ALLIED LAWS

6. Abetment – Denial of loan on loan – Prudent banking – Not abetment to
suicide [Indian Penal Code, 1850, S. 306, S. 107; Code of Criminal Procedure,
1973, S. 482]

Santosh Kumar
vs. State of Maharashtra & Anr. Cr.A.
(APL) No. 63 of 2016 (Bom)(HC) (Nag. Bench) Date of order: 9^th
September, 2020 Bench: V.M. Deshpande J. and Anil S. Kilor J.

FACTS

The applicant was Branch Manager, Bank of Maharashtra, Morshi Branch,
District Amravati. The complainant had a loan account with the Bank. So did his
father Wamanrao. Sudhir Gawande, the brother of the complainant, committed
suicide on 12^th June, 2015 by hanging himself in his house. The
complainant approached Morshi Police Station and lodged a report against the
present applicant. As per the FIR, the bank manager had said no to Sudhir
Gawande for a fresh restructuring of a loan, which led to his suicide.

After
registration of the offence, since the applicant apprehended arrest, he moved
an application, vide Misc. Criminal Bail Application No. 529 of 2015,
for grant of pre-arrest bail. The Sessions Judge at Amravati on 26^th
June, 2015 granted him pre-arrest bail in the event of arrest. Thereafter, the
applicant filed the present proceedings for quashing of the FIR.

HELD

The Court
relied on the decision of the Supreme Court in the case of Dilip s/o
Ramrao Shirasrao and Ors. vs. State of Maharashtra and Anr. 2016 ALL MR (Cri)
4328 wherein it was held that it is incumbent upon the prosecution to
show at least prima facie that the accused had an intention to aid,
instigate or abet the deceased to commit suicide. In the absence of such
material, the accused cannot be compelled to face trial for the offence
punishable u/s 306 of the IPC.

The loan account of the complainant was showing outstandings to the tune
of Rs. 2,32,689. The deceased was not having any loan outstanding in his name.
If a previous loan amount is outstanding and if the applicant, who is the
Branch Manager of the said Bank, refuses to grant any further loan, it can be
said to be an act of a vigilant and prudent banker, and it cannot be said that
by such act he instigated and / or abetted the person to commit suicide. The
criminal application is allowed.

7. Arbitration – Place of Arbitration – Only the High Court named in the
Arbitration agreement has territorial jurisdiction – Only such Court can
appoint an Arbitrator [Arbitration & Conciliation Act, 1996, S. 11(6)]

SJ Biz Solution
Pvt. Ltd. vs. M/s Sany Heavy Industry India Pvt. Ltd. ARBP No. 56 of
2018 (Orissa)(HC) Date of order:
1^st October, 2020 Bench: Mohammad Rafiq CJ

FACTS

An issue arose
between the manufacturer of heavy construction equipment and its dealer in
Orissa. The petitioner filed an application u/s 11(6) of the Arbitration and
Conciliation Act, 1996 (the Act) seeking appointment of an independent
Arbitrator to arbitrate the disputes between the petitioner and the respondent.

The petitioner contended that although as per clause 15 of the
dealership agreement it was agreed that the place of arbitration shall be Pune,
the jurisdiction of this Court to entertain the present application filed u/s
11(6) of the Act is not excluded as the cause of action, wholly or at least in
part, has arisen in the territory of Orissa. The petitioner further contended
that in view of the definition of the Court given in section 2(1)(e) of the
Act, the Courts at Bhubaneswar would have jurisdiction to entertain the
petition u/s 9 and for the same reason the Court would also have the
territorial jurisdiction, especially in view of section 11(11).

HELD

It was held
that in an identical issue before the Supreme Court in the case of Swastik
Gases Private Limited vs. Indian Oil Corporation Limited (2013) 9 SCC 32,
it was held that the territorial jurisdiction to appoint an Arbitrator lies as
per the jurisdiction agreed upon in the agreement.

The Court
considered the decision of the Supreme Court in the case of Duro
Felguera, S.A. vs. Gangavaram Port Limited (2017) 9 SCC 729 which held
that all that the Court at the stage of section 11 of the Act needs to see is
whether an Arbitration agreement exists, nothing more and nothing less. It was
held that legislative policy and purpose is essentially to minimise the Court’s
intervention at the stage of appointing the Arbitrator. Therefore, all other
questions, including the question of territorial jurisdiction, are not open for
consideration.

After analysing
various decisions, the Court held that the argument of the petitioner that
while considering the petition u/s 11(6) of the Act this Court ought to only
examine the existence of the Arbitration agreement and should leave all other
questions, including that of territorial jurisdiction, open for consideration
by the Arbitrator in the scope of section 16 of the Act, cannot be
countenanced.

It held that the Court did not have the territorial jurisdiction to
entertain the present petition filed u/s 11(6) and accordingly dismissed the
petition as not maintainable.

8. Civil dispute – Legal representative – Maintainability of
applications – Inheritance of shares – NCLT has no jurisdiction [Companies Act,
2013, S. 241, S. 242, S. 244]

Aruna Oswal vs.
Pankaj Oswal & Ors. CA Nos. 9340,
9399 and 9401 of 2019 (SC) Date of order:
6^th July, 2020 Bench: Arun Mishra J. and S. Abdul Nazeer J.

FACTS

These appeals
have been preferred against the judgment of the NCLAT concerning
maintainability of applications filed under sections 241 and 242 of the
Companies Act, 2013.

The case is the
outcome of a family tussle. The Late Abhey Kumar Oswal, during his lifetime,
held a large amount of shares in M/s Oswal Agro Mills Ltd., a listed company.
He passed away in Russia on 29^th March, 2016. Prior to that, he
filed a nomination as per section 72 in favour of Mrs. Aruna Oswal, his wife.
Two witnesses duly attested the nomination in the prescribed manner. As per the
appellant, it was explicitly provided therein that this nomination shall
supersede any prior nomination made by him.

Mr. Pankaj
Oswal (son of the deceased) and Respondent No. 1, filed a partition suit,
claiming entitlement to one-fourth of the estate of Abhey Oswal. He also filed a company petition
alleging oppression and mismanagement in the affairs of the Respondent No. 2
company.

HELD

The Supreme
Court, relying on the case of World Wide Agencies (1990) 1 SCC 536
held that a legal representative has a right to maintain an application for
oppression and mismanagement without being registered as a member against the
securities of a company. Further, the Court, relying on the case of Sangramsinh
P. Gaekwad (2005) 11 SCC 314 held that a dispute as to inheritance of
shares is a civil dispute and does not attract the Company Court’s jurisdiction
and held that the matter was not maintainable before the NCLT.

9. Dishonour of Cheque – Post-retirement – Director – Not responsible
for daily affairs – Proceedings including the summons quashed [Negotiable
Instruments Act, 1881, S. 138, S. 141; Code of Criminal Procedure, 1973, S.
482]

Alibaba
Nabibasha vs. Small Farmers Agri-Business Consortium & Ors. CRL. M.C.
1602/2020, CRL. M.A. 9935/2020 (Del)(HC) Date of order:
23^rd September, 2020 Bench: V. Kameswar Rao J.

FACTS

Proceedings
have been initiated by the Respondent No.1 against the petitioner before the
Metropolitan Magistrate, Saket Courts, u/s 138 of the Negotiable Instruments
Act, 1881 (N.I. Act) purportedly on the ground that the petitioner was a
director of the Respondent No. 2. According to the petitioner, the cheques in
question, all dated 31^st December, 2018 were issued by the
Respondent No. 2 for a total amount of Rs. 45 lakhs and the same were
dishonoured due to insufficient funds vide memo dated 11^th
January, 2019.

The petitioner
ceased to be a director of the Respondent No. 2 w.e.f. 27^th October,
2010, at least eight years prior to the issuance of the cheques in question.
The petitioner was a non-executive director of the Respondent No. 2 for a brief
period between 7^th October, 2009 and 27^th October, 2010.
The resignation of the petitioner was also notified to the Registrar of
Companies / Ministry of Company Affairs by the Respondent No. 2 by filing Form
32 dated 4^th January, 2011 which is a public document.

However, the
Court, in a mechanical manner, considering only the Company Master Data of the
period when the Petitioner was director, has entertained the complaint u/s 138
of the N.I. Act and without applying any judicial mind and without recording
any satisfactory reasons as to whether the offence is made out against the
petitioner, has issued the summons.

The petitioner
filed a petition u/s 482 of the Code of Criminal Procedure, 1973 (CrPC) to
quash the proceedings initiated by the Respondent No. 1.

HELD

The case of the
Respondent No. 1 is primarily that the petitioner was involved in the
discussion before an agreement was executed between the Respondent No. 1 and
the Respondent No. 2. However, Form 32, i.e. the petitioner ceasing to be a
director, is not disputed. This factum surely suggests that the
petitioner having resigned on 27^th October, 2010 from the Respondent
No. 2 was not the director when the agreement dated 3^rd March, 2011
was executed. Even the cheques dated 31^st December, 2018 were issued
much after the petitioner’s resignation as director of the Respondent No. 2.

It is settled
law that mere repetition of the phraseology of section 141 of the Act that the
accused is in charge and responsible for the conduct of the day-to-day affairs
of the company may not be sufficient and facts stating as to how the accused
was responsible must be averred.

Further, is is a settled position of law that the High Court while
entertaining a petition of this nature shall not consider the defence of the
accused or conduct a roving inquiry in respect of the merits of the
accusation/s but if the documents filed by the accused / petitioner are beyond
suspicion or doubt and upon consideration demolish the very foundation of the
accusation/s levelled against the accused, then in such a matter it is incumbent
for the Court to look into the said document/s which are germane even at the
initial stage and grant relief to the person concerned u/s 482 CrPC in order to
prevent injustice or abuse of the process of law. The petition was allowed and
the proceedings including the summons were quashed.

10. Maintenance – Death of Husband – Wife has right to claim maintenance
– From estate inherited by father-in-law [Hindu Adoptions and Maintenance Act,
1956, S. 19, S. 22]

Sardool Singh
Sucha Singh Matharoo vs. Harneet Kaur widow of Bhupinder Singh Matharoo &
Anr. WP (ST.) No.
4054 of 2020 (Bom)(HC) Date of order:
7^th September, 2020 Bench: Nitin W. Sambre J.

FACTS

The petitioner
had two sons. One of them, Late Bhupinder, was married to Respondent No. 1 on
12^th December, 2004 and died on 21^st May, 2015. The
mother of Respondent No. 1 died in the year 2016, whereas her father died in
February, 2017. It is her case that she has no independent source of income and
she and her son are completely dependent on the earnings of the petitioner.

Respondent No.
1 preferred the proceedings u/s 19 and 22 of the Hindu Adoption and Maintenance
Act, 1956 (Act) before the Family Court with a prayer for grant of maintenance
of Rs. 1,50,000 per month to her and Rs. 50,000 to her son. The claim was
resisted by the present petitioner. Vide impugned order dated 28^th
January, 2020 the Family Court has allowed the prayer partly and granted
maintenance of Rs. 40,000 per month towards the widow and Rs. 30,000 per month
to her son.

It is the case
of the petitioner that he is already incurring expenses of about Rs. 95,000 per
month on the respondents. Further, he has to maintain himself (he is a cancer
patient), his aged wife, his other son and his family, and also to repay bank
loans. Therefore, he filed a Writ Petition to quash and set aside the order.

HELD

A plain reading of section 19 of the Act contemplates that the
respondents have every right to claim maintenance after the death of the
husband from the estate inherited by her father-in-law, i.e., the present
petitioner. As per section 19(1) the respondent has to demonstrate that she is
unable to maintain herself. It is in this eventuality that she can claim
maintenance from the estate of her husband, but still the fact remains that the
said burden can be discharged by Respondent No. 1 at an appropriate stage. The
object with which the provision is made in the statute book for grant of
interim maintenance cannot be ignored.

Further, the income of the petitioner for A.Y.
2018-2019 as reflected in the income-tax returns was Rs. 74,87,007. Therefore,
the maintenance awarded to the respondent appears to be justified. The petition
is dismissed.