Monthly Archives: December 2018

Cruelty – Levelling False Allegations

Cruelty can never be defined with exactitude. What is cruelty will depend upon the facts and circumstances of each case. In case the wife makes reckless, defamatory and false accusations against her husband, his family members and colleagues, which would definitely have the effect of lowering his reputation in the eyes of his peers. Mere filing of complaints is not cruelty, if there are justifiable reasons to file the complaints. Merely because no action is taken on the complaint or after trial the accused is acquitted may not be a ground to treat such accusations of the wife as cruelty within the meaning of the Hindu Marriage Act,1955. However, if it is found that the allegations are patently false, then there can be no manner of doubt that the said conduct of a spouse leveling false accusations against the other spouse would be an act of cruelty. Raj Talreja v. Kavita Talreja, 2017 (123) ALR 835.

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Filed under cruelty, Matrimonial Cruelty, Matrimonial Dispute

Insolvency Proceedings – Time Period for filing application

As per sub-section (1) of Section 9 of the Insolvency and Bankruptcy Code, application can be filed after the expiry of period of ten days from the delivery of notice or invoice demanding payment, which is in tune with the provisions contained in Section 8 that gives ten days’ time to the corporate debtor to take any of the steps mentioned in sub-section (2) of Section 8. As per sub-section (2) of Section 9, the operational creditor is supposed to file an application in the prescribed form and manner which needs to be accompanied by requisite/prescribed fee as well. Sub-section (3) puts an obligation on the part of the operational creditor to furnish the information stipulated therein. Once such an application is filed and received by the adjudicating authority, fourteen days’ time is granted to the adjudicating authority to ascertain from the records of an information utility or on the basis of other evidence furnished by the operational creditor, whether default on the part of corporate debtor exists or not. This exercise, as per sub-section (5), is to be accomplished by the adjudicating authority within fourteen days. Sub-section (5) provides two alternatives to the adjudicating authority while dealing with such an application. In case it is satisfied that conditions mentioned in clause (i) of Section 9(5) are satisfied, the adjudicating authority may pass an order admitting such an application. On the other hand, if the adjudicating authority finds existence of any eventuality stated in sub-section (2), it may order rejection of such an application.

 One of the conditions, is that application under sub-section (2) has to be complete in all respects. In other words, the adjudicating authority has to satisfy that it is not defective. In case the adjudicating authority, after the scrutiny of the application, finds that there are certain defects therein and it is not complete as per the provisions of sub-section (2), in that eventuality, the proviso to sub-section (5) mandates that before rejecting the application, the adjudicating authority has to give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice.

 Sub-section (5) of Section 9, thus, stipulates two time periods. Insofar as the adjudicating authority is concerned, it has to take a decision to either admit or reject the application within the period of fourteen days. Insofar as defects in the application are concerned, the adjudicating authority has to give a notice to the applicant to rectify the defects before rejecting the application on that ground and seven days’ period is given to the applicant to remove the defects. Surendra Trading Company v. Juggilal Kamplapat Jute Mills Company Ltd., (2017) 16 SCC 143.

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Filed under Insolvency and Bankruptcy Code, Time Period for Filing Application

Dishonour of Cheque – Complaint Must Contain Factual Allegations

The scheme of the prosecution in punishing under Section 138 of the Negotiable Instruments Act  is different from the scheme of Cr.P.C. Section 138 creates an offence and prescribes punishment. No procedure for the investigation of the offence is contemplated. The prosecution is initiated on the basis of a written complaint made by the payee of a cheque. Obviously such complaints must contain the factual allegations constituting each of the ingredients of the offence under Section 138. Those ingredients are (1) that a person drew a cheque on an account maintained by him with the banker; (2) that such a cheque when presented to the bank is returned by the bank unpaid; (3) that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of it validity whichever is earlier; (4) that the payee demanded in writing from the drawer of the cheque, the payment of the amount of money due under the cheque to payee; and (5) such a notice of payment is made within a period of 30 days from the date of receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. It is obvious from the scheme of Section 138 of the Act, that each one of the ingredients flows from a document which evidences the existence of such an ingredient. The only other ingredient which is required to be proved to establish the commission of an offence under section 138 is that inspite of the demand notice referred to above, the drawer of the cheque failed to make the payment within a period of 15 days from the date of the receipt of the demand. A fact which the complainant can only assert but not prove, the burden would essentially be on the drawer of the cheque to prove that he had in fact made the payment pursuant to the demand. N. Harihara Krishnan v. J. Thomas, 2017 (101) ACC 690.

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Filed under Complaint for Dishonour of Cheque, Negotiable Instruments Act

Notice for Dishonour of Cheque – Requirements of

In the case of Suman Sethi v. Ajay K. Churiwal, (2000) 2 SCC 8, it was held as under:

       “It is a well settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the “said amount”, i.e. the cheque amount. If no such demand is made, the notice no doubt would fall short of its legal requirement. Where in addition to the “said amount” there is also a claim by way of interest, cost etc. whether the notice is bad would depend on the language of the notice. If in a notice while giving the break-up of the claim, the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these, additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, the notice might well fail to meet the legal requirement and may be regarded as bad.”

          In the case of Suman Sethi v. Ajay K. Churiwal, (2000) 2 SCC 8, the Hon’ble Supreme Court has also referred to its judgment in the case of Central Bank of India v. Saxons Farms, 1999 (39) ACC 891 (SC) and held that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Though in the notice demand for compensation, interest, cost etc. is also made, the drawer will be absolved from his liability under Section 138 if he makes the payment of the amount covered by the cheque of which he aware within 15 days from the date of receipt of the notice or before the complaint is filed. Hari Mohan Agrawal v. State of U.P., 2017 (101) ACC 843.

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Filed under Negotiable Instruments Act, Notice for Dishonour of Cheque

Term Compensation – Under Motor Vehicles Act

The term “compensation” has not been defined in the Motor Vehicles Act, 1988. By interpretive process, it has been understood to mean to recompense the claimants for the possible loss suffered or likely to be suffered due to sudden and untimely death of their family member as a result of motor accident. Two cardinal principles run through the provisions of the Motor Vehicles Act of 1988 in the matter of determination of compensation. Firstly, the measure of compensation must be just and adequate; and secondly, no double benefit should be passed on to the claimants in the matter of award of compensation. Section 168 of the Motor Vehicles Act, 1988 makes the first principle explicit. Sub-section (1) of that provision makes it clear that the amount of compensation must be just. The word “just” means — fair, adequate and reasonable. It has been derived from the latin word “Justus”, connoting right and fair. In State of Haryana v. Jasbir Kaur, (2003) 7 SCC 484, it has been held that the expression “just” denotes that the amount must be equitable, fair, reasonable and not arbitrary. In Sarla Verma v. DTC, (2009) 6 SCC 121, it was held that the compensation “is not intended to be a bonanza, largesse or source of profit”. That, however, may depend upon the facts and circumstances of each case, as to what amount would be a just compensation. Reliance General Insurance Company Ltd. v. Shashi Sharma, (2016) 9 SCC 627.

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Filed under compensation, Motor Vehicles Act

Termination of – Arbitration Proceedings

Section 32 of the Arbitration and Conciliation Act, 1996 contains a heading “Termination of Proceedings”. Sub-section (1) provides that the arbitral proceedings shall be terminated by the final arbitral award or by an order of the Arbitral Tribunal under sub-section (2). Sub-section (2) enumerates the circumstances when the Arbitral Tribunal shall issue an order for the termination of arbitral proceedings. Clause (c) of Section 32(2) of the Arbitration and Conciliation Act, 1996 contemplates two grounds for termination, i.e. (i) the Arbitral Tribunal finds that the continuation of the proceedings has for any other reason become unnecessary, or (ii) impossible. The eventuality as contemplated under Section 32 shall arise only when the claim is not terminated under Section 25(a) and proceeds further. The words “unnecessary” or “impossible” as used in clause (c) of Section 32(2), cannot be said to be covering a situation where proceedings are terminated in default of the claimant. The words “unnecessary” or “impossible” has been used in different contexts than to one of default as contemplated under Section 25(a). Sub-section (3) of Section 32 further provides that the mandate of the Arbitral Tribunal shall terminate with the termination of the arbitral proceedings subject to Section 33 and sub-section (4) of Section 34. Section 33 is the power of the Arbitral Tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature or to give an interpretation of a specific point or part of the award. Section 34(4) reserves the power of the court to adjourn the proceedings in order to give the Arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of the Arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. On the termination of proceedings under Sections 32(2) and 33(1), Section 33(3) further contemplates termination of the mandate of the Arbitral Tribunal, whereas the aforesaid words are missing in Section 25. When the legislature has used the phrase “the mandate of the Arbitral Tribunal shall terminate” in Section 32(3), non-use of such phrase in Section 25 (a) has to be treated with a purpose and object. The purpose and object can only be that if the claimant shows sufficient cause, the proceedings can be recommenced. Srei Infrastructure Finance Ltd. v. Tuff Drilling Pvt. Ltd., (2018) 11 SCC 470.

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Filed under Arbitration, Termination of Proceedings, Termination of Proceedings, Uncategorized

Divorce by Mutual Consent – Withdrawal of Suit

The person who institutes a suit, has every right to withdraw the same. Where the parties had filed a petition for divorce by mutual consent expressing their desire to dissolve their marriage due to temperamental incompatibility and the respondent (wife) withdrew her consent before the stage of second motion. The withdrawal of consent was after a period of eighteen months of filing the petition. The respondent (wife) further submitted that she was taken by surprise when she was asked by the appellant for divorce, and had given the initial consent under mental stress and duress. She also stated that she never wanted divorce and is willing to live with the appellant (husband) as his wife. Consent should always be a free consent.

       Even if withdrawal application is filed after 18 months, the court is not bound to grant divorce decree by mutual consent. The court has to proceed with about the genuineness of the averments in the petition and also to find out whether the consent was not obtained by force, fraud or undue influence and whether marriage can be saved. The court may make such inquiry as it thinks fit including the hearing or examination of the parties for the purpose of satisfying itself whether the averments in the petition are true. Rahul Kamal v. Sudha Pandey, 2018 (131) ALR 673.

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Filed under divorce by mutual consent, Withdrawal of Suit

Disclosure Regarding Previous Marriage

      On a careful reading of Clause (c) ofSection 12(1) of the Hindu Marriage Act, it will appear that both the partiesin case of adult are obliged to divulge mutually and unequivocally the materialfact or circumstances to each other before or at least at the time of marriageso much so that element of deception is ruled out. The words material fact orcircumstances have not been defined or specified. It varies from one family toanother, according to culture, ethos and social system in ages and situation.For example in a conservative family having attachment with puritan society ina marriage inevitable and unerring expectation is that both the bride and groommust not have any record of prior marriage in any sense nor will have anymarriage in any sense, not even any premarital affairs with other boy or girl(as the case may be). They cannot think of even marrying outside their caste andcommunity, conversely, a family with liberal and cosmopolitan approach, thought,particularly in urban area will not mind in case of marriage even havingknowledge of background of prior marriage or premarital affair with other sexoutside their caste and community. In case of former, concealment of caste,community or background of prior marriage or premarital affairs before or atthe time of marriage is obviously extremely material and it amounts to fraud inobtaining consent.

       In the case of Saswati Chattopadhyaya v. Avik Chattopadhyaya, (2011) 3 ICC 51, the husband was not informed about the earlier marriage at the time of negotiation or at the time of solemnization of marriage. On inquiry, the husband came to know that there had been previous marriage of the appellant with one Sudip and it was also discovered that the earler marriage was dissolved by consent. When the matter reached the family court, it came to the conclusion that there has been suppression of the relevant fact with regard to the premarital status of the appellant and such relevant fact goes to the root of the matrimonial relationship. Pradeep Kumar Maheshwari v. Smt. Anita Agarwal, 2018 (131) ALR 566.

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Filed under Matrimonial Dispute, Previous Marriage

Appointment of Arbitrator – Arbitrability of Dispute

In Booz Allen and Hamnilton Inc. v. S.B.I. Home Finance Ltd., (2011) 5 SCC 532, Hon’ble Supreme Court considered the arbitrability of dispute and scope of Section 11 of the Arbitration and Conciliation Act and held as under:

       “The nature and scope of issues arising for consideration in an application under Section 11 of the act for appointment of arbitrators, are far narrower than those arising in an application under Section 8 of the Act, seeking reference of the parties to a suit to arbitration. While considering an application under Section 11 of the Act, the Chief Justice or his designate would not embark upon an examination of the issue of “arbitrability” or appropriateness of adjudication by a private forum, once he finds that there was an arbitration agreement between or among the parties, and would leave the issue of arbitrability for the decision of the Arbitral Tribunal. If the arbitrator wrongly holds that the dispute is arbitrabe, the aggrieved party will have to challenge the award by filing an application, under Section 34 of the Act, relying upon sub-section 2(b)(i) of that Section.”
       In Dura Felguera, S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729, Hon’ble Supreme Court considered the provisions of sub-section (6) and sub-section (6A) of Section 11 of the Arbitration and Conciliation Act, 1996 and held as under:

       “From a reading of Section 11(6A), the intention of the legislature is quite clear, i.e. the court should and need only look into one aspect – the existence of an arbitration agreement. What are the factors for deciding as to whether there is an arbitration agreement is the next question. The resolution to that is simple – it needs to be seen if the agreement contains a clause which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement.” Swatantra Properties (P) Ltd. v. Airplaza Retail Holdings Pvt. Ltd., 2018 (5) AWC 5168.

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Filed under Appointment of Arbitrator, Arbitration

Time Barred Appeal – Delay of only 6 days

Initially, the appeal was presented in time and it was for the reason of removing the discrepancies that the period of additional 6 days went by. During this period of six days, the appellant has shown that he was running from pillar to post to remove the discrepancies and in the circumstances, the view taken by the Learned Real Estate Appellate Tribunal, Lucknow appears to be harsh. It can also be seen that it is settled principle of law that discretion should be exercised in favour of hearing rather than shutting it out when there was a delay of only five days in filing the appeal and the appellant was making the best efforts to remove the discrepancies as pointed out by the office of the Appellate Tribunal and immediately thereafter he with all promptitude took necessary steps to file the appeal without any inordinate delay. The circumstances should have been considered in its proper perspective by the Appellate Tribunal. M/s Capital Infra Projects Pvt. Ltd. v. Surinder Bhaiya, 2018 (131)ALR 182.

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Filed under Real Estate (Regulation and Development) Act,, Time Barred Appeal