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Triyambak S. Hegde v. Sripad

Citation

Date

Brief

REED 2021 SC 09008

Court

Supreme Court

Subject 

Dishonour of cheque - Appeal by the Complainant

September 22, 2021

Bench

N.A.

Applicable Law

Sections 118, 118(a), 138, 139, Negotiable Instruments Act, 1881
Sections 200, 313, Code of Criminal Procedure, 1973

It was difficult to comprehend as to why it would have been drawn for Rs.1,50,000/( Rupees one lakh fifty thousand only) only when it is the case of the appellant that the advance amount paid was Rs.3,50,000/( Rupees three lakh fifty thousand only) and had to get back the entire advance paid. The natural conduct would have been to secure for the full amount if that was the situation. Keeping all these aspects in view, the case put forth by the respondent does not satisfy the requirement of rebuttal even if tested on the touchstone of preponderance of probability. Therefore, in the present facts it cannot be held that the presumption which had arisen in favour of the appellant had been successfully rebutted by the respondent herein. The High Court therefore was not justified in its conclusion. As observed by this Court in Kaushalya Devi Massand vs. Roopkishore Khore, REED 2011 SC 03001, the gravity of complaint under N.I. Act cannot be equated with an offence under the provisions of the Indian Penal Code, 1860 or other criminal offences. The Supreme Court observed, if an enhanced fine was imposed it would meet the ends of justice. Only in the event the respondent-accused not taking the benefit of the same to pay the fine but committing default instead, he would invite the penalty of imprisonment.

In Re: Cognizance for Extension of Limitation

Citation

Date

Brief

REED 2021 SC 09011

Court

Supreme Court

Subject 

Suo Moto Cognizance for Extension of Limitation

September 22, 2021

Bench

N.A.

Applicable Law

Sections 23(4), 29A, Arbitration and Conciliation Act, 1996
Section 12A, Commercial Courts Act, 2015
Sections 138(b), 138(c), Negotiable Instruments Act, 1881

The Apex Court has recalled the suo motu order of April 27, 2021, which had extended with effect from March 14, 2021 the limitation period for filing of cases in view of the COVID second wave. The Court observed that the suo motu extension of limitation period will stand withdrawn with effect from 2 October 2021. The Supreme Court disposed the M.A. No.665 of 2021 with the following directions:
(I) In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021; (II) In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that longer period shall apply; (III) The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings; (IV) The Government of India shall amend the guidelines for containment zones, to state. “Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements.”

Justice (Retd) Ashok Iqbal Singh Cheema v. Union of India and Others

Citation

Date

Brief

REED 2021 SC 09536

Court

Supreme Court

Subject 

Petition - Filed by the Officiating Chairperson, NCLAT to - Issue a Writ of Mandamus or in the nature of Mandamus or any other appropriate Writ - Directing the Respondent no.1 to include the period from 11.09.2021 to 20.09.2021 as part of continuous service of the Petitioner in terms of communication dated 16.07.2021 bearing no.A- 40012/1/2020 – Ad.IV (Annexure P/12) and pay all service benefits accordingly

September 15, 2021

Bench

N.A.

Applicable Law

During the course of hearing, learned Attorney General fairly stated that respondent No.1 – Union of India has no objection in accepting the prayer `C’ made by the petitioner Justice A.I.S. Cheema, in the present writ petition and to allow the petitioner to work upto 20.09.2021 as the Officiating Chairperson, National Company Law Appellate Tribunal, New Delhi to enable him to pronounce the judgments prepared by him. Learned Attorney General further submitted that after acceptance of the above-mentioned prayer ‘C’ made by the petitioner in the instant writ petition, consequential order will be passed by the respondents forthwith. It is also the submission of the learned Attorney General that respondent No.3 will proceed on leave upto 20.09.2021. Taking note of the submissions advanced by the learned Attorney General for India, the writ petition was disposed of in the above terms.

Zila Sahkari Bank Limited v. Ram Niwas and Another

Citation

Date

Brief

REED 2021 SC 08004

Court

Supreme Court

Subject 

Service Matter - Termination - Respondent seeking grant of relief

August 30, 2021

Bench

N.A.

Applicable Law

Section 100, Code of Civil Procedure, 1908
Regulation 19, Uttar Pradesh Cooperative Societies Employees’ Service Regulations, 1975

The termination has been found to be contrary to the regulations and hence, illegal. The issue which survives is in regard to the grant of relief. The first respondent served for a period of less than three years from 31 July 1980 until his appointment was terminated on 14 June 1983. Over thirty-eight years have elapsed since the date of the termination. Having regard to the above circumstances and the nature of the appointment, the Apex Court were of the view that a direction for the payment of compensation in lieu of the reliefs which have been granted by the Trial Judge (and affirmed in appeal) would meet the ends of justice.

SEPCO Electric Power Construction Corporation v. POWER MECH Projects Limited

Citation

Date

Brief

REED 2021 SC 08003

Court

Supreme Court

Subject 

Bank Guarantee - Appeal against the High Court Order to substitute an irrevocable Bank Guarantee

August 23, 2021

Bench

N.A.

Applicable Law

Article 136, Constitution of India, 1950
Section 5(c), Banking Regulation Act, 1949
Section 114, Order 47 Rule 1, Code of Civil Procedure, 1908
Section 13(1A), Commercial Courts Act, 2015
Sections 9, 34, 37, Arbitration and Conciliation Act, 1996
Sections 2(e), 45A(a), Reserve Bank of India Act, 1934
Notification DBOD IBD. No.8137/23.03.026/2011-12 dated 1.12.2011
published in the Gazette of India (Part III Section 4)

The short question in these Appeals is, whether the High Court was right in refusing to accept a legally valid irrevocable Bank Guarantee of Rs.30 Crores, issued by the Industrial and Commercial Bank of China Limited, Mumbai, hereinafter referred to as ‘ICBC’ which is a Scheduled Bank included in the Second Schedule of the Reserve Bank of India Act, 1934, and insisting that the Appellant should furnish a fresh Bank Guarantee of the same amount, with identical terms, issued by a “Scheduled Indian Bank”, notwithstanding the expenditure incurred by the Appellant in obtaining the Bank Guarantee from ICBC. These Appeals are restricted only to the question of legality of the direction of the High Court, requiring the Appellant to substitute a legally valid irrevocable Bank Guarantee, issued by ICBC, which is a Scheduled Bank, carrying on business in India, with a Bank Guarantee of equivalent amount issued by a “Scheduled Indian Bank”. However, Justices of the Division Bench did not have the same views, they have given different verdicts as follows:
Per Indira Banerjee, J.: The Apex Court observed that it appears that all the concerned parties proceeded on the understanding that there was no difference between a ‘Scheduled Indian Bank’ and ‘Scheduled Bank located in India’, in the absence of any specific definition of the expression ‘Scheduled Indian Bank’ in the RBI or the Banking Regulation Act. ICBC is also a Scheduled Bank within the meaning of Section 2 (e) of the RBI Act, which defines a ‘Scheduled Bank’ to mean a bank included in the Second Schedule to the RBI Act. As a Scheduled Bank and a banking company within the meaning of the Banking Regulation Act, ICBC is governed by the regulatory provisions of the RBI Act and the Banking Regulation Act and the Rules, Regulations, Orders, Notifications etc. issued thereunder. The circulars and directives of the Reserve Bank of India with regard to Bank Guarantees/ Demand Guarantees are binding on ICBC. The RBI Act only defines ‘Scheduled Banks’ which includes Scheduled Foreign Banks operating in India. The RBI Act or the Second Schedule thereto does not segregate Scheduled Indian Banks. There is no definition of Scheduled Indian Bank in the RBI Act. The regulatory provisions of the RBI Act apply equally to all scheduled banks. There can be no doubt that the Court has the discretion to insist on a Bank Guarantee from any specific bank or class of banks to safeguard the interests of the beneficiary of the Bank Guarantee. The Court may legitimately disapprove a Bank Guarantee of a bank with a history which raises doubts with regard to its credibility. In this case, there is nothing on record to give rise to any doubts with regard to the credibility of ICBC or its financial ability or willingness to honour guarantees. In the absence of any adverse material against ICBC and in the light of a plethora of reports showing its financial soundness, Justice Indira Banerjee was of the view that the High Court erred in directing the Appellant to replace the Bank Guarantee of ICBC, already furnished pursuant to an order of Court passed on 12.02.2019, with another Bank Guarantee, oblivious of the practical realities in the arena of banking activities, specially the difficulties in obtaining a Bank Guarantee from banks with which the applicant has no transaction and ignoring the cost already incurred by the Appellant by way of bank charges for obtaining the guarantee.
Per V. Subramaniun, J: If a party to a proceeding invites an order by making an offer, he is obliged to honour the commitment made in the form of the offer. The contention of Mr. K.V. Vishwanathan that his client’s offer in paragraph 1(iii) of the order dated 12.02.2019 to furnish a bank guarantee of a scheduled Indian bank stood modified by paragraph 6 of the order, is not acceptable. This is for the reason that the very same learned Judge from whom the order dated 12.02.2019 was invited, clarified on 09.04.2019 that what he had in mind was what was actually offered by the petitioner. Once the same learned Judge has clarified that there was no intention to accept the offer made by the petitioner with a modification, it is not open to the appellate court to upset the discretion exercised by the learned Judge. The question whether there exists statutorily, a distinction between “a Scheduled Indian Bank” and “a Scheduled Bank located in India” does not arise for consideration in this case, as the dispute primarily revolves around what was offered in Court by one of the parties, what was accepted in Court, and what was recorded in the Order and clarified later. If without any offer from the petitioner, an adjudication had been made by the Court directing the petitioner to furnish bank guarantee of a particular type of bank and a dispute had been raised thereafter, it is only then that a question of law as to the status of such a bank with reference to the statutory provisions, would have arisen. Justice V. Ramasubramaniun deemed it fit to dismiss the Special Leave Petitions as not giving rise to any substantial question of law warranting our interference under Article 136 of the Constitution.
Since both Justices have not been able to be agreed, the matter forthwith be placed before Hon’ble the Chief Justice of India for appropriate directions.

Narayan Deorao Javle (Deceased) v. Krishna and Others

Citation

Date

Brief

REED 2021 SC 08002

Court

Supreme Court

Subject 

Suit for redemption of mortgage land was dismissed - Appeal

August 16, 2021

Bench

N.A.

Applicable Law

Sections 59A, 60, 91, Transfer of Property Act, 1882

The appellant has purchased the land measuring 1 acre 32 gunthas comprising in Survey No. 67/3 for a sum of Rs.1,000/-. No part of the sale consideration was paid to the owners or was kept by the appellant for payment to the mortgagee. Thus, it was unequivocal sale of complete rights in the land comprising in Survey No. 67/3. Section 60 of the Act provides that a person interested in a share of the mortgaged property will not entitle him to redeem his own share on payment of a proportionate part of the amount remaining due on mortgage. Therefore, conversely, a purchaser from the mortgagor is entitled to redeem the share of the land purchased by him but on payment of the entire mortgage amount. Therefore, the decree of foreclosure passed in the suit filed by the mortgagee will not extinguish the right of the mortgagor to redeem land in view of the fact that he was not impleaded as a party in the suit though he has purchased part of the mortgaged property by virtue of registered sale deed. Consequently, the appeal was allowed. The judgment of the High Court was set aside and that of the First Appellate Court was restored.

SKS Power Generation (Chattisgarh)Limited v. Canara Bank

Citation

Date

Brief

REED 2021 Bom 08560

Court

High Court

Subject 

Bank Guarantee

August 10, 2021

Bench

Bombay

Applicable Law

Section 145, Indian Contract Act, 1872
Section 2(c), Commercial Courts Act, 2015

Irretrievable injury, has to be such a circumstance which would make it impossible for the guarantor to reimburse himself, if he ultimately succeeds. This will have to be decisively established and it must be proved to the satisfaction of the court that there would be no possibility whatsoever of the recovery of the amount from the beneficiary, by way of restitution. Commitment of banks must be honoured free from interference by the courts and it is only in exceptional cases, that is to say, in case of fraud or in a case where irretrievable injustice would be done if bank guarantee is allowed to be encashed, the court should interfere. In order to invoke these special equities, that is to say, that the person against whom invocation is made would never be able to recover the amount under the bank guarantees, it must be shown decisively to the satisfaction of the Court that there is no possibility — i.e. not the slightest possibility at all — of restitution in this amount. Again, showing that Cethar is in a precarious financial condition, or that it is in liquidation is insufficient for this purpose. What must be demonstrated must be something far more clear than a mere apprehension.

Suman Chadha and Another v. Central Bank of India

Citation

Date

Brief

REED 2021 SC 08001

Court

Supreme Court

Subject 

Contempt of Court

August 8, 2021

Bench

N.A.

Applicable Law

Sections 13(2), 13(40, 17, SARFAESI Act, 2002
Sections 2(b), 10, 12, 13(a), 19, Contempt of Courts Act, 1971

The Supreme Court were clearly of the view that the finding of the High Court that the petitioners are guilty of contempt, does not call for our interference under Article 136. However, learned counsel for the petitioners, pleaded that the Court may show sympathy on the petitioners, in view of the fact that the immovable properties which the petitioners attempted to save, by approaching the DRT and the High Court, have already been sold. All the attempts made by the petitioners from 2015 onwards, to save the mortgaged properties have been in vain. There is no dispute on facts that the mortgaged properties have now been sold and with extraordinary efforts, the Bank has also taken possession. The petitioners have also spent 11 days in custody out of the total period of imprisonment of three months imposed by the High Court. In such circumstances, we think that it is sufficient punishment for the petitioners.

A. P. Mahesh Cooperative Urban Bank Shareholders Welfare Association v. Ramesh Kumar Bung and Others

Citation

Date

Brief

REED 2021 SC 07003

Court

Supreme Court

Subject 

Interlocutory Applications granting stay including arrest - Challenging - Appeal

July 19, 2021

Bench

N.A.

Applicable Law

Sections 91, 156(3), 482, Code of Criminal Procedure, 1973
Sections 120B, 409, 420, 467, 468, 471, 477A, Indian Penal Code, 1860
Section 84, MultiState Cooperative Societies Act, 2002

It is completely wrong on the part of the petitioner to contend that the High Court was swayed by the pendency of civil writ proceedings. The High Court actually took note of the manner in which the color of the entire proceedings changed from February 2020 to February 2021 and it was in that background that the learned Judge took note of the pendency of civil proceedings and
the overlapping of allegations. Therefore, the petitioner cannot press into service the ratio in Mohd. Allauddin Khan, 2019) 6 SCC 107 and K. Jagdish, 2020) 14 SCC 552. Even the decision in N.N. Global Mercantile Pvt. Ltd., 2021) SCC Online SC 13 will not go the rescue of the petitioner since the reference in the impugned order to Section 84 of the Multistate cooperative Societies Act, 2002 was only for the limited purpose of dealing with the allegations relating to admission of members. Therefore, the Apex Court were of the considered view that the High Court was perfectly justified in granting interim protection to the Respondents 1 to 3 herein and in ensuring that the supremacy of the ballot is not sabotaged by the authority of the police. Hence the SLPs were dismissed.

Atlanta Infrastructure Limited v. Delta Marine Company and Others

Citation

Date

Brief

REED 2021 SC 07002

Court

Supreme Court

Subject 

Bank Guarantee - Encashment of

July 18, 2021

Bench

N.A.

Applicable Law

Section 45 of the Evidence Act, 1872
Order 41 Rule 27, Code of Civil Procedure, 1908

The Apex Court observed that the argument of the respondent No.1 was fallacious. It was trite to say that as a bank guarantee is an independent contact, there was a limited scope for interference in case of encashment of bank guarantee as enunciated by various courts including this Court from time to time. One of the reason for interference could be egregious fraud. The fraud must be relatable to the bank guarantee. Learned counsel for the respondent No.1 admits that what he was trying to show was that the signatures of the officers of the appellant on documents did not match with the vakalatnama or some other documents which would in turn show that the appellants had been acting fraudulently in a different matter. However, this has nothing to do with the issue relating to the signatures of the representatives of the appellant, which they do not deny. The Court further noted that the perceive this to be another endeavour on part of the respondent No.1 to unnecessarily keep prolonging the issue and somehow prevent encashment of the bank guarantee.