Jurisdiction of Company Law Tribunal to interfere with Commercial Decision

Insolvency and Bankruptcy Code, 2016:

An enquiry under Section 31, is the limited enquiry that the Adjudicating Authority is permitted is, as to whether the resolution plan provides:

i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment ofother debts of the corporate debtor,

(ii) the repayment of the debts of operational creditors in prescribed manner,

(iii) the management of the affairs of the corporate debtor,

(iv) the implementation and supervision of the resolution plan,

(v) the plan does not contravene any of the provisions of the law for the time being in force,

(vi) conforms to such other requirements as may be specified by the Board.

Scope of Judicial Review:

Appeal is a creature of statute and that the statute has not invested jurisdiction and authority either with NCLT or NCLAT, to review the commercial decision exercised by CoC of approving the resolution plan or rejecting the same.

Nirav Modi to be extradited from UK to India; Orders Magistrate

An extradition request submitted by the Government of India, the Requesting State (“GOI”) for the extradition of Nirav Deepak Modi (“NDM”):

On presentation of evidence:

“Unlike the evidence from the Defence, the evidence produced by the GOI in the case, through no fault of Counsel, was poorly presented and very difficult to navigate. Observations I note were similarly made by the Senior District Judge (Magistrates’Courts) in Mallya. I hope the GOI take these observations on board in relation to future requests.”

Para 12

In Devani v. Kenya [2015] EWHC 3535 (Admin) Aitkens LJ analysed the correct approach to
extradition u/s.84(1), as under:

“ 47. In the case of a country to which s.84(1) EA 2003 applies, a three-stage process
is involved once the DJ is satisfied that the request document itself establishes that
the conduct alleged is criminal in accordance with the laws of the requesting state.
The first stage, following the decision of the House of Lords in Norris v. Government
of the United States of America, is to identify, for the relevant charge, the “essence of
the conduct”
which is alleged by the requesting state. Secondly, the DJ must
determine, upon the assumption that the relevant conduct had occurred in the UK,
whether that conduct would be an offence under the UK law. For this purpose, the
requesting state will often produce “notional English charges” identifying the
particular UK offence which is said to be constituted by the “essence of the conduct”
alleged. Thirdly, the DJ must determine whether the requesting state has proved, on
the basis of all admissible evidence (taking account of the admissibility rules set out
in sections 84(2) – (4), s.202 and s.205 of the EA) whether there is sufficient evidence
to substantiate the conduct alleged.

My role is to consider whether a tribunal of fact, properly directed, could reasonably
and properly convict on the basis of the evidence. I am not required to be sure of guilty
in order to send the case to the Home Secretary. The extradition court must conclude
that a tribunal of fact, properly directed and considering all the relevant evidence,
could reasonably be sure of guilt.

Extracts of findings of the Magistrate:

I do not accept the submissions that NDM was involved in legitimate business and using the LOUs in a permissible fashion. It would not be in PNBs interests to create such enormous financial exposure through a financial product which the evidence from the Bank officials confirms is not designed for general business lending, I find there is no evidence of genuine import transactions and the applications for the LOUs was being done dishonestly. The statement of Rajendra Keshri is supportive of the fact the LOUs obtained by NDM’s firms were used to re-pay liabilities in relation to buyer’s credit obtained from earlier LOUs. Suggestion that buyers credit obtained by the Nirav Modi Firms was required for making payment for genuine imports from suppliers mentioned in the LOUs is not born out by statements from the dummy directors in the Hong Kong and Cairo based companies. Their evidence is that these companies were not genuine suppliers and were shadow companies controlled by NDM through several employees who were represented as directors of the
companies. NDM’s firms’ business transactions were primarily with these dummy companies. The statements demonstrate that the circulation of pearls, diamonds and gold between the NDM firms and the Dubai and Hong Kong based companies was not genuine business and the companies were being used for transferring funds generated “in the guise of sale – purchase / export – import of goods” colloquially referred to as “round tripping transactions”. Again, there no evidence demonstrating that the NDM firms had any sanctioned facility with PNB.

Although there may be no direct evidence of NDM entering into an agreement with Bank officials and his other alleged conspirators, the evidence of the links between Nirav Modi, Nehal Modi, Mihir Bhansali, Gokulnath Shetty and Yashwant Joshi alone combined with my other findings above, in particular the lack of evidence of any sanctioned limit agreed with the Bank; the manner in which the LOUs were obtained and concealed, the manner to which the LOUs was used, the actions of NDM, his brother and Mr Bhansali after the CBI investigation opened cumulatively and progressively eliminate the alternative narrative put forward on NDMs behalf. The combination of the evidence taken as a whole create an inevitable conclusion NDM, his brother, Mr Shetty, Mr Bhansali and Mr Joshi Jie Zhang, were operating together dishonestly with other associates and banking officials to defraud the PNB.

Proof of Mense Rea need not be as per English Law:

A request need not identify the relevant mens rea of the equivalent English offence for
the purposes of satisfying dual criminality. Instead it suffices that the necessary
mental element can be inferred by the court from the conduct identified in the request
documents or that the conduct alleged includes matters capable of sustaining the
mental element necessary under English law. (Para 97)

Scrutiny by the Court of the description of conduct alleged to constitute the
offence specified, is not an enquiry into the adequacy of the evidence summarised in
the request. The Court is not concerned to assess the quality or sufficiency of the
evidence in support of the conduct alleged; R (Castillo) v. King of Spain [2005] 1WLR
1043. (Para 100)

Evidence of Justice Thipsey:

Continue reading “Nirav Modi to be extradited from UK to India; Orders Magistrate”

Web series disrespecting religious symbols of a community is not acceptable in law.

The makers of web series ‘Tandav’ are not entitled to anticipatory bail. Aparna Purohit, content director of Amazon Prime Videos, denied anticipatory bail by Allahabad High Court
The basic philosophy of the Constitution is to permit the people of all faith to practice, profess and propagate their religion freely without hurting or acting against the people who profess or practice different religious faith than theirs.

Therefore, it is a onerous duty of every citizen to respect the feelings of the people of other faith even while making a fiction.

The irresponsible conduct against the inherent mandate of the Constitution of India by anyone affecting the fundamental rights of the large number of citizens cannot be acquiesced to only because of the tendering of unconditional apology after committing the alleged act of crime and indiscretion.

The reference to the disclaimer cannot be considered to be a ground for absolving the applicant of permitting the streaming of an objectionable movie online.

The use of the word “TANDAV” as the name of the movie can be offensive to the majority of the people of this country since this word is associated with a particular act assigned to Lord Shiva who is considered to be creator, conservator and destroyer of the mankind all together.

Speech or expression causing or likely to cause disturbance or threats to public order or divisiveness and alienation amongst different groups of people or demeaning dignity of targeted groups,is against the Preamble of the Constitution of India. It violates dignity, liberty and freedom of others and poses threat to the unity and integrity of the nation and may be dealt as per Sections 153-A,295-A and 505(2) I.P.C.

A brazen tendency of Hindi cinema:

This Court takes further judicial notice of the fact that whenever such crimes are committed by some citizens of the country, like the applicant and her co-accused persons, and it is made the subject matter of demonstration and public protest, the forces inimical to the interest of this country become active and they make it an issue and raise it before different national and international forums alleging that the Indian citizens have become intolerant and “India”has become unsafe place to live. Continue reading “Web series disrespecting religious symbols of a community is not acceptable in law.”

UK Supreme Court holds Uber drivers as workers subject to employment tribunal.

The definition of a “worker” in section 230(3) of the Employment Rights Act 1996 and other relevant legislation includes anyone employed under a contract of employment but also extends to some individuals who are self-employed. In particular, the definition includes an individual who works under a contract

“whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”.

The judgment emphasises five aspects of the findings made by the employment tribunal which justified its conclusion that the claimants were working for and under contracts with Uber.

First, where a ride is booked through the Uber app, it is Uber that sets the fare and drivers are not permitted to charge more than the fare calculated by the Uber app. It is therefore Uber which dictates how much drivers are paid for the work they do;

Second, the contract terms on which drivers perform their services are imposed by Uber and drivers have no say in them

Third, once a driver has logged onto the Uber app, the driver’s choice about whether to accept requests for rides is constrained by Uber. One way in which this is done is by monitoring the driver’s rate of acceptance (and cancellation) of trip requests and imposing what amounts to a penalty if too many trip requests are declined or cancelled by automatically logging the driver off the Uber app for ten minutes, thereby preventing the driver from working until allowed to log back on.

Fourth, Uber also exercises significant control over the way in which drivers deliver their services. One of several methods mentioned in the judgment is the use of a ratings system whereby passengers are asked to rate the driver on a scale of 1 to 5 after each trip. Any driver who fails to maintain a required average rating will receive a series of warnings and, if their average rating does not improve, eventually have their relationship with Uber terminated.

A fifth significant factor is that Uber restricts communications between passenger and driver to the minimum necessary to perform the particular trip and takes active steps to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride.

Taking these factors together, the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber. Drivers are in a position of subordination and dependency in relation to Uber such that they have little or no ability to improve their economic position through professional or entrepreneurial skill. In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance. The Supreme Court considers that comparisons made by Uber with digital platforms which act as booking agents for hotels and other accommodation and with minicab drivers do not advance its case. The drivers were rightly found to be “workers”.

Continue reading “UK Supreme Court holds Uber drivers as workers subject to employment tribunal.”

Power of Civil Court to split suit into arbitrable and non-arbitrable dispute?

Section 8 of Arbitration and Conciliation Act, 1996 is as under:

Power to refer parties to arbitration where there is an arbitration agreement. (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.”

For interpretation of Section 8, Section 5 would have no bearing because it only contemplates that in the matters governed by Part-I of the Act, Judicial authority shall not intervene except where so provided in the Act. Except Section 8, there is no other provision in the Act that in a pending suit, the dispute is required to be referred to the arbitrator. Further, the matter is not required to be referred to the arbitral Tribunal, if (1) the parties to the arbitration agreement have not filed any such application for referring the dispute to the arbitrator; (2) in a pending suit, such application is not filed before submitting first statement on the substance of the dispute; or (3) such application is not accompanied by the original arbitration agreement or duly certified copy thereof. This would, therefore, mean that Arbitration Act does not oust the jurisdiction of the Civil Court to decide the dispute in a case where parties to the Arbitration Agreement do not take appropriate steps as contemplated under sub- sections (1) & (2) of Section 8 of the Act.

Continue reading “Power of Civil Court to split suit into arbitrable and non-arbitrable dispute?”

Arbitration of Landlord and Tenant dispute if permissible?

Remedy of Arbitration:

Arbitration is a private dispute resolution mechanism whereby two or more parties agree to resolve their current or future disputes by an arbitral tribunal, as an alternative to adjudication by the courts or a public forum established by law. Parties by mutual agreement forgo their right in law to have their disputes adjudicated in the courts/public forum. Arbitration agreement gives contractual authority to the arbitral tribunal to adjudicate the disputes and bind the parties.

Dispute between lessor and lessee:

The tenancy in question was not protected under the rent control legislation and the rights and obligations were governed by the Transfer of Property Act.

Who will decide the arbitrability of dispute?

‘Who decides Arbitrability?’ can be crystallized as under:

(a) Ratio of the decision in Patel Engineering Ltd.on the scope of judicial review by the court while deciding an application under Sections 8 or 11 of the Arbitration Act, post the amendments by Act 3 of 2016(with retrospective effect from 23.10.2015) and even post the amendments vide Act 33 of 2019 (with effect from 09.08.2019), is no longer applicable.

(b) Scope of judicial review and jurisdiction of the court under Section 8 and 11 of the Arbitration Act is identical but extremely limited and restricted.

Continue reading “Arbitration of Landlord and Tenant dispute if permissible?”

Reservations in Appointment is not creation of rigid slots for employment

Reservation in appointment:

Article 16(4) of Constitution of India:

Subject to any permissible reservations i.e.either Social (Vertical) or Special (Horizontal), opportunities to public employment and selection of candidates must purely be based on merit.Any selection which results in candidates getting selected against Open/General category with less merit than the other available candidates will certainly be opposed to principles of equality. There can be special dispensation when it comes to candidates being considered against seats or quota meant for reserved categories and in theory it is possible that a more meritorious candidate coming from Open/General category may not get selected. But the converse can never be true and will be opposed to61the very basic principles which have all the while been accepted by this Court. Any view or process of interpretation which will lead to incongruity as highlighted earlier, must be rejected.

Even going by the present illustration, the first female candidate allocated in the vertical column for Scheduled Tribes may have secured higher position than the candidate at Serial No.64. In that event said candidate must be shifted from the category of Scheduled Tribes to Open / General category causing a resultant vacancy in the vertical column of Scheduled Tribes. Such vacancy must then enure to the benefit of the candidate in the Waiting List for Scheduled Tribes – Female.

Reservation is not rigid:

Reservations, both vertical and horizontal, are method of ensuring representation in public services. These are not to be seen as rigid “slots”, where a candidate’s merit, which otherwise entitles her to be shown in the open general category, is foreclosed, as the consequence would be, if the state’s argument is accepted. Doing so, would result in a communal reservation, where each social category is confined within the extent of their reservation, thus negating merit. The open category is open to all, and the only condition for a candidate to be shown in it is merit, regardless of whether reservation benefit of either type is available to her or him.

Arbitrary denial of Admission to MBBS Course.

The Respondent No.1 passed the final year MBBS Examination in January, 2019. She completed the one-year Compulsory Rotary Internship as a Resident Intern from 28.03.2019 to 27.03.2020 at Malla Reddy Narayana Multispecialty Hospital. Thereafter, she was awarded Bachelor of Medicine and Bachelor of Surgery Degree on11.06.2020. In the meanwhile, she appeared in the All-India National Eligibility-cum-Entrance Test (NEET)Medical PG Entrance examination, 2020 on 05.01.2020.She secured All India Rank-93563 with 327 marks in the NEET examination for admission into Post Graduation Medical Course. The Respondent No.1 was called for counselling and was given provisional admission to the MS (General Surgery) course in the Mop-up Phase (MQ)-P3 on 28.07.2020 and was allotted to the Respondent No.2- College under Management Quota. According to the provisional allotment order, Respondent No.1 was required to report before the Principal of Respondent No.2-College by 04:00 PM on 30.07.2020. In case of failure to report before Respondent No.2 -College within the prescribed time, the provisional selection of Respondent No. 1 shall be automatically cancelled.According to Respondent No.1, she approached Respondent No.2-College along with her father on29.07.2020 and 30.07.2020 for submission of certificates and payment of tuition fees as well as college fees. Inspite of her presence in Respondent No. 2-College, the admission of Respondent No.1 was not completed. On30.07.2020, the last date for admission into PG Medical Courses was extended till 30.08.2020 pursuant to the directions issued by this Court. Respondent No.1 made an attempt to meet the Chairman of Respondent No.2-College on 07.08.2020. However, she was not permitted to meet the Chairman. 3.Having left with no other alternative, Respondent No.1 filed a Writ Petition for seeking a declaration that denial of admission to her in the PG Medical Course for the academic year 2020-2021 as illegal. Respondent No.1 also sought a direction to Respondent No.2-College to grant admission in MS (General Surgery). Respondent No.2-College filed a counter in the Writ Petition in which it was stated that the University constituted a Committee for verification of original certificates and students who were allotted provisional admission by the University were directed to approach the said Committee for the purpose of verification of original certificates. Respondent No.2-College denied that Respondent No.1approached the College for admission on 29.07.2020 or 30.07.2020. In the next sentence the Respondent No.2-College averred that Respondent No.1 and her father visited the College on 29.07.2020 only for the purpose of enquiring about the admission procedure and the requisite fee. As Respondent No.1 did not avail the opportunity of admission, Respondent No.1-Collegecontended that Respondent No.5 was given admission on 11.08.2020.

By its judgment dated 18.09.2020, a Division Bench of the High Court allowed the Writ Petition and directed the Appellant to create a seat in MS (General Surgery)and to grant admission to Respondent No.1. The High Court disbelieved the statement of Respondent No.2-College that Respondent No.1 did not approach the College either on 29.07.2020 or 30.07.2020. The admission granted to Respondent No.5 who is 2000ranks below Respondent No.1 on 11.08.2020 was found fault with by the High Court. As Respondent No.1 was illegally denied admission by Respondent No.2-College,the High Court directed creation of a seat and to grant admission in MS (General Surgery) to her.

In S. Krishna Sradha case(supra), Supreme Court held as follows:

Continue reading “Arbitrary denial of Admission to MBBS Course.”

Uttar Pradesh promulgates anti-conversion (love-jihad) law.

A marriage in Uttar Pradesh will be declared “null and void” if the conversion of a woman is solely for that purpose. Those wishing to change their religion after marriage have to apply to the district magistrate at least 60 days prior to conversion. The Priest/Moulana performing the conversion without this notice shall also be liable to imprisonment.

U.P. Unlawful Religious Conversion Prohibition Ordinance:

Thus the Uttar Pradesh became the first state to bring an anti-love jihad law after Governor Anandiben Patel promulgated the UP Prohibition of Unlawful Conversion of Religion Ordinance 2020. The law prohibits forcible or “dishonest” religious conversions and is applicable from today (28th November 2020) in Uttar Pradesh to check ‘love jihad‘.

For conversions of minors and women of SC/ST community, there will be a jail term of three to 10 years with a Rs 25,000 penalty. In case of mass conversion, offenders can be penalised with a jail term of 3-10 years and a fine of at least Rs 50,000.

Read full Ordinance here:

Fixation of seniority in a newly created cadre

Interpretation of Rule 27 of the Rajasthan Commercial Taxes Subordinate Services (General Branch) Rules, 1975:

Delay in appointment made through multiple advertisement:

“Seniority in respect of persons appointed on the posts included in the cadre of service shall be as per the provisions of these rules and shall be fixed from the date of their appointment. Those appointed on ad hoc or urgent temporary basis, they shall not be considered after their regular selection.

Provided

(1)That the seniority inter-se of the persons appointed to the Service before the commencement of the rules, and/or in process of integration of the Services of the pre-reorganisation of States of Rajasthan or the Services of the new State of Rajasthan established by the State Re-organisation Act, 1956, shall be determined, modified or altered by the Appointing Authority on an ad hoc basis;

(2)That the persons selected and appointed as a result of a selection, which is not subject to review and revision, shall rank senior to the persons who are selected and appointed as a result of subsequent selection. Seniority inter se of persons selected on the basis of seniority-cum-merit and on the basis of merit in the same selection shall be the same as in the next below grade;”

Keeping in mind that the advertisements (for filling the entire cadre, in both the quotas or streams of recruitment) were issued one after the other, and more importantly, that this was the first selection and recruitment to a newly created cadre,the delay which occurred on account of administrative exigencies (and also the completion of procedure, such as verification of antecedents) the seniority of the promotees given on the basis of their dates of appointment, is justified by Rule 27 in this case.

Read Full Judgment here: