Author: jurisprime

  • Validity of the application for appointment of Arbitrator without original copy of the agreement

    Validity of the application for appointment of Arbitrator without original copy of the agreement

    Arbitration is a private dispute resolution mechanism based on an agreement between parties, where they agree to abide by the decision of an arbitrator which is legally enforceable. It is in the principle of arbitration that parties can choose arbitrators or rely on an arbitration institution. If the appointment process fails, either party can apply to the appropriate court under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Arbitration Act’), for the appointment of the arbitrator. Section 11 also entrusts Chief Justice to make such scheme which shall govern the matter of arbitration entrusted to it. As per the Scheme of Appointment of Arbitrators by the Chief Justice of Calcutta High Court, 1996 (hereinafter referred to as ‘Scheme’) one of the requisites of the application is that it must also be accompanied by a certified copy or the original arbitration agreement. However, the Hon’ble High Court of Calcutta, in the case of Chandan Chatterjee v. Gita Sundararaman,[i] has taken a different stand.

    In the discussed case a Memorandum of Understanding (MoU) was entered into between the partners of the partnership firm, Swarna School (respondent), and the Trustees to transfer the partnership business and the trust to Mr. Chandan Chatterjee (petitioner). The MoU also contained an arbitration clause providing for arbitration in case of dispute. Accordingly, in case of dispute, the petitioner invoked the arbitration clause. The respondent failed to appoint the arbitrators according to the arbitration clause and petitioner preferred an application under Section 11 of the Arbitration Act before the Hon’ble High Court of Calcutta. According to Section 11, the parties are free to decide upon the procedure for the appointment of the arbitrators, but if one of the parties fails to follow the procedure and do not  agree to the appointment of the arbitrator within 30 days, the other party is free to approach the appropriate Court for the appointment of arbitrator. In the instant case, one of the issues raised by the respondent was that the petitioner has failed to file a certified copy or the original arbitration agreement, while filing an application under Section 11 of the Act, as mandated by the scheme and accordingly be rejected.

    Herein the Hon’ble High Court made a detailed observation of the Scheme. A reference was made to Clause 3(a) of the Scheme, which states that when an application under Section 11 of the arbitration Act is made it must accompany, with it the original arbitration agreement or a duly certified copy, but if the application is not accompanied with such original documents, then in such case Clause 7 of the same scheme provides two remedies to the Applicant. The first being the discretion of the Chief Justice of the Hon’ble High Court or his designate, to reject or allow the application. The second remedy is that if the technical defects or omissions of the application can be rectified, then with the prior approval of the Chief Justice of the Hon’ble High Court, the applicant can apply afresh application.

    In the instant case, the reference was made to the judgment of the Hon’ble Supreme Court in the case of Vidyawati Gupta v. Bhakti Hari Nayak, [ii] wherein it was held that when there is a non-compliance of procedural and directory provisions of the law during the course of any litigation, the entire process is not invalidated if the defects are of the curable nature. Accordingly, in the instant case Hon’ble High Court held that in cases where the existence of the agreement is not the point of dispute, an application under Section 11 of the Act ought not to be dismissed on technical or procedural defects and rectification shall cure them of those defects. The application filed under Section 11 of the Act by the petitioner was allowed and the matter was referred for arbitration.  

    It is pertinent to note that, the intent behind any statute is to provide systematic governance and not to take away the substantial right vested with the people. Same can be observed through various judgements of the Hon’ble Supreme Court. The recent judgement of the Hon’ble Supreme Court in the case of Ramnath Exports Pvt. Ltd. vs Vinita Mehta,[iii] held that any procedural impropriety, although may be considered as an irregularity that can be fixed, should not be permitted to undermine the substantive right obtained by any plaintiff without providing a fair chance to cure it. Reference may also be placed to the judgement given in the case of Uday Shankar Triyar v. Ram Kalewar Prasad Singh and Anr,[iv] wherein the Hon’ble Supreme Court held that the failure to adhere to any procedural requirement for a statement of claim, appeal document, application, or request for remedy should not automatically result in dismissal or rejection unless a relevant statute or rule so mandates.

    It is relevant to know that, the stricter provision with respect to admitting application  has been already stipulated in sub-section (2) of Section 8 of Arbitration Act and the same stricter provision could have been applied in the instant case, however, the scheme provides a discretion with the Chief Justice and his designates to either allow or not such application. Where the statutes itself doesn’t mandate such a procedure then it shall always be the intent of court not to take away the rights otherwise vested with the one seeking justice.

    Authors- Nivedita Jha & Deepit Sheel

    [The Authors are associate and intern respectively, in Corporate Law Division in Juris Prime Law Services]

    [i] 2023 SCC OnLine Cal 1407

    [ii] (2006) 2 SCC 777

    [iii] 2022 LiveLaw (SC) 564

    [iv] (2006) 1 SCC 75

  • Government Servants are not entitled to overtime allowance

    Government Servants are not entitled to overtime allowance

    Labour exploitation is violation of human rights and it is necessary to keep check on factories in order to avoid such violation. In this regard there are various legislative provisions in place to prevent such exploitation. These provisions prescribe maximum working hours for every factory and industry for any given day or week. But there are certain circumstances, which forces the worker to work more than the permissible working hours. In such cases, the workers are compensated through ‘overtime allowance’, which is at least double of the wages. The concept of Overtime Allowance is protected by the Section 59 of the Factories Act,1948 (Factories Act) and the same provision has also been carried over to the new labour code in the Section 27 of The Occupational Safety, Health and Working Conditions Code, 2020. However, there was an ambiguity regarding the applicability of these provisions on government servants. This issue has been well settled in the matter of Security Printing & Minting Corpn. of India Ltd. v. Vijay D. Kasbe, (2023 SCC OnLine SC439).

    In the instant case, The Central Administrative Tribunal (CAT) and the Hon’ble Bombay High Court (HC) held that as per Section 59 of the Factories Act the double over time allowance is applicable on the person who is employed as Supervisors at Security Prating & Minting Corpn. of India Ltd. (SPMCIL), which is a company under the Department of Economic Affairs, government of India.

    However, the Hon’ble Supreme Court observed that SPMCIIL is a wholly owned government company and accordingly the employees are to be treated as government servants. It is for this reason that the instant matter has been considered as a ‘service matter’ under the purview of Section 3 of Administrative Tribunals Act, 1985 and was considered under the jurisdiction of CAT.

    It is pertinent to note that, as per the Rule 11 of Fundamental Rules, 1922, all the government servants have to be at the disposal of government at all the time without any claim for additional remuneration. Due to the explicit debar by Rule 11 for additional remuneration, it is observed that there was no scope for the supervisors to seek payment of double Over Time Allowance. The Hon’ble Supreme Court also referred to the Rule 100 of Maharashtra Factories Rules, 1963, which specifically exempts supervisors from receiving any kind of over time allowance.

    We understand that the nature and the condition of the work of the government servant and that of the workmen at factory doesn’t hold much commonality. It is for this reason why the legislature had to come up with different statutory protection for the workmen from different workspace. It can be observed that, certain perks and allowances are exclusive to the government servants whereas the workers under Factories Act doesn’t have such access. For example, the Government Servants receives an automatic and periodic wage revision through Pay Commissions. While, on the other hand, the wage revision of workers governed by the Factories Act is done through the Minimum Wages Act, 1948, under which only the minimum wage paid to any worker of any given class or classes of factories doing any particular type of work is revised by the State or Central Government after every five years, if such revision is necessary. Though there are other benefits, which are exclusive to the workers governed under Factories Act, which doesn’t spread to the Government Servants such as weekly hours, weekly holidays, daily hours, limitations to night shifts etc. In the case of Security Printing & Minting Corpn. of India Ltd. (supra), if the government Servants were to be allowed to be governed under the Factories Act, they would enjoy the selective benefits and liabilities as per their convenience.

    The judgement given in the case of Security Printing & Minting Corpn. of India Ltd. (supra) holds great significance in today’s time as it explains in depth about the different kind of employments, possible ambiguity in understanding the terms like workmen and worker under different statutes, and the scope of Factories Act along with applicability of double allowance on the government servants under the Factories Act.

     

    Authors- Nivedita Jha & Deepit Sheel

    [The Authors are Associate and Intern, respectively, in Corporate Law division in Juris Prime Law Services]

     

  • Latest Update 3

    Latest Update 3

    Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
    It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the like).
    It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the like).
  • Latest Update 2

    Latest Update 2

    Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
    It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the like).
    It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the like).
  • Latest Update 1

    Latest Update 1

    Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
    It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the like).
    It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the like).
  • New Labour Code – A Step Towards Employee Well Being

    New Labour Code – A Step Towards Employee Well Being

    The Central Government codified 29 labour laws into 4 codes for the upliftment of workers by providing them security, respect, health and other welfare measures. These labour reforms will not only enhance the Government’s mission of ‘Ease of Doing Business’ but will also help in employment generation and workers well-being. The benefits of these labour codes have been extended to unorganized sector as well. These codes were passed in the Parliament and will become applicable soon after their publication in the official gazette. The new Labour Law is divided into:

    A) CODES ON WAGES, 2019

    B. CODE ON SOCIAL SECURITY, 2020

    C. THE OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2020

    D. INDUSTRIAL RELATIONS CODE, 2020

  • Supreme Court appoints two Nodal Counsels in the batch of matters pertaining to Personal Guarantors in Insolvency Proceedings

    Supreme Court appoints two Nodal Counsels in the batch of matters pertaining to Personal Guarantors in Insolvency Proceedings

    On 07.02.2023, Hon’ble Supreme Court in SLP(C) No. 16464/2021 and WP No. 1281/2021 (lead cases in the group) appointed two Nodal Counsels in the batch of matters pertaining to Personal Guarantors in Insolvency Proceedings. The Bench headed by Justice Chandrachud has appointed Ms. Pallavi Pratap, Advocate for Petitioners and Mr. Sanjay Kapur, Advocate for Respondents as nodal counsel in the batch of matters where vires of Sec. 95 to Sec. 100 of IBC is under challenge.
    Both the nodal counsel shall put together the written submissions in the lead cases and in the pending matters seriatim.
    A joint compilation of all precedents and other documentary material which is sought to be relied upon by the parties will be prepared, duly indexed. The joint compilation will be provided to all the counsel appearing on behalf of the contesting parties in these proceedings. The nodal counsel will prepare, after discussion with all the counsel for the petitioners, the order in which arguments will be addressed by counsel appearing on behalf of the petitioners. This exercise will be completed by 17 February 2023.
    The matter will be listed on 21 February 2023 on top of the Board.
    “There are in all more than 200 petitions. The question of law involved is on initiation of insolvency proceedings under sec. 95, application of interim moratorium under Sec. 96, appointment of Resolution Professional under sec. 97 and admission and rejection of the application. The issue is with respect to lack of principle of natural justice being followed whereby the personal guarantor is not provided a right to hearing and some draconian powers are vested in the Resolution Professional. This is to the detriment also in case pertaining to personal insolvency process also.”, Ms. Pallavi Pratap said to IBC Laws team.
  • Realisation percentage of recovery

    Realisation percentage of recovery

    Realisation percentage of recovery by banks through IBC are between SARFEASI and DRT. I feel this may improve significantly if the Govt amend IBC as may be required from time to time like waterfall mechanism under liquidation and timely recruitment of members to NCLT and NCLAT.

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