13 Sant Shri Gajanan Maharaj Sansthan vs. United India Insurance Company Limited AIR 2021 Bombay 177 (Nag)(HC) Date of order: 29th January, 2021 Bench: A.S. Chandurkar J, N.B. Suryawanshi J
Insurance claim – Insurance agreement entered into at Khamgaon – Property situated at Pandharpur – Property destroyed – Part of cause of action at Khamgaon – Court at Khamgaon has jurisdiction [Insurance Act, 1938, S. 20]
FACTS
The plaintiff is a public trust registered under the provisions of the Bombay Public Trust Act, 1950 and the Societies Registration Act, 1860. It runs various educational institutions and charity hospitals at various places in the State of Maharashtra. The Trust on 4th August, 1977 purchased a non-agricultural property at Pandharpur for construction of the Sant Gajanan Maharaj Temple. With a view to safeguard the said property, it entered into an agreement of insurance with the defendant.
The structure was damaged on account of floods during 2001-2003. The trust pleaded that it was required to bear substantial costs and therefore there was a cause of action for recovering money from the defendants.
The insurance company raised an objection to the territorial jurisdiction of the Civil Court at Khamgaon. The property insured was situated at Pandharpur in Solapur District which was beyond the territorial jurisdiction of the Khamgaon Court. The claim for insurance was based on the damage caused to the insured property on account of the occurrence of the events also at Pandharpur. Merely because the insurance policy was entered into at Khamgaon the same could not be a reason to confer jurisdiction on the Court at Khamgaon.
HELD
The contract between the parties was entered into at Khamgaon and the amount of premium was paid by the plaintiff and received by the defendant at Khamgaon. This indicates that as the contract of insurance between the parties was executed at Khamgaon and the policy of insurance was also issued by the office of the defendant at Khamgaon, part of the cause of action arose at Khamgaon. On acceptance of premium by the defendant at Khamgaon, the policy of insurance commenced and though the property insured was located at Pandharpur, District Solapur, the Court at Khamgaon had jurisdiction to entertain the suit based on the insurance policies as the part of the cause of action had arisen at Khamgaon. The Trial Court has rightly held that the Court had territorial jurisdiction to entertain the suit.
14 Collector of Stamps vs. Tulsi Rice and Pulse Mills AIR 2021 Gujarat 72 Date of order: 22nd March, 2021 Bench: Vineet Kothari J, Biren Vaishnav J
Stamp Duty – Retiring partner – Assigning his interest in land to partnership firm – No transfer of assets – No stamp duty [Stamp Act, 1899, S. 48]
FACTS
One of the seven partners of a partnership firm, viz. Tulsi Rice and Pulse Mills, assigned his interest in the leasehold land leased for 99 years by GIDC to the partnership firm.
It is the case of the Stamp Duty Authorities that the assignment amounted to ‘transfer’ as defined in the Stamp Law and the Stamp Authority was justified in levying Stamp Duty vide order dated 16th April, 2008.
The case of the partnership firm was allowed by the Single Judge of the Gujarat High Court. The State of Gujarat filed an appeal against the judgment and order dated 18th October, 2016 allowing the writ petition filed by the respondent and holding that on the deed of assignment dated 5th August, 2000, stamp duty could not be demanded by the Stamp Authorities.
HELD
Even though the said document was titled as ‘Deed of Assignment’, it could not be an assignment or transfer of asset or property by one of the partners of the partnership firm as he had no exclusive right, title or interest in the said leasehold land which was on 99 years’ lease given by GIDC to the said firm. The Court held that the document in question executed in the present case is, in effect, a retirement of one of the partners of the firm who, upon his retirement from the said firm, released his right in the leasehold land in question in favour of the continuing six partners.
The case under this document would squarely fall within the ambit and scope of section 48 of the Indian Partnership Act, 1932 which provides for the mode of settlement of accounts between the partners. It appears that the Stamp Authority in the present case was misled by the title of the document ignoring the actual event or intention of the document by which seven continuing partners assigned the right, title or interest in favour of the six continuing partners, except the seventh and the outgoing retiring partner and the same was construed as a ‘transfer’ or ‘assignment’ by the outgoing partner in favour of the six continuing partners.
The appeal was dismissed.
15 Alka Khandu Avhad vs. Amar Syamprasad Mishra and Anr. AIR 2021 Supreme Court 1616 Date of order: 8th March, 2021 Bench: Dr. D.Y. Chandrachud J, M.R. Shah J
Dishonour of cheque – Proceedings against husband and wife – Wife neither signatory – No joint bank account – No joint liability u/s 138 of the Negotiable Instrument Act, 1881
FACTS
The respondent No. 1 (Amar Syamprasad Mishra) had filed a criminal complaint against the appellant and her husband for the dishonour of a cheque in the Court of the Metropolitan Magistrate, Mumbai. That the original complainant raised a professional bill for the legal work done by him to represent accused Nos. 1 and 2 in the legal proceedings. That, thereafter, original accused No. 1, husband of the appellant herein, handed over to the complainant a post-dated cheque of 15th March, 2016. The said cheque was presented for encashment and the same came to be returned unpaid with the endorsement ‘funds insufficient’. The Respondent No. 1 filed a complaint against both the accused (husband and wife) for the offence punishable u/s 138 of the Negotiable Instrument Act, 1881 (NI Act). The Metropolitan Magistrate directed to issue process against both the accused.
HELD
On a fair reading of section 138 of the NI Act, before a person can be prosecuted the following conditions are required to be satisfied:
i) that the cheque is drawn by a person on an account maintained by him with a banker;
ii) the cheque is for the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability; and
iii) the said cheque is returned by the bank unpaid, either because the amount of money standing to the credit of that account is insufficient to honour the cheque, or that it exceeds the amount arranged to be paid from that account.
Section 138 of the NI Act does not speak about joint liability. Even in case of a joint liability, in case of individual persons a person other than a person who has drawn the cheque on an account maintained by him cannot be prosecuted for the offence u/s 138. A person might have been jointly liable to pay the debt but such a person cannot be prosecuted unless the bank account is jointly maintained and she / he was a signatory to the cheque.
The appeal was allowed.
16 Prabhat General Agencies and Ors. vs. Jammu Kashmir Bank Ltd. and Ors. AIR 2021 Supreme Court 3469 Date of order: 9th July, 2021 Bench: A.M. Khanwilkar J, Sanjiv Khanna J
Sale of mortgaged property – Challenge on portion of land sold – Challenge on private sale by bank – No violation as sufficient opportunity given to the debtor – Only portion of land which is mortgaged can be sold [Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, S. 38, R.8, R.9]
FACTS
The appellants herein have questioned the auction process inter alia on the ground that the land mortgaged to the respondent bank was only 550 marlas, but possession of 784.5 marlas is being handed over to the respondent Nos. 3 and 4 (private parties) who have purchased the same in the sale by the bank. Further, the reserve price was fixed at Rs. 5.50 crores but the same was sold for Rs. 4.50 crores.
HELD
The appellants have not made the payments in spite of several opportunities. Further, with respect to the sale price the respondents resorted to private sale only when the auction proceedings did not fructify. The appellants were duly informed by the bank and were given sufficient opportunity to deposit the dues. However, the bank must ensure handing over only 550 marlas of land to the private parties from the larger property.
The appeal was dismissed.
17 Ankit Vijaykumar Khandelwal vs. Aarti Rajkumar Khandelwal AIR 2021 Bombay 151 Date of order: 28th April, 2021 Bench: Anuja Prabhudessai J
Arbitration – Partnership deed – Arbitration clause to resolve all disputes through arbitration – Post dissolution of firm – Arbitration clause would not cease to exist [Arbitration and Conciliation Act, 1996, S. 8; Indian Partnership Act, 1932, S. 43]
FACTS
The plaintiff (Aarti Rajkumar Khandelwal) filed a suit for dissolution of partnership firm and rendition of accounts against the respondent (Ankit Vijaykumar Khandelwal). The defendant filed a notice of motion to refer the dispute to arbitration in terms of clause 19 of the Partnership Deed.
HELD
The arbitration clause is widely worded and is not restricted or limited to disputes arising prior to dissolution of partnership firm. The partnership deed does not indicate that the parties intended to exclude post-dissolution disputes from arbitral reference. Consequently, there is no embargo to refer such disputes to arbitration. The enforcement of clause 18 and provisions under sections 46 and 48 of the Arbitration Act, 1996 come into operation post dissolution of partnership. In the absence of any embargo to refer a post-dissolution dispute to the arbitrator, it is not possible to accept that the arbitration clause would cease to exist with dissolution of the partnership firm. Thus, there is a valid arbitration agreement between the parties. The dispute raised in the suit has its genesis in the arbitration clause.
The revision application is allowed.
