Newsletter ARBITRATION AND CONCILIATION ACT, 1996 JULY, 2022 WHETHER SECTION 11(6A) OF ARBITRATION ACT CIRCUMVENT THE JURISDICTION OF COURTS TO CONSIDER THE ISSUE OF ARBITRABILITY? Recently the Hon’ble Supreme Court in the case titled ‘Indian Oil Corporation Limited v. NCC Limited’ interpreted Section 11(6A) of the Arbitration and the Conciliation Act, 1996 and held that the court is well within its rights to scrutinise the issue of non-arbitrability at the stage of appointment of arbitrators in Section 11. Notably, Section 11(6A) being inserted through 2015 amendment to Arbitration Act provides for the Courts to consider the existence of a valid arbitration agreement between the parties. In the present case, the Hon’ble Supreme Court observed that the High Court also erred in holding that after insertion of Section 11 (6-A), the scope of inquiry is limited to check whether a binding agreement exists between the parties. In this regard, they further held that the issues of jurisdiction and non-arbitrability can be entertained at the stage of reference under Section 11 of the Arbitration and Conciliation Act. The Hon’ble Court further dwell on the Jurisdiction of Courts and observed that it may even consider the accord and satisfaction of claims at deciding stage of Section 11, if the facts are such. Read More... INSOLVENCY AND BANKRUPTCY CODE, 2016 WHETHER AN APPLICATION UNDER SECTION 7 OF IBC HAS TO BE        MANDATORILY ADMITTED BY THE ADJUDICATING AUTHORITY MANDATORILY? Recently a division bench of the Hon’ble Supreme Court comprising of Justice Indira Banerjee and Justice J.K. Maheshwari narrowed the scope of filing the CIRP proceedings under Section 7 of IBC against the Corporate Debtor in the case titled ‘Vidarbha Industries Power Limited vs. Axis Bank Ltd.’ Herein, the Hon’ble Supreme Court observed that the National Company Law Tribunal has the discretion to admit or not to admit an application filed against the Corporate Debtor for initiating CIRP proceedings. The Hon’ble Supreme Court further observed that Section 7(5)(A) is a discretionary provision and is not mandatory in nature thereby implying that it is at the discretion of the Authority to admit or not admit the application. The Hon’ble Court further observed that existence of debt and default will only qualify the financial creditor to file the application but it is a discretionary power conferred on the Adjudicating Authority to admit the Petition. The Hon’ble Supreme Court further drew the distinction between Section 7(5)(a) and Section 9(5)(a) of the Insolvency and Bankrutpcy Code, 2016 and held that the usage of  “may” in Section 7(5)(a) makes it discretionary whereas usage of “shall” in Section 9 makes it a mandatory provision. Thus, the usage of “may” and “shall” in the sections is for a specific purpose and has different connotation. Even though giving wide discretionary powers to the adjudicating Authority, the Hon’ble Court did hold that the discretionary power should not be exercised arbitrarily. The Bench even disregarded the landmark Judgment titled ‘Swiss Ribbons Pvt. Ltd. v. Union of India’ to the extent that it does not consider the question of admitting a petition in case of default being mandatory or discretionary. In this regard, the Hon’ble Court stated, “The language used in a judgment cannot be read like a statute. In any case, words and phrases in the judgment cannot be construed in a truncated manner out of context.” Read More... WHETHER CIRP PROCEEDINGS UNDER SECTION 9 OF IBC CAN BE DISMISSED IF THE DEBT IS DISPUTED? Recently the Hon'ble Supreme Court narrowed the scope of filing CIRP proceedings under Section 9 of the Insolvency and Bankruptcy Code against Corporate Debtor in the case titled ‘SS Engineers vs. Hindustan Petroleum Corporation Ltd.’ Herein, the Hon'ble Supreme Court observed that if the debt is disputed, then CIRP proceedings cannot be initiated against the Corporate Debtor. The Supreme Court held that while examining an application under section 9 of IBC, key requirements have to be fulfilled before initiating the proceedings of CIRP:- (i)The operational debt should be more than Rupees 1,00,000, (ii) The operational debt is payable and had not been paid. This has to be furnished with proper evidence, (iii) There should not be any pre-existing dispute before the receipt of the demand notice. Read More... WHETHER RESOLUTION PROFESSIONAL CAN PREFER AN APPEAL IN PERSONAL CAPACITY CHALLENGING REMARKS MADE BY LD. AA ON HIS EFFORTS IN VERIFYING CLAIMS FILED BY CREDITORS Recently, the Hon’ble National Company Law Appellate Tribunal in the case titled ‘Sumant Kumar Gupta, RP M/s Vallabh Textiled Co. Ltd. v. Vardhman Industries Ltd.’ held that the RP should discharge his responsibilities with highest standards of professional excellence, dexterity, integrity and in good faith. Herein, the Hon’ble Appellate Tribunal affirmed the findings of the Ld. Adjudicating Authority that RP lacked professionalism in analyzing the admissibility of claims filed by the Financial Creditor before him.  In the present case, the Financial Creditor filed its claim well within the time stipulated in the public -announcement. Subsequently, the RP sought additional information for verification of claims from the Financial Creditor. However, time given to the Financial Creditor to provide this information was very limited i.e. one day. Since, the Financial Creditor could not satisfy the requirements as sought by the RP, its claim was rejected. Thereafter when the Financial Creditor tried to re-file its revised claim, the RP again rejected the said claim. The Ld. Adjudicaitng Authority also directed the RP to consider Financial Creditor’s claim and the same was also affirmed by Hon’ble Appellate Tribunal, thereby calling out the actions of the RP. Read More... WHETHER DEMAND NOTICE UNDER SECTION 8 OF IBC HAS TO BE MANDATORILY DELIVERED ON THE REIGSTERED ADDRESS OF THE CORPORATE DEBTOR ? Recently, the Hon’ble National Company Law Appellate Tribunal in the case titled ‘Jitendra Kumar Singh v. M/s Vishkarma Tool Work & Anr.’ held that the legislature has used the word “or” in Rule 5(2)(a) & (b) of 2016 Rules which means that the demand notice could either be served on the registered address of the Corporate Debtor or through email to the Whole Time Director, Key Mannegerial Person or designated partner. Read More... WHETHER PROSECUTION UNDER SECTION 69 OF IBC IS EXTENDABLE ON PERSONS WHO ARE NOT OFFICERS OF THE CORPORATE DEBTOR? Recently, a three judge bench of Hon’ble National Company Law Appellate Tribunal comprising of Justice Ashok Bhushan, Justice M. Satyanarayana Murthy and Technical Member Barun Mitra  in the case titled ‘Mr Rohit Jasoria, Prop. RJ Brothers & Partner RJ Logistics Service LLP v. AArgus Global Logistics Pvt. Ltd.’ held that Section 69 of the Insolvency and Bankruptcy Code, 2016 specifically stipulates that only the Corporate Debtor or officer of the Corporate Debtor could be held punishable for transactions defrauding creditors. This implies that the persons who are not the officers of the Corporate Debtor cannot be awarded punishment under Section 69 of the Code. Read More... INTELLECTUAL PROPERTY RIGHTS WHETHER THE DEFENDANT’S TRADEMARK ‘JAMES BOND’ IS DECEPTIVELY SIMILAR TO CADBURY’S ‘GEMS’/’GEMS BOND’? Recently the Delhi High Court in the case titled ‘Mondelez India Foods Pvt. Ltd & Anr. vs. Neeraj Food Products’ held that an identical colour scheme layout and arrangement is a ground for trademark infringement as it amounts to deceptive similarity. In the present case, the defendant company had launched a chocolate product being ‘James Bond’ having same colour scheme and layout as that of Plaintiff’s product ‘Cadbury Gems’. Additionally, Cadbury Gems had registered a trademark ‘Gems Bond’ which was valid and subsisting long before Defendant launched it’s product and introduced the mark. Accordingly, the single Judge Bench in Delhi High Court comprising of Justice Pratibha M Singh awarded Rs. 16 lakh damages to the plaintiff and the trademark of the defendant was found to be deceptively similar to that of the Plaintiff’s trademark. Read More... WHETHER THE USAGE OF TRADEMARKS “FACEBAKE” OR “FACECAKE” AMOUNT TO TRADEMARK INFRINGEMENT OF META’S MARK “FACEBOOK”? Recently, the Delhi High Court in the case titled ‘Meta Platforms, INC vs. Noufel Malol &Anr.’ held that the usage of the trademarks ‘facebake’ and ‘facecake’ will lead to trademark infringement to Meta’s mark FACEBOOK and has restrained the usage of the said mark. In the present case, the Meta Platforms INC. moved an application alleging that Noufel  being the Defendant Company is infringing the trademark Facebook by copying its design, colour, scheme, font and the overall look. At this stage, the counsel for Defendant submitted that the mark might look similar at first instance but the business line is completely different as the Defendant is engaged in baking and cooking whereas, the Plaintiff offers social media services. The defendents even submitted that they already changed the name of the trademark from ‘facebake’ to ‘facecake’. The Delhi High Court has observed that thougth there was difference between the trademarks but the visual representation of the ‘facebake’ indicated the mala fide intention of the defendant so that they can obtain unfair advantage of goodwill by the use of their trademark. This will lead to deceptive similarity which is a ground for rejecting a trademark. The Delhi High Court has permanently restrained the usage of these trademarks. Read More... Miscellaneous WHETHER NON-COMPLIANCE OF THE ARREST PROVISIONS WOULD ENTITLE THE ACCUSED THE GRANT TO BAIL? Recently the Hon’ble Supreme Court in the case titled ‘Satender Kumar Antil vs Central Bureau Of Investigation’ held that the non-compliance of the mandates in Section 41 and 41A will qualify the accused to be granted bail. Notably, Section 41 of The Code of Criminal Procedure lays down that police may arrest a person without warrant and Section 41A states that the police officer should arrest a person without warrant only if the person is concerned with a cognizable offence and against whom a reasonable complaint has been lodged and a reasonable suspicion has occurred. The Hon’ble Supreme Court further held that police officers not complying with the mandates referred in Section 41 and 41A will be brought before the higher authorities and appropriate actions will be taken against them. The Hon’ble Supreme Court noted that the compliance of this mandate will avoid unnecessary arrests and will also de-cluster the number of bails that take place. The Hon’ble Supreme Court has placed its reliance on the case ‘Arnesh Kumar vs. State of Bihar’ in which it was held that there should be satisfactory reasons to arrest. Read More... WHETHER THE APPELLANT CAN BE GRANTED PRE-ARREST BAIL IN AN OFFENCE UNDER SECTION 376(2) IPC ON THE GROUND THAT A WOMAN WAS RESIDING VOLUNTARILY WITH THE APPELLANT Recently, the Hon’ble Supreme Court in the case titled ‘Ansaar Mohammad vs. The State of Rajasthan & Anr.,’ granted a pre-arrest bail in favour of the Appellant on the ground that the woman was residing with the man voluntarily in a relationship. The Hon’ble Court observed that the Complainant cannot file a rape case when the relationship gets disrupted and sour. In the present case, the Appellant preferred an application seeking pre-arrest bail under Section 438 of CrPC. Hereunder, the woman had been residing with the man for over four years with her own consent from the age of 21 and that the couple has a female child born from the relation between the parties. The Hon’ble Supreme Court further observed that just because the relationship did not work, this cannot be a ground for filing a rape case and the Appellant was thus allowed to seek pre-arrest bail. Read More... WHETHER UNMARRIED WOMEN ARE ALLOWED TO TERMINATE THEIR PREGNANCY? Recently the Hon’ble Supreme Court has widened the scope of aborting pregnancy by stating that the word ‘partner’ is used in the 2021 Amendment, the Medical Termination of Pregnancy Act in the case titled ‘X vs The Principal Secretary, Health & Family Welfare Department’. Herein the Hon’ble Supreme Court has held that women cannot be denied the right to terminate the pregnancy because of their marital status. The Hon’ble Supreme court further observed that if women have to suffer an unwanted pregnancy, then it would be contrary to the laws enacted by the Parliament. The Hon’ble Supreme Court held that difference between a married and an unmarried woman is not reasonable with the objects of the laws enacted by the Parliament. The Hon’ble Supreme Court held that termination of pregnancy can take place upto 20 weeks as states in Section 3(2) of the Medical Termination of Pregnancy Act.The Hon’ble Supreme Court widened the expression of ‘women or her partner’ stating that women will include unmarried women as well and that is in compliance with Article 14 of the Indian Constitution. Read More... CONTOURS OF THE PREVENTION OF MONEY LAUNDERING ACT, 2002, EXAMINED BY THE HON’BLE SUPREME COURT OF INDIA The Hon’ble Supreme Court in the case titled ‘Vijay Madanlal Choudhary Vs Union of India’ has upheld the validity of certain provisions of the Prevention of Money Laundering Act, 2002 which is summarized herein below- Section 5 of the Prevention of Money Laundering Act, 2002 has been upheld constitutionally valid as it provides a balance to secure the interests of person and the procedure of crime which is required to deal. Section 8(4) has been upheld as it is being invoked and acts in accordance with the meaning which has been assigned to it. Section 17(1) has been upheld as there are various safeguards that are provided under the section hereinabove. Section 18(1) has been upheld constitutionally valid as the amended provision is not arbitrary in nature. Section 19 has been upheld as there are major protections and safeguards provided under the Section and it is not arbitrary in nature. Section 24 has been upheld as it has a direct nexus with the pruposes and aims of the Act and is not arbitrary in nature. The expression ‘proceedings’ should be given wide interpretation so as to include the procedure followed by the Adjudicating Authority and the Special Court. The expression ‘investigation’ in the Act is interchangeable with the expression of ‘inquiry’ and has not to be limited by the offence under the Act. The expression ‘proceeds of crime’ has to be interpreted strictly as it is the core ingredient in constituting the offence of money laundering thereby, widening the scope of Section 3 of the Act. The legislative policy and the nature of the offence does not have any repercussions on the validity of the schedule. In this regard the Hon’ble Supreme Court has taken reliance on the case titled ‘Ishwar Singh Bindra & Ors. vs. The State of U.P.465’, Joint Director of Mines Safety it which it was interpreted that the word “and” in Section 3 as “or” to give full effect to the legislative intent of the Section. Additionally, the issue as to whether amendments in the Act with respect to finance could not have been enacted by the Parliament through a Finance Act will be dealt with the case of Rojer Mathew by bench of seven judges. Read More... WHETHER ADDITIONAL CHIEF METROPOLITAN MAGISTRATE CAN BE CONSIDERED AT PAR CHIEF METROPOLITAN MAGISTRATE IN CONTEXT WITH SECTION 14 OF THE SARFAESI ACT? Recently, in the case titled ‘R.D Jain and Co. vs. Capital First Ltd.’ division bench of the Hon’ble Supreme Court comprising of Hon’ble Justice MR Shah and Justice BV Nagarathna held that the Additional District Magistrate and the Additional Chief Metropolitan Magistrate are to be taken at par with the District Magistrate and the Chief Metropolitan Magistrate for the purpose of expeditious disposal of applications filed under Section 14 of the SARFAESI Act. Notably, Section 14 of the SARFAESI ACT mandates the Chief Metropolitan Magistrate or the District Magistrate to deliver possession of a secured asset within 30 days, extendable to an aggregate of 60 days upon recording reasons in writing. The Hon’ble Court observed that the backlog of cases before Chief Metropolitan Magistrates is tremendous. The Court further held that the main objective of Section 14 of the SARFAESI Act is to provide expeditious disposal of the applications and for this purpose the Additional District Magistrates and Additional Chief Metropolitan Magistrates have to be taken at par with the District Magistrate and Chief Metropolitan Magistrate for exercising the functions mentioned in Section 14. In this regard the Hon’ble Supreme Court overruled three High Court judgements titled ‘Ushpa Devi B Jain Vs. Indian Overseas Bank’ ( Gujarat High Court),  ‘Shri Chellaperumal & Anr. Vs. The Authorised Officer & Ors’( Calcutta High Court) and  ‘Aseena Vs. Sub­ Divisional Magistrate’  (Kerala High Court). On the other hand, the Hon’ble Supreme Court has upheld the Bombay High Court judgement as it was in compliance with the ratio which is decided in the present case. Read More... NEW DELHI X -3, Green Park Main, New Delhi, 110016, Telephones: +91 11 2652 0041-42 For further / specific information, please contact us at: info@tandonandco.com Disclaimer: The contents of this newsletter are intended for information purposes only, and parts of this newsletter are based on news reports and have not been independently verified. The newsletter is not in the nature of a legal opinion or advice. They may not encompass all possible regulations and circumstances applicable to the subject matter and readers are encouraged to seek legal counsel prior to acting upon any of the information provided therein. Tandon & Co. neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this newsletter.  This newsletter is the exclusive copyright of Tandon & Co. and may not be circulated, reproduced or otherwise used by the intended recipient without the prior permission of its originator.