Newsletter ARBITRATION AND CONCILIATION ACT, 1996 MAY, 2021 Interplay between provisions of IBC and Arbitration Act Recently, the Hon’ble Calcutta High Court clarifies the interplay between provisions of Insolvency and Bankruptcy Code, 2016 (‘Code’) and the Arbitration Act. The present proceeding is precisely a case where, the issue was whether the Award should be set aside or sustained, would be a complete waste not only of judicial time as well as of the parties since the claim of the Award-holder has been extinguished upon approval of the Resolution Plan under Section 31 of the Code. The Court further observed that the adjudication on the legality of the impugned Award cannot lead to its logical conclusion and would hence be irrelevant. Thus, the Arbitration Petition for setting aside of Award was disposed of as being rendered infructuous. Read More... INSOLVENCY AND BANKRUPTCY CODE, 2016 Constitutional validity of the Part III of the Insolvency and Bankruptcy Code, 2016, came into force vide Government’s notification dated 15.11.2019, has been upheld by the Hon’ble Supreme Court. Recently, the Hon’ble Supreme Court in various transfer petitions, has dismissed the challenge to the constitutional validity of the Central Government’s notification dated 15.11.2019, notifying the provisions for recovery of dues from personal guarantors to corporate debtors under Part III of the Insolvency and Bankruptcy Code, 2016 (hereinafter the ‘Code’). The petitioner’s main challenge to the notification was that it is manifestly arbitrary and discriminatory insofar as notified provisions of Part III of the Code only in respect of personal guarantors, whereas part III governs the insolvency resolution and bankruptcy for individuals and partnership firms in general. The Hon’ble Supreme Court upheld the validity of the notification. The Hon’ble Supreme Court held that approval of a resolution plan does not ipso facto discharge a personal guarantor (of a corporate debtor) of her or his liabilities under the contract of guarantee. Release or discharge of a principal borrower from the debt owed by it to its creditor, by an involuntary process, i.e. by operation of law, or due to liquidation or insolvency proceeding, does not absolve the surety/guarantor of his or her liability, which arises out of an independent contract. It is also held that approval of a resolution plan relating to a corporate debtor does not operate so as to discharge the liabilities of personal guarantors (to corporate debtors). Read More... Time Lost during Pandemic and pendency ofJudicial Proceedings are excluded for computation of period of CIRP The Division Bench of Hon’ble National Company Law Appellate Tribunal excluded time lost due to judicial intervention and also the time lost on account of imposition of lockdown, including the time spent in filing the appeal for the Appellate Authority. Reliance was placed on the judgment of Hon’ble Supreme Court in Essar Steel India Ltd. v. Satish Kumar Gupta in Civil Appeal No.8766-67 of 2019, Anil Tyagi v. Committee of Creditors C.A. (AT)(I) No. 120 of 2021 alongwith State Bank of India v. M/s Century Communication Ltd. &Ors. Read More... The Code of Criminal Procedure, 1973 Right of a person in detention to consult lawyer of his choice is a constitutional right, State can’t dilute it The Hon’ble Delhi High Court granted relief to Shifa Ur Rehman, President of the Alumni Association of the Jamia Milia Islamia, arrested and charged under UAPA in connection with the Delhi Riots that broke out in Delhi last year. A single judge bench comprising of Justice VibhuBakhru observed that it is the constitutional right of a person in detention to consult with the lawyer of his choice which cannot be diluted by the State. The Court further held that it is unable to accept that it is permissible to not comply with the principles of natural justice on the ground that even if same were complied with, it would serve no useful purpose. The observation came after Rehman challenged the order passed by a Sessions Court allowing prosecution’s application under Section 43D of UAPA and extended the period of investigation and his detention till 17th September, 2020. It was therefore claimed by Rehman that he was not afforded adequate opportunity to oppose the application for extension of period for completion of investigation as he was not granted access to legal assistance and that despite orders passed by the concerned courts, he was not provided any opportunity to consult or instruct his lawyers. Read More... The Hon’ble Supreme Court dismisses a Transfer Petition filed in a Trademark Dispute The petitioner, claiming to be the owner of the mark ‘SACHAMOTI’, filed a suit against the respondent before the Delhi High Court in 2016 alleging infringement and passing off by the respondent. The respondent filed a private complaint in 2016 against the petitioner before the Judicial Magistrate No. IV, Salem under Section 420 of the Indian Penal Code (Cheating and dishonestly inducing delivery of property) and Section 103 of the Trademarks Act (Penalty for applying false trademarks, trade descriptions etc). The Magistrate took cognizance of the matter and proceedings are on. The petitioner filed the transfer petition under Section 406 of CrPC (Power of Supreme Court to transfer cases and appeals) to transfer the criminal case from Salem to Patiala House, New Delhi. The Hon’ble Supreme Court dismissed the Transfer Petition and held that convenience of one of the parties cannot be a ground for invoking Section 406 of CrPC. The given fact-situation is to be distinguished from that of the fact-situation in the Supreme Court judgment in Mrudul M. Damle&Anr. v. CBI (2012) 5 SCC 706 where transfer petition was granted. In Mrudul M. Damle&Anr, the transfer petition was granted for the reason that most of the witnesses and accused themselves were based out of a different jurisdiction. The Court further held that Section 406 of CrPC (Power of Supreme Court to transfer cases and appeals) is to be sparingly exercised and a mere apprehension is not enough. Read More... OTHER RELEVANT JUDGMENTS PASSED BY VARIOUS COURTS UNDER VARIOUS LAWS Availability of an alternative remedy does not prohibit the High Court from entertaining a writ petition in an appropriate case. Recently, the Hon’ble Supreme Court has held that it is well settled that availability of an alternative remedy does not prohibit the High Court from entertaining a writ petition in an appropriate case. The High Court may entertain a writ petition, notwithstanding the availability of an alternative remedy, particularly (1) where the writ petition seeks enforcement of a fundamental right; (ii) where there is failure of principles of natural justice or (iii) where the impugned orders or proceedings are wholly without jurisdiction or (iv) the vires of an Act is under challenge. Reference may be made to Whirlpool Corporation v.Registrar of Trade Marks, Mumbai and Ors. reported in AIR 1999 SC 22 and Pimpri Chinchwad Municipal Corporation and Ors. V. Gayatri Construction Company and Ors, reported in (2008) 8 SCC 172, cited on behalf of Respondent No.1.  It is now well settled by a plethora of decisions of this Court that relief under Article 226 of the Constitution of India may be granted in a case arising out of contract. However, the writ jurisdiction under Article 226, being discretionary, the High Courts usually refrain from entertaining a writ petition which involves adjudication of disputed questions of fact which may require analysis of evidence of witnesses. Monetary relief can also be granted in a writ petition. Read More... The Hon’ble Supreme Court explains the concept of repugnancy of a legislation under Article 254 of the Indian Constitution. The Hon’ble Supreme Court pronounced a judgment in Forum for People’s Collective Efforts &Anr. V. The State of West Bengal &Anr., whereby it allowed the petition of the homebuyer’s association challenging the constitutional validity of West Bengal’s state enactment, the Housing Industry Regulation Act, 2017 (‘HIRA’), on the grounds that it was a mere replica of the Centre’s Real Estate (Regulation and Development) Act, 2016 (‘RERA’) In the judgment, the Court observed that there was a significant overlapping between the central and state enactments. The Court opined that IRA was repugnant to RERA not only because it was inconsistent with RERA in certain aspects but also because it attempted to set up a parallel mechanism/regime that was identical to RERA in several other aspects. On account of this repugnancy, the Court struck down HIRA as unconstitutional. Read More... The Hon’ble Supreme Court stood as a staunch proponent of the freedom of media to report Court Proceedings. The authority of a judge to conduct judicial proceedings and to engage in a dialogue during the course of a hearing and the freedom of media to report not just judgments but judicial proceedings came up for discussion, when a constitutional body, the Election Commission of India set up a plea that the oral remarks made by the judge of Madras High Court, during the course of hearing on the issue of surge in Covid Cases and its failure to implement the protocols and safety measures in conducting elections, were baseless, and tarnished the image of the Commission, and ought not have been reported. The Hon’ble Supreme Court deliberated on Open Court Proceedings and held that extension of freedom of speech and expression that media possesses constitutes a ‘virtual’ extension of open court and this phenomenon is not a cause of apprehension, but celebration of constitutional ethos which bolsters integrity of judiciary by focusing attention on its functions. 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.