List of Current Affairs

Source: Supreme Court 

Why in News?

A bench of  Justice JB Pardiwala and Justice Sudhanshu Dhulia held that in the given case it was not proved that the deceased was subjected to cruelty soon before her death in connection with demand for dowry and hence this was not the case of dowry death.           

• The Supreme Court held this in the case of Chabi Karmarkar v. The State of West Bengal. 

What is the Background of Chabi Karmarkar v. The State of West Bengal Case? 

• The deceased and Appellant no.2 were married in March 2003. 
• On 2^nd May 2006 the deceased committed suicide by hanging herself in her matrimonial home. 
• A post mortem was conducted. As per the report of post mortem there were ligature marks and there were no other ante-mortem injuries on the body of the deceased. 
• First Information Report was filed where it was alleged that the deceased was being harassed on demand of dowry.  
• Therefore, a case was registered under Section 304 B, Section 498A and Section 306 read with Section 34 of Indian Penal Code, 1860 (IPC). 
• The Trial Court convicted teh sister-in-law (Appellant no.1), husband (Appellant no. 2) and mother-in-law of the deceased . 
• The High Court upheld the conviction and sentence in appeal. 
• Consequently, the appeal was filed in the Supreme Court.  

What were the Court’s Observations? 

• The Court held that the following facts have been proved beyond beyond any doubt: 
  • Deceased died within seven years of marriage. 
  • The death was by suicide in the matrimonial home. 
  • There was harassment at the hands of her in-laws and particularly by the husband. 
  • There was marital discord between husband and wife.  
• The prosecution has examined several witnesses.  
• The Court held that it was clear that the deceased faced harassment and cruelty at the hands of her husband, however, these witnesses did not state that such cruelty and harassment was in connection with demand for dowry. 
• With respect to demand for dowry there were some general statements made which are not sufficient to convict the accused under Section 304B of IPC. 
•  Thus, the Court held that in the present facts the accused can be convicted under Section 306 (Abetment to suicide) and Section 498A of IPC (Cruelty).  
• The conviction under Section 304B (Dowry Death) was however, set aside. 

What is Dowry?

• About 
  • Section 2 of the Dowry Prohibition Act, 1961 lays down the definition of dowry. 
• Constituents of Dowry 
  • Any property or 
  • Valuable security 
  • Given or agreed to be given directly or indirectly 
• Parties to Dowry 
  • By one party to marriage to other party to marriage 
  • By the parent of either party to marriage or by any other person to either party to marriage or to any other person 
• Time of Dowry 
  • At or before or at any time after marriage in connection with the marriage of the said parties 
• Dowry Does not Include 
  • It does not include dowry or mahr in the case of persons to whom the Muslim Personal Law (Shariat) applies. 

What are the Provisions Relating to “Dowry Death” in Criminal Laws?

What are the Judgments Explaining Essentials of Dowry Death? 

• Charan Singh @ Charanjit Singh v. State of Uttarakhand (2023) 
  • The Court in this case refused to invoke Section 304B of IPC. 
  • The Court held that there were only certain oral averments made regarding demand of motorcycle and land which was also much prior to the incident. 
  • The aforesaid incident does not in any way fulfil the prerequisites required for conviction under Section 304B or for raising the presumption under Section 113B of IEA.  
  • The Court further observed that mere death of the deceased being unnatural within seven years of marriage will not be sufficient to convict the accused under Section 304B and 498A of IPC. 
• Rajinder Singh v. State of Punjab (2015) 
  • There are four ingredients of the offence of dowry death under Section 304 B of IPC: 
    • death of a woman must have been caused by any burns or bodily injury or her death must have occurred otherwise than under normal circumstances 
    • such death must have occurred within seven years of her marriage 
    • soon before her death, she must have been subjected to cruelty or harassment by her husband or any relative of her husband 
    • such cruelty or harassment must be in connection with the demand for dowry. 
• Sher Singh @ Partapa v. State of Haryana (2015) 
  • The Court in this case interpreted the term “soon” as it appears in Section 304 B of IPC. 
  • The word “soon” should not be interpreted in terms of days or months or years. 
  • The demand for dowry should not be stale or an aberration of the past but should be a continuing cause of death under Section 304B. 
  • Once these concomitants are established by prosecution even to the extent of preponderance of probability the initial presumption of innocence is replaced by an assumption of guilt of the accused. 
• Dinesh Seth v. State of NCT of Delhi (2008) 
  • The Court examined the width and scope of two Sections i.e. Section 498A and Section 304B of IPC. 
  • Section 498A of IPC has a wider spectrum as it covers all the cases in which wife is subjected to cruelty by her husband or relative of her husband. 
  • The ingredient of “cruelty” is common to both the Sections but the width and the scope of the two sections is different, in so far as Section 304B deals with cases of death as a result of cruelty or harassment within seven years of marriage and Section 498A deals with all cases where the wife is subjected to cruelty by her husband or relatives of her husband.

Source: Supreme Court 

Why in News? 

Recently, the Supreme Court in the matter of Chalasani Udaya Shankar and others v. M/s. Lexus Technologies Pvt. Ltd. and others has held that Company Law Tribunals have the power to order rectification under Section 59 of the Companies Act, 2013 when the case prima facie indicates a party victim of fraud. 

What was the Background of Chalasani Udaya Shankar and others v. M/s. Lexus Technologies Pvt. Ltd. and others Case? 

• In the present case, the respondent company (M/s. Lexus Technologies Pvt. Ltd.) was incorporated in Andhra Pradesh. 
• Respondent No. 2 and 3 and 4 after acquiring shares in the company became its director. 
• It was alleged that Appellant No. 1,2, and 3 had the majority shares in the company in spite of that the control and management was left by them to be conducted by the respondents. 
• It was argued by the respondent that the share certificate obtained by the appellants were fabricated. 
• It was also argued by the respondent that the signs taken on blank papers was misused by the appellants. 
• The appellant alleged that the respondents did not conduct the Annual General meetings (AGM) for the financial years 2014-15, 2015-16 and 2016-17, due to which the Registrar of Companies struck off the name of the company from the Register of Companies as per Section 248 of the Companies Act, 2013.  
• Later while browsing on the company’s portal, it was discovered by the appellants that the respondents have filed false financial statements and annual reports for the defaulting financial years. 
• It was also alleged that the respondents removed the name of the appellants shareholding from the records of the company. 
• It was further alleged that the respondents have many times committed various acts of oppression with the intention of grabbing the company property. 
• It was sought by the appellants before the National Company Law Tribunal (NCLT): 
  • For rectification of the Register of Members of the company, by entering their names. 
  • To initiate appropriate action against respondents under Section 447 and Section 448 of Companies Act, 2013 
  • To charge the respondents for oppression and mismanagement. 
• NCLT dismissed the application filed by the appellant followed by an appeal to National Company Law Appellate Tribunal (NCLAT). 
• NCLAT also dismissed the appeal aggrieved by which the appellate file the present civil appeal before the Supreme Court. 

What were the Court’s Observations? 

• The Supreme Court observed the decision of the NCLAT that: 
  • The transfer of payment and allotment of shares by the ‘known persons’ was not clearly appreciated by the NCLAT. 
  • After a thorough examination it was obtained that the ‘known persons’ who paid the money were Appellants only. 
  • Therefore, the conclusion made by the NCLAT that appellants did not transfer any money to the respondent was held factually wrong. 
• The Supreme court widely observed the provisions of Section 59 of the Companies Act as: 
  • The court noted that the purpose of Section 59 is to fix mistakes, adding names that should be done but not done. 
  • It was added by the court that the phrase ‘sufficient cause’ under the provisions must be closely examined by the courts on case-to-case basis. 
  • The phrase must be examined in a such a way that it complies with the rules of CA and the test for cause of erasion of name in the register must be examined accordingly. 
  • The Supreme Court further added that the observation of NCLAT that the present case is prima facie a case of fraud and the appellants are the victims then the rectification could have been ordered by the NCLAT. 
• The Supreme Court also criticized the observations made by NCLT and NCLAT as: 
  • The Supreme Court stated that the NCLT has failed to operate mandatory law by not exercising its power for rectification. 
  • The Supreme Court also added that the appreciation of available documents must be done thoroughly by the tribunals before coming to any conclusion and NCLAT failed to do so. 
  • The Supreme Court also noted that the NCLT also failed in examining the contentions made by the parties and did not perform adequate verification of the evidences produced. 
• The Supreme Court allowed the present appeals and restored it to the NCLT to freshly examine the merits of the case and to dispose of the petition expediously. 

What are the Cases Referred in the Case of Chalasani Udaya Shankar and others v. M/s. Lexus Technologies Pvt. Ltd. and others? 

• Adesh Kaur v. Eicher Motors Limited and Ors (2018):  
  • In this case the Supreme Court held that on facts, an open-and-shut case of fraud is made out and the person seeking rectification was the victim, the National Company Law Tribunal would be entitled to exercise such power under Section 59 of CA. 
  • It was also held that exercising power under Section 59 will not be barred only because serious proceedings are going on against the defaulters (in this case criminal proceedings were going on against the company members). 
• Ammonia Supplies Corporation (P) Ltd v. M/S Modern Plastic Container (1998): 
  • In this case it was held that the power under Section 155 of CA, 1956 (now Section 59 of CA) cannot be exercised when the issue raised does not fall within the scope of rectification. 

What is Section 59 of the CA? 

• Section 59 of CA was earlier covered under Section 155 of CA, 1956. 
• Provisions related to the register of members are given under Section 88 of CA. 
• This section states the Rectification of register of members as: 

1. Rectification of Register of Members—

• If the name of any person is, without sufficient cause: 
  • Entered in the register of members of a company, or 
  • After being entered in the register, is, without sufficient cause, omitted therefrom, or 
  • If a default is made, or unnecessary delay occurs in entering in the register the fact of any person having become or ceased to be a member, 
• The person aggrieved, any member of the company, or the company may appeal to: 
  • The Tribunal (as prescribed), or 
  • A competent court outside India (specified by the Central Government by notification) in respect of foreign members or debenture holders residing outside India for rectification of the register. 

2. Tribunal's Powers in Appeals—

• The Tribunal may, after hearing the parties to the appeal under sub-section (1), by order: 
  • Either dismiss the appeal or 
  • Direct that the transfer or transmission shall be registered by the company within ten days of the receipt of the order, or 
  • Direct rectification of the records of the depository or the register, and in such a case, direct the company to pay damages, if any, sustained by the aggrieved party. 

3. Right to Transfer Securities—

• The provisions of this section shall not restrict the right of a holder of securities to transfer such securities, and any person acquiring such securities shall be entitled to voting rights unless the voting rights have been suspended by an order of the Tribunal.

4. Rectification for Contraventions—

• Where the transfer of securities is in contravention of any provisions of: 
  • The Securities Contracts (Regulation) Act, 1956, 
  • The Securities and Exchange Board of India Act, 1992, 
  • This Act, or 
  • Any other law in force, 
• The Tribunal may, on an application made by the depository, company, depository participant, holder of the securities, or the Securities and Exchange Board, direct any company or depository to rectify its register or concerned records and correct the contravention. 

Source: Supreme Court  

Why in News?

The Supreme Court clarified that, under the Arbitration & Conciliation Act, 1996 (A & C Act), courts at the referral stage should only determine the existence of a valid arbitration agreement and should not delve into complex factual disputes. This decision reinforces the doctrine of competence-competence, stating that detailed factual inquiries are inappropriate at this stage. The case involved a dispute over whether a non-signatory party could be included in arbitration proceedings, emphasizing the Court's stance on limiting preliminary judicial scrutiny. 

• CJI DY Chandrachud and Justices JB Pardiwala and Manoj Misra held in the matter of Cox and Kings v. SAP India Pvt Ltd. 

What was the Background of Cox and Kings v. SAP India Pvt Ltd.? 

• The petitioner is a company registered under the Companies Act, 1956, engaged in providing tourism packages and hospitality services. 
• Respondent No. 1 is also a registered company, providing business software solution services. It is a wholly owned subsidiary of Respondent No. 2, a company incorporated under German law. 
• The petitioner and Respondent No. 1 entered into an SAP Software End User License Agreement & SAP Enterprise Support Schedule on 14th December 2010. 
• In 2015, Respondent No. 1 recommended their 'Hybris Solution' (SAP Hybris Software) to the petitioner, claiming it would be 90% compatible with the petitioner's requirements. 
• The parties entered into three separate agreements for the purchase, customization, and use of the SAP Hybris Software. 
• Issues arose regarding the timely completion and implementation of the SAP Hybris Software project. 
• The petitioner contacted Respondent No. 2 (the German parent company) about the issues faced in the project execution. 
• Despite attempts to resolve the issues, the contract for the SAP Hybris Software project was rescinded on 15th November 2016. 
• Respondent No. 1 issued a notice invoking arbitration on 29th October 2017, for alleged wrongful termination of the contract and non-payment. 
• An arbitral tribunal was constituted to adjudicate the disputes between the parties. 
• The petitioner filed a Statement of Defence and counterclaims for an amount of Rs. 45,99,71,098/-. 
• During the proceedings, the National Company Law Tribunal (NCLT) admitted an insolvency application against the petitioner. 
• The petitioner sent a fresh notice to both respondents on 7th November 2019, invoking arbitration and including Respondent No. 2 in the notice. 
• Upon the respondents' failure to appoint an arbitrator, the petitioner filed the present petition. 

What were the Court’s Observations? 

• The Court noted that the respondents raised several objections against the petition, but none of these objections questioned or denied the existence of the arbitration agreement invoked by the petitioner. 
• The Court held that the requirement of prima facie existence of an arbitration agreement, as stipulated under Section 11 of the Arbitration and Conciliation Act, 1996, was satisfied in this case. 
• The Court emphasized that once the arbitral tribunal is constituted, the respondents will have the opportunity to raise all available legal objections before it. 
• The Court clarified that the arbitral tribunal should first consider and rule on any preliminary objections raised by the respondents. 
• The Court stated that only if the preliminary objections are rejected by the tribunal should it proceed to adjudicate the petitioner's claims. 
• The Court reiterated the principle of minimal judicial interference at the referral stage, leaving complex factual and legal issues for the arbitral tribunal to decide. 
• The Court emphasized the doctrine of competence-competence, allowing the arbitral tribunal to rule on its own jurisdiction and the admissibility of claims. 
• The Court refrained from delving into the merits of the case or deciding on the binding nature of the arbitration agreement on non-signatories at the referral stage. 
• The Court upheld the view that the arbitral tribunal is the preferred first authority to examine questions of arbitrability and jurisdiction. 
• Based on these observations, the Court allowed the petition and appointed a sole arbitrator to adjudicate the dispute. 

What is Section 11 of the Arbitration and Conciliation Act, 1996? 

• Nationality of Arbitrators:  
  • Any person of any nationality can be an arbitrator, unless the parties agree otherwise. 
  • Appointment procedure:  
  • Parties are free to agree on a procedure for appointing arbitrators, subject to subsection (6). 
  • In the absence of an agreement, for a three-arbitrator tribunal, each party appoints one arbitrator, and the two appointed arbitrators select the third (presiding) arbitrator. 
• Role of Arbitral Institutions:  
  • The Supreme Court and High Courts can designate graded arbitral institutions for appointing arbitrators. 
  • In jurisdictions without graded institutions, the Chief Justice of the High Court may maintain a panel of arbitrators. 
  • These arbitrators are deemed to be arbitral institutions and are entitled to fees as specified in the Fourth Schedule. 
• Appointment in case of failure:  
  • If a party fails to appoint an arbitrator within 30 days of receiving a request, or if the two appointed arbitrators fail to agree on the third within 30 days, the appointment is made by the designated arbitral institution. 
  • For international commercial arbitration, the Supreme Court designates the institution; for other arbitrations, the High Court does so. 
• Sole arbitrator appointment:  
  • If parties fail to agree on a sole arbitrator within 30 days, the appointment is made as per subsection (4). 
• Failure to act under agreed procedure:  
  • If a party, the appointed arbitrators, or a designated person/institution fails to perform under the agreed procedure, the court-designated arbitral institution makes the appointment. 
• Disclosure requirements:  
  • Before appointing an arbitrator, the arbitral institution must seek a written disclosure from the prospective arbitrator as per Section 12(1). 
  • The institution must consider any qualifications required by the parties' agreement and the contents of the disclosure. 
• International commercial arbitration:  
  • For sole or third arbitrator appointments in international commercial arbitrations, the designated institution may appoint an arbitrator of a nationality different from the parties. 
• Multiple appointment requests:  
  • If multiple requests are made to different institutions, the one receiving the first request is competent to appoint. 
• Time frame for appointment:  
  • The arbitral institution must dispose of an application for appointment within 30 days of serving notice on the opposite party. 
• Fees determination:  
  • The arbitral institution determines the arbitral tribunal's fees and payment manner, subject to rates in the Fourth Schedule. 
  • This doesn't apply to international commercial arbitrations or where parties have agreed on fee determination as per arbitral institution rules. 
• Non-delegation of judicial power:  
  • The designation of a person or institution by the Supreme Court or High Court is not considered a delegation of judicial power. 

What is the Scope of Section 11 of A& C Act? 

• Courts are not expected to act mechanically when referring disputes to arbitration under Section 11. 
• Courts are obliged to apply their minds to core preliminary issues, within the framework of Section 11(6-A) of the Act. 
• The judicial review at this stage is not intended to usurp the jurisdiction of the Arbitral Tribunal but to streamline the arbitration process. 
• Even when an arbitration agreement exists, courts can decline to refer a dispute to arbitration if it does not correlate to the agreement. 
• The 2015 amendment to the Act restricted the scope of Section 11 to a prima facie determination of whether an arbitration agreement exists. 
• Courts should examine if the agreement contains a clause providing for arbitration pertaining to the disputes that have arisen between the parties. 
• In certain cases, such as insurance contracts, courts can examine the issue of non-arbitrability at the reference stage itself. 
• Courts are not to adopt an absolute "hands off" approach; limited yet effective intervention is permissible to effectuate the arbitration process. 
• The scope of prima facie examination includes determining whether the subject matter of the dispute is arbitrable, but this should be limited to rare occasions. 
• Courts are required to see whether the dispute in question correlates to the arbitration agreement between the parties. 
• Where there is no correlation between the dispute and the arbitration agreement, the reference to arbitration can be rejected, despite the existence of an agreement between the parties. 
• The judicial review under Section 11 does not interfere with the principle of kompetenz-kompetenz and separation of powers between courts and arbitral tribunals. 

What are the Landmark Judgments of Section 11 of A & C Act?  

• DLF Home Developers Limited v. Rajapura Homes Private Limited & Anr. (2021): 
  • This recent judgment expanded the scope of judicial inquiry under Section 11. 
• Duro Felguera, S.A. v. Gangavaram Port Limited (2017): 
  • It is held that the courts should only look into the existence of an arbitration agreement. 
• Oriental Insurance Company Limited v. Narbheram Power and Steel (P) Limited (2018): 
  • Allowed examination of non-arbitrability at the reference stage in insurance contracts. 
• United India Insurance Company Limited and Another v. Hyundai Engineering & Construction Company Limited and Others. (2018): 
  • Similar to Oriental Insurance, allowed examination of non-arbitrability at the reference stage. 
• Garware Wall Ropes Limited v. Coastal Marine Constructions & Engineering Limited (2019): 
  • Dealt with unstamped documents and their validity for arbitration. 
• PSA Mumbai Investments PTE. Limited v. Board of Trustees of the Jawaharlal Nehru Port Trust and Another (2018): 
  • It was concluded that an arbitration clause in request for qualification documents would not be applicable. 
• Brightstar Telecommunications India Ltd. v. Iworld Digital Solutions Private Ltd. (2018): 
  • Delhi High Court decision that expanded on Duro Felguera, looking beyond mere existence of arbitration agreement. 
• Vidya Drolia and Others v. Durga Trading Corporation (2021): 
  • A significant judgment that clarified the limited scope of judicial review under Sections 8 and 11, while allowing for prima facie examination in certain cases.