Adjudicating Authority have the power to set aside an ex-parte Order provided, it is satisfied that there was sufficient cause with respect to service of Notice – Ms. AKJ Fincap Limited Vs. Bank of India – NCLAT New Delhi

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MSME certificate is required to take benefit of MSME under Section 240A of IBC, the Resolution Professional & AA are not expected to go into accounts and investigate if and in which category an application falls under Section 7 of MSME Act – Ashish Mohan Gupta Vs. The Liquidator of M/s. Hind Motors India Ltd (In Liquidation) – NCLAT New Delhi

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Whether the period of limitation for filing the Petition under Section 34 would commence from the date on which the draft award was circulated to the parties or the date on which the signed copy of the award was provided – Dakshin Haryana Bijli Vitran Nigam Ltd. Vs. M/s Navigant Technologies Pvt. Ltd. – SC

Section 32 provides that the arbitral proceedings shall be terminated after the final award is passed. With the termination of the arbitral proceedings, the mandate of the arbitral tribunal terminates, and the tribunal becomes functus officio. In an arbitral tribunal comprising of a panel of three members, if one of the members gives a dissenting opinion, it must be delivered contemporaneously on the same date as the final award, and not on a subsequent date, as the tribunal becomes functus officio upon the passing of the final award. The period for rendering the award and dissenting opinion must be within the period prescribed by Section 29A of the Act. There is only one date recognised by law i.e. the date on which a signed copy of the final award is received by the parties, from which the period of limitation for filing objections would start ticking. There can be no finality in the award, except after it is signed, because signing of the award gives legal effect and finality to the award. The date on which the signed award is provided to the parties is a crucial date in arbitration proceedings under the Indian Arbitration and Conciliation Act, 1996. It is from this date that: (a) the period of 30 days’ for filing an application under Section 33 for correction and interpretation of the award, or additional award may be filed; (b) the arbitral proceedings would terminate as provided by Section 32(1) of the Act; (c) the period of limitation for filing objections to the award under Section 34 commences. Section 34 provides recourse for judicial scrutiny of the award by a Court, upon making an application under sub-sections (2) and (3) for setting aside the award. The period of limitation for filing the objections to the award u/S. 34 commences from the date on which the party making the application has “received” a signed copy of the arbitral award, as required by Section 31(5) of the 1996 Act. Hon'ble Supreme Court opinions that the period of limitation for filing objections would have to be reckoned from the date on which the signed copy of the award was made available to the parties i.e. on 19.05.2018 in the instant case.(p6)

The DRT is required to examine the issue of validity and legality of the mortgage so as to ascertain that the action taken by the Bank is proper and legal – Union Bank of India Vs. M/s Shars Dairy Pvt. Ltd. – DRAT Allahabad Bench

The principle laid down in the Pranjivan Purushottam Zaveri & Anr. Vs. Dena Bank through Authorized Officer and/or Assistant and Ors., 2011(3) G.L.H. 632 is applicable to the facts of the present matter that the DRT is required to examine the issue of validity and legality of the mortgage so as to ascertain that the action taken by the Bank is proper and legal. In the instant case, the Tribunal below has not pondered over the aspect of validity and legality of the alleged mortgage created in favour of the appellant-Bank by the respondents no. 3 & 4 and has directly concluded that “Union Bank of India is not secured creditor, as the original title deeds are not available with it”. No finding was recorded that which of the documents were original title deeds and whether the mortgage created in favour of the appellant-Bank was valid or not, as also the title deeds deposited with the appellant- Bank were forged or similar/different with that of the title deeds produced by the respondent no. 1.(p12-13)

The provisions of CPC can be invoked to a limited extent, as provided under section 22 of the RDB Act, in which Order XX Rule 11(2) does not find place to be invoked – Indian Bank Vs. M/s Hotel Tiger Inn – DRAT Allahabad Bench

The provision of Order XX Rule 11(2) of CPC is applicable to the decree passed in a money suit under the CPC, whereas the O.A. was filed under the RDBI Act, wherein the provisions of CPC can be invoked to a limited extent, as provided under section 22 of the RDB Act, in which Order XX Rule 11(2) does not find place to be invoked. Further, the said provision can be invoked only with the consent of the decree holder and no installment can be fixed without consent of such decree holder. In the instant case, the counsel for the Bank has vehemently opposed the application filed by the respondents. Thus, there was no question of any consent. So even otherwise, the Tribunal below has wrongly allowed the application under the pretext of Order XX Rule 11(2) of the CPC.

The DRT, where the property is located, has jurisdiction and also the DRT, where a part of cause of action has arisen, may entertain the S.A. – State Bank of India Vs. Baldeo Metals Pvt. Ltd. – DRAT Allahabad Bench

It is evident from the Section 17(1)(A) of  SARFAESI Act that the DRT, where the property is located, has jurisdiction and also the DRT, where a part of cause of action has arisen, may entertain the S.A. In the case at hand, one of the properties is located at Ghaziabad out of six properties. As such a part of cause of action has arisen under the jurisdiction of the DRT, Lucknow. Thus, the Tribunal below has rightly observed to have jurisdiction in view of this provision of the statute.(p7)

Although any minor irregularity or any typographical error may be clarified by way of corrigendum, but the publication of sale notice in the newspaper is a primary requirement of Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 – Syndicate Bank Vs. M/s Anand Industries – DRAT Allahabad Bench

DRAT held that there is no dispute on the point that the earlier sale notice dated 30.06.2016 fixing the date of auction on 30.07.2016 was not acted upon and the Bank has issued fresh sale notice dated 15.07.2016 and the same was sent to the borrowers and affixed on the premises. Thus, the earlier sale notice dated 30.06.2016 has become redundant. As such the publication made in the newspaper with regard to sale notice dated 30.06.2016 remained of no consequence. Although any minor irregularity or any typographical error may be clarified by way of corrigendum, but the publication of sale notice in the newspaper is a primary requirement of Rule 8(6) of the Rules, 2002. Thus, the Bank was required to publish the sale notice dated 15.07.2016 in the newspaper instead of publishing a corrigendum only to the effect that for the sale notice published in the newspaper on 30.06.2016, the date of auction be read as “26.08.2016”. This corrigendum does not clarify, as to what were the conditions of the sale notice and the other details thereof. The public at large cannot gather any inference from such corrigendum in order to participate in the bid. Therefore, this corrigendum was not sufficient to take place of the publication of sale notice dated 15.07.2016 in the newspaper as required under Rule 8(6) of the Rules, 2002.

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