Justice InduĀ Malhotra

The period of limitation for filing an application u/s 11Ā of Arbitration Act would be governed by Article 137 of the First Schedule of the Limitation Act, 1963 (till the Parliament amends the Section 11) & the period of limitation will begin to run from the date whenĀ there is failure to appoint the arbitrator – Bharat Sanchar Nigam Ltd. & Anr. Vs. M/s Nortel Networks India Pvt. Ltd. – Supreme Court

Honā€™ble Supreme Court held that various High Courts have taken the view that Article 137 of the Limitation Act would be applicable to an application under Section 11 of the Arbitration Act. The Courts have taken recourse to the position that the limitation period would be governed by Article 137, which provides a period of 3 years from the date when the right to apply accrues. However, this is an unduly long period for filing an application u/s. 11, since it would defeat the very object of the Act, which provides for expeditious resolution of commercial disputes within a time bound period. The 1996 Act has been amended twice over in 2015 and 2019, to provide for further time limits to ensure that the arbitration proceedings are conducted and concluded expeditiously. Section 29A mandates that the arbitral tribunal will conclude the proceedings within a period of 18 months. In view of the legislative intent, the period of 3 years for filing an application under Section 11 would run contrary to the scheme of the Act.
It would be necessary for Parliament to effect an amendment to Section 11, prescribing a specific period of limitation within which a party may move the court for making an application for appointment of the arbitration under Section 11 of the 1996 Act.
The Court on the issue whether the Court while exercising jurisdiction under Section 11 is obligated to appoint an arbitrator even in a case where the claims are ex fade time-barred held that in rare and exceptional cases, where the claims are ex facie time- barred, and it is manifest that there is no subsisting dispute, the Court may refuse to make the reference.

The period of limitation for filing an application u/s 11Ā of Arbitration Act would be governed by Article 137 of the First Schedule of the Limitation Act, 1963 (till the Parliament amends the Section 11) & the period of limitation will begin to run from the date whenĀ there is failure to appoint the arbitrator – Bharat Sanchar Nigam Ltd. & Anr. Vs. M/s Nortel Networks India Pvt. Ltd. – Supreme Court Read Post Ā»

There is a mandate of presumption of consideration in terms of the provisions of the NI Act, 1881 and the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act – SumetiĀ Vij Vs. M/SĀ ParamountĀ TechĀ FabĀ  Industries – Supreme Court

The object of introducing Section 138 and other provisions of Chapter XVII in the Act appears to be to enhance the acceptability of cheques in the settlement of liabilities. The drawer of the cheque be held liable to prosecution on dishonour of cheque with safeguards provided to prevent harassment of honest drawers. Section 138 primarily relates to a civil wrong and the amendment made in the year 2000 specifically made it The burden of proof was on the accused in view of presumption under Section 139 of the Act and the standard of proof was of “preponderance of probabilities”. The N.I. Act including a cheque carrying a presumption of consideration in terms of Sections 118(a) and 139 of the Act which is related to the purpose referred to.(p13)

There is a mandate of presumption of consideration in terms of the provisions of the Act and the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act.(p14)

The scope of Section 139 of the Act is that when an accused has to rebut the presumption, the standard of proof for doing so is that of “preponderance or probabilities” which has been examined by a three-Judge Bench of this Court in Rangappa vs. Sri Mohan (2010) 11 SCC 441.(p15)

It is well settled that the proceedings under Section 138 of the Act are quasi-criminal in nature, and the principles which apply to acquittal in other criminal cases are not applicable in the cases instituted under the Act.(p16)

There is a mandate of presumption of consideration in terms of the provisions of the NI Act, 1881 and the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act – SumetiĀ Vij Vs. M/SĀ ParamountĀ TechĀ FabĀ  Industries – Supreme Court Read Post Ā»

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. – Supreme Court

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 daysā€™ 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 ā€œreceivedā€ 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)

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. – Supreme Court Read Post Ā»

Only those Financial Creditors that are related partiesĀ in praesentiĀ would be debarred from CoC under the first proviso to Section 21(2), those related party Financial Creditors that cease to be related parties in order to circumvent the exclusion under the first proviso to Section 21(2), should also be considered as being covered by the exclusion thereunder – Phoenix Arc Pvt. Ltd. Vs. Spade Financial Services Ltd. and Ors. – Supreme Court

An issue of interpretation in relation to the first proviso of Section 21(2) is whether the disqualification under the proviso would attach to a financial creditor only in praesenti, or if the disqualification also extends to those financial creditors who were related to the corporate debtor at the time of acquiring the debt. Thus, facially, it would appear that the use of the simple present tense in the first proviso to Section 21(2) indicates that the disqualification applies in praesenti. Furthermore, this interpretation would also be supported by a reading of the first proviso to Section 21(2), in light of the definition of ā€˜related partyā€™ under Section 5(24), which uses phrases such as ā€˜is accustomed to actā€™ or ā€˜is associatedā€™ to define a related party in the present tense.(p82 & 84).

While the default rule under the first proviso to Section 21(2) is that only those financial creditors that are related parties in praesenti would be debarred from the CoC, those related party financial creditors that cease to be related parties in order to circumvent the exclusion under the first proviso to Section 21(2), should also be considered as being covered by the exclusion thereunder. Mr Kaul has argued, correctly in our opinion, that if this interpretation is not given to the first proviso of Section 21(2), then a related party financial creditor can devise a mechanism to remove its label of a ā€˜related partyā€™ before the Corporate Debtor undergoes CIRP, so as to be able to enter the CoC and influence its decision making at the cost of other financial creditors. (p95)

Only those Financial Creditors that are related partiesĀ in praesentiĀ would be debarred from CoC under the first proviso to Section 21(2), those related party Financial Creditors that cease to be related parties in order to circumvent the exclusion under the first proviso to Section 21(2), should also be considered as being covered by the exclusion thereunder – Phoenix Arc Pvt. Ltd. Vs. Spade Financial Services Ltd. and Ors. – Supreme Court Read Post Ā»

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