Magistrate can vary an order under Section 125 Cr.PC: SC

The Supreme Court of India recently clarified that reviving of maintenance application of wife under Section 125 of Criminal Procedure Code (“Code”) is not hit by the embargo contained in Section 362 of the Code.

“The use of expression ‘from time to time’ [in Section 125] has purpose and meaning. It clearly contemplates that with regard to order passed under Section 125(1) Cr.P.C., the Magistrate may have to exercise jurisdiction from time to time”, the Court said.

“…..Magistrate does not become functus officio after passing an order under Section 125 Cr.P.C., as and when occasion arises the Magistrate exercises the jurisdiction from time to time. By Section 125(5) Cr.P.C., Magistrate is expressly empowered to cancel an order passed under Section 125(1) Cr.P.C. on fulfilment of certain conditions”, the Court added.

The Court further said that Section 127 Cr.P.C. also discloses the legislative intendment where the Magistrate is empowered to alter an order passed under Section 125 Cr.P.C. Sub-Section (2) of Section 127 Cr.P.C. also empower the Magistrate to cancel or vary an order under Section 125.

It was pleaded before the Court that under Section 362 Cr.P.C. the court cannot alter or review the judgment except to correct a clerical or arithmetical error.

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CPC Order XXVII Rule 8A ‘archaic’, no exceptional treatment for Government: SC

The Supreme Court of India recently held that no exceptional treatment can be given to the Government while considering the application for stay filed by the Government in proceedings under Section 34 of the Arbitration and Conciliation Act.

Section 34 provides for filing an application for setting aside the arbitral award on limited grounds.

The Court held that the provisions of Order XXVII Rule 8A of the Civil Procedure Code (CPC), which states that no security shall be required from the Government in case of there being a money decree passed against the Government and the execution of which is prayed for, cannot be applied to arbitration.

The Court further stated that provisions of Order XXVII Rule 8A of the CPC are archaic, not applicable to current times and do not exempt the government from making deposits as directed by the Court.

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No Unfair Trade Practice from Star and Airtel: SC

The Supreme Court of India recently ruled that there is no basis to conclude that Star India (P) Ltd. (“Star India”) and Bharti Airtel Limited (“Airtel”) colluded to finance the prize money for the ‘Har Seat Hot Seat’ (“HSHS contest”) contest during the telecast of program ‘Kaun Banega Crorepati’ (”KBC”) in 2007 from the SMS revenue earned by Airtel.

“…………there is no basis to conclude that the prize money for the HSHS contest was paid directly out of the SMS revenue earned by Airtel, or that Airtel and Star India had colluded to increase the SMS rates so as to finance the prize money and share the SMS revenue, and the finding of the commission of an “unfair trade practice” rendered by the National Commission on this basis is liable to be set aside”, the Court said.

The Court mentioned that The National Commission’s reliance on a newspaper report regarding the amount of revenue and profit earned by the appellants from the HSHS contest was unwarranted, in as much as there was absolutely no corroboration for the allegations therein with respect to the number of SMSs received, and the breakup of revenue earned into cost, value addition from service, and profit.

After reviewing the services-cum-sponsorship agreement between the appellants, the Court said there is no provision in the agreement for revenue sharing between the parties, or requiring Airtel to finance any part of the prize money paid by Star India towards the HSHS contest.

During HSHS contest, the viewers of KBC were invited to participate by answering an objective type question with four possible options during each episode, and viewers who wished to participate were required to send in the correct answer, inter alia through SMS services, offered by Airtel and other providers.

Posted in Company Law, Consumer Law, Contract Law, General Law, Telecommunications Law | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Commercial wisdom of CoC is not subject to adjudicating authority purview: SC

In a landmark ruling, the Supreme Court of India clarified that commercial wisdom of the committee of creditors is not subject to the adjudicating authority or the appellate authority’s purview under the Insolvency and Bankruptcy Code.

“The NCLAT judgment which substitutes its wisdom for the commercial wisdom of the Committee of Creditors and which also directs the admission of a number of claims which was done by the resolution applicant, without prejudice to its right to appeal against the aforesaid judgment, must therefore be set aside,” a large Bench of the Court ruled.

The Court further clarified that full freedom and discretion has been given to the Committee of Creditors to classify creditors and to pay secured creditors amounts which can be based upon the value of their security, which they would otherwise be able to realize outside the process of the Code, thereby stymying the corporate resolution process itself.

The Court also stated that the Committee of Creditors does not act in any fiduciary capacity to any group of creditors. On the contrary, it is to take a business decision based upon ground realities by a majority, which then binds all stakeholders, including dissentient creditors.

The Supreme Court also held that the time of 330 days from the insolvency commencement date, including extensions and the time taken in legal proceedings, was not mandatory.

The Court said “If it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or Appellate Tribunal to extend time beyond 330 days.“

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NRIs have right to possess property in Punjab/Chandigarh: SC

Upholding the constitutional validity of Section 13-B of the East Punjab Urban Rent Restriction Act, 1949 (“Act”), the Supreme Court of India clarified that non-resident Indians (“NRI”) have the right to recover immediate possession of residential or non-residential buildings in Union Territory of Chandigarh and State of Punjab on the satisfaction of the conditions mentioned in the Act.

“Section 13-B cannot, therefore, be treated as an arbitrary classification that infringes and violates Article 14 of the Constitution”, a large Bench of the Court said.

The Court said that Section 13-B of the Act cannot be held to be unconstitutional because it grants a right to claim eviction for bona fide need by summary procedure to a certain group of landlords, that is, Non-Resident Indians subject to and on the satisfaction of statutory conditions which incorporate a check on frivolous evictions.

“The right of Non-Resident Indians to initiate eviction under the summary procedure provided in Section 18-A of the Rent Act is not an unfettered and absolute right. It is subject to satisfaction of various pre-requisites and imperatives that ensure and check potential abuse by resorting to a short-circuit procedure. The requirement should arise from a genuine need of the Non-Resident Indian landlord or his dependent”, the Court further observed.

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Interception of phone calls only in case of public emergency/public safety: BHC

In an important ruling, the Bombay High Court recently ruled that the interception of the phone calls by the authorities is permitted only in the case of ‘public emergency’ or in the interest of ‘public safety’.

Stating that the orders passed by the Union Ministry of Home Affairs allowing Central Bureau of Investigation (“CBI”) to intercept the phone calls as ultra vires of Section 5(2) of the Indian Telegraph Act, 1885, the Court said “….an order for interception can be issued on either the occurrence of any public emergency or in the interest of the public safety. The impugned three interception orders were issued allegedly for the reason of ‘public safety’. As held in PUCL (supra), unless a public emergency has occurred or the interest of public safety demands, the authorities have no jurisdiction to exercise the powers under the said section. The expression “Public Safety” as held in PUCL (supra) means the state or condition of freedom from danger or risk for the people at large. When either of two conditions are not in existence, it was impermissible to take resort to telephone tapping.”

“The Respondents could not justify any ingredients of risk to the people at large or interest of the public safety, for having taken resort to the telephonic tapping by invading the right to privacy. Neither from the impugned orders nor from the record any situation showing interest of public safety is borne out”, the Court added.

According to the CBI, the petitioner bribed a bank official for credit-related favor and three separate phone interception orders were allowed by the Union Ministry of Home Affairs.

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Amounts written in different inks render negotiable instrument void: MHC

The Madras High Court recently held that amounts written in different inks in a promissory note without any justification amounts to material alteration and would render the promissory note void.

Any material alteration without the consent of the parties would render the negotiable instrument void as per section 87 of the Negotiable Instrument Act. Thus, the duty of proving consent of parties is also cast upon the plaintiff as the duty to prove the promissory note lies with the plaintiff.

The Court further held that since the First Appellate Court is the final court to settle facts it is the solemn duty of the First Appellate Court to examine facts in all cases and such examination is within the confines of law.

Posted in Banking Law, Company Law, Consumer Law, General Law, Negotiable Instruments Act | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment