Newsletter CONSTITUTION OF INDIA FEBRUARY, 2021 Article 19 (1) (a) of the Constitution of India i.e. Right to freedom of speech and expression also includes right to seek global opinion. Recently, the Hon’ble Delhi High Court while granting bail to a 22-year old climate activist Disha Ravi, observed that  Article 19 of Constitution of India  Right to Freedom of Speech and Expression includes right to seek global opinion. Read More... CIVIL PROCEDURE CODE, 1908 Litigants who settle disputes without court intervention under Section 89 CPC entitled to refund of court fees Recently, the Hon’ble Supreme Court in the matter of  High Court of Judicature at Madras vs. M.C. Subramaniam, has observed that participants in private settlements will be entitled to the same benefits as those who have been referred to explore alternate dispute settlement methods under Section 89 of CPC. The court added that purpose of Section 69­A of Tamil Nadu Court Fees and Suit Valuation Act, 1955 is to reward parties who have chosen to withdraw their litigation in order to save the time and resources of the Court by enabling them the claim refund of court fees deposited by them. The Apex Court further observed that Section 89 of Civil Procedure Code should be interpreted liberally in a manner that would serve its object and purpose Read More... Order XX of CPC which lays down time limit for pronouncing judgment does not apply to High Courts Recently, the Hon’ble  Apex Court in the matter of SJVNL v. M/s CCC HIM JV, recently observed that Order XX of Code of Civil Procedure (CPC) which prescribes time limit for courts to pronounce judgments will not apply to High Courts . The Hon’ble Apex Court further observed that if there is a 6-month hiatus between reserving a judgment and delivering it, either party can move an application before the High Court Chief Justice, who may then decide that the matter be heard afresh. Read More... PREVENTION OF MONEY LAUNDERING ACT, 2002 Whether salaries drawn prior to alleged commission of PMLA offences would constitute "proceeds of crime": Recently, the Hon’ble Madras High Court recently ruled that the salaries drawn by an employee prior to the commission of alleged money laundering activities by a company would not constitute the proceeds of a crime under the Prevention of Money Laundering Act (PMLA). Read More... Whether de-freezing of bank accounts under the Prevention of Money Laundering Act, 2002, shall be valid or not? The Hon’ble Supre Court while analyzing the scope of the powers available to the ED, the Bench observed that even though adequate powers were vested with the authorities, such powers are strictly circumscribed by the procedure laid down under the Act. In light of the same, the Bench held that the freezing of the accounts of the appellant was legally untenable on account of non-compliance with the procedure established under the Act. The decision of the Supreme Court reaffirms the position with respect to the mandatory requirement of presence of “reasons to believe” as well as strict compliance with the procedure contemplated under the Act before depriving any individual or entity of their property. The observations made by the Court are bound to have a far-reaching impact on proceedings under the PMLA, 2002 before the Adjudicatory Authority as well as the appellate courts, thereby ensuring that the actions of the enforcement authorities are within the letter of the law. Read More... INSOLVENCY AND  BANKRUPTCY CODE, 2016 Whether Section 10A would stand attracted to a situation where the application under Section 9 was filed prior to 05.06.2020, when Section 10A was inserted, and in respect of a default which has taken place after 25.03.2020 Recently, the Hon'ble Supreme Court affirmed the NCLAT decision and held that financial distress caused by the outbreak of Covid-19 provides the backdrop to the insertion of Section 10A. The language of the provision is not always decisive to arrive at a determination whether the provision if applicable prospectively or retrospectively. The Ordinance and the Amending Act enacted by Parliament, adopt 25 March 2020 as the cut-off date. The proviso to Section 10A stipulates that "no application shall ever be filed" for the initiation of the CIRP "for the said default occurring during the said period”. The expression "shall ever be filed" is a clear indicator that the intent of the legislature is to bar the institution of any application for the commencement of the CIRP in respect of a default which has occurred on or after 25 March 2020 for a period of six months, extendable up to one year as notified. The explanation which has been introduced to remove doubts places the matter beyond doubt by clarifying that the statutory provision shall not apply to any default before 25 March 2020. The substantive part of Section 10A is to be construed harmoniously with the first proviso and the explanation. Reading the provisions together, it is evident that Parliament intended to impose a bar on the filing of applications for the commencement of the CIRP in respect of a corporate debtor for a default occurring on or after 25 March 2020; the embargo remaining in force for a period of six months, extendable to one year. Acceptance of the submission of the appellant would defeat the very purpose and object underlying the insertion of Section 10A. For, it would leave a whole class of corporate debtors where the default has occurred on or after 25 March 2020 outside the pale of protection because the application was filed before 5 June 2020. Read More... Supreme Court stays NCLAT’s judgment in V. Padmakumar Vs. Stressed Assets Stabilisation Fund (SASF) & Anr. on Company’s Balance Sheet amounts to an acknowledgement of debt under Section 18 of the Limitation Act, 1963. Recenctly, in an appeal preferred before the Hon’ble Supreme Court with respect to issue raised as to whether the acknowledgement made in the balance sheet shall be considered as acknowledgment for computing the limitation period under IBC or not, the Hon’ble Supreme Court has stayed the order passed by the Ld. NCLAT stating the acknowledgment in the balance sheet shall not be considered for computing limitation period under IBC. Read More... Setting up an untenable plea should not in and by itself invite the penal consequences which emanate from the exercise of the contempt jurisdiction Recently, the Hon’ble Supreme Court The role of the adjudicating authority under sub-section (1) of Section 31 comes into being upon the approval of the resolution plan by the CoC under sub-section (4) of Section 30. The function which is assigned by the statute to the adjudicating authority is to determine whether the resolution plan which has been approved by the CoC meets the requirements of sub-section (2) of Section 30. Upon being satisfied that the resolution plan meets those requirements, the adjudicating authority “shall by order approve the resolution plan”. Before passing an order of approval the adjudicating authority has to satisfy itself that the resolution plan has provisions for its effective implementation. Read More... Whether service of Demand Notice u/s 8 of the Code on a Director of the Corporate Debtor can be construed as deemed delivery or not for initiation of CIRP under Section 9 of the Code? Recently, the Hon’ble NCLAT held that the Demand Notices sent u/s 8 of the Code to the registered address, and functional address of the Corporate Debtor met with the remarks' addressee moved' and 'unclaimed' respectively. Unclaimed, will also have to be treated as Service of Notice. Again one set of Demand Notice was duly served upon one of the Directors of the Corporate Debtor. The legislative intent of issuance of Demand Notice under Section 8(1) is not a mere formality but a mandatory provision. Only after service of notice under Section 8(1) and on completion of 10 days, if payment towards the demand is not made, an Operational Creditor gets right to apply under Section 9 and not before such date. The Hon’ble NCLAT further observed that service of the notice upon the directors fulfilsthe mandate u/s 8 of the Code and the Adjudicating Authority has rightly admitted the application u/s 9 filed by the Operational Creditor for initiating Corporate Insolvency Resolution Process against the Corporate Debtor. Read More... The term deposit includes any receipt of money by a company either as deposit or loan or in any other form by it, the meaning of Deposit is enlarged by covering receipts of money in any other form & after all, a deposit is something more than a mere loan of money Recently, the Hon’ble NCLAT while interpreting the word “ Deposit” has held that it cannot be gainsaid that the term deposit includes any receipt of money by a company either as deposit or loan or in any other form by it. Under the Companies (acceptance of deposits) Rules, 2014 the term Deposit is defined under Rule 2(1)(c) in an inclusive manner. The meaning of Deposit is enlarged by covering receipts of money in any other form. After all, a deposit is something more than a mere loan of money. For invoking the jurisdiction of the Tribunal as per Section 74(2) under the Companies Act, 2013, even a partial failure by the Company to repay the deposit was sufficient. In fact, Section 2(31) of the Companies Act speaks of the meaning of deposit. Also, that the Tribunal has vide discretionary powers regarding the repayment of ‘Deposit’(s) but it must exercise its discretion objectively taking into consideration all the relevant aspects in a conspectus judicial manner. In reality, the distinction between deposit and loan may not be a relevant factor for interpreting the term Deposit. To put it succinctly, under the new Companies Act, 2013, the definition of the term Deposit is of wider amplitude, as opined by this Tribunal. Read More... IBC-Writ Jurisdiction Can Be Invoked Despite Availability Of Alternative Remedy If Allegation Pertains To Lack Of Jurisdiction Of NCLT. Recently, the Hon’ble Calcutta High Court while adjudicating the writ petition filed before the Hon’ble Court by Kolkata Municipal Corporation  In Kolkata Municipal Corporation & Anr. v. Union of India & Ors., the Court was hearing a writ petition filed by the Kolkata Municipal Corporation, challenging the order of  NCLT directing it to hand over the property of a private-Respondent, to the Liquidator. The Calcutta High Court has held that a writ petition Article 226 of the Constitution, challenging the jurisdiction of NCLT in a matter, is maintainable despite existence of an alternate remedy in form of appeal before NCLAT. Read More... THE SECURITASATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITIES INTEREST ACT 2002 (SARFAESI ACT) SARFAESI Act, Applicable To Coffee Plantations In State Of Karnataka Recently, the Karnataka High Court in U M Ramesh Rao vs Union Bank of India a division bench of Justice B V Nagarathna and Justice Nataraj Rangaswamy said: "The expression 'agricultural land' in Section 31(i) of the SARFAESI Act, does not include land on which plantation crops are grown namely, cardamom, coffee, pepper, rubber and tea as defined in Section 2(A)(25) of the Land Reforms Act." The Karnataka High Court has ruled that securities created in 'Coffee plantations can be enforced for the realization of debts as coffee plantations would not come within the scope and ambit of agricultural land, under the SARFAESI Act, insofar as the State of Karnataka is concerned. Read More... OTHER RELEVANT JUDGMENTS PASSED BY VARIOUS COURTS UNDER VARIOUS LAWS Despite Marrying Willingly A Minor Girl Can't Be Allowed To Stay With Husband Till She Attains Majority: Allahabad High Court Recently, the Hon’ble Allahabad  High Court in  Pradeep Tomar And Another v. State of U.P. and Another held  that a minor girl cannot be allowed to live in a matrimonial relationship with a man she claims to be her husband even if she had left her home of her own accord and married the Man out of her own free will. The Court observed that Section 94(2) of the Juvenile Justice (Care and Protection of Children) Act, 2015 makes it vivid that in the face of a date of birth certificate from the school or the matriculation or equivalent certificate from the concerned examination Board, the other evidence about the age of a victim cannot be looked into.The Court also said "The marriage would not be void under Section 12 of the Prohibition of Child Marriage Act, 2006, but would be voidable under Section 3 of the said Act. Read More... Muslim Man Can Marry More Than Once Without Divorcing Earlier Wife But Same Doesn't Apply To A Muslim Woman: Punjab and Haryana High Court Recently, the Hon’ble Punjab and Haryana High Court has in the matter of  Nahida & Anr. V. State of Haryana & Ors. Petitioner No.1, the Muslim lady (who admittedly was married earlier) did not obtain a legally valid divorce from her first husband before marrying Petitioner No. 2, Muslim man. The petition is held not maintainable at the behest of the petitioners who have got married without petitioner No.1 being legally and validly divorced, the Court observed. The petitioner was given liberty to approach the concerned Senior Superintendent of Police for redressal of their apprehensions regarding threats to their life and liberty. Read More... IMPORTANT NOTIFICATIONS/ORDERS PASSED BY THE COURTS IN VIEW OF THE OUTBREAK OF COVID-19 AND NATIONWIDE LOCKDOWN DECLARED BY THE CENTRAL GOVERNMENT Hon’ble Delhi High Court shall start physical hearing of the matters from 15.03.2020. Recently, the Hon’ble High Court has issued a notification vide notification no. __________has issued notification that the Hon’ble High Court shall resume physical hearing all matters from 15.03.2021. Read More... Hon’ble National Company Law Tribunal shall resume physical hearing from 01.03.2021. Recently, the Hon’ble National Company Law Tribunal has issued a notification vide notification dated 23.02.2021 has issued notification that the Hon’ble National Company Law Tribunal shall resume physical hearing all matters from 01.03.2021. Read More... Education Should Never Be Compromised": Gujarat High Court Directs Govt. To Ensure That No Child Drops Out Due To Inability To Pay Fee. During a survey it was revealed that various hardship faced by people during the lockdown and particularly sudden stoppage of mid-day meals in government school. Gujarat High Court directed the State Government to ensure that the inability to pay the fees should not compel the parents to stop providing education to their children. It may be noted that the Bench of Chief Justice Vikram Nath and Justice J. B. Pardiwala had taken up a public interest litigation (on its own motion) based on a survey done by the Indian Institute of Management Ahmedabad (IIM Ahmedabad) and UNICEF Gujarat. 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