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An application for extension of the time period for passing an arbitral award under Section 29A(4) read with Section 29A(5) of Arbitration and Conciliation Act, 1996 is maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be – Rohan Builders (India) Pvt. Ltd. Vs. Berger Paints India Ltd. – Supreme Court

In this judgment, Hon’ble Supreme Court held that:

(i) Extension under Section 29A beyond six months, even by consent of the parties, is not permitted.
(ii) The court has the power to extend the period for making an award at any time before or after the mandated period.
(iii) The word “terminate” in Section 29A(4) makes the arbitral tribunal functus officio, but not in absolute terms.
(iv) The termination of the arbitral mandate is conditional upon the non-filing of an extension application and cannot be treated as termination stricto sensu. Termination under Section 29A(4) is not set in stone or absolutistic in character.
(v) The power of the court to extend the time is to be exercised only in cases where there is sufficient cause for such extension.
(vi) The arbitral tribunal may not pronounce the award till an application under Section 29A(5) of the A & C Act is sub-judice before the court.
(vii) In a given case, where an award is pronounced during the pendency of an application for extension of period of the arbitral tribunal, the court must still decide the application under sub-section (5), and may even, where an award has been pronounced, invoke, when required and justified, sub-sections (6) to (8), or the first and third proviso to Section 29A(4) of the A & C Act.
(viii) Conclusion: An application for extension of the time period for passing an arbitral award under Section 29A(4) read with Section 29A(5) is maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be.

An application for extension of the time period for passing an arbitral award under Section 29A(4) read with Section 29A(5) of Arbitration and Conciliation Act, 1996 is maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be – Rohan Builders (India) Pvt. Ltd. Vs. Berger Paints India Ltd. – Supreme Court Read Post »

When Secured Creditor proceeds to realize Security Interest, it is his duty to ask the liquidator for an estimated amount as provided in Liquidation Process Regulation 21A – Phoenix ARC Pvt. Ltd. Vs. Mr. Kuldeep Verma Liquidator of KS Oils Ltd. – NCLT Allahabad Bench

In this case, following issues arises for consideration:

i. where the amount payable by the secured creditor under sub-Regulation (2)(a), is not certain, whether liquidator is mandated to inform the secured creditor the estimated amount;

ii. if liquidator has not informed the estimated amount, whether provision of sub-Regulation (3) would apply or not?

iii. Whether first proviso is an exception to sub-Regulation (2) which mandates the secured creditor to pay the amount within 90 days.

When Secured Creditor proceeds to realize Security Interest, it is his duty to ask the liquidator for an estimated amount as provided in Liquidation Process Regulation 21A – Phoenix ARC Pvt. Ltd. Vs. Mr. Kuldeep Verma Liquidator of KS Oils Ltd. – NCLT Allahabad Bench Read Post »

Whether Earnest Money Deposit(EMD) paid by Operational Creditor against tender for services would amount to an “Operational Debt” within the meaning of the IBC, 2016? – Supreme Transport Organisation Pvt. Ltd. Vs. Maharashtra Airport Development Company Ltd. – NCLT Mumbai Bench

The Adjudicating Authority held that it is very clear from the plain reading of the definition of “Operational Debt” under Section 5(21) of the Code that the EMD deposited by an Operational Creditor is not included anywhere in the above definition and therefore the amount claimed by the Petitioner being the EMD does not fall within the definition of “operational debt”. The learned Senior PCA appearing for the Operational Creditor tried to convince this Tribunal that it is an advance paid by the Operational Creditor for securing the services by Corporate Debtor and therefore would amount to an “operational debt”. However, this Tribunal is unable to accept the above submission in the absence of any authoritative pronouncement.

Whether Earnest Money Deposit(EMD) paid by Operational Creditor against tender for services would amount to an “Operational Debt” within the meaning of the IBC, 2016? – Supreme Transport Organisation Pvt. Ltd. Vs. Maharashtra Airport Development Company Ltd. – NCLT Mumbai Bench Read Post »

Creeping up an escalating liability to Chairpersons of large conglomerates/companies for cheques issued in day-to-day affairs of the business of a company would unfairly and unnecessarily expand the provisions of vicarious liability under the provisions of the Negotiable Instruments Act – Yashovardhan Birla Vs. Cecil Webber Engineering Ltd. & Ors – Delhi High Court

Hon’ble High Court held that (i) merely the mention of the name of Accused No.3 on the letter head as being the Head of the Group, does not ipso facto or ipso jure make him in-charge of and responsible for the affairs and business of the company at the time the offence was committed.
(ii) The Courts have consistently reiterated that a non-executive director may be the custodian of governance of the Company but are not involved in the day-to-day affairs of running its business and only monitor executive activities of the Company.
(iii) The phrase ‘Chairman’/ ‘Chairperson’ of a Company is not specifically defined under the Companies Act and the reference to the word ‘Chairman’ has been made in Section 104 of the Companies Act 2013 where the Chairman of a meeting is appointed by its members unless otherwise provided in the Articles of the Company. Reference may also be made to section 203 of the Companies Act 2013 which prescribes the roles of key managerial personnel of a company and makes a distinction with the post of a ‘Chairperson’.
(iv) Creeping up an escalating liability to Chairpersons of large conglomerates/companies for cheques issued in day-to-day affairs of the business of a company would unfairly and unnecessarily expand the provisions of vicarious liability under the provisions of the Negotiable Instruments Act.

Creeping up an escalating liability to Chairpersons of large conglomerates/companies for cheques issued in day-to-day affairs of the business of a company would unfairly and unnecessarily expand the provisions of vicarious liability under the provisions of the Negotiable Instruments Act – Yashovardhan Birla Vs. Cecil Webber Engineering Ltd. & Ors – Delhi High Court Read Post »

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