Judgements
- Dena Bank vs. C. Shivakumar Reddy; CA 1650 OF 2020, LL
2021 SC 349
The Supreme court observed that a fresh cause of action can be initiated under section 7 of IBC, if due of corporate debtor to financial debtor remain unpaid.
"Judgment and/or decree for money in favour of the Financial Creditor, passed by the DRT, or any other Tribunal or Court, or the issuance of a Certificate of Recovery in favour of the Financial Creditor, would give rise to a fresh cause of action for the Financial Creditor, to initiate proceedings under Section 7 of the IBC for initiation of the Corporate Insolvency Resolution Process, within three years from the date of the judgment and/or decree or within three years from the date of issuance of the Certificate of Recovery, if the dues of the Corporate Debtor to the Financial Debtor, under the judgment and/or decree and/or in terms of the Certificate of Recovery, or any part thereof remained unpaid."
- Orator Marketing Pvt. Ltd. vs. Samtex Desinz Pvt. Ltd.,
LL 2021 SC 333
The Supreme Court observed that a financier who gave interest free loans to finance the commercial operations of a corporate body is a Financial Creditor and capable to start the Corporate Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016.
"There is no discernible s no discernible reason, why a term loan to meet the financial requirements of a Corporate Debtor for its operation, which obviously has the commercial effect of borrowing, should be excluded from the purview of a financial debt"
- PSA Sical Terminals Pvt. Ltd. vs. Board of Trustees of V.O. Chidambranar Port Trust Tuticorin [CA 3699-3700 OF 2018], LL 2021 SC 329
The Supreme court observed that an arbitration award which disregards vital evidence in arriving at its decision or rewrites a contract is liable to be set aside under Section 34 of the Arbitration and Conciliation Act on the ground of patent illegality.
The bench comprising Justices RF Nariman and BR Gavai observed that a conclusion based on no evidence at all or an award which disregards vital evidence in arriving at its decision would be perverse. Rewriting a contract for the parties would be breach of fundamental principles of justice, the court said.
- Siddhivinayak Realties Pvt Ltd v. V Hotels Ltd & Ors Notice of Motion No.119 of 2016 in Commercial Suit No.133 of 2018
BHC noted in this case that the terms of Section 43(4) and analysed the same on principles by stating that Section 43(4) of the Act is in pari materia with Section 37(5) of the earlier Arbitration Act of 1940 (1940 Act), the only difference being that the end date of the exclusion period is indicated under the 1940 Act, either by an order of the Court setting aside an award or pronouncing the arbitration agreement to have ceased to have effect with reference to the difference referred, unlike the Act which talks about only the date of the order setting aside the award.
BHC held that in case of a dispute referred to arbitration where an award is set aside by the Court, the principle of merger will be fruitful for figuring the exclusion period under Section 43(4) of the Act for estimating the limitation period for the arbitration proceeding
- Silpi Industries v. Kerala State Road Transport Corp & Anr Civil Appeal Nos. 1570-1578 of 2021 and 1620-1622 of 2021
Supreme Court observed that MSME Act contains provisions for mandatory conciliation before reference to arbitration, which is not the case in Arbitration Act. Hence, it arrived at the conclusion that MSME Act, being a specialized beneficial legislation, has superseding effect over Arbitration Act, which is a general Act. If there is an arbitration agreement between two parties, where the seller is covered by the MSME Act, then in case of dispute, the seller is permitted to directly approach the Council under MSME Act and not recourse to arbitration primarily. Further, the buyer would be entitled to file a counter claim before the Council itself, although there is no provision to this effect in the MSME Act, so that the objective of the MSME Act is not defeated. ?
Further, Supreme court observed that Section 43 of the Arbitration Act applied the Limitation Act, 1963 expressly as it applies to court proceedings. Similarly, in a case wherein a dispute settlement fails before the Council and the said matter is referred to arbitration under Section 18(3) of the MSME Act, the Limitation Act, 1963 would also apply to such arbitration proceedings that arise out of disputes that could not be settled under Section 18 (3) of the MSME Act.
Legislation and notification.
- Amendments to the CGST Act w.r.t. the requirement of audit of annual accounts.1
Amendments to the CGST Act w.r.t. the requirement of audit of annual accounts and filing of reconciliation statement notified Notification no. 29 and 30/2021- Central Tax dated July 30, 2021 the amendments to CGST Act proposed vide Finance Act, 2021, omitting the requirement of getting the accounts audited by a chartered accountant or a cost account which was mandatorily required to be submitted along with reconciliation statement in Form GSTR 9C, with effect from August 1, 2021. Further, suitable amendment to section 44 of the CGST Act has also been made effective from August 1, 2021, which now provides that the reconciliation statement can now be self-certified by a taxpayer and will form part of the annual return to be furnished in Form GSTR 9. In order to facilitate the said changes, suitable amendment has also been made to Rule 80 of CGST Rules14 and instructions contained under Form GSTR 9. Taxpayers having aggregate turnover exceeding five crores in a F.Y.15 will still be required to file reconciliation statement in Form GSTR 9C, however on self-certification basis.
- RBI notifies new PPI norms RBI's latest PPI notification2
RBI notifies new PPI norms RBI's latest PPI imposes interoperability necessities, increases maximum limit, and now permits cash withdrawal from full-KYC PPIs of Nonbanks. In April, the RBI had announced a change in policy for full-KYC Prepaid Payment Instruments ("PPIs"). This new policy was notified into law on May 19, 2021, which now mandates interoperability increases the maximum amount unpaid, and authorizes cash drawing from non-bank full-KYC PPIs. From March 31, 2022, issuers are required to give holders of full-KYC PPIs interoperability through card networks (for PPIs in the form of cards) and UPI (for PPIs in the form of electronic wallets). Interoperability is mandatory on the acceptance side as well. Migration towards interoperability did not gain much traction under the earlier 'Prepaid Payment Instruments – Guidelines for Interoperability', which had made adoption of interoperability voluntary. Notably, interoperability will continue to be optional for Gift PPIs. Further, PPIs for Mass Transit Systems are exempted from these requirements. The maximum amount outstanding in respect of full-KYC PPIs has also been increased from INR 1,00,000 to INR 2,00,000. Further, cash withdrawal is now permitted for Full-KYC PPIs of non-bank PPI issuers, a feature which was earlier restricted to bank issued PPIs. There is a maximum limit of INR 2,000 per withdrawal, with an overall limit of INR 10,000 per month. PPI issuers offering this facility are required to establish proper customer redressal mechanisms and a suitable cooling period for cash withdrawal, upon opening or loading/reloading funds into such PPIs, in order to mitigate fraud risks. The RBI believes this change in policy will boost migration to full-KYC PPIs and complement the acceptance infrastructure.
Footnotes
1. Notification no. 29 and 30/2021- Central Tax dated July 30, 2021, available at
2. RBI
notifies new PPI norms
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12094&Mode=0#:~:text=This%20has%20reference%20to%20paragraphs,cash%20
withdrawal%20shall%20be%20permitted
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