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Interim relief cannot be seeked for an International Arbitration Case: SC

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Case title: Ilwohnibrand Co. Ltd. V. Mahakali Food Pvt.Ltd and Ors.

Case no: Arbitration case No.of 2023

Dated on: 3rd April, 2024

Quorum: Hon’ble Justice Sushrut Arvind Dharmadikhari  and Hon’ble Shri Justice Devnarayan Mishra

Facts of the Case:

The petitioner had business relationship with the respondent no.1 to 3. A sale contract was entered into between the petitioner and the respondents on 18.09.2019 for supply of 2014 MT ‘ Full-Fat Soya Grits’. However, respondents committed a breach of contract wherein there was neither the quantity supplied according to the contract nor the quality. Even for the sub-standard material supplied by the respondent, the authorities conducted raid and sealed the premises of the petitioner. Petitioner notified the respondent about the breach. Respondent though admitted the supply of substandard quality under the contract and promised to compensate the petitioner but no such compensation was ever paid. Another contract was entered into between the petitioner and the respondent wherein respondent insisted for enhanced rate and issued proforma invoice and payment was duly made by the petitioner. However, respondent again committed breach of contract by not supplying the material as per the timeline mandated in the contract and in fact only supplied goods worth $1,42,500 despite receiving advance payment of $375,000 and thereafter respondent did not make any supply and stopped answering the calls. Again, with malicious intent, respondents communicated that it shall pay the balance amount to the petitioner, but no heed has been paid. Efforts to resolve the dispute failed since the respondent did not want to and stopped making communication with the petitioner. Since, the contract between parties provides for resolution of dispute by way of arbitration to be conducted in India, the petitioner filed petition under the Section 9 (1)(i) of the Conciliation Act of 1996 before the Commercial Court which was dismissed for want of jurisdiction with liberty to the petitioner to approach appropriate forum. Hence, the present petition had been filed. Shri Aniket Naik, appointed as Amicus Curiae submitted that petitioner has already approached the Commercial Court under Section 9 of the Act of 1996 seeking interim protection. However, learned Commercial Court dismissed the application filed by the petitioner holding the same as not maintainable for want of jurisdiction as the matter pertains to international commercial arbitration and not domestic arbitration.

Contentions of the Appellant:

Learned counsel for the petitioner submitted that evidence of breach committed by the respondent are available and, therefore, an order of interim protection securing the amount involved in the arbitration is required to be passed since despite sending several reminders, respondent kept making false promises, but neither exported the balance shipment nor compensate for the delivery of sub-standard quality of products thereby putting the petitioner to suffer irreparable loss. In terms of section 2(e) and (f) of the act of 1996, the petition can by heard by this court being the jurisdictional court and the present arbitration being an international commercial arbitration. In an identical situation the apex court , in S.D. Containers V. Mold Tek Packaging Ltd., had remanded the case to the court to be tried under its original civil jurisdiction where the court held that while invoking its powers under clause (9) of the letter patent read with rule 1(8) of chapter IV of the rules of the exercise its extra ordinary civil jurisdiction. Hence, the petition which is made under Section9 of the Act 1996 is exclusively triable by this court, therefore, the present petition to be deleted from the category of  the arbitration case and be listed under  the relevant category before appropriate single bench.

Contentions of the Amicus Curiae:

Petitioner has already approached the commercial court under Section 9 of the Act of 1996 seeking interim protection. But the court dismissed saying that the same is not maintainable as it pertains to international arbitration. Thereafter,

Petitioner has preferred the present application under section 9 (2)(1)(f) of the act of 1996 which is not maintainable in the view the fact that as per the Chapter 2 Rule 3 of Rules, 2008 an application under section 11 of the act of 1996 shall be registered as arbitration case which deals with the appointment of the arbitrator.  Court to sub-rule 8 Rule 10 Chapter 2, of the High Court rules 2008 which says that these cases can be considered as a  Miscellaneous Civil Case and also to be registered as a Miscellaneous Civil Case if they do not fall under the ambit of the first seven clauses which is not interlocutory to any proceedings. It is submitted that petitioner can very well file Miscellaneous Civil Case in terms of sub-rule 8 of Rule 10 of Chapter 2 of Rules of 2008, which can be entertained and appropriate orders can be passed.

Legal Provisions:

Section 9 of the Arbitration and Conciliation Act-  Seeking interim reliefs before, or during the arbitral proceedings, or at any time after the passing of the award but before it is enforced.

Section 11 of the Arbitration and Conciliation Act- Appointment of the arbitrator.

Sub-rule 8 of Rule 10 of Chapter 2 of the High Court of Madhya Pradesh rules of 2008- Filing miscellaneous civil cases.

Issues:

Whether the petitioner is entitled to seek interim measure of protection and securing the amount involved in the arbitration   under section 9 of Arbitration act 1996 and section 10 of the commercial courts act,2015?

Courts Judgement and Analysis:-

The present petition itself is not maintainable on twin grounds:

(i) Firstly , the petitioner resorting to the liberty granted by the Commercial Court has filed present petition under Section 9 r/W Section 2(1)(f) of the Act of 1996 seeking interim protection before this Court which cannot be entertained by this Court.

(ii) Secondly, as rightly pointed out by Amicus Curiae, in terms of Chapter 2 Rule 3 of the Rules of 2008, an application Section 11 of the Act of 1996 shall be registered as an arbitration case which deals with appointment of Arbitrator which is not the case herein.

In the considered opinion of this Court, looking to the nature of case and the relief as sought for by the petitioner, the same does not fall within the category of an Arbitration Case. Rather the same ought to have been filed as a Miscellaneous Civil case falling within the ambit and scope of any other application of civil nature, not falling under any of the specified categories in terms of sub-rule 8 of Rule 10 of Chapter 2 of Rules of 2008. In view of the above   discussion, its hereby rejected. Accordingly, the present petition is hereby dismissed with liberty to the petitioner to file miscellaneous civil case in terms of sub-rule 8 of Rules of 2008.

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Judgement Reviewed By- Parvathy P.V.

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Supreme Court: Moving the High Court’s jurisdiction to seek release of seized vehicles without engaging the magistrate deemed inappropriate.

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Case title: Khengarbhai Lakhabhai Dambhala v. The State of Gujarat

Case no.: Criminal Appeal No.1547 Of 2024

Order on: 8th April 2024

Quorum: Justice Bela M. Trivedi and Justice Pankaj Mithal

FACTS OF THE CASE

In this case, the appellant claimed ownership of a vehicle, an Eicher 10.80 (Blue) bearing no. GJ 05-BT-0899, which was seized by police as Muddamal Article in connection with FIR no. 11200038231465/2023. The FIR was lodged under various sections of the Gujarat Prohibition Act and IPC at the Pardi Police Station, District Valasad. The police intercepted the vehicle based on secret information and alleged that it was carrying English Liquor (1240.200 Liters) worth rupees 7 lakhs without any pass or permit. The appellant, claiming to be the owner, filed a Special Criminal Application No.6465 of 2023 before the High Court of Gujarat at Ahmedabad seeking release of the seized vehicle. However, the High Court dismissed the application through an order dated 08.06.2023, leading to the present appeal.

CONTENTIONS OF THE APPELLANT

The appellant contended that the vehicle should be released, claiming ownership, without approaching the concerned criminal court under Section 451 of the Cr.P.C. Instead, they filed a Special Criminal Application directly in the High Court under Article 226/227 of the Constitution of India.

CONTENTIONS OF THE RESPONDENTS

The State of Gujarat, represented as the respondent, contended that Section 98(2) of the Gujarat Prohibition Act 1949 forbids the release of the vehicle until the final judgment of the court if the quantity of seized liquor exceeds the prescribed limit.

In this case, the seized quantity of liquor was 1240 liters, far exceeding the prescribed quantity of 20 liters as per the relevant notification.

In case of Sunderbhai Ambalal Desai vs. State of Gujarat, it is of no use to keep the seized vehicles at the police stations for a long period and it is for the magistrate to pass appropriate orders for the proper custody of the said such vehicles during the pendency of the trial. However, as observed earlier, the appellant without approaching the concerned criminal court under Section 451 of the Cr.P.C seeking custody of the vehicle in question, directly approached the High Court by filing Special Criminal Application under Article 226/227 of the Constitution of India, which was not the proper course as adopted by the appellant.

LEGAL PROVISIONS

Section 65 of Gujarat Prohibition Act, Sub-Section:

(a) imports or exports any intoxicant 1 [ ( other than opium ) ] or hemp.

(e) sells or buys any intoxicant 1 [ (other than opium) ] or hemp.

Section 81 of Gujarat Prohibition Act – Whoever, attempts to commit or abets the commission of an offence be punished for such attempt or abetment.

Section 98(2) of Gujarat Prohibition Act – Any receptacle, package or covering in which any of the articles liable to confiscation by the order of the Court.

Section 132 of Gujarat Prohibition Act – Article seized – [When anything has been seized, under the provisions of this Act by a Prohibition Officer exercising powers under section 129 or by an Officer in-charge of a Police Station].

ISSUE –

  • Whether the vehicle seized in connection with the offense under the Gujarat Prohibition Act could be released pending trial.
  • Whether the appellant’s approach, directly filing a Special Criminal Application in the High Court, was appropriate.

COURT’S ANALYSIS AND JUDGEMENT

The court analyzed Section 451 of the Cr.P.C., which deals with the custody and disposal of property during an inquiry or trial. It emphasized that the criminal court has the jurisdiction to pass orders regarding custody or disposal of the property. The appellant’s direct approach to the High Court was deemed inappropriate, as there existed a specific statutory provision under Cr.P.C. for seeking custody of the seized property.

Regarding the prohibition against the release of the vehicle under Section 98(2) of the Gujarat Prohibition Act, the court noted the ambiguity in its wording. It observed that the provision lacked coherence in its construction and did not clearly establish a relationship between its parts. However, considering the broader context of the Act and Cr.P.C., the court concluded that the vehicle could not be released without proper legal procedure being followed.

The court dismissed the appeal, emphasizing that the appellant should approach the concerned criminal court for custody of the vehicle during the trial. It clarified that the dismissal didn’t bar the appellant from seeking relief through the appropriate legal channels.

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Judgement Reviewed by – Chiraag K A

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Appeals against the Contempt orders of Central Administrative Tribunal (CAT) available only before the Supreme Court and not High Court: Allahabad High Court

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Case title: Dr Brajendra Singh Chauhan & Ors. Vs Central Administrative Tribunal & Ors

Case no.: Writ Application No. – 602 of 2024

Order on: March 22nd, 2024

Quoram: Justice Vivek Kumar Birla and Justice Donadi Ramesh

Facts of the case

The petitioners who were initially appointed as Short Term Medical Officers had approached the Central Administrative Tribunal (CAT), Allahabad Bench and sought to issue an order to the respondents for their appointment as regular Assistant Medical Officers. The CAT ruled in favour of the petitioners. However, the petitioners alleging non-compliance of the order by the respondents again approached the CAT by filing a contempt petition under the provisions of the Contempt of Courts Act, 1971. The Tribunal noting a substantially compliance of the order by the respondents disposed of the application. Aggrieved by the same, the petitioners appealed before the Allahabad High Court under Article 226 of the Constitution.

The Respondent’s Counsel submitted that the writ petition is not maintainable under Article 226 by citing Section 17 of the Administrative Tribunal Act, 1985 (AT Act) in conjunction with Section 19 of the Contempt of Courts Act, 1971 (CC Act).

Legal Provisions

Article 323A – It empowers the Parliament to enact the law providing for adjudication or trial by Administrative Tribunals and specifies the jurisdiction and powers of such Tribunals including their power to punish for contempt.

Section 14 & Section 15 of the AT Act – It specifies the jurisdiction, powers and authority for the Central Administrative Tribunal and State Administrative Tribunal respectively.

Section 17 of the AT Act – It empowers the Tribunal to punish for contempt of court and exercise its power similar to the High Court with regard to provisions of the Contempt of Courts Act, 1971.

Section 12 of the CC Act – It provides Punishment for Contempt of Court.

Section 19 of the CC Act – It provides that the appeals against the orders of Tribunal shall lie as a matter of right to the Bench of at least two Judges of High Court, where the contempt order is passed by the Single Judge and it shall lie to the Supreme Court where the order is passed by the Bench.

Court’s Analysis and Judgement

The Court addressing the question of maintainability of writ petition filed before the High Court against the orders passed under the Contempt of Courts Act delved into Article 323 A, Sections 14 & 17 of the AT Act and Sections 11, 12 & 19 of the CC Act. It drew a distinction between the orders passed by the Tribunal under Section 14(1) of the AT Act and the order passed under Section 17 of the AT Act. The Bench noted that the while there is no statutory remedy of appeal available under the former, the latter provides the same by virtue of Section 19 of the CC Act. Further, it noted that since the contempt proceeding under Section 17 of the AT Act is dealt with by a bench of not less than two members, the orders passed would be appealable only before the Supreme Court. Hence, it ruled that any order or decision of the Tribunal under the Contempt of Courts Act shall be appealable only to the Supreme Court within 60 days from the date of the order.

The Court heavily relied on the precedence laid down in the cases of T. Sudhakar Prasad Vs Government of A.P. and L. Chandra Kumar Vs. Union of India and held that the orders of the Tribunal under the Contempt of Courts Act shall be appealable only before the Supreme Court and no writ petition against the same shall be maintainable before the High Court under Article 226 / 277 of the Constitution of India. Accordingly, it dismissed the present petition citing the lack of maintainability.  This judgement thus, throws light on the jurisdictional scope of appeals arising from contempt proceedings under Section 17 of the Administrative Tribunals Act and clears line on the exclusive appellate jurisdiction of the Supreme Court in matters regarding contempt orders issued by the Tribunal.

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Judgement Reviewed by – Keerthi K

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NCDRC overstepped its authority and jurisdiction by disregarding the Agreement’s binding covenants: Supreme court

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Case title: Venkataraman Krishnamurthy vs Lodha Crown Buildmart Pvt. Ltd.

Case no.: CIVIL APPEAL NO. 971 OF 2023

Decided on: 22.02.2024

Quorum: Hon’ble Justice Aniruddha Bose, Hon’ble Justice Sanjay Kumar

 

Hon’ble Justices stated that, “it was not open to the NCDRC to apply its own standards and conclude that, though there was delay in handing over possession of the apartment, such delay was not unreasonable enough to warrant cancellation of the Agreement. It was not for the NCDRC to rewrite the terms and conditions of the contract between the parties and apply its own subjective criteria to determine the course of action to be adopted by either of them.”

 

BRIEF FACTS:

The complainants, who planned to buy an apartment in a Mumbai building that the respondent company was going to build, were the appellants. The complainants received a flat as a result of the parties’ execution of an Agreement to Sell. The sale consideration was to be paid in four instalments of “application money” in accordance with the payment schedule, with the remaining sum due when fit outs started. According to the agreement, the complainants were to receive possession of the flat by June 30, 2016, or within a grace period of one year, so they could fit it out.

The complainants went to the NCDRC, claiming that the company had terminated the agreement and failed to deliver possession of the flat for fit outs by the specified date. In addition to reimbursement for the money they had paid, they prayed for damages for the harassment, mental anguish, and torture they had endured, as well as reimbursement for the costs of the lawsuit. The complainants were before the supreme Court because they were unhappy NCDRC order.

COURT ANALYSIS AND JUDGEMENT:

The court ruled that the contract condition required payment of delay compensation, and that if the delay lasted more than twelve months after the end of the grace period, the allottee could terminate the contract and receive a refund of his payment. The contract condition, however, stated that the refund would be made without any interest.

The Court went on to say that the appellants’ desire to avoid the additional tax liability resulting from the implementation of the Goods and Service Tax regime could not be used against them or attributed to them as an underhanded reason for withdrawing from the agreement.

After analysing the evidence and the parties’ agreement, the court concluded that the NCDRC exceeded its authority and jurisdiction by ignoring the binding covenants in the Agreement and introducing its own logic and rationale to determine what the parties’ future course of action, particularly the appellants, should be.  

The court orders the respondent-company to refund the deposited amount of Rs. 2,25,31,148 in twelve equal monthly instalments via post-dated cheques, with simple interest at 12% per annum, from the date of receipt of the amount or parts thereof until actual repayment.

 

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Written by – Surya Venkata Sujith

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Ashwini Upadhyay Ruling Deciphered, Special Courts Can Try Sitting & Former Legislators, Not Just Current Offenses: Delhi High Court

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Case Title: Manjinder Singh Sirsa vs State of NCT of Delhi and Anr.

Case No: CRL.M.C. 9128/2023 & CRL.M.A. 34100/2023

Decided on: 08.01.2024

CORAM: Hon’ble Ms. Justice Swarna Kanta Sharma

 

 Facts of the Case

In an effort to reform elections, the Supreme Court issued several directives in the case of Ashwini Kumar Upadhyay v. Union of India, W.P. (C) 699/2016, including establishing Special Courts in various states to expedite trials for criminal cases involving MPs/MLAs. One such court was set up in Delhi in February 2018. However, on November 9, 2023, the Court further directed these Special Courts to prioritize cases against current MPs/MLAs.

The petitioner, a former MLA in Delhi, argues that this new directive doesn’t apply to him since he ceased being an MLA in February 2020, before the updated directions were issued. He further claims the criminal complaint against him pertains to events after he left office, therefore exceeding the Special Court’s jurisdiction.

Despite appearing in court through counsel due to being out of the country, the petitioner’s attempt to quash the complaint and summoning order through CrPC Section 482 and subsequent revision were unsuccessful. He then sought to return or transfer the complaint based on jurisdictional grounds, but this request was also dismissed. This dismissal prompted the petitioner to file the present petition.

The petitioner maintains that he shouldn’t face trial in the Special Court meant for current MPs/MLAs because he is no longer one and the alleged offenses occurred after his term ended. The court’s decision on this petition will determine the venue and potential consequences for the petitioner’s upcoming trial.

Legal provision

Section 482 of CrPC –

Saving of inherent powers of High Court. Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.

Issues

  • Whether the Special courts, constituted for the purpose of trying cases relating to MLAs/MPs, will have jurisdiction to try the petitioner?
  • Whether the directions contained in the judgment of Hon’ble Apex Court apply to cases, registered after a person ceases to be an MP/MLA?

Court decision and analysis

Hon’ble Apex Court had sought details from the Government of India, as rightly observed by the learned ACMM, regarding cases which are lodged against the present or former legislators, between the period from 2014 and 2017. Thereafter, the Hon’ble Apex Court had passed certain directions for the effective disposal of criminal cases against sitting and former legislators, in 2018. The Hon’ble Apex Court had directed the High Courts to provide information about the pending cases against MPs/MLAs in a prescribed format, in 2020. Thereafter, after the matter was again taken up by the petitioner, it was clarified that the pendency of the case of Ashwini Kumar Upadhyay, would not come in the expeditious disposal of the case relating to the elected representatives i.e. either sitting or former. Hon’ble Apex Court nowhere has observed that the Special Courts shall try only those offenses where the accused was a sitting MP/MLA, at the time of the commission of offence.

On the basis of the aforementioned orders, Court arrived to the conclusion that the Special Courts were constituted for dealing with cases against the legislators i.e. MPs or MLAs, whether sitting or former.

In the light of the directions issued by the Apex Court contained in the case of Ashwini Kumar Upadhyay and applying it to the facts of the present case, the court was of the opinion that the Special Court constituted to deal with cases against MPs/MLAs, have no jurisdiction to try the present complaint case.

Accordingly, the present petition along with pending application stood dismissed.

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Written by- Bhawana Bahety

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