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FIVE SIGNIFICANT JUDGMENTS OF 2015

 Limitation to be decided by the Court as preliminary issue under Section 9-A of CPC

While discussing the ambit of Section 9A of the Code of Civil Procedure (CPC) (as amended by Maharashtra Amendment Act) in deciding the issue of jurisdiction of the court, the Supreme Court, in the case of Foreshore Co-operative Housing Society Limited and Ors. vs Praveen D. Desai and Ors. ruled that Section 9A is mandatory in nature and was included with the intention to decide the issue relating to jurisdiction of the court as a preliminary issue notwithstanding the provision contained in Order XIV Rule 2 of the CPC. The term 'jurisdiction' under Section 9A therein is used in a wider sense and is not restricted to the conventional definition of being either pecuniary or territorial; limitation therefore must be decided by the Court as preliminary issue.

Departmental Inquiry Proceedings should be concluded within six months

The Supreme Court in the case of Prem Nath Bali vs. Registrar, High Court of Delhi ruled that every employer (whether State or private) must make a sincere endeavor to conclude departmental inquiry proceedings once initiated against the delinquent employee within a reasonable time and as far as possible within six months as an outer limit. Where it is not possible for the employer to conclude due to certain unavoidable causes arising in the proceedings within the time frame then efforts should be made to conclude within reasonably extended period depending upon the cause and the nature of inquiry but not more than a year.

Hindu Succession (Amendment) Act, 2005 to have prospective effect

In the case of Prakash and Ors. v Phulavati and Ors., the Supreme Court ruled that the Hindu Succession (Amendment) Act, 2005, (“Amendment Act”), that gave daughters an equal right in coparcener properties, will have a prospective effect. The Court observed that the rights under the Amendment Act are applicable to living daughters of living coparceners (those persons sharing the inheritance of an undivided property equally with others) as on the date when amendments came into force, i.e. September 9, 2005, irrespective of when such daughters were born.

Controversial Cyber Law provision, Section 66-A struck down by Supreme Court

In the case of Shreya Singhal and Ors. vs Union of India (UOI) and Ors., the Supreme Court struck down Section 66-A of the Information Technology Act, 2000 which authorised the police to arrest a person for posting allegedly "offensive" or ‘menacing’ content on internet/websites. This Section was found by the Court to be “open-ended, undefined and vague. The Court ruled that, “Sec 66-A arbitrarily, excessively and disproportionately invades the right of free speech and upsets the balance between such right and the reasonable restrictions that may be imposed on it”. Analysing the validity of Section 66A on the grounds of reasonable restrictions on free speech mentioned under Article 19 (2), the Court held that this provision had “no proximate relationship to public order” and failed to pass the muster of the “clear and present danger” test.

 

Limitation to file Written Statement in the District Consumer Forum

A Three Judges Bench of the Supreme Court in New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd., has reiterated the position laid down in the case of Dr. J.J. Merchant & Ors. v. Shrinath Chaturvedi, [(2002) 6 SCC 635] that the District Consumer Forum can grant an extended period of a maximum of 15 days to the opposite party for filing his version or reply. The Court ruled that the period of limitation cannot be extended beyond that.

 


FIVE SIGNIFICANT LEGAL AMENDMENTS OF 2015

Negotiable Instruments (Amendment) Act 2015

The Negotiable Instruments (Amendment) Act 2015 shall be deemed to have come into force from 15.06.2015. The amendment makes changes in provisions relating to the territorial jurisdiction for filing Cheque dishonour cases in the Negotiable Instruments Act. As per the amendment, the offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction,— (a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or (b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.

Payment Of Bonus (Amendment) Bill, 2015

The Payment of Bonus (Amendment) Act, 2015 shall be deemed to have come into force retrospectively i.e. from 01.04.2014. As per the amendment, the eligibility limit for payment of bonus to employees’ has been increased from Rs 10,000/- per month to Rs. 21,000/- per month. Furthermore, for the purposes of calculation of bonus, an employee’s salary will now be assumed to be Rs 7,000/- per month (earlier it was Rs. 3500/-) or the minimum wage notified for the employment under the Minimum Wages Act, 1948 (whichever is higher). The Amendment shall come into force from 1st April 2014.

 

The Arbitration and Conciliation (Amendment) Bill, 2015

The Arbitration and Conciliation (Amendment) Act, 2015 shall be deemed to have come into force from 23.10.2015. The Amendment Act inter alia introduced the following amendments in the Arbitration and Conciliation Act, 1996 :

  • The judicial authority, before which an action is brought in a matter which is a subject matter of an arbitration agreement, shall compulsorily refer the parties to arbitration unless it finds that no prima facie no valid arbitration agreement exists

  • The amendment attempts to fix limits on the fee payable to the arbitrator and empowers the High Court to frame such rules as may be necessary considering the rates specified in the 4th Schedule.

  • once the arbitral tribunal is constituted, the Court shall not entertain an application for interim measure unless it finds circumstances that may render the remedy provided under section 17 inefficacious.

  • A person having relationships as specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator.

  • Completion of arbitration proceedings within a period of 12 months

 

The Companies (Amendment) Act, 2015

The Companies (Amendment) Act, 2015 received the assent of the President on 25.05.2015. Different provisions of the Act have come into force on different dates. The Companies (Amendment) Act, 2015 inter alia amends following provisions of the Companies Act, 2013:

  • Removal of minimum requirement of paid up share capital of Rs. One Lakh for private limited companies and Rs. Five lakhs for public limited companies.

  • Repealing section 11 of the Companies Act 2013 thereby no requirement for completing certain formalities before commencement of business.

  • Reporting of fraud cases by the Auditor

  • Allowing the holding company to give loan or guarantee to its wholly owned subsidiary.

 

The Commercial Courts, Commercial Division & Commercial Appellate Division of High Courts Act, 2015

The Act enables the creation of commercial divisions in high courts, and commercial courts at the district level to deal with commercial disputes. The Act shall be deemed to have come into force on 23.10.2015. Commercial courts, equivalent to district courts, shall be set up in all states and union territories. Commercial divisions shall be set up in those high courts which exercise ordinary original civil jurisdiction, namely, the High Courts of Delhi, Bombay, Calcutta and Madras. Commercial divisions in high courts and commercial courts will deal with all matters relating to commercial disputes involving an amount of Rs one crore or more. The Appellate Division in all High Courts will hear the appeals from orders and judgments from the Commercial courts.

 

FIVE DEVELOPMENTS AWAITED IN 2016

The Goods and Services Tax (GST) Constitution Amendment Bill

The 122nd Constitution Amendment Bill was passed by the Lok Sabha in May 2015 but is yet to be passed by the Rajya Sabha. GST will subsume services tax, excise duties, stamp duties, entry tax and central sales tax.

The Insolvency and Bankruptcy Code, 2015

This Bill was introduced in the Lok Sabha on 21.12.2015 and aims to consolidate the existing laws relating to insolvency of companies, limited liability entities (including limited liability partnerships and other entities with limited liability), unlimited liability partnerships and individuals into a single legislation. The Bill will facilitate the application of consistent provisions to different stakeholders affected by business failure or inability to pay debt and enable swift and effective bankruptcy resolution. The Bill proposes to establish an Insolvency Regulator, Insolvency Adjudicating Authority, Insolvency Information Utilities and Professionals to improve resolution of conflicts between creditors and debtors, avoid destruction of value, distinguish malfeasance vis-a-vis business failure and clearly allocate losses in macroeconomic downturns.

Extension of Maternity Leave for Private Sector Employees

The Ministry of Labour is expected to amend the Maternity Benefit Act, 1961 to extend maternity leave for women from 12 weeks to 26 weeks whereby employers (government as well as private sector) are liable to pay full wages for the period of leave.

The Wage and Industrial Relations Code

Following the recommendations of the Second National Labour Commission, the Ministry of Labour intends to converge the current 44 central labour laws into four codes, namely code on industrial wages, code on industrial relations, code on social security and code on safety and security conditions of workers.

The Consumer Protection Bill, 2015

The Bill was introduced in the Lok Sabha in its Monsoon Session to widen the ambit of the Consumer Protection Act, 1986. The Bill provides for establishment of the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers. It also includes provisions for "product liability" if product/services causes personal injury, death or property damage. The bill also proposes "mediation" as an alternative dispute resolution mechanism for speedy disposal of court cases. The mediation will be under the aegis of consumer courts.

by Dhanesh Rale (Partner) and Sanjana Sinharoy (Associate)

Abhay Nevagi and Associates, Advocates, Pune

 

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