SURESH SHAH V. HIPAD TECHNOLOGY INDIA PRIVATE LTD.

PARTIES OF THE CASE

  • PETITIONER: Suresh Shah
  • RESPONDENT: Hipad Technology India Private Limited

CITATION: Arbitral Petition (Civil) No. 08/2020

BENCH: Justice A.S. Bopanna, Justice V. Ramasubramanian

FACTUAL BACKGROUND:

There was a dispute between the petitioner and respondent regarding the sub-lease of a premise. The sub-lease deed between the parties contained a clause that stated that in case of any dispute, the same should be resolved by the process of Arbitration. The petitioner approached the Court under Section 11(5) of the Arbitration and Conciliation Act, 1996 seeking the appointment of a Sole arbitrator for resolving the dispute which had arisen between the parties in relation to the Sub-lease.

ISSUE:

Whether the dispute arising under the Sub-lease deed being governed under the Transfer of Property Act, 1882 (TP Act) is arbitrable or not under the Arbitration and Conciliation Act, 1996?

DECISION:

The Hon’ble Supreme Court concluded that as the tenancy dispute was not subject to any special statutes, it is hence arbitrable under TP Act, 1882. Further, it held that considering that the respondent neither replied to the said notice nor did he object to the arbitrator proposed by the petitioner, the petition for appointment for Sole arbitrator was hence allowed.

REASONING AND ANALYSIS:

The Apex Court considered the provisions contained in Section 111, 114 and 114A of the TP Act, 1882. These provisions denote the manner in which the determination of lease would occur. It also determined the forfeiture, in case the lessee/tenant broke expressed conditions, agreed between the parties, or as provided in law. Thus, it is a provision enabling the exercise of equitable jurisdiction, in appropriate cases as a matter of discretion.

The Supreme Court also analysed a position settled in Namdeo Lokman Lodhi v. Narmadabai and others and clarified that when any disputes arise between the landlord and tenant regarding the determination of lease under the TP Act, 1882, the landlord can secure the possession of the leased property by instituting a suit in the Court having jurisdiction. However, if the parties agreed upon any dispute resolution through arbitration, the landlord would be entitled to invoke the arbitration clause and make a claim before the learned arbitrator. Even in such proceedings, if the circumstances as contained in Section 114 and 114A of TP Act, 1882 arise, it can be brought up before the learned Arbitrator who would take note of the same and act in accordance with the law and pass the award.

Another three-judge Bench of the Supreme Court referred to the law laid down in Vidya Drolia and clarified why arbitrability of tenancy disputes is contingent on whether the lease agreement is governed by the Transfer of Property Act, 1882 or by special statutes. It stated that the tribunal’s jurisdiction is limited to disputes, concerning and arising, from the term and conditions of a lease agreement.

Therefore, insofar as matters related to eviction or tenancy governed by any special statutes are concerned, where the tenant enjoys special protection against eviction, the Court/Forum specified and conferred jurisdiction under the statute alone can adjudicate such matters. Hence in such cases, the dispute is non-arbitrable.

Similarly, if the special statutes do not apply to the premises/property and the lease/tenancy created thereunder is where the cause of action arises to seek for eviction and in such transaction, if the parties are governed by an Arbitration Clause, the dispute between the parties is arbitrable.

The Court also observed that the said arbitration qualifies as an International Commercial Arbitration as the petitioner is a citizen of Kenya and the dispute is arbitrable as the rights of the tenant were not protected by any special statute where the tenant enjoys special statutory protection, therefore, there would be no impediment for resolving the dispute through arbitration.

CONCLUSION:

The judgement must be explicitly read in the context of landlord-tenancy disputes under specific provisions of the Transfer of Property Act, 1882. Caution must be exercised in considering the nature of the dispute under action. The judgment cannot be broadly applied to mean that all provisions under the TP Act, 1882 are arbitrable.

M/s. Fortune Infrastructure (Now Known as M/s. Hicon Infrastructure) & Anr. Vs. Trevor D’Lima & Ors.

Civil Appeal No(s). 3533-3534 0f 2017

Facts of the case: 

In 2011, M/s Fortune Infrastructure had launched a residential housing project under the name “Hicons Onyx” AKA Fortune Residency in which the respondent booked a flat by paying a sale consideration amount of Rs 1,87,00,000/-. The appellant transferred the construction project to another company, M/s Zoy Shelcon Pvt. Ltd. because the former company could not suffice the cost of construction. In 2015, a consumer complaint was filed in the National Consumer Disputes Redressal Commission (NCDRC) against the appellant (M/s Fortune Infrastructure) as they failed to deliver the flat to the aggrieved party. The NCDRC held the appellant liable and ordered the appellant to (a) refund the amount of sale consideration, (b) as compensation to pay a sum of Rs. 3,65,46,000/- plus Rs. 10,000 as cost of litigation and (c) 10% pa of the aforesaid amount from the day of the judgment. The appellant not satisfied with the order, approached the Supreme Court through civil appeals. They reasoned that it was no breach of contract as they have transferred the construction of the building to another company, and they should not be held liable in the present case in a deficiency of service. 

Issues raised:

Hearing both the parties and examining pieces of evidence on record, the Hon’ble court raised two issues:

  1. Whether in the following issue there is a deficiency of service or contractual breach on the part of the appellants?
  2. Whether the awarded compensation was just and reasonable or not?

Judgment:

The Hon’ble court upheld the impugned order of NCDRC giving reasoning that the appellant did not give any valid reason as to why the delay happened concerning the transfer of the flat to the respondent, they have waited for a reasonable amount of time for the completion of contract. There was a contractual obligation between the parties and, the compensation should be awarded to the respondent based on the deficiency of service. 

About the second issue, there is no airtight formula for awarding the compensation. But considering the circumstances of the case, the respondent was deprived of increment of the price of the flat because the appellant failed to deliver it or substitute another property. So, the breach results in damages deem fit and reasonable in the case by fixing the market rate as not to exceed the amount of compensation as gain-based and not actual-loss-based. The court ordered the appellant to (a) refund the sale consideration amount, (b) to pay a sum of Rs. 2,27,20,000/- plus Rs. 20,00,000 compensation of the parking unit, and (c) Rs. 10,000 the cost of litigation within six weeks. 

Conclusion:

The Hon’ble court’s discretion while awarding compensation made sure to award an appropriate amount without being unjust to the other party. When there is no set formula present, facts and circumstances of the case decide the quantum of compensation as it should solely be based on an actual-loss formula. 

AWAZ & OTHERS V. RBI & OTHERS

PARTIES OF THE CASE –

  • PETITIONER: Awaz & Others
  • RESPONDENT: Reserve Bank of India & Others

CONSUMER COMPLAINT NO.: 51 OF 2007 

BENCH: J. M.B. Shah, J. Mrs. Rajyalakshmi Rao, J. Mr. Anupam Dasgupta

BRIEF FACTS

The present case arose out of a complaint filed by Awaz, a registered trust and a consumer organization, to protect the consumers from unjustified exploitation of their needs by banks or non-banking financial institutions in their money lending activity.

ISSUE

Whether the then current activities of banks and non-banking financial institutions were exploitative to consumers?

JUDGMENT 

Summons were issued to responsible officers of the RBI. The Registry was also directed to issue summons to the Chief General Manager, Department of Non-Banking Financial Companies and the Chief General Manager, Department of Banking Operations of the RBI, to remain personally present. In the meantime, the commercial banks, which had not filed their written version, were instructed to file the same.
The Court opined that from the scenario, it appeared that both the Union of India and the RBI have given green signal to the NBFCs or the Banks to charge rate of interest depending upon the vulnerable circumstances of the borrower. This is against the spirit and object of the Consumer Protection Act, 1986 and amounts to unfair trade practice and the consumers are to be completely protected from the same. Further, various circulars issued by the RBI while exercising powers under Section 45L of the Reserve Bank of India Act,1934, clearly provided that usurious rate of interest could not be charged. But, as it was, there seemed to be no control on this issue and the banks/non-banking financial institutions were indeed exploiting the situation. Hence the Court rightly decided that the exorbitant rates of interest were against the Consumer Protection Act, 1986.

Vineeta Sharma v. Rakesh Sharma

Citation: Civil Appeal No. Diary No.32601 Of 2018

Corum: Justice Arun Mishra, Justice S. Abdul Nazeer, Justice M.R. Shah

Facts: 

Ms. Vineeta Sharma,(Appellant), filed a case against her two brothers viz. Mr. Rakesh Sharma & Satyendra Sharma, and her mother,(Respondents). Sh. Dev Dutt Sharma who was the father of the appellant, expired on December 11, 1999. He left behind three sons, one daughter, and a wife. One of his sons who was unmarried expired on July 1, 2001. The Appellant claimed 1/4th share in the property of her father, being the daughter. The Respondents stated that after her marriage, she ceased to be a member of the Joint family and on that ground, The Hon’ble Delhi High Court disposed of the appeal stating that the amendments of 2005 did not benefit the Appellant, as the father of the Appellant passed away on  December 11, 1999. This judgment was similar to the one of Prakash & Ors. v. Phulavati & Ors. But the conflict arose when a judgment contrary to this was found in the case of Danamma @ Suman Surpur & Anr. v. Amar & Ors. A Larger bench was referred in this case to settle on the conflicting judgment. 

Issues:

  • Whether the position of the daughter in HUF is of coparceners?
  • What will be the effect of the death of the father before amendment 2005, on the daughter’s right over the property?
  • Whether the application of amendment of 2005 is retrospective?

Judgment:

Before 1956, the Shastric and Customary Law varied from region to region governed by Hindus. The two main schools of Hindu Succession law were Dayabhaga and Mitakshara. Sometimes it also varied in the same region on a caste basis. But after 1956, with the introduction of the Hindu Succession Act, 1956, Ancestral property started getting devolved by survivorship rule only. Only the males were the coparceners up to three generations. Women were not recognized as coparceners. 

In 2005, the legislature through a progressive amendment to the Hindu Succession Act 1956 granted coparcenary rights to daughters under section 6 like the sons have. The Survivorship Rule was abrogated. Daughters were also recognized as coparceners. Succession was either ‘Testamentary’ or ‘Intestate Succession’. Enforcement Date of the Amendment Act was 9th September, 2005. Although the legislative intent of the Amendment was clear, it became a subject matter of intense legal debate and resulted in various courts interpreting the same in divergence. 

The Apex Court in the case of Prakash & Ors. v. Phulavati and Ors. laid down that the provisions of the amendment are applicable to living daughters of living coparceners as of 9th September, 2005, irrespective of when such daughters are born. It stated that the father has to be alive on the date of enforcement of the 2005 amendment and only then, daughters can claim the benefit under the 2005 Amendment. It also said that the retrospective effect of the Amendment was applicable till 20th November 2004 and thus Phulavati was not considered as a coparcener. 

However, in the case of Danamma @ Suman Surpur & Anr. v. Amar & Ors (2018), the Court granted the rights to a coparcener who had died much before 9.9.2005. Though the case didn’t specifically focus on the concept of Living Daughter of a Living Coparcener, it opined that the daughters have equal rights as the son on the ancestral property even though the coparcener had died before the amendment. This judgment was contradictory to the judgment of Prakash & Ors. V. Phulavati and Ors., creating confusion regarding the status of daughters as a coparcener. 

The Supreme Court in this particular case stated the nature of the rights of the members of a coparcenary under the Hindu Law, and proceeded to hold the right of the daughters under the Amendment of 2005 to be retroactive rather than prospective. The Court disagreed with the judgment of 2016. It stated that the father need not be alive on the date of enforcement of the 2005 Amendment. It stated that the daughters have coparcenary rights over the ancestral property since birth like sons. The court by this judgment recognized that gender cannot be a justification for denial of anyone’s inheritance right. This interpretation by the Supreme Court has removed male superiority over Hindu ancestral property. It gave the daughters the equal coparcenary rights in consonance with the spirit of equality, under Article 14 of the Indian Constitution.

Chebrolu Leela Prasad Rao & Ors. v. State of Andhra Pradesh & Ors

FACTS:

● The Government Issued Manuscript (GOMs) was issued by the Governor of Andhra Pradesh on 5th November 1986, exercising the power to do so under para 5(1) of Schedule V of the Constitution of India.

● The GOMs issued directed that the posts for teachers in educational institutions in the Scheduled Tribe areas shall be reserved for the Scheduled Tribes (STs) only.

● The Andhra Pradesh Administrative Tribunal quashed the GOMs issued through an order.

● The order was questioned in the Supreme Court of India and was dismissed due to withdrawal.

● Another GOMs was issued on 25th April 1987 in order to amend previous GOMs. This new GOMs allowed the appointment of non-tribal people to hold the teacher posts in the schedules areas until qualified STs are available to take up the posts.

● Later, the non-tribal teachers were terminated and they filed a Writ Petition against such termination in the High Court of Andhra Pradesh.

● In 2002, the Government issued a fresh notification providing for 100 per cent reservation to the teacher posts in the schedules areas to the STs.

● Writ Petitions were filed in the High Court which upheld this issue and aggrieved by this, appeals were filed in the Supreme Court of India.

ISSUES IDENTIFIED :

1. What is the scope of paragraph 5(1), Schedule V to the Constitution of India? a) Does the provision empower the Governor to make a new law?b) Does the power extend to subordinate legislation?c) Can the exercise of the power conferred therein override fundamental rights guaranteed under Part III? d) Does the exercise of such power override any parallel exercise of power by the President under Article 371D?

2. Whether 100% reservation is permissible under the Constitution of India?

3. Whether the notification merely contemplates a classification under Article 16(1) and not reservation under Article 16(4)?

4. Whether the conditions of eligibility (i.e., origin and cut-off date) to avail the benefit of reservation in the notification are reasonable?”

Note: These issues were identified by the court in the judgement.

JUDGEMENT :

Answering Issue 1, the Supreme Court of India held, “The Governor in the exercise of powers under Para 5(1), Fifth Schedule to the Constitution, can exercise the powers concerning any particular Act existing in the country. The Governor can direct that such law shall not apply and is empowered to apply such law to the Scheduled Areas or any part thereof in the State subject to exceptions and modifications, and can also issue a notification with retrospective effect.

Answering Issue 1(a), the Supreme Court of India held, “Para 5(1), Schedule V of the Constitution doesn’t empower the Governor to make a new law, but merely to make a provision within the parameters of modification and exceptions of an Act in the country”.

Answering Issue 1(b), the Supreme Court of India held, “The power of the Governor does not extend to subordinate legislation”.

Answering Issue 1(c), the Supreme Court of India held, “The Governor’s power under Para 5(1) of the Fifth Schedule to the Constitution is subject to some restrictions, which have to be observed by the Parliament or the legislature of the State while making law and cannot override the fundamental rights guaranteed under Part III of the Constitution”.

Answering Issue 1(d), the Supreme Court of India held, “In exercise of power under Para 5(1) of the Fifth Schedule to the Constitution of India, the Governor cannot override the notification issued by the President in the exercise of powers under Article 371D”.

Answering Issue 2, the Supreme Court of India held, “GOMs providing for 100 per cent reservation is not permissible under the Constitution of India, the outer limit is 50 per cent”.

Answering Issue 3, the Supreme Court of India held, “The notification in question cannot be treated as classification made under Article 16(1). Once the reservation has been provided to Scheduled Tribes under Article 16(4), no such power can be exercised under Article 16(1)”.

Answering Issue 4, the Supreme Court of India held, “The conditions of eligibility in the notification with a cut off date and origin to avail the benefits of the reservation is unreasonable and arbitrary”.

ANALYSIS :

Issue 1 and 1(a) judgement – The Governor has the power to make rules and regulations regarding the Tribes Advisory Council which can be formed for the administration and control of scheduled areas in order to advise on matters about the welfare and advancements of such areas. Further, the Governor has the authority to issue a notification which annuls the effect of any Act in the country or its parts in scheduled areas and also empowers the Governor to create exceptions, modifications and retrospective effects to such Acts. Therefore, the Governor has the power to exclude law in the scheduled areas, and apply it with exceptions and modifications, but this power cannot and does not extend to creating or re-writing a law under para 5(1) Schedule V of the Constitution of India.

Issue 1(b) judgement – A subordinate legislation cannot be added in the ken of Para 5(1). The power of the Governor is restricted to modifying and making an exception to the Acts enacted in the country as empowered under Para 5(1) of Schedule V.

Issue 1(c) judgement – Every legislative Act has to conform with the rights guaranteed under Part III of the Constitution and this limitation is applied to the Governor as well.

Issue 1(d) judgement – The order issued by the Governor conflicted with the Presidential Order issued under Article 371D. According to the Presidential Order, the non-tribe people can apply within the scheduled areas, but the Governor’s order is taking this right away due to the 100 per cent reservation for STs.

Issue 2 judgement – Making 100 per cent reservation is discriminatory and impermissible as the opportunity of public employment cannot be denied unjustly. The right to equality and the total exclusion of others by creating an opportunity for one class is not the intention behind this right. Right to equal opportunity and ensuring it under Article 51A cannot be deprived.

Issue 3 judgement – A district is a local area and a unit for the appointment of teachers. According to the  Presidential Order, incumbent of one district cannot stake claim outside the district for an appointment. The reservations for STs are covered within the ken of Article 16(4). Therefore, no further preference could have been made under Article 16(1) in favour of STs as this article is exhaustive of the special provisions that can be made in favour of SCs, STs and OBCs. Reservation for the other classes can be provided under Article 16(1) and not to STs to whom the reservation has been provided under Article 16(4).

Issue 4 judgement – The conditions deprive the STs who are permanent residents of the areas and have settled after the cut-off dates. The classification violates Articles 14, 15(1) and 16 of the Constitution as it creates a class within a class.

Note: This analysis was derived from the judgement notification.

CONCLUSION :

The Supreme Court allowed the appeals and upheld that the limits of the reservation, i.e. 50 per cent must not be exceeded by the states.

Muthuramalingam & Others v. State Rep. by Insp. of Police

Criminal Appeal Nos. 231-233 of 2009 with Nos. 225-227, 895 of 2009 and of 2015

Bench: T.S. Thakur, Rohinton Fali Nariman, Prafulla C. Pant

Facts of the Case:

The following case entails an appeal made to the Supreme Court against an order and a common judgment passed by the High Court of Madras. In this judgment, the criminal appeals filed by the appellants against their conviction and sentences of imprisonment for life were dismissed. In this case, the appellants were tried and convicted for several offences and multiple murders, thus sentenced to various varying sentences for the same. A sentence for life given was ordered to run consecutively. Thus, following the failure of criminal appeals challenging the conviction and the imposition of consecutive life terms, the appellants have lodged the present appeals to challenge the judgments and orders of the lower courts.

It is to be noted here that when there are multiple sentences awarded to the convicted of multiple charges, they can run in two ways. They may run concurrently, that is the convicted individual serves all sentences together at the same time. Or, they may run consecutively, meaning that the sentences are served one after the other.

Issue:

Whether a convicted individual can be given consecutive life terms after being found guilty of a series of murders for which he was tried in a single trial?

Judgment:

On the issue in contention, the counsel for the appellants quoted Section 31 of the CODE OF CRIMINAL PROCEDURE that allowed sentencing for multiple sentences of imprisonment to be accrued either consecutively or concurrently, on the discretion of the judge. In furtherance of this, they further cited two cases, one being O. M. Cherian v. State of Kerala 2015 2 SCC 501, wherein the court advocated for a concurrent sentence. In the second case, Duryodhan Rout v. State of Orissa, it was held that by Section 31(2) of the CODE OF CRIMINAL PROCEDURE it was laid out that “no consecutive sentence can be imposed”. The respondents on the other hand, cited precedents in opposition to the same where the court decided for consecutive sentencing. These precedents were in clear contradiction to the once cited by the appellants.

In light of the same, the constitutional bench held that multiple sentences for imprisonment to life can be awarded for multiple offences or murders in this case, however the shall not be ordered to run consecutively. They would be superimposed over one another in order that any remission or commutation granted in one doesn’t by fact result in a remission or commutation granted for another.

Conclusion:

In the aforementioned case, the court held that it was legitimate for the Trial Court to direct the prisoner to first undergo the term sentence and then commence serving the sentence for life. It stated that the language of Section 31 of the CrPC allowed for the same. The converse however, that is to first serve the life sentence and then the term would not be acceptable. It further regarded the Regular Bench hearing appeals to check for modification or alteration required in light of the case.

Youth Bar Association of India v Union of India, AIR 2016 SC 4136

copy of FIR on the police website

The facts of the case:

In this case, a writ petition was filed under Article 32 of the Indian Constitution. Youth Bar Association of India (petitioner) has prayed in the nature of mandamus, directing the Union of India and the States to upload every FIR registered in all the police station within the territory of India on the official website of police of all States, as early as possible, preferable within 24 hours from the time of registration of FIR.

Issue:

•​Whether the prayed writ by an order or direction directing the respondents to upload every FIR lodged in all the police stations within the territory of India in the official websites of the police of all states is maintainable or not?

•​Whether FIR can be uploaded as early as possible, preferably within 24 hours from the time of lodging or not?

Judgment:

The court projected that an accused is allowed to get a copy of the FIR at an early stage than as prescribed under section 207 of the Cr. P.C 1973 and the accused may apply with a certain amount of fee prescribed by State Government to either officer-in-charge of the police station or superintendent of police to obtain a certified copy of FIR within 24 hours.

Or, the accused may apply with a certain fee as prescribed by the State Government before the concerned Magistrate or Special Judge to whom the FIR has been forwarded and it will be issued within 2 working days.

The SC supervised that the copies of the FIR should be uploaded on the police website, however, unless the offense is sensitive, like sexual offenses, offenses of insurgency, terrorism, and of that category, or offenses under POCSO Act 2012 and such other offenses. In such exception or sensitive cases, whether to upload or not the copy of the FIR on the website, shall not be taken by an officer below the rank of DySP or any person holding an equivalent post.

If FIR is declined to provide because of the sensitivity of the case, one can approach the Superintendent of Police or Commissioner of police in the metropolitan area. It will be assigned to a committee of 3 police officials and the decision will be given within 3 working days as to whether a copy of the FIR can be granted or not. The committee has to be formed with 8 weeks of 15th November 2016. However, if some state police forces are not complying with these directions, it will be considered as contempt of the court.

VIKRAM SINGH v. UNION OF INDIA

FACTS :

The appellants including Vikram Singh were tried, convicted, and sentenced to death by the High Court of Punjab and Haryana, for the offences of ‘kidnapping for ransom’, punishable under Section 364A and ‘murder’, punishable under Section 302 and of the Indian Penal Code, 1860. This was on account of the appellants’ kidnapping and murdering a 16-year-old boy and demanding a ransom of 50 lacs from his father. Following this, they filed a writ petition before the High Court challenging the constitutional validity of Section 364A and praying for a mandamus striking down the same. Further, they contested that the provision wouldn’t apply to individuals demanding ransom from private individuals and that its primary purpose was to apply against terrorist activities. When dismissed, they file an appeal to the Supreme Court of India, praying for the same.

ISSUES :

1. Whether the offence charged and punishment prescribed under Section 364A be withdrawn if the ransom was made against a private individual and not against the Government, any foreign State, or international intergovernmental organization?

2. Whether Section 364A of IPC is ultra vires the Constitution of India on account of limiting the discretion of Courts overprescribing punishment?

JUDGEMENT :

A bench of three judges held on the first issue in the contention that Section 364A was broad enough to apply to private individuals and rejected the arguments made by the appellants that it applied exclusively to offences involving terrorist acts committed against the government, any foreign state or international intergovernmental organization. The court stated that though amended, the legislature chose not to delete the phrase “any other person” from it, and here, the principle ejusdem generis, arguing the similarity of the phrase to the words preceding it, does not apply. This was also reasoned on the grounds of the matter being held invalid in multiple prior appeals, thus calling for no further action as long as the prior appeal stands rejected.

On the second issue in contention, the appellants had cited the precedent of Mithu Singh v. State of Punjab (1983) 2 SCC 277 wherein Section 303 of the Indian Penal Code, 1860; was struck down stating that the mandatory death penalty was unconstitutional. The Court responded to this stating that firstly, the aforementioned case doesn’t stand similar to the facts and circumstances of this case and hence wouldn’t hold good. Also, Section 302 prescribed death as punishment whereas Section 364A established the discretion of the Courts in prescribing death or life imprisonment. Secondly, the court held that prescribing punishments is a function of the legislature and the legislature is presumed to be supremely competent of the same. Courts do have the jurisdiction to interfere when the punishment prescribed is outrageously disproportionate to the offence or so inhuman or brutal that the same cannot be accepted by any standard of decency. However, it was held that in this scenario they don’t apply due to the nature of the offence. Hence, Section 364A was held to be constitutionally valid by the Court.

CONCLUSION :

The Hon’ble Court held that Section 364A was applicable to the offence when committed against private individuals. The provision was also held to be constitutionally valid. Hence, this appeal was dismissed.

Mankato Impex Private Limited v. AirVisual Limited

Facts:

The petitioner-company, incorporated in India, dealing in air quality management and supply of air purifiers and related items, entered into a 5-year Memorandum of Understanding with the respondent-company, incorporated under the laws of Hong Kong, dealing with the manufacture and sale of air quality monitors and information, wherein the respondent agreed to sell to the petitioner the complete line of the respondent’s air quality monitors products for onward sale. The petitioner was also made the exclusive distributor in India, along with being granted non-exclusive rights for distribution in Sri Lanka, Bangladesh, and Nepal. The starting date for the same was to be the date of the first delivery of Air Quality Monitors to the petitioner, i.e., 03/10/2016 or 01/11/2016, whichever was later. Owing to the same, the petitioner spent huge amounts of money for promoting and creating a brand value for the product.

On 14/10/2017 the petitioner received an email from IQAir AG stating that the respondent was now a part of IQAir AG. The letter attached to the mail stated that the product in question was discontinued and that the company would not assume any contractual or legal obligations of the respondent, and deal with resellers by negotiating new contracts. In its reply, the petitioner invoked the terms of the MoU and claimed that the company was liable to honor the contract as it is presumed that the acquisition was made keeping in view the respondent’s existing liabilities and objections. After a reply that was near identical to the company’s previous mail, the petitioner’s repeated failure of contact with the company led it to invoke the arbitration clause i.e., clause 17 of the MoU, along with a petition filed under Section 9 of the Arbitration and Conciliation Act before the Delhi High Court. Although the petition was still pending, the High Court, vide interim order, restrained the respondent from selling any of its products in India.

The company kept contending that it did not accrue any contractual or legal obligations to itself while also pointing out that Clause 17 of the MoU provided for arbitration administered and seated in Hong Kong, and that should the petitioner wish to resolve the dispute by arbitration, they should refer the dispute to an arbitration institution in Hong Kong.

Against this backdrop, the petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act seeking the appointment of Sole Arbitrator under Clause 17 of the MoU.

Issues:

1. Given Clause 17.2 of the MoU whether the parties have agreed that the seat of arbitration is at Hong Kong.

2. Whether this Court lacks jurisdiction to entertain the present petition filed under Section 11 of the Arbitration and Conciliation Act, 1996.

Judgment:

Arbitration Petition No.32 of 2018 filed by the petitioner seeking appointment of an arbitrator under Section 11(6) of the Act was dismissed.

Ratio:

According to the Court, the present case dealt with an International Commercial Arbitration within the meaning provided in Section 2(1) of the Arbitration Act. Further, placing reliance in the interpretation of Section 2(2) in the case of in Bharat Aluminum Company v. Kaiser Aluminum Technical Services Inc. [(2012) 9 SCC 552] (BALCO) the Court held that Part-I of the Act would have no application to “International Commercial Arbitration” held outside India. The Court duly noted that the “seat of arbitration” and “venue of arbitration” could not be used interchangeably. It had also been established that mere expression; “place of arbitration” cannot be the basis to determine the intention of the parties that they have intended that place as the “seat” of arbitration.

Hence, interpreting clause 17 of the MoU, the Court held that a paired reading of clause 17.1 and 17.3 of the MoU was necessary, but the same was no bar to the interpretation of clause 17.2 which stipulates that the dispute arising out of or relating to MoU including the existence, validity, interpretation, breach or termination thereof or any dispute arising out of or relating to it had to be referred to and finally resolved by the arbitration administered in Hong Kong. The words in Clause 17.2 that “arbitration administered in Hong Kong” served as an indicium that the seat of arbitration was at Hong Kong. Once the parties had chosen “Hong Kong” as the place of arbitration to be administered, the laws of Hong Kong would govern the arbitration. The Indian courts had no jurisdiction for the appointment of the arbitrator.

The Court also noted that the proviso added to Section 2(2) did not include Section 11 within its ambit. Hence, it had no application to “International Commercial Arbitrations” seated outside India.

SHREYA SINGHAL V. UNION OF INDIA

PARTIES OF THE CASE

PETITIONER: Shreya Singhal• RESPONDENT: Union of India

CITATION: AIR 2015 SC 1523

BENCH: J. Chelameswar, J. Rohinton Fali Nariman

FACTUAL BACKGROUND

A writ petition was filed under Article 32 of the Constitution of India stating that the police have misused their power under Section 66A of Information Technology Act, 2000 (IT Act) inter alia, it violates the freedom of speech and expression in various instances. In the present case, two women were arrested for questioning the shutdown of Mumbai after the death of Shiv Sena chief, Bal Thackeray by the Mumbai police by invoking Section 66A. The women posted their comments on Facebook. Later, the arrested women were released and it was decided to close the criminal cases against them. However, such arrests had already attracted widespread public protest.

ISSUES

Whether Section 66A and 69A of the IT Act is constitutionally valid? Whether Section 66A of the IT Act is violative of the fundamental right of freedom of speech and expression under Article 19(2) of the Indian Constitution?

JUDGMENT, REASONING AND ITS ANALYSIS

The Apex Court struck down Section 66A of the IT Act, stating that its ban on statements that could cause ‘annoyance, inconvenience, enmity, hatred or ill will’ was unconstitutional.

The Court found that the comment did not amount to any incitement and the alleged act does not come under any offence. In this case, a positive use of the fundamental right of freedom of speech and expression was provided by the Indian Constitution.

The Court observed that the expressions used in Section 66A of the IT Act is completely ‘open-ended’, ‘undefined’ and it is not covered under Article 19(2) of the Indian Constitution. Section 66A had no direct connection with causing disturbance to public order or incitement to commit an offense. It was hence struck down in its entirety by the Court because it violates the right of freedom of speech and expression guaranteed by Articles 19(1)(a) and 19(2). The perspective adopted by the Court was to protect the fundamental right of freedom of speech and expression and in no way the legislation can take away this right, by claiming cover under Article 19(2) of the Constitution. Moreover, the Court applied the rule of severability that struck down only those sections which were vague and arbitrary. It was observed that the whole legislation need not be held invalid.

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