Directors’ Liability - The Legal Chamber

This Supreme Court judgment reaffirms that objections to the execution of an arbitral award under Section 47 of the CPC are maintainable only within a very narrow compass, limited to grounds of jurisdictional infirmity or voidness. The Court emphasized that allegations of fraud or breach of fiduciary duty by a party’s own officers, raised after the award has attained finality, do not constitute such grounds unless they render the award a nullity. The business judgment rule protects decisions that fall within a range of reasonableness. Facts Of The Case: The dispute arose from a Long Term Agreement (LTA) dated 07.03.2007 between MMTC Limited and Anglo American Metallurgical Coal Pvt. Limited for the supply of coking coal. The agreement included an option for MMTC to extend the con...

The Supreme Court quashed the criminal defamation proceedings against the bank officials. It held that for offences under the Indian Penal Code, there is no concept of vicarious liability. Prosecuting officers without arraigning the company as an accused and without specific allegations of their culpable role is impermissible and an abuse of process. Facts Of The Case: The case originated from a loan default by Phoenix India, which had secured credit facilities from the Bank of Baroda. After the firm's account was classified as a non-performing asset, the Bank initiated recovery under the SARFAESI Act. A critical error occurred when the Bank issued a symbolic possession notice under Section 13(4) of the Act, which inadvertently quoted the outstanding dues as approximately Rs. 56.15 cro...

Tag: Directors’ Liability

Arbitration Award Final: Supreme Court Dismisses MMTC’s Post-Decree Objections

Landmark Ruling: Supreme Court Bars Prosecution of Company Directors Without Suing the Company First