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Whether part of arbitration clause containing the word “may” can be construed to be an arbitration agreement as contemplated under Section 7 of Arbitration and Conciliation Act, 1996 – BGM and M-RPL-JMCT (JV) Vs. Eastern Coalfields Ltd. – Calcutta High Court

In this important judgment, Hon’ble Calcutta High Court holds that:
(i) The will to arbitrate must clearly be articulated in the arbitration clause. There is no room for any doubt or second-guessing. Parties must be clear in their minds that they wish to subject themselves to arbitration as the chosen mechanism of dispute resolution and ensure that the intention is expressed in writing in the form of the arbitration agreement.
(ii) An arbitration agreement also does not sit comfortably with conditions attached for the parties to go to arbitration. The clause should not be subject to or conditional upon further or future events which may or may not occur.
(iii) In essence, there cannot be any ‘ifs’ and ‘buts’ or an undecided mumble; the parties must give a resounding “Yes” to arbitration.
(iv) For a movement analogy; the arbitration agreement is not about a hesitant 1 step ahead-2 steps backward / back-tracking but a confident 1–way stride forward to arbitration.
(v) The word “may” in the relevant part of the clause gives an option to the parties to either refer the dispute to arbitration or hold back on the arbitration. The word “may” makes the clause conditional on a future event/s or to the other parts of the clause and gives the parties the option to resile from the clause.

Whether part of arbitration clause containing the word “may” can be construed to be an arbitration agreement as contemplated under Section 7 of Arbitration and Conciliation Act, 1996 – BGM and M-RPL-JMCT (JV) Vs. Eastern Coalfields Ltd. – Calcutta High Court Read Post »

Cheques encashed wrongly/fraudulently would squarely fall within the ambit of a ‘debt’ under Section 2(g) of RDB Act, 1993 and enables the Bank wrongly deprived their money to recover it – Bank of Baroda Vs. Mr Ramesh C. Bhuptani & Ors. – DRAT Mumbai

DRAT held that the defendants Nos. 1, 3, 5 and 7 to 9 had received the amount in their accounts consequent to the presentation of the cheques to the Appellant Bank and were and enriched by the amounts they received. The cheques were wrongly/fraudulently encashed by them, even though it may not be with their active participation in the fraud, they had been recipients of the amount fraudulently from the Appellant Bank. Under the circumstances, the amount that they received would squarely fall within the ambit of a ‘debt’ under Sec. 2(g) and enables the Bank wrongly deprived their money to recover it. In case the said defendants had received money that was legally due to them from others, their remedy to recover that amount lies elsewhere and not by fraudulent means deployed to extract money from the bank undeservedly. It may also be true that they were not guilty of fraud themselves or may even have been victims of the fraud, but that would not permit them to defend their case and retain the illegally earned money that comes into their account from the Appellant Bank.

Cheques encashed wrongly/fraudulently would squarely fall within the ambit of a ‘debt’ under Section 2(g) of RDB Act, 1993 and enables the Bank wrongly deprived their money to recover it – Bank of Baroda Vs. Mr Ramesh C. Bhuptani & Ors. – DRAT Mumbai Read Post »

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