Tag: third-party rights

Arbitrator’s Inaction for 4 Years Leads to Award Being Quashed: Supreme Court Ruling
16Jan By The Legal ChamberNo Comments
Supreme Court

Arbitrator’s Inaction for 4 Years Leads to Award Being Quashed: Supreme Court Ruling

In appeals arising from a delayed and unworkable arbitral award, the Supreme Court held that inordinate and unexplained delay in pronouncement can vitiate an award if it explicitly and adversely impacts its findings, rendering it contrary to public policy or patently illegal under Section 34 of the Arbitration Act. The Court further clarified that such an unworkable award, which fails to resolve disputes and irreversibly alters parties' positions, is liable to be set aside, and in exceptional circumstances, the Court may exercise its jurisdiction under Article 142 of the Constitution to do complete justice. Facts Of The Case: The case originated from a Joint Development Agreement (JDA) dated 17.12.2004 between respondent landowners and a developer (later amalgamated into the ...
Read More
Society Cannot Evade Decree by Raising Unauthorized Constructions, Rules Supreme Court
24Dec By The Legal ChamberNo Comments
Supreme Court

Society Cannot Evade Decree by Raising Unauthorized Constructions, Rules Supreme Court

The Supreme Court upheld the enforceability of a cooperative court's decree for specific performance, ruling that subsequent unauthorized constructions and unapproved plot mergers do not render a decree inexecutable. The Court directed the removal of obstructing structures to facilitate the allotment and delivery of vacant possession to the decree-holder, affirming the executability of the award. Facts Of The Case: The appellant, Southern Nagpur Co-operative Society Limited, was directed by the Cooperative Court in a 2000 award to allot Plot No. 5A to its member, respondent Ganpati Yadavrao Kumbhare, a decree upheld in subsequent appeals. During execution proceedings, the appellant society objected, claiming the plot had lost its identity as it was merged with adjoining Plots 4 and 4A in...
Read More
Supreme Court Clarifies: Licensee Must Pay Arrears, Not Liquidated Damages, at Interim Stage
4Dec By The Legal ChamberNo Comments
Supreme Court

Supreme Court Clarifies: Licensee Must Pay Arrears, Not Liquidated Damages, at Interim Stage

In a suit for eviction under a lapsed license agreement, the Supreme Court ruled that the trial court cannot grant liquidated damages as an interim measure under Order XXXIX Rules 1 & 2 CPC. However, it upheld the application of Order XV-A CPC (Bombay Amendment), directing the licensee to pay ascertained arrears and ongoing license fees with annual increments, failing which the defense can be struck off. Facts Of The Case: The case originated from a Leave and License Agreement executed on 08.10.2013 between the appellant licensors and the respondent licensee for 36 months, from 01.11.2013 to 31.10.2016, with a 7% annual increase in license fee. Clause 19 stipulated liquidated damages of Rs. 10,000 per day if the licensee failed to vacate upon expiry. After the license period lapsed, ...
Read More
No Redemption After Auction Notice: Supreme Court Major Ruling on Bank Loan Recovery
10Nov By The Legal ChamberNo Comments
Supreme Court

No Redemption After Auction Notice: Supreme Court Major Ruling on Bank Loan Recovery

This Supreme Court judgment clarifies that the right of redemption of a mortgagor under Section 13(8) of the SARFAESI Act is extinguished upon the publication of the notice of sale, as per the 2016 amendment. The Court held that this amended provision is retrospective in operation and overrides the general right of redemption under the Transfer of Property Act, 1882. The ruling emphasizes that only a single composite notice of sale is required under the SARFAESI Rules, irrespective of the mode of transfer adopted by the secured creditor. Facts Of The Case: The borrowers, M/s KPK Oils and Proteins India Pvt. Ltd. and its guarantors, availed credit facilities from the respondent Bank in January 2016, creating an equitable mortgage over various properties. After the loan account was classif...
Read More
Supreme Court Backs Landowners: Slum Authority Can’t Acquire Land Without Notice
26Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Backs Landowners: Slum Authority Can’t Acquire Land Without Notice

The Supreme Court affirmed the landowner's preferential right to redevelop a Slum Rehabilitation Area under the Maharashtra Slum Areas Act, 1971. It held that the Slum Rehabilitation Authority must issue a specific notice inviting the owner to submit a redevelopment scheme before any acquisition under Section 14 can be initiated. The 2018 Amendment to the Act did not dilute this mandatory requirement, and acquisition proceedings commenced without such notice were declared illegal. Facts Of The Case: The case concerns a plot of land in Bandra, Mumbai, owned by the Basilica of Our Lady of the Mount (Church Trust). A portion of this land had been encroached by hutments since the 1930s and was declared a slum area in 1978. The slum dwellers formed the Shri Kadeshwari Cooperative Housing Soci...
Read More
Wake-Up Call for Courts: Supreme Court Says Long Delays Can Create New Rights in Property Disputes
18Sep By The Legal ChamberNo Comments
Supreme Court

Wake-Up Call for Courts: Supreme Court Says Long Delays Can Create New Rights in Property Disputes

The Supreme Court set aside the High Court's order condoning a delay of 5,250 days in filing a restoration application. It held that courts must be cognizant of third-party rights created during prolonged delays and that such condonation requires reasoned orders after hearing affected parties, who may be impleaded. The matter was remanded for fresh consideration. Facts Of The Case: The case originated from a suit for eviction filed by Mafatlal Mangilal Kothari and another (Respondent Nos. 1 and 2) against the defendants concerning a disputed property. The Trial Court dismissed the suit in 1988, prompting the plaintiffs to file a First Appeal. This appeal was admitted by the Bombay High Court in 1989 but was eventually listed in 2008, where the Court passed an order stating that if the co...
Read More
Supreme Court Reins In Judicial Intervention in Arbitration After Appointment
17Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Reins In Judicial Intervention in Arbitration After Appointment

This Supreme Court judgment holds that a non-signatory to an arbitration agreement has no legal right to be present in the arbitral proceedings as the award would not bind them, violating the confidentiality mandate under Section 42A. Furthermore, a court becomes functus officio after appointing an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, and cannot entertain subsequent applications for intervention or issue ancillary directions. Facts Of The Case: The case originated from an oral family settlement between Pawan Gupta (PG) and Kamal Gupta (KG), later recorded in a Memorandum of Understanding/Family Settlement Deed (MoU/FSD) dated 09.07.2019, which was not signed by KG’s son, Rahul Gupta (RG). PG initiated proceedings under Section 11(6) of the Arbitra...
Read More
Supreme Court Decides: Who Pays When a Car Insurance Policy is Cancelled?
9Sep By The Legal ChamberNo Comments
Supreme Court

Supreme Court Decides: Who Pays When a Car Insurance Policy is Cancelled?

This Supreme Court case reaffirms the principle that an insurance policy stands rescinded upon dishonour of the premium cheque and intimation to the concerned parties, absolving the insurer from statutory liability. However, applying the "pay and recover" doctrine, the insurer was directed to pay the awarded compensation to the third-party claimants and was permitted to recover the same from the vehicle owner. Facts Of The Case: On August 22, 2005, Dheeraj Singh died when his motorcycle was hit from behind by a speeding truck (HR 46 A 1020). The deceased, a 36-year-old computer engineer, was found to be earning ₹3,364 per month. His dependents filed a claim before the Motor Accident Claims Tribunal. The appellant, National Insurance Company Ltd., disowned liability by contending that the...
Read More