HIGHLIGHTS OF THE MONTH
Subsequent suit after rejection of earlier plaint must be filed within limitation period
[Indian Evangelical Lutheran v. SRI Bala & Co. (Civil Appeal No. 1525/2023)]
In a recent judgment, the Supreme Court of India addressed the limitations on filing subsequent lawsuits after the rejection of an earlier plaint. The Court emphasized that while Order VII Rule 13 of the Code of Civil Procedure, 1908 ('CPC') permits the filing of a fresh suit following the rejection of a previous plaint, such a suit must adhere to the 3-year limitation period stipulated under Article 113 of the Limitation Act, 1963 ('Limitation Act').
The Court unequivocally stated that the provisions of the CPC do not supersede the limitations imposed by the Limitation Act. Consequently, any subsequent suit filed beyond the 3-year period would be barred by limitation and subject to rejection under Order VII Rule 11(d) of the CPC.
In this case, the Respondent initially filed a suit in 1993, which was subsequently rejected in 1998. The respondent then filed a second suit in 2007, exceeding the 3- year limitation period as prescribed under Article 113 of the Limitation Act. The Court held that the second suit was time-barred and allowed the application to reject it.
Objections to the place of suing must be raised at the earliest possible opportunity
[Punjab National Bank v. Atin Arora & Anr. (SLP (C) No. 15347 of 2020)]
The Supreme Court of India recently highlighted the significance of raising timely jurisdictional challenges in legal proceedings. In this case, the Hon'ble Court addressed the issue of a company's delayed objection to the jurisdiction of the National Company Law Tribunal ('NCLT'). The company had initially participated in insolvency proceedings before the NCLT but later sought to challenge the NCLT's jurisdiction citing a change in its registered address.
The Court emphasized that the objections under Section 21 of the Code of Civil Procedure, 1908 ('CPC') must be raised at the earliest possible opportunity. Allowing such objections to be raised at a later stage would disrupt course of legal proceedings. In this specific case, the Court ruled that the company's delay in raising the jurisdictional challenge, coupled with its active participation in the proceedings before the NCLT, rendered the objection inadmissible.
Furthermore, the Court criticized the High Court for exceeding its powers under Article 227 of the Constitution. The High Court's intervention in the NCLT's proceedings was deemed inappropriate, as Article 227 of the Constitution is intended to be used only in exceptional circumstances to correct grave jurisdictional errors or prevent gross injustice.
Supreme Court dismissed the appeal to limit the scope of corporate insolvency resolution process
[Harpal Singh Chawla v. Vivek Khanna & Ors. (Civil Appeal No. 14708/2024)]
The Supreme Court recently dismissed an appeal seeking to limit the scope of the Corporate Insolvency Resolution Process ('CIRP') initiated against 'Spaze Towers Pvt. Ltd.' The appellant, a suspended director of the company, argued that the CIRP should be restricted solely to the 'Spaze Arrow project', as the insolvency petition was primarily filed by allottees of that specific project.
However, the Supreme Court upheld the decision of the National Company Law Appellate Tribunal ('NCLAT'), which rejected the appellant's argument. The NCLAT observed that numerous creditors from other projects had filed legitimate claims against the company. Restricting the CIRP to a single project would have unfairly excluded these creditors and potentially jeopardized their ability to recover their dues.
The NCLAT further emphasized that the purpose of the Insolvency and Bankruptcy Code, 2016 is to ensure a fair and equitable resolution for all creditors of a distressed company. Limiting the scope of the CIRP would undermine this fundamental principle.
Supreme Court reiterates that directors of a company cannot be held vicariously liable for criminal acts automatically
[Sanjay Dutt & Ors. v. The State of Haryana & Anr. (Criminal Appeal No. 11/2025)]
The Supreme Court of India has ruled that directors of a company cannot be automatically held vicariously liable for the company's criminal acts. In a recent judgment, the Court emphasized that the directors of a company can only be held liable if:
- The company itself is liable for the wrongful act.
- There is specific evidence establishing the director's personal involvement in the conduct that directly links them to the company's liability.
- Such liability is supported by a specific provision in the relevant statute.
The Court clarified that mere authorization of an act at the company's behest or the exercise of supervisory roles within the company is insufficient to establish personal liability for directors. There must be some evidence indicating that the director's personal involvement in the illegal activity.
Immovable property can be transferred by way of a registered instrument only
[Sanjay Sharma v. Kotak Mahindra Bank Ltd. & Ors. (SLP (C) No. 330/2017)]
The Supreme Court of India has unequivocally reaffirmed the importance of registering a sale deed for the valid transfer of immovable property. In the recent judgment, the Court emphasized that mere possession and payment of consideration, without the legally mandated registration, are insufficient to establish ownership.
This principle is based on Section 54 of the Transfer of Property Act, 1882 ('TPA'), which stipulates that the transfer of immovable property can only be legally effected through a registered instrument. The Court underscored the significance of the word "only" in this provision, emphasizing that for immovable property valued at or above one hundred rupees, registration is mandatory to effect a valid sale.
The instant case involved a dispute over property ownership following an auction sale under the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002. The respondent no. 2, Raj Kumar Vij, sought to establish ownership based on an unregistered agreement to sell and a General Power of Attorney. The Court categorically rejected this claim, emphasizing that under Section 54 of the TPA, unregistered documents cannot serve as valid proof of ownership.
Mentioning wrong section in application is not always fatal: Delhi High Court
[Rajeev Shukla v. Gopal Krishna Shukla (Neut. Cit. No. 2025:DHC:12)]
The Delhi High Court recently observed that minor technicalities, such as citing the wrong section of law in an application, should not be allowed to obstruct the pursuit of justice.
The Court asserted that the core substance of an application should be given paramount importance over its form. The Court held that an incorrect section citation would not be considered fatal to a case provided it does not mislead the Court or cause prejudice to the opposing party.
In this case, the Trial Court dismissed an application for condonation of delay solely due to the incorrect citation of Section 151 Code of Civil Procedure, 1908 instead of the relevant provision under the Limitation Act, 1963. The High Court considered this dismissal erroneous and observed that the Trial Court should have prioritized the merits of the application and the reasons for the delay over the technicality of the incorrect section citation.
The Delhi High Court reiterates that an appeal not maintainable under Section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), will also not be maintainable under Section 13 of the Commercial Courts Act, 2015 (CCA)
[Synergies Casting Ltd. v. National Research Development Corporation & Anr., (FAO(OS)(COMM) 1/2025)]
The present case came to be when the appellant, Synergies Casting Limited, preferred an appeal against the order of the Single Judge of the Delhi High Court regarding execution of the arbitral award. The primary question before the High Court was the maintainability of the present appeal. The appellant had submitted that although appeal under Section 37 of the Arbitration Act was not maintainable, Section 13 CCA legitimizes the same.
- Section 37 of the Arbitration Act lays down the specific grounds where appeals can be preferred, including when the Court allows or refuses to set aside the arbitral award under Section 34 of the Arbitration Act.
- Section 13 CCA, on the other hand, refers to appeals from the judgement or order of a Commercial Court.
The High Court did not agree with the appellant's abovementioned submission since the order of the Single Judge neither sets aside nor refuses to set aside the arbitral award, and therefore, not fulfilling the criteria set under Section 37 of the Arbitration Act. Elaborating further, the High Court said:
- No appeal is maintainable in arbitration matters unless the scope for the same has been expressly provided for under Section 37 of the Arbitration Act,
- While Section 13 CCA may prima facie appear to be legitimizing appeals against orders as the one challenged in the present case, the said provision specifically mentions Section 37 of the Arbitration Act and insinuates precedence of Section 37 over the otherwise general provision contained under Section 13, and
- The Arbitration Act is a 'self-contained' Code and therefore, weight must be given to the legislative intent which has conspicuously laid down the scope and applicability.
The Supreme Court decides upon the scope of Section 4 of the Limitation Act, 1963 on Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act)
[My Preferred Transformation & Hospitality Pvt. Ltd. & Anr. v. M/s Faridabad Implements Pvt. Ltd., (Civil Appeal No. 336 of 2025)]
In the present case, the appeal came to be when the appellant failed to challenge the arbitral award within the window of three months, as given under Section 34(3) of the Arbitration Act. Further, even after the 30-day condonable period under the Proviso to Section 34(3), the appellant failed to enforce its rights under the said provision since the said condonation period expired on a court holiday. The appellant then filed the application after re-opening of court but the same was barred by limitation. The appellant, consequently, argued that Under Section 4 of the Limitation Act, which allows for institution of appeal on the day of the court's reopening, their appeal under Section 34 is maintainable.
The Supreme Court decided that the appellant's argument was untenable and stated the following –
- That Section 4 of the Limitation Act is applicable only to the extent where the three-month period expires on a court holiday, however, the same cannot be applied when the 30-day period of condonation under Section 34(3) of the Arbitration Act has expired.
- That the bare reading of Section 34 of the Arbitration Act expressly states an application to set aside an arbitral award under Section 34 must be made within three-months and only at the court's discretion, can a further period of 30 days be awarded subject to sufficient cause being shown. However, no further condonation period or extension is allowed.
- That where there is an exclusion of applicability of the Limitation Act, the same shall be construed as an intended exclusion and not be interpreted otherwise, since such an act will render the efficacy of the Arbitration Act fruitless.
The Delhi High Court addresses the scope of value addition by a brand name to a trade mark as a result of conjunctive use
[Gensol Electric Vehicles Pvt. Ltd. v. Mahindra Last Mile Mobility Limited, (CS(COMM) 849/2024)]
The Delhi Court, while determining whether the logos 'EZIO' and 'Mahindra ZEO' are identical or nor, opined that the brand name 'Mahindra' has amassed such tremendous levels of goodwill and reputation that its use alongside a trade mark is sufficient to confer a distinctive and distinguishable value to the concerned trade mark.
The dispute came to be when the plaintiff, Gensol, approached the High Court to permanently injunct the defendant, Mahindra, from using the logo of 'Mahindra ZEO' which it claimed was nearly identical to Gensol's 'EZIO' logo. In the matter, the High Court agreed that while the previous version of the defendant's mark, 'eZEO' was indeed nearly identical to Gensol's 'EZIO' logo, the revised 'Mahindra ZEO' logo could not be adjudged as identical or similar due to the brand value 'Mahindra' confers. It also played into the High Court's consideration that unlike the defendant who had already begun use of the 'Mahindra ZEO' logo on its vehicles, Gensol was yet to commence any use and that mere registration of the trade mark does not automatically confer any goodwill or reputation unless substantial use can be shown.
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