Mr. Justice Yashwant Varma

The jurisdiction of the Court under Section 34 of the Act is neither in the nature of an appellate remedy or akin to the power of revision – Center for Research Planning and Action Vs. National Medicinal Plants Board Ministry of Ayush Government of India – Delhi High Court

A plain reading of Section 34 reveals that the scope of interference by the Court with the arbitral award under Section 34 is very limited, and the Court is not supposed to travel beyond the aforesaid scope to determine whether the award is good or bad. Even an award that may not be reasonable or is non-speaking to some extent cannot ordinarily be interfered with by the Courts. It is also well settled that even if two views are possible, there is no scope for the Court to reappraise the evidence and take a different view from that taken by the arbitrator.

The jurisdiction of the Court under Section 34 of the Act is neither in the nature of an appellate remedy or akin to the power of revision – Center for Research Planning and Action Vs. National Medicinal Plants Board Ministry of Ayush Government of India – Delhi High Court Read Post »

Is imposition of an exorbitant interest in the background of contemporary commercial practices against the fundamental policy? – BPL Ltd. Vs. Morgan Securities & Credits Pvt. Ltd. – Delhi High Court

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Is imposition of an exorbitant interest in the background of contemporary commercial practices against the fundamental policy? – BPL Ltd. Vs. Morgan Securities & Credits Pvt. Ltd. – Delhi High Court Read Post »

Does the rejection of an application to set aside an award filed under Section 34 of the Arbitration and Conciliation Act, 1996, due to lack of jurisdiction, fall within the ambit of Section 37(1)(c)? | Can a petition under Section 11 for the constitution of an arbitral tribunal be recognised as an application made to a Court? – CP Rama Rao Sole Proprietor Vs. National Highways Authority of India – Delhi High Court

Hon’ble Delhi High Court held that the District Judge has taken the position that by virtue of the Section 11 petition having been preferred before this Court and the said circumstance being relevant for the purposes of Section 42, the petition for setting aside could have only been instituted before the High Court. That order clearly cannot be described to be a refusal to set aside an award on grounds which are specified and spoken of in Section 34(2) of the Act.

The Hon’ble Court further held that the District Judge has clearly taken an erroneous view in holding that a petition under Section 11 is one made to a court and which would consequently attract Section 42 of the Act.

Does the rejection of an application to set aside an award filed under Section 34 of the Arbitration and Conciliation Act, 1996, due to lack of jurisdiction, fall within the ambit of Section 37(1)(c)? | Can a petition under Section 11 for the constitution of an arbitral tribunal be recognised as an application made to a Court? – CP Rama Rao Sole Proprietor Vs. National Highways Authority of India – Delhi High Court Read Post »

Whether reassessment action under Section 148 of the Income Tax Act, 1961 can be initiated notwithstanding the Resolution Plan having been approved by the NCLT – Asian Colour Coated Ispat Ltd. Vs. Assistant Commissioner of Income Tax and Anr. – Delhi High Court

Hon’ble Delhi High Court (Division Bench) referring judgments in M Tech Developers (2024) ibclaw.in 289 HC, Sree Metaliks (2023) ibclaw.in 59 HC and Rishi Ganga Power Corporation (2023) ibclaw.in 1176 HC has quashed the impugned notice under Section 148 of the Income Tax Act, 1961 for A.Y. 2014-15.

Hon’ble High Court also clarified applicability of State Tax Officer v. Rainbow Papers Ltd. (2022) ibclaw.in 107 SC and Greater Noida Industrial Development Authority v. Prabhjit Singh Soni and Anr. (2024) ibclaw.in 53 SC on the facts of the case.

Whether reassessment action under Section 148 of the Income Tax Act, 1961 can be initiated notwithstanding the Resolution Plan having been approved by the NCLT – Asian Colour Coated Ispat Ltd. Vs. Assistant Commissioner of Income Tax and Anr. – Delhi High Court Read Post »

Any proceedings for assessment, reassessment or re-computation initiated in terms of the faceless assessment procedure under Section 144B of Income Tax Act, 1961, after approval of Resolution Plan is contrary to the Clean Slate theory under IBC – M Tech Developers Pvt. Ltd. Vs. National Faceless Assessment Centre, Delhi and Anr. – Delhi High Court

Hon’ble Delhi High Court held that:

(i) The Section 144B of the Income Tax, 1961 power entails proceedings for assessment, reassessment or re-computation being initiated in terms of the faceless procedure of assessment as prescribed therein. Any effort to assess, reassess or re-compute could tend to lean towards a re-computation of liabilities which otherwise stands freezed by virtue of the Resolution Plan having been approved. Such an action or recourse would clearly be barred by Section 31 of the IBC.
(ii) A Section 144B action is what the Supreme Court frowned upon and chose to describe as the “hydra head ” and thus being contrary to the clean slate principle which the IBC advocates.
(iii) Referring Dishnet Wireless Ltd. Vs. Assistant Commissioner of Income Tax (OSD) (2022) ibclaw.in 141 HC held that the IBC does not erect different levels of protection or insulation dependent upon whether corporate insolvency had been initiated voluntarily or on the basis of a petition referable to Section 7 of the IBC.
(iv) The Tax Authorities cannot sustain the invocation of Section 144B based on their own failure to lodge a claim within the time stipulated.

Any proceedings for assessment, reassessment or re-computation initiated in terms of the faceless assessment procedure under Section 144B of Income Tax Act, 1961, after approval of Resolution Plan is contrary to the Clean Slate theory under IBC – M Tech Developers Pvt. Ltd. Vs. National Faceless Assessment Centre, Delhi and Anr. – Delhi High Court Read Post »

Successful Resolution Applicant cannot be foisted with any liabilities other than those which are specified and factored in Resolution Plan and which may pertain to a period prior to Resolution Plan itself having been approved – Ireo Fiveriver Pvt. Ltd. Vs. Income Tax Department and Anr. – Delhi High Court

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Successful Resolution Applicant cannot be foisted with any liabilities other than those which are specified and factored in Resolution Plan and which may pertain to a period prior to Resolution Plan itself having been approved – Ireo Fiveriver Pvt. Ltd. Vs. Income Tax Department and Anr. – Delhi High Court Read Post »

Whether approval of Resolution Plan under IBC results in an extinguishment of a claim which was admitted for a notional amount of Re. 1 only because of arbitration was already invoked prior to admission of CIRP and Whether after approval of Resolution Plan, the claim can be said to be unenforceable in law and the dispute falls within the genre of non-arbitrability – Indian Oil Corporation Ltd. Vs. Arcelor Mittal Nippon Steel India Ltd. – Delhi High Court

In this case, IOCL invoked arbitration on 11.07.2017. On 02.08.2017 CIRP was initiated against Essar Steel. IOCL filed its claim. RP allotted Re. 1 as notional amount stating that the remaining claim amount is not admitted because of pending dispute with respect to this claim as the arbitration proceedings were initiated by IOCL. Post CIRP, IOCL filed this petition u/s 11 of the Arbitration Act.

Hon’ble High Court held that:

(i) The Successful Resolution Applicant is only bound to meet the claims as may have been accepted and ultimately form part of the approved Resolution Plan. This issue assumes seminal importance since the Successful Resolution Applicant cannot be left open to defend or oppose claims which are either not factored in the Resolution Plan nor can it be left to fend off actions that may be brought with respect to alleged or asserted dues of the Corporate Debtor which were not admitted.

(ii) Approval of the Resolution Plan clearly amounts to the extinguishment of all debts that were owed by the Corporate Debtor except to the extent as was admitted in the Resolution Plan. The IBC and the resolution process does not contemplate matters being left inchoate. In fact, and to the contrary it exhorts one to accept the seal of finality and quietitude which stands attached to the approval of a Resolution Plan.

(iii) Jurisdiction also bids High Courts to ensure that dead disputes are not revived and parties forced to undertake arbitration.

(iv) The Court while considering the issue of reference would refuse to do so only in situations where either the arbitration agreement is found to be non-existent, where the claim can ex facie be said to be unenforceable in law say for instance where it is barred by the statute of limitation or where the dispute of which reference is sought falls within the genre of non-arbitrability.

(v) A refusal to refer would be justified when there is not “even a vestige of doubt” with respect to non-arbitrability or where it is evident that the matter is “demonstrably non-arbitrable”.

(vi) A reference of the disputes as sought by the petitioner would clearly amount to a reopening of the Resolution Plan and which is clearly impermissible in light of the finality which was accorded by the decision of the Supreme Court in CoC of Essar Steel India Ltd. (2019) ibclaw.in 07 SC.

(vii) The petition fails and shall stand dismissed.

Whether approval of Resolution Plan under IBC results in an extinguishment of a claim which was admitted for a notional amount of Re. 1 only because of arbitration was already invoked prior to admission of CIRP and Whether after approval of Resolution Plan, the claim can be said to be unenforceable in law and the dispute falls within the genre of non-arbitrability – Indian Oil Corporation Ltd. Vs. Arcelor Mittal Nippon Steel India Ltd. – Delhi High Court Read Post »

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