Manish Kumar v. Union Of India And Another. WRIT PETITION(C) NO.26 OF 2020 decided on 19/01/2021
Judgment Link:
https://main.sci.gov.in/supremecourt/2020/583/583_2020_33_1501_25559_Judgement_19-Jan-2021.pdf

Factual antecedents. The challenge is to Sections 3, 4 and 10 of the Insolvency and Bankruptcy Code (Amendment) Act 2020. Section 3 of the impugned amendment amends Section 7(1) of the Insolvency and Bankruptcy Code, 2016. Section 4 of the impugned amendment incorporates an additional Explanation in Section 11 of the Code. Section 10 of the impugned amendment inserts Section 32A in the Code.

HELD: The impugned amendments are upheld. However, this is subject to the following directions, issued under Article 142 of the Constitution of India:
i. If any of the petitioners move applications in respect of the same default, as alleged in their applications, within a period of two months from today, also compliant with either the first or the second proviso under Section 7(1), as the case may be, then, they will be exempted from the requirement of payment of court fees, in the manner, which we have detailed in the paragraph just herein before.
ii. Secondly, we direct that if applications are moved under Section 7 by the petitioners, within a period of two months from today, in compliance with either of the provisos, as the case may be, and the application would be barred under Article 137 of the Limitation Act, on the default alleged in the applications, which were already filed, if the petitioner file applications under Section 5 of the Limitation Act, 1963, the period of time spent before the Adjudicating Authority, the Adjudicating Authority shall allow the applications and the period of delay shall be condoned in regard to the period, during which, the earlier applications filed by them, which is the subject matter of the third proviso, was pending before the Adjudicating Authority.
iii. We make it clear that the time limit of two months is fixed only for conferring the benefits of exemption from court fees and for condonation of the delay caused by the applications pending before the Adjudicating Authority. In other words, it is always open to the petitioners to file applications, even after the period of two months and seek them benefit of condonation of delay under Section 5 of the Limitation Act, in regard to the period, during which, the applications were pending before the Adjudicating Authority, which were filed under the unamended Section 7, as also thereafter.

Compiled by Sumana Chamarty, Advocate, Daksha Legal.

Pampapathi vs The State of Karnataka. Criminal Appeal 100346/2016 and connected appeals decided on 22 December 2020. Justice B.A. Patil and Justice M.I. Arun.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/358937/1/CRLA100127-17-22-12-2020.pdf

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Shriram Properties Pvt Ltd vs State of Karnataka and others. Writ Petition 47747/2017 and connected matters decided on 19 January 2021. Justice Aravind Kumar and Justice B.A. Patil.

HELD: We uphold the validity of the Constitutional validity of the Karnataka Land Grabbing Prohibition Act, 2011. The evidence admitted in civil court can be admitted in the Special Court.

Location of Land Grabbing Courts in capital city is onerous. Transferring of cases taking jurisdiction of the Civil Court without any reasons is not correct. Hence we direct the Special Court to re examine the transfer of cases.

Special Court to take note of the observations made in this Judgment and deal with cases individually. Petitioners may apply to the Special Court for dismissal or dropping of the proceedings. Till the adjudication is done, demolition of the building or forcible taking possession is not to be done.

Mandamus issued to constitute additional courts preferably in all districts.

Observations of the Court will be updated soon.

S. Basavaraj, Advocate, Daksha Legal.

The latest Standard Operating Procedure issued by the Karnataka High Court on 18 January 2021 withdraws the relaxation made to the dress code of the Advocates. The Advocates are expected to follow normal dress code with effect from 1st February 2021.

Read the SOP Notification PDF

M.B.Adinarayana vs The State of Karnataka and others. Writ Petition 2073/2020 and connected matter decided on 4 January 2020.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/312451/1/WP2073-19-04-01-2020.pdf

Relevant paragraphs: 1 and 5. The question which arises for consideration in both the petitions is whether the Karnataka Parliamentary Secretaries Salaries, Allowances and Miscellaneous Provisions Act,  1963 (for short ‘the said Act of 1963) as amended by the Karnataka Parliamentary Secretaries Allowances (Amendment)  Act,  1999 is constitutionally valid? The said Act of 1963 empowers the Hon’ble Chief Minister to appoint Parliamentary Secretaries from amongst the members of the Karnataka Legislative Assembly and the Karnataka Legislative Council.  The basic challenge is on the ground that the State Legislature lacked the legislative competence to make the said Act.   The other challenge is on the ground that for all intents   and purposes, the Parliamentary Secretaries are on par with the Ministers and the said Act enables the Hon’ble Chief Minister to cross the ceiling on number of Ministers prescribed under Article 164 (1-A) of the Constitution of India. Therefore, the said Act infringes the aforesaid Constitutional provision. These  are broadly the two main grounds on which challenge has been incorporated.

11. It is true that there is no specific provision under the said Act, which specifically lays down that the Parliamentary Secretaries shall be entitled to the status of Hon’ble Ministers or Ministers of State or Deputy Ministers to whom, the Hon’ble Governor administers the oath of office on the advice of the Hon’ble Chief Minister. But, the said Rules show that there is hardly any difference between the role of a Deputy Minister or a Minister of State without independent charge and a  Parliamentary Secretary. The most of the duties and functions of Parliamentary Secretaries are akin to the Legislative duties of a Deputy Minister or a Minister of State without independent charge.  The drastic amendments made by the amendment Act  of 1999 makes the intention of the Legislature  very  clear.  Firstly, as stated earlier, by the amended Act, a provision was made for the first time that the  Parliamentary Secretaries shall  be entitled to the salaries and allowances equivalent to the salaries and allowances admissible to the Hon’ble Ministers.

Judgment of the Supreme Court in Bimolangshu Roy (dead) through Lrs –vs- State of Assam and another (2018) 14 SCC 408) relied on.

19. The Apex Court has held that the State Legislature has no competence to enact a law providing for appointment of Parliamentary Secretaries. Moreover, the said  Act does not confer any privileges on the members of both Houses as legislators qua Legislature.

24. There is another aspect of the case based on the provisions of Article-164 (1-A) of the Constitution. We have already held in paragraph-11 above that there is hardly any difference between the role of a Deputy Minister and a Parliamentary Secretary. On a conjoint reading of the various provisions of the said Act and the said Rules, we have already come to the above conclusion, which shows that for all intents and purposes, the office of the Parliamentary Secretaries has trappings of the post of Hon’ble Ministers of State without independent charge or at least Hon’ble Deputy Ministers. The said Act will work as a devise available to the Hon’ble Chief Minister to appoint the members of the  Legislative  Assembly and Legislative Council of his choice as parliamentary Secretaries, who cannot be made as Ministers  due  to constraints of Article 164(1-A). This will completely defeat and nullify the upper ceiling limit imposed by Article 164(1-A) of the Constitution of India on number of Ministers. Hence, even otherwise, the said enactment is ultra vires the constitutional mandate in Article 164(1-A).

We hold that the State Legislature of Karnataka had no legislative competence to enact the Karnataka Parliamentary Secretaries Salaries, Allowances and Miscellaneous Provisions Act, 1963 as amended by Act No. 7 of 1999.

Compiled by S. Basavaraj, Advocate, Daksha Legal.

The High Court of Karnataka, Chief Justice Abhay Shreeniwas Oka and Justice Sachin Shankar Magadum, ordered notice in a Public Interest Litigation filed by Samaj Parivarthan Samudaya challenging the appointment of Sriyuts – M.P. Renukacharya , Mahadev Prakash, Mohan A. Limbikai , Sunil G.S., Shankargowda Patil, M.B. Marmkal and Laksminarayana as advisors to Chief Minister and conferring Minister status to them. The writ petition questioned the appointments as violative of Article 164(1A) of the Constitution of India. Read the petition.

Writ Petition 787/2021 (PIL) PDF below

Raman Tech. & Process Engg. Co. v. Solanki Traders, (2008) 2 SCC 302

Judgment Link: https://main.sci.gov.in/jonew/judis/31173.pdf

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HELD: 4. The object of supplemental proceedings (applications for arrest or attachment before judgment, grant of temporary injunctions and appointment of receivers) is to prevent the ends of justice being defeated. The object of Order 38 Rule 5 CPC in particular, is to prevent any defendant from defeating the realisation of the decree that may ultimately be passed in favour of the plaintiff, either by attempting to dispose of, or remove from the jurisdiction of the court, his movables. The scheme of Order 38 and the use of the words “to obstruct or delay the execution of any decree that may be passed against him” in Rule 5 make it clear that before exercising the power under the said Rule, the court should be satisfied that there is a reasonable chance of a decree being passed in the suit against the defendant. This would mean that the court should be satisfied that the plaintiff has a prima facie case. If the averments in the plaint and the documents produced in support of it, do not satisfy the court about the existence of a prima facie case, the court will not go to the next stage of examining whether the interest of the plaintiff should be protected by exercising power under Order 38 Rule 5 CPC. It is well settled that merely having a just or valid claim or a prima facie case, will not entitle the plaintiff to an order of attachment before judgment, unless he also establishes that the defendant is attempting to remove or dispose of his assets with the intention of defeating the decree that may be passed. Equally well settled is the position that even where the defendant is removing or disposing his assets, an attachment before judgment will not be issued, if the plaintiff is not able to satisfy that he has a prima facie case.

5. The power under Order 38 Rule 5 CPC is a drastic and extraordinary power. Such power should not be exercised mechanically or merely for the asking. It should be used sparingly and strictly in accordance with the Rule. The purpose of Order 38 Rule 5 is not to convert an unsecured debt into a secured debt. Any attempt by a plaintiff to utilise the provisions of Order 38 Rule 5 as a leverage for coercing the defendant to settle the suit claim should be discouraged. Instances are not wanting where bloated and doubtful claims are realised by unscrupulous plaintiffs by obtaining orders of attachment before judgment and forcing the defendants for out-of-court settlements under threat of attachment.

6. A defendant is not debarred from dealing with his property merely because a suit is filed or about to be filed against him. Shifting of business from one premises to another premises or removal of machinery to another premises by itself is not a ground for granting attachment before judgment. A plaintiff should show, prima facie, that his claim is bona fide and valid and also satisfy the court that the defendant is about to remove or dispose of the whole or part of his property, with the intention of obstructing or delaying the execution of any decree that may be passed against him, before power is exercised under Order 38 Rule 5 CPC. Courts should also keep in view the principles relating to grant of attachment before judgment.

Compiled by S. Basavaraj, Advocate, Daksha Legal.

Parmanand Patel v. Sudha A. Chowgule, (2009) 11 SCC 127.

Judgment Link: https://main.sci.gov.in/jonew/judis/34044.pdf

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HELD: 23. A Receiver, having regard to the provisions contained in Order 40 Rule 1 of the Code of Civil Procedure, is appointed only when it is found to be just and convenient to do so. Appointment of a Receiver pending suit is a matter which is within the discretionary jurisdiction of the Court. Ordinarily the Court would not appoint a Receiver save and except on a prima facie finding that the plaintiff has an excellent chance of success in the suit.

24. It is also for the plaintiff not only to show a case of adverse and conflict claims of property but also emergency, danger or loss demanding immediate action. Element of danger is an important consideration. Ordinarily, a Receiver would not be appointed unless a case has been made out which may deprive the defendant of a de facto possession. For the said purpose, conduct of the parties would also be relevant.

Compiled by S. Basavaraj, Advocate, Daksha Legal.

Mohd. Laiquiddin v. Kamala Devi Misra, (2010) 2 SCC 407.

Judgment Link: https://main.sci.gov.in/jonew/judis/35888.pdf

Relevant paragraphs: 22. The sole issue raised by the respondents in this appeal, who are the appellants in Civil Appeals Nos. 4411-12 of 2002, is whether the finding of the courts below that the partnership firm stood dissolved on account of death of one of the partners was correct in the light of the express provisions of the Partnership Act, namely, Section 42(c) of the same.

23. Before we proceed to examine the correctness of this concurrent finding arrived at by the courts below, it is necessary to examine the relevant provisions of the Partnership Act, 1932 and the relevant clauses of the partnership deed entered between the original plaintiff and the original defendant. “Partnership” is defined under Section 4 of the Act which reads as under:

“4. Definition of ‘partnership’, ‘partner’, ‘firm’ and ‘firm name’.—‘Partnership’ is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”

24. Section 42 of the Act reads as under:

“42. Dissolution on the happening of certain contingencies.—Subject to contract between the partners a firm is dissolved—

(a) if constituted for a fixed term, by the expiry of the term;

(b) if constituted to carry out one or more adventures or undertakings, by the completion thereof;

(c) by the death of a partner; and

(d) by the adjudication of a partner as an insolvent.”

25. Dissolution of a partnership firm on account of death of one of the partners is subject to the contract entered into by the parties. In this context, it is pertinent to refer to the terms of the deed of partnership. Clause 22 of the partnership deed reads as follows:

“The partnership shall be in force for a period of 42 years certain from this date and the death of any partner shall not have the effect of dissolving the firm.”

This clause clearly states that death of any partner shall not have the effect of dissolving the firm. However, in the facts and circumstances of the case, we are not in a position to give absolute effect to this clause of the deed of partnership.

26. The learned counsel for the respondents contended that since the parties agreed that in spite of the death of any of the partners, the firm shall continue for 42 years irrespective of the death of the original plaintiff (since deceased). They further argued that it clearly contemplates that the legal representative of the partner, who dies, would be under a duty to enter into a fresh deed of partnership. The legal representatives were precluded from claiming benefits if they deny entering into a fresh partnership agreement.

27. In order to arrive at the conclusion that the partnership firm stood dissolved on account of death of one of the partners, the High Court had rightly placed reliance on S. Parvathammal v. CIT2 wherein the High Court held that in a firm consisting of two partners on account of death of one of the partners, the firm automatically is dissolved and observed as follows: (ITR pp. 161-62)

“… a partnership normally dissolves on the death of a partner unless there was an agreement to the contrary. There was no such agreement in the original partnership deed. Even assuming that there was such an agreement, in a partnership consisting of two partners, on the death of one of them, the partnership automatically comes to an end and there is no partnership which survives and into which a third party can be introduced. Hence, on the death of S, the original partnership was dissolved. The subsequent taking in of the assessee as a partner was only as a result of the entering into of a new partnership between R and the assessee. Partnership was not a matter of heritable status but purely one of contract.”

In the light of the aforementioned case, it is clear that when there are only two partners constituting the partnership firm, on the death of one of them, the firm is deemed to be dissolved despite the existence of a clause which says otherwise. A partnership is a contract between the partners. There cannot be any contract unilaterally without the acceptance by the other partner.

Compiled by S. Basavaraj, Advocate, Daksha Legal.

Dr. Jayasheela Venu and another vs A.J.F. D’Souza and others. Regular First Appeal 1225/2011 decided on 15 January 2021.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/358438/1/RFA1225-11-15-01-2021.pdf

Locus Classicus = An authoritative passage from a standard work that is often quoted as an illustration.

Appeal allowed.

Compiled by S. Basavaraj, Advocate, Daksha Legal.