Litigation Arbitration



S. 143A of the Negotiable Instruments Act directory and not discretionary.
The Chhattisgarh High Court has held that the S. 143A of the Negotiable Instruments Act 1881, providing for payment of interim compensation is directory, and not discretionary.

The said section provides for payment of interim compensation up to 20% of the amount of the cheque, in cases of summary trial where the accused pleads ‘not guilty’ in relation to the complaint, or in any other case after framing of charges.

Interpreting the word ‘may’ used in the provision as ‘shall, the Court found that the purpose of the amendment which inserted S. 143A into the Act was to safeguard the interests of the Complainant, who is already suffering the consequences of the dishonour of the cheque, as well as any other incidental legal proceedings that may arise for recovery of the amount.

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Centre notifies Amendment to Tribunal Rules 2020.
The Central Government has notified an amendment to the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020, which now enables the appointment of advocates with at least 10 years of experience as Judicial Members to all those Tribunals covered within its ambit.

The main concern of the Supreme Court in Madras Bar Association v. UOI was the difference in the eligibility criteria prescribed for appointment of advocates to the Tribunals as opposed to their appointment to the High Court.

Bringing the 2020 Rules in consonance with the diktat of the Supreme Court, the schedule of the Rules was amended, apropos the prescribed qualifications for appointment of Advocates to various tribunals such as the Income-tax Appellate Tribunal, Customs, Excise and Service Tax Appellate Tribunal, Central Administrative Tribunal, Securities Appellate Tribunal, etc.

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Delhi Court issued direction to lodge FIR against fraud involving bitcoins
In first of its kind, the Tis Hazari Court has directed the Moti Nagar Police Station to lodge an FIR under the provisions of Indian Penal Code against the offence of fraud committed during transaction of bitcoins.

The complainant who is a dealer in bitcoins was frequently supplying the said cryptocurrency to the accused.  Accused used to transfer funds to the bank account of the complainant, in return of which, the complainant used to transfer bitcoin into the accused’s virtual wallet/ address on the online transaction portal “Binance”. On 5th July 2020, the complainant was informed that his bank accounts was frozen and his transaction in bitcoins were marked as illegal transaction.

On confronting the accused by the complainant regarding that source/ legality of money paid by the accused against the bitcoins, upon which the accused admitted that these payments were a ‘scam’, and that the accused also refused to return the bitcoins transferred to him by the complainant. The complainant alleged that he has been cheated by the accused, and had sought the intervention of the Court for directions to police for registration of a criminal case and thorough investigation in the matter.

Upon a consideration of the complaint under Section 200 of Criminal Procedure Code and the application under 156(3) Criminal Procedure Code., the other material on record, and the action taken report of the police, the Court opined that cognizable offences u/s 403/411/420 of Indian Penal Code have been prima facie committed. In pursuant thereto, the Court directed the investigation authorities to register the FIR against the accused and submit the report within 2 days of the Order.

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Hierarchy of Secured Creditors at the Liquidation Stage – Supreme Court to Examine.
The Supreme Court has, in the case of Kotak Mahindra Bank Ltd. v. Technology Development Board & Ors. stayed the operation of the judgement delivered by the Hon’ble NCLAT, which held that all creditors relinquishing their security would be treated as a single class, ranking equally for distribution of assets under S. 53 of the Code.

It has been contended that the Hon’ble NCLAT has erred in disregarding the difference between the claims of creditors who hold the first charge on the assets of the Corporate Debtor and those who hold the second charge.

Having the stayed the operation of the judgement of the Hon’ble NCLAT, the Supreme Court will now have to examine the priority accorded to secured creditors under S. 53, especially in light of its own decision in Essar Steel which acknowledged the differential treatment of creditors belonging to separate classes.

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A Partitioned Joint Hindu Family can reunite and continue to have Joint Family Status – Supreme Court Reiterates.
The Supreme Court has held that even after a Joint Hindu family has been partitioned in the past, there is nothing preventing the members from reverting to their previous arrangement and reuniting, to continue to their original Joint Family Status.

In the present case, the parties in question had partitioned their family to protect a parcel of their land from being acquired under the Land Ceiling Laws. It was contended by the parties that they had subsequently reunited and hence should be granted the status of a joint Hindu Family once again.

Referring to several treatises of Hindu Law, and its own previous decisions the Supreme Court held that such an exercise, although permissible, was contingent on the intentions and conduct of the parties while finally allowing the appeal granting all members of the family an equal share of the land in question.

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Delhi High Court overruled its own judgement which mandated judgement debtors to compulsorily file additional affidavit of assets during execution of money decree
Delhi High Court in the judgement of Bhandari Engineers & Builders Pvt. Ltd. Vs. Maharia Raj Joint Venture MANU/DE/4601/2019 in purported exercise of power under Section 151 and Order XXI Rule 41 of the Code of Civil Procedure, 1908 read with Sections 106 and 165 of the Indian Evidence Act and Article 227 of the Constitution of India, proceeded to formulate/draft an affidavit of assets and income, to be mandatorily filed by the judgment debtor in execution proceedings.

Though the Court, in the earlier part of the judgment had noted that the need for directing such affidavit to be filed would arise only when the decree holder was not aware of the assets of the judgment debtor, but in the concluding portion of the judgment, the Court proceeded to issue a direction to all courts executing a decree for recovery of money, to, in the first instance direct the judgment debtor to file the affidavit in the form as drafted by the Court and directed he copy of the said judgment to be circulated to all the Courts and others concerned.

Vide judgement dated 5th July 2021 in Delhi Chemical and Pharmaceutical Works Pvt. Ltd. and Anr. Versus Himgiri Realtors Pvt. Ltd and Anr. EFA (OS)(COMM) NO.4/2021 has hold abovementioned judgement as no good law to the extent directing the executing Court to, even in the absence of any application of the decree holder, to direct the judgment debtor to file affidavits in the format as also laid down therein. The same was held to be contrary to the express language of Order XXI Rule 41 of the Code of Civil Procedure, 1908.

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