Orders and Judgments Duration May 25, 2021-June 14, 2021

“Learn from the mistakes of others. You can’t live long enough to make them yourself .”

ELEANOR ROOSEVELT

LITIGATION

  • Syed Amjad Husain v. Navneet Sahgal,AdditionalChief SecretaryInfo.& Public Relation,Lko.&Anr.
    Personal Service of Contempt Notice is an essential requirement of law-07 June 2021
    The Allahabad High Court held that under the Contempt of Court Act, 1971, affecting of personal service on the alleged contemner is an essential requirement.It ruled that service on the contemnor through the official attached with him is a clear violation of the prescribed rules and cannot in any way be presumed personal service.
    The Order can be accessed at:
    https://www.livelaw.in/pdf_upload/allahabad-hc-personal-service-of-contempt-notice-essential-395179.pdf
  • M/s Aamoda Broadcasting Company Pvt. Ltd.&The State of Andhra Pradesh &Ors.
    SC stays coercive action against two Telugu channels- 31 May 2021
    The Supreme Court today stayed coercive action against two Telugu channels – TV5 and ABN Andhra Jyothi – based on the first information reports filed by the police in Andhra Pradesh on charges of sedition.
    The Court said that prima facie the FIRs are an attempt to “muzzle media freedom”. It observed that there was a need to define the scope of offences under Sections 124A (sedition) and 153A (promotion of communal hatred) under the Indian Penal Code, to ensure freedom of media.
    The Order can be accessed at:
    https://main.sci.gov.in/supremecourt/2021/12172/12172_2021_35_329_28040_Order_31-May-2021.pdf

COMPETITION & UNFAIR TRADE PRACTICE

  • Amazon Seller Services Pvt. Ltd. v. Competition Commission of India &Ors.
    Karnataka HC dismisses writ petition of Amazon, Flipkart against CCI probe-11 June 2021
    The Karnataka High Court dismissed plea of e-commerce giants Amazon and Flipkart on the investigation ordered by the Competition Commission of India (“CCI”) against them for alleged violations of provisions of competition laws.
    It also pointed out that Section 26(1) of the Competition Act, 2002, specifying the procedure for inquiry if the CCIfinds a prima facie case, does not mention about issuance of any notice to any party before or at the time of formation of an opinion by the Commission on the basis of information received by it. It also noted that the order passed by the Commission is an 'administrative direction' to one of its wings departmentally and without entering upon any adjudicatory process.
    The Order can be accessed at:
    https://www.livelaw.in/pdf_upload/amazon-flipkart-competitiion-commission-karnataka-hc-394852.pdf

CORPORATE

  • Union Bank of India on behalf of CoC of DHFCLv. Kapil Wadhawan&Ors.
    Orders should not be passed when Resolution Plan has already been approved or order is reserved-25May 2021
    The NCLAT stayed the NCLT’s order, which asked the Committee of Creditors (“CoC”) to consider Wadhawan’s settlement offer. It held that the pendency of the appeal before it should not come in the way of the NCLT passing orders in approving the resolution plan, on which hearing has concluded and the order is reserved.
    It noted that, “... here the matter had proceeded to the stage where even (the) resolution plan had been approved and was before (the) adjudicating authority. There would be no end if such reversals are allowed. There is no dispute regarding the fact that the resolution plan has already been approved and is before the adjudicating authority. Without deciding the same, the present order has been passed.”
    The Order can be accessed at:
    https://nclat.nic.in/Useradmin/upload/99726223960ace4b8c811f.pdf
  • Executive Engineer, Uttar Gujrat VIJ Company Ltd. v. Mr. Devang P Samapat, RP of M/s Kanoovi Foods Pvt. Ltd.' Electricity for Corporate Debtor’s office constitutes part of Corporate Insolvency Resolution Process (“CIRP”) Costs-27 May 2021 The NCLAT ruled that the supply of electricity for running of Corporate Debtor’s office constitutes the part of CIRP costs which can be recovered when Resolution Plan (RP) is approved. It clarified that if the electricity consumption was for manufacturing and output of the biscuits which is the normal operation of the Corporate Debtor, in that case dues arising from such supply of electricity during moratorium would have to be paid during moratorium.
    Sub-section 2A of Section 14 read with regulations referred above makes it clear that if the supply is for managing the operations of the Corporate Debtor the supply cannot be interrupted during moratoriumexcept where Corporate Debtor has not paid dues arising from such supply during the moratorium period.
    It held that, “ the consumption is stated to have been for running of office and security of Corporate Debtor. In that case, the same will be part of the CIRP Costs which can be recovered when the Resolution Plan is approved or would form part of Section 53 if the Liquidation has been initiated”.
    The Order can be accessed at:
    https://efiling.nclat.gov.in/nclat/order_view.php?path=L05DTEFUX0RvY3VtZW50cy9DSVNfRG9jdW1lbnRzL2Nhc2Vkb2Mvb3JkZXJzL0RFTEhJLzIwMjEtMDUtMjcvY291cnRzLzEvZGFpbHkvMTYyMjk3MzU4OTEyMDExODkxMzYwYmM5Yzk1YWUwMjIucGRm
  • Union of India through Secretary, Ministry of Finance &Ors. v. M/s Ruchi Soya Industries Ltd.' Crown Debts that does not come under IBC Resolution Plan cannot be enforced- 27 May 2021The respondent’s Committee of Creditors (“CoC”) adopted the resolution plan quickly, in accordance with Section 30(4) of the Insolvency & bankruptcy Code, 2016, and the adjudicating body issued decisions in accordance with Section 31 of the IBC.The appellant attempted to overturn this in order to recoup import duties from the corporate debtor.
    The Court held that it does not matter if the duties were claimed prior to the resolution plan. Any claim filed prior to the approval of the resolution plan could not be continued and would be lost if it was not included in the plan. If the departments of the central or state governments do not file an application or participate in the resolution process, their claims are automatically extinguished.
    It ruled that under the IBC, crown debts do not take precedence over secured creditors because Section 238 of the code provides for the IBC’s overriding effect over other laws.
    The Order can be accessed at:
    http://karnatakajudiciary.kar.nic.in/judgements/WA_2575_2018_FINAL.pdf
  • M/s Indiana Hospital and Heart Institute Ltd. v. Ministry of Corporate Affairs' NCLT Bangalore allows plea to extend tenure for redeeming Cumulative Preference Shares- 28 May 2021NCLT proceeded to allow the company’s prayer to extend the tenure of 5% Redeemable Cumulative Preference Shares for a period of two years, after ensuring that consent of such shareholders were taken.
    This decision was owing to the onset of COVID-19 pandemic and the ensuing economic slump, due to which the company was unexpectedly not able to raise the funds required to redeem the shares from the company profits and the proceeds from the fresh issue of shares. This was in line with the stance of taking a liberal view of matters during the pandemic period and in sync with the promotion of government initiatives for ease of doing business.
    The order can be accessed at:
    https://images.assettype.com/barandbench/2021-06/dbac9ace-a4c4-4046-ac9b-268ed081d4a4/NCLT_ORDER.pdf

Disclaimer “This information has been gathered from various sources. Nothing herein is or may be construed as legal advice”.