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case_law:supreme_court_quarterly_digest_july_-_september_2018_part_1_83627122018

Supreme Court Quarterly Digest July - September 2018 Part 1

Aadhaar - Whether the Aadhaar Project creates or has tendency to create surveillance state and is, thus, unconstitutional on this ground - Whether the Aadhaar Act violates right to privacy and is unconstitutional on this ground - Discussed. Justice K.S. Puttaswamy (Retd.) v. Union of India, 2018 (12) Scale 1 W.P. (C) No. 494 of 2012 26-09-2018

Advocates Act, 1961 - Salary, Allowances and Pension of Members of Parliament Act, 1954 - Bar Council of India Rules - Rule 49. Ashwini Kumar Upadhyay v. Union of India, 2018 (4) JLJR 70 : JT 2018 (9) SC 449 : 2018 (4) RCR (Civil) 497 : 2018 (11) Scale 459 : 2018 (7) SLT 625 W.P. (C) No. 95 of 2018 25-09-2018

All India Service (Discipline and Appeal) Rules, 1969 - Rr. 6 & 8 - Procedure for imposing major penalties - A major penalty cannot be imposed except after holding an enquiry- disciplinary authority shall “draw up or caused to be drawn up” the substance of the imputation of misconduct or misbehavior into definite and distinct article of charge - an opportunity to be given to the delinquent to submit his explanation- the authority to institute proceedings and to impose penalty on a member of All India Service is the State Government, if he is serving in connection with the affairs of the State. State of Tamil Nadu rep. by Secretary to Govt. (Home) v. Promod Kumar IPS, AIR 2018 SC 4060 : 2018 (10) Scale 157 C.A. No. 8427 of 2018 21-08-2018

Arbitration - Arbitrator has the power to award interest pendente lite where justified. Raveechee and Co. v. Union of India, 2018 (4) ALT 46 : 2018 (4) CTC 330 : 2018 (3) RCR (Civil) 465 : 2018 (8) Scale 415 C.A. No. 5964-5965 of 2018 03-07-2018

Arbitration - the impugned order is not a reasoned order and the grounds on which the objection of the appellant was allowed by the SubJudge who declined to make the Award Rule of the Court, was not considered by the High Court - the matter is remitted back to the High Court. Punjab State Electricity Board v. Megh Raj Bansal, Govt. Contractor and Suppliers, JT 2018 (8) SC 317 : 2018 (5) RAJ 278 C.A. No. 9012 of 2018 29-08-2018

Arbitration - Vague Arbitration Clause - Option of Arbitration or Court Adjudication - Intention of Parties to Arbitrate is vital, even if the dispute resolution clause is vague - Choice of the Parties to be respected if a contract clause gives option of arbitration or court adjudication - Clause 15 refers to arbitration or court. It, therefore, gives an option. Since petitioner chose arbitration, a sole Arbitrator is appointed. Zhejiang Bonly Elevator Guide Rail Manufacture Co. Ltd. v. Jade Elevator Components, AIR 2018 SC 4271 : 2018 (5) ArbLR 178 : JT 2018 (9) SC 84 : 2018 (5) RAJ 464 : 2018 (11) Scale 188 : (2018) 9 SCC 774 Arb.C. No. 22 of 2018 14-09-2018

Arbitration Act, 1940 - Pendente Lite Interest - Under the 1940 Act, an arbitrator has power to grant pre-reference interest under the Interest Act, 1978 as well as pendente lite and future interest. However, he is constricted only by the fact that an agreement between the parties may contain an express bar to the award of pre-reference and/or pendente lite interest. Reliance Cellulose Products Ltd. v. Oil and Natural Gas Corporation, AIR 2018 SC 3707 : 2018 (4) ArbLR 276 : 2018 (3) RCR (Civil) 861 : (2018) 9 SCC 266 C.A. No. 6639 of 2018 20-07-2018

Arbitration and Conciliation Act, 1996 - Clauses which is inserted in an Agreement to to prevent disputes from occurring and to ensure smooth implementation of the Agreement, thereby making it clear that the object was not to adjudicate disputes but to prevent them will not be an arbitration agreement. Shyam Sunder Agarwal v. P. Narotham Rao, 2018 (9) Scale 367 : (2018) 8 SCC 230 C.A. No. 6872 of 2018 23-07-2018

Arbitration and Conciliation Act, 1996 - S. 11(9) - existence of arbitration clause meant for determination of dispute by arbitration. Trans Asian Shipping Services (Pvt.) Ltd. v. Beacon Shipping Lines Ltd. Represented by Mr. Mohammed S. Aslam Managing Director, 2018 (5) ArbLR 182 : JT 2018 (9) SC 314 : 2018 (5) RAJ 652 : 2018 (4) RCR (Civil) 313 : 2018 (13) Scale 1 Arb.C. No. 20 of 2012 19-09-2018

Arbitration and Conciliation Act, 1996 - S.34 - Application for setting aside arbitral award - Speedy resolution of arbitral disputes has been the reason for enacting the 1996 Act, and continues to be the reason for adding amendments to the said Act to strengthen the aforesaid object. Quite obviously, if issues are to be framed and oral evidence taken in a summary proceeding under Section 34, this object will be defeated. An application for setting aside an arbitral award will not ordinarily require anything beyond the record that was before the Arbitrator. However, if there are matters not contained in such record, and are relevant to the determination of issues arising under Section 34(2)(a), they may be brought to the notice of the Court by way of affidavits filed by both parties. Crossexamination of persons swearing to the affidavits should not be allowed unless absolutely necessary, as the truth will emerge on a reading of the affidavits filed by both parties. Emkay Global Financial Services Ltd. v. Gird har Sondhi, AIR 2018 SC 3894 : 2018 (5) ArbLR 1 : 2018 (3) JLJR 385 : JT 2018 (8) SC 147 : 2018 (3) PLJR 406 : 2018 (10) Scale 15 : (2018) 9 SCC 49 : 2018 (7) SLT 669 C.A. No. 8327 of 2018 20-08-2018

Arbitration and Conciliation Act, 1996 - S.34 - the word “place” cannot be used as seat. To elaborate, a venue can become a seat if something else is added to it as a concomitant. But a place unlike seat, at least as is seen in the contract, can become a seat if one of the conditions precedent is satisfied. It does not ipso facto assume the status of seat. Union of India v. Hardy Exploration and Production (India) INC, AIR 2018 SC 4871 : 2018 (5) ArbLR 226 : 2018 (5) RAJ 1 : 2018 (4) RCR (Civil) 614 : 2018 (11) Scale 733 C.A. No. 4628 of 2018 25-09-2018

Arbitration and Conciliation Act, 1996 - S.34 - Whether the Insolvency and Bankruptcy Code, 2016 can be invoked in respect of an operational debt where an Arbitral Award has been passed against the operational debtor. K. Kishan v. Vijay Nirman Company Pvt. Ltd., 2018 (5) Bom.C.R. 705 : 2018 (5) RAJ 143 : 2018 (4) RCR (Civil) 197 : 2018 (10) Scale 256 C.A. No. 21824 of 2017 14-08-2018

Arbitration and Conciliation Act, 1996 - Section 34 (3) - Limitation Act, 1963 - Section 17 - Condonation of a delay caused on the account of alleged fraud played on the objector (party challenging the award) beyond the period prescribed - Once the party has received the Award, the limitation period under Section 34(3) of the Arbitration Act commences. Section 17 of the Limitation Act would not come to the rescue of such objecting party. P. Radha Bai v. P. Ashok Kumar, 2018 (5) ArbLR 204 : 2018 (4) RCR (Civil) 571 : 2018 (13) Scale 60 C.A. No. 7710 of 2013 26-09-2018

Arbitration and Conciliation Act, 1996 - Ss. 48 & 49 - A foreign award has not borne stamp duty under the Indian Stamp Act, 1899 would not render it unenforceable. Shriram EPC Limited v. Rioglass Solar SA, AIR 2018 SC 4539 : 2018 (5) ArbLR 161 : 2018 (5) CTC 770 : 2018 (3) JLJ 584 : JT 2018 (9) SC 148 : 2018 (4) KLT 265 : 2018 (5) RAJ 359 : 2018 (4) RCR (Civil) 317 : 2018 (11) Scale 108 C.A. No. 9515 of 2018 13-09-2018

Armed Forces - Pension - “basic pay” - “actually drawn” - Computation of - Submarine pay was includible in “pay” for purposes of computing Service Pension of appellants. N.N. Godfred v. Union of India, 2018 (8) Scale 714 C.A. No. 10035 of 2010 11-07-2018

Arms Act, 1959 - Ss. 25(1)(A), 25(1AA) r/w. 35 - Recovery of six live cartridges from a car - Conviction - Sustainability. Mohmed Rafiq Abdul Rahim Shaikh v. State of Gujarat, AIR 2018 SC 4292 : 2018 (3) Crimes 520 : JT 2018 (9) SC 114 : 2018 (11) Scale 227 : 2018 (7) SLT 726 Crl.A. No. 1078 of 2008 13-09-2018

Army Act, 1950 - S. 83 - Armed Forces Tribunal Act, 2007 - S.31 - ‘absenting himself without leave’. Union of India v. Col Ran Singh Dudee, 2018 (8) Scale 421 C.A. No. 11009 of 2017 03-07-2018

Army Law - Postings and Transfers - Army personnel are duty bound to serve wherever they are ordered to. Maj. Amod Kumar v. Union of India, JT 2018 (8) SC 443 : 2018 (11) Scale 43 : 2018 (7) SLT 715 W.P. (C) No. 918 of 2017 06-09-2018

Association - Principles of Natural Justice - Expulsion of certain members from its membership. Tamil Nadu Chamber of Commerce and Industry represented Thr. its Hony. Secretary v. P. Mahendravel, JT 2018 (8) SC 558 : 2018 (9) Scale 635 C.A. No. 7421 of 2018 01-08-2018

Ayodhya Case - No case has been made out to refer the Constitution Bench. M. Siddiq (D) Thr. Lrs. v. Mahant Suresh Das, 2018 (11) Scale 667 : 2018 (7) SLT 567 C.A. No. 10866 of 2010 27-09-2018

Bail - At the time of considering an application for bail, the Court must take into account certain factors such as the existence of a prima facie case against the accused, the gravity of the allegations, position and status of the accused, the likelihood of the accused fleeing from justice and repeating the offence, the possibility of tampering with the witnesses and obstructing the Courts as well as the criminal antecedents of the accused. It is also well settled that the Court must not go into deep into merits of the matter while considering an application for bail. All that needs to be established from the record is the existence of a prima facie case against the accused. State of Orissa v. Mahimananda Mishra, JT 2018 (9) SC 186 : 2018 (4) Crimes 156 : 2018 (2) OLR 768 : 2018 (11) Scale 239 Crl.A. No. 1175 of 2018 18-09-2018

Bail - case involving embezzlement to the tune of Rs.2.78 Crores - stringent conditions should be imposed. Bharat Stars Services Pvt Ltd. v. Harsh Dev Thakur, Crl.A. No. 1089 of 2018 28-08-2018

CBI Investigation - Power of Court. Union of India v. Sunil Tripathi, AIR 2018 SC 3570 : 2018 (9) Scale 305 : (2018) 8 SCC 463 C.A. No. 5987 of 2018 31-07-2018

Civil Law - Delay condoned - Leave granted. Sarup Singh v. State of Haryana, 2018 (9) Scale 251 C.A. 6763 of 2018 18-07-2018

Civil Law - Possession and Continuity of Possession - Legality of - Concurrent Findings rendered by the Appellate Court and the Revision Court, as affirmed by the High Court - Appeal is, hence, dismissed. Ram Raj v. Badra (Dead) through Lrs. C.A. No. 82 of 2007 11-07-2018

Civil P.C. 1908 - Additional Evidence - Procedure to be followed by appellate courts after receiving additional evidence. Corporation of Madras v. M. Parthasarathy, AIR 2018 SC 3777 : 2018 (5) ALD 201 : 2018 (130) ALR 703 : 2018 (3) JLJR 355 : JT 2018 (8) SC 15 : 2018 (3) PLJR 376 : 2018 (4) RCR (Civil) 39 : 2018 (9) Scale 559 : 2018 (6) SLT 766 : (2018) 9 SCC 445 C.A. No. 3033 of 2006 10-08-2018

Civil P.C. 1908 - It would be just and proper that all properties belonging to or claim to belonging to the family or/and its members though denied by the parties against each other should be made subject matter of one civil suit rather than two civil suits. P.K. Narayanan Raja v. Ambika, JT 2018 (8) SC 52 : 2018 (9) Scale 528 : (2018) 9 SCC 164 C.A. No. 561 of 2008 10-08-2018

Civil P.C. 1908 - Necessary / Proper Party - A person whose presence before a forum may be necessary in order to enable it effectually and completely to adjudicate upon and settle all the questions involved in the dispute is a necessary party. A necessary party is one without whom no order can be made effectively. A proper party is one in whose absence an effective order can be made, but whose presence is necessary for complete and final decision on the question involved in the proceedings. Swapna Mohanty v. State of Odisha, 2018 (10) Scale 346 C.A. No. 8425 of 2018 21-08-2018

Civil P.C. 1908 - O. 21 Rr. 72 & 85 - Non compliance of mandatory provisions - Since first respondent-corporation is not only the auction purchaser but also a decree holder as well, there is no question of deposit of the auction amount.. Bee Gee Corporation Pvt. Ltd. v. Punjab Financial Corporation, JT 2018 (9) SC 341 : 2018 (4) RCR (Civil) 607 C.A. No. 9651 of 2018 18-09-2018

Civil P.C. 1908 - O. 39 R. 1 & 2 - Interim Stay - Justifiable reason(s) to support either the grant or rejection need(s) to be stated keeping in view the facts and the law applicable to the controversy involved. Birwati Chaudhary v. State of Haryana, AIR 2018 SC 4207 : 2018 (10) Scale 13 : (2018) 9 SCC 458 http://bit.ly/CA8376of2018 20-08-2018

Civil P.C. 1908 - O.11 R.14 & O.7 R. 14 - Production of document on which plaintiff sues or relies. State of Assam v. Union of India, 2018 (9) Scale 54 O.S. No. 2 of 1988 20-07-2018

Civil P.C. 1908 - O.37 R.5 - Requirements of - Commercial transactions executed in relation to supply of coal - Recovery of - Suit is pending - contesting defendants have not yet filed their written statements disclosing their defense - trial in the suit on merits is yet to commence - in such circumstances, any observations on facts would cause prejudice to the rights of the parties while prosecuting the suit on merits. Empee Distilleries Limited v. Gimpex Private Ltd., JT 2018 (9) SC 305 : 2018 (13) Scale 22 C.A. No. 9865 of 2018 24-09-2018

Civil P.C. 1908 - O.41 Rr. 23, 23­A, 24 & 25 - Rent Control Act, 1999 (Maharashtra) - S.16(1)(n) - Eviction Suit - Compromise Decree - Execution - Revisionary Court - Remand. Hiya Associates v. Nakshatra Properties Pvt. Ltd., JT 2018 (9) SC 398 : 2018 (4) RCR (Civil) 721 : 2018 (13) Scale 583 C.A. No. 9996 of 2018 26-09-2018

Civil P.C. 1908 - O.9 R.13 - Summary Suit for Eviction - Suit was decreed ex-parte - the possession, which has already been restored to the appellant, shall continue with her, of course, subject to any final orders that may be passed by the High Court in the challenge proposed to be made by the respondent. Rekha Gurunath Mhashelkar v. Yashwant Vichare, C.A. No. 10658 of 2013 19-09-2018

Civil P.C. 1908 - O.XLI R.27 - Additional Evidence - Test for production of - the First Appellate Court would have been within its jurisdiction to permit the party to the proceedings to produce additional evidence before it for full, complete and effectual adjudication of the proceedings - there are two options available to the Appellate Court. First, it may record the evidence itself by permitting the parties to produce evidence before it as per Rule 27 of Order XLI or direct the Court from whose decree the appeal under consideration has arisen, to do so. Uttaradi Mutt v. Raghavendra Swamy Mutt, 2018 (3) JLJ 553 : JT 2018 (10) SC 353 : 2018 (4) RCR (Civil) 723 : 2018 (13) Scale 538 C.A. No. 9333 of 2018 26-09-2018

Civil P.C. 1908 - S. 100 - Second Appeal - Case is remanded to the High Court for deciding the second appeal afresh on merits in accordance with law by properly framing the substantial question (s) of law on the question of ownership of the plaintiffs over the suit land and then to examine as to whether the findings on the said question recorded by two Courts suffer from any error (s) or not. Narayana Gramani v. Mariammal, 2018 (5) CTC 682 : JT 2018 (8) SC 578 : 2018 (11) Scale 91 C.A. No. 5057 of 2009 11-09-2018

Civil P.C. 1908 - S. 47 - Questions to be determined by the Court executing decree - Executing Court must execute the decree as it stands without adding anything to it. Kohinoor Transporters v. State of Uttar Pradesh, AIR 2018 SC 4138 : 2018 (5) ArbLR 27 : 2018 (5) RAJ 219 : 2018 (10) Scale 50 C.A. No. 8338 of 2018 21-08-2018

Civil P.C. 1908 - Second Appeal - Compromise Decree - Legislative intent which does not allow the parties to take recourse to these legal remedies to challenge the compromise once it is arrived at in the suit / appeal - Only exception being if the challenge is founded on the ground of fraud committed by the parties in obtaining any judicial orders, the suit, in appropriate case, may lie. Ved Pal (d) Tr. Lrs. v. Prem Devi (d) Tr. Lrs., 2018 (3) JKJ 153 : 2018 (9) Scale 526 : (2018) 9 SCC 496 : 2018 (7) SLT 695 C. A. No. 8353 of 2014 10-08-2018

Civil P.C. 1908 - Second Appeal - In the second appeal, no question of law much less substantial question of law arose and the substantial question of law framed by the High Court is not a substantial question of law but purely a question of fact in dispute between the parties. Kalyan Singh v. Ravinder Kaur (D) Thr. Lrs., JT 2018 (9) SC 190 C.A. No. 9332 of 2018 11-09-2018

Civil P.C. 1908 - Second Appeal - Remand - Compromise - High Court erred in not considering the question of genuineness and legality of the compromise and straightaway proceeded to decide the second appeal on merits. Muni Reddy v. C. Nagaraju, 2018 (5) ALD 191 : JT 2018 (9) SC 253 : 2018 (11) Scale 370 C.A. No. 2342 of 2008 20-09-2018

Companies Act, 2013 - the observations made in the impugned order may have far reaching consequences and deprive the Competent Authority or the Statutory Authority to proceed in the matter in accordance with the provisions of the Companies Act, 2013 in respect of investigations and including filing of complaint/police report concerning the offences involving serious financial frauds or economic misdemeanor, the impugned order, therefore, deserves to be stayed. Serious Fraud Investigation Office v. Neeraj Singal, 2018 (10) Scale 671 Crl.A. No. 1114 of 2018 04-09-2018

Company Law - Whether Section 14 of the Insolvency and Bankruptcy Code, 2016, which provides for a moratorium for the limited period mentioned in the Code, on admission of an insolvency petition, would apply to a personal guarantor of a corporate debtor. State Bank of India v. V. Ramakrishnan, AIR 2018 SC 3876 : 2018 (5) ALD 162 : 2018 (5) Mh.L.J. 692 : 2018 (4) MPLJ 23 : 2018 (4) RCR (Civil) 110 : 2018 (9) Scale 597 CA 3595 of 2018 14-08-2018

Compromise - parties have settled their disputes between them amicably - They have also filed a joint memo of compromise - The appeals are disposed of in terms of the joint memo of compromise, which shall form part of the decree. C. Kannan v. M. Jayakumari, C.A. No. 5877 of 2016 25-09-2018


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