Joint and Several Liability - The Legal Chamber

Commercial Contracts & Interest Rates: Supreme Court Reaffirms ‘Party Autonomy’ Over ‘Public Policy’

3Mar

By The Legal ChamberNo Comments

Supreme Court

Commercial Contracts & Interest Rates: Supreme Court Reaffirms ‘Party Autonomy’ Over ‘Public Policy’

The Supreme Court held that under Section 31(7)(a) of the Arbitration and Conciliation Act, 1996, party autonomy prevails; where a commercial contract specifies an interest rate, the arbitral tribunal has no discretion to deviate. A stipulated interest rate of 36% with monthly rests in a bill discounting agreement between equal bargaining parties is not unconscionable or against public policy. The rule of contra proferentem does not apply to mutually negotiated commercial contracts. Facts Of The Case: The dispute originated from a bill discounting facility extended by the respondent, Morgan Securities and Credits Private Limited, to M/s BPL Display Device Ltd (BDDL) and the appellant, BPL Limited, through sanction letters dated 27.12.2002 and 11.06.2003. The facility allowed BDDL to ...

Supreme Court Rules Insurance Company Liable for Worker Compensation Alongside Employer

25Dec

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Rules Insurance Company Liable for Worker Compensation Alongside Employer

The Supreme Court held that under the Employee’s Compensation Act, 1923, an insurer can be made a party and held jointly and severally liable for compensation if the employer's liability is covered by the insurance policy. The Court clarified that Section 19 of the Act empowers the Commissioner to determine the liability of the insurer, ensuring the workman's remedy is effective and not illusory. Facts Of The Case: The case originated from a claim filed by a workman (the second respondent), who was employed as a driver by the appellant, Alok Kumar Ghosh. The workman suffered a disabling injury due to an accident arising out of and in the course of his employment. He filed for compensation under the Workmen’s Compensation Act, 1923, against both his employer (the appellant) and The New In...

Supreme Court Shifts Liability Back to Insurance Company in Landmark Motor Accident Case

11Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Shifts Liability Back to Insurance Company in Landmark Motor Accident Case

This Supreme Court judgment holds that under Section 147 of the Motor Vehicles Act, 1988, an insurer is liable to indemnify claims for the owner of goods or his authorized representative traveling in a goods vehicle. Furthermore, the registered owner remains liable for compensation until a transfer is formally reported to the Registering Authority under Section 50, and the insurer cannot avoid its liability based on unsubstantiated assertions. Facts Of The Case: A motor accident involving a goods vehicle resulted in several claims for death and injury. The injured and deceased were petty hawkers, such as a fish monger and a vegetable vendor, who were accompanying their goods in the vehicle at the time of the accident. The insurance company contested its liability on two primary gro...

Supreme Court Clarifies: Partners Liable for Bounced Cheques Even If Firm Isn’t Named

4Aug

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Clarifies: Partners Liable for Bounced Cheques Even If Firm Isn’t Named

The Supreme Court ruled that in cases under Section 138 of the Negotiable Instruments Act, a partnership firm need not be separately arraigned as an accused if its partners are prosecuted. The notice to partners constitutes notice to the firm, as partners are jointly and severally liable. The Court clarified that unlike companies, partnership firms lack a separate legal identity, making partners directly liable. The judgment distinguishes between vicarious liability (for companies) and joint liability (for firms), upholding the complaint’s validity despite the firm’s omission. The High Court’s order quashing the complaint was set aside. Facts Of The Case: The appellant, Dhansingh Prabhu, advanced a loan of ₹21 lakh to the respondents, Chandrasekar and another, who were partners of the fi...