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If, after considering the material on record, Arbitral Tribunal takes a particular view on the interpretation of the contract, the Court under Section 34 of Arbitration and Conciliation Act, 1996 does not sit in appeal over the findings of the Arbitrator – National Highways Authority of India (NHAI) Vs. Hindustan Construction Company Ltd. – Supreme Court

Hon’ble Supreme Court held that The law regarding the scope of interference in a petition under Section 34 of the Arbitration and Conciliation Act, 1996 was laid down in the case of MMTC Ltd. v. Vedanta Ltd.(2019) ibclaw.in 146 SC. In the case of UHL Power Company Ltd. v. State of Himachal Pradesh (2022) ibclaw.in 78 SC, it has been held that the jurisdiction of the Court under Section 34 is relatively narrow and the jurisdiction of the Appellate Court under Section 37 of the Arbitration Act is all the more circumscribed. In the light of the limited scope for interference under Section 37 appeal, we will have to deal with the submissions. If, after considering the material on record, the Arbitral Tribunal takes a particular view on the interpretation of the contract, the Court under Section 34 does not sit in appeal over the findings of the arbitrator.

If, after considering the material on record, Arbitral Tribunal takes a particular view on the interpretation of the contract, the Court under Section 34 of Arbitration and Conciliation Act, 1996 does not sit in appeal over the findings of the Arbitrator – National Highways Authority of India (NHAI) Vs. Hindustan Construction Company Ltd. – Supreme Court Read Post »

RBI Master Circular on Wilful Defaulters does not contain any requirement that the order passed by First Level Committee should disclose the constitution of the First Level Committee | Decision of First Level Committee does not attain finality till it is confirmed by Review Committee – Mr. Dumpala Madhusudhana Reddy Vs. REC Ltd. – Telangana High Court

The batch of 3 Writ Appeals were preferred by the suspended Board of Directors of M/s. Ind Bharath Power (Madras) Limited challenging the order passed by the Ld. Single Judge Bench upholding the decision/order of the First Level Committee of REC Limited in declaring the Appellants as wilful defaulters.

The Appellants alleged that the First Level Committee has acted in contrary to the procedure laid down in the RBI Master Circular dated 01.07.2015, as firstly the Appellants have not been informed about the constitution of First Level Committee and, secondly, there has been delegation of power as the decision of the First Level Committee was communicated to the Appellants by a member of the Committee.
Thereupon, the Sr. Advocate for Appellants relied upon the landmark judgment of ‘Jah Developers’ highlighting that declaration of Appellants as wilful defaulter is a direct violation of fundamental rights.

The Sr. Advocate representing the Respondent outrightly highlighted that the decision of the First Level Committee is well within the guidelines of the RBI Master Circular and that the order of the First Level Committee would attain finality only when it is confirmed by the review committee. Thus, the Appellants have preferred the Writ Appeal at a very premature stage and hence deserves no indulgence by the Hon’ble Division Bench of the Telangana High Court presided by the Chief Justice.

The Hon’ble Court after hearing the submissions of the parties and considering the guidelines of RBI Master Circular asserted that the Master Circular does not contain any requirement that the order passed by the First Level Committee should disclose the constitution of the First Level Committee and further held that till the time the provisional order of First Level Committee is not confirmed by the review committee, it is not possible to infer that any rights of the Appellants have been violated. Moreover, the Hon’ble Court also held that the case of Jah Developers is of no assistance in facts and circumstances of the case at hand. Thereby, the Division Bench upheld the order of the Ld. Single Bench and while disposing off the Appeals, granted liberty to the Appellants to approach the review committee within a period of 3 weeks from the date of receipt of the order.

RBI Master Circular on Wilful Defaulters does not contain any requirement that the order passed by First Level Committee should disclose the constitution of the First Level Committee | Decision of First Level Committee does not attain finality till it is confirmed by Review Committee – Mr. Dumpala Madhusudhana Reddy Vs. REC Ltd. – Telangana High Court Read Post »

The status of Financial Creditor cannot be accorded to a person who, in the garb of a lender comes in a Real Estate Project as a Speculative Investor and for mere recovery of monies files exorbitant claims – Mr. Rohit Prasad Vs. M/s S and N Lifestyle Infraventures Pvt. Ltd. – NCLT New Delhi Bench Court-V

The Adjudicating Authority held that while determining both Issue ii and Issue iii together, on bare perusal of Section 5 (7) of Insolvency and Bankruptcy code “financial creditor” means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred; Section 5 (8) “financial debt” means a debt along with interest, if any, which is disbursed against the consideration for the time value of money. The status of “Financial Creditor” cannot be accorded to a person who, in the garb of a lender comes in the project as a speculative investor and for mere recovery of monies files exorbitant claims. Therefore, the benefit of section 5(8)(f) of IBC will not enure in his favour and the amount claimed in Part IV of the application doesn’t amount to become Financial Debt as per code. Therefore, the present application filed under section 7 of the IB Code 2016 against the corporate debtor is not maintainable.

The status of Financial Creditor cannot be accorded to a person who, in the garb of a lender comes in a Real Estate Project as a Speculative Investor and for mere recovery of monies files exorbitant claims – Mr. Rohit Prasad Vs. M/s S and N Lifestyle Infraventures Pvt. Ltd. – NCLT New Delhi Bench Court-V Read Post »

SARFAESI Act and RDB Act shall have overriding effect to provisions of H.P. Value Added Tax Act 2005 (HPVAT) – Bhagwan Singh Vs. State of Himachal Pradesh- Himachal Pradesh High Court

Hon’ble High Court held that SARFAESI Act as well as RDB Act are Central Legislations whereas HPVAT is a State Legislation. SARFAESI Act and RDB Act declare priority of secured creditors upon secured assets over all revenues, taxes, cesses and other rates payable to Central Government or State Government or local authorities. Provisions of Section 31-B of RDB Act are also the same. Section 26 of HPVAT creates first charge on property of dealer or such other person from whom any amount of tax or penalty including interest is recoverable.

SARFAESI Act and RDB Act shall have overriding effect to provisions of H.P. Value Added Tax Act 2005 (HPVAT) – Bhagwan Singh Vs. State of Himachal Pradesh- Himachal Pradesh High Court Read Post »

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