Larger Bench References Made By Supreme Court in 2021

Sneha Rao

1 Jan 2022 3:58 AM GMT

  • Larger Bench References Made By Supreme Court in 2021

    In the COVID-19 affected 2021, where the Supreme Court was functioning in a hybrid model throughout except for the first three months of the year, several substantial points of law were settled by answering long-pending references. Also, some new points of public importance were referred to a larger bench. Here is a look at some of such important judgments(in no particular...

    In the COVID-19 affected 2021, where the Supreme Court was functioning in a hybrid model throughout except for the first three months of the year, several substantial points of law were settled by answering long-pending references. Also, some new points of public importance were referred to a larger bench. Here is a look at some of such important judgments(in no particular order.

    Whether non-payment of stamp duty On Commercial Contract Will Invalidate Arbitration Agreement

    In N.N.Global Mercantile Pvt Ltd v Indo Unique Flame Ltd a three judge bench of the Supreme Court has observed that non-payment of stamp duty on the commercial contract will not invalidate the arbitration agreement. Disagreeing with two earlier judgments in this regard, the bench comprising Justices DY Chandrachud, Indu Malhotra and Indira Banerjee.  

    Disagreeing with earlier judgments in this regard (SMS Tea Estates Pvt. Ltd. v. M/s. Chandmari Tea Co. Pvt. Ltd.(2011) 14 SCC 66; Garware Wall Ropes Limited v. Coastal Marine Constructions and Engineering Limited (2019) 9 SCC 209; Vidya Drolia & Ors. v. Durga Trading Corporation), the bench comprising Justices DY Chandrachud, Indu Malhotra and Indira Banerjee referred the following question to the Constitution Bench.

    "Whether the statutory bar contained in Section 35 of the Indian Stamp Act, 1899 applicable to instruments chargeable to Stamp Duty under Section 3 read with the Schedule to the Act, would also render the arbitration agreement contained in such an instrument, which is not chargeable to payment of stamp duty, as being non-existent, unenforceable, or invalid, pending payment of stamp duty on the substantive contract/instrument?"

    Appointment of Arbitrator by Ineligible Person: Union of India v Tantia Constructions Ltd

    In the case of Union of India v Tantia Constructions Ltd, the Supreme Court referred to a larger bench the issue of whether the appointment of an arbitrator by a person, who is disqualified to be an arbitrator as per Section 12(5) of the Arbitration Act, is valid. A bench comprising Justices RF Nariman, Navin Sinha, and KM Joseph doubted the correctness of the decision in Central Organisation for Railway Electrification vs.M/s ECI-SPIC-SMO-MCML (JV) A Joint Venture Company and referred the issue to a larger bench.

    In the decision delivered on December 17, 2019 in Central Organization of Railway Electrification, a division bench comprising Justices R Banumathi and AS Bopanna had held that such appointments by an authority who is disqualified from being an arbitrator can be valid depending on the facts. On the other hand, an earlier decision delivered by a 2-judge bench headed by Justice Nariman in the case Bharat Broadband Network Ltd vs United Telecoms Ltd(April 2019) had held that the appointment of arbitrator by a person who himself is ineligible to be an arbitrator as per Section 12(5) of the Arbitration and Conciliation Act 1996 is void ab initio.

    On January 11, 2021, the three-judge bench headed by Justice Nariman observed that it prima facie disagreed with the decision in Central Organisation for Railway Electrification vs.M/s ECI-SPIC-SMO-MCML (JV) A Joint Venture Company and asked the Chief Justice to constitute a larger Bench to look into the correctness of this judgment.

    Inclusion of Day of Remand in Default Bail claim

    In the case of Enforcement Directorate v Kapil Wadhawan, a Bench of Justices Sanjay Kishan Kaul and Hrishikesh Roy referred to a larger bench the question of whether the day of remand is to be included for considering a claim for default bail. The Court was considering the appeal filed against the Bombay High Court judgment which held that the day of remand has to be included for the purpose of computing the period of 90 days or 60 days as contemplated in Section 167 (2)(a)(ii) of the Code of Criminal Procedure.

    The bench noticed that, in State of M.P. Vs. Rustom & Ors, Ravi Prakash Singh Vs. State of Bihar and M. Ravindran Vs. Intelligence Officer, Director of Revenue Intelligence, it was held that the date of remand is to be excluded for computing the permitted period for completion of the investigation. On the other hand, the judgments in Chaganti Satyanarayan Vs. State of Andhra Pradesh, CBI Vs. Anupam J Kulkarni, State Vs. Mohd. Ashraft Bhat, State of Maharashtra Vs. Bharati Chandmal Varma, and Pragyna Singh Thakur Vs. State of Maharashtra, has held that the date of remand must be included for computing the available period for investigation for determining entitlement to default bail.

    The Bench observed that since "the earlier position of law was not considered and the latest decision is of a 3 judges bench, it is necessary for a bench of appropriate strength to settle the law taking note of the earlier precedents. Unless the issue is appropriately determined, the courts across the country may take decision on the issue depending upon which judgment is brought to the Court's notice or on the Courts own understanding of the law, covering default bail under Section 167 (2)(a) II of CrPC."

    Employee Provident Fund Pension Case

    In Employees Provident Fund Organization and others v.Sunil Kumar B and others, a Division Bench of Justices U U Lalit and Ajay Rastogi referred a bench of appeals in the EPF case to a larger bench.

    Before the Supreme Court, EPFO argued that the RC Gupta case needs to be revisited as it was decided without taking note of the judgment in Krishna Kumar. In Krishena Kumar Vs.Union of India(1990) it was observed that the Rules governing the Provident Fund Scheme were entirely different from the Rules governing Pension Scheme, therefore, Pension Retirees and Provident Fund Retirees did not form a homogeneous class.

    The difference between the two schemes which was the fulcrum of the decision in Krishna Kumar was not so noted in the subsequent decision given in 2016 in the case of R.C. Gupta and Ors. v Regional Provident Fund Commissioner, Employees' Provident Fund Organization and Ors. It would not be a mere adjustment of amount to transfer from one fund to another as stated in R.C. Gupta and the decision in R.C. Gupta is required to be re-visited.

    A division bench comprising Justices UU Lalit and Ajay Rastogi said that since RC Gupta was decided by a coordinate bench of two-judges, the proper course would be to refer the matter to a larger bench. The Bench observed:

    "These, and the other submissions touching upon the applicability of the principle laid down in the decision in R.C. Gupta1 go to the very root of the matter. Sitting in a Bench of two Judges it would not be appropriate for us to deal with said submissions. The logical course would be to refer all these matters to a Bench of at least three Judges so that appropriate decisions can be arrived at."

    The bench said that the principal questions that arise for consideration are :

    1. Whether there would be a cut-off date under paragraph 11(3) of the Employees' Pension Scheme and

    2. Whether the decision in R.C. Gupta v. Regional Provident Fund Commissioner (2016) would be the governing principle on the basis of which all these matters must be disposed.

    Prospective Application of Constitution Bench decision on Condonation of Delay in Consumer Cases

    A 2-judge bench of the Supreme Court in Bhasin Infotech and Infrastructure Private Ltd versus Neema Agarwal and others has expressed the need for a larger bench decision on the issue regarding the prospective operation of the Constitution Bench judgment in the case New India Assurance Company Limited vs. Hilli Multipurpose Cold Storage Private Limited, which had held that Consumer Forum cannot condone the delay of more than 45 days in filing the version of the opposite party.

    Regarding the extent and impact of the prospective operation of the said judgment, two coordinate benches of the Supreme Court took contrary views.

    In the case Daddy Builders Private Ltd vs Manisha Bhargava, a 2-judge bench comprising Justices DY Chandrachud and MR Shah took the view that the prospective operation of New India Assurance decision would mean that delay of more than 45 days already condoned before the date of that decision (March 4, 2020), will remain unaffected. However, a contrary view was taken by another 2-judge bench in the case Dr. A Suresh Kumar vs. Amit Agarwal. In this case, a bench comprising Justices Vineet Saran and Dinesh Maheshwari took the view that even the delay condonation applications which are pending as on the date of the Constitution Bench judgment will remain unaffected. According to this bench, such pending delay condonation applications should also be decided on merit.

    In this backdrop, a bench of Justices Vineet Saran and Dinesh Maheswari expressed that the matter ought to be settled by a larger bench. Accordingly, the bench directed the Registry to place the matter before the Chief Justice of India for appropriate action.

    It may be noted that another three-judge bench had decided to settle the conflict between two-division bench judgments. In December 2021 a bench of Justices Justices DY Chandrachud, Surya Kant and Vikram Nath clarified that the applications to condone the delay of more than 45 days in filing the version of the opposite party in consumer cases, which were pending as of March 4, 2020, will not be impacted by the ruling of the Constitution Bench judgment in the case New India Assurance Company Limited vs. Hilli Multipurpose Cold Storage Private Limited, which had held that Consumer Forum cannot condone the delay of more than 45 days in filing the version of the opposite party. 

     Pending references before 9-judge bench

    As per the 'statistics about matters pending in Supreme Court' published in August 2021, there are 5 Nine Judges Bench Matters pending before the Supreme Court. These cases pertain to interpretations of :

    (1) 'material resources' in Article 39(b) of Constitution

    (2) Section 18-G of Industries (Development and Regulation) Act,

    (3) 'Industries' in Industrial Disputes Act

    (4) Royalties on mineral rights.

    (5) The questions on religious practices referred to in Sabarimala review.



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