'Unrelated Party To Contract Cannot Be Regarded As Veritable Party To Arbitration Agreement': Bombay High Court

The Bombay High Court has held that an unrelated third party to a contract cannot be treated as a “veritable party” to the arbitration agreement and hence cannot be compelled to participate in the arbitral proceedings. The Court reiterated that the doctrine enabling non-signatories to be treated as parties to an arbitration agreement applies only where there exists a close relationship,...

'Big Corporations Must Adopt Reasonable Litigation Policy Against Small Enterprises': Bombay High Court

The Bombay High Court dismissed an appeal under section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) filed by Mahindra Defence Systems Ltd. challenging an arbitral award passed by the Micro, Small and Medium Enterprises Facilitation Council in favour of Rajana Industries holding that the award was reasoned, fair and free from...

Information Regarding GST Returns Of Company Cannot Be Disclosed Under RTI Act: Bombay High Court

The Bombay High Court on Tuesday (October 14) held that a company's Goods and Services Tax (GST) returns filing cannot be disclosed under the Right To Information (RTI) Act. Sitting at Aurangabad bench, single-judge Justice Arun Pednekar noted that section 158(1) of the GST Act prohibits disclosure of information of GST returns to third parties and that section 8(1)(j) of the RTI Act too...

Pendency Of Appeal U/S 37 A&C Act Against First Award Does Not Bar Fresh Arbitration Proceedings: Bombay High Court

The Bombay High Court held that pendency of an appeal under section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) does not prohibit a party from initiating a fresh round of arbitration when an earlier arbitral award has already been set aside. Accordingly, the present application under section 11 of the Arbitration Act was allowed and a sole...

Apportionment Of Liability Without Evidence Is Akin To 'Panchayati Approach': Bombay High Court Sets Aside NSE Arbitral Award Against Broker

The Bombay High Court set aside an arbitral award passed under National Stock Exchange (NSE) bye-laws that had upheld an order passed by Investor Grievance Redressal Panel (IGRP) directing Peerless Securities Limited to pay ₹7.18 lakhs to Vostok (Fareast) Securities Pvt. Ltd. for the losses caused by unauthorised trading in the trading and future segment. The IGRP had held that...

Mortgage, Enforcement And Related Declaratory Reliefs Are Non-Arbitrable: Bombay High Court

The Bombay High Court Bench of Justice Sandeep V Marne has observed that enforcement of mortgage is a right in rem and any dispute seeking enforcement of mortgage cannot be referred to arbitration. Civil suit will lie for enforcement of such a right in rem. Facts Defendant No.1 and his partners are developers appointed for redevelopment of Defendant No.5 – Society under...

Income Tax Act | Deputy Commissioner Cannot Act Beyond DRP Directions; Assessment After S.144C(13) Time Limit Invalid: Bombay High Court

The Bombay High Court stated that the Deputy Commissioner cannot act beyond the dispute resolution panel (DRP) directions; assessment completed beyond Section 144C(13) of the Income Tax Act, 1961, the time limit is invalid. Section 144C(13) of the Income Tax Act, 1961 mandates the completion of the assessment within one month from the end of the month in which DRP directions are...

Input Tax Credit Can't Be Blocked If Credit Balance Is Nil: Bombay High Court

The Bombay High Court on Tuesday held that Input Tax Credit (ITC) cannot be blocked under Rule 86-A of the Central Goods and Services Tax Rules, 2017, if the electronic credit ledger of a taxpayer shows a nil balance on the date of the blocking order. A Division Bench of Justice M S Sonak and Justice Advait M Sethna observed, “Therefore, on a plain reading of the rule, if on...

Prior IBC Proceedings Don't Bar Criminal Prosecution Of Directors Under S. 138 Negotiable Instruments Act: Bombay High Court

The High Court of Bombay, Nagpur Bench, comprising Justice M.M. Nerlikar, has held that the prior initiation of IBC proceedings does not bar criminal prosecution of directors under section 138 of the Negotiable Instruments Act. Background of the Case The petitioner extended a short-term loan of Rs. 15 lakhs to the respondent through its directors. A post-dated cheque was issued as...

Pre-Show Cause Notice Consultation Not An Empty Formality, Mandatory When Demand Is Over ₹50 Lakhs: Bombay High Court

The Bombay High Court has held that pre-show cause notice consultation is not an empty formality; mandatory before the show cause notice (SCN) in demands above Rs. 50 lakhs. The question before Justices M.S. Sonak and Advait M. Sethna was whether a pre-consultation notice would be mandatory before issuing show cause notices where the tax demand exceeds Rs. 50 Lakhs. The bench...

Proceedings For Conciliation & Arbitration Under MSME Act Cannot Be Clubbed: Bombay High Court

The Bombay High Court has set set aside two ex-parte orders passed by the Micro and Small Enterprises Facilitation Council (MSEFC), Daman holding that the council acted in breach of mandatory two stage procedures under the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act”). The court remitted the matter for fresh arbitration in accordance with law. A bench led...

Mere Registration Of FIR Or Pendency Of Proceedings Before DRT Does Not Bar Reference To Arbitration: Bombay High Court

The Bombay High Court bench of Justice Advait M. Sethna has held that the disputes between Mangal Credit and Fincorp Limited and Ulka Chandrshekhar Nair are arbitrable under the Arbitration and Conciliation Act, 1996 (Arbitration Act) even though allegations of fraud and forgery were raised and a criminal was filed in which no progress has been made. The Court further held...