Corporate Law - The Legal Chamber

This judgment primarily interprets Section 25-O of the Industrial Disputes Act, 1947, regarding deemed closure. The Court examined if an application for closure was complete and if the State's communication constituted a valid refusal within the statutory 60-day period for deemed permission. It also considered the "appropriate Government's" role and Article 19(1)(g) (freedom of trade) implications. Facts Of The Case: The case originated from an application by Harinagar Sugar Mills Ltd. (Biscuit Division) seeking permission to close its undertaking, as required under Section 25-O of the Industrial Disputes Act, 1947. The company sought closure due to various reasons, including financial viability issues. The central dispute revolved around whether the State of Maharashtra, as the appropri...

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...

Tag: Corporate Law

Supreme Court Upholds Right to Shut Business, Orders ₹15 Crore Compensation for Workers

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