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Delhi High Court Upholds Settlement Agreement at Reduced Interest Rate, Safeguarding Appellant’s Legal Rights

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Case Name: Anil Sharma & Ors v. Genesis Finance Co. Ltd. & Ors 

Case No.: RFA(OS)(COMM) 39/2019 

Dated: May 08, 2024 

Quorum: Justice Vibhu Bakhru and Justice Tara Vitasta Ganju 

 

FACTS OF THE CASE: 

In this intra-court appeal, the appellants have challenged a judgement and decree dated 27.03.2019 (referred to as the challenged order) issued by the learned Single Judge in CS(COMM) 307/2016, which is captioned Genesis Finance Company Ltd. v. Anil Sharma & Others. 

By the contested order, the learned single judge granted respondent no. 1’s application under Order XIIIA of the Code of Civil Procedure and issued a preliminary decree in accordance with Order XXXIV Rule 4 of the CPC, stating that the plaintiff was entitled to recover ₹2,03,00,000/-as a joint and several recovery from the appellants and respondent nos. 2 and 3 (defendants in the suit), together with interest at the rate of 18% annually from the date of the lawsuit’s institution until its realisation and 24% annually from the Settlement Deed dated 20.01.2014 until the date of the suit’s institution, or 31.03.2016.  

Furthermore, the educated Single Judge had also ordered costs to be measured at ₹2.5 lacs. The learned Single Judge gave the respondent nos. 2 and 3 and the appellants six months to pay the plaintiff’s debt; if they fail to do so, the plaintiff may seek a final decree for the sale of the mortgaged properties, or a portion of them, to recoup the outstanding amounts.  

The defendant had filed the aforementioned suit in order to recover ₹4,15,14,023.76/- (Rupees Four Crores Fifteen lakhs Fourteen thousand Twenty-Three and Seventy-Six paise only) as well as pendente lite and future interest at the rate of 36% per annum (reducing). The plaintiff also requested a decree for the sale of mortgaged properties as stated in Paragraph 4 of the complaint. 

The appellants have based their defence on the claim that they were misled into signing a Loan Agreement with the plaintiff on May 19, 2011 (henceforth referred to as the Loan Agreement) on the false impression that the loan came with a simple interest rate of 17.67% annually.  

On the other hand, the loan was structured with an interest rate of 17.67% (flat), which, when calculated using the decreasing balance approach, amounted to about 30.08%. This assumption was made when the documentation was created. 

The experienced single judge concluded that the appellants had no chance of winning their defence. Based on the appellants’ admission of the payment schedule that was a component of the loan agreement, the aforementioned conclusion was reached. Furthermore, there was no disagreement about the parties’ agreement to settle their differences over the outstanding liability and interest that was due on it when they signed the Settlement Agreement. 

 

LEGAL PROVISIONS: 

  • Section 138 of the Negotiable Instruments Act, 1881. Penalises the dishonouring of any cheque written for “any debt or other liability” that has been partially or fully paid. Furthermore, there is coextensive accountability between the major debtor and the guarantor. So, in accordance with section 138, N.I., the guarantor cannot avoid liability. 

 

CONTENTIONS OF THE APPELLANTS: 

According to the appellants’ learned counsel, they were under the false impression that the equivalent monthly installment for loan facility repayment was ₹11,68,735/-. Nevertheless, they had paid back ₹2,61,98,620/- against a loan of ₹2,75,00,000/-, or 22.4 equal monthly installments. The plaintiff argued that the EMIs were based on a 30.08% annual interest rate, but that the plaintiff had deceitfully convinced appellant nos. 1 through 3 to agree to pay interest at the rate of 17.67%. 

According to his submission, if the annual percentage rate for the EMIs was 17.67%, the corresponding monthly installment would be ₹9,89,644. He presented evidence that the appellants signed the Settlement Agreement at the time the mother of appellants nos. 1 and 3 was brought into the intensive care unit. The appellants acknowledged that ₹2,03,00,000 was still owed as of January 20, 2014, but they had signed the Settlement Agreement in error because they had put their trust in the plaintiff.  

Additionally, he argued that the plaintiff had taken advantage of the appellants’ pressing need for money to force them to sign on the dotted line. He argued that the Settlement Agreement was unenforceable because it was signed while the appellants were extremely agitated and not in a normal mental state due to the mother of appellants nos. 1 and 3 being critically ill and admitted to the intensive care unit due to multiple organ failure. 

The court determined that the parties in question in the debt Agreement, the defendants committed to repaying the debt over the course of 36 monthly installments. The fixed amount for the monthly installment was ₹11,68,735/-. Consequently, there could be no misinterpretation of the payable interest. 

 

COURT’S ANALYSIS AND JUDGMENT: 

According to the court’s ruling, interest is computed over the whole loan duration. Thus, in this instance, the appellant would be required to pay a total of 53.01% in interest over the course of three years, or 17.67% annual interest. The appellants would be required to return ₹4,20,74,460/-, with the aforementioned interest being payable on the whole ₹2,75,00,000/-loan principal. Because the repayment schedule was attached to the loan paperwork and stated that the total amount above was due, the appellants could not have been misled about the method used to calculate the interest.  

The court determined that the plaintiff had filed complaints under Section 138 of the NI Act, which were pending in the Dwarka courts, because the appellants’ checks had been returned unpaid. Therefore, there could not have been any doubt at that point regarding the appellants’ knowledge of the conditions of the Loan Agreement. The parties to mediation were referred to by the court, and as a result, the appellants entered into a Settlement Agreement that was included in the mediation proceedings. 

The appellants had complete knowledge of the plaintiff’s allegation, the court further noted. It is evidently an afterthought to argue that the appellants were not in a proper state of mind since their mother was in the intensive care unit (ICU) at the relevant period. The appellants did not make any such claim in their written declaration. Furthermore unsubstantial is the claim that the appellants were not given access to the whole Settlement Agreement. Moreover, the written declaration that the defendants filed makes no mention of this kind. As said earlier, there is no disagreement regarding the implementation of the Settlement Agreement.  

Additionally, take note of the fact that even though the Settlement Agreement is clear and stipulates that interest will be paid at a rate of 36% annually on a decreasing balance basis, the learned Single Judge had lowered the pre-suit interest rate to 24% annually. The plaintiff has agreed to the impugned order’s reduction in interest rates from 36% to 24% annually, even though it is not discussed in it. We see no need to investigate this further as a result. 

 

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Judgment reviewed by Riddhi S Bhora. 

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Calcutta High Court Upholds Associate Professor’s Right to Promotion and Benefits, Affirms Decision on Humanitarian Grounds

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Case Name:  Dr. Tapas Kumar Mandal v. Union of India & Ors 

Case No.: WPA 24009 of 2019 

Dated: March 19, 2024 

Quorum: Justice Amrita Sinha 

 

FACTS OF THE CASE: 

In this current writ petition, the petitioner requests that the Departmental Promotion Committee, also known as “the DPC,” recommend that he be promoted. Additionally, the petitioner requests that all encashment of leave, pension, and gratuity be released, as well as a directive to the Institute’s authority to accept this recommendation. 

The Institute was being served by the petitioner. On June 30, 2010, he reached the usual age of retirement and retired from the military. The petitioner was under consideration for a promotion from Associate Professor grade E to Professor grade F before to retirement; however, the petitioner was superannuated prior to the promotion being finalised. 

While the petitioner was employed, he was the target of disciplinary action. Long after he retired, the aforementioned procedure was still ongoing. The petitioner filed a writ suit with this court, and on June 29, 2017, the Hon’ble Division Bench issued an order addressing the matter. The Hon’ble Division Bench instructed the authority to grant admissible service benefits that were denied to the petitioner as a result of the order of punishment dated June 16, 2011, and to drop the disciplinary proceeding that was started against the petitioner through the charge sheet dated August 30, 2005, while deciding how to handle the appeal. 

The petitioner filed a contempt application on June 21, 2019, claiming that he had not followed the Hon’ble Division Bench’s directive, since he had not been granted promotion. The case was eventually resolved. The petitioner made a push for advancement in the contempt motion. It was with satisfaction that the Honourable Court noted that there was no clear directive on the power to promote the petitioner.  

The petitioner has been denied promotion by the Institute, and this is the main reason for the current writ suit. 

 

CONTENTIONS OF THE PETITIONER: 

In their petition, the petitioners requested that the Departmental Promotion Committee’s (DPC) proposal be accepted by the Saha Institute of Nuclear Physics, also known as “the Institute.” His advancement from Associate Professor (grade E) to Professor (grade F) was the subject of the recommendation.  

The counsel asked for a further directive to discharge any consequential benefits, such as leave encashment, pension, and gratuity, in addition to the promotion. It was further contended that On June 30, 2010, Dr. Mandal announced his retirement from the Department of Health and Welfare. But, even after he retired, the disciplinary actions that had been started against him while he was serving persisted. 

Following the submission of a writ petition by Dr. Mandal, the Hon’ble Division Bench directed the authorities to halt the disciplinary action against him. Additionally, the court ordered that benefits for eligible service that had previously been refused be granted. In addition, Dr. Mandal was entitled to receive payment for any unpaid wage arrears resulting from a promotion awarded by the Governing Council. 

Dr. Mandal claimed in his application for contempt that he had not followed the court’s order on promotion as he had not received promotion. 

 

CONTENTIONS OF THE RESPONDENTS: 

The petitioner’s promotion claim was disputed by the respondents. They claimed that as the promotion was not completed before Dr. Mandal’s superannuation, he was not eligible to receive the benefits of the promotion. 

It was argued by the respondents that Dr. Mandal’s disciplinary actions throughout his employment were appropriate and justified. They maintained that these procedures ought to go on even after he retires and were unrelated to the promotion controversy. 

The respondents claimed they had followed the court’s ruling in order to justify their acts. They argued that, per the directive of the Honourable Division Bench, the disciplinary proceedings were dropped. But they made it clear that Dr. Mandal was not given the promotion by default. 

In reference to the salary arrears, the respondents contended that payment would only occur in the event that Dr. Mandal was promoted by the Governing Council. They insisted that there was no duty to make up any arrears up until that point. 

The promotion procedure, disciplinary actions, and following the court’s orders constituted the focal points of the respondents’ arguments, to sum up. 

 

COURT’S ANALYSIS AND JUDGMENT: 

The Court decided that it lacked the necessary knowledge to evaluate an employee’s merits. It is the responsibility of the employer to evaluate each candidate for a promotion based only on merit, and only then may the employer move forward with the decision. Since the employer has exclusive authority over the matter, it is improper to impose the Court’s opinion on top of the DPC’s.  

A promotion was given to an employee as a mean of encouraging them to raise their game so that the employer can use their experience to further the institution’s development. An employee is to be motivated to perform and deliver to the best of their abilities when they are promoted.  

The court was of the view that withholding a promotion due to valid reasons, such as the pending outcome of a criminal or disciplinary case against the candidate, is now considered an acceptable stance. Because of legal issues in this particular case, the petitioner’s promotion was denied. 

As soon as the legal proceedings came to an end and the Court issued its directive, the petitioner was superannuated by the time the case regarding their promotion was reopened. An employee was no longer eligible for advancement following superannuation. The only way to compensate an employee in such a case is to give them relief in the form of money, provided that the employee is able to demonstrate that their rejection of advancement was unlawful. 

The court determined that the employer’s decision to deny the petitioner a promotion did not appear to have been motivated by illegality, arbitrariness, bias, or malice in this particular case. The Court does not believe that the denial of the petition was incorrect for the same reason.  

Considering the aforementioned, the Court declined to take on jurisdiction over the case. The writ petition was dismissed as a result of its failure. The related applications have been closed. 

 

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Establishing Equilibrium: Delhi High Court Upholds Appellant’s Right to Present Additional Evidence Despite Prolonged Proceedings 

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Case Name: Remy Israni v. R.B. Sethi Jessa Ram Hospital and Bros 

Case No.: LPA 314/2024 

Dated: April 23, 2024 

Quorum: Justice Rekha Palli and Justice Saurabh Banerjee 

 

FACTS OF THE CASE: 

The case’s circumstances are such that an application that the appellant made in an attempt to add more papers to the record. The goal of this appeal, which is being filed under Clause X of the Letters Patent, is to challenge the ruling made by the learned Single Judge in W.P.(C) 5005/2024 on April 5, 2024.  

According to the contested ruling, the learned Single Judge has stayed the implementation of the aforementioned order dated 14.02.2024 while providing notice in the respondents’ writ suit contesting the order dated 14.02.2024 issued by the learned Industrial Tribunal (Tribunal). 

Due to the specifics of the case, the appellant’s attempt to add new papers to the record was made through an application. This appeal is being brought in accordance with Clause X of the Letters Patent with the intention of contesting the decision rendered by the learned Single Judge in an earlier matter.  

The challenged ruling states that the learned Single Judge has given notice in the respondents’ writ petition opposing the order issued by the learned Industrial Tribunal, and has stopped the implementation of the aforementioned order dated February 14. 

 

CONTENTIONS OF THE APPELLANTS: 

The learned counsel for the appellant argues that the learned Single Judge has stayed the contested order notwithstanding the fact that the respondents did not request any temporary relief before the Court. The appellant will thus be unable to introduce into evidence any further papers that were filed with her affidavit.  

The appellant, who has been pursuing her claim before the learned Tribunal for over ten years, will suffer grave prejudice due to the order made by the learned Single Judge. As a result, the pending proceedings before the learned Tribunal will essentially finish. 

The appellant’s counsel further contends that the learned single judge stayed the disputed decision despite the fact that the respondents did not seek temporary relief from the court. As a result, the appellant will be unable to present any additional documents filed with her affidavit as evidence. 

The appellant, who has been litigating her claim before the learned Tribunal for more than ten years, will suffer significant prejudice as a result of the learned Single Judge’s order. As a result, the pending processes before the learned Tribunal will be practically completed. 

CONTENTIONS OF THE RESPONDENTS: 

The learned counsel representing the respondents acknowledges receipt of the notification and argues that the learned Tribunal erred significantly in imposing costs on the respondents for legitimately objecting to the appellant’s early filing of papers. She urges the appeal to be rejected on the grounds that the learned Single Judge was right to stay the learned Tribunal’s order. 

The respondents contend that it was improper for the learned Tribunal to charge them fees for their legitimate concerns regarding the appellant’s delayed filing of papers. The stay order would effectively put an end to the ongoing proceedings before the learned Tribunal. 

 

COURT’S ANALYSIS AND JUDGMENT: 

We may start by noting the pertinent excerpts of the order issued by the learned Tribunal on February 14, 2024, which order was challenged before the learned Single Judge, after taking into account the submissions of learned counsel for the parties and reviewing the record. 

The court further stated that after reviewing the aforementioned order, it is clear that the learned Tribunal assessed a cost of Rs. 10,000/-to the respondents in response to their rejection of the appellant’s request for additional documents to be filed with her affidavit of evidence. This appears to have forced the respondents to file a writ petition in order to challenge the original order. 

The court stated that although they were inclined to concur with her that this was not a matter that should be subject to costs, they believed the learned Tribunal was right when it concluded that the appellant was entitled to submit more papers along with her affidavit as evidence. We believe that the learned tribunal correctly held that the appellant had no obstacle to filing these additional documents because the Industrial Disputes Act, 1947 was a helpful piece of legislation that did not apply the strict timeliness requirements under the Commercial Courts Act or the CPC.  

The court declared that, given the previously mentioned instructions, they believed the writ petition to be infructuous in and of itself. As a result, they allow either party to freely file a suitable application with the learned Single Judge to request that it be handled in accordance with this order. 

In the end, it was decided that the appeal and the pending application were handled in the manner mentioned above, with a request made to the knowledgeable Industrial Tribunal to continue deciding the appellant’s outstanding claim in accordance with the law. 

 

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Measures for ‘Reasonable accommodation’ necessary to ensure greater accessibility for the hearing and visually impaired persons: Delhi High Court

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Case title: Akshat Baldwa & Ors Vs Yash Raj Films & Ors

Case no.: W.P. (C) 445/2023 and CM APPL. 1752/2023, 67351/2023

Decision on: March 15th, 2024

Quoram: Justice Prathiba M. Singh

Facts of the case

The issue in the present case underscores the broader question of disability rights, particularly the right of individuals with disabilities to enjoy public and private spaces without discrimination.

The four Petitioners who were visually and hearing impaired field a writ petition against the Yash Raj Films producer of movie ‘Pathaan’, two Ministries and Amazon prime video. The Petitioners, who were the consumers of audio-visual entertainment, had filed the present petition, highlighting the challenges faced by persons with disabilities in accessing audio-visual content both in traditional theaters and online streaming platforms. Their grievance was that the existing physical and virtual spaces predominantly catered to able-bodied individuals, thereby excluding persons with disabilities from enjoying equal access.

The petitioners seeking for the enforcement of various rights and accessibility requirements as prescribed under the Rights of Persons with Disabilities Act, 2016(RPWD) sought to direct the films released in India to cater to the needs of the disabled, both in physical and digital spaces, in accordance with national and international legal frameworks and standards.

Submissions on behalf of the Petitioners

The Petitioner No. 2 appearing in-person submitted that apart from the subtitles having been approved by the Central Board of Film Certification (hereinafter, ‘CBFC’), the audio description and closed captions were not made available. Further, there provided English subtitles instead of being in the language of the film, i.e., Hindi which made it almost impossible for hearing and visually impaired persons to enjoy the said film. He also sought to direct the Ministry of Information and Broadcasting and the Department of Empowerment of Persons with Disabilities in the Ministry of Social Justice & Empowerment to notify required standards in this regard.

Submissions on behalf of the Respondents

The Counsel submitted that the film ‘Pathaan’ had already been approved by the Central Board of Film Certification (CBFC) and accordingly the producers provided the English subtitles. The Counsel pointing out to the arrangement between the Producers and OTT platform, Amazon Prime Video submitted that they are  willing to take any reasonable steps which may be required to ensure that its films are enjoyed by hearing and visually impaired persons as well. Further, the Counsel for Respondent Nos.2 and 3 – Ministries, pointed out that the MIB had issued certain directions to the Film Producers Association and to the CBFC, way back in October, 2019, to use audio description and subtitles/closed captions in all films.

Court’s Analysis and Judgement

The Bench considering Section 42 of the RPWD Act 2016 which obliged the Government to take measures regarding the accessibility to persons with disabilities directed the producer Yash Raj Films to prepare audio description, close captioning and subtitles of the movie within two weeks and submit it to Central Board of Film Certification (CBFC) for a decision on re-certification. Consequently, the producers of ‘Pathaan’ movie complied with all the directions of the Court. But however, the Court also had to adjudicate on the broader question of disability rights regarding the audio-visual entertainment.

The MIB, following the directions of the Court filed an affidavit on the guidelines titled “Draft Guidelines of Accessibility Standards in the Public Exhibition of Feature Films in Cinema Theaters for Persons with Hearing and Visual Impairment.” The guidelines laid down Accessibility Standards for public exhibition of feature films for persons with hearing and visual impairment in cinema halls or movie theaters for commercial purposes.

Amidst these proceedings, an application seeking inclusion of accessibility features for the films “Jawan” and “Hi Papa” was also preferred before this bench, for which it directed the MIB was to identify and designate a specific officer to deal with these issues.

The Court considering the submissions made by the parties on the implementation of the said guidelines and on appointing a designated officer for the same, quoted various precedence on the subject. The authorities referred by this Court mandated to provide reasonable accommodation to persons with disabilities. It asserted that the accessibility is crucial and enforceable as a legal right.

The Bench stated that the private parties have to ensure that ‘reasonable accommodation’ measures are taken in order to enable greater accessibility for the hearing and visually impaired persons. Further, with regard to physical accessibility to film theaters, it stated that the State has a positive obligation to take that all possibly steps in this direction. Therefore, ruled that non-provision of accessibility features would constitute an offence under the RPWD Act and issued direction on the notification of the guidelines.

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Judgement Reviewed by – Keerthi K

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Rajasthan High Court: Court Upholds Candidate’s Right to Marks, Orders Immediate Appointment with Full Benefits

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Title: Sita Ram Jakhar vs State of Rajasthan

Citation: S.B. Civil Writ Petition No. 17796/ 2022

Coram: Justice Sudesh Bansal

Decided on: 14/03/2023.

Introduction:

The case revolves around the recruitment process initiated by the Directorate, Home Defence, Rajasthan, through an advertisement dated 18.11.2021. The recruitment is for various posts, including Constable General, Constable Bigular, Constable Drumman, and Constable Driver in different districts. The matter is under consideration by the court, with both parties presenting their arguments, and the court has examined the available material on record.

Facts:

The petitioner applied for the post of Constable General in the Rajasthan Home Guard Subordinate Service and claimed entitlement to 5 marks for a computer aptitude certificate (RS-CIT). Although he possessed the certificate, the petitioner alleged that he was not awarded the marks during the selection process, resulting in his exclusion from the final merit list.

In response to the writ petition, the respondents argued that the petitioner failed to produce the RS-CIT certificate during the document’s verification stage. The court, acknowledging the unique circumstances, allowed the petitioner to undergo a fresh document verification process. Subsequently, the Selection Board examined the RS-CIT certificate on January 12, 2023, and provisionally awarded 5 marks to the petitioner. The Board concluded that the addition of these marks placed the petitioner above the last cutoff marks in the OBC (NCL) category, making him eligible for inclusion in the final selection list.

The respondents, in their reply, mentioned that the results had already been declared, and candidates from the final merit list had received appointments. However, during the court proceedings, a representative of the Rajasthan Home Guard Service acknowledged that there was an opportunity to consider the petitioner for appointment.

The court, considering the petitioner’s eligibility for the marks and the peculiar circumstances, referred to a recent Supreme Court judgment (Food Corporation of India Vs. Rimjhim) to address the issue. The judgment discussed the importance of considering a candidate’s eligibility despite procedural lapses, emphasizing the essence of justice in such matters.

Judgement analysis:

The court, applying the legal principles laid down by the Supreme Court, acknowledged that the petitioner possessed the necessary computer aptitude qualification (RS-CIT) and was eligible for 5 marks. The court considered the proceedings of the Selection Board, which confirmed the petitioner’s eligibility and awarded him the additional marks. The court concluded that the petitioner, with the extra marks, surpassed the last cutoff in the final merit list for the Constable General Non-TSP post in the OBC (NCL) category.

As a result, the court directed the respondents to appoint the petitioner to the vacant Constable General Non-TSP position in the OBC (NCL) category immediately. The petitioner was granted all service benefits, including seniority and increments, notionally from the date of the appointment. Additionally, the petitioner was entitled to actual and monetary benefits from the date of the appointment. The writ petition was allowed accordingly, and all related applications were disposed of.

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Written By: Gauri Joshi

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