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  • Notice Under Section 132 Mandatory Before Treating Trademark Application as β€˜Abandoned’

    Notice Under Section 132 Mandatory Before Treating Trademark Application as β€˜Abandoned’

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 23.09.2026

    Notice Under Section 132 Mandatory Before Treating Trademark Application as β€˜Abandoned’

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Delhi High Court has held that a trademark application cannot be treated as β€œabandoned” under Section 132 of the Trade Marks Act, 1999 without first issuing a notice to the applicant requiring it to remedy the alleged default within a specified period.

    Justice Jyoti Singh allowed an appeal filed by RITES Limited, formerly Rail India Technical and Economic Service Limited, against an order of the Registrar of Trade Marks dated 25 November 2025, which had treated RITES’ trademark application as abandoned.

    The Court held that notice under Section 132 is a β€œsine qua non” before an application can be declared abandoned and found that the Registrar’s action in the present case was legally untenable because RITES had not been given the statutory opportunity to rectify the alleged default.

    RITES Sought Registration of Its Trademark in Class 37

    • According to the order, RITES commenced use of the trademark β€œRITES” on 26 March 2008 in relation to construction, infrastructure consultancy and allied services.
    • On 25 May 2023, the company filed Trademark Application No. 5951147 in Class 37 seeking registration of the mark.
    • A hearing notice was subsequently issued on 12 September 2025 and the matter came up before the Hearing Officer on 12 November 2025.
    • The dispute arose over the filing of additional documents intended to substantiate RITES’ claimed use of the mark from 26 March 2008.

    Hearing Officer Informally Indicated Filing of Additional Documents

    • RITES contended that during the hearing on 12 November 2025, the Hearing Officer had informally indicated that additional documents should be filed.
    • However, according to the High Court’s record, no written direction was passed and no timeline was fixed for filing those documents.
    • The very next day, on 13 November 2025, RITES uploaded the additional documents.
    • A technical/clerical error, however, resulted in those documents being uploaded against a related trademark application instead of the application presently under consideration.

    Registrar Treated Trademark Application as β€˜Abandoned’

    • On 25 November 2025, the Registrar of Trade Marks treated RITES’ application as abandoned.
    • The impugned order proceeded on the basis that RITES had been required to file documents supporting its claim of use from 26 March 2008 within two days, but had failed to do so even after 12 days.
    • RITES challenged that decision before the Delhi High Court under Section 91 of the Trade Marks Act, 1999.

    RITES: Documents Were Filed Next Day, But Against Wrong Application

    • Before the High Court, RITES argued that the Registrar had wrongly treated its application as abandoned and had failed to give any cogent reason apart from the alleged non-filing of documents within two days.
    • The company maintained that it had, in fact, uploaded the user documents on 13 November 2025β€”the day immediately following the hearing.
    • The problem was that, due to a clerical oversight, the documents were inadvertently uploaded against Application No. 515449 rather than the trademark application involved in the present appeal.

    RITES Relied on Its Existing Registrations in Classes 37 and 42

    • RITES also argued that the Trade Marks Registry had itself previously recognised its proprietary rights in the mark RITES by granting multiple registrations of the same mark, including registrations in Classes 37 and 42.
    • According to the company, those registrations represented statutory recognition of its longstanding use and distinctiveness and supported its expectation of consistent treatment by the Registry.
    • The High Court’s order, however, ultimately turned on the procedural safeguards contained in Section 132 rather than finally determining RITES’ substantive entitlement to registration.

    Section 132 Is Not an Automatic or Punitive Provision, RITES Argued

    • RITES submitted that Section 132 is not intended to operate as a punitive mechanism.
    • Under the provision, the Registrar may treat an application as abandoned where, in the Registrar’s opinion, the applicant has defaulted in prosecuting its application.
    • But RITES emphasised that this power is accompanied by an express procedural safeguard: before declaring the application abandoned, the Registrar must issue a notice requiring the applicant to remedy the default within the period specified in the notice.
    • The applicant may also seek an opportunity of being heard.
    • Only when the applicant fails to remedy the default within the specified period can the application be treated as abandoned.
    • RITES argued that no such statutory notice had been issued in its case.

    Registrar Defended Abandonment Order

    • The Registrar of Trade Marks defended the impugned decision.
    • It was argued that despite RITES having been granted time to produce documents substantiating its claim of use from 26 March 2008, the company failed to furnish the required material.
    • The Registrar therefore maintained that there was no reason for the High Court to interfere with the abandonment order.

    Delhi HC: Section 132 Was Violated Rather Than Complied With

    • The High Court rejected the Registrar’s defence.
    • Justice Jyoti Singh observed that there was merit in RITES’ contention that the impugned order had been passed β€œmore in violation than in compliance of Section 132” of the Trade Marks Act.
    • The Court explained that although Section 132 empowers the Registrar to treat an application as abandoned where the applicant defaults in prosecution, the provision also mandates issuance of notice to the applicant.
    • That notice must require the applicant to remedy the default within a specified period. If desired, the applicant may also seek an opportunity of hearing.

    Notice Under Section 132 Is a β€˜Sine Qua Non’: Delhi HC

    The Court laid down the central proposition in clear terms:

    • β€œNotice under Section 132 to the defaulting applicant is a sine qua non before an action is taken.”
    • In other words, the Registrar cannot directly jump from an alleged procedural default to abandonment of the trademark application.
    • The statutory notice is a condition precedent to exercise of the abandonment power.
    • This finding is significant for trademark prosecution because abandonment can have serious consequences for applicants, particularly where the alleged default is capable of being readily cured.

    Technical Glitch Did Not Permit Registrar to Bypass Statutory Notice

    • The Court also examined the specific circumstances surrounding RITES’ documents.
    • The hearing had taken place on 12 November 2025, and RITES had uploaded the supporting documents on 13 November 2025, albeit against the wrong application.
    • The High Court held that even assuming this technical glitch amounted to a default in prosecution, the Registrar was still bound to issue notice to RITES requiring it to remedy the default and correctly upload the documents supporting its claim of use from 26 March 2008.
    • The mistake did not eliminate the protection conferred by Section 132.

    Abandonment Without Opportunity to Remedy Default Legally Untenable

    • The Court noted that no such notice was issued.
    • Instead, the application was directly declared abandoned through the order dated 25 November 2025.
    • Justice Jyoti Singh therefore held that without notice giving the applicant an opportunity to remedy the default, the abandonment order was legally untenable.
    • The judgment consequently reinforces an important distinction between the existence of a procedural default and the legal consequences that may follow from that default.
    • Even where a default exists, the Registrar must comply with the procedure prescribed by the Trade Marks Act before imposing the consequence of abandonment.

    Delhi HC Sets Aside Registrar’s Order

    • The High Court ultimately allowed RITES’ appeal and set aside the Registrar’s order dated 25 November 2025.
    • The Registrar was directed to give RITES an opportunity to furnish the requisite supporting documents substantiating its claimed use of the trademark.
    • A specific timeline is to be provided for filing those documents, after which the Registrar must proceed with the application in accordance with law.

    RITES Wins Procedural Relief, But Trademark Registration Not Yet Granted

    • An important qualification is that the Delhi High Court did not order registration of the RITES trademark.
    • Nor did it finally adjudicate the merits of the company’s claim regarding use, distinctiveness or registrability of the mark.
    • The Court expressly disposed of the appeal with β€œno expression on the merits of the case.”
    • Accordingly, RITES obtained a significant procedural victory: its application can no longer be treated as abandoned on the basis of the impugned order, and it must now be given an opportunity to furnish the required evidence.
    • The ultimate question of registration remains for the Trade Marks Registry to determine in accordance with law.

    Why the Judgment Matters for Trademark Applicants

    • The decision has practical significance for trademark prosecution before the Registry.
    • Applicants frequently face procedural issues relating to uploading evidence, filing user affidavits, responding to examination requirements and complying with directions issued during hearings. The RITES ruling makes clear that where the Registrar proposes to invoke Section 132 because of an alleged default in prosecution, the statutory safeguard cannot be bypassed.
    • The decision is particularly relevant where the alleged default arises from a clerical error, technical glitch or incorrect uploading of documents.
    • The Registrar retains the power to treat an application as abandoned, but only after the applicant has first been notified of the default and given the statutorily contemplated opportunity to cure it.

    Key Takeaway

    The Delhi High Court has clarified that notice under Section 132 of the Trade Marks Act is mandatory before a trademark application can be treated as abandoned for default in prosecution.

    Even where supporting documents were mistakenly uploaded against another application, the Registrar could not directly declare the application abandoned.

    The applicant first had to be given notice and an opportunity to remedy the default.

    The judgment therefore reinforces the broader principle that procedural mistakes capable of rectification cannot be converted into abandonment without following the safeguards expressly prescribed by the Trade Marks Act.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Delhi High Court

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Bombay HC: Interest & Penalty Under RERA Recoverable as Land Revenue; Possession Through Civil Court

    Bombay HC: Interest & Penalty Under RERA Recoverable as Land Revenue; Possession Through Civil Court

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 23.09.2026

    Bombay HC: Interest & Penalty Under RERA Recoverable as Land Revenue; Possession Through Civil Court

    This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email id amitnaren@outlook.com .  

    The Bombay High Court at Goa has clarified the two distinct mechanisms contemplated under Section 40 of the Real Estate (Regulation and Development) Act, 2016 for enforcement of RERA ordersβ€”monetary directions for payment of interest, penalty or compensation are recoverable through the revenue machinery, whereas directions requiring a person to do or refrain from doing an act can be enforced in the manner prescribed for execution of such directions.

    A Division Bench of Justice Valmiki Menezes and Justice Amit S. Jamsandekar dismissed petitions filed by M/s Sunstar Homes, finding that the complainants had followed the correct routes for enforcing the different components of a composite Goa RERA order. The Court, however, expressly declined to decide the constitutional/statutory validity of Rule 4 of the Goa RERA Rules, holding that the issue had become academic in the facts of the case.

    Sunstar Homes Challenged Rule 4 of Goa RERA Rules

    • The principal challenge raised by Sunstar Homes concerned the vires of Rule 4 of the Goa Real Estate (Regulation and Development) (Recovery of Interest, Penalty, Compensation, Fine Payable, Forms of Complaints and Appeal, etc.) Rules, 2017.
    • Sunstar argued that Section 40 of RERA itself provides two different mechanisms for enforcing orders.
    • According to the developer, Section 40(1) governs recovery of interest, penalty or compensation, while Section 40(2) deals with enforcement of orders directing a person to perform an act or refrain from performing an act.
    • The developer contended that Rule 4 impermissibly prescribed a single method for executing both categories by treating RERA orders as if they were decrees of a civil court and providing for execution under the Code of Civil Procedure.

    RERA Had Directed Possession, Penalty and Interest

    • The dispute arose from a composite order passed against Sunstar Homes by the Goa Real Estate Regulatory Authority.
    • The order contained three principal directions: the developer was required to hand over possession of certain premises, pay penalty, and pay interest to the complainants.
    • Sunstar Homes challenged the order before the RERA Appellate Tribunal. However, the Tribunal dismissed its appeal, resulting in confirmation of the original RERA order.
    • This created the central issue before the High Court: how should different parts of a composite RERA order be enforced when some directions are monetary and others require performance of an act?

    Possession Order Executed Through Civil Court

    • The complainants approached the Civil Court under Order XXI of the Code of Civil Procedure read with Rule 4 of the Goa Rules for enforcement of the portion of the RERA order directing delivery of possession.
    • By the time the matter came before the High Court, that execution had already been completed.
    • The Civil Court had handed over possession of the apartments to the concerned complainants, and therefore nothing further remained to be executed as regards the possession direction.

    Interest and Penalty Recovery Taken Before Revenue Authorities

    • The complainants followed a different route for the monetary component of the RERA order.
    • For recovery of the interest and penalty, proceedings were initiated before the Mamlatdar under the Goa Land Revenue Code, 1971.
    • The High Court recorded that the Revenue Authorities had quantified the interest and penalty amount and that those recovery proceedings were still pending.
    • This distinction became decisive in the High Court’s assessment.

    Section 40(1): Interest, Penalty and Compensation Recoverable as Arrears of Land Revenue

    • The High Court explained that Section 40(1) deals with monetary liabilities such as interest, penalty and compensation.
    • Such amounts are to be recovered through proceedings for recovery as arrears of land revenue.
    • Accordingly, the proceedings initiated before the revenue authorities for recovery of interest and penalty were within the statutory mechanism contemplated by Section 40(1).
    • The Court specifically found that the pending proceedings under the Goa Land Revenue Code were within the powers of the Revenue Authorities under Section 40(1) of RERA.

    Section 40(2): Possession Direction Can Be Executed Through Civil Court

    • The other component of the RERA order was materially different.
    • The direction requiring Sunstar Homes to hand over possession was not merely an order for payment of money. It required the developer to perform an act.
    • The High Court treated this as falling within Section 40(2).
    • The complainants had approached the Civil Court and sought enforcement through the CPC, and the possession order had already been successfully executed.
    • The Court held that the complainants had adopted the correct course by taking the possession component falling under Section 40(2) to the Civil Court, while pursuing the monetary component under Section 40(1) before the revenue authorities.

    One RERA Order Can Therefore Require Two Different Execution Routes

    • An important practical consequence of the judgment is that a single composite RERA order can contain directions that require different modes of enforcement.
    • Where an order simultaneously directs a promoter to hand over possession and pay interest, penalty or compensation, the entire order need not necessarily be enforced through one forum or procedure.
    • The nature of each direction determines its enforcement route.

    Thus, in the present case:

    Component of RERA OrderRelevant ProvisionEnforcement Route
    Handing over possessionSection 40(2)Civil Court/CPC mechanism prescribed under the Rules
    Payment of interestSection 40(1)Recovery as arrears of land revenue
    Payment of penaltySection 40(1)Recovery as arrears of land revenue

    The High Court found that this was precisely the course followed by the complainants.

    High Court Does Not Decide Validity of Rule 4

    • Although Sunstar Homes had mounted a direct challenge to the vires of Rule 4, the High Court did not adjudicate that larger question.
    • This is an important qualification to the judgment.
    • The possession portion of the RERA order had already been executed through the Civil Court, while the monetary recovery proceedings were validly pending before the Revenue Authorities under Section 40(1).
    • Consequently, deciding the vires of Rule 4 would have been merely academic in the circumstances of these petitions.
    • The Court therefore expressly left the validity challenge open to be considered in an appropriate future petition.
    • Accordingly, the judgment should not be read as either upholding or striking down Rule 4 of the Goa RERA Rules on its merits.

    Sunstar Homes’ Petitions Dismissed

    • The High Court ultimately declined to entertain the petitions insofar as they challenged Rule 4 and dismissed all the petitions without costs.
    • The Rule was discharged in each matter.
    • Thus, the execution already completed for delivery of possession remained undisturbed, while the revenue proceedings concerning recovery of interest and penalty could continue.

    Why This Judgment Matters for RERA Execution Proceedings

    • The ruling provides useful guidance on a recurring issue in RERA litigation: the distinction between enforcement of monetary awards and enforcement of non-monetary directions.
    • A RERA order may contain multiple forms of relief. The execution mechanism cannot necessarily be determined simply by calling the entire decision a β€œRERA order.” Instead, the nature of the particular relief being enforced must be examined.
    • For promoters, allottees and practitioners, the decision indicates that Section 40(1) and Section 40(2) operate in different fields. Monetary recovery of interest, penalty or compensation travels through the land-revenue recovery mechanism, whereas a direction such as handing over possession may be executed through the mechanism applicable to non-monetary directions.
    • At the same time, the judgment leaves an important legal question unresolved: whether Rule 4 of the Goa RERA Rules itself is valid in all its applications. The Bombay High Court deliberately left that question open for determination in a case where deciding it would have a live practical consequence.

    Key Takeaway

    The Bombay High Court’s ruling establishes, in the context of the Sunstar Homes dispute, that the complainants correctly used two separate enforcement routes for a composite RERA order: Civil Court execution for delivery of possession under Section 40(2), and revenue recovery proceedings for interest and penalty under Section 40(1). The Court did not adjudicate the vires of Rule 4 and therefore did not pronounce a general ruling validating or invalidating the Goa RERA execution rule.

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    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Bombay High Court

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  • Karnataka HC: Courts Cannot Re-Appreciate Evidence to Find Patent Illegality in Arbitral Award

    Karnataka HC: Courts Cannot Re-Appreciate Evidence to Find Patent Illegality in Arbitral Award

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 23.09.2026

    Karnataka HC: Courts Cannot Re-Appreciate Evidence to Find Patent Illegality in Arbitral Award

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    The Karnataka High Court has reaffirmed the limited scope of judicial interference with arbitral awards, holding that courts exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996 cannot re-appreciate evidence or interfere merely because another interpretation of the contract may be possible.

    A Division Bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Joshi dismissed an appeal filed by the State Project Director, Rashtriya Madhyamika Shikshana Abhiyana, thereby leaving undisturbed an arbitral award of β‚Ή60,24,774 towards price escalation, along with interest, in favour of Mycon Construction Ltd.

    Dispute Over Price Adjustment Clause in Government Construction Contract

    • The dispute arose from a tender floated for the construction of model schools and the upgrading and strengthening of existing Government High Schools across 30 districts of Karnataka.
    • Mycon Construction Ltd. emerged as the successful bidder for construction work under Package A-B. The parties consequently executed a construction agreement dated 15 May 2013, consisting of General Conditions of Contract and Special Conditions of Contract. Additional work was subsequently entrusted to Mycon, leading to a supplementary agreement dated 14 March 2017.
    • The controversy centred on Clause 39 β€” the Price Adjustment Clause.
    • Although the original tender material available on the e-procurement portal contained a note stating that the β€œprice adjustment clause may be treated as deleted,” the agreements actually executed by the parties in 2013 and 2017 continued to contain Clause 39.

    Arbitrator Awards β‚Ή60.24 Lakh Against Claim of β‚Ή1.22 Crore

    • During execution of the project, Mycon raised bills claiming amounts under the price adjustment mechanism. The State objected, eventually resulting in arbitration.
    • The Arbitral Tribunal adopted the fast-track procedure and delivered its award on 8 September 2023.
    • Against Mycon’s claim of β‚Ή1,22,81,956, the Tribunal partly allowed the claim and awarded β‚Ή60,24,774 along with interest, holding that the Price Adjustment Clause was valid.
    • The State challenged the award under Section 34, but the Commercial Court dismissed its petition on 2 December 2024. This led to the Section 37 appeal before the Karnataka High Court.

    State: Price Adjustment Clause Was Intended to Be Deleted

    • The State’s principal argument was that the tender/RFP had indicated that the Price Adjustment Clause was to be treated as deleted.
    • It contended that Clause 39 had found its way into the final agreement only because the agreement was erroneously signed by the State Project Engineer. According to the State, Mycon could therefore not claim any amount under that provision.
    • The State further argued that when the tender note expressly contemplated deletion of the Price Adjustment Clause, the authority signing the contract on behalf of the Government could not subsequently incorporate that clause into the agreement.
    • The State also invoked Article 299 of the Constitution, contending in effect that Clause 39 should be treated as non-existent because it had allegedly been incorporated without authority.

    Signed Contract Expressly Contained Clause 39

    • The High Court considered it significant that there was no dispute that the final agreement signed by the parties expressly contained Clause 39.
    • While the e-procurement portal carried the note that Clause 39 β€œmay be treated as deleted,” the agreement ultimately executed by the parties neither contained such a note nor had Clause 39 scored out.
    • The State did not dispute that the signed agreement contained the provision.
    • Clause 39 itself provided for adjustment of the contract price for increases or decreases in rates and prices of labour, materials, fuels and lubricants, subject to the contractual formula and conditions.
    • The High Court further recorded that there was no controversy regarding the calculation of the β‚Ή60,24,774 escalation amount in accordance with Clause 39. The dispute was essentially whether Clause 39 formed part of the parties’ agreement at all.

    Mycon: Bid Was Reduced Because Price Adjustment Protection Was Available

    • Mycon’s original bid was β‚Ή7,22,96,246.41, which was subsequently reduced during negotiations to β‚Ή6,70,56,696.
    • The contractor contended that it had agreed to the reduction because the contract contained a Price Adjustment Clause. It also claimed that during a meeting held on 13 February 2013, the concerned authorities had indicated that higher premiums were unnecessary because price adjustment protection was available.
    • Mycon additionally relied upon a Government Order dated 26 November 2004, under which a price adjustment clause was to be included in works contracts where the estimated cost put to tender was β‚Ή100 lakh or more and the completion period was 12 months or more.

    Tribunal Was Entitled to Interpret the Contract: High Court

    • The Arbitral Tribunal had rejected the State’s contention that the words β€œmay be treated as deleted” automatically meant that Clause 39 had ceased to form part of the contract.
    • The Tribunal instead relied upon the final signed agreement, which retained Clause 39 without any note stating that it should be deleted.
    • It therefore held that the executed agreement could not be read as excluding Clause 39 merely because of the note appearing in the RFP on the e-procurement portal.
    • The Tribunal had also rejected the State’s argument concerning lack of authority of the State Project Engineer. The State had neither rescinded nor rectified the contract and the contractor had executed the works between 2013 and 2018 without the Government taking steps to modify or rescind the agreement.
    • The High Court found that the real dispute was therefore not about the existence of the contract, but about the terms of that contract. Such a dispute fell squarely within the jurisdiction of the Arbitral Tribunal.

    Error in Contract Interpretation Is Ordinarily Within Arbitrator’s Jurisdiction

    • The Division Bench referred to the Supreme Court’s ruling in MSK Projects India (JV) Ltd. v. State of Rajasthan, (2011) 10 SCC 573.
    • The principle highlighted by the Court was that an error committed by an arbitrator while construing a contract is an error within the arbitrator’s jurisdiction. A jurisdictional error arises when the arbitrator travels outside the contract and deals with matters not entrusted to arbitration.
    • The High Court also relied upon SAIL v. Gupta Brother Steel Tubes Ltd., (2009) 10 SCC 63, where the Supreme Court distinguished between an arbitrator travelling beyond the contract and an arbitrator merely interpreting the contractual provisions.
    • Where the arbitrator’s conclusion represents a possible view, courts should not interfere merely because another view may also be possible. Courts cannot examine the correctness of arbitral findings as though exercising appellate jurisdiction.

    Courts Cannot Substitute Their Own Interpretation of Contract

    • The Karnataka High Court further relied upon State of Rajasthan v. Puri Construction Co. Ltd., (1994) 6 SCC 485.
    • The Supreme Court had distinguished between an error within jurisdiction and an error in excess of jurisdiction, holding that courts cannot substitute their own evaluation of the facts or contractual interpretation merely because they might have reached a different conclusion.
    • Where the arbitrator’s interpretation of a contract represents a possible view, the award cannot be reopened simply to reassess the contractual materials and evidence.

    Construction of Contract Lies Within Province of Arbitral Tribunal

    • The Bench also referred to Assam SEB v. Buildworth (P) Ltd., (2017) 8 SCC 146, reiterating that questions concerning construction of contractual provisions ordinarily fall within the province of the Arbitral Tribunal.
    • Where the arbitrator’s interpretation is supported by relevant evidentiary material, courts cannot interfere merely because they might prefer another construction.

    Section 34 Courts Cannot Re-Appreciate Evidence

    • The High Court agreed with the Commercial Court that the Tribunal’s conclusions were based upon evidence and could not be characterised as patently illegal or contrary to the public policy of India.
    • It reiterated that courts cannot re-appreciate evidence while examining an arbitral award, and that interference must remain confined to the grounds expressly provided under Section 34.
    • The Bench relied upon Delhi Airport Metro Express Pvt. Ltd. v. Delhi Metro Rail Corporation Ltd., AIR Online 2021 SC 78, where the Supreme Court emphasised that Section 34 courts must act strictly within the confines of the statutory provision and refrain from appreciation or re-appreciation of facts and evidence.

    Every Error of Law Is Not β€œPatent Illegality”

    • The High Court also reiterated the restrictive meaning of patent illegality under Section 34(2A).
    • An illegality must go to the root of the matter. Every legal error or erroneous application of law does not amount to patent illegality.
    • Interference may be justified where, among other circumstances, the arbitrator adopts a view that is not even a possible one, interprets a contractual clause in a manner no fair-minded or reasonable person could adopt, travels outside the contract, bases conclusions on no evidence, or ignores vital evidence.
    • Courts, however, cannot re-appreciate evidence merely to reach the conclusion that an award is patently illegal.

    Article 299 Argument Rejected

    • The State had relied on K.P. Chowdhry v. State of Madhya Pradesh, AIR 1967 SC 203 to challenge the contractual provision.
    • The Karnataka High Court found that decision inapplicable because it concerned a situation where no written agreement had been entered into after the auction.
    • In Mycon’s case, there was an undisputed signed agreement between the parties, and there was no dispute that the Government had awarded the works contract and that an agreement for execution of those works was authorised.
    • The controversy was therefore confined to whether Clause 39 formed part of the contractual terms, a question that the Arbitral Tribunal had already considered and decided in Mycon’s favour.
    • The Tribunal had also taken note of the State’s failure to rescind or rectify the executed agreement.

    Karnataka HC Dismisses State’s Appeal; Mycon’s Award Stands

    • The Division Bench ultimately held that the State’s challenge could not be sustained under either Section 34(2) or Section 34(2A) of the Arbitration and Conciliation Act.
    • Finding no ground to interfere with the arbitral award and no infirmity in the Commercial Court’s refusal to set it aside, the High Court dismissed the State’s appeal.
    • Accordingly, Mycon Construction Ltd. succeeded in defending the arbitral award of β‚Ή60,24,774 towards price escalation, along with interest, against the State’s Section 34 and Section 37 challenges.

    Key Takeaway

    The ruling reinforces a fundamental principle of Indian arbitration law: interpretation of contractual terms is primarily the domain of the arbitrator. A court exercising jurisdiction under Sections 34 or 37 cannot substitute its preferred contractual interpretation merely because another view is possible.

    Where an executed government contract expressly contains a price adjustment clause, and the arbitrator adopts a possible interpretation of that agreement based on the contractual documents and evidence, judicial interference cannot be justified simply by pointing to a conflicting note in the earlier tender material.

    Connected Matter

    Supreme Court: State Cannot Raise New Defence at Award-Challenge Stage When It Was Never Taken Before Arbitrator

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Karnataka High Court

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  • Calcutta HC: Unexplained Increase in Seized Drug Weight Raises Doubt Over NDPS Investigation

    Calcutta HC: Unexplained Increase in Seized Drug Weight Raises Doubt Over NDPS Investigation

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 23.09.2026

    Calcutta HC: Unexplained Increase in Seized Drug Weight Raises Doubt Over NDPS Investigation

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Calcutta High Court, Circuit Bench at Port Blair, has granted bail to David Johnson in a case involving the alleged recovery of 54.01 grams of methamphetamine, after finding substantial and arguable questions concerning the change in weight of the seized substance, chain of custody, compliance with Section 42(2) of the NDPS Act and the manner in which the safeguard under Section 50 was communicated.

    Justice Prasenjit Biswas held that, when these circumstances were considered cumulatively at the bail stage, the petitioner had established reasonable grounds sufficient to satisfy the first limb of the stringent twin conditions under Section 37 of the NDPS Act. The Court also found no material indicating that he was likely to commit a similar offence while on bail.

    Bail Sought in 54.01-Gram Methamphetamine Case

    • David Johnson approached the High Court under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) seeking bail in Special NDPS Case No. 05 of 2026, arising from FIR No. 03 of 2026 registered by Police Station Anti-Narcotics.
    • The case was registered under Section 22(c) of the NDPS Act, 1985.
    • The petitioner argued that despite the statutory embargo under Section 37, the material available on record gave rise to reasonable grounds for believing that he may not be guilty of the alleged offence and that he was not likely to commit an offence while on bail.

    Seized Methamphetamine Allegedly Increased From 54.01g to 54.11g

    • One of the most significant issues before the High Court concerned an apparent discrepancy in the weight of the alleged contraband.
    • According to the prosecution, 54.01 grams of methamphetamine had been seized from David Johnson. However, when the substance was subsequently weighed during sampling before the Magistrate, its total weight was recorded as 54.11 grams.
    • The defence questioned how the seized substance could have increased by 0.10 gram between seizure and subsequent sampling, particularly when the identity, quantity and integrity of the contraband were central to an NDPS prosecution.
    • The High Court found this discrepancy relevant. It observed that although the numerical difference might appear small, it could not be ignored altogether in an NDPS prosecution where the identity, quantity and integrity of the seized substance assume fundamental importance.
    • More importantly, the Court noted that no satisfactory explanation had been placed before it as to how the weight increased between seizure and sampling.

    Samples Not Sent Directly From Magistrate to Forensic Laboratory

    • The second major issue concerned the chain of custody.
    • The petitioner relied upon Rules 13 and 14 of the Narcotic Drugs and Psychotropic Substances (Seizure, Storage, Sampling and Disposal) Rules, 2022.
    • Rule 13, as noted by the Court, contemplates that samples after certification by the Magistrate should be sent directly to the jurisdictional laboratory for chemical analysis without delay, while Rule 14 deals with expeditious testing and submission of the chemical analysis report.
    • However, the materials before the High Court prima facie indicated that after inventory and sampling proceedings before the Magistrate, the samples were not transmitted directly to the jurisdictional forensic laboratory.
    • Instead, they were first retained in the police malkhana and were thereafter forwarded to the CFSL.

    Chain of Custody Intended to Prevent Alteration, Substitution or Contamination: HC

    • The High Court stressed the purpose behind the prescribed procedure.
    • It observed that the requirement governing transmission of samples is intended to maintain their integrity and minimise the possibility of alteration, substitution, contamination or uncertainty regarding the identity of the material ultimately examined by the forensic laboratory.
    • The Court held that the relevant question was not simply whether the seized substance eventually reached the CFSL. It was also necessary to consider whether the prescribed chain of custody and safeguards governing its movement had been duly maintained.
    • The manner in which the material had been retained and transmitted, when coupled with the unexplained weight discrepancy, raised an arguable issue concerning the integrity of the seized substance and the sample subjected to chemical examination.

    Section 42(2) Compliance Also Questioned

    • The petitioner additionally alleged non-compliance with Section 42(2) of the NDPS Act, particularly in relation to the alleged secret information upon which the investigating agency had acted.
    • The High Court found prima facie substance in this argument.
    • Justice Biswas observed that the safeguards under Section 42 cannot be treated as empty formalities, especially considering the stringent penal consequences under the NDPS Act.
    • Where the prosecution acts upon prior secret information, the statutory requirement concerning the recording and communication of that information assumes significance. On the material then before the Court, strict compliance had not been satisfactorily demonstrated so as to completely dispel the doubt raised by the petitioner.

    Section 50 Notice Also Came Under Scrutiny

    • The State argued that Section 50 of the NDPS Act was not applicable to the search in question. Nevertheless, according to the State, a Section 50 notice had been served upon David Johnson as a matter of abundant precaution, and the petitioner had acknowledged it by signing the notice.
    • The High Court nevertheless examined the notice because the State itself relied upon it as evidence of compliance.
    • The Court observed that where a personal search is undertaken, the statutory safeguard under Section 50 assumes importance and the right contemplated by the provision must be communicated clearly and unambiguously.
    • Significantly, the notice placed before the High Court did not appear to contain the name or sufficient particulars of the Gazetted Officer before whom the petitioner was allegedly offered the option of being searched.
    • Prima facie, this raised a substantial question as to whether the petitioner had actually been made aware of the specific statutory safeguard available to him.

    Supreme Court’s Parmanand Judgment Relied Upon

    • The petitioner relied upon the Supreme Court judgment in State of Rajasthan v. Parmanand and Another, (2014) 5 SCC 345.
    • The High Court noted the Supreme Court’s emphasis that the right under Section 50 of the NDPS Act is not an empty formality, and its communication must be clear, individual and unambiguous.
    • The High Court also referred to Parmanand while examining the Section 50 notice in David Johnson’s case and reiterated the importance of the statutory safeguard.

    Earlier Calcutta HC NDPS Bail Orders Also Cited

    Apart from Parmanand, the petitioner relied upon orders passed by Coordinate Benches of the Calcutta High Court in:

    • Alok Kumar Mandal β€” CRM (NDPS) 8 of 2025
    • Shri Sandeep Bera β€” CRM (NDPS) 9 of 2025
    • Shri Raju Golder β€” CRM (NDPS) 5 of 2025

    These authorities were cited in support of the petitioner’s challenge to the procedural compliance in the NDPS investigation.

    State: Procedural Objections Should Be Tested at Trial

    • The State opposed bail and argued that the alleged discrepancies were matters that should properly be considered during trial after prosecution witnesses had been examined and subjected to cross-examination.
    • It maintained that the seizure memo recorded recovery of the contraband from the petitioner and that this fact could not be disregarded merely because of the discrepancies highlighted by the defence.
    • According to the State, the investigating agency had substantially followed the NDPS procedure, and the objections did not provide sufficient grounds for satisfying Section 37.

    Section 37 Does Not Require Mini-Trial at Bail Stage

    • The High Court clarified the standard applicable while considering bail under Section 37.
    • The Court stated that it was not required to conduct a meticulous appreciation of evidence or record a finding of acquittal. At the same time, Section 37 requires reasonable satisfaction, based on the presently available material, regarding whether there are reasonable grounds for believing that the accused is not guilty and whether he is unlikely to commit an offence while on bail.
    • The Court explained that β€œreasonable grounds” requires something more substantial than a mere prima facie consideration, although it does not amount to a final adjudication of the prosecution case.

    Cumulative Procedural Defects Sufficient to Overcome Section 37 Embargo

    After examining the material, the High Court identified four circumstances which, when considered cumulatively, raised substantial and arguable questions:

    1. The unexplained increase in weight from 54.01 grams to 54.11 grams;
    2. The manner in which the samples were retained and subsequently transmitted to the forensic laboratory;
    3. The prima facie deficiency in compliance with Section 42(2); and
    4. The apparent infirmity in the notice purportedly issued under Section 50.
    5. According to the Court, these issues raised substantial questions concerning both the legality of the search and seizure and the integrity of the chain of custody.
    6. The Court consequently found reasonable grounds for the purposes of the first condition under Section 37.
    7. As regards the second condition, no material had been placed before the Court from which it could reasonably conclude that David Johnson, if released, was likely to commit a similar offence. The second limb of Section 37 could therefore also be satisfied by imposing appropriate conditions.

    Calcutta High Court Grants Bail to David Johnson

    • The High Court ultimately held that David Johnson had, at the present stage, overcome the rigours of Section 37 of the NDPS Act and was entitled to bail.
    • He was directed to be released on furnishing a bail bond of β‚Ή20,000 with two sureties of the same amount, one of whom must be a local surety, to the satisfaction of the Chief Judicial Magistrate, Port Blair.
    • The Court imposed several conditions, including that Johnson must attend the concerned police station every alternate day, cooperate with the investigation, appear before the Trial Court on every hearing date unless exempted, and not leave the Islands without prior permission of the Trial Court.
    • He was also prohibited from influencing witnesses, tampering with evidence or obstructing the trial.

    Bail Order Does Not Amount to Acquittal

    • Importantly, the High Court expressly clarified that its observations were confined solely to consideration of the bail application and should not be construed as any final opinion on the merits of the prosecution case.
    • Thus, the Court’s prima facie observations concerning Sections 42 and 50, the weight discrepancy and chain of custody do not constitute a final determination that the investigation was illegal or that the petitioner is innocent. Those issues remain open for determination at trial.

    Key Takeaway

    The ruling demonstrates the importance of maintaining strict procedural safeguards in NDPS investigations, particularly where the stringent bail restrictions under Section 37 apply.

    In David Johnson’s case, the Calcutta High Court found that the unexplained increase in the weight of the alleged methamphetamine, intervening malkhana custody before transmission to CFSL, prima facie deficiency under Section 42(2), and apparent infirmity in the Section 50 notice, cumulatively created substantial and arguable questions sufficient at the bail stage to overcome the first limb of Section 37.

    With no material suggesting that the petitioner was likely to commit a similar offence while on bail, the Court found the second condition capable of being satisfied as well and granted conditional bail.

    Connected Matter

    Supreme Court: Accused Must Be Clearly and Individually Informed of Section 50 Right Before Personal Search

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Calcutta High Court

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  • Karnataka HC Refuses to Quash ED Proceedings

    Karnataka HC Refuses to Quash ED Proceedings

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 23.09.2026

    Karnataka HC Refuses to Quash ED Proceedings

    This Short Article has been prepared & written by Advocate G Sridharamurthy. The views expressed are based on his interpretation of the law. He can be reached at his email id sriadv3@gmail.com . 

    In a significant judgment concerning homebuyer complaints, delayed real-estate projects, alleged diversion of project funds and proceedings under the Prevention of Money Laundering Act (PMLA), the Karnataka High Court has refused to terminate criminal and money-laundering proceedings concerning the Ozone Urbana project.

    Justice M. Nagaprasanna dealt together with six writ petitions filed by Ozone Urbana Infra Developers Pvt. Ltd. and its office-bearers, challenging various criminal complaints/FIRs as well as Enforcement Directorate proceedings, including ECIRs and a Provisional Attachment Order (PAO) covering properties stated to be worth β‚Ή423.38 crore.

    The Court held, in substance, that serious allegations involving multiple homebuyers, alleged diversion and siphoning of substantial funds, non-delivery of homes and complex financial transactions could not, at the threshold, simply be reduced to private contractual disputes.

    Ozone Urbana Project at Centre of Multiple Proceedings

    • Ozone Urbana Infra Developers was developing a township known as β€œOzone Urbana”, comprising 12 projects with single-unit houses, low- and mid-rise units, high-rise apartments and associated infrastructure.
    • According to the judgment, land for the development was acquired during 2006–2007 and construction commenced in 2012. The litigation involved the company, its Chairman and Managing Director Vasudevan Sathyamoorthy, other office-bearers, several homebuyers, police authorities and the Directorate of Enforcement.
    • The connected petitions arose from different complaints and investigations but involved overlapping allegations concerning the project and its financial affairs.

    Homebuyers Alleged Payment of Substantial Consideration Without Delivery of Flats

    • The judgment records several complaints by individual homebuyers and the Ozone Urbana Buyers Welfare Association.
    • One complaint concerned a senior-citizen homebuyer who allegedly paid β‚Ή64,52,418 in full for a flat in β€œOzone Urbana Pavilion”. According to the complaint, even after about 10 years from the initial booking, the construction remained incomplete and possession had not been delivered.
    • Another homebuyer alleged payment of β‚Ή1,32,10,000 towards a flat in β€œOzone Urbana Avenue”. The complaint alleged that despite payment of the entire consideration, the flat was not handed over and was subsequently sold to a third person.
    • These were allegations under investigation, not findings of guilt.

    Buyers’ Association Alleged Project Was Only 49% Complete

    • The Ozone Urbana Buyers Welfare Association also lodged a complaint.
    • According to the allegations recorded in the judgment, the Ozone Urbana Township commenced in 2012 with a projected 1,800 units and was represented as being completed by 2017. The complaint alleged that only about 49% of the construction had been completed.
    • The homebuyers further alleged that they had been induced through subvention schemes, tripartite arrangements and buy-back schemes. In some instances, banks and housing finance companies allegedly released up to 90% of the loan amount without adequately verifying construction progress, title or the project’s financial position.
    • It was further alleged that the developer had undertaken to service pre-EMI/EMI payments until possession but subsequently stopped doing so, leaving the homebuyers to service the loans themselves.

    β€œNeither the Home Nor the Money”: Allegations Before Court

    • The judgment records the complainants’ case that the affected buyers were left with β€œneither the home nor the money”, while banks had initiated proceedings under the SARFAESI Act for non-payment of loan instalments.
    • Crime No. 77 of 2024 consequently involved allegations under Sections 406, 409, 420, 120-B and 34 IPC and Section 9 of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPIDFE Act).

    Developer: Disputes Were Civil, Contractual and Already Before RERA

    • Ozone Urbana and its office-bearers argued that the controversies were fundamentally civil and contractual disputes arising from delayed construction, payment obligations and real-estate agreements.
    • They contended that the essential ingredients of cheating and criminal breach of trust were absent because there was no fraudulent intention from the inception of the transactions.
    • The petitioners also relied on the fact that certain homebuyers had already invoked remedies under RERA, arguing that parallel criminal proceedings based on the same underlying transaction amounted to abuse of process.
    • Reliance was placed, among other authorities, on the principles governing quashing of criminal proceedings laid down in State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335.

    RERA Remedy Does Not Automatically Convert Criminal Allegations Into a Civil Dispute

    • The broader reasoning of the judgment is important for real-estate disputes.
    • The mere existence of contractual remedies, RERA proceedings or insolvency proceedings does not, by itself, require criminal allegations to be terminated where the complaint independently discloses facts capable of constituting criminal offences.
    • The Court treated the allegations in the connected homebuyer matters as requiring investigation rather than a premature determination at the quashing stage.
    • The judgment therefore underscores the distinction between an ordinary case of delayed possession or contractual breach and allegations extending to matters such as double sale of units, alleged diversion of funds, alleged misappropriation, subvention arrangements and other financial transactions.

    2022 ECIR Also Survives Despite Technical Quashing of Predicate FIR

    • A particularly significant issue concerned the 2022 ECIR β€” ECIR No. BGZO/70/2022.
    • The ED had registered the ECIR following predicate proceedings arising from complaints concerning the Ozone Urbana project. The petitioners argued that subsequent developments affecting the predicate FIRs destroyed the foundation of the PMLA proceedings.
    • The High Court rejected that contention.
    • It drew a distinction between a predicate proceeding being quashed on merits, thereby striking at the substratum of the scheduled offence, and quashing based upon a technical defect, which does not necessarily erase the underlying allegations of criminality.
    • The Court found that the underlying private complaint continued to subsist. It therefore held that the 2022 ECIR and the summons issued under Section 50 PMLA could not be treated as automatically foundationless merely because a predicate FIR had suffered quashing on a technical ground.

    Fresh 2025 ECIR and β‚Ή423.38 Crore Attachment Challenged

    • The company also challenged ECIR/BGZO/01/2025, registered by the ED in 2025.
    • The ECIR was based on multiple predicate crimes. Meanwhile, the ED conducted search and seizure proceedings on 1 and 2 August 2025, during which digital devices and books of account were collected. Section 50 summons followed on 4 August 2025.
    • A further major development arose from proceedings before the Supreme Court concerning homebuyers, builders, banks and housing finance companies operating under subvention schemes.
    • The Supreme Court proceedings eventually led to a CBI investigation and registration of an FIR alleging offences under Section 420 read with Section 120-B IPC and Sections 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988.
    • That CBI FIR was subsequently added to the 2025 ECIR.

    ED Provisionally Attached Properties Worth β‚Ή423.38 Crore

    • On 4 October 2025, the Directorate of Enforcement issued a Provisional Attachment Order under Section 5(1) PMLA.
    • According to the ED’s press release reproduced in the judgment, immovable properties valued at β‚Ή423.38 crore were provisionally attached.
    • The attached assets were stated to include unsold inventory comprising 92 flats in the Avenue project and 13 flats in Aqua 2, approximately 4.5 acres of commercial land, and personal properties of the promoter and his wife, including land at Kannehalli Village, Mudigere.
    • The ED alleged that the company and its promoter had generated proceeds of crime of approximately β‚Ή927.22 crore through alleged diversion of funds. Importantly, these figures represent the ED’s allegations recorded in the proceedings, not a final judicial determination of money laundering or the quantum of proceeds of crime.

    Karnataka HC Refuses to Quash 2025 ECIR

    • The High Court rejected the argument that the 2025 ECIR lacked a surviving predicate offence.
    • It observed that the predicate proceedings remained alive and that one of the underlying crimes arose from a CBI investigation pursuant to directions of the Supreme Court.
    • The allegations had yet to undergo investigation and trial. At this stage, the High Court said it could not presume that those proceedings had ceased to exist and, on that assumption, terminate consequential PMLA proceedings.
    • The Court accordingly held that so long as the scheduled offence subsists and the proceedings concerning it have not been obliterated, the ECIR cannot be treated as foundationless.

    Provisional Attachment Is Not Final Determination of β€œProceeds of Crime”

    • The Court also refused to interfere with the PAO at this stage.
    • An important qualification in the judgment is that a provisional attachment is not a final judicial determination that the property constitutes proceeds of crime.
    • Questions concerning the nexus between alleged criminal activity and the attached property, whether the assets satisfy the statutory definition of β€œproceeds of crime”, and whether the attachment can ultimately be sustained are matters for the adjudicatory mechanism prescribed under the PMLA.
    • The Court therefore rejected the attempt to have those questions conclusively determined in the writ proceedings at the provisional-attachment stage.

    PMLA Provides Complete Statutory Mechanism Against Attachment

    • The High Court relied upon the Supreme Court’s decision in JSW Steel Ltd. v. Enforcement Directorate, 2025 SCC OnLine SC 2150.
    • It emphasised the statutory structure under which Section 5 permits provisional attachment, Section 8 provides adjudication and confirmation before the Adjudicating Authority, and Section 26 provides an appellate remedy before the Appellate Tribunal.
    • The High Court held that interfering with a provisional attachment at its threshold would effectively short-circuit the adjudicatory mechanism established by Parliament.

    Economic Offence Allegations Cannot Be Viewed Through Narrow Contractual Lens: HC

    • One of the strongest parts of the judgment concerns the Court’s treatment of the alleged economic offences.
    • The High Court observed that the allegations were not confined to a single complainant or an isolated contractual transaction. They involved allegations of financial transactions of considerable magnitude, diversion and siphoning of funds and use of money for purposes different from those for which it had allegedly been collected.
    • The Court noted that such allegations affected numerous stakeholders, particularly homebuyers.
    • It observed that for a homebuyer, purchase of a home is often not merely an investment in property but the culmination of years of savings coupled with the continuing burden of a housing loan.
    • The allegations therefore could not, at this stage, be examined merely through the narrow prism of individual contractual disputes.

    Court Calls for β€œFull and Unhindered Investigation”

    • Considering the alleged movement and diversion of substantial funds and the number of affected persons, the Court held that the matter had wider economic and societal ramifications.
    • It found that such allegations warranted a full and unhindered investigation in accordance with law.
    • At a stage when the allegations remained to be tested through the legally prescribed process, interdiction of the proceedings was held to be inappropriate.

    Civil and Criminal Remedies Can Operate in Their Own Fields

    • The judgment is particularly relevant to developers and homebuyers because it demonstrates that resort to RERA, civil proceedings or insolvency remedies does not necessarily create immunity against criminal investigation.
    • The crucial inquiry remains whether the allegations, taken at face value, disclose ingredients of an independent criminal offence.
    • Thus, an ordinary contractual delay may stand on one footing; allegations involving dishonest inducement, double sale, diversion of money, breach of trust, conspiracy or laundering of alleged proceeds of crime may stand on another.
    • The existence of a civil remedy is therefore not, by itself, decisive of whether criminal proceedings should be quashed.

    Court Also Examines KPIDFE Act in Context of Homebuyer Funds

    • Another important question concerned the applicability of the Karnataka Protection of Interest of Depositors in Financial Establishments Act.
    • The petitioners argued that developers were not financial establishments and that purchasers of flats could not simultaneously be treated as β€œdepositors”.
    • The judgment examined authorities dealing with similarly worded depositor-protection legislation, including decisions addressing the breadth of the expressions β€œdeposit” and β€œfinancial establishment” and their potential application to money collected by builders from flat purchasers.
    • This aspect assumes particular importance where funds are collected from the public against a promise to provide property or another specified service and the transaction is alleged to have resulted in fraudulent default.

    Key Principle on PMLA Predicate Offences

    • Another significant legal principle emerging from the ruling is that quashing of a predicate FIR does not invariably and mechanically result in termination of an ECIR.
    • The reason for quashing the predicate proceeding matters.
    • Where the scheduled offence itself is extinguished on merits, the consequences under PMLA may be materially different. But where a particular FIR is quashed because of a procedural or technical defect while the underlying complaint and allegations remain alive, the Court held that PMLA proceedings cannot necessarily be treated as having lost their foundation.
    • That distinction could have wider implications for future PMLA litigation.

    Ozone Urbana’s Challenge to ED Proceedings Fails

    • Ultimately, the High Court declined to halt the ED’s investigation and refused to interfere with the provisional attachment at this stage.
    • The ruling does not amount to a finding that Ozone Urbana, its promoters or office-bearers are guilty of cheating, diversion of funds or money laundering. Those allegations remain subject to investigation, statutory adjudication and, where applicable, trial.
    • What the Court decided at this stage was that the allegations and surviving predicate proceedings provided sufficient legal basis for the investigations and statutory processes to continue, and that the High Court’s extraordinary jurisdiction could not be used to terminate them prematurely.

    Why the Judgment Matters

    The 210-page ruling is important at the intersection of RERA, criminal law, PMLA, depositor-protection legislation and insolvency law.

    For homebuyers, it reinforces that pursuing remedies under RERA or other civil/statutory forums does not necessarily prevent them from invoking criminal law where the factual allegations independently disclose criminality.

    For developers and promoters, the judgment illustrates that the defence of a β€œpurely civil dispute” will not automatically succeed at the quashing stage where allegations extend beyond mere delay in construction or contractual non-performance to alleged dishonest inducement, multiple sales, diversion of funds or other financial wrongdoing.

    For PMLA proceedings, the ruling reiterates that a provisional attachment under Section 5 is only an interim statutory measure and that disputes regarding whether the attached assets actually constitute β€œproceeds of crime” ordinarily have to travel through the statutory adjudication and appellate process.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Karnataka High Court

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  • Patna HC: Customs Cannot Freeze Bank Accounts Without Following Section 110(5) Safeguards

    Patna HC: Customs Cannot Freeze Bank Accounts Without Following Section 110(5) Safeguards

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 23.09.2026

    Patna HC: Customs Cannot Freeze Bank Accounts Without Following Section 110(5) Safeguards

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In an important ruling governing the Customs Department’s power to provisionally attach bank accounts, the Patna High Court has held that the safeguards contained in Section 110(5) of the Customs Act, 1962 must be strictly followed, considering the drastic consequences that freezing a bank account can have on an ongoing business.

    The Division Bench of Justice Rajeev Ranjan Prasad and Justice Sunil Dutta Mishra partly allowed a writ petition filed by Nxtify Technologies Private Limited, a company engaged in digital and affiliate marketing and resale of gift vouchers/cards, challenging the freezing and provisional attachment of several bank accounts.

    The Court quashed attachment orders that had been issued without the required approval of the Commissioner and held that certain debit-freeze directions issued in October 2025 did not comply with Section 110(5). It also set aside extension orders for want of a pre-decisional hearing and reasons.

    At the same time, the Court declined to interfere with certain fresh provisional attachment orders dated 7 January 2026 that satisfied the statutory requirements. The ruling is therefore a significant clarification that Customs’ power to protect revenue is available, but only through strict compliance with the procedure prescribed by Parliament.

    Investigation Into Alleged Fraudulent Exports Led to Nxtify’s Accounts

    • The controversy originated from a Customs investigation initiated around October 2023 against certain exporters, including M/s Venus Exports, M/s Vidhur Enterprises and M/s B.K. Overseas.
    • The allegations concerned fraudulent export activities and wrongful availment of Input Tax Credit.
    • During the investigation, Customs found that substantial amounts had allegedly been transferred by entities under investigation into Nxtify’s accounts. Although the investigation was initially not against Nxtify itself, Customs formed the view that certain money allegedly arising from fraudulent activities had reached the company and proceeded to provisionally attach its bank accounts.
    • Nxtify was subsequently described as a third-party beneficiary of amounts allegedly fraudulently availed by exporters, and additional accounts maintained with different banks were subjected to attachment.

    Earlier Penalties and Appropriation From Attached Accounts

    • The dispute had a longer history.
    • Nxtify had earlier approached the Karnataka High Court challenging provisional attachments. During those proceedings, Customs passed adjudication orders dated 18 October 2024 relating to show-cause notices issued to exporters and imposed penalties of β‚Ή50 lakh and β‚Ή1.50 crore.
    • Those amounts were appropriated from Nxtify’s provisionally attached bank accounts.
    • The Karnataka High Court subsequently granted an interim stay on 29 October 2024. The judgment records that further amounts of β‚Ή87,924.64 and β‚Ή82 lakh were thereafter debited on 4 November and 14 November 2024 respectively.
    • Nxtify filed statutory appeals before the Commissioner (Appeals), Patna, which were stated to be pending.

    Five Bank Accounts Put Under Debit Freeze in October 2025

    • The immediate controversy before the Patna High Court arose when several of Nxtify’s accounts were again subjected to debit freezes during October 2025.
    • The judgment records that five bank accounts maintained with ICICI Bank, RBL Bank, IDFC First Bank and Kotak Mahindra Bank were placed under debit freeze.
    • Nxtify contended that it received no prior notice and initially came to know of the action through communications and SMS messages from the banks.
    • After making representations, the company received a communication dated 17 November 2025 stating that a trail of funds had been noticed during investigations involving certain exporters and that the accounts had been attached under Section 110(5) of the Customs Act.

    Nxtify: Written Attachment Order Cannot Come After Bank Freeze

    • Nxtify’s principal argument was that Customs could not first freeze the bank accounts and subsequently issue a formal order in an attempt to regularise the action.
    • The company argued that the exercise of power under Section 110(5) must precede the actual attachment.
    • According to Nxtify, the accounts were frozen in October 2025, whereas certain impugned written orders were issued only on 7 January 2026. It characterised this as an impermissible post-facto attempt to validate an action already taken without authority of law.
    • The company further contended that a valid attachment requires formation of an opinion based on tangible material, a written order, prior approval of the Principal Commissioner or Commissioner, and a demonstrated necessity to protect revenue or prevent smuggling.

    Customs: Fresh Investigations Revealed New Money Trails

    • The Customs Department disputed Nxtify’s case.
    • It alleged that the company had received substantial funds originating from fraudulent exporters through intermediaries and thereafter converted those amounts into prepaid instruments or gift cards.
    • According to Customs, statements recorded under Section 108 of the Customs Act showed that amounts had been received from entities such as Venus Exports and used for issuing prepaid cards against commission.
    • Customs further stated that fresh investigations involving other exporters had revealed additional financial trails.
    • In the case of M/s Kumar Enterprises, Customs alleged that β‚Ή46.52 lakh had been transferred to Nxtify.
    • In another investigation concerning M/s Kentil Technosoft Private Limited, the Department claimed that a money trail exceeding β‚Ή3 crore had flowed into Nxtify’s accounts. Customs maintained that the subsequent attachments arose from separate investigations and fresh financial trails rather than merely continuing the earlier action.
    • These remained the Department’s allegations; the High Court was deciding the legality of the attachment procedure, not finally determining the underlying allegations.

    Section 110(5) Imposes Mandatory Safeguards

    • Section 110(5) of the Customs Act empowers the proper officer, during proceedings under the Act, to provisionally attach a bank account where the officer considers it necessary for protecting the interest of revenue or preventing smuggling.
    • However, the statute imposes several conditions.
    • The proper officer must form the required opinion; the attachment must be made by an order in writing; approval of the Principal Commissioner of Customs or Commissioner of Customs must be obtained; and the initial attachment cannot exceed six months.
    • An extension for a further period of up to six months requires reasons to be recorded in writing, with the extension communicated before expiry of the original period.

    Provisional Attachment Is a Drastic Power: High Court

    • The Patna High Court relied significantly on the Supreme Court’s decision in Radha Krishan Industries v. State of Himachal Pradesh, (2021) 6 SCC 771.
    • Although that case dealt with provisional attachment under GST legislation, the High Court considered the relevant statutory provisions to be in pari materia for purposes of examining the substantive and procedural safeguards governing provisional attachment.
    • The Supreme Court had emphasised that provisional attachment is a draconian power carrying serious consequences and therefore requires strict compliance with the statutory preconditions.
    • The formation of opinion cannot be based on unguided discretion. There must be a proximate and live nexus between the attachment and protection of government revenue, and the authority must establish necessity, rather than mere expediency.

    Customs Admitted Two Attachment Orders Lacked Commissioner’s Approval

    • A critical development occurred during the proceedings.
    • The Department’s own records showed that provisional attachment orders dated 10 October 2025 concerning Kentil Technosoft and 23 October 2025 concerning Kumar Enterprises had been issued without approval of the Commissioner.
    • The respondents admitted this position.
    • The High Court held that where the statutory approval required by Section 110(5) was absent, the provisional attachment orders as well as their subsequent extensions were illegal.
    • The Court accordingly quashed those attachment orders and their extensions.

    Debit Freeze Without Proof of Written, Reasoned and Approved Order Held Invalid

    • The Court also examined the freezing of other Nxtify accounts.
    • Customs maintained that the October 2025 directions themselves were provisional attachment orders and that the January 2026 orders related to different accounts or stages of the investigation.
    • However, the Department did not establish that the relevant October directions were written orders containing reasons and supported by approval of the competent authority.
    • The High Court therefore concluded that the October 2025 debit-freeze directions concerning those accounts were not in accordance with Section 110(5).
    • This aspect of the judgment is particularly important for Customs investigations: an instruction to a bank restricting operation of an account cannot be treated as a substitute for compliance with the formal statutory conditions governing provisional attachment.

    Written Order and Commissioner’s Approval Are Not Empty Formalities

    • The Court’s reasoning reinforces that the safeguards in Section 110(5) are substantive, not merely procedural technicalities.
    • A provisional attachment can severely disrupt working capital, employee payments, vendor payments and ordinary commercial operations. The statutory requirement of prior approval by a senior Customs authority therefore operates as an important check against arbitrary exercise of coercive power.
    • The High Court referred to Boxster Impex Pvt. Ltd. v. Union of India, 2020 SCC OnLine Bom 978, where the Bombay High Court identified the essential conditions for Section 110(5): a written order, pendency of proceedings under the Customs Act, formation of the necessary opinion, prior approval of the Principal Commissioner/Commissioner and adherence to the six-month statutory period.
    • The Court also considered Chokshi Arvind Jewellers v. Union of India, 2024 SCC OnLine Bom 793, which stressed that the necessity for attachment must rest upon tangible material and that the written order should disclose why attachment is required to protect revenue or prevent smuggling.

    Not Every January 2026 Attachment Was Quashed

    • Importantly, Nxtify did not succeed in having every attachment set aside.
    • The High Court separately examined the provisional attachment orders dated 7 January 2026.
    • It found that these orders had been issued after obtaining the Commissioner’s approval. The orders were in writing and recorded reasons on the basis of which the proper officer formed the opinion that attachment was necessary in connection with investigations relating to Kumar Enterprises and Kentil Technosoft.
    • The Court therefore held that these provisional attachment orders did not require interference.
    • This distinction is central to understanding the judgment: the High Court did not hold that Customs lacked power to attach Nxtify’s accounts. Rather, it invalidated those exercises of power that failed to comply with Section 110(5), while leaving legally compliant attachment orders undisturbed.

    Extension of Attachment Requires Pre-Decisional Hearing: Patna HC

    • The judgment contains another significant ruling concerning extension of provisional attachment beyond the original period.
    • The Court examined an extension order and found that before extending the attachment, the competent authority had neither issued a show-cause notice nor afforded Nxtify an opportunity of hearing. The extension order also did not disclose reasons.
    • The Department attempted to provide a hearing during the pendency of the writ petition and passed a fresh order on 6 July 2026.
    • The High Court was sharply critical of that course.
    • It recorded its β€œreservations and unhappiness” with the authority taking fresh steps while the writ petition was pending and observed that the attempt to alter the position during the adjournment was not β€œfair play in action” and was in breach of judicial discipline. The ASG ultimately stated that the Department would not press the fresh order.

    Section 110(5) Requires Pre-Decisional, Not Post-Decisional, Hearing for Extension

    • The High Court ultimately accepted Nxtify’s submission that the requirement in the context of extension under Section 110(5) is one of pre-decisional hearing, not post-decisional hearing.
    • Since the extension orders had been passed without giving the petitioner an opportunity of hearing and without properly recording reasons, the Court held them to be bad in law and liable to be set aside.
    • Thus, an authority cannot first extend the coercive attachment and subsequently attempt to cure the deficiency by offering a hearing after the decision has already been taken.

    Department Free to Proceed Afresh in Accordance With Law

    • The High Court, however, protected the Department’s statutory powers.
    • It clarified that setting aside the defective attachment/extension orders would not prevent Customs from continuing pending adjudication proceedings.
    • The Department was also left free, if so advised, to take such steps as are available under the Customs Act, including passing fresh provisional attachment or extension orders where legally permissible and after complying with statutory requirements.
    • Accordingly, the writ petition was allowed to the extent indicated in the judgment, rather than in absolute terms.

    Why This Judgment Matters for Customs Investigations

    • The ruling is significant for importers, exporters, intermediaries and even third parties whose accounts become connected to Customs investigations through an alleged money trail.
    • Section 110(5) gives Customs substantial protective power, but the judgment demonstrates that this power cannot be exercised through informal banking instructions or retrospectively regularised paperwork.
    • The key safeguards emerging from the ruling are clear: there must be a valid proceeding under the Customs Act; the proper officer must form an opinion based on relevant material; attachment must be necessary for protecting revenue or preventing smuggling; the decision must be embodied in a written order; prior approval of the Principal Commissioner or Commissioner is mandatory; and any extension must comply independently with the statutory safeguards, including reasons and the procedural protection recognised by the Court.
    • The judgment also underscores that procedural compliance assumes greater importance precisely because freezing a bank account can cripple an operating business.

    Key Takeaway

    The Patna High Court has drawn a clear line between the existence of Customs’ power to freeze a bank account and the lawful exercise of that power.

    Customs may invoke Section 110(5) where the statutory conditions exist, including in the course of investigations involving alleged fraudulent exports and money trails. But a debit freeze unsupported by a duly approved, reasoned written order cannot be sustained merely by issuing documentation later.

    Equally significant, an extension of attachment cannot be treated as automatic: according to the High Court, pre-decisional hearing and reasons are essential before continuing the coercive restriction beyond the initial period.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Patna High Court

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  • Rajasthan High Court: 15-Year Delay in Trademark Application Violates Natural Justice

    Rajasthan High Court: 15-Year Delay in Trademark Application Violates Natural Justice

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 22.09.2026

    Rajasthan High Court: 15-Year Delay in Trademark Application Violates Natural Justice

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Rajasthan High Court has held that trademark registration applications cannot be kept pending indefinitely, observing that excessive delay in deciding such applications violates principles of natural justice and that the right to their speedy and expeditious disposal is protected under Article 21 of the Constitution of India.

    Justice Anoop Kumar Dhand made the observations while dealing with a petition filed by Mrs. Nirmala Kabra, whose application for registration of the trademark β€œBreastone”, filed in June 2010, had remained undecided for more than 15 years.

    Trademark Application Pending Since 2010

    • The petitioner approached the High Court with a limited prayer seeking a direction to the Registrar of Trade Marks to decide her application for registration of the mark β€œBreastone.”
    • The application had been filed on 25 June 2010. According to the petitioner, despite the passage of considerable time, the Registrar had neither decided the application nor passed a reasoned and speaking order. She therefore sought a time-bound direction for disposal of the application.
    • The Registrar opposed the petition, though the Court recorded that counsel appearing for the Registrar was not in a position to controvert the petitioner’s submissions.

    Opposition Filed in 2013; Matter Stagnant After 2017

    • Examining the record, the High Court found that the application for β€œBreastone” was filed on 25 June 2010 and was subsequently opposed by Respondent No. 2, Hassnar Health and Personal Care, through an opposition dated 7 March 2013.
    • After completion of pleadings, the matter was posted for recording evidence on 25 July 2017. However, according to the judgment, nothing further had been done for more than eight years thereafter.
    • The case thus presented what the Court regarded as a striking example of delay in India’s trademark registration system.

    Rule 50 of Trade Marks Rules Provides Time-Bound Framework

    • The High Court examined Rule 50 of the Trade Marks Rules, 2017, which governs hearing and decision in trademark opposition proceedings.
    • Rule 50 requires the Registrar, after closure of evidence, to notify the parties of the first date of hearing. It also regulates adjournments and provides that no party should receive more than two adjournments, with each adjournment not exceeding 30 days.
    • The Court observed that these restrictions demonstrate that the Rules contain a mechanism intended to ensure expeditious disposal of trademark registration proceedings.

    15-Year Delay Violated Rule 50: High Court

    • The High Court strongly criticised the delay.
    • It observed that the trademark application had remained pending for more than one and a half decades, which the Court treated as a clear violation of the mandatory provisions of Rule 50.
    • The Registrar, the Court said, is expected to follow the Trade Marks Rules, 2017 in their β€œletter and spirit” and cannot be permitted to keep matters pending indefinitely.

    Excessive Delay Violates Principles of Natural Justice

    • The judgment also addressed the broader consequences of administrative delay in intellectual property proceedings.
    • According to the Court, prolonged pendency can lead to loss of evidence, increased costs and a sense of injustice among the parties. Such delays may also undermine public confidence in the fairness and efficiency of the statutory system and leave businesses in prolonged uncertainty.
    • Significantly, the Court held that excessive delay in disposal of trademark applications amounts to a violation of principles of natural justice, since statutory procedures are required to be conducted fairly and within a timely framework.

    Speedy Disposal of Trademark Applications Is Protected Under Article 21

    • One of the most significant observations in the judgment concerns Article 21 of the Constitution.
    • The High Court held that trademark registration applications cannot remain pending for decades and that the Registrar is expected to decide them within a reasonable period.
    • The Court went on to state that the right to speedy and expeditious disposal of such applications is a valuable and cherished right of the applicant guaranteed under Article 21, treating it as an integral and essential component of the fundamental right to life.
    • This gives the judgment significance beyond the individual trademark dispute, because the Court connected administrative efficiency in trademark proceedings with constitutional principles of timely decision-making.

    Registrar Directed to Decide β€œBreastone” Application Within Three Months

    • Taking serious note of the fact that the petitioner’s application had remained undecided for more than 15 years, the High Court issued both case-specific and general directions.
    • For Mrs. Kabra’s application, the Registrar was directed to decide the pending trademark application as expeditiously as possible and within three months from receipt of the certified copy of the order.
    • Importantly, the High Court did not direct registration of the trademark β€œBreastone” and did not decide the merits of the opposition. The relief was confined to ensuring a timely decision by the competent statutory authority.

    General Direction for All Pending Trademark Applications

    • The Court did not restrict its observations to the petitioner’s individual application.
    • It issued a general direction to the Registrar of Trade Marks to decide all pending applications expeditiously, as early as possible and in accordance with Rule 50 of the Trade Marks Rules, 2017.
    • This aspect gives the judgment wider administrative significance for applicants whose trademark registration or opposition proceedings have remained pending for extended periods.

    High Court Calls for Strategy to Address Trademark Backlog

    • Before concluding, the Court also addressed the systemic problem of pending trademark applications.
    • It expected the Registrar of Trade Marks to develop a strategy to tackle the backlog and observed that a fast and simple mechanism for securing intellectual property rights and protecting businesses is the need of the hour.
    • According to the Court, expeditious disposal of pending trademark applications would enable the system to resolve disputes more fairly and effectively while maintaining public confidence in the trademark administration framework. A copy of the order was directed to be sent to the Registrar of Trade Marks for necessary compliance.

    Why the Judgment Matters

    • The ruling carries significance for trademark applicants and businesses facing prolonged delays before the Trade Marks Registry. It establishes three notable propositions from the Court’s reasoning: Rule 50 provides an expeditious procedural framework; excessive administrative delay can violate principles of natural justice; and the Court treated speedy disposal of trademark applications as protected by Article 21.
    • At the same time, the judgment should not be read as creating automatic registration rights merely because an application has remained pending for a long period. The Registrar retains authority to decide the application and any opposition on their merits.

    Key Takeaway

    The Rajasthan High Court has made it clear that the Trade Marks Registry cannot allow registration applications to remain undecided for decades. In Mrs. Nirmala Kabra’s case, a trademark application pending for more than 15 years prompted the Court not only to direct its disposal within three months but also to issue a broader direction for expeditious disposal of pending trademark applications and call upon the Registrar to formulate a strategy to tackle the backlog.

    Connected Matter

    Rajasthan High Court: Trademark Applications Cannot Remain Pending Indefinitely; Speedy Disposal Is a Right Protected Under Article 21

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Rajasthan High Court

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  • Andhra Pradesh HC Grants Bail as Charge Sheet Not Filed Even After 180 Days

    Andhra Pradesh HC Grants Bail as Charge Sheet Not Filed Even After 180 Days

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 22.09.2026

    Andhra Pradesh HC Grants Bail as Charge Sheet Not Filed Even After 180 Days

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Andhra Pradesh High Court has granted bail to an accused in an NDPS case involving an alleged 59.160 kg of ganja, taking note of his 201 days of judicial custody, substantial completion of investigation, absence of adverse antecedents, and the fact that the charge sheet had not been filed even after expiry of the statutory period of 180 days.

    The order was passed by Dr. Justice Y. Lakshmana Rao in Pawan Kumar Yadav v. State of Andhra Pradesh, Criminal Petition No. 7886 of 2026, on September 21, 2026.

    Bail Sought in Commercial Quantity NDPS Case

    • The petitioner, Pawan Kumar Yadav, arrayed as Accused No. 4, approached the High Court under Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) seeking bail in Crime No. 41 of 2026 registered at Gokavaram Police Station, East Godavari District.
    • The case was registered for alleged offences punishable under Section 8(c) read with Section 20(b)(ii)(C) of the Narcotic Drugs and Psychotropic Substances Act, 1985.
    • The Court recorded that the allegation against the petitioner concerned involvement in dealing with 59.160 kg of ganja, which constituted a commercial quantity.

    Petitioner Claimed False Implication

    • Counsel for the petitioner contended that Pawan Kumar Yadav was innocent and had been falsely implicated by the police. It was further submitted that he was the sole earning member of his family and that his continued incarceration would cause undue hardship to his dependants.
    • The petitioner also undertook to comply with any conditions imposed by the High Court if released on bail.

    State Opposed Bail

    • The prosecution strongly opposed the application, arguing that the investigation was still underway and that several material witnesses remained to be examined.
    • The Assistant Public Prosecutor contended that releasing the petitioner at that stage could create a risk of his absconding, thereby affecting the ongoing investigation and the process of law.

    201 Days in Custody, But No Charge Sheet

    • A significant factor considered by the High Court was the length of the petitioner’s incarceration.
    • The petitioner had been arrested on March 4, 2026 and had remained in judicial custody for 201 days by the time the bail petition was considered.
    • The Court specifically recorded that although a substantial part of the investigation concerning the petitioner’s alleged role had been completed, the charge sheet had not been filed even after expiry of the statutory period of 180 days.

    The Court further noted that:

    • no application seeking custodial interrogation of the petitioner had been filed;
    • the period for filing such an application had expired;
    • no application seeking extension of the period of judicial custody had been filed; and
    • no adverse antecedents had been reported against the petitioner.

    Rajasthan Residence Not Sufficient to Deny Bail

    • The petitioner was a permanent resident of Rajasthan. Nevertheless, the High Court observed that he had a fixed abode and considered that stringent bail conditions could adequately address the prosecution’s apprehensions.
    • The Court found that, if released subject to such conditions, there was no likelihood of the petitioner absconding, threatening witnesses, tampering with evidence or hampering the further investigation.

    High Court Grants Bail With Stringent Conditions

    • Considering the facts and circumstances, nature and gravity of the allegations, period of incarceration and stage of investigation, the High Court held that the petitioner could be enlarged on bail subject to stringent conditions.
    • The Court accordingly allowed the criminal petition and directed his release on a β‚Ή50,000 bond with two sureties for the like amount each, to the satisfaction of the I Additional Judicial Magistrate of First Class, Rajamahendravaram.
    • The petitioner was also directed to appear before the concerned Station House Officer every Saturday between 10:00 AM and 5:00 PM until filing of the charge sheet, and not to leave the district without prior permission of the SHO.
    • He must cooperate with further investigation, make himself available for interrogation when required, refrain from influencing or threatening persons acquainted with the case, and surrender his passport, if any. If he does not possess a passport, he must furnish an affidavit to that effect.

    Why the Decision Is Significant

    • The order is notable because the alleged quantity of ganja was expressly recorded as commercial quantity, yet the High Court considered the prolonged custody and procedural status of the investigation while deciding the bail application.
    • The particularly important factual circumstances recorded by the Court were the petitioner’s 201-day incarceration, failure to file the charge sheet after expiry of the 180-day period, substantial completion of investigation concerning his alleged role, absence of any application for extension of judicial custody, and lack of adverse antecedents.
    • The order, however, is only a bail decision. The High Court did not acquit the petitioner or finally determine whether the allegations under the NDPS Act were proved. Those questions remain matters for the criminal proceedings.

    Key Takeaway

    The Andhra Pradesh High Court granted bail to an accused allegedly involved in a 59.160 kg ganja case after finding that he had already spent 201 days in judicial custody, while the charge sheet remained unfiled beyond the 180-day statutory period and no application for extension of judicial custody had been made.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Andhra Pradesh High Court

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  • Punjab & Haryana HC: Serious Real Estate Fraud Allegations Cannot Be Treated as Mere Civil Dispute Under RERA

    Punjab & Haryana HC: Serious Real Estate Fraud Allegations Cannot Be Treated as Mere Civil Dispute Under RERA

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 22.09.2026

    Punjab & Haryana HC: Serious Real Estate Fraud Allegations Cannot Be Treated as Mere Civil Dispute Under RERA

    This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email id amitnaren@outlook.com .  

    The Punjab and Haryana High Court has refused regular bail to an accused in an alleged real estate fraud concerning the commercial project β€œRoselyn Square”, holding that the allegations went beyond a simple dispute over delayed possession or non-payment of assured returns and prima facie involved fabrication and alteration of documents, cheating, criminal breach of trust and conspiracy.

    Justice Virinder Aggarwal dismissed the regular bail petition filed by Bhupinder Singla, while expressly clarifying that the Court was not expressing any final opinion on the merits of the criminal case.

    Regular Bail Sought in Roselyn Square Fraud Case

    • Bhupinder Singla approached the High Court under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, corresponding to Section 439 of the Code of Criminal Procedure, seeking regular bail during trial.
    • The proceedings arose from FIR No. 228 dated 4 May 2026, registered at Police Station Zirakpur, District S.A.S. Nagar (Mohali), Punjab, for offences under Sections 61(2), 316(2), 318(4), 336(2), 338 and 336(3) of the Bharatiya Nyaya Sanhita, 2023. The judgment identifies their corresponding IPC provisions as Sections 120-B, 406, 420, 465, 467 and 468.
    • The FIR followed a complaint by Ashok Kumar Loomba against several persons associated with the Roselyn Square project, including Bhupinder Singla. The allegations concerned conspiracy, cheating, criminal breach of trust and related financial fraud in connection with investments in the commercial real estate project.

    Investors Allegedly Induced by 15% Assured Returns

    • According to the prosecution case recorded in the judgment, the complainant and co-investor Anil Kumar Syal were allegedly induced to invest substantial sums in Roselyn Square on the basis of various representations.
    • They were allegedly promised assured returns at 15% per annum, payable quarterly in advance until possession, followed by lease rental of β‚Ή100 per square foot of super area after possession.
    • The units were also allegedly promised to be delivered in a fully furnished condition by 1 January 2024.
    • The judgment records alleged investments of β‚Ή1.19 crore for Unit No. 121 and β‚Ή2.125 crore each for Unit Nos. 123 and 124, besides β‚Ή8,38,870 towards GST, taking the alleged aggregate investment to approximately β‚Ή5.44 crore.

    Allegation of β‚Ή1.43 Crore Outstanding Assured Returns

    • The complainants alleged that despite receipt of the basic sale consideration, the accused neither executed the requisite Buyer’s Agreement nor delivered possession.
    • According to the complaint, assured returns were initially paid but subsequently discontinued. As of June 2025, the alleged outstanding assured returns were stated to be β‚Ή31,23,750 for Unit No. 121, β‚Ή56,63,806 for Unit No. 123 and β‚Ή55,78,125 for Unit No. 124, aggregating to approximately β‚Ή1.43 crore.
    • The prosecution further alleged that although the actual sale consideration was substantially higher, agreements reflected a nominal consideration of β‚Ή55 lakh per unit and that the remaining amount was allegedly dealt with through off-record transactions.
    • These remained prosecution allegations at the bail stage and were not finally adjudicated by the High Court.

    Partial Completion Certificate Allegedly Projected as Final

    • The complaint also alleged that the project remained incomplete and that a Partial Completion Certificate dated 21 July 2023 had been projected as though it were a final Completion Certificate.
    • There were further allegations regarding alienation of common areas and attempts to commercially exploit or sell parking spaces contrary to applicable statutory provisions and regulatory norms.
    • A preliminary inquiry was conducted following the complaint, after which the FIR was registered.

    Petitioner: Dispute Is Civil and Commercial in Nature

    • Senior Counsel appearing for Bhupinder Singla argued that the dispute arose essentially from a real estate transaction and was civil and commercial in nature, but had been given an unwarranted criminal colour.
    • The defence contended that Agreements to Sell had been duly executed and that the complainant himself had failed to pay the complete agreed consideration, with substantial amounts allegedly still outstanding.
    • It was also submitted that Roselyn Square was duly registered under the Real Estate (Regulation and Development) Act, 2016 (RERA) and possessed statutory approvals, including an Occupancy Certificate dated 21 July 2023.
    • The petitioner further claimed that his wife was the promoter/proprietor of the project and that he was merely a Director of M/s Robus Landcorp Pvt. Ltd., without a direct role in the project’s day-to-day management.

    Defence Disputed β‚Ή5.44 Crore Investment Claim

    • The petitioner also disputed the prosecution’s financial allegations.
    • His counsel argued that the claim of an investment of β‚Ή5.44 crore was unsupported by documentary evidence and asserted that only approximately β‚Ή1.53 crore had been received through banking channels, while more than β‚Ή55 lakh allegedly remained recoverable from the complainant.
    • It was further argued that the petitioner had cooperated with the investigation even before registration of the FIR and supplied relevant documents.
    • According to the defence, no further recovery was required, the investigation had substantially progressed and continued incarceration would serve no meaningful investigative purpose. Counsel invoked the general principle that β€œbail is the rule and jail is the exception.”

    State: Allegations Reveal Planned Economic Fraud

    • The State and the complainant strongly opposed bail.
    • They contended that the allegations disclosed a well-planned conspiracy to defraud investors of substantial amounts. The Court was informed that Bhupinder Singla had been arrested on 6 May 2026, while co-accused Rosy Singla remained absconding and was allegedly concealing incriminating documents and proceeds of the alleged offence.
    • The prosecution also maintained that the complainant and co-investors had been cheated of approximately β‚Ή5.44 crore, besides an alleged outstanding liability of β‚Ή2,11,65,681 towards assured returns.
    • It claimed to possess documentary evidence relating to payments through banking channels as well as alleged cash transactions.

    Electronic Chats Allegedly Corroborated Cash Payments

    • The prosecution further disputed the petitioner’s reliance upon the project’s completion-related documents.
    • It contended that information obtained under the Right to Information Act contradicted the petitioner’s characterization of the relevant Occupancy Certificate and that the No Objection Certificate relied upon by the petitioner had already expired.
    • Of particular significance, the High Court noted the prosecution’s case that a substantial portion of the sale consideration had allegedly been received in cash.
    • Although the petitioner denied receiving cash payments, the investigating agency claimed to have collected electronic chat communications allegedly acknowledging and corroborating receipt of those amounts. The High Court carefully clarified that the evidentiary value of this material would be examined during trial.

    Not a Simple RERA Dispute: High Court

    • The High Court rejected, at the bail stage, the attempt to characterize the allegations merely as a civil dispute relating to real estate.
    • Justice Virinder Aggarwal observed that this was β€œnot a simpliciter case of delayed delivery of possession or non-payment of assured returns by a developer” for which the complainant could simply have invoked the statutory remedy under Section 31 of the Real Estate (Regulation and Development) Act, 2016.
    • Instead, the allegations prima facie disclosed serious offences involving fabrication and alteration of documents, cheating, criminal breach of trust and conspiracy.
    • The ruling is therefore significant in distinguishing between an ordinary builder-buyer dispute capable of being pursued under RERA and allegations containing an additional criminal element such as fraud, forgery or conspiracy.

    Absconding Co-Accused Weighed Against Bail

    • Another major factor was the status of co-accused Rosy Singla.
    • The Court recorded that she had not been apprehended despite repeated efforts by the investigating agency and, according to the prosecution, was absconding while allegedly concealing incriminating documents and proceeds of the offence.
    • In these circumstances, the High Court held that if Bhupinder Singla were released at that stage, the possibility of his absconding or otherwise frustrating the course of investigation could not be ruled out.

    Punjab & Haryana High Court Refuses Regular Bail

    • Taking into account the gravity and nature of the allegations, stage of investigation, role attributed to the petitioner, abscondence of the co-accused and material collected by the investigating agency, the High Court concluded that no case had been made out for grant of regular bail.
    • The petition was accordingly dismissed.
    • Crucially, the Court expressly stated that it was not expressing any opinion on the merits of the case, so that neither side would be prejudiced during trial. Thus, the order represents a refusal of bail and not a final determination of the petitioner’s guilt.

    Key Legal Takeaway

    The decision demonstrates that the availability of a remedy under RERA does not, by itself, convert every dispute connected with a real estate project into an exclusively civil or regulatory matter.

    Where the allegations prima facie extend beyond delayed possession or assured returns and include matters such as forged or altered documents, fraudulent inducement, alleged cash transactions, cheating, criminal breach of trust and conspiracy, criminal proceedings may stand on a different footing from the remedies available under Section 31 of RERA.

    At the same time, because the present proceeding concerned regular bail, the High Court did not finally determine whether those allegations were true. Their evidentiary worth and the petitioner’s criminal liability remain matters for investigation and trial.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Punjab & Haryana High Court

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  • Supreme Court: Unsigned Arbitration Agreement Can Still Bind Parties If Correspondence Shows Consensus

    Supreme Court: Unsigned Arbitration Agreement Can Still Bind Parties If Correspondence Shows Consensus

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 22.09.2026

    Supreme Court: Unsigned Arbitration Agreement Can Still Bind Parties If Correspondence Shows Consensus

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    The Supreme Court has held that an arbitration agreement need not necessarily bear the signatures of both parties if their correspondence and conduct provide a written record demonstrating consensus on the arbitration arrangement. The Court emphasized that, while examining such an agreement, courts should determine whether the parties were ad idem, or of the same mind, regarding the contractual terms and arbitration mechanism.

    In Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia Pvt. Ltd., the Supreme Court upheld enforcement of a foreign arbitral award arising from commodity transactions governed by terms referring disputes to the Singapore Commodity Exchange, and dismissed Govind Rubber’s challenge.

    Dispute Arose From International Rubber Supply Contracts

    • Govind Rubber Ltd., based in Mumbai, entered into commercial dealings with Singapore-based Louis Dreyfus Commodities Asia Pvt. Ltd. for the purchase of natural rubber.
    • One transaction involved 200 MT of Thai RSS-3 natural rubber at US$2,880 per MT, CIF Nhava Sheva, while another sales contract involved 201.6 MT of SIR20 at US$2,895 per MT, CIF Nhava Sheva. The respondent’s sales contracts stated the governing terms as the Singapore Commodity Exchange.
    • The dispute eventually went to arbitration before the Singapore Commodity Exchange.

    Foreign Award Directed Govind Rubber to Pay US$716,283

    • During the arbitration proceedings, Govind Rubber raised objections to the jurisdiction of the Singapore Commodity Exchange and contended that jurisdiction lay in Mumbai.
    • At the same time, however, Govind Rubber lodged a counterclaim of US$3,734,036.25 and agreed to the nomination of the sole arbitrator.
    • The arbitral tribunal ultimately passed an award dated 18 December 2009, directing Govind Rubber to pay US$716,283 to Louis Dreyfus for breach of contract, along with arbitration costs and expenses of Singapore Dollar 20,330. The counterclaim was rejected.

    Bombay High Court Permitted Enforcement of Foreign Award

    • Govind Rubber did not challenge the arbitral award itself. Instead, it subsequently instituted a suit against the respondent before the Bombay High Court seeking, among other reliefs, damages.
    • Louis Dreyfus thereafter filed proceedings for enforcement and execution of the foreign award.
    • The Bombay High Court allowed the enforcement petition, finding that Govind Rubber had failed to establish a ground for refusing enforcement. The High Court held that the foreign award was enforceable under Part II of the Arbitration and Conciliation Act, 1996 and binding upon the parties under Section 46.
    • Govind Rubber then approached the Supreme Court.

    Govind Rubber: Sales Contract Containing Arbitration Clause Was Never Signed

    • The principal argument before the Supreme Court was that the sales contract containing the reference to arbitration before the Singapore Commodity Exchange had not been signed and returned by Govind Rubber.
    • The appellant argued that its own purchase order contained separate commercial terms, including exclusive jurisdiction of the Bombay High Court. It therefore contended that there was no consensus between the parties to submit their disputes to arbitration before the Singapore Commodity Exchange.
    • Govind Rubber also argued that merely making a counterclaim after receiving notice from the arbitrator did not amount to waiver of its jurisdictional objection.

    Respondent: Parties Had Acted Upon the Sales Contract

    • Louis Dreyfus argued that the sales contract was a concluded commercial arrangement and that Govind Rubber had itself acted upon its terms.
    • The respondent pointed out that Govind Rubber had requested amendments to the payment terms contained in the sales contractβ€”from 100% Letter of Credit to 10% advance by Telegraph Transfer and the remaining 90% by Documents Against Paymentβ€”and those changes had been accepted.
    • The respondent therefore argued that the conduct and correspondence between the parties demonstrated consensus regarding the sales contract, including its dispute-resolution mechanism.

    Supreme Court: Arbitration Agreement Need Not Always Be Signed

    • The Supreme Court examined Section 7 of the Arbitration and Conciliation Act, 1996, particularly Section 7(3), Section 7(4)(a)-(c) and Section 7(5).
    • The Court explained that while an arbitration agreement must be in writing, it does not invariably need to be contained in a document formally signed by both parties.
    • Section 7(4)(b), for example, recognizes an arbitration agreement evidenced through an exchange of letters, telex, telegrams or other means of telecommunication providing a record of the agreement. Section 7(4)(c) also recognizes an agreement arising from an exchange of statements of claim and defence where its existence is alleged by one party and not denied by the other.
    • The Supreme Court consequently held that a written arbitration agreement β€œneed not be signed by the parties” where the requisite record of agreement is established through communications contemplated by Section 7.
    • The Court added that where the parties are prima facie shown to be ad idem, the mere fact that one party did not sign the agreement does not by itself absolve that party from its obligations.

    E-Commerce and Electronic Communications Recognised

    • The judgment is particularly notable for recognizing the practical realities of modern commercial transactions.
    • The Supreme Court referred to internet purchases, tele-purchases, online ticket bookings and standard-form contracts, observing that where the parties’ identity is established and there is a record of their agreement, an arbitration agreement may arise if the arbitration clause reflects consensus between them.
    • The Court expressly stated that a signature is not a formal requirement under Sections 7(4)(b), 7(4)(c) or 7(5) of the Arbitration Act.

    Commercial Agreements Should Be Interpreted to Give Them Effect

    • The Supreme Court further held that a commercial document containing an arbitration clause should be interpreted, where appropriate, in a manner that gives effect to the agreement rather than invalidating it.
    • It referred to Astro Vendeor Compania Naviera SA v. Mabanaft GmbH, (1970) 2 Lloyd’s Rep. 267 and Paul Smith Ltd. v. H and S International Holdings Inc., (1991) 2 Lloyd’s Rep. 127, in support of an approach that seeks to give effect to the parties’ intentions when construing arbitration agreements.
    • The Court also relied upon Union of India v. D.N. Revri & Co., AIR 1976 SC 2257, reiterating that commercial documents should receive a common-sense construction that gives efficacy to the contract rather than a narrow, pedantic or overly legalistic interpretation that defeats it.

    Correspondence Showed Meeting of Minds

    • Applying those principles, the Supreme Court examined the parties’ actual communications.
    • The Court noted that Govind Rubber had itself requested amendments to the payment terms of the sales contract. Its communication specifically requested the respondent to β€œamend your sale contract accordingly” and send the amended sales contract and pro forma invoice.
    • The Court also found that invoices had been split at Govind Rubber’s request, that the relevant request referred to the sales contract, and that the parties proceeded on the terms contained in that contract.
    • From this correspondence, the Supreme Court concluded that there was a meeting of minds and that the parties were ad idem regarding the terms of the sales contract, which provided for dispute resolution through the Singapore Commodity Exchange.

    Filing Counterclaim Also Showed Submission to Arbitration

    • Another important consideration was Govind Rubber’s conduct after commencement of arbitration.
    • The company responded to the arbitration proceedings by lodging a substantial counterclaim before the arbitral tribunal.
    • The Supreme Court held that by making the counterclaim, Govind Rubber had submitted to the jurisdiction of the arbitrator.
    • The Court referred in this context to Cairncross v. Lorimer, (1860) 7 Jur NS 149, Sarat Chunder Dey v. Gopal Chunder Laha, 19 IA 203, and Chowdhri Murtaza-Hossein v. Mt. Bibi Bechunnissa, 3 IA 209, while discussing the consequences of participating in arbitration despite having knowledge of a possible jurisdictional objection.

    Supreme Court Upholds Foreign Award

    • The Court ultimately held that the material on record clearly showed that Govind Rubber had acted pursuant to the sales contract. Consequently, whether the contract itself had been formally signed was not decisive in the circumstances.
    • The Court also noted that Govind Rubber had never challenged the 18 December 2009 arbitral award before any court.
    • Finding no valid ground to oppose enforcement, the Supreme Court upheld the Bombay High Court’s conclusion that the foreign award was enforceable under Part II of the Arbitration and Conciliation Act and binding upon the parties.
    • The appeal filed by Govind Rubber Ltd. was dismissed, with no order as to costs. 

    Key Takeaway

    The decision establishes an important principle for commercial arbitration: absence of signatures does not automatically mean absence of an arbitration agreement.

    Where the correspondence, electronic communications and conduct of the parties demonstrate that they were ad idem on contractual terms incorporating arbitration, the requirement of a written arbitration agreement under Section 7 can be satisfied even without a formally signed contract. At the same time, the judgment turns on the particular documentary record and conduct of the partiesβ€”including Govind Rubber’s requests to amend the sales contract and its participation in arbitration through a counterclaimβ€”rather than laying down that every unsigned arbitration clause is automatically binding.

    Connected Matter

    Delhi High Court: Prior Emails Cannot Override Clear Terms of Final Signed Contract; Grants Anti-Arbitration Injunction Against London Arbitration

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    Source: Supreme Court

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