List of Current Affairs

Source: Supreme Court 

Why in News? 

Recently, the bench of Justices JB Pardiwala and R Mahadevan has held that partner of an Unregistered Partnership firm is ineligible to file the suit for recovery against the other partners. 

• The Supreme Court held in the matter of Sunkari Tirumala Rao & Ors. V. Penki Aruna Kumari (2025). 

What was the Background of Sunkari Tirumala Rao & Ors. v. Penki Aruna Kumari Case?  

• The case involves a business dispute centered around a stone crusher quarry. 
• The primary protagonist is a business owner who was operating a stone crusher quarry but found herself struggling to manage the business independently. 
• Seeking a solution, the owner decided to invite multiple partners to join her in the business venture.  
• On 11th December 2009, she drafted a partnership agreement that restructured the ownership of the quarry. The key elements of this arrangement were: 
  • The original owner would retain 25% ownership of the quarry. 
  • Five additional partners would be brought in with the following percentage splits: 
    • Partner No. 1: 20% 
    • Partner No. 2: 15% 
    • Partner No. 3: 15% 
    • Partner No. 4: 7.5% 
    • Partner No. 5: 7.5% 
• As part of this partnership formation, the new partners collectively invested 30 lakhs (3 million) rupees. This investment was meant to provide capital for the quarry's operations and to formalize the new ownership structure. 
• The partnership agreement explicitly stated that from the date of signing, all partners would: 
  • Share in the profits and losses 
  • Verify monthly distributions 
  • Maintain the properties 
  • Pay necessary government taxes 
  • Operate with mutual trust and without disputes 
• However, the partnership faced an immediate legal challenge.  
• The partnership was never formally registered, which would become a critical issue in the subsequent legal proceedings.  
• The unregistered status of the partnership would ultimately prevent the partners from pursuing a straightforward recovery lawsuit. 
• This background sets the stage for the legal dispute that would unfold, centering on the complexities of an unregistered partnership and the legal limitations faced by its members when seeking to resolve financial conflicts. 
• The trial court held that the suit is maintainable. 
• The same was appealed before the Andhra Pradesh High Court where the court held that: 
  • The suit is not maintainable under Section 69(1) of the Indian Partnership Act, 1932 (IPA). 
  • The fact that the business had not commenced was irrelevant. 
  • Cited a historical Lahore High Court judgment Bishen Narain v. Swaroop Narain (1938) which held that an unregistered partnership deed prevents suit maintenance. 
  • Emphasized that once a partnership agreement exists, it must be registered for any suit to be maintainable. 
• Aggrieved by the decision of the High Court the present petition has been filed by the Supreme Court. 

What were the Court’s Observations? 

• The Supreme Court made the following Observations: 
  • Confirmed the mandatory nature of Section 69 of the IPA. 
  • Highlighted two key conditions for a suit to be barred under Section 69(1)
    • The suit must be filed by a person "suing as a partner in a firm." 
    • The suit must aim to enforce a right arising from a contract. 
  • Noted specific details of the partnership deed. 
  • Observed that the Rs. 30,00,000 was invested as capital for acquiring 75% collective shares. 
  • Concluded that:  
    • The suit was between partners of an unregistered firm. 
    • The suit sought to enforce a contractual right. 
    • The suit did not qualify for any exceptions under Section 69 of the PA. 
  • Recommended that the plaintiffs should have instead filed:  
    • A suit for dissolution of the partnership. 
    • A suit for rendition of accounts. 
  • Ultimately dismissed the Special Leave Petition, agreeing with the High Court's interpretation. 
• The Supreme Court's observations effectively reinforced the legal principle that unregistered partnership firms face significant limitations in pursuing legal remedies, particularly monetary recovery suits. 

What is the Effect of Non-Registration of a Partnership Firm? 

Section 69: Effect of Non-Registration of Partnership Firms 

• Subsection (1): Restrictions on Suits Between Partners 
  • No partner can file a suit against another partner or the firm. 
  • Suit is only allowed if: 
    • The firm is registered. 
    • The suing partner is listed in the Register of Firms. 
• Subsection (2): Restrictions on Suits Against Third Parties 
  • An unregistered firm cannot sue third parties. 
  • Legal action requires: 
    • Firm registration. 
    • Partners listed in the Register of Firms. 
• Subsection (3): Exceptions and Scope of Restrictions 
  • Permitted Legal Actions: 
    • Allowed legal proceedings include: 
      • Dissolving the partnership. 
      • Seeking accounts of a dissolved firm. 
      • Realizing property of a dissolved firm. 
• Additional Exemptions: 
  • Powers of official assignees, receivers, or courts in insolvency cases. 
  • Realizing property of an insolvent partner. 
• Subsection (4): Further Exemptions 
  • Exemptions for: 
    • Firms without business in specified territories. 
    • Small claims under 100 rupees. 
    • Specific types of legal proceedings in Presidency towns and provinces. 

Source: Supreme Court 

Why in News? 

A bench of Justice Abhay S Oka and Justice Ujjal Bhuyan held that the challenge to the jurisdiction of the arbitral tribunal cannot be raised after submitting the statement of defence.                         

• The Supreme Court held this in the case of M/s Vidyawati Construction Company v. Union of India (2025). 

What was the Background of M/s Vidyawati Construction Company v. Union of India Case?  

• The Appellant contracted to construct a building for Railway Electrification Project, Allahabad. 
• There was a dispute regarding payment to the appellant. 
• The original arbitration clause specified three arbitrators. 
• The Chief Justice initially appointed two arbitrators and directed them to appoint an umpire. 
• When original umpire resigned, Chief Justice appointed a retired High Court Chief Justice as sole arbitrator. 
• The proceedings began before the sole arbitrator. 
• The Respondent raised the objection regarding jurisdiction after filing the statement for defence, arguing that the contract required three arbitrators. 
• The above objection was rejected by the sole arbitrator. 
• The award was ultimately granted on 21st February 2008. 
• This award was challenged by the respondent on various grounds by filing a petition before the District Judge under Section 34 of the Arbitration and Conciliation Act, 1996 (A & C Act). 
• The District Judge set aside the award merely on the ground that the composition of the Arbitral Tribunal was illegal as sole arbitrator could not have been appointed. 
• This decision was confirmed by the High Court when the appeal was filed under Section 37 of the A & C Act. 
• Thus, the matter was before the Supreme Court. 

What were the Court’s Observations?  

• The Court observed that the respondent has agreed in so many words that the arbitrator appointed was to act as the sole arbitrator. 
• A specific agreement on the part of the respondent has been recorded in the proceedings. 
• Further, the Court noted that Section 16 (2) of the A & C Act puts a bar on raising a plea of lack of jurisdiction after submitting the statement of claim. 
• Hence, the objection raised by the application was rightly rejected by the Learned Arbitrator. 
• Thus, the Court in view of the respondent’s conduct and Section 16 (2) A & C Act, Section 34, Section 37 of A &C Act Courts were not right in upholding the objections of the respondents.

What is Section 16 of the A & C Act? 

• Section 16 of the A & C Act lays down the competence of arbitral tribunal to rule on its jurisdiction. 
• Section 16 (1) lays down that the arbitral tribunal may rule on its own jurisdiction including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose, —  
  • an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and  
  • a decision by the arbitral tribunal that the contract is null, and void shall not entail ipso jure the invalidity of the arbitration clause. 
• Section 16 (2) of the Act provides that a party must raise a plea challenging the tribunal’s jurisdiction no later than submitting the statement of defence. 
  • However, appointing or participating in the appointment of an arbitrator does not bar a party from raising such a plea. 
• Section 16 (3) provides that a plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. 
• Section 16 (4) provides that the arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified. 
• Section 16 (5) provides that the arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award. 
• Section 16 (6) provides that a party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34. 

What are the Landmark Cases Based on Section 16 of the A & C Act?

• Surender Kumar Singhal v. Arun Kumar Bhalothia (2021): 
  • The Delhi High Court in this case reiterated the principle of Kompetenz- Kompetenz which provides that the Arbitral Tribunal has authority to decide on it’s own jurisdiction. 
  • Objections to the tribunal's jurisdiction under Section 16 must be addressed by the tribunal. 
  • Further, the tribunal should decide on such objections promptly or treat them with urgency as a preliminary issue, depending on the specifics of the case. 
• National Aluminium Company Limited v. Subhash Infra Engineers (2019): 
  • The Supreme Court in this case held that objections regarding the existence or validity of an arbitration agreement can only be raised through an application under Section 16 of the Arbitration and Conciliation Act. 

Source: Allahabad High Court 

Why in News? 

Recently, the bench of Justice Ashwani Kumar Mishra and Justice Donadi Ramesh has held that religious practices should not infringe on public peace and comfort. 

• The Allahabad High Court held in the matter of Mukhtiyar Ahmad v. State of Up And 6 Others (2025). 

What was the Background of Mukhtiyar Ahmad v. State of Up And 6 Others Case?  

• The legal dispute centers on the use of loudspeakers in religious places, specifically mosques, and the right to use amplification devices during religious practices.  
• The case involves the recitation of Azan (Islamic call to prayer). 
• Previously, the Allahabad High Court had recognized Azan as an integral part of Islamic religious practice. 
• In May 2020, the court allowed Muezzins to recite Azan during COVID-19 lockdown. 
• However, the court strictly prohibited the use of microphones and loudspeakers. 
• The court emphasized that Azan can be recited using human voice without amplification. 
• Mukhtiyar Ahmad (Petitioner) filed a writ petition seeking permission to install loudspeakers on a mosque. 
• The petitioner lacked legal standing (locus standi) as he was neither the mosque administrator nor the mosque owner. 
• The state challenged the petition's maintainability due to the petitioner's lack of legal rights. 
• The court found merit in the state's objection and dismissed the petition. 

What were the Court’s Observations? 

• The Allahabad High Court made the following observations as: 
  • Religious Places Purpose: 
    • Primarily for offering prayers to divinity. 
    • Use of loudspeakers cannot be claimed as an absolute right. 
  • Legal Standing: 
    • Petitioner lacks locus standi (legal right to file the petition). 
    • Not the mosque's administrator or owner. 
  • Loudspeaker Usage: 
    • Azan is an integral part of Islamic practice. 
    • However, using microphones and loudspeakers is NOT an essential religious practice. 
    • Azan can be recited by human voice without amplification devices. 
  • Broader Perspective: 
    • Loudspeaker use potentially creates public nuisance. 
    • The court is cautious about potential communal harmony disruptions. 
    • Emphasize minimizing noise pollution in religious practices. 
  • Consistent Judicial Stance: 
    • In May 2022, the court settled that loudspeaker use is not a fundamental right. 
    • Dismissed contempt pleas related to loudspeaker usage, viewing them as potentially politically motivated 
• The Allahabad High Court ultimately dismissed the writ petition, reinforcing that religious practices should not infringe on public peace and comfort. 

What is Article 25 of the Constitution of India? 

Article 25: Freedom of Conscience and Free Profession, Practice and Propagation of Religion  

• Fundamental Right Enshrined: Article 25 says that all persons are equally entitled to freedom of conscience and the right to freely profess, practice and propagate religion.  
• The implications of this are:  
  • Freedom of conscience: Inner freedom of an individual to mould his relation with God or Creatures in whatever way he desires.  
  • Right to Profess: Declaration of one’s religious beliefs and faith openly and freely.  
  • Right to Practice: Performance of religious worship, rituals, ceremonies and exhibition of beliefs and ideas.  
  • Right to Propagate: Transmission and dissemination of one’s religious beliefs to others or exposition of the tenets of one’s religion.  
• Scope:  
  • Article 25 covers religious beliefs (doctrines) as well as religious practices (rituals).  
  • Moreover, these rights are available to all persons—citizens as well as non-citizens.  
• Restrictions:  
  • These rights are subject to public order, morality, health and other provisions relating to fundamental rights.  
  • The State is permitted to regulate or restrict any economic, financial, political or other secular activity associated with religious practice.