Limitation Period for an Appeal under Section 37 of Arbitration and Conciliation Act 1996
Introduction Limitation Period Under Section 34 and Section 37 of the Act Judicial Interpretation Conclusion Shruti Mehta, Associate, Solomon & Co. About Solomon & Co. Solomon & Co. (Advocates & Solicitors) was founded in 1909 and is amongst India’s oldest law-firms. The Firm is a full-service firm that provides legal service to Indian and international companies and high net-worth individuals on all aspects of Indian law. “Disclaimer” The information contained in this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. As such, it should not be used as a substitute for consultation with a competent adviser. Before making any decision or taking any action, the reader should always consult a professional adviser relating to the relevant article posting. Copyright © 2020 Solomon & Co., All rights reserved.
Cinematograph (Amendment) Bill, 2023: An Invasion on Piracy
Introduction Films have always been a great source of entertainment for the masses. While the budgets infused into films/cinema, multiplexes have gone up exponentially, films and people involved in making such films have always suffered due to the overwhelming presence of “piracy”. The Supreme Court in State of Andhra Pradesh v Nagoti Venkataramana₁ aptly put across the advent of piracy in films stating: “Piracy has become a global problem due to rapid advances in technology. Mainly there are three types of piracy, namely, piracy of the printed word, piracy of sound recordings and piracy of cinematograph films. The object of the pirate in all such cases is to make quick money and avoid payment of legitimate taxes and royalties.” The Delhi High Court more recently in the case of UTV Software Communication Ltd. & Ors. v 1337X.To & Ors.₂ while discussing the profits earned by such pirates stated: “It is estimated that in India, while the film industry earns around 2 billion dollars from legitimate sources such as screening at theaters, home videos and TV rights, piracy earns 35 percent more at 2.7 billion dollars. It is important to realize that piracy reduces jobs, exports and overall competitiveness in addition to standards of living for a nation and its citizens. More directly, online piracy harms the artists and creators, both the struggling as well as the rich and famous. Consequently, online piracy has had a very real and tangible impact on the film industry and rights of the owners.” Against this backdrop, the Cinematograph (Amendment) Bill, 2023 assumes monumental significance. The said Amendment Bill has been passed by both houses of parliament and is awaiting presidential assent.₃ The amendment envisages reducing piracy drastically by introduction of Clause 6AA, Clause 6AB and Clause 7(1A) in the Cinematograph Act, 1952. This has also been captured by the legislature in the Statement of Objects and Reasons where Clause (3)(a) iterates that “the Cinematograph (Amendment) Bill, 2023 aims to comprehensively address the issues relating to film certification and attempts to address the issue of unauthorized recording and exhibition of films and curb the menace of film piracy by transmission of unauthorized copies on the internet. I. Proposed Section 6AA, 6AB and 7(1A) of the Cinematograph (Amendment) Bill, 2023 “6AA. No person shall use any audio-visual recording device in a place licensed to exhibit films with the intention of making or transmitting or attempting to make or transmit or abetting the making or transmission of an infringing copy of such film or part thereof.” This definition is much needed as the 1952 legislation does not contain any information about unauthorized recording. Further, it is intriguing to note that the term audio-visual recording device has been defined in the said section as “a digital or analogue photographic or video camera or any other technology or device capable of enabling the recording or transmission of a copyrighted cinematographic film or any part thereof, regardless of whether audio-visual recording is the sole or primary purpose of the device.” The statute does not address the same and hence its iteration in this bill is key for clarity on what constitutes an audio-visual recording device. “6AB. No person shall use or abet the use of an infringing copy of any film to exhibit to the public for profit– The proposed section assumes significance in two ways. Primarily, the definition of the section indicates that the motive for committing the act of piracy is profit which had not been iterated by the statute until now. Further, the said provision explicitly recognizes the role of the Copyright Act, 1957 and also seeks to charge the person under the said statute mostly under Section 52. Further, the clause “any other law for the time being in force” indicates that the individual committing piracy may also be charged under the Information Technology Act, 2000 and the requisite criminal legislations as also indicated by Clause 7(1B) of the proposed bill. “(1A) Save as otherwise provided in Section 52 of the Copyright Act, 1957, if any person contravenes the provisions of Section 6AA or Section 6AB, he shall be punishable with imprisonment for a term which shall not be less than three months, but may extend to three years and with a fine which shall not be less than three lakh rupees but may extend to five percent of the audited gross production cost.” The said section is the punitive measure enumerated within the act for perpetrators and it stands apart from the earlier statute due to the said reasons: (1) the statute provides for the minimum fine to be Rs. 20,000 (“Rupees Twenty Thousand Only”) while the same may be extended to Rs. 1,00,000 (“Rupees One Lakh Only”). On the other hand, the bill provides for minimum fine to be Rs. 3,00,000 (“Rupees Three Lakh Only”) while the maximum is five percent of the audited gross production cost. II. Government’s Control over Films Reduced: Section 6(1) Omitted The bill with reference to Section 6 of the principal act omits sub-section (1). The said section stated that “the Central Government (may, on its own motion, at any stage.) call for the record of any proceeding in relation to any film which is pending before or has been decided by, the Board and after such enquiry, into the matter as it considers it necessary, make such order in relation thereto as it thinks fit, and the Board shall dispose of the matter in conformity with such order:” The said clause would mean that something such as “entertainment” which is completely based on perception would be in the hands of the government even though the film certification board is completely capable of evaluating films and judging their acceptability and impact on the public. This said argument was also raised before the Supreme Court in Union of India v K.M. Shankaraappa₄ where the court rightly concluded that “Once an Expert Body has considered the impact of the film on the public and has cleared the film, it is no
Draft Digital Personal Data Protection Rules, 2025
In August 2023, India enacted its first standalone data protection and privacy law in the form of the Digital Personal Data Protection Act, 2023 (“DPDP Act”). In January 2025, the much-awaited subordinate rules under the DPDP Act, namely the Digital Personal Data Protection Rules, 2025 (“Draft Rules”) were released in draft form by the Ministry of Electronics and Information Technology (“MeitY”) inviting comments and feedback from the public by 5th March 2025. Key Features of the Draft Rules Consent of Data Principals Consent Managers Reasonable Security Safeguards Data Fiduciaries must implement reasonable security safeguards to protect Personal Data from breaches. This includes data encryption, access controls, monitoring through logs, data back-ups, and measures for detecting and addressing unauthorized access. They must retain logs and data for one year (unless required by law to retain for longer) and ensure contracts with the persons who process Personal Data on behalf of the Data Fiduciary (“Data Processors”) mandate similar security measures, supported by effective technical and organizational safeguards. Rights of Data Principals Restrictions on Processing of Personal Data Outside India The transfer of Personal Data outside India by a Data Fiduciary, whether processed within or outside India, is subject to such restrictions as the Central Government may, by order, specify, in respect of making such Personal Data available to any foreign State, or to any person or entity under the control of such State or any agency of such a State. Since the Draft Rules have entrusted the Central Government with powers to restrict the processing of Personal Data outside India, the Central Government is likely to issue (and periodically review) a negative list of countries and/or the conditions for processing Personal Data outside India, in due course. Data Breach Notification Significant Data Fiduciaries (“SDFs”) Children’s Data Protection The requirement of these additional safeguards will only be exempted for the Data Fiduciaries or for such purposes as given in Draft Rules (for example: if the Data Fiduciary is a clinical establishment, mental health establishment or healthcare professional, then the processing is restricted to provision of health services to the child by such establishment or professional, to the extent necessary for the protection of their health). Government Powers Exemption for Research, Archiving, or Statistical Purposes The DPDP Act exempts Personal Data processing for research, archiving, or statistical purposes, provided it complies with the standards set out in the Draft Rules, ensuring data use for academic and policy research while maintaining safeguards. Key Takeaways About Solomon & Co. Solomon & Co. (Advocates & Solicitors) was founded in 1909 and is amongst India’s oldest law-firms. The Firm is a full-service firm that provides legal service to Indian and international companies and high net-worth individuals on all aspects of Indian law. “Disclaimer” The information contained in this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. As such, it should not be used as a substitute for consultation with a competent adviser. Before making any decision or taking any action, the reader should always consult a professional adviser relating to the relevant article posting. Copyright © 2020 Solomon & Co., All rights reserved.
The Chutiyaram Trademark Case: A Battle of Culture, Law, and Public Sentiment
In one of the most controversial trademark cases in India’s recent history, the Chutiyaram trademark has sparked a nationwide debate. What seemed like a simple trademark application for a food brand soon became a battleground of legal, cultural, and social tensions. The Birth of the Controversial Mark The saga began when Sadhna Goswami, an entrepreneur, filed a trademark application for the name “Chutiyaram” on November 3, 2022. The name, combining the words “Chutiya” (a derogatory term in Hindi) and “Ram” (a revered Hindu deity), was intended for a food product line, including namkeen and biscuits. The application was filed under Class 30 of the Trade Marks Act, 1999. Initially, the trademark application was accepted by the Trademark Registry on March 4, 2025, after the examiner found that the mark was distinctive and not directly linked to any scandalous or offensive meaning. The combination of the words was deemed arbitrary, and there was no clear reference to any offensive goods. The approval, however, was soon met with a firestorm of controversy. The Trademark Journal and Media Outcry On March 17, 2025, the trademark was published in the Trademark Journal, triggering the beginning of the public scrutiny phase. The approval of Chutiyaram immediately captured attention, sparking debates across various media platforms. The term “Chutiya” raised concerns, as it is commonly understood in Hindi as a derogatory term for a fool or idiot, often used in offensive contexts. Though the second part of the name, “Ram”, referred to Lord Rama, a significant figure in Hinduism, the name as a whole seemed to clash with the country’s moral and cultural sensitivities. Media outlets, including Bar & Bench, began questioning whether the Trademark Registry had made a mistake in approving a name that could be interpreted as culturally insensitive. The storm of reactions culminated in a backlash, with accusations that the Registry had made a grave error in allowing such a term to pass through. The Withdrawal: Media Pressure or Legal Necessity? On March 18, 2025, just one day after the mark’s publication in the Journal, the Trademark Registry issued an order withdrawing its initial acceptance. The Registry claimed that the acceptance was granted in error and that the mark was now open to objections under Sections 9 and 11 of the Trade Marks Act, which prohibit scandalous and offensive marks. A hearing was scheduled for further review of the trademark’s application. This swift withdrawal raised even more questions, particularly regarding the influence of public opinion and media scrutiny on the legal process. In a written response filed by Sadhna Goswami and her legal representative, Anil Yadav before the Trademark Registry (available on Anil Yadav’s Linkedin page), applicant vehemently argued that the decision to withdraw the trademark was unjust and motivated by a media trial. She accused various media outlets of sensationalizing the issue, creating a false narrative that the mark was deliberately offensive, even though it was a culturally rich and spiritually significant term. According to, them, the withdrawal was a response to external media pressure and not based on any legal error or substantial grounds, as per their defence available on page. The Applicant’s Defense: A Cultural Symbol In her defence (available on the source mentioned above), Goswami elaborated on the significance of the mark. The word “Chutiyaram” was not meant to be vulgar or offensive. According to her, the term was derived from “Chutiya”, which she claimed was related to “Choti”, a sacred tuft of hair in Hinduism, and “Ram”, referring to Lord Rama. Goswami argued that the mark symbolized spirituality and cultural heritage. She explained that in Hindu rituals, the Shikha (a sacred tuft of hair) plays an important role in spiritual practices. By combining these two elements, she asserted that the trademark had a religious and cultural essence. She also pointed out that the “Chutiyaram” mark had no connection to the derogatory meaning of the word “Chutiya” that critics had highlighted. Allegations of Systemic Bias Further complicating the situation, Goswami’s legal team raised concerns over systemic bias within the Trademark Registry. They argued that the Registry’s digital filing system lacked a proper module for Hindi or vernacular language marks, forcing applicants to transliterate their marks into English. This, according to Goswami, reflected a colonial hangover that marginalized India’s rich linguistic diversity in favor of English. Additionally, Goswami pointed to past instances where trademarks with potentially offensive names, had been accepted without controversy. She contended that the inconsistent treatment of marks like “Chutiyaram” violated the principle of equality under Article 14 of the Indian Constitution. A Call for Reinstatement In light of the events, Goswami made a formal request to the Trademark Registry to reinstate the acceptance of the trademark. She asked the Registry to acknowledge that the withdrawal was influenced by media pressure rather than legal considerations, and to ensure that future decisions would be free from external interference. She also called for a reform of the trademark process to eliminate biases against Hindi and vernacular languages. Conclusion: A Landmark Legal Battle The Chutiyaram case has already become a pivotal moment in India’s trademark history, highlighting the delicate balance between freedom of expression and public morality. As it moves through legal channels, it may well reshape the way culturally sensitive trademarks are evaluated in India, making it a case to watch for years to come. Author & Co-Author: Geet Thakar, Associate & Anand Patel, Senior Associate About Solomon & Co. Solomon & Co. (Advocates & Solicitors) was founded in 1909 and is amongst India’s oldest law-firms. The Firm is a full-service firm that provides legal service to Indian and international companies and high net-worth individuals on all aspects of Indian law. “Disclaimer” The information contained in this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. As such, it should not be used as a substitute for
Fraudulent Transactions: What To Keep In Mind While Ring Fencing Your Assets
Introduction In light of the worldwide Covid-19 pandemic and the resulting financial slump in the country many companies are likely to find modes to ring fence their assets for better security and protection. Some distressed companies may also look at ring fencing their assets to secure them from any corporate insolvency resolution process (“CIRP”) that these distressed companies may be at the brink of. While doing so, the companies have to ensure that such transfers are in their ordinary course of business and such transfers are not undertaken with an intent for tax evasion or for constituting a fraud or preferential treatment to the creditors. The Insolvency and Bankruptcy Code, 2016 (“the Code”), the Companies Act, 2013 and Transfer of Property Act, 1882 provides for provisions for setting aside any transfers that have been effected with an intent to defraud the creditors of a company. This article enlists various kinds of fraudulent transactions that can be set aside by the Court under the above-mentioned enactments. I The Code: The Report of Bankruptcy Law Reforms Committee 2015 had discussed the possibility of identifying and recovering from vulnerable/fraudulent transactions. These are transactions that fall within the category of wrongful or fraudulent trading by the entity, or unauthorized use of capital by the management. There are two concepts that are recognized in other jurisdictions under this category of transactions: fraudulent transfers, and fraudulently preferring a certain creditor or class of creditors. If such transactions are established, then they will be reversed. Assets that were fraudulently transferred will be included as part of the assets in liquidation. The Committee recommended that all transactions up to a certain period of time prior to the appointment of the interim resolution professional (referred to as the “look-back period”) should be scrutinized for any evidence of such transactions by the relevant Insolvency Resolution Professional (“IRP”). Accordingly, under the Code, Sections 43, 45, 49, 50 and 66, deal with transactions that can be avoided or set aside by the IRP and the Liquidator. These transactions are of five categories: a. Preferential transactions The intention of legislature behind enacting such provisions is that fraudulent transactions are avoided so that such assets would be available either with the IRP or with the liquidator, as the case may be, to put the corporate debtor back on its wheels or if that is not possible, to ensure that the creditors of the corporate debtor get a fair deal. Relevant Period / Look-back Period under the Code: The relevant time period for these transactions to be challenged is 2 years preceding the insolvency commencement date in the case of transaction with a related party and 1 year in case of any other person. A. Preferential and undervalued transactions – entered into for the benefit of one creditor at the relevant period (Section 43): (i) A transaction shall be considered a preferential transaction if there has been a transfer of property of an interest in respect of an existing debt or liability and such transfer has the effect of putting such creditor in a beneficial position than it would have been in the event of a distribution of assets u/s 53 of the Code. But any transfer which is made in the ordinary course of business or which creates a security interest in the property acquired by the corporate debtor shall not be a preferential transaction. The transaction should further fall within the ‘relevant time period’ for it to be preferential. (ii) The Hon’ble Supreme Court has, in the matter of Anuj Jain, Interim Resolution Professional for Jaypee Infratech Limited Vs Axis Bank Limited Etc., (Civil Appeal Nos. 8512-8527 of 2019), held that the transfers and mortgages created by Jaypee Infratech Limited for the benefit of the lenders of its holding company Jaiprakash Associates Limited were made to defraud the creditors of the corporate debtor Jaypee Infratech Limited and were not made in ordinary course of business or financial affairs of the corporate debtor. Jaypee Infratech Limited, whose ordinary course of business was of ensuring execution of housing/building projects, had inflated itself to routinely mortgaging its assets and/or inventories to secure the debts of its holding company, and that too, at the cost of its own financial well-being (iii) The Apex Court while setting aside these transactions as being of deemed preference to related party by the corporate debtor during the look-back period of two years and thereby covered within the period envisaged by Sub-section (4) of Section 43 of the Code, laid down that while considering whether a transaction is preferential or not has to answer the following questions: (iv) Examples of preferential transactions may include: B. Undervalued transactions at the relevant period (Section 45): An undervalued transaction, has to have the following requisites: While deciding whether a transaction is an undervalued transaction, the Tribunal has the power to seek an independent expert to assess evidence relating to the value of the undervalued transactions. C. Undervalued transactions entered into for defrauding the creditors (Section 49): (i) The undervalued transactions as defined above entered with mala fide intentions to defraud the creditors by putting the assets of the corporate debtor beyond the reach of creditors or otherwise to prejudice the interest of the creditor who would be entitled to make a claim against the corporate debtor and adversely affect the interests of the said creditor, are covered under this very provision. The important element required for attracting section 49 is that there should be deliberate act on the part of corporate debtor to enter into an undervalued transaction. Exceptions to the above: (ii) In case of an undervalued transaction entered with an intent to defraud a creditor, while protecting the interests of persons who are victims of such transactions, the Tribunal has the power to restore the position of the corporate debtor as it existed before such transaction as if the transaction had not been entered into. D. Exorbitant credit transaction (Section 50): (i) A transaction shall be considered an exorbitant credit transaction if the corporate debtor obtains any credit facility with exorbitant rate of interest or unfair credit terms such as
The Law On Amendment Of Pleadings In Civil Suits
I. OVERVIEW: Order VI Rules 17 of the Code of Civil Procedure, 1908 (the ‘Civil Procedure Code’) forms the cornerstone of the law on the amendment of pleadings. The said rule is reproduced below for your reference: Amendment of pleadings. The Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties : Provided that no application for amendment shall be allowed after the trial has commenced, unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial The Hon’ble Supreme Court, in the landmark case of Salem Advocate Bar Association, T.N. v. Union of India1, has noted the history and object of Order VI Rule 17 as follows: “Order 6 Rule 17 of the Code deals with amendment of pleadings. By Amendment Act 46 of 1999, this provision was deleted. It has again been restored by Amendment Act 22 of 2002 but with an added proviso to prevent application for amendment being allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial. The proviso, to some extent, curtails absolute discretion to allow amendment at any stage. Now, if an application is filed after commencement of trial, it has to be shown that in spite of due diligence, such amendment could not have been sought earlier. The object is to prevent frivolous applications which are filed to delay the trial.” The instant article explores the position of Indian law on when pleadings can be amended and the extent to which Courts would permit such amendment, as evolved and expounded by judicial precedents. II. GENERAL PRINCIPLES ON AMENDMENT OF PLEAINGS: It is fairly settled law that amendment of pleadings under Order VI Rule 17 is to be allowed if such an amendment is required for proper and effective adjudication of controversy between the parties and to avoid multiplicity of judicial proceedings, subject to certain conditions such as allowing the amendment should not result in injustice to the other side. Further, in normal circumstances, an admission made by the defendant, conferring certain rights on Plaintiff is not allowed to be withdrawn, resulting in prejudice to such right of the Plaintiff, depending on the facts and circumstances of a given case. In certain situations, a time barred claim cannot be allowed to be raised by proposing an amendment to take away the valuable accrued right of a party. However, mere delay in making an amendment application itself is not enough to refuse amendment as the delay can be compensated in terms of money. The Hon’ble Supreme Court has held that the purpose and object of Order VI Rule 17, is to allow either party to alter or amend his pleadings in such manner and on such terms as may be just.2 The power to allow amendment is wide and can be exercised at any stage of the proceedings in the interests of justice on the basis of guidelines laid down by various High Courts and the Hon’ble Supreme Court. Amendment of Pleadings cannot be claimed as a matter of right and under all circumstances. However, the Courts, while deciding such prayers, should not adopt a hyper-technical approach. A liberal approach should be the general rule, particularly in cases where the other side can be compensated with costs.3 It has also been held by the Hon’ble Supreme Court4 that a party is not allowed by amendment to set up a new case or a new cause of action, particularly when a suit on a new case or cause of action is barred.5 But it is well recognized that where the amendment does not constitute the addition of a new cause of action or raise a different case, but amounts to no more than a different or an additional approach to the same facts, the amendment will be allowed, even after the expiry of the statutory period of limitation.6 The Hon’ble Supreme Court has also held that it is well settled law that delay in filing the application for amendment of the written statement is not a ground for refusal of prayer for amendment. Further, the Court cannot go into the merit of such amendment. The only question at the time of considering amendment of the pleadings would be whether such amendment would be necessary for decision of the real controversy between parties in the suit.7 In the landmark case of Reevajeetu Builders and Developers v. Narayanaswamy and Sons & Ors.8, it has been held that, on an analysis of English and Indian cases, some of the basic principles which ought to be taken into consideration while allowing or rejecting an application for amendment of pleadings are: III. AMENDMENT TO A PLAINT VIS-À-VIS A WRITTEN STATEMENT: The Hon’ble Supreme Court has held that the amendment of a plaint and amendment of a written statement are not exactly governed by the same principle. While some general principles are common to both, but the rules that the plaintiff cannot be allowed to amend his pleadings so as to alter materially or substitute his cause of action or the nature of his claim has necessarily no counterpart in the law relating to the amendment of the written statement, since adding a new ground of defense or substituting or altering a defense does not raise the same problem as adding, altering, or substituting a new cause of action.9 The Court has thus held that inconsistent pleas can be raised by defendants in the written statement, although the same may not be permissible in case of plaint.10 IV. WHEN DOES TRIAL COMMENCE: The proviso of Order VI Rule 17 states that ”… no application for amendment shall be allowed after the trial
An Overview of Real Estate Laws and Regulations Applicable in India
1. Overview A transaction in real estate in India must take into consideration: The Republic of India is a federation of 28 States and 8 Union Territories, and is governed by laws enacted and rules and regulations framed by: and Many Central legislations on subjects in the Concurrent List (e.g. registration of documents) have State amendments. Customary laws are applicable to the extent not inconsistent with the Constitution of India (e.g. Islamic Law is applicable to succession in the case of Mohammedans). For our responses, Central laws and laws applicable in the state of Maharashtra (of which the capital city is Mumbai) have been taken into consideration. Note that some laws differ from state to state and that local laws may also apply depending upon the type of transaction. 2. What is the main legislation relating to real estate ownership? 3. How is ownership of real estate proved? Any transaction for transfer of interest in immovable property is required to be in writing and registered in the office of the “Sub-Registrar of Assurances”, subject to a few exceptions. A document of transfer of interest in immovable property which is compulsorily registrable but has not been registered is not admissible in evidence in civil proceedings. Registration of instruments which are required to be registered will constitute deemed notice to the public of the immovable property transactions which have been effected by such instruments. Most land holdings have been surveyed by government authorities and allotted a revenue survey number and issued a “Record of Right” (in case of agricultural lands in Maharashtra) or “Property Register Card” (in case of non-agricultural lands in Maharashtra) and similar documents in other parts of India. These revenue documents record the name of the original owner (at the time of first survey of the land by the government) and subsequent transfers as may have been notified to the authorities. The revenue documents provide prima facie evidence of ownership and devolution of title. Documents registered in respect of the property in the office of the Sub-Registrar of Assurances and documents issued by the revenue authorities are necessary steps for establishing the ownership of real estate. However, barring exceptions, an agreement for the transfer of immovable property or an interest therein (which does not itself operate to transfer any interest in land) is not required to be in writing or registered but a suit for specific performance of an unregistered agreement for sale of immovable property may be maintainable. Also, devolution of title on the demise of the owner and whether the names of all heirs of the deceased have been recorded in the revenue records, require consideration. 4. Are there any restrictions on who can own real estate? Persons resident outside India fall into the following three categories: (i) non-resident Indians; (ii) foreign nationals of Indian origin; and (iii) foreign nationals of non-Indian origin. (i) and (ii) can purchase or be gifted residential and commercial property (not agricultural land/plantation property/farm houses/private forest land which may only be inherited by (i) and (ii)). (iii) cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India. (iii) can, however, acquire or transfer immovable property in India, on lease, for a period not exceeding 5 years. A foreign company cannot acquire immovable property in India. However, a foreign company which has established a branch office in India may acquire immovable property in India which is necessary or incidental to its activity, subject to certain conditions. A foreign company which has established a liaison office in India cannot acquire immovable property in India, but can acquire property by way of lease, for a period not exceeding 5 years. A branch office is subject to taxation in India; a liaison office is not, because it cannot earn revenue in India. Foreign direct investment (“FDI”) into India is governed by the Consolidated FDI Policy. Investment can be made into an Indian company by subscribing to or acquiring instruments which are permitted, including equity shares, compulsorily convertible debentures, preference shares and certain other products available to foreign portfolio investors. External Commercial Borrowing is not permitted for investment in real estate or purchase of land, unless used for affordable housing, construction and development of Special Economic Zones and industrial parks/integrated townships. Under Indian law, a minor is not competent to enter into a contract. However, property can be acquired by a minor by inheritance or by the guardian for the minor or out of funds gifted to the minor. Transfer of immovable property during the minority of the holder can be effected with Court sanction. 5. What types of proprietary interests in real estate can be created? Freehold: Where the owners are dominant owners of the property in perpetuity with no obligation to make any payment to or seek consent from any other person and all other rights and interests in the property emanate from the owner. The absolute ownership of the owner is subject to some statutory restrictions e.g. on excavation and mining and extent of construction. Leasehold/Tenancy: Where the lessee/tenant has possession and use and income of the property for a fixed term or even in perpetuity, on condition that he pays rent and observes and performs the terms and conditions of the lease/tenancy, and the lessor/landlord has the right to terminate the lease/tenancy and take back possession, unless the lessee/tenant can claim protection from eviction under rent control legislation or the Transfer of Property Act. Licensee/Occupancy Rights: Where a person is permitted by the owner or by the lessee/tenant (provided the terms of lease/tenancy permit the lessee/tenant to do so) to carry on a specified activity on the property of the owner/lessee on specified conditions. Common Ownership: Where a building is owned by a Co-operative Society or Limited Company or Association of Apartment Owners/Condominium and individual apartments/offices/premises are acquired and used by Members/Shareholders/Apartment Owners on certain conditions. 6. Is ownership of real estate and the buildings on it separate?
Vidarbha Industries Power Limited v Axis Bank Limited- A temporary storm in the waters?
INTRODUCTION The Supreme Court on 12th July 2022, in Vidarbha Industries Power Ltd. v Axis Bank Ltd. [1] held that Section 7(5)(a) of the Insolvency & Bankruptcy Code (“IBC”) is directory. Enunciating on the same, the Supreme Court held that National Company Law Tribunal (“NCLT”) can reject an application even if the financial creditor fulfills the twin test of establishing “debt” and “default” on the part of the corporate debtor. While a Review Petition was filed against the said judgment due to the untoward path taken, the same was rejected by the Supreme Court. The case analysis seeks to understand the position as adopted by various forums in the present case and seeks to critique the Supreme Court judgment as being violative of the objectives of the IBC. The analysis also tests for the sustainability of this position in the insolvency regime of India in times to come. BRIEF FACTS OF THE CASE Axis bank being the financial creditor of Vidarbha Industries filed an application under Section 7(2) before the NCLT, Mumbai for institution of Corporate Insolvency Resolution Process (“CIRP”). In response, Vidarbha Industries filed a Miscellaneous Application No. 570 of 2020 in C.P. (IB) No. 264 of 2020 before the NCLT seeking stay on proceedings under Section 7 of the IBC in the NCLT as long as Civil Appeal No. 372 of 2017 was pending in the Supreme Court. Vidarbha Industries averred that it was power generating company operating a 600 MW Coal-fired Thermal Power Plant in Maharashtra and had been supplying power to Reliance Infrastructure Ltd. (“RIL”) since 1st April 2014 as per various agreements approved by the Maharashtra Electricity Regulatory Commission (“MERC”). In 2016, Vidarbha Industries filed an application before MERC for truing up the Aggregate Revenue Requirement and for determination of tariff due to increase in fuel costs and cost of procuring coal. MERC disposed off the application in June 2016, by disallowing substantial portions of the fuel costs for financial years (2014-15, 2015-16) and additionally capped the said tariff for (2016-17 to 2019-20). An Appeal was filed before the Appellate Tribunal for Electricity (“APTEL”) which was allowed. Hence Vidarbha Industries claimed that an amount of INR 1,730 Crores (Indian Rupees One Thousand Seven Hundred and Thirty Crores only) is due as per the order passed by APTEL. Though MERC has challenged the said order by way of an Appeal before the Supreme Court, the same is pending adjudication. Hence, in its Miscellaneous Application for stay Vidarbha Industries stated that it was financially healthy and due to unwanted financial stress due to the pending Appeal, debts could not be paid. The NCLT dismissed the stay application by holding Section 7 to be mandatory in its wording and hence Vidarbha Industries approached the NCLAT. The NCLAT held that the issue of liquidity as raised by Vidarbha Industries cannot impact the admission of Application under Section 7 of the IBC when the twin test of existence of a debt and default to pay the debt is proven. The said decision was finally brought before the Supreme Court and the question raised was “whether Section 7(5)(a) is mandatory or a discretionary provision?” SUPREME COURT JUDGMENT Vidarbha Industries’ Stance Vidarbha Industries basis the facts stated that the only reason for the existence of debt was the pending appeal and once the same is adjudicated in its favor, it would realize a sum of INR1,730 Crores (Indian Rupees One Thousand Seven Hundred and Thirty Crores only) and would be able to satisfy the debt. Basis the law, it was strongly contended that a perusal of Section 7(5)(a) indicates the use of “may” when admitting an application for initiating the CIRP process. Hence, Vidarbha Industries averred that the NCLT can reject an application even if there is existence of debt for meeting the ends of justice and achieving the true objective of the IBC, i.e., revival of the company and value maximization. Axis Bank’s Stance Solely relying on the statute, Axis Bank Ltd. vehemently argued that once default in payment of dues has been admitted, application must be allowed. While relying on Swiss Ribbons Pvt. Ltd. & Anr. v Union of India & Ors. [2] it was contended that the legislative policy as established by the IBC was to shift from “inability to pay debts” to “determination of default.” It was further stated that the adjudicating authority under Section 7 was merely required to ascertain existence of default within 14 days of receipt of such application and if the default was found, the adjudicating authority should allow the application. It was concludingly argued that the said section was mandatory in nature and pointed out that since the application being instituted in the NCLT, one year had lapsed and there was no change in the solvency of Vidarbha Industries. JUDGMENT OF THE SUPREME COURT The Supreme Court stated that both the previous fora as per the requirements of Section 7 of the IBC had only observed whether a debt and requisite default had occurred. It concluded that both the institutions had not entered into the merits of the matter. While not agreeing with the view taken by the previous forums, the Supreme Court held that the award of the ATEPL cannot completely be disregarded, and the viability and overall financial health of Vidarbha Industries cannot be held as extraneous matters. While holding that the use of the word “may” under Section 7(5) to be directory, the Supreme Court stated that the rule of literal construction must be taken into consideration while viewing statutes. The Supreme Court also enumerated the difference between the CIRP Proceedings lodged by an Operational Creditor and Financial Creditor. While the former under Section 9(5) having filed an application “shall” be allowed to initiate CIRP upon existence of debt and default therein, the latter “may” be permitted to do the same if the tribunal is satisfied that no other reasons preclude the application from being allowed as was seen in the present case. Due to these reasons, the Orders
22Light v OSEPL Pvt. Ltd.: An able defense to appointment of an arbitrator?
1. Introduction 2. Facts of the Matter 3. Was there an Arbitrable Dispute? 4. Scope of Judicial Review of Claims 5. Why is such prima facie examination necessary? 6. Conclusion – Nikhilesh Koundinya, Associate, Solomon & Co. About Solomon & Co. Solomon & Co. (Advocates & Solicitors) was founded in 1909 and is amongst India’s oldest law-firms. The Firm is a full-service firm that provides legal service to Indian and international companies and high net-worth individuals on all aspects of Indian law. “Disclaimer” The information contained in this article is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. As such, it should not be used as a substitute for consultation with a competent adviser. Before making any decision or taking any action, the reader should always consult a professional adviser relating to the relevant article posting. Copyright © 2020 Solomon & Co., All rights reserved.
Overview of the Mediation Bill, 2021
Introduction In a world where disputes are an inevitable facet of human interaction, governments and legal systems are increasingly turning to alternative methods of conflict resolution to alleviate the burden on courts and promote more efficient and harmonious solutions. One such significant stride towards streamlining conflict resolution mechanisms is through the Mediation Bill, 2021 (“Bill”), which has made its mark in the legislative landscape of India. The journey of the Bill through the review process of the Standing Committee, the Rajya Sabha, and the Lok Sabha reflects a meticulous approach to institutionalise the mediation process within the country’s legal framework. This approach specifically focuses on institutional mediation to resolve disputes, encourage community mediation, and make online mediation an acceptable and cost-effective process. Various provisions such as section 89 of the Code of Civil Procedure, 1908, section 28 of the Indian Contract Act, 1872, and section 442 of the Companies Act, 2013 provide for mediation as a viable option for resolving disputes amicably. However, there was a vacuum prior to the introduction of the Bill, as no legislation provided for the procedure and related intricacies of this mechanism. Therefore, there was a need for a stand-alone law to remove the inconsistencies between the various pieces of existing legislation. The key features of the Bill are abridged below: Applicability of the Bill The provisions of the Bill apply to the mediation proceedings conducted in India where: Non-applicability of the Bill The Bill states that certain disputes should not be referred for mediation, such as: Pre-litigation mediation The Bill introduces a concept of pre-litigation mediation wherein the parties may voluntarily attempt to resolve the disputes before filing any suit and the same can be carried out irrespective of the existence of any mediation agreement. The procedure for court-annexed mediation shall be determined by the Supreme Court or the High Court wherein the Supreme Court or the High Court will constitute a mediation committee that will maintain a panel of mediators for conducting mediations. The Bill also permits online mediation, provided that both parties agree in writing to mediate disputes online. The parties must also only use secure computer networks, or video/audio conferencing when conducting online mediation. Appointment of mediator A person of any nationality may be appointed as a mediator provided that he possesses such qualifications, experience and accreditation as may be prescribed. The parties can either mutually agree upon a mediator and the procedure of its appointment or in cases of a dispute, a mediator shall be appointed by a mediation service provider from the panel of mediators within seven (7) days of such application. To ensure a bias-free and fair mediation process, a mediator is required to be a neutral third party and should be impartial in its conduct. The Bill recognizes and enforces the same by obligating the mediators to disclose any potential circumstance that may constitute a conflict of interest or is likely to give rise to justifiable doubts as to the independence or impartiality of the mediator in the conduct of the mediation before the commencement of the mediation process itself. Interim relief prior to mediation A party may file a lawsuit or other appropriate legal action before a court or tribunal with appropriate jurisdiction to request immediate interim relief prior to the start of, or throughout, mediation proceedings under the Bill. In addition, the Bill gives courts and tribunals the authority to refer parties to mediation at any point during the legal process. Withdrawal from mediation Either party may withdraw from mediation at any time after completion of the first two (2) mediation sessions. In case, any party fails to attend the first two mediation sessions without any reasonable cause which results in the failure of mediation, the court, in subsequent litigation proceedings on the same subject matter between the parties, may impose necessary costs on the party who had failed to attend the mediation sessions. Time limit for completion of mediation Mediation shall be completed within a period of one twenty (120) days from the date fixed for the first appearance before the mediator which may be extended for a period as agreed by the parties, but not exceeding sixty (60) days. Mediation settlement agreement It is a written agreement signed by the parties to settle their disputes which is authenticated by the mediator. The parties herein can also settle disputes that were not part of the scope of mediation prior to the commencement of the mediation proceedings. The mediation settlement agreement has the same binding effect and enforceability as a Court’s judgment or a decree, challengeable only on the grounds of fraud, corruption, impersonation or relating to any dispute not fit for mediation. Confidentiality of mediation proceedings All parties are required to keep the following aspects related to mediation confidential: Mediation Council of India The Bill also talks about establishing a Mediation Council of India (“Council”) to promote and regulate both domestic as well as international mediation in India. The members of the Council are to be selected from amongst the Supreme Court or the High Court judges, eminent persons and academicians in the field of mediation, and key government officials. The Bill also lays down the roles, responsibilities, and duties of the Council. Analysis The Bill was further amended in the year 2023 based on the suggestions and recommendations of the Standing Committee. Few suggestions have been incorporated; however, a plethora of shortcomings persist and warrant careful consideration and reflection. Some of such lacunas are elucidated herein: Firstly, in pre-litigation mediation, the parties have the option to seek interim relief from a court or a tribunal in “Exceptional Circumstances” under section 8 of the Bill. However, there lies ambiguity surrounding what constitutes an exceptional circumstance as there exists no qualifying criteria for the same. This may lead to multiple court interventions along with delay which fails to fulfil the object of the Bill. Further, there is no appeal mechanism available against an order passed under the relevant section. Furthermore, in the pursuit of
