Mr. Justice J.B. Pardiwala

DRT does not have the jurisdiction to grant a declaration with respect to the mortgage deed or the sale deed | Jurisdiction to declare a sale deed or a mortgage deed being illegal is vested with the civil court under Section 9 of the Code of Civil Procedure – Central Bank of India and Anr. Vs. Smt. Prabha Jain and Ors. – Supreme Court

The Hon’ble Supreme Court held that:

(i) The SARFAESI Act has not been enacted for providing a mechanism for adjudicating upon the validity of documents or to determine questions of title finally. The DRT does not have the jurisdiction to grant a declaration with respect to the mortgage deed or the sale deed as sought by the Plaintiff.
(ii) The jurisdiction to declare a sale deed or a mortgage deed being illegal is vested with the civil court under Section 9 of the Code of Civil Procedure. Therefore, the civil Court has the jurisdiction to finally adjudicate upon the first two reliefs.
(iii) The DRT is not permitted to examine the validity of the earlier sale deed, whereafter the mortgage was executed in favour of the Bank.

DRT does not have the jurisdiction to grant a declaration with respect to the mortgage deed or the sale deed | Jurisdiction to declare a sale deed or a mortgage deed being illegal is vested with the civil court under Section 9 of the Code of Civil Procedure – Central Bank of India and Anr. Vs. Smt. Prabha Jain and Ors. – Supreme Court Read Post »

Can a partner of an unregistered partnership firm file a Suit for recovery of money, being hit by Section 69 of the Indian Partnership Act, 1932? – Sunkari Tirumala Rao and Ors. Vs. Penki Aruna Kumari – Supreme Court

The Hon’ble Supreme Court held that in this case, the suit for recovery was filed by a set of partners together on one side, against another partner, for the purpose of enforcing a right accruing under the agreement. It is a clear as a noon day that the present suit had not been instituted by or on behalf of the firm against any third persons so as to fall under the ambit of Section 69(2). The petitioners have also not filed the instant suit for enforcing any statutory right conferred under any other law or a common law right so as to exempt the application of Section 69. Hence, the rigours of Section 69(1) would apply on such a suit and the partnership firm being unregistered would prevent the petitioners from filing a bare suit for recovery of money from the respondent.

Can a partner of an unregistered partnership firm file a Suit for recovery of money, being hit by Section 69 of the Indian Partnership Act, 1932? – Sunkari Tirumala Rao and Ors. Vs. Penki Aruna Kumari – Supreme Court Read Post »

Circumstances when a sale of property by auction or other means may be set-aside after its confirmation | Henderson Principle | Applicability of Lis Pendens in case of subsequent transfer of the property sold under auction – Celir LLP v. Mr. Sumati Prasad Bafna and Ors. – Supreme Court

In this judgment, Hon’ble Supreme Court deals with the following points:
(i) Concept of Abuse of Process of Court and Collateral challenge to judgments that have attained finality.
(ii) Scope of Section 17 of the SARFAESI Act, 2002.
(iii) Once Borrower has elected to move the High Court for the very same cause of action and underlying prayers, the Borrower was precluded from pursuing its remedies before the DRT.
(iv) The ‘Henderson’ Principle as a corollary of Constructive Res-Judicata.
(v) Four situations where in second proceedings between the same parties doctrine res judicata as a corollary of the principle of abuse of process may be invoked
(vi) Applicability of Lis Pendens in the absence of any registration as required under the State Amendment to Section 52 of the Transfer of Property Act, 1882.
(vii) Interpretation of the Higher Court decisions.
(viii) Circumstances when a sale of property by auction or other means under the SARFAESI Act may be set-aside after its confirmation.

Circumstances when a sale of property by auction or other means may be set-aside after its confirmation | Henderson Principle | Applicability of Lis Pendens in case of subsequent transfer of the property sold under auction – Celir LLP v. Mr. Sumati Prasad Bafna and Ors. – Supreme Court Read Post »

A sale certificate issued to the purchaser in pursuance of the confirmation of an auction sale is merely evidence of such title and does not require registration under Section 17(1) of the Registration Act | When the auction purchaser presents the original sale certificate for registration, it would attract stamp duty in accordance with Articles 18 and 23 of the First Schedule to the Stamp Act – The State of Punjab and Anr. Vs. Ferrous Alloy Forgings P Ltd. and Ors. – Supreme Court

The Hon’ble Supreme Court held that:

(i) A sale certificate issued to the purchaser in pursuance of the confirmation of an auction sale is merely evidence of such title and does not require registration under Section 17(1) of the Registration Act.
(ii) Mere filing under Section 89(4) of the Registration Act itself is sufficient when a copy of the sale certificate is forwarded by the authorised officer to the registering authority.
(iii) However, a perusal of Articles 18 and 23 respectively of the first schedule to the Stamp Act respectively makes it clear that when the auction purchaser presents the original sale certificate for registration, it would attract stamp duty in accordance with the said Articles.

A sale certificate issued to the purchaser in pursuance of the confirmation of an auction sale is merely evidence of such title and does not require registration under Section 17(1) of the Registration Act | When the auction purchaser presents the original sale certificate for registration, it would attract stamp duty in accordance with Articles 18 and 23 of the First Schedule to the Stamp Act – The State of Punjab and Anr. Vs. Ferrous Alloy Forgings P Ltd. and Ors. – Supreme Court Read Post »

Whether the appointment process under an arbitration agreement, which allows a party who has an interest in the dispute to unilaterally appoint a sole arbitrator or curate a panel of arbitrators and mandate that the other party select their arbitrator from the panel, is valid in law? – Central Organisation for Railway Electrification Vs. ECI SPIC SMO MCML (JV) A Joint Venture Company – Supreme Court

Conclusion:
a. The principle of equal treatment of parties applies at all stages of arbitration proceedings, including the stage of appointment of arbitrators;
b. The Arbitration Act does not prohibit PSUs from empanelling potential arbitrators. However, an arbitration clause cannot mandate the other party to select its arbitrator from the panel curated by PSUs;
c. A clause that allows one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator. Further, such a unilateral clause is exclusive and hinders equal participation of the other party in the appointment process of arbitrators;
d. In the appointment of a three-member panel, mandating the other party to select its arbitrator from a curated panel of potential arbitrators is against the principle of equal treatment of parties. In this situation, there is no effective counterbalance because parties do not participate equally in the process of appointing arbitrators. The process of appointing arbitrators in CORE (supra) is unequal and prejudiced in favour of the Railways;
e. Unilateral appointment clauses in public-private contracts are violative of Article 14 of the Constitution;
f. The principle of express waiver contained under the proviso to Section 12(5) also applies to situations where the parties seek to waive the allegation of bias against an arbitrator appointed unilaterally by one of the parties. After the disputes have arisen, the parties can determine whether there is a necessity to waive the nemo judex rule; and
g. The law laid down in the present reference will apply prospectively to arbitrator appointments to be made after the date of this judgment. This direction applies to three-member tribunals

Whether the appointment process under an arbitration agreement, which allows a party who has an interest in the dispute to unilaterally appoint a sole arbitrator or curate a panel of arbitrators and mandate that the other party select their arbitrator from the panel, is valid in law? – Central Organisation for Railway Electrification Vs. ECI SPIC SMO MCML (JV) A Joint Venture Company – Supreme Court Read Post »

Landmark judgment on determination of Seat of Arbitration – Arif Azim Co. Ltd. Vs. Micromax Informatics FZE – Supreme Court

This judgment covers:
(i) Notional Doctrine of Concurrent Jurisdiction and Applicability of Part I of the Arbitration & Conciliation Act, 1996.
(ii) Criterion or Test for Determination of Seat of Arbitration: Conflict of ‘Venue’ versus ‘Seat’ of Arbitration.
(iii) Closest Connection Test – Place of Arbitration to be ascertained by the Law governing the Arbitration Agreement and not the Place of Arbitration.
(iv) The Shashoua Principle – ‘Venue’ to be construed as ‘Seat’.
(v) Non-exclusive jurisdiction clause in arbitration agreement.
(vi) Doctrine of Forum non Conveniens.

Landmark judgment on determination of Seat of Arbitration – Arif Azim Co. Ltd. Vs. Micromax Informatics FZE – Supreme Court Read Post »

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