Common Interpretation judgment

Whether the MSMED Act, 2006 would prevail over the SARFAESI Act, 2002? – Kotak Mahindra Bank Ltd. Vs. Girnar Corrugators Pvt. Ltd. & Ors. – Supreme Court

/ 24 minutes of reading

In this case, Division Bench of the High Court has allowed an appeal and has quashed and set aside the judgment passed by the learned Single Judge and has observed that MSMED Act will prevail over SARFAESI Act, 2002. Hon’ble Supreme Court held that Section 26E of the SARFAESI Act which is inserted in 2016 is also having a non-obstante clause. As per the settle position of law, if the legislature confers the later enactment with a non-obstante clause, it means the legislature wanted the subsequent/later enactment to prevail. Thus, a priority conferred / provided under Section 26E of the SARFAESI Act would prevail over the recovery mechanism of the MSMED Act. The aforesaid is to be considered along with the fact that under provisions of the MSMED Act, more particularly Sections 15 to 23, no priority is provided with respect to the dues under the MSMED Act, like Section 26E of the SARFAESI Act. It also held that while exercising power under Section 14 of the SARFAESI Act, even the District Magistrate has no jurisdiction and/or District Magistrate and/or even the Chief Metropolitan Magistrate has no jurisdiction to adjudicate the dispute between secured creditor and debtor.

Whether the MSMED Act, 2006 would prevail over the SARFAESI Act, 2002? – Kotak Mahindra Bank Ltd. Vs. Girnar Corrugators Pvt. Ltd. & Ors. – Supreme Court Read Post »

When judgment is pronounced without reasoning, it is not a judgment in the eye of law for the reason that the requirement of reasoning either by Original Court or Appellate Authority is to convey the mind of the judge while deciding such an issue before the Tribunal – Gandhar Oil Refinery (India) Ltd. Vs. City Oil Pvt. Ltd. – NCLAT New Delhi

/ 13 minutes of reading

NCLAT held that it is settled law that the Court or Tribunal shall record reasons for its conclusion on the basis of merits. What an order should contain normally is not specified anywhere but the order must be reasoned one since the judgment or order in its final shape usually contains in additional to formal parts (a) A preliminary or introductory part, showing the form of the application upon which it was made, the manner in which and the place at which, the writ or other originating process was served, the parties appearing any consent, waivers, undertakings or admissions given or made, so placed as to indicate whether they relate to the whole judgment or order or only part of it, and a reference to the evidence upon which the judgment or order is based and (b) A substantive or mandatory part, containing the order made by the Court as has been said in Halsbury’s Laws of England (4th Edition, Volume 26 P. 260).

When judgment is pronounced without reasoning, it is not a judgment in the eye of law for the reason that the requirement of reasoning either by Original Court or Appellate Authority is to convey the mind of the judge while deciding such an issue before the Tribunal – Gandhar Oil Refinery (India) Ltd. Vs. City Oil Pvt. Ltd. – NCLAT New Delhi Read Post »

Section 9(5)(i) vs. Section 7(5)(a) of IBC: The Adjudicating Authority may in its discretion not admit the application of a Financial Creditor filed u/s 7, however, Section 9(5)(i) is mandatory, almost identical provision relating to the initiation of CIRP by an Operational Creditor – Vidarbha Industries Power Ltd. Vs. Axis Bank Ltd. – Supreme Court

/ 55 minutes of reading

In this landmark judgment, Hon’ble Supreme Court clarifies various issues in filing of CIRP u/s 7 and 9. The Hon’ble Court held that If Section 7(5)(a) of the IBC is construed literally the provision must be held to confer a discretion on the Adjudicating Authority (NCLT). The fact that Legislature used ‘may’ in Section 7(5)(a) of the IBC but a different word, that is, ‘shall’ in the otherwise almost identical provision of Section 9(5) shows that ‘may’ and ‘shall’ in the two provisions are intended to convey a different meaning. It is apparent that Legislature intended Section 9(5) of the IBC to be mandatory and Section 7(5)(a) of the IBC to be discretionary. The IBC does not countenance dishonesty or deliberate failure to repay the dues of an operational creditor. Further, it held that the Adjudicating Authority may in its discretion not admit the application of a Financial Creditor. It is certainly not the object of the IBC to penalize solvent companies, temporarily defaulting in repayment of its financial debts, by initiation of CIRP. There is no fixed time limit within which an application under Section 7 of the IBC has to be admitted.

Section 9(5)(i) vs. Section 7(5)(a) of IBC: The Adjudicating Authority may in its discretion not admit the application of a Financial Creditor filed u/s 7, however, Section 9(5)(i) is mandatory, almost identical provision relating to the initiation of CIRP by an Operational Creditor – Vidarbha Industries Power Ltd. Vs. Axis Bank Ltd. – Supreme Court Read Post »

Whether the “sum” awarded under Section 31(7)(a) of the Arbitration and Conciliation Act, 1996 would include the interest pendente lite or not? – Delhi Airport Metro Express Pvt. Ltd. Vs. Delhi Metro Rail Corporation – Supreme Court

/ 36 minutes of reading

The Hon’ble Supreme Court held that the majority judgment held that Section 31(7)(a) of Arbitration and Conciliation Act, 1996 refers to the total amount or sum for the payment for which the award is made. As such, the amount awarded under Section 31(7)(a) would include the principal amount plus the interest amount pendente lite. It was held that the interest to be calculated as per Section 31(7)(b) would be on the total sum arrived as aforesaid under Section 31(7)(a). If Section 31(7)(a) is given a plain and literal meaning, the legislative intent would be clear that the discretion with regard to grant of interest would be available to the Arbitral Tribunal only when there is no agreement to the contrary between the parties. The phrase “unless otherwise agreed by the parties” clearly emphasizes that when the parties have agreed with regard to any of the aspects covered under Section 31(7)(a), the Arbitral Tribunal would cease to have any discretion with regard to the aspects mentioned in the said provision. Only in the absence of such an agreement, the Arbitral Tribunal would have a discretion to exercise its powers under Section 31(7)(a). The discretion is wide enough. It may grant or may not grant interest. It may grant interest for the entire period or any part thereof. It may also grant interest on the whole or any part of the money.

Whether the “sum” awarded under Section 31(7)(a) of the Arbitration and Conciliation Act, 1996 would include the interest pendente lite or not? – Delhi Airport Metro Express Pvt. Ltd. Vs. Delhi Metro Rail Corporation – Supreme Court Read Post »

There is no requirement that an arbitration agreement be an original, the parties stamp the agreement, the parties must sign every page – Great Offshore Ltd. Vs. Iranian Offshore Engineering & Construction Company – Supreme Court

/ 33 minutes of reading

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There is no requirement that an arbitration agreement be an original, the parties stamp the agreement, the parties must sign every page – Great Offshore Ltd. Vs. Iranian Offshore Engineering & Construction Company – Supreme Court Read Post »

The power of review can be exercised with extreme care, caution and circumspection and only in exceptional cases – Jain Studios Ltd. Vs. Shin Satellite Public Co. Ltd. – Supreme Court

/ 7 minutes of reading

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The power of review can be exercised with extreme care, caution and circumspection and only in exceptional cases – Jain Studios Ltd. Vs. Shin Satellite Public Co. Ltd. – Supreme Court Read Post »

The section heading or marginal note can be relied upon to clear any doubt or ambiguity in the interpretation of any provision and to discern the legislative intent – Eastern Coalfields Ltd. Vs. Sanjay Transport Agency & Anr. – Supreme Court

/ 5 minutes of reading

It is well settled rule of interpretation that the section heading or marginal note can be relied upon to clear any doubt or ambiguity in the interpretation of any provision and to discern the legislative intent. The section heading constitutes an important part of the Act itself, and may be read not only as explaining the provisions of the section, but it also affords a better key to the constructions of the provisions of the section which follows than might be afforded by a mere preamble. The said interpretation can well be applied to understand and construct the various clauses of an arbitration agreement also, which is in the realm of commercial contract. While interpreting so, the Court may not depend only on the text but context as well in order to fully comprehend the context and the meaning of the clause.

The section heading or marginal note can be relied upon to clear any doubt or ambiguity in the interpretation of any provision and to discern the legislative intent – Eastern Coalfields Ltd. Vs. Sanjay Transport Agency & Anr. – Supreme Court Read Post »

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