Category: Litigation Legal

Negotiable Instruments (Amendment) Act.

The New Amendment in Negotiable Instrument Act is applicable and effective from 01/09/2018*

Under the said amendment a new section 143 A is added which reads as under:

Section 143A:

 In the Negotiable Instruments Act, 1881 (hereinafter referred to as the principal Act), after section 143, the following section shall be inserted, namely:—

Power to direct interim compensation.

‘‘143A. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant—

(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and

(b) in any other case, upon framing of charge.

(2) The interim compensation under sub-section (1) shall not exceed twenty per cent. of the amount of the cheque.

(3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.

(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.

(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973.

(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973, shall be reduced by the amount paid or recovered as interim compensation under this section.’’.

Thus if any cheque bounce case the complainant or the aggrieved party need not wait for a longer period of time to get his legally recoverable debt. A person is entitled for an interim Compensation  to an extent of 20% of the total claim amount of the cheque issued, under the provisions of the Act even when the case in under trail..

Under the said amendment a new section 148 is added which reads as under:

New section 148:

In the principal Act, after section 147, the following section shall be inserted, namely:—

Power of Appellate Court to order payment pending appeal against conviction.

‘‘148. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial Court:

Provided that the amount payable under this sub-section shall be in addition to any interim compensation paid by the appellant under section 143A.

(2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant.

(3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal:

Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.

Thus even in the case of Appeal stage in the cheque bounce cases case the aggrieved party will be entitled to get interim compensation of 20% of the total amount in addition to the 20% of the interim compensation of the total claim amount of the cheque, issued under sec. 143A, under the provisions of the Act.

THE ARBITRATION AND CONCILIATION (AMENDMENT) BILL, 2018

THE ARBITRATION AND CONCILIATION (AMENDMENT) BILL, 2018

Amendment to Sec. 2 of  The Arbitration and conciliation act 1996 – a New clause  (Ca) is included – ‘(ca) “arbitral institution” means an Arbitral institution designated by the Supreme Court or a High Court under this Act;’;

Amendment of sec. 11  –

Under sce.11(3a)- The High court and Supreme Court judges shall have the power to designate arbitral institutions form time to time. If no Arbitral Institutions are provided the High court shall maintain a panel of Arbitrators for discharging the functions of Arbitral Institutions.

  • Concerned Chief Justice shall do the Panel of Arbitrators shall be reviewed from time to time.
  • In the case of International  Commercial Arbitration the designated Arbitral Institution appointed by the supreme court shall appoint the Arbitrators and in cases other than International Arbitrations the Arbitral Institutions designated by the High court shall appoint the Arbitrators.
  • An application made for the appointment of Arbitrators shall be disposed off within 30 days of service of notice to opposite party.
  • The Arbitral Institution shall determine the fees of Arbitral Tribunal as per schedule Fourth. This shall not be applicable for International Arbitrations and International Commercial Arbitrations where the fees has been already fixed by parties.

Amendment of sec 23- A claim statement and defense shall be completed within a period of six months of the Arbitrators receiving notice of the appointment.

Amendment of sec 29A- Award in the Arbitration cases shall be made within 12 months form the date of completion of pleadings, Except International Commercial Arbitration..

New Sec 42A is inserted- This section provides that all the proceedings of the Arbitration shall be kept confidentially except the Award that needs to be enforced and executed.

New sec 42B inserted – This sections provides that no suit or proceedings shall lie against the Arbitrators while any action is done in good faith.

Sec.43 A to sec 43 J – Provides for the Establishment and incorporation of Arbitration Council of India,  Composition of Council, Duties and Functions of the Council,  Appointment of experts and Constitution of committees, General norms for grading Arbitral Institutions, Norms of Accreditation, Depository of Awards, Power to make regulations by  council.

Thus under the Amendment act the Arbitration will be having a separate council and Institutions like any other Authorities and will be functioning as per these provisions.

New Sec 87 inserted – Unless the parties Agrees, the Amendments made to Arbitration and conciliation Amendment act 2015 – shall not apply – If the Arbitral proceedings have commenced before the Commencement of the Amendment act 2015, the court proceedings in relation to such arbitral proceedings whether such proceedings are commenced before of after the Amendment act 2015,

It shall apply only to Arbitral Proceedings and court proceedings commenced on or after the commencement of Amendment act 2015 came into force.

A new Eighth Schedule is inserted specifying the Qualifications, Experience and Norms of such Arbitrator to be appointed under the act.

section 26 of the Arbitration and conciliation Amendment act 2015  has been Omitted with effect from 23rd October 2015.

EFFECT OF NON-REGISTRATION OF PARTNERSHIP FIRMS

Indian Partnership Act

Section “69 Effect of non-registration-

(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.

(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.

(3) The provisions of subsections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect – (a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or (b) the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909, or the Provincial Insolvency Act, 1909, to realise the property of an, insolvent partner.

Under Section 69(1), a suit, inter alia to enforce right arising from a contract cannot be filed by a person Suing as a partner in a firm against the other partners of the firm unless the firms registered. Under sub-section (3) any other proceeding to enforce a right a arising from a contract by a person suing as a partner against the other partners of an unregistered Firm is also barred. Since the right to resort to arbitration flows from the contract between the parties contained in the partnership deed, a suit or any other proceeding by a partner to enforce this term in the contract against the other partners would, therefore, normally be barred under the first part of sub- section (3) of Section 69. (Vide Jagdish Chandra Gupta v. Kajaria Traders (India) Ltd. [AIR 1964 SC 1882 infra]). Subsection (3) in its later part, however, carves out certain exceptions to the bar contained in sub-sections (1), (2) and the first part of sub section(3).

Under sub-section (3)(a) this bar will not affect the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm or any right or power to realise the property of a dissolved firm.

Therefore, although the partnership firm may be unregistered, one partner can sue other partners for dissolution of the firm and for accounts. The words “to sue” used in sub-section (3)(a) cannot be construed narrowly to refer only to suits for dissolution of partnership and accounts. The exception contained in sub-section (3)(a) applies not merely to sub-sections (1) and (2) but also to the first part of sub-section (3) which deals with proceedings other than suits. Therefore, in order that subsection (3)(a) would apply to all these provisions, the words “to sue” section (3)(a) must be understood as applying to any proceedings for dissolution of partnership or for accounts of a dissolved firm or to realise the property OF a dissolved firm. This proceeding may be either by way of a suit or it can even be a proceeding under the Arbitration Act to secure these rights through arbitration. [Vide Prem Lata (Smt)] & Anr. v. M/s IsharDass Chaman&Ors. (1995 2 SCC 145), a judgment to which one of us was a party.] Therefore, an arbitration clause in a partnership deed of an unregistered partnership can be enforced for the purpose of securing, inter alia, a dissolution and accounts of the partnership or for enforcing any right or power for obtaining the property of a dissolved firm.

APPLICABILITY OF ARBITRATION AND CONCILIATION ACT 1940 AND ARBITRATION AND CONCILIATION ACT 1996.

In a peculiar case, where the parties under the agreement have agreed for the applicability of Arbitration and Conciliation Act, 1940, while the agreement was done after the Arbitration and conciliation Act 1996 had come in force.

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.4664 OF 2018

(Arising out of SLP (Civil) No.14589 of 2016)

Purushottam s/o Tulsiram Badwaik ……Appellant

VERSUS

Anil & Ors. ..…. Respondents

The SLP was filed as regards the issue under which provisions of the Arbitration act, the dispute has to be decided and which Act shall be applicable, when the parties in their agreement have agreed to refer to the Arbitration and Conciliation act 1940, while the agreement was done very well after the Arbitration and Conciliation act 1996 was in force.

HELD- In view of the Arbitration and Conciliation act 1996 and repeal provisions at Sec 85 – The provisions- The correct approach, according to us, would be in promoting the object of implementing the scheme of alternative dispute resolution as was rightly submitted in MMTC Ltd. (Supra). It would be farfetched to come to the conclusion that there could be no arbitration at all. As is clear from MMTC Ltd. (Supra) what is material for the purposes of the applicability of 1996 Act is the agreement between the parties to refer the disputes to arbitration. If there be such an arbitration agreement which satisfies the requirements of Section 7 of 1996 Act, and if no arbitral proceeding had commenced before 1996 Act came into force, the matter would be completely governed by the provisions of 1996 Act. Any reference to 1940 Act in the arbitration agreement would be of no consequence and the matter would be referred to arbitration only in terms of 1996 Act consistent with the basic intent of the parties as discernible from the arbitration agreement to refer the disputes to arbitration.

Viewed thus, the High Court was not right in observing that there could be no arbitration at all in the present case. In situations where the relevant clause made reference to the applicability of “the provisions of the Indian Arbitration Act and Rules made thereunder” as was the case in MMTC Ltd. (Supra), on the strength of Section 85(2)(a) the governing provisions in respect of arbitral proceedings which had not commenced before 1996 had came into force would be those of 1996 Act alone. On the same reasoning even if an arbitration agreement entered into after 1996 Act had come into force were to make a reference to the applicable provisions of those under Indian Arbitration Act or 1940 Act, such stipulation would be of no consequence and the matter must be governed under provisions of 1996 Act. An incorrect reference or recital regarding applicability of 1940 Act would not render the entire arbitration agreement invalid. Such stipulation will have to be read in the light of Section 85 of 1996 Act and in our view, principles governing such relationship have to be under and in tune with 1996 Act. As observed earlier, the requirements of “arbitration agreement” as stipulated in Section 7 of 1996 Act stand completely satisfied in the present matter nor has there been any suggestion that the agreement stood vitiated on account of any circumstances in the realm of undue influence, fraud, coercion or misrepresentation. In the circumstances, the attempt must be to sub-serve the intent of the parties to resolve the disputes by alternative disputes resolution mechanism. The High Court was, therefore, completely in error.

We therefore set aside the judgment and order passed by the High Court and accept the appeal preferred by the appellant. The matter will have to be dealt with by the trial court in terms of Section 8 of 1996 Act. The parties shall appear before the trial court on 14th May, 2018 for effectuating the arbitration agreement.

Criminal law Amendment Bill 2018 with Reference to POSCO ACT

Criminal law Amendment Bill 2018 with reference to POSCO ACT

POSCO- An act was passed in the year 2012 to protect the child from and against the commission of sexual offences such as sexual assault, sexual harassment and pornography. Thus special courts were set up under the Act to conduct trail of such cases. Under this act ay person below the age of 18 is a child. Thus any such sexual assault on a child shall be tried under the act.

By way of an Amendment to Criminal Act. The period of trial has been fixed to two months. A special court shall do the trail and conclude the case within two months. Further under the amendment the extent of punishment for the offence of rape of a s\child under the age of 12 years shall be imposed with death penalty while under the POSCO act it was for a term of Ten years has been increased to 20 years term of imprisonment.

DATA PROTECTION LAWS

In the global information economy, personal data have become the fuel driving much of current online activity. Every day, vast amounts of information are transmitted, stored and collected across the globe enabled by massive improvements in computing and communication power. Some broadband packages of today are 36,000 times faster than what dial-up Internet connections could offer when the first Internet browser was introduced two decades ago. In developing countries, online social, economic and financial activities have been facilitated through mobile phone uptake and greater Internet connectivity. The transborder nature of the Internet as well as the speed and sheer volume of communications pose problems to cyber security such as those related to the identification, investigation, jurisdiction, criminalization and prosecution of those who commit security and data breaches. In this environment, security of information is a concern for governments, businesses and consumers alike.

Protecting data and privacy rights online is a significant and increasingly urgent challenge for policymakers.

Data protection regulation is high on the political agenda at the time of writing, as evidenced by a number of current developments.

  • The United Nations in 2015 appointed a Special Rapporteur on the right to privacy.
  • The European Union is finalizing a new General Data Protection Regulation to replace the European Directive on Data Protection, which has been a prominent source of regulation for twenty years.
  • Data protection has been included in several international trade agreements.
  • Data protection regulation has been considered in several high profile court cases in relation to national surveillance issues.
  • Numerous countries are drafting new data protection laws or are reviewing existing ones.
  • The European Union and the United States have re-negotiated a long standing cross- border data protection agreement (the former EU-US Safe Harbor Framework, now to be known as the EUUS Privacy Shield).
  • Several global and regional organizations have issued (or are developing) multiparty agreements and/or guidelines on data protection.

Article XIV ( c) (ii) of the WTO’s General Agreement on Trade in Services (GATS) permits trade restrictions

that are necessary for “the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts”, specifying that “such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services”.

Article XIV of the WTO General Agreement on trade in Services. Article 14.11 allows restrictions on cross border transfers if they satisfy four requirements:

(i) the law must be necessary “to achieve a legitimate public policy objective” – this appears to be very straightforward requirement;

(ii) the law must not be “applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination

(iii) the law must not be “a disguised restriction on trade”; and

(iv) the law must “not impose restrictions on transfers of information greater than are required to achieve the objective”.

This is a very high level provision that recognizes the positive aspects of data protection regulation.

However, it is also well recognized that if data protection regulations go ‘too far’ they may have a negative impact on trade, innovation and competition. While the potential need to control cross-border flows of data for privacy purposes is clear, the application of such controls in an increasingly interconnected world is very challenging. ICT developments, such as cloud services, are making things even more complex, with processing entities not necessarily aware about where data are located.

RAJASTHAN HC ISSUES STAY ON REAL ESTATE REGULATORY AUTHORITY

Rajasthan HC in Grj Distributors and Developers private limited Vs Union of India, through secretary, Govt. Of India-

Rajasthan HC issued stay order on 31.7.2018 staying the execution of the orders passed by the Real Estate Regulatory authority. Thus the order passed by the RERA authority could not have been executed.

The Division Bench of the Rajasthan High Court has clarified further that the order as under:

“Taking into consideration the peculiar facts of this case, we stay execution of the orders passed by the Real Estate Regulatory authority, till next hearing date.”

It is on this ground that the Real Estate Regulatory authority and even the tribunal is proceeding with the hearing of the case other than the cases where interim order has been passed by the court.

The issue was raised as to whether the Real Estate Regulatory authority/Tribunal can hear the matter without it proper constitution. A period of one year has been given under the act for its constitution. but there is no proper authority set up even after the expiry of one year period. A period of one year has been given under the act for its constitution.

That even after the period of one year given under the act No action for it was initiated by the state govt. according to the state govt. the provisions of the Act for constitution of the authority or the Tribunal within a period of one year is directory in nature. The court said that the period of one year is directory or mandatory would be decided in the writ petition. Since the constitution of the Authority and the tribunal is in question, they should not undertake hearing till the matter is decided. As there is code of conduct imposed by the Election commission in the state that needs to be decided.

Therefore till then hearing in all the cases would be deferred by the authority as well as the tribunal so that it can be taken up by the duly constituted Authority and Tribunal.

RERA Karnataka orders Refund of money with interest

RERA Karnataka orders Refund of money with interest

Recently RERA Karnataka In some of the cases against the Builder/Developer who has defaulted in handing over the constructed  house, Villa and Apartment the  Aggrieved home Buyers have approached the RERA Karnataka Seeking for cancellation of Agreement and Refund of the amount with interest as per RERA provisions.

The home buyers have entered into agreement with the builder/developer in the year 2014-15 and as per the Agreed terms the builder/developer was supposed to handover the possession of the homes within a period of 24 months from the date of Agreement and the hard truth was like any other builder/developer here also there was a default of the builder/Developer and he has not handed over the possession to home buyers who have paid 70 to 80 % of the amount to purchase the home. In the meanwhile there was a dispute between the Builder/Developer and the landowner, the Builder having entered into a registered JDA has defaulted even with the landowners and the quality of construction was very bad that the building would have collapsed within few years of the construction as construction activity was not carried out properly. thus the landowners have got stay in the court. the construction has come to a standstill with no development in the project. Thus the home buyers who had entered into agreement with the Builder/developer came asking for cancellation of Agreement with Builder/Developer and to refund the amount with interest. The RERA Karnataka has after hearing the case issued the orders for refund of the amount with interest at the rate of 10.25% interest on the amount paid by the home buyers.

Procedure in a civil suit to determine the objections raised on the payment of court fees.

Procedure in a civil suit to determine the objections raised on the payment of court fees.

In a civil suit filed by the plaintiffs, the defendants in the usual course of filing their objections/written statement raise an objection that the court fee paid in insufficient or the court fees in not paid properly. in this regard a question arose and the Full bench of High Court of Karnataka has answered how to determine the court fees in a case where there is an objection on the payment of court fees. the question was:

“As to whether, by virtue of sec 11 of the Karnataka court fees and suit valuation act, 1958, when an issue of valuation and court fees is raised on the objections of defendants, the same is invariably required to be tried as a preliminary issue and before taking evidence on other issues?”

The court has held that as per Sec.11(2)&(5) of the act, the determination shall be taken by the court before the evidence is recorded on the merits of the claim in its discretion and such discretion shall be conditioned by requirements of rule 2 Or 14 of CPC. In our view, if the court  finds that the question of valuation and or court fees as raised by the defendant relates to the jurisdiction of the court as it may try such an issue first and before the evidence is recorded on the merits of the claim: and in other eventualities the court may examine such a question of valuation and/or court fees, but not necessarily as preliminary issue of before the evidence on the other issues.

Unsigned Arbitration Agreements not invalid in all cases: SC

Unsigned Arbitration Agreements not invalid in all cases: SC

Section 7(4) only further adds that an arbitration agreement would be found in the circumstances mentioned in the three sub-clauses that make up Section 7(4). This does not mean that in all cases an arbitration agreement needs to be signed.’…

Supreme Court in Caravel Shipping services pvt ltd.., VS  M/s Preimer Sea foods Exim pvt ltd.,

a document styled as “Multimodal Transport Document/Bill of Lading” dated 25.10.2008. This Bill of Lading states that the Consignor/Shipper is one M/s Premier Seafoods Exim Private Limited of Kerala, and that Caravel Shipping Services Private Limited, who is the appellant before us, is the agent who facilitates transport. The very opening Clause of the Bill of Lading specifies:

“In accepting this Bill of Lading the Merchant expressly agrees to be bound by all the terms, conditions, clauses and exceptions on both sides of the Bill of Lading whether typed, printed or otherwise.”

The Respondent filed a Suit being O.S. No. 9 of 2009 before the Sub-Judge’s Court in Kochi to recover a sum of Rs.26,53,593/- in which the Bill of Lading was expressly stated to be a part of cause of action. Soon after the Suit was filed, an I.A. being I.A. No. 486 of 2009 was filed by the appellant under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) in which it was pointed out to the Court that an arbitration clause was included in the printed terms annexed to the Bill of Lading.

The law in this behalf, in Jugal Kishore Rameshwardas vs. Mrs. Goolbai Hormusji, AIR 1955 SC 812, is that an arbitration agreement needs to be in writing though it need not be signed. The fact that the arbitration agreement shall be in writing is continued in the 1996 Act in Section 7(3) thereof. Section 7(4) only further adds that an arbitration agreement would be found in the circumstances mentioned in the three sub-clauses that make up Section 7(4). This does not mean that in all cases an arbitration agreement needs to be signed. The only prerequisite is that it be in writing, as has been pointed out in Section 7(3).

Hon’ble Supreme court has held that the Arbitration agreement need not necessarily be a signed document to invoke the arbitration clause of the agreement. it prerequisites that the agreement shall be in writing.