Bombay High Court Weekly Round Up: August 29 - September 3 , 2022

Nizar Noorali Rangara and Anr. v. State of Maharashtra and Ors. 2022 LiveLaw (Bom) 310

USP Studios Pvt. Ltd. v. Ganpati Enterprises & Ors. 2022 LiveLaw (Bom) 311

Relcon Infroprojects Ltd. & Anr. v. Ridhi Sidhi Sadan, Unit of Shree Ridhi Co. Op. Housing Society Ltd. & Ors. 2022 LiveLaw (Bom) 312

Jagdish Lahu Badhe & Ors. v. State of Maharashtra & Ors. Citation: 2022 LiveLaw (Bom) 313

Unichem Laboratories Limited versus Union of India and Ors. Citation: 2022 LiveLaw (Bom) 314

Sunil Vishnu Mukane & Ors. v. State of Maharashtra 2022 LiveLaw (Bom) 315

Jalgaon Janta Sahakari Bank Ltd. & Anr. v. Joint Commissioner of Sales Tax & Anr. with 11 connected matters 2022 LiveLaw (Bom) 316

Reports/Judgments

Company In Liquidation Cannot Always Avoid Proceedings U/S 138 NI Act, Its Conduct Can Be Weighed In: Bombay High Court

Case Title: Nizar Noorali Rangara and Anr. v. State of Maharashtra and Ors.

Citation: 2022 LiveLaw (Bom) 310

Bombay High Court held that to determine whether a complaint under section 138 can be entertained when the company is in the process of winding up, the fact and circumstance of each case have to be considered. The question cannot be considered without the facts especially to "insulate a company and its ex-directors from the rigors of law where it appears that they profess to take advantage of their own wrong".

Justice N. J. Jamadar further observed that a winding up order due to settlement terms is not on the same pedestal as winding up order passed on merits

Implicitly Admitted Liability Does Not Prevent Reference Of Dispute To Arbitration If Arbitration Agreement Exists: Bombay High Court (livelaw.in)

Case Title: USP Studios Pvt. Ltd. v. Ganpati Enterprises & Ors.

Citation: 2022 LiveLaw (Bom) 311

The Bombay High Court held that impliedly admitted liability cannot prevent reference of dispute to arbitration. Justice N. J. Jamadar further held that judicial authority must make a reference to arbitration if even a semblance of dispute exists between two parties who have an arbitration agreement.

Notice Under Section 21 Of A&C Act Issued; Court Not Barred From Exercising Jurisdiction Under Section 9: Bombay High Court

Case title: Relcon Infroprojects Ltd. & Anr. v. Ridhi Sidhi Sadan, Unit of Shree Ridhi Co. Op. Housing Society Ltd. & Ors.

Citation: 2022 LiveLaw (Bom) 312

The Bombay High Court ruled that merely because a notice under Section 21 of the Arbitration and Conciliation Act, 1996 (A&C Act) to refer the disputes to arbitration is issued by a party, the Court is not barred from exercising jurisdiction under Section 9 of the A&C Act for interim measures. The Court added that it is not constrained to refer the parties to arbitration and convert the proceedings under Section 9 into an application under Section 17 of the A&C Act, to be adjudicated by the arbitral tribunal.

Justice G.S. Kulkarni reiterated that when an application under Section 9 has already been taken up for consideration, the question of examining whether the remedy under Section 17 is efficacious or not would not arise.

Registrar Didn't Act Independently: Bombay HC Sets Aside Govt Order Removing NCP Members From Jalgaon Milk Union's Managing Committee

Case title – Jagdish Lahu Badhe & Ors. v. State of Maharashtra & Ors.

Citation: 2022 LiveLaw (Bom) 313

The Aurangabad bench of Bombay High Court on Tuesday set aside an order removing 14 members of elected managing committee of the Jalgaon Zilla Dudh Utpadak Sangh Ltd.

"DDR has passed the impugned order not only in the absence of any ground or by resorting to any enquiry by following the principles of natural justice but even has passed it mala fide with an ulterior motive to oblige the Government", the court observed.

Bombay High Court Directs CBIC To Issue Clarification Regarding Distribution/ Reporting Of ISD Credit

Case Title: Unichem Laboratories Limited versus Union of India and Ors.

Citation: 2022 LiveLaw (Bom) 314

The Bombay High Court has directed the Central Board of Indirect Taxes and Customs (CBIC) to issue a clarification in relation to the distribution/ reporting of the ISD credit.

The Bench of Justices K.R. Shriram and Gauri Godse was dealing with a batch of writ petitions, highlighting the difficulties faced by the petitioners in the distribution/ reporting of the ISD credit.

Bombay High Court Overturns Dacoity Conviction Citing Lapses In Arrangement Of Test Identification Parade By The Police

Case title: Sunil Vishnu Mukane & Ors. v. State of Maharashtra

Citation: 2022 LiveLaw (Bom) 315

The Bombay High Court overturned conviction of four accused in a dacoity case observing that the prosecution's evidence was unreliable due to irregularities in arranging the test identification parade.

Justice Sarang V. Kotwal held "In this particular case in view of these infirmities, benefit of doubt must go to the accused. There are no other incriminating circumstances against the appellants".

The court noted the strong possibility that the prosecution witnesses had an opportunity to see the accused before the test identification parade. The prosecution has to rule out that possibility, which was not done. Further the prosecution didn't prove that the witnesses didn't see the dummies brought by the police for the identification. "If the witnesses had an opportunity to see the dummies before the test identification parade; then it was very easy to identity the accused", the court observed.

The court further observed that sixteen dummies were asked to take part in one single identification parade for four accused. Proper procedure stipulates six dummies per accused and no more than two accused in a single identification parade.

SARFAESI - Dues Of Secured Creditor Superior To Dues To State Govt Departments: Bombay High Court Full Bench

Case Title: Jalgaon Janta Sahakari Bank Ltd. & Anr. v. Joint Commissioner of Sales Tax & Anr. with 11 connected matters

Citation: 2022 LiveLaw (Bom) 316

The Bombay High Court held that the dues of a secured creditor would rank superior to the dues of a state government department on sale of secured asset.

A full bench consisting of Chief Justice Dipankar Datta, Justice M. S. Karnik and Justice N. J. Jamadar answered seven questions of law related to the SARFAESI Act, 2002 and Recovery of Debts and Bankruptcy Act, 1993 (RDDB Act).

The court further held that Chapter IV-A of SARFAESI Act is prospective and will apply from the date it was brought into force, i.e., 24th January 2020.

The court held that a secured creditor cannot invoke section 31B of the RDDB Act to claim priority if it is disabled from obtaining 'priority' under section 26E of the SARFAESI Act for want of CERSAI registration.

The court overruled para 21 of division bench decision in ASREC (India) Limited v. State of Maharashtra. ASREC and paragraph 35 of the division bench decision in SBI v. State of Maharashtra

The court held that the priority under RDDB Act and SARFAESI Act wouldn't apply if the immovable property of the defaulter is attached and proclamation issued in accordance with law before Chapter IV-A of the SARFAESI Act or section 31B of the RDDB Act were enforced.