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Delhi High Court: Quashes Complaint under Section 138 of NI Act Due to Lack of Prima Facie Evidence

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Delhi High Court: Quashes Complaint under Section 138 of NI Act Due to Lack of Prima Facie Evidence

Case title:  GARHWAL JEMS AND JEWELLERY PVT. LTD. & ORS. VS RMI STEELS LTD.

Case no.:  CRL.M.C. 2452/2022 & CRL.M.A. 10307/2022

Dated on: 29th February 2024

Quorum:  Hon’ble. MR JUSTICE NAVIN CHAWLA

FACTS OF THE CASE

This petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (in short, ‘Cr.P.C.’) read with Article 227 of the Constitution of India, praying for quashing of the complaint filed by respondent under Sections 138 read with Section 142 of the Negotiable Instruments Act, 1881 (in short, ‘NI Act’), being CC No. 5840/2019, titled as M/s RMI Steels Ltd. v. M/s Garhwal Jems & Jewellery Pvt. Ltd. & Ors., pending before the Court of the learned Metropolitan Magistrate, NI Act-06, Central-District, Tis Hazari Courts, Delhi. The above complaint has been filed by the respondent alleging that the respondent entered into an Agreement to Sell dated 31.03.2018 with the petitioner no.1 for sale of its movables and immovable property of its factory situated at Plot No. A-1 and B-1 measuring 32926.20 sq. mtr. (Comprising 24406.73 sq mtr. of A-l and 8519.47 sq. mtr of B-1) at Village Dhalwala, Muni-ki-Reti Industrial Area, District Tehri Garhwal, Uttarakhand, for a total consideration of Rs.9.30 crores. That in terms of the said Agreement to Sell, the petitioners, after paying sale consideration to the tune of Rs.5,73,64,050/-, were liable to pay the balance sale consideration of Rs.3,47,05,950/-, which they undertook to pay in form of discharge of liabilities / dues of the respondent on or before 30.09.2018. The complaint further alleges that it was agreed between the parties that on failure on the part of the accused to discharge the said dues, it would entitle the respondent to recover the same from the petitioners / accused. In order to secure the payment of the aforesaid dues, a cheque bearing no.079173 for a sum of Rs.75,00,000/- drawn on the Punjab National Bank, Rishikesh, was issued by the petitioner in favour of the respondent as a security deposit. It is further alleged that the debt that the petitioners had undertaken to discharge, became due and payable in October 2018, however, as the petitioners failed to discharge the same, on 09.01.2019, an Addendum to the aforementioned Agreement to Sell was executed between the parties. It is further alleged that as the accused failed to discharge the debt by 29.04.2019 as well, in terms of the Addendum, the respondent presented the above-mentioned cheque, which was returned dishonored by the bank with the remarks ‘funds insufficient’. A legal Notice dated 30.04.2019 was sent by the respondent to the petitioners, to which the petitioners replied vide reply dated 18.05.2019, denying their liability to pay the said amount. The respondent, therefore, filed the above complaint.

 ISSUES

  • Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), discloses a prima facie case against the petitioners.
  • Whether the cheque in question was issued for the discharge of any debt or liability as defined under Section 138 of the NI Act.
  • Whether the respondent was forced to make any payment to its creditors due to the petitioners’ failure to discharge their liabilities.
  • Whether the complaint should be quashed under the inherent powers of the High Court under Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.).
  • Whether the conditions specified in the Agreement to Sell and the Addendum for encashment of the security cheque were met.

LEGAL PROVISIONS

Code of Criminal Procedure, 1973 (Cr.P.C.)

Section 482: Saving of inherent powers of High Court

This section preserves the inherent powers of the High Court to make orders necessary to prevent the abuse of the process of any court or otherwise to secure the ends of justice. It is often invoked to quash criminal proceedings that do not disclose a prima facie case or are otherwise frivolous.

Constitution of India

Article 227: Power of superintendence over all courts by the High Court

This article grants every High Court the power of superintendence over all courts and tribunals within its jurisdiction. The High Court can exercise this power to ensure that subordinate courts function within the bounds of their authority and to correct any gross errors of law or fact.

Negotiable Instruments Act, 1881 (NI Act)

Section 138: This section makes it an offence if a cheque is dishonored due to insufficiency of funds or if the amount exceeds the arrangement made with the bank, provided certain conditions are met the cheque must be presented within six months (or its validity period). A notice demanding the payment must be issued to the drawer within 30 days of the receipt of information of dishonor. The drawer must fail to make the payment within 15 days of receiving the notice.

Section 142: Cognizance of offences This section outlines the conditions under which courts can take cognizance of offences under Section 138, including the necessity of a written complaint by the payee or the holder in due course of the dishonored cheque.

Section 139: Presumption in favour of holder This section presumes that the cheque was issued for the discharge, in whole or in part, of any debt or other liability unless the contrary is proved. This presumption shifts the burden of proof to the accused to show that there was no liability or debt.

CONTENTIONS OF THE APPELLANT

The learned counsel for the petitioner, drawing my attention to the terms of the Agreement to Sell dated 31.03.2018 and the Addendum dated 09.01.2019 executed between the petitioner no.1 and the respondent, submits that the cheque of Rs.75 lakhs could be encashed by the respondent only when the petitioners fail to make the payment in discharge of the liabilities of the respondent and the respondent is forced to make the payment for the same. The learned counsel for the petitioners submits that in the present case, the complaint does not state that the respondent had to make any payment to its own debtors for discharge of the liability, therefore, to its own showing, there was no debt owed by the petitioners to the respondent for which the security cheque of Rs.75 lakhs could have been presented by the respondent for encashment. He submits that, in the absence of these averments in the complaint, the complaint is not maintainable and is liable to be dismissed. In rejoinder, the learned counsel for the petitioner submits that the plea of the respondent that the lease deed has been obtained by misrepresentation is totally false and, in fact, it is the respondent who is trying to make an unjustified gain by encashing the cheque.

 CONTENTIONS OF THE RESPONDENTS

The learned counsel for the respondent submits that the plea raised by the petitioner is a disputed question of fact, which can be best determined by the learned Trial Court on evidence being led by the parties. She submits that the petitioners have also obtained a Lease Deed from SIDCUL based on misrepresentations.  Further submits that the Agreement to Sell and the Addendum were executed by the petitioners only to discharge its liabilities owed to such institutions and others, as is also recorded in the Agreement to Sell. She submits that the petitioners failed to make the payment of the dues to such institutions and others, thereby entitling the respondent to present the cheque for encashment. She submits that in any case, these are matters to be considered by the learned Trial Court and cannot be a ground for quashing the complaint at this stage.

COURT’S ANALYSIS AND JUDGEMENT

I have considered the submissions made by the learned counsels for the parties. A reading of the above averments would show that the respondent claims that the liability for which the cheque has been presented is under the Agreement to Sell dated 31.03.2018 read with the Addendum dated 09.01.2019, and that the cheque had been presented for encashment as the petitioners failed to discharge their debt by 29.03.2019. In the Complaint, there is no averment that the respondent had to pay the debt due to the default of the petitioners. A reading of the above terms/clauses would clearly show that it is only where the petitioners, as a purchaser, fail to pay the dues owed to the workers, the State Industrial Development Corporation of Uttarakhand Limited (SIDCUL), Service Tax dues, and the VAT dues, owed by the respondent, and the respondent, as a seller, has to pay the same, that the respondent would debit the account of the petitioner/purchaser, making the petitioner liable to pay the said amount, and thereafter proceed to encash the security cheque of Rs.75 lakhs. For the liability to arise for the presentation of the cheque for encashment, therefore, it is essential that the respondent is forced to make the payment to the workers/above-mentioned authorities, which liability, otherwise, the petitioners had undertaken to pay in terms of the Agreement to Sell and the Addendum. In the present case, the Complaint does not state that the respondent had to make any payment to any of the above-mentioned workers/authorities. Therefore, the liability for which the cheque of Rs.75 lakhs was given by the petitioners as security to the respondent, had not arisen and the cheque could not have been presented for encashment by the respondent. One of the conditions which has to be satisfied by the complainant for making out an offence under Section 138 of the NI Act against the drawer of the cheque, is that the cheque in question has been issued for the discharge, in whole or in part, of any debt or any liability of the accused. In the present case, as the debt or liability in terms of the Agreement to Sell and/or the Addendum itself had not arisen, Section 138 of the NI Act was not attracted and the ingredients of the offence were not satisfied. Though, the learned counsel for the respondent has placed reliance on Section 139 of the NI Act to submit that there shall be a presumption that a cheque issued is for discharge of any debt or other liability, however, the presumption in the present case stands negated by the very terms of the Agreement to Sell and the Addendum. Though the power under Section 482 of the Cr.P.C. is to be exercised sparingly and in the rarest of rare cases, at the same time, where, from a bare reading of the complaint, the offence is not made out, the power must be exercised to quash such a complaint. Applying the abovementioned principles enunciated by the Supreme Court to the facts of the present case, as the Complaint filed by the respondent lacks the necessary averments that would give rise to the debt and/or liability of the petitioners for which the cheque had been issued, the complaint filed by the respondent deserves to be quashed. Accordingly, the petition is allowed. Complaint, being CC No. 5840/2019, titled as M/s RMI Steels Ltd. v. M/s Garhwal Jems & Jewellery Pvt. Ltd. & Ors., pending before the Court of the learned Metropolitan Magistrate – 06, NI Act, Central District, Tis Hazari Courts, Delhi is hereby quashed. There shall be no order as to costs.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Judgement Reviewed by – HARIRAGHAVA JP

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Verizon Secures Permanent Injunction in Trademark Infringement Case Against VRIZON, Delhi High Court Rules  

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Verizon Secures Permanent Injunction in Trademark Infringement Case Against VRIZON, Delhi High Court Rules

 

Case title:  VERIZON TRADEMARK SERVICES LLC & ORS. VS VERIZON TRADEMARK SERVICES LLC & ORS.

Case no.:  CS(COMM) 407/2023 & I.A. 11201/2023

Dated on: 29th February 2024

Quorum:  Hon’ble. MR JUSTICE SANJEEV NARULA

FACTS OF THE CASE

The Plaintiff No. 1 (‘Verizon Trademark Services LLC’), an intellectual property holding company, is the proprietor of numerous trademarks consisting of/ incorporating the mark ‘VERIZON’. Plaintiff No. 1 granted exclusive licence to Plaintiff No. 2 (‘Verizon Licensing Company’) for use of the trademark ‘VERIZON’ as well as the ‘VERIZON’ logos. Plaintiff No.2 then further granted an exclusive sub-license to Plaintiff No. 3 (‘Verizon Communications India Private Ltd.’) in accordance with the terms of the license agreement entered into with Plaintiff No. 1. Plaintiffs are part of the Verizon group of companies, being among the world’s leading providers of, inter alia, communications, information technology and security products/ services. They own and operate one of the most expansive end-to-end global Internet Protocol networks serving more than 2,700 cities in over 150 countries worldwide, including India. Plaintiffs have coined and adopted the mark ‘VERIZON’, derived from the Latin word ‘Veritas’ (connoting certainty and reliability) and ‘Horizon’ (signifying forward looking and visionary), which is used as their trade name. Plaintiffs have filed the present suit for infringement and passing off in respect of their registered trademarks and logos – ‘VERIZON’, Plaintiffs have secured registrations in over 200 countries, with earliest registrations in India dating back to the year 2000. Details of Plaintiffs’ trademark registrations in India under various Classes have been set out at Paragraph No. 28 of the plaint. Plaintiff uses the VERIZON Trademarks for a wide range of products and services primarily in the telecommunications sector. The registrations also suggest that use of the VERIZON Trademarks is not limited to these areas, as the Plaintiffs continue to expand their services and products. Plaintiffs have been using the VERIZON Trademarks extensively, continuously and uninterruptedly since their adoption in and about the year 2000. Further, they have expended heavily towards advertisement and promotion of their goods/ services, details whereof have been delineated at Paragraph No. 16 of the plaint. Consequently, Plaintiffs have acquired substantial goodwill and reputation in their VERIZON Trademarks, which have become a source identifier solely and exclusively for the Plaintiffs’ goods and services. Plaintiffs are aggrieved by the Defendants’ dishonest adoption of the mark/ brand name ‘VRIZON’ [“Impugned Mark”], used in respect of inter alia various household and kitchenware goods. Pursuant to finding Defendants’ trademark application No. 4300781 for registration of the Impugned Mark on a ‘Proposed to be Used’ basis, Plaintiffs issued several cease-and-desist notices, however, no response was received despite attempts to follow up. In such circumstances, the Plaintiffs approached this Court asserting that the Impugned Mark is deceptively similar to their VERIZON Trademarks, thereby amounting to infringement under Section 29(4) of the Trade Marks Act, 1999 [“Act”].

 ISSUES

  • Whether the Plaintiffs’ “VERIZON” trademarks qualify as well-known trademarks under Section 2(1) (zg) and Section 11(6) of the Trade Marks Act, 1999?
  • Whether the Plaintiffs’ “VERIZON” trademarks qualify as well-known trademarks under Section 2(1) (zg) and Section 11(6) of the Trade Marks Act, 1999?

LEGAL PROVISIONS

Section 2(1) (zg) of the Trade Marks Act, 1999:

This section defines a well-known trademark as a mark that has become widely known to the relevant section of the public. This section is relevant in determining the reputation and recognition of the ‘VERIZON’ trademark in India.

Section 11(6) of the Trade Marks Act, 1999:

 It lists the factors that must be considered to decide whether a mark is well-known. These include knowledge of the trademark in relevant public sectors, the duration and geographical area of use, the extent of promotion, and the registration status of the trademark in various jurisdictions.

Section 29(4) of the Trade Marks Act, 1999:

This section deals with the infringement of trademarks that are well-known in India, regardless of whether the infringing mark is used for goods or services not similar to those for which the trademark is registered. Are identical with or similar to the registered trademark. Have no due cause. Take unfair advantage of or are detrimental to the distinctive character or repute of the registered trademark.

Order VIII Rule 10 of the Code of Civil Procedure, 1908:

Procedure when a Defendant Fails to File Written Statement: This provision allows the court to pronounce judgment against a defendant who fails to file a written statement within the prescribed time, allowing for ex-parte decisions when defendants do not respond to summons.

Order XIII-A of the Code of Civil Procedure, 1908:

This order permits courts to pass summary judgments without requiring a full trial if it finds that the defendant has no real prospect of defending the claim. This can expedite the resolution of cases with clear-cut issues.

Rule 27 of the Delhi High Court Intellectual Property Rights Division Rules, 2022:

Ex-Parte Proceedings and Remedies: This rule guides the court on handling intellectual property cases, including granting injunctions and other remedies, especially when proceedings are ex-parte due to the absence of the defendants.

CONTENTIONS OF THE APPELLANT

Ms. Vaishali Mittal, counsel for Plaintiffs, presses for an ex-parte summary decree in terms of Order VIII Rule 10 read with Order XIII-A of the Code of Civil Procedure, 1908 (CPC). In light of the above, the Court has proceeded to adjudicate the present matter by assessing the Plaintiffs’ case for infringement under Section 29(4) of the Act on the basis of the pleadings and documents on record. Plaintiffs have, through documents, established their ownership over the VERIZON Trademarks, which have been registered under various classes and such registrations continue to be valid and subsisting. Moreover, Ms. Mittal has pointed out that during the course of the present proceedings, a coordinate Bench of this Court, in Verizon Trademark Services LLC & Ors. and Vikash Kumar1, has held the mark ‘VERIZON’ to be a well-known trade mark within the meaning of Section 2(1) (zg) read with Section 11(6) of the Act. Considering the above, and given their significant revenue and marketing expenditure as noted above, Plaintiffs have established their substantial goodwill and reputation in the VERIZON Trademarks. Defendants do not have any registration in respect of the Impugned Mark. In fact, their trademark application No. 4300781, against which opposition was filed by the Plaintiffs, has since been abandoned, and is reflected as such on the Trademark Registry website. Further, Defendants have not received any authorization from the Plaintiffs for their adoption of the Impugned Mark to qualify as ‘permitted use’ in the course of trade. The Defendants’ trademark application seeks registration for ‘VRIZON’ under Class 21, which encompasses household and kitchenware items — a category distinctly separates from the Plaintiffs’ array of goods and services which primarily include communications, information technology, and security solutions. Moreover, the Defendants filed their application in the year 2019 on a ‘Proposed to be Used’ basis. Contrastingly, the Plaintiffs have shown that they have extensively and continuously utilized the VERIZON Trademarks since their inception in the year 2000, thereby affirming their status as the prior user of the mark. Plaintiffs have thus unequivocally established through their pleadings and documentary evidence that the present case meets all the criteria for infringement as outlined in Section 29(4) of the Act The “Identity or Similarity” criterion is conclusively satisfied, owing to the phonetic and visual similarities between Defendants’ Impugned Mark “VRIZON” and the Plaintiffs’ VERIZON Trademarks. The Defendants’ deployment of the Impugned Mark in course of trade, specifically targeting household and kitchenware under Class 21, substantiates the “Use of the Mark” requirement. This application distinctly diverges from the Plaintiffs’ focus on telecommunications and IT services, thus fulfilling the “Goods or Services Not Similar” criterion. 12.3. Moreover, the Defendants’ choice of the ‘VRIZON’ mark, devoid of any justifiable cause shown to the Court, is clearly an attempt to capitalize on the Plaintiffs’ well-established mark and take unfair advantage of the same.

CONTENTIONS OF THE RESPONDENTS

No Appearance Defendants did not appear or file a written statement despite being served with summons, leading to ex-parte proceedings. Trademark Abandonment The defendants’ application for the ‘VRIZON’ trademark was abandoned and listed as such on the Trademark Registry website.

COURT’S ANALYSIS AND JUDGEMENT

In view of the striking similarity between the competing marks, the Defendants’ use of ‘VRIZON’ is bound to mislead the public, thereby diluting the distinctive character and reputation of the Plaintiffs’ registered VERIZON Trademarks. Thus, Defendants’ adoption and use of ‘VRIZON’ also meets the “Unfair Advantage or Detriment” criterion. Plaintiffs have also thoroughly substantiated the reputation of the VERIZON Trademarks in India through their annual reports evidencing revenue generated and promotional expenses. Further, this Court has also affirmed the well-known status of the ‘VERIZON’ mark, reinforcing its significance and protection under the law. In light of the above, the Defendants’ intended use of the Impugned Mark ‘VRIZON’ for products unrelated to those associated with the VERIZON Trademarks renders them liable for infringement claims under Section 29(4) of the Act. Thus, the instant suit is liable to be decreed in favour of the Plaintiffs as per Order VIII Rule 10 read with Order XIII-A of the CPC, as applicable to commercial suits, and Rule 27 of the Delhi High Court Intellectual Property Rights Division Rules, 2022. Although Plaintiffs have also sought damages and legal costs in terms of prayers sought at Paragraphs No. 78 (v) and (vi) of the plaint, the Court does not find any reason to grant the same, in view of the fact that the Defendants’ now abandoned trademark application was filed on a ‘Proposed to be Used’ basis, and no evidence of actual use of the Impugned Mark has been placed on record other than a few screenshots of listings on third party e-commerce websites. The prayer for declaration of the VERIZON Trademarks as ‘well-known’ marks is also not being considered by the Court in the present case, given that an ex-parte decree is being passed with no contest by the Defendants. As regards the remaining prayers, Ms. Mittal states that the same are not being pressed in the present proceedings. Accordingly, a decree of permanent injunction is granted in favour of the Plaintiffs and against the Defendants in terms of the prayer sought at Paragraph No. 78(i) of the plaint. The present suit, along with pending applications, is disposed of.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Judgement Reviewed by – HARIRAGHAVA JP

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Delhi High Court Affirms Tribunal’s Decision, stating that the Arbitral Tribunal’s discretion was exercised appropriately and not arbitrarily.

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Delhi High Court Affirms Tribunal’s Decision, stating that the Arbitral Tribunal’s discretion was exercised appropriately and not arbitrarily.

 

Case title:  ROADWAY SOLUTIONS INDIA INFRA LIMITED VS NATIONAL HIGHWAY AUTHORITY OF INDIA

Case no.: ARB. A. (COMM.) 18/2024 & I.A. 7167/2024, I.A. 7168/2024, I.A. 7169/2024

Dated on: 28th May 2024

Quorum:  Hon’ble. MR JUSTICE ANUP JAIRAM BHAMBHANI

FACTS OF THE CASE

The present appeal filed under section 37(2)(b) of the Arbitration & Conciliation Act 1996 (“A&C Act‟), the appellant (claimant in the arbitral proceedings) impugns order dated 27.03.2024 made by a 03-Member Arbitral Tribunal, on an application under section 17 of the A&C Act seeking certain interim reliefs. As perusal of the impugned order shows that the learned Tribunal has dealt with the matter in considerable detail and has addressed all three principal prayers made in the application individually. The learned Tribunal has dealt with each of the reliefs sought in the section 17 application in the following way Insofar as the relief of injuncting the respondent from proceeding with the fresh RFPs and NITs is concerned, the learned Tribunal has held that that relief had become infructuous since the respondent has already gone ahead and awarded the contract to a third-party, and the validity of termination of the appellants contract is required to be decided in the main proceedings. The learned Tribunal has then proceeded to decide the interim prayer against threat of the appellant being disqualified from participating in future RFPs/NITs. In this behalf, suffice it to say, the learned Tribunal has held in favour of the appellant, and after a fairly detailed discussion, has come to the conclusion that the appellant satisfies all three tests, viz. of making-out a prima-facie case, of satisfying the learned Tribunal that balance of convenience lies in the appellants favour, and also that irreparable loss and injury would be suffered by the appellant as a consequence. Accordingly, the learned Tribunal has held in favour of the appellant, granting a limited interim protective order as to the appellants entitlement to participate in future tenders that may be issued by the respondent. Thereafter, the learned Tribunal goes-on to consider the statements filed by each of the parties, in relation to the value of the work completed by the appellant, as indicated in certain Interim Payment Certificates. The learned Tribunal observes that there is huge variation between the amount claimed by the appellant to be due and the amount that the respondent says is payable.

 ISSUES

  1. Whether the Arbitral Tribunal’s order dated 27.03.2024, concerning the application for interim relief under section 17 of the A&C Act, warrants interference by the court under the limited scope of section 37 of the A&C Act.

LEGAL PROVISIONS

Arbitration and Conciliation Act, 1996

Section 17: This section empowers an Arbitral Tribunal to order interim measures of protection as it deems necessary at the request of a party. This includes ordering a party to provide a deposit for the costs of arbitration or granting interim relief similar to those that courts can grant.

Section 37(2)(b): This section provides for appeals against orders of an Arbitral Tribunal granting or refusing to grant interim measures under Section 17. The scope of judicial intervention under this section is limited to ensure that the Tribunal’s discretion is not unduly interfered with unless it is shown to be arbitrary, capricious, irrational, or perverse.

CONTENTIONS OF THE APPELLANT

Mr. Arvind Nayar, learned senior counsel appearing for the appellant Mr. Arvind Nayar, learned senior counsel appearing for the appellant further argues, that as the record would show, in the proceedings filed for interim relief in this court, both the Co-ordinate Bench as well as the Division Bench, were pleased to hold in favour of the appellant and had restrained encashment of the bank guarantees, which position has now been reversed by the learned Tribunal. Mr. Nayar also points-out that the learned Tribunal has given no reasons for its conclusion, permitting invocation of the bank guarantees. Senior counsel argues that once the learned Tribunal had applied the triple-test and held in favour of the appellant in relation to other reliefs, the relief against invocation of the bank guarantees was in fact, a consequential relief, which ought to have followed.

CONTENTIONS OF THE RESPONDENTS

Mr. Ankur Mittal, learned counsel is present on behalf of the respondent on advance copy; but has not been called-upon to address the court. Upon a careful consideration of the submissions made by Mr. Nayar, this court is of the opinion that the learned Tribunal was in no way bound by the interim orders granted by the Co-ordinate Bench or by the Division Bench of this court in the various proceedings referred to above. In fact, concededly the Division Bench had extended the interim order restraining the invocation of bank guarantees only till the first sitting of the learned Arbitral Tribunal. That order was however continued by the learned Tribunal till the final decision on the section 17 application. In the meantime, the very constitution of the learned Tribunal also came to be changed; during which period also the invocation of the bank guarantees remained stayed. The interim order passed by the Division Bench had therefore long outlived its intent and purpose.

COURT’S ANALYSIS AND JUDGEMENT

As observed above, all three reliefs sought by way of the section 17 application have been considered in detail by the learned Arbitral Tribunal, and after due consideration and reasoning, the learned Tribunal has held that insofar as staying the effect of the termination notice is concerned, that relief has been rendered infructuous, since in the meantime not only did the contract stand terminated, but fresh NITs and RFPs had been issued and a fresh contract had been awarded to a third-party. That being said, the learned Tribunal has observed that the validity of the termination would, of-course, be considered on its merits in the course of the arbitral proceedings. Insofar as the other relief of debarring the appellant from participating in future tenders is concerned, the learned Tribunal has held in favour of the appellant, thereby granting interim protection and assuring the appellants entitlement to participate in future tenders. However, as far as invocation of the bank guarantees is concerned, after giving due consideration to the value of the work claimed to be completed by the appellant; and the respondents version thereon, the learned Tribunal has come to the conclusion that, at the interim stage, there is no basis to injunct invocation of the bank guarantees. The discussion in the impugned order would also show that the appellant had failed to even allege a case of „fraud‟; and had also failed to make-out a case of „special equities‟ in its favour that would warrant restraining invocation of the bank guarantees. It is also needs no detailed articulation, that interference by court under section 37(2)(b) of the A&C Act is warranted only in exceptional circumstances, when the court finds that the use of the discretionary power under section 17 of the A&C Act by an Arbitral Tribunal is palpably arbitrary, capricious, irrational or perverse. This Bench has itself so held in India bulls Housing Finance Ltd. & Anr. vs. Shipra Estate Ltd. and connected matters, while explaining the scope of interference by court under section 37 of the A&C Act. In the circumstances of the present case, this court is of the view that no ground is made-out for interfering with order dated 27.03.2024 passed by the learned Arbitral Tribunal on the application under section 17 of the A&C Act, within the limited ambit and scope of the jurisdiction of this court under section 37 of the A&C Act. The appeal is accordingly dismissed in-limine without however any order as to cost. Pending applications, if any, also disposed-of.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Judgement Reviewed by – HARIRAGHAVA JP

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The Delhi High Court Exposes Collusion: Orders Execution of Property Decree, Penalizes Perjury

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Case Title – Paresh Dandona Vs. Sukruti Dugal & Ors.
Case Number – FAO (OS) 35/2023 & CM APPL. 11617/2023
Dated on – 22nd May, 2024
Quorum – Hon’ble The Acting Chief Justice and Justice Manmeet Pritam Singh Arora

FACTS OF THE CASE
The case of Paresh Dandona Vs. Sukruti Dugal & Ors., involves a dispute over the properties owned by Late Mr. S.N. Dandona and Mrs. Shyam Kumari Dandona, especially the Vasant Vihar Property (Jointly owned by the parents) and the Kailash Hills Property (Exclusively owned by the father). After the demise of the parents, the Appellant (Son) filed a partition suit in 2010. An interim injunction was issued, restraining the respondents from transferring or creating third party rights in the properties. Eventually, a consent decree was passed in the year 2015 stating the share of the Appellant as the basement and ground floor of the Vasant Vihar Property whereas the share of the Respondent No. 2 as the first floor, second floor, and the terrace of the Vasant Vihar Property, and the entire Kailash Hills Property. The Respondent No. 2 agreed to purchase the portion of the Appellant for INR 34.5 Crores within 3.5 years and to pay license fee of INR 4 Lacs per month for interim possession. The Respondent No. 2 failed to make the payment, leading the Appellant to file an execution petition in 2018, resulting in the court issuing the warrants of possession. Subsequently, Respondent No. 1 (Daughter of the Respondent No. 2) instituted another suit claiming the properties were part of a Hindu Undivided Family (HUF), seeking a partition and alleging suppression of the consent decree. An ex-parte interim order was issued, maintaining the status quo.

ISSUES
The main issue of the case whirled around whether the consent decree of 2015, partitioning the properties, is valid and enforceable?
Whether the Respondent No. 2 and the Respondent No. 1 supressed the material facts and made false statements to the court?
Whether the Respondent No. 2 should vacate the portion of the Appellant and pay the agreed license fee?
Whether the suit instituted filed by the Respondent No. 1 is collusive and an abuse of the court process?
Whether the interim order dated 21st December, 2018 should be vacated?

LEGAL PROVISIONS

Order VI Rule 15 of the Code of Civil Procedure, 1908 prescribes the Verification of pleadings
Order XLIII Rule 1(r) of the Code of Civil Procedure, 1908 prescribes the Appeal from Orders
Order XLIII Rule 3 of the Code of Civil Procedure, 1908 prescribes the Form of Appeals
Order XXXIX Rule 1 of the Code of Civil Procedure, 1908 prescribes the Cases in which temporary injunction may be granted
Order XXXIX Rule 2 of the Code of Civil Procedure, 1908 prescribes the Injunction to restrain repetition or continuance of breach
Order XXXIX Rule 4 of the Code of Civil Procedure, 1908 prescribes the Order for injunction may be discharged, varied or set aside
Section 10 of the Delhi High Court Act, 1966 prescribes the Powers of the Judges of the High Court of Delhi
Section 2(c) of the Contempt of Courts Act, 1971 prescribes the Definition of Civil Contempt
Section 12 of the Contempt of Courts Act, 1971 prescribes the Cognizance of criminal contempt in other cases
Section 19(2) of the Hindu Marriage Act, 1955 prescribes the Actual place of the residence and not a legal or constructing residence
Section 191 of the Indian Penal Code, 1860 prescribes the Definition for giving false evidence
Section 193 of the Indian Penal Code, 1860 prescribes the Punishment for False evidence
Article 32 of the Constitution of India prescribes the Remedies for enforcement of rights conferred by this Part
Article 226 of the Constitution of India prescribes the Power of High Courts to issue certain writs

CONTENTIONS OF THE APPELLANT

The Appellant, through their counsel, in the said case contented that the consent decree was reached after detailed deliberations and should be upheld and that the Respondent No. 2 had agreed to its terms but failed to comply with the same.
The Respondent No. 2 failed to purchase the portion of the Appellant within the agreed period and did not pay the license fee and thus, the Appellant sought execution of the decree.
The Appellants asserted that the Respondent No. 1 and the Respondent No. 2 suppressed the existence of the consent decree and misled the court to obtain an ex-parte order and that the affidavits of the Respondent No. 2, are contradictory, showing falsehoods and violations of interim orders.
The suit instituted by the Respondent No. 1 is alleged to be collusive, intending to obstruct the execution of the consent decree and deny the Appellant his rightful share.
The Appellant seeks to vacate the interim order that prevents the execution of the warrants of possession.

 CONTENTIONS OF THE RESPONDENT
The Respondent, through their counsel, in the said case contented that the status-quo order does not benefit her rather supports the vacation of the interim order and that the Respondent No. 2 estranged from Respondent No. 1 as well as opposes the suit instituted by her, asserting it as frivolous and not maintainable to which the Respondent No. 2 admits the validity of the consent decree and acknowledges her obligation under it but states she is financially unable to pay the license fee or vacate the property.
The Respondent No. 1 agrees to vacate the interim order requests the court to secure the potential 1/6th share in the estate of her grandfather and that the Respondent No. 1 admits to the incorrect statements regarding her possession of the Vasant Vihar Property and acknowledges residing at her matrimonial home. While agreeing to vacate the interim order, the Respondent No. 1 seeks protection for her share of the estate inherited by the Respondent No. 2.

COURT ANALYSIS AND JUDGMENT
The court in the case of Paresh Dandona Vs. Sukruti Dugal & Ors., noticed that the claim of possession of the Vasant Vihar Property by the Respondent No. 1 were falsified by affidavits from the Respondent No. 2 and Respondent No. 3, revealing the property had been sold in the year 2012. The court stated that the inconsistency between the claims of the Respondent No. 1 in the unamended and amended plaint and the affidavits of other Respondents constituted perjury. The judgment dated 9th January,2023 was set aside, and the ad-interim order dated 21st December 2018 was vacated. The Appellant was permitted to proceed with the execution of the proceedings to recover possession of his portion as per the consent decree, with a restriction on creating third-party rights during the pendency of the suit. The court directed the Respondent No. 2 to disclose and deposit 2/3rd of the sale consideration received from the sake of the first and the second floors of the Vasant Vihar property and the Kailash Hills Property, with interest, to secure the interests of the Respondent No. 1 and the Respondent No. 3. Given the abuse of the legal process and the collusion between Respondent No. 1 to Respondent No. 3 to obstruct the execution of the consent decree, the court initiated Suo moto criminal contempt proceedings against them. The court emphasized the importance of truthful affidavits, referencing the stance of the Supreme Court on preserving the integrity of legal affidavits and the responsibility placed on individuals verifying pleadings. The false verifications of pleadings are punishable under Sections 191 and 193 of the Indian penal Code, 1860, and the actions of the Respondent No. 1 met the criteria for contempt due to false assertions in her pleadings and affidavits. The Appeal was allowed.
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Judgement Reviewed by – Sruti Sikha Maharana
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The Delhi High Court Invalidates Jamia Millia Islamia’s Officiating VC Appointment: Cited Reason as Initial Flawed Appointment Process

Blog, Delhi High Court ,

Case Title – MD Shami Ahmad Ansari & Anr, Vs. Jamia Millia Islamia & Ors.
Case Number – W.P. (C) 15161/2023
Dated on – 22nd May, 2024
Quorum – Justice Tushar Rao Gedela

FACTS OF THE CASE
In the case of MD Shami Ahmad Ansari & Anr, Vs. Jamia Millia Islamia & Ors. the Vice Chancellor (VC) of Jamia Milia Islamia University appointed Prof. Eqbal Hussain as the Pro Vice Chancellor (PVC) on the 14th of September, 2023 in accordance with the relevant statutes of the university. A notification was issued the following day, confirming Hussain’s assumptions of the PVC role. Later, an office was issued on the 26th September, 2023, stating that if the office of the VC became vacant or the VC was unable to perform the duties, Hussain would act as the Officiating VC until a new VC was appointed or the existing one resumed duty. During a period when the VC was abroad from the 27th of September to 8th October, 2023, Hussain served as the Officiating VC as per university statutes. On the 3rd of November, 2023, the Ministry of Education was informed by the VC about handling over the charge of the VC to Hussain upon the VC’s superannuation on the 12th of November,2023. Subsequently, an officer order was issued on the same date, officially transferring the charge of Officiating VC to Hussain. Aggrieved by these actions, the Appellant instituted a petition challenging the appointments as PVC and later as Officiating VC, alleging violations of university statues, ordinances, the JMI Act, and non-compliance with the UGC Regulations of 2018. They sought a writ of Quo Warranto from the court.

ISSUES
The main issue of the case whirled around whether the appointment of the Respondent No. 2 as PVC and subsequently as Officiating VC was made in accordance with the provisions of the JMI Act, Statutes, and UGC regulations?
Whether the continuation of the Respondent No. 2 as the officiating VC after the term of the previous VC ended was unlawful, considering the co-terminus nature of the tenure of the PVC with that of the VC?
Whether the Appellant have standing to challenge the appointments and whether they exhausted alternative remedies available under the law?

LEGAL PROVISIONS
Section 8 of the Statutes of Jamia Millia Islamia Act, 1988 prescribes that The President of India shall be the Visitor of the University
Section 11(3) of the Statutes of Jamia Millia Islamia Act, 1988 prescribes that The Shaikh-ul-Jamia (Vice-Chancellor) may, if he is of opinion that immediate action is necessary on any matter, exercise any power conferred on any authority of the University by or under this Act and shall report to such authority the action taken by him on such matter

CONTENTIONS OF THE APPELLANT
The Appellant, through their counsel, in the said case contented that the appointment of the Respondent No. 2 (the officiating VC) was made in the violation of the JMI Act, Statutes, and UGC Regulations and that the emergent powers under Section 11(3) were wrongly invoked, and the appointment did not follow the correct procedure outlined in the Statutes.
The Appellant contends that the appointment of Respondent No. 2 as PVC and subsequently as officiating VC was not in accordance with past practices and was an attempt to circumvent the established procedures for appointment and that the tenure of the PVC is co-terminus with that of the VC, and therefore, Respondent No. 2 continuation as Officiating VC after the term of the VC ended was illegal.
Further, it was asserted that the provisions of the Statute 2(6) were misinterpreted to justify the appointment of the Respondent No. 2, and the exercise of powers under Section 11(3) was not justified by any emergent situation and that the appointment contravened Regulation 7.0 of the UGC Regulations, which govern appointments to the post of PVC and VC.

 CONTENTIONS OF THE RESPONDENT
The Respondent, through their counsel, in the said case contented that appointment of the Respondent No. 2 was made in compliance with the relevant provisions of the JMI Act and Statutes. They contend that the VC had the authority to make such appointments under Section 11(3) in emergent situations. The Respondents justify the exercise of powers by the VC under Section 11(3) and assert that the appointment of the Respondent No. 2 as PVC and later Officiating VC was necessary to ensure the smooth functioning of the University.
The Respondent questioned the maintainability of the petition, arguing that the petitioners did not raise objections at the appropriate time, and the petition lacks merit and that the provisions of Statute 2(6) and second proviso to Statute 4(2) allow for the continuation of Respondent No. 2 as Officiating VC until a new VC assumes office.
It was asserted that there is no repugnancy between the University’s Statues and the UGC Regulations, and the appointment of Respondent No. 2 was in line with both sets of regulations.

COURT ANALYSIS AND JUDGMENT
The court in the case of MD Shami Ahmad Ansari & Anr, Vs. Jamia Millia Islamia & Ors. meticulously analysed the provisions of the JMI Act, 1988, along with the Statutes framed thereunder and the UGC Regulations, 2018. Concerning the appointment of the Respondent as PVC and subsequently as Officiating VC, the court discovered that the procedure outlined in the Statutes were not followed. The Court emphasized that the appointment of the respondent as PVC violated Statute 4, as there was no approval from the Executive Council (EC) as required. Additionally, the subsequent appointment of the respondent as officiating VC was deemed invalid due to the initial flawed appointment process. The court also emphasized that the appointment of the respondent as PVC violated Statute 4, as there was no approval from the Executive Council (EC) as required. Moreover, the subsequent appointment of the respondent as officiating VC was deemed invalid due to the initial flawed appointment process. The court scrutinized the invocation of Section 11(3) of the JMI Act, which grants emergency powers to the VC. The court concluded that such powers should only be exercised in extraordinary situations, which were not evident in this case. The court, in this case, emphasized that the appointment of the respondent as PVC violated Statute 4, as there was no approval from the Executive Council (EC) as required. Additionally, the subsequent appointment of the respondent as officiating VC was deemed invalid due to the initial flawed appointment process.
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Judgement Reviewed by – Sruti Sikha Maharana
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