No legality attached to fatwa, it’s not binding: Delhi HC - The Daily Guardian
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No legality attached to fatwa, it’s not binding: Delhi HC

Delhi High Court has made it abundantly clear that there cannot be any legality or validity attached to a fatwa issued by a maulvi especially in respect of ownership of immovable property. Such a declaration in form of fatwa would also not be binding on the third party.

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Delhi HC

In a latest, landmark, laudable and learned judgment titled Mohd Ashraf & Ors vs Abdul Wahid Siddique in C.R.P. 89/2016 delivered recently on December 14, 2020, the Delhi High Court has held that there cannot be any legality or validity attached to a fatwa, especially in respect of ownership of immovable property, and such a declaration would not be binding on a third party. A single Judge Bench of Justice Pratibha M Singh of Delhi High Court answered the issue in an appeal against a lower court order which had dismissed an application pertaining to ownership of property in Delhi’s Daryaganj area. Very rightly so!

To start with, Justice Pratibha M Singh sets the ball rolling by first and foremost pointing out in para 1 that, “This hearing has been done by video conferencing.”

CM APPL. 3822/2019

Para 2 then states that, “This application has been filed by the Petitioners seeking condonation of 25 days’ delay in re-filing the application for stay of the trial court proceedings till the disposal of the present petition. Delay is condoned. Application is disposed of.”

CM APPL. 54975/2018

It is then stated in para 3 that, “This application has been filed by the Petitioners for exemption from filing certified copies of the annexures and fair typed copies of dim annexures. Allowed, subject to all just exceptions. Application is disposed of.”

C.R.P. 89/2016 & CM APPLs. 54974/2018, 3821/2019

As we see, it is then stated in para 4 that, “Two short issues arise in this petition:

i. Firstly, whether the judgment of the Trial Court dismissing the application under Order XII Rule 6 CPC, after nearly one and a half years of arguments being heard and the order being reserved, is sustainable?

ii. Whether rights in an immovable property can be legally and validly derived on the basis of a fatwa issued by a maulvi and its binding nature on a third party?”

To put things in perspective, the Bench then envisages in para 5 that, “A suit for possession and recovery of damages was filed by three Plaintiffs i.e., Mr. Mohd Ashraf, Ms. Sadia Saad Yusuf and Mr. Javed Iqbal, who are the Petitioners in the present petition, against Mr. Abdul Wahid Siddique i.e., the Respondent/Defendant (hereinafter, “Defendant”). The case of the Plaintiff’s/Petitioners (hereinafter, “Plaintiff’s”) is that they are the owners of the suit property, being property bearing no 1525-27, Begum Manzil, Pataudi House, Darya Ganj, New Delhi-110002 (hereinafter, “suit property”) and they trace back their title to one Mst. Musharraf Begum through six registered sale deeds and a fatwa, which are as under:

i. Fatwa dated 6th November, 1971 issued by Mufti Musharraf Ahmed, Jamia, Fatehpuri, Delhi which, as per the Plaintiff’s, vested rights in Mr. Mohammad Salim Hussain.ii. Sale Deed dated 18th February, 1999 executed by Mr. Asmat Saleem, son of Late Mr. K.M. Salim Hussain in favour of Mr. Arshad Zarabi and Mr. Zahid Hussain.

iii. Sale Deed dated 26th June, 2002 executed by Mr. Arshad Zarabi and Mr. Zahid Hussain in favour of Mr. Mohd. Ashraf by which Mr. Mohd. Ashraf is stated to have acquired 75% of the suit property.

iv. Sale Deed dated 7th February, 2011 executed by Mr.Zahid Hussain in favour of Mr. Javed Iqbal by which Mr. Javed Iqbal is stated to have acquired 25% share in the suit property.

v. Sale Deed dated 7th February, 2011 executed by Mr. Mohd. Ashraf favour of Mr. Javed Iqbal by which Mr. Javed Iqbal is stated to have acquired 9% share in the suit property i.e a total of 34% share in the suit property.

vi. Sale Deed dated 7th February, 2011 executed by Mr. Mohd. Ashraf in favour of Ms. Sadia Saad Yusuf, by which Ms. Sadia Saad Yusuf is stated to have acquired 33% share in the suit property.

Thus, the foundation of all the Sale Deeds is the fatwa dated 6th November, 1971.”

While stating the reason for filing of the suit for possession, the Bench then notes in para 6 that, “Further, the case of the Plaintiffs is that the Defendant was a tenant of Mst. Musharraf Begum and has no right in the suit property. Purchase of the suit property was made by the Plaintiffs by registered sale deed in the year 2002 and 2011, pursuant to which notice demanding arrears of rent and vacation of premises was issued in May, 2011 to the Defendant. The Defendant challenged the ownership of the Plaintiffs on various grounds leading to the filing of the suit for possession.”

As it turned out, while stating the defendant’s case, the Bench then enunciates in para 7 that, “The Defendant’s defence is that the original owner had made a declaration, transferring ownership in favour of the Tenants. The Defendant’s case in the written statement is as follows:

i. That if the rent is Rs.375/- per month then the provisions of the Delhi Rent Control Act, 1958 would apply.

ii. The Plaintiff’s own case is that the Defendant is in possession since 32 years or more and no rent has been paid by the Defendant over this entire period. Thus, the Defendant is the owner of the suit property by means of adverse possession.

iii. The Plaintiff does not disclose the chain of documents by which the Plaintiff became the exclusive owner of the suit property and if the said chain is disclosed it would be clear that the ownership is claimed on the basis of forged and fabricated documents.

iv. No person has demanded the rent from the Defendant since 1971. There is no rent agreement or rent receipt in favour of the Plaintiff or even the original owner Mst. Mussharaf Begum.

v. Since Mst. Mussharaf Begum had no children and no close relatives during her lifetime she had declared that the tenants/occupants of the property would become owners upon her death.

vi. The intention of the Plaintiff is to grab the suit property on the basis of forged and fabricated documents.

vii. That an unlawful attempt was made to disconnect the electricity supply to the premises which was restored by an order of the ld. Civil Judge in Suit No. 387/2011.”

Be it noted, it is then stipulated in para 8 that, “The following issues were framed in the suit on 23rd October, 2013:

“1. Whether the plaintiff is entitled to decree for recovery of possession of suit property? OPP

2. Whether the plaintiff is entitled to decree for recovery of damages at the rate of Rs.25,000/- p.m. from the date of filing of the suit till the possession is handed over? OPP

3. Whether the plaintiff is entitled to decree of permanent injunction restraining the defendant from creating third party interest in the suit property? OPP

4. Whether the defendant has become the owner of the suit property by way of adverse possession? OPD

5. Relief.””

Going forward, the Bench then states in para 9 that, “After issues were framed, an application under Order XII Rule 6 CPC was filed by the Plaintiffs. Arguments on the application were heard on 27th September 2014 and the matter was fixed for orders/clarifications on 15th October, 2014. Thereafter, on several dates, the order was not passed. Further, without any direction from the Court, on two occasions the Defendant filed case law. Finally, the Plaintiffs moved an application under Order XX Rule 1 CPC seeking pronouncement of judgment and finally, the impugned order dismissing the Order XII Rule 6 CPC application was passed on 12th February, 2016.”

More significantly, the Bench then observes in para 21 that, “Heard counsels for the parties. The legality and validity of a fatwa issued by maulvis has been the subject matter of the judgment of the Supreme Court in Vishwa Lochan Madan v. UOI & Others., (2014) 7 SCC 707. The Supreme Court was concerned with the question as to whether a fatwa is binding and if so, in what manner. The Supreme Court was unequivocal in its pronouncement that a fatwa does not satisfy the requirements of a legally binding document and they do not trace their origin to validly made law. The observations of the Supreme Court are as under:

“13. As it is well settled, the adjudication by a legal authority sanctioned by law is enforceable and binding and meant to be obeyed unless upset by an authority provided by law itself. The power to adjudicate must flow from a validly made law. A person deriving benefit from the adjudication must have the right to enforce it and the person required to make provision in terms of adjudication has to comply that and on its failure consequences as provided in law are to ensue. These are the fundamentals of any legal judicial system. In our opinion, the decisions of Dar-ul-Qaza or the fatwa do not satisfy any of these requirements. Dar-ul-Qaza is neither created nor sanctioned by any law made by the competent legislature. Therefore, the opinion or the fatwa issued by Dar-ul-Qaza or for that matter anybody is not adjudication of dispute by an authority under a judicial system sanctioned by law. A Qazi or Mufti has no authority or powers to impose his opinion and enforce his fatwa on anyone by any coercive method. In fact, whatever may be the status of fatwa during Mogul or British Rule, it has no place in independent India under our constitutional scheme. It has no legal sanction and cannot be enforced by any legal process either by the Dar-ul-Qaza issuing that or the person concerned or for that matter anybody. The person or the body concerned may ignore it and it will not be necessary for anybody to challenge it before any court of law. It can simply be ignored. In case any person or body tries to impose it, their act would be illegal. Therefore, the grievance of the petitioner that Dar-ul-Qazas and Nizam-e-Qaza are running a parallel judicial system is misconceived.

14. As observed earlier, the fatwa has no legal status in our constitutional scheme. Notwithstanding that it is an admitted position that fatwas have been issued and are being issued. The All India Muslim Personal Law Board feels the “necessity of establishment of a network of judicial system throughout the country and Muslims should be made aware that they should get their disputes decided by the Qazis”. According to the All India Muslim Personal Law Board “this establishment may not have the police powers but shall have the book of Allah in hand and sunnat of the Rasool and all decisions should be according to the book and the sunnat. This will bring the Muslims to the Muslim courts. They will get justice”.

15. The object of establishment of such a court may be laudable but we have no doubt in our mind that it has no legal status. It is bereft of any legal pedigree and has no sanction in laws of the land. They are not part of the corpus juris of the State. A fatwa is an opinion, only an expert is expected to give. It is not a decree, nor binding on the court or the State or the individual. It is not sanctioned under our constitutional scheme. But this does not mean that existence of Dar-ul-Qaza or for that matter practice of issuing fatwas are themselves illegal. It is informal justice delivery system with an objective of bringing about amicable settlement between the parties. It is within the discretion of the persons concerned either to accept, ignore or reject it. However, as the fatwa gets strength from the religion; it causes serious psychological impact on the person intending not to abide by that. As projected by Respondent 10 “Godfearing Muslims obey the fatwas”. In the words of Respondent 10 “it is for the persons/parties who obtain fatwa to abide by it or not”. He, however, emphasises that “the persons who are God fearing and believe that they are answerable to the Almighty and have to face the consequences of their doings/deeds, such are the persons, who submit to the fatwa”. Imrana’s case is an eye-opener in this context. Though she became the victim of lust of her father-in-law, her marriage was declared unlawful and the innocent husband was restrained from keeping physical relationship with her. In this way a declaratory decree for dissolution of marriage and decree for perpetual injunction were passed. Though neither the wife nor the husband had approached for any opinion, an opinion was sought for and given at the instance of a journalist, a total stranger. In this way, the victim has been punished. A country governed by rule of law cannot fathom it.””

As a corollary, it is then held in para 22 that, “A perusal of the above judgment makes it abundantly clear that a fatwa cannot be imposed on a third party. A fatwa can be completely ignored and no one needs to challenge the same before any Court of law. Imposition of a fatwa would itself be illegal. The effect of this judgment on the alleged fatwa, which is the basis of the Plaintiffs claim to ownership, would therefore have to be adjudicated by the Trial Court.”

Without mincing any words, it is then observed in para 23 that, “Moreover, the manner in which ownership of immovable property can either be vested or transferred is governed by the Transfer of Property Act, 1882 and the provisions of the Registration Act, 1908 have to be complied with. While inheritance can undoubtedly be decided on the basis of personal law, in the present case, there has been no adjudication as to who has inherited the suit property which belongs to Mst. Mussharaf Begum and in what share. A Court of law would have to adjudicate this issue after considering the documents and evidence before it. A mere unilateral fatwa allegedly issued in favour of one Mohd. Salim Hussain, on the basis of which his son purportedly transferred the rights to the Plaintiffs, cannot be a valid and legal transfer in the eyes of law – that too, for decreeing a suit under Order XII Rule 6 CPC.”

It is worth noting that it is then disclosed in para 24 that, “Recognizing such rights based on a fatwa which has not been examined or sanctioned by a Court of law would be contrary to the Constitutional scheme. While a fatwa can be the basis of an amicable settlement of disputes between parties who submit to such a settlement process, binding the same on a third party would be contrary to law. As held in Masoor Ahmed v. State (NCT of Delhi) and Ors., 2008 (103) DRJ 137, as per Section 2 of the Muslim Personal Law (Shariat) Application Act, 1937, issues relating to intestate succession, special property of females, including personal property, marriage, dissolution of marriage, maintenance, dower, guardianship, gifts, trusts and trust properties, and wakfs would be governed by the Muslim Personal Law (Shariat). However, this Shariat law would have to be applied by the Court dealing with the dispute. The Court in seisin of a dispute would have to satisfy itself as to the legality and validity of the claim to ownership and only then pass an order in accordance with law. There cannot be any legality or validity attached to a fatwa, especially in respect of ownership in an immovable property. Such a declaration would also not be binding on any third party.”

Briefly stated, it is then stated in para 25 that, “A perusal of the entire chain of documents shows that the basis of the Plaintiffs’ claim of ownership to the suit property is the alleged fatwa dated 6 th November, 1971 issued by Mufti Musharraf Ahmed, Jamia, Fatehpuri, Delhi. The said fatwa is in the form of a conversation and is recorded below. The original fatwa is in Urdu but a Hindi translation has been placed on record.”

After going through it, the Bench then holds in para 26 that, “Firstly, the genuinity of the above document has not been established by the Plaintiffs. Whether, in fact, such a fatwa was issued or not is not clear. This fatwa forms the foundation of the other Sale Deeds as per which the Plaintiffs have acquired ownership rights. Unless and until, this foundational document is proved in accordance with law, the Plaintiffs cannot claim rights in the suit property. Moreover, even as per the above document, after the demise of Mst. Mussharaf Begum, she had left behind various other heirs including two nieces and an uncle, apart from her nephew – Mohd. Salim Hussain. The fatwa itself states that after the other heirs’ rights are given, then the nephew – Mohd. Salim Hussain would become the owner of the suit property. The question as to whether rights in the property have been given to the other heirs or not is not clear. Moreover, during oral submissions, ld. counsel for the Defendant has also submitted that the question as to whether Mohd. Salim Hussain is himself a nephew or not is in doubt. Thus, all the foundational facts in this case are yet to be established.”

To put it succinctly, it is then laid bare in para 27 that, “The Defendant has in the written statement denied the chain of documents and has alleged that the documents are forged and fabricated. The Defendant has also set up a defense that a declaration was made by Mst. Mussharaf Begum that after her demise the occupants of the various portions of the suit property would be the owners. Whether such a declaration was made or not is not clear. The defense of adverse possession has also been taken and would require to be adjudicated. The Defendant is in physical possession of the property and a decree would result in the Defendant being dispossessed. This court is of the opinion that the issues are such that they cannot be decided in an Order XII Rule 6 CPC application.”

As a consequence, the Bench then holds in para 28 that, “In view of the above, this Court holds that the present suit is not liable to be decreed under Order XII Rule 6 CPC. There is no admission by the Defendant in the written statement, documents or otherwise. In fact, there is a clear denial by the Defendant of the right of the Plaintiffs. Even if the Defendant is stated to have admitted Mst. Mussharaf Begum’s ownership of the property, the same would not lead to a decree being passed as much as the Plaintiffs would have to validly and legally trace back their title to Mst. Mussharaf Begum. The other defences of the Defendant, including adverse possession, would also have to be adjudicated.”

While lambasting the inordinate delay by the Trial Court, the Bench then holds in para 29 that, “This Court expresses enormous dissatisfaction over the manner in which passing of orders under Order XII Rule 6 CPC was delayed by the Trial Court after hearing arguments. However, on merits, the dismissal of the application under Order XII Rule 6 CPC would not be liable to be interfered with.”

To be sure, the Bench then directs in para 30 that, “The Plaintiffs are stated to have filed their evidence by way of affidavit. In view thereof, considering the fact that the suit is more than nine years old, it is directed that trial of the suit be concluded within six months and judgment be pronounced on or before 31st July, 2021.”

Moving on, the Bench then holds in para 31 that, “The petition is disposed of in the above terms. All pending applications are also disposed of.”

Finally, it is then held in the last para 32 that, “Copy of this order be sent to the ld. Registrar General of this Court and be also circulated to District & Sessions Judges of all Districts to ensure that the timelines as prescribed in Anil Rai (supra), Balaji Baliram Mupade (supra) and Deepti Khera (supra) are adhered to in respect of pronouncement of orders.”

To sum up, the Delhi High Court has made it abundantly clear that there cannot be any legality or validity attached to a fatwa issued by a maulvi especially in respect of ownership of immovable property. Such a declaration in form of fatwa would also not be binding on the third party. Justice Pratibha M Singh who has authored this notable judgment has gone through different aspects also and has not left an iota of doubt on this key issue. There can certainly be no denying it!

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Legally Speaking

TELANGANA HIGH COURT: PLACE OF RESIDENCE OF THE ARBITRATOR WOULD NOT BE THE SEAT OF ARBITRATION

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The High Court of Telangana in the case M/s S. Square Infra v. Garneni Chalapathi Rao observed and held that the place of residence of the arbitrator would not determine the seat of arbitration.

The Single bench comprising of Justice P. Sree Sudha observed and held that merely because an arbitrator residing in Hyderabad has been appointed, it does not mean that only the Courts at Hyderabad would have the jurisdiction to decide all the matters arising out of arbitration agreement.

Facts of the Case:

In the present case, after the dispute arouse between the parties, the respondent sent a letter to the petitioner for nomination an arbitrator who is residing in Hyderabad. To its said notice, petitioner replied and declined the appointment of the arbitrator for the reason that there was no dispute which required the appointment of an arbitrator.

A suit was filled by the respondent before the VII Additional District Judge Sangareddy, seeking for relief of permanent injunction. An application was filled by the petitioner under Section 8 of the Arbitration & Conciliation Act and the parties referred to the arbitration.

An application was filled by the respondent under section 9 of the Arbitration & Conciliation Act before the Principal District Judge, Sangareddy, Subsequently, an application was filled by the petitioner for transferring the application from the Court at Sangareddy to Court at Hyderabad.

Contentions made by Parties:

On the following grounds, the petitioner sought the transfer of application.

An arbitrator residing in Hyderabad was nominated to respondent. However, only the courts in Hyderabad would have the jurisdiction to decide all the matters arising out of the arbitration.

It was stated that the nomination of an arbitrator residing in Hyderabad amounted to designating Hyderabad as the Seat of Arbitration.

On the following grounds, the respondent countered the submissions of the petitioner:

An application was filled by the petitioner under Section 8 of the A&C Act before the Court at Sangareddy. However, in terms of Section 42 of the A&C Act, only the court at Sangareddy would have the jurisdiction to decide all the matters arising out of arbitration.

Court Analysis:

The Court held that the seat of arbitration would not be decide by the place of residence of the arbitrator.

The argument of the petitioner was rejected by the court that since the respondent had initially nominated an arbitrator residing in Hyderabad, the Hyderabad Court would have the jurisdiction.

The court stated that merely because a party has nominated an arbitrator who resides in Hyderabad, the same would not designate Hyderabad as the Seat of arbitration in absence of any designation of the seat under the arbitration agreement.

It was further stated by the court that the application filled by the petitioner filled under Section 8 application before the Court at Sangareddy consequent to which the parties were referred to arbitration. Therefore, the Court would have the jurisdiction, in terms of Section 42 of the A&C Act.

The Transfer petition was dismissed by the Court.

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Legally Speaking

DELHI HIGH COURT REMANDS IN THE MATTER BACK TO ASSESSING OFFICER AFTER SETTING ASIDE: JUST 3 DAYS’ TIME GRANTED TO RESPOND TO THE INCOME TAX NOTICE

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plea in Delhi High Court seeking repatriation of 56 pregnant nurses

The Delhi High Court in the case Shubham Thakral Vs ITO, the Delhi bench comprising of Justice Manmohan and Justice Manmeet Pritam Singh Arora observed and remanded the matter back to the assessing officer as just 3 days’ time was granted to respond to the income tax notice.

In the present case, the petitioner/assessee assailed the notice under Section 148A (b) of the Income Tax Act, 1961 and the order passed under Section 148A (d) for the Assessment Year 2018–19.

It was contended by the assessee that only three days’ time was granted to the assessee to respond, as against the mandatory statutory period of at least seven days. However, despite of the fact that the annexure attached to the notice gave the petitioner eight days to respond, the e-filing submission portal was closed earlier, in violation of Section 148A (b) of the Income Tax Act.

Furthermore, the petitioner relied on the decision of Delhi High Court, in the case of Shri Sai Co-operative Thrift and Credit Society Ltd versus ITO, the Delhi High Court in the case held that under Section 148A (b), a minimum time of seven days has to be granted to the assessee to file its reply to the show cause notice.

No objections were raised by the department/respondent to the matter being returned to the Assessing Officer for a fresh decision in accordance with the law. Accordingly, the court set aside the order passed under Section 148A (d) for the Assessment Year 2018-19. The Assessing officer was directed by the court to pass a fresh reasoned order in accordance with the law after considering the reply of the petitioner, which was directed to be filed within a week.

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ALLAHABAD HIGH COURT: ADVOCATES SHOULDN’T ADVISE CLIENTS TO REAGITATE MATTERS IF THERE IS NO ERROR APPARENT ON FACE OF RECORD

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The Allahabad High Court in the case Malhan and 17 Others Vs. State Of U.P. And Another observed and stated that an advocate should be given such a piece of advice when there is no error apparent on the face of the record nor was there any reason why the matter be re-agitated it was finally decided.

The bench comprising of Justice Dr. Kaushal Jayendra Thaker and Justice Vivek Varma observed while dealing with the civil review application wherein the bench observed the concerned advised his client to make a chance by filling the instant review application after a period of six year.

In the present case, a civil review petition was filled along with the application under section 5 of the Limitation Act, 1963., the application was filled for seeking condonation of delay in filling the application, the application was filled with a delay of six years i.e., 1900 days.

It was stated by the applicant that the review application could not be filled due to the blockage of public transportation on account of the COVID-19 guidelines.

Moreover, the court observed that the appeals were disposed of by the Apex Court in the year 2016 and only in 2020-2021, the pandemic struck India and furthermore, it cannot be said that due to the COVID guidelines the public transportation was blocked and however, the applicant could not come to Allahabad Court to file review.

Further, it was stated that the court asked the counsel for the review applicants to explain the delay in filling the review application, to which the council gave a strange reply that the counsel had advised the clients that they must take a chance by filling this review application after a period of six years.

Following this, the Court observed:

The court noted that an advocate should not give such an advice when there is no error apparent on the face of record nor was there any other reason that when the matter was finally decided, why the matter be re-agitated.

It was stated that the court has no reason to condone the delay of six years as the same was not explained as to why this review application is filed after such an inordinate delay.

The Court opined that the lapse in approaching the court within the time is understandable but a total inaction for long period of delay without any explanation whatsoever and that too in absence of showing any sincere attempt on the part of suiter, this would add to his negligence and the relevant factor going against him.

The court observed that careless and reckless is shown by the review applicant in approaching the court and due to the condemnation of delay in the application with a token cost of Rs.10,000/, the court dismissed the application.

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SUPREME COURT CRITICISES HIGH COURT: POSTING ANTICIPATORY BAIL PLEA AFTER TWO MONTHS CAN’T BE APPRECIATED

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The Supreme Court in the case Sanjay versus The State (NCT of Delhi) & ANR observed and stated that in the case where personal liberty is involved, the court is expected to pass orders at the earliest while taking into account the merits of the matter in one way or other. Further, the top court observed that posting of an application for anticipatory bail after a couple of months cannot be appreciated by the court.

The bench comprising of Justice C. T. Ravikumar and the Justice Sudhanshu Dhulia was hearing a June 2 SLP against the Delhi High Court in a petition filed under section 420, 467, 468, 471, 120-B, 34 of the Indian Penal Code, 1860 for seeking anticipatory bail in a 2022 FIR, a notice is issued. It was stated that the learned APP for the state is present and accepts the notice and seeks time to file status report. The High Court in the impugned order stated that Let the status report be filed by the state prior to the next date with an advance copy to the learned counsel for the petitioner. The matter is to be list on 31.08.2022.

It was noted by the bench comprising of Justice Ravikumar and the Justice Dhulia that in the captioned Special Leave Petition, the grievance of the petitioner is that the application for anticipatory bail moved by the petitioner, being Crl. M.A. No. 11480 of 2022 in Bail Application No. 1751 of 2022 without granting any interim protection, was posted to 31.08.2022. on 24.05.2022, the bail application was moved on.

However, the bench asserted that the bench is of the considered view that in a matter involving personal liberty, the Court is expected to to pass orders at the earliest while taking into account the merits of the matter in one way or other.

It was declared by the bench that at any rate posting an application for anticipatory bail after a couple of months cannot be appreciated by the court.

Further, the bench requested to the High Court to dispose off the application for anticipatory bail on its own merits and in accordance with law expeditiously, preferably within a period of three weeks after reopening of the Court. Adding to it, the bench stated that if the main application could not be disposed off, for any reason, within the stipulated time, relief sought for in the interlocutory and on and on its own merits, the application shall be considered.

While disposing of the SLP, the bench directed in its order that we grant interim protection from arrest to the petitioner herein, Till such time.

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Legally Speaking

IN THE CIRP OF BOMBAY RAYON FASHIONS LTD, NATIONAL COMPANY APPELLATE TRIBUNAL (NCLT) STAYS THE CONSTITUTION OF COC

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The National Company Appellate Tribunal (NCLT) in the case National Company Appellate Tribunal (NCLT), comprising of the bench of Justice M. Venugopal (Judicial Member) and the technical member, Shri Kanthi Narahari observed while adjudicating an appeal filed in Prashant Agarwal v Vikash Parasprampuria, has stayed in the Corporate Insolvency Resolution Process (CIRP) the constitution of the Committee of Creditors (COC) of Bombay Rayon Fashions Ltd. on 15.06.2022, the order was passed.

FACTS OF THE CASE:

The Operational Creditor or the Respondent, Vikash Parasprampuria is the sole Proprietor of Chiranjilal Yarn Traders and the respondent had supplied goods to a public listed company i.e., Bombay Rayon Fashions Limited (“Corporate Debtor”). The Operational Creditor raised nine invoices which was accepted by the Corporate Debtor without any demur and it was noted that the dispute, protest and part payments were also made towards certain invoices.

The reminder letter was sent by the Operational Creditor when the Corporate Debtor failed to release balance payments letters followed by a Demand Notice under Section 8 of the IBC dated 05.11.2020, which was delivered to the Corporate Debtor but no response was received from the Corporate Debtor.

MUMBAI NCLT PROCEEDINGS

An application under section 9 of the Insolvency & Bankruptcy Code, 2016 was filled by the Operational Creditor before the NCLT Mumbai Bench, seeking to initiation of CIRP against the Corporate Debtor, for defaulting in payment of Rs.1,60,87,838/-, wherein the principal amount was Rs. 97,87,220/- and remaining was interest. 01.11.2020, was the default date.

the Operational Creditor placed reliance so as to justify the compliance of Rs. 1 Crore threshold for initiating CIRP of the NCLT judgement in the case Pavan Enterprises v. Gammon India, it was held in the case that interest is payable to the Operational of Financial Creditor then the debt will include interest, in terms of any agreement. However, by including the interest component the threshold of Rs. 1 Crore was being me and no reply has been filled by the Corporate Debtor.

NCLT DECISION:

An order dated 07.06.2022, the NCLT Mumbai Bench observed that the Corporate Debtor had time and again by its letter, invoices and by making part payment acknowledged its liability.

It was stated by the bench that the application under Section 9 was complete in all respects as required by law and there was a default in the payment of debt amount by the Corporate Debtor. The bench accepted the application and the CIRP was initiated against the Corporate Debtor, Mr. Santanu T Ray, Interim Resolution Professional was appointed.

NCLT PROCEEDINGS:

An application was filled by the appellant, Prashant Agarwal before the NCLT against the order dated 07.06.2022.

The settlement was proposed by the Respondent by submitting that if it would be satisfied if the Appellant pays the principal amount along with the CIRP cost towards settlement and on the settlement proposal, the appellant is yet to seek instructions.

Accordingly, the bench in the CIRP of the Corporate Debtor stayed the constitution of CoC and the CIRP process would otherwise continue.

The Appellant to accept or reject the settlement proposal of the Respondent, the bench listed the matter on 07.07.2022.

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Legally Speaking

ESTOPPEL CANNOT OVERRIDE LAW: SUPREME COURT ACCEPTS UNSUCCESSFUL CANDIDATES’ CHALLENGES TO SELECTION PROCESS HELD AGAINST REGULATIONS

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The Supreme Court in the case Krishna Rai (Dead) Through LRs versus The Benarus Hindu University & Others observed and held that the principle of estoppel or acquiescence would not be applied in a selection process when the principle of estoppel is held contrary to the relevant rules.

The bench comprising of Justices Dinesh Maheshwari and Justice Vikram Nath observed and reiterated that that the procedure in the relevant service manual will prevail over the principle of estoppel and the principle of estoppel cannot override in the eye of law.

An appeal was considered by bench relating to the filling up of 14 posts in Class III (Junior Clerk) in the Benarus Hindu University by way of promotion. However, the notification inviting the applications from Class IV employees for promotion to Class III had not prescribed that interview will be conducted in addition to the typing test. It was also stated that the The service rules also did not mention interview for promotion to Class III. However, it finalized 14 candidates, the Board of Examiners conducted an interview as well.

Before the Allahabad High Court, some of the candidates challenged the selection process by some candidates, who did not get selected. The candidates alleging that through the manual did not prescribe an interview and the Board of Examiners conducted the interview by “changing the rules of the game”. The Selection process was set aside by the Single bench of the High Court by holding that a grave error was committed by preparing the merit list on the basis of the interview as well.

on appeal by the BHU, the division bench of the High Court set aside the judgement of the Single bench on the ground that the petitioners without protest after having participated in the interview, the petitioners are estopped from challenging the selection process after becoming unsuccessful. The appellants approached the Supreme Court challenging the order of division bench.

The Court noted that the Supreme Court held that the division bench fell in error by applying the principle of estoppel. the Manual duly approved by the Executive Council, According to para 6.4, all Class-IV employees who had put in five years’ service and passed matriculation examination or equivalent, those employees were eligible for the promotion to the post of Junior Clerk Grade.

the departmental written test of simple English, Hindi, and Arithmetic, but could not pass the typing test, was passed by the eligible candidates and still the candidates would be eligible for promotion.

It was observed by the Court that the Board on their own changed the criteria and by introducing an interview it made it purely merit based and the merit list was also prepared on the basis of marks awarded in the type test, the written test and interview.

The Top Court said that it is settled principle that the principle of estoppel cannot override the law and the manual duly approved by the Executive Council will prevail over any such principle of estoppel or acquiescence.

The Court remarked, while referring to the precents that If the law requires something to be done in a particular manner, there can be no estoppel against law, then it must be done in that particular manner, and if it is not done in that particular manner, then in the eye of the law, it would have no existence.

It was stated that the case laws relied upon by the Division bench had no application in the facts of the present case as none of those judgments laid down states that the principle of estoppel would be above in the eye of law.

Accordingly, The judgement of the Single bench was restored and the appeal was allowed, the judgement of the division bench was set aside.

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