Case BriefsTribunals/Commissions/Regulatory Bodies

Securities Appellate Tribunal, Mumbai: The Bench Tarun Agarwala, Presiding Officer and Dr C.K.G. Nair, Member disposed of the appeal with a direction that the appellant made a representation before SEBI in a matter where the interest on an amount was held for 13 years. 

The facts of the case are that SEBI floated Securities and Exchange Board of India (Interest Liability Regularization) Scheme, 2004 wherein stockbrokers having outstanding fee liabilities could pay the entire outstanding amount of principal along with 20% of the outstanding interest in which case they would not be liable for payment of the balance 80% of the outstanding interest. Based on the scheme, SEBI issued a fee liability statement in October 2004. As per the statement, the appellant was required to pay a sum of Rs 3,32,016. The appellant paid a sum of Rs 2,12,921 towards the entire outstanding amount of principal along with 20% interest. Thereafter the appellant filed an appeal before the Tribunal seeking relief for setting aside the impugned fee liability statement issued by SEBI. The Tribunal by an order disposed of the appeal directing SEBI to take a final decision after taking into account the payment made by the appellant and if the adjustment was required then SEBI was required to do so. In the meanwhile, during the pendency of the appeal, the appellant paid an amount of Rs 3,14,497 under protest pursuant to the fee liability statement dated March 16, 2005. The contention of the appellant was that the respondent had unlawfully withheld the amount of Rs 3,14,497 without any authority of law for a period of 13 years and, therefore, was entitled to interest as well as costs of litigation which the appellant had incurred.

The Tribunal held that before approaching the Tribunal for payment of interest and costs, it would be appropriate for the appellant to approach SEBI for the said relief. The appeal was thus disposed of with such direction. [MLB Financial Services Ltd. v. SEBI, Appeal No. 313 of 2018, Order dated 01-02-2019]

Case BriefsHigh Courts

Patna High Court: A Division Bench comprising of Amreshwar Pratap Sahi and Anjana Mishra, JJ. hearing a letters patent appeal, permitted a group of street vendors to make a representation regarding removal of their stalls before the Nagar Parishad.

Appellants were street vendors whose stalls were situated by the side of Nagar Parishad office near the Bazar Samiti of Khagaria. A notice was issued calling upon them to remove their stalls and locate them inside the Bazar Samiti of Khagaria in order to remove traffic congestion on road. Appellants challenging the said notice in a writ petition before this Court contending that since they were paying rent regularly to the Nagar Parishad, they were entitled to no disturbance in running their stalls/shops. The said petition was dismissed stating that a statutory efficacious alternative remedy was available for their grievance. Hence, the present appeal.

The Court noted that under the Bihar Municipal Act, 2007, Nagar Parishad had the power to rent out, lease or sell any commercial infrastructure. The Act empowers it to take appropriate action with regard to maintenance or settlement of its property in accordance with law.

Therefore, notices issued to the appellants were subject to powers being exercised by Nagar Parishad. It was stated that there was no express provision for an alternative statutory remedy, as indicated in the impugned judgment.

In view thereof, appellants were permitted to represent their cause before the Empowered Standing Committee or the Chief Municipal Officer of Nagar Parishad, and the concerned authority was directed to dispose of any such representation expeditiously.[Md. Shamshad Alam v. State of Bihar, 2018 SCC OnLine Pat 2257, decided on 18-12-2018]

Case BriefsHigh Courts

Delhi High Court: A Single Judge Bench comprising of Vibhu Bakhru, J. dismissed a petition seeking a writ to be issued to set aside the reply under Section 13 (3A) of  Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) given by the respondent Bank against the representation filed by the petitioner.

The petitioner challenged the proceedings instituted by the Bank for enforcement of the security interest under the SARFAESI Act. The petitioner had defaulted to the payment of certain loans payable to the Bank and resultantly he was declared a non-performing asset. He was issued a notice by the Bank under Section 13(2). The petitioner made a representation thereagainst. The Bank responded to the said representation, but it was received by the petitioner beyond a period of 15 days from the date of communication of the representation as provided under Section 13(3-A). The petitioner claimed that due to the said lapse, the proceedings under SARFAESI were rendered valid.

The only question for consideration before the Court was whether the delay by a lender in communicating its decision to reject a representation made by a borrower under Section 13(3-A) vitiates the proceedings initiated in terms of Section 13 of the SARFAESI Act.

The High Court after giving due consideration to the law on the subject held that the said proceedings did not become infructuous merely due to delay in communicating the response as aforementioned. The Court perused various decisions of the Supreme Court including ITC Ltd. v. Blue Coast Hotels Ltd., 2018 SCC OnLine SC 237 wherein it was held that provisions under Section 13(3-A) were mandatory and failure on the part of the creditor to respond to the representation of borrower vitiate the recovery proceedings. Nonetheless, it also examined the relevant facts and concluded that the creditor had, in fact, examined the borrower’s representation even though it had failed to furnish a reply to the representation made by the borrower. In view of the above, the Supreme Court held that the borrower was not entitled to discretionary relief under Article 226 of the Constitution of India. Relying on the said decision, the High Court held, the requirement that the secured creditor considered the objection/representation of the borrower as mandatory but the requirement, that he communicates its conclusion within 15 days cannot be held to be so. In view thereof, the petitioner’s contention was held to be sans merit. The petition was then dismissed. [Kannu Aditya India Ltd. v. SBI, 2018 SCC OnLine Del 12208, Order dated 26-10-2018]

Case BriefsHigh Courts

Manipur High Court – A Single Judge Bench of Kh. Nobin Singh J., disposed of a writ petition by ordering the State Government to issue a speaking order with respect to the disposal of the representation which the petitioners were asked to make.

The petitioners were lecturers in United College, Chandel. After the college was taken over by the State Government, the employees of the college were included as the employees of the state government. There were certain conditions for such inclusion. The inclusion of the petitioners as lecturers was contingent on their obtaining an M.Phil or an equivalent degree within three years, failing which the increment in their pay would have been denied.

As the petitioners had failed to obtain an equivalent degree in the stipulated time period, an order was issued by the government which sought to withhold any increment that they had received after the completion of the time period.

In 2016, the final absorption of 16 lecturers and 1 librarian was completed, and an order was issued for the disbursal of the normal/annual increment in pay of these positions. Aggrieved by this, the petitioners argued that they had submitted the relevant documents to the authorities concerned immediately after obtaining the M.Phil/ Ph.D. degree. Thus, persons located in a similar position were being accorded the benefits, and their denial of the same was a violation of Articles 14 and 16 of the Constitution of India.

The Single Judge Bench found the writ petition to be similar to WP(C) No. 817 of 2017, which pertained to Tamenglong College, and gave the same order, asking the petitioners to submit a representation within a week of receiving a copy of the order. The State Government, after receiving the representation, was to dispose of it by issuing a speaking order. [L. Haokholet v. State of Manipur,2018 SCC OnLine Mani 126, Order dated 11-10-2018].