Tag: commercial law

Supreme Court Rules: Tender Conditions Must Be Clear, Can’t Reject Bids on Unstated Requirements
16Oct By The Legal ChamberNo Comments
Supreme Court

Supreme Court Rules: Tender Conditions Must Be Clear, Can’t Reject Bids on Unstated Requirements

The Supreme Court ruled that tender conditions must be explicit and unambiguous. A bidder cannot be disqualified for non-submission of a document not expressly mandated by the tender. The tendering authority must act fairly and cannot impose hidden requirements, especially when a submitted certificate adequately demonstrates compliance with the stated criteria. Facts Of The Case: The case involved a tender issued by Madhya Pradesh Power Generating Co. Ltd. (MPPGCL) for coal beneficiation work. Maha Mineral, the appellant, submitted its bid relying on its past experience as a 45% partner in a Joint Venture (JV) named Hind Maha Mineral LLP. To prove this, it submitted a work execution certificate from the Maharashtra State Mining Corporation (MSMC), which explicitly stated its 45% share an...
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Supreme Court Revives Cheque Bounce Cases, Says ‘Sick Company’ Status is Not a Get-Out-of-Jail Card
9Oct By The Legal ChamberNo Comments
Supreme Court

Supreme Court Revives Cheque Bounce Cases, Says ‘Sick Company’ Status is Not a Get-Out-of-Jail Card

The Supreme Court held that proceedings under Section 138 of the Negotiable Instruments Act are not automatically barred against a company declared sick under SICA, even if a restraint order under Section 22A exists. The nature of the restraint and the purpose of the cheque issuance are mixed questions of law and fact to be decided during trial based on evidence. Furthermore, a Magistrate lacks the inherent power to review or recall the issuance of summons. Facts Of The Case: The appellant, Shree Nagani Silk Mills Pvt. Ltd., supplied goods to the first respondent, L.D. Industries Ltd., which was declared a sick company by the BIFR. Towards the payment for these supplies, the accused company issued several cheques in 2001, which were subsequently dishonoured due to "insufficient funds"....
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Supreme Court Clarifies: Limitation Act Applies to MSMED Arbitration But Not Conciliation
13Aug By The Legal ChamberNo Comments
Supreme Court

Supreme Court Clarifies: Limitation Act Applies to MSMED Arbitration But Not Conciliation

The Supreme Court ruled on the applicability of the Limitation Act, 1963, to conciliation and arbitration proceedings under Section 18 of the MSMED Act, 2006. It held that the Limitation Act does not apply to conciliation proceedings, allowing time-barred claims to be referred for settlement. However, the Act applies to arbitration proceedings under Section 18(3), as Section 43 of the Arbitration and Conciliation Act, 1996, incorporates the Limitation Act into such arbitrations. The Court emphasized that the MSMED Act’s provisions override general laws, ensuring a balanced approach to dispute resolution while protecting suppliers' rights. The disclosure of unpaid amounts in financial statements under Section 22 may extend limitation periods, subject to case-specific scrutiny. Facts Of The...
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SARFAESI Act’s Section 11: Supreme Court Affirms Mandatory Arbitration for Financial Institutions
11Jun By The Legal ChamberNo Comments
Supreme Court

SARFAESI Act’s Section 11: Supreme Court Affirms Mandatory Arbitration for Financial Institutions

The Supreme Court, in Bank of India vs. M/s Sri Nangli Rice Mills Pvt. Ltd., ruled that Section 11 of the SARFAESI Act is mandatory, requiring inter-se disputes between banks and financial institutions concerning secured assets to be resolved through arbitration. No explicit arbitration agreement is needed; the provision legally mandates it, thereby divesting DRT of jurisdiction in such matters. Facts Of The Case: In the case of Bank of India vs. M/s Sri Nangli Rice Mills Pvt. Ltd. & Ors., the core dispute involved the priority of charge over secured assets (stocks of paddy and rice) belonging to a common borrower, M/s Sri Nangli Rice Mills Pvt. Ltd., between two public sector banks: Bank of India (appellant) and Punjab National Bank (respondent). Both banks had extended credit facil...
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Cheque Bounce Case: Supreme Court Reinstates Case Against Director in ₹6 Crore Cheque Dishonour Case
7Jun By The Legal ChamberNo Comments
Supreme Court

Cheque Bounce Case: Supreme Court Reinstates Case Against Director in ₹6 Crore Cheque Dishonour Case

The Supreme Court clarified that for vicarious liability under Section 141 of the Negotiable Instruments Act, complaints need not reproduce statutory language verbatim. Substantive allegations demonstrating a director's responsibility for company affairs suffice. The Court emphasized substance over form, ruling that technical pleading deficiencies don't invalidate proceedings if the complaint, read holistically, establishes the director's operational role. The judgment reinstated criminal proceedings against the director, overturning the High Court's quashing order. Facts Of The Case: The case involved a complaint filed by HDFC Bank against M/s R Square Shri Sai Baba Abhikaran Pvt. Ltd. and its directors, including Mrs. Ranjana Sharma (Respondent No. 2), for dishonor of a cheque worth ₹6...
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