrator and secure speedy resolution of dispute by way of arbitration. The scheme underlying the Arbitration and Conciliation Act has to be construed by harmoniously interpreting its provisions. It is imperative for the court to examine qualification and impartiality of arbitrator as well as to secure speedy resolution of dispute. The terms of arbitration agreement providing for arbitrator to be named by designation cannot be read in isolation. It also cannot be construed in a manner inconsistent with the scheme of the Act. The question is answered holding that an application under Section 11(6) of the Arbitration and Conciliation Act would lie also in a case where arbitrator is named, by designation, where (i) arbitrator named is not impartial, or (ii) he lacks required qualification, or (iii) for any other justifiable cause to secure speedy resolution of dispute, by way of a reasoned order. M/s AARGEE Engineering and Company v. ERA Infra Engineering Ltd., 2017 (122) ALR 179.

Leave a comment

Filed under Appointment of Impartial Arbitrator, Arbitration

Departmental Enquiry – Duty of Disciplinary Authority

In Chamoli District Co-operative Bank Ltd. v. Raghunath Singh Rana, (2016) 12 SCC 204, it was held as under:
“(i) The enquiries must be conducted bona fide and care must be taken to see that the enquiries do not become empty formalities.
(ii) If an officer is a witness to any of the incidents which is the subject matter of the enquiry or if the enquiry was initiated on a report of an officer, then in all fairness he should not be the Enquiry Officer. If the said position becomes known after the appointment of the Enquiry Officer, during the enquiry, steps should be taken to see that the task of holding an enquiry is assigned to some other officer.
(iii) In an enquiry, the employer/department should take steps first to lead evidence against the workman/delinquent charged and give an opportunity to him to cross examine the witnesses of the employer. Only thereafter, the workman/delinquent be asked whether he wants to lead any evidence and asked to give any explanation about the evidence led against him.
(iv) On receipt of the enquiry report, before proceeding further, it is incumbent on the part of the disciplinary/punishing authority to supply a copy of the enquiry report and all connected materials relied on by the enquiry officer to enable him to offer his views, if any.”
The principal of law that emanates is that initial burden is on the department to prove the charges. In case where enquiry is initiated with a view to inflict major penalty, department must prove charges by adducing evidence by holding oral enquiry. State of U.P. v. Aditya Prasad Srivastava, (2017) 2 UPLBEC 901.

Leave a comment

Filed under Departmental Enquiry, Duty of Disciplinary Authority

Family Arrangement – Object of

In Kale v. Director of Consolidation, (1976) 3 SCC 119, it was held as under:
“By virtue of a family settlement or arrangement members of a family descending from a common ancestor or a near relation seek to sink their differences and disputes, settle and resolve their conflicting claims or disputed titles once for all in order to buy peace of mind and bring about complete harmony and goodwill in the family. The family arrangements are governed by a special equity peculiar to themselves and would be enforced if honestly made.
The object of the arrangement is to protect the family from long drawn litigation or perpetual strifes which mar the unity and solidarity of the family and create hatred and bad blood between the various members of the family. A family arrangement by which the property is equitably divided between the various contenders so as to achieve an equal distribution of wealth instead of concentrating the same in the hands of a few is undoubtedly a milestone in the administration of social justice. That is why the term ‘family’ has to be understood in a wider sense so as to include within its fold not only close relations or legal heirs but even those persons who may have some sort of antecedent title, a semblance of a claim or even if they have spes successionis so that future disputes are sealed forever and the family instead of fighting claims inter se and wasting time, money and energy on such fruitless or futile litigation is able to devote its attention to more constructive work in the larger interest of the country. Rajni Sanghi v. Western India State Motors Ltd., (2015) 16 SCC 631.

Leave a comment

Filed under Family Law, Family Settlement

Hindu Marriage – Status of Wife

Hindu Marriage is a sacred and holy union of husband and wife by virtue of which the wife is completely transplanted in the household of her husband and takes a new birth. It is a combination of bone to bone and flesh to flesh. To a Hindu wife her husband is God and her life becomes one of the selfless service and profound dedication to her husband. She not only shares the life and love, but the joys and sorrows, the troubles and tribulation of her husband and becomes an integral part of her husband’s life and activities. Colebrooke in his book Digest of Hindu Law, Vol.II, described the status of wife thus:
“A wife is considered as half the body of her husband, equally sharing the fruit of pure and impure acts: whether she ascends the pile after him or survives for the benefit of her husband, she is a faithful wife.”
Further Colebrooke in his book Digest of Hindu Law, Vol. II quoted the Mahabharata at page 121 thus:
“Where females are honoured, there the deities are pleased; but where they are unhonoured there all religious acts become fruitless.” Anuradha Samir Vennangot v. Mohandas Samir Vennangot, (2015) 16 SCC 596.

Leave a comment

Filed under Matrimonial Relationship, Status of Wife

Pre – Existing Duty Doctrine

Pre-existing duty doctrine is a principle under the Contract Act and states that if a party to a contract is under a pre-existing duty to perform, then no consideration is given for any modification of the contract and the modification is therefore voidable. In the 13th edition of Pollock and Mulla Indian Contract and Specific Relief Act in Vol. 1, it is mentioned at page 101 about the pre-existing obligation under law, which provides that:
“The performance of what one is already bound to do, either by general law or by a specific obligation to the other party, is not a good consideration for a promise; because such performance is no legal burden to the promisor, but rather relieves him of a duty. Neither is the promise of such performance a consideration, since it adds nothing to the obligation already existing.” Anuradha Samir Vennangot v. Mohandas Samir Vennangot, (2015) 16 SCC 596.

Leave a comment

Filed under Contract Law, Pre-Existing Duty

HUF – Manager has a distinct role from Karta

While there can be no doubt that a Hindu Widow is not a coparcener in the HUF of her husband and, therefore, cannot act as a karta of the HUF after the death of her husband, the two expressions i.e. karta and manager may be understood to be not synonymous and the expression “manager” may be understood as denoting a role distinct from that of karta. Hypothetically, we may not take the case of HUF where the male adult coparcener has died and there is no male coparcener surviving or where the sole male coparcener is a minor. In such a situation obviously the HUF does not come to an end. The mother of the male coparcener can act as the legal guardian of the minor and also look after his role as the karta in her capacity as his legal guardian. Such a situation has been found to be consistent with the law by the Calcutta High Court in Sushila Devi Rampuria v. ITO, (1960) 38 ITR 316 rendered in the context of the provisions of the Income Tax Act and while determining the liability of such an HUF to assessment under the Act.
A similar proposition of law is also to be found in Dhujram v. Chandansingh, 1974 MPLJ 554 though, again, in a littled different context. The High court had expressed the view that the word “manager” would be consistent with the law if understood with reference to the mother as the natural guardian and not as the karta of the HUF. Shreya Vidyarthi v. Ashok Vidyarthi, (2015) 16 SCC 46.

Leave a comment

Filed under Hindu Law, HUF

Power Project and Power Plant – Distinction

In Union of India v. Indian Charge Chrome, (1999) 7 SCC 314 it was held as under:
“The industrial resolution made a clear distinction between ‘power project’ which is set up for generation and distribution of electricity and a ‘power plant’ which is set up to generate power for their own requirement or captive consumption of the industrial unit. The captive ‘power plant’ cannot be considered as ‘power project’ and the two cannot be equated with each other. A power project is set up by the Government to cater to the needs of the public by generating and distributing the electricity generally while a captive power plant is set up by an industrial unit to feed power to its own plant or unit for manufacturing of goods other than power. Though it is true that an industrial unit installing a power plant to the extent of the electricity generated by it shares the burden of the Government power projects generating electricity for distribution and to that extent their purpose may be alike, the fact remains that a power generating unit in the public sector has its own limitations and shortcomings as well. An industrial unit depending on public power generation source shall have to bear with power cuts, failures and other regulations and restrictions imposed in the public interest. By installing its own power plant, the industrial unit is free to generate and avail uninterrupted power supply or the quantum and flow of electricity suited to its own requirements and thereby it can maximize its production and consequently its profits. It is therefore clear that power plant projects engaged in generation and distribution of power as its end product – the sense in which the expression has been used in the industrial policy resolution constitute a class by themselves distinct from the power plants established by industrial units generating electricity for captive consumption and not for distribution. The two classes are well defined.” Venkataraya Power Ltd. v. Commissioner of Customs, (2015) 16 SCC 295.

Leave a comment

Filed under Commercial Law, Power Plant

Manufacture – Concept of

While dealing with the question as to whether the process of bleaching, dyeing, printing, sizing, shrinkproofing, waterproofing, rubberizing or organic processing carried on in respect of cotton or manmade grey fabric amounted to “manufacture” within the meaning of Central Excise and Salt Act, 1944, the Hon’ble Apex Court in Ujagar Prints (2) v. Union of India, (1989) 3 SCC 488, held that the generally accepted test to find out whether there was manufacturing was to see whether the application of processes brought out a change to take the commodity that it could no longer be considered as the original commodity. The said decision was applied in Aspinwall & Co. Ltd., v. CIT, (2001) 7 SCC 525 and again by the Hon’ble Apex Court in Orient Paper & Industries Ltd. v. State of M.P., (2006) 12 SCC 468.
In State of Karnataka v. Shaw Wallace & Co. Ltd., (1998) 110 STC 506 (Kant), the Hon’ble High Court of Karnataka considered a case of the dealer engaged in Indian Made Foreign Liquor. The High Court held that without blending there cannot be any manufacture of IMFL. It is also to be pointed out that blending is also an essential part of the manufacturing process of IMFL. Even if the part of the process is done by the assessee and the other part under the control and the supervision of other parties, yet, the concept of manufacturing process cannot be taken out. CIT v. VINBROS & Company, (2015) 14 SCC 483.

Leave a comment

Filed under Excise Act, Manufacture