{"id":5140,"date":"2023-06-20T07:51:46","date_gmt":"2023-06-20T07:51:46","guid":{"rendered":"https:\/\/zeus.firm.in\/zeus-newsletter-june-2023\/"},"modified":"2023-06-20T07:51:46","modified_gmt":"2023-06-20T07:51:46","slug":"zeus-newsletter-june-2023","status":"publish","type":"post","link":"https:\/\/zeus.firm.in\/zeus-newsletter-june-2023\/","title":{"rendered":"ZEUS Newsletter June 2023"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong>Highlights:<\/strong><\/span><\/p>\n<h4 style=\"text-align: left;\"><span style=\"color: #800000;\"><strong><span style=\"color: #ab2430;\"><span style=\"color: #ab2430;\">Corporate Brief<\/span><\/span><\/strong><\/span><\/h4>\n<ul style=\"text-align: justify;\">\n<li><em>Notification dated 03.05.2023 issued by the Ministry of Finance on transactions done by Chartered Accountants (CA), Company Secretaries (CS), Certified Management Accountants (CMA) on behalf of their clients to be covered under the Prevention of Money Laundering Act, 2002 (PMLA). <\/em><\/li>\n<li><em>Circular dated 03.05.2023 issued by SEBI on introduction of Legal Entity Identifier (LEI) for issuers who have listed and\/or propose to list non-convertible securities, securities debt instruments and security receipts. <\/em><\/li>\n<li><em>Notification dated 10.05.2023 issued by the Ministry of Corporate Affairs (MCA) on the Companies (Removal of Names of Companies from the Registrar of Companies) Second Amendment Rules, 2023. <\/em><\/li>\n<li><em>Circular dated 22.05.2023 issued by Securities and Exchange Board of India (SEBI) on Dematerialization of securities of Hold Cos and SPVs held by Infrastructure Investment Trusts (InvITs).<\/em><\/li>\n<\/ul>\n<h4><span style=\"color: #ab2430;\"><strong>RERA Brief<\/strong><\/span><\/h4>\n<ul style=\"text-align: justify;\">\n<li><em>Circular dated 09.05.2023 issued by Goa Real Estate Regulatory Authority regarding Landlord\/Investor having area revenue share in real estate project to be treated as promoter and opening of separate bank account by such landowner \/promoter or investor \/promoter to open a separate bank account for deposit of 70% of the sale proceeds realized from the allotees of their share.<\/em><\/li>\n<li><em>Order dated 15.05.2023 issued by Maharashtra Real Estate Regulatory Authority regarding verification by MahaRERA to ascertain authenticity of commencement certificates and occupation certificates which are submitted by promoters.<\/em><\/li>\n<li><em>Circular dated 23.05.2023 issued by Goa Real Estate Regulatory Authority regarding Anti money \u2013 laundering, counterfeiting the financing of terrorism , and combating proliferation financing guidelines for Real Estate Agents, 2023.<\/em><\/li>\n<li><em>Order dated 24.05.2023 issued by Rajasthan Real Estate Regulatory Authority regarding documents required for acceptance of completion certificate. <\/em><\/li>\n<li><em>Order dated 29.05.2023 issued by Maharashtra Real Estate Regulatory Authority regarding display of QR code in promotions\/ advertisements material relating to Real Estate projects registered with MahaRERA.<\/em><strong style=\"font-size: revert; color: initial;\">\u00a0<\/strong><\/li>\n<\/ul>\n<h4 style=\"text-align: left;\"><span style=\"color: #ab2430;\"><strong>NCLT Brief<\/strong><\/span><\/h4>\n<ul style=\"text-align: justify;\">\n<li><em>Whether a Section 9 petition under IBC is maintainable on an award which is under challenge under Section 34 of Arbitration &amp; Conciliation Act, 1996?<\/em><strong style=\"font-size: revert; color: initial;\">\u00a0<\/strong><\/li>\n<\/ul>\n<h4 style=\"text-align: left;\"><span style=\"color: #ab2430;\"><strong>Litigation Brief<\/strong><strong>\u00a0<\/strong><\/span><\/h4>\n<ul style=\"text-align: justify;\">\n<li><em>NO CONVICTION CAN BE MADE IN A TRIAL IN THE APPELLATE COURT WITHOUT CALLING ON RECORDS OF THE CASE FROM THE TRIAL COURT<\/em><\/li>\n<li><em>Vivad Se Vishwas II\u201d: Government Issues Scheme to Settle Contractual Disputes<\/em><strong style=\"font-size: revert; color: initial;\">\u00a0<\/strong><\/li>\n<\/ul>\n<h3 style=\"text-align: center;\"><span style=\"color: #ab2430;\"><strong>\u00a0<\/strong><strong><em>Corporate Brief<\/em><\/strong><\/span><\/h3>\n<p><span style=\"color: #ab2430;\"><strong>Notification dated 03.05.2023 issued by the Ministry of Finance on transactions done by Chartered Accountants (CA), Company Secretaries (CS), Certified Management Accountants (CMA) on behalf of their clients to be covered under the Prevention of Money Laundering Act, 2002 (PMLA).<\/strong><strong style=\"font-size: revert; text-align: justify;\">\u00a0<\/strong><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li>The Ministry of Finance (Department of Revenue) vide its notification dated 03.05.2023 notified that the financial transactions carried out by (i) an individual who obtained a certificate of practice under section 6 of the Chartered Accountants Act, 1949 and practicing individually or through a firm, in whatever manner it has been constituted; (ii) an individual who obtained a certificate of practice under section 6 of the Company Secretaries Act, 1980 and practicing individually or through a firm, in whatever manner it has been constituted; (iii) an individual who has obtained a certificate of practice under section 6 of the Cost and Works Accountants Act, 1959 and practicing individually or through a firm, in whatever manner it has been constituted, on behalf of his client, in the course of his or her profession, in relation to the following activities:\n<ol>\n<li>buying and selling of any immovable property;<\/li>\n<li>managing of client money, securities or other assets;<\/li>\n<li>management of bank, savings or securities accounts;<\/li>\n<li>organization of contributions for the creation, operation or management of companies;<\/li>\n<li>creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities<\/li>\n<\/ol>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">shall be included under the ambit of the definition of \u201cperson carrying on designated business or profession\u201d By virtue of this inclusion the persons mentioned above have also been included in the definition of \u2018Reporting Entity\u2019 under the Act.<\/p>\n<p><span style=\"color: #ab2430;\"><strong><em>Circular dated 03.05.2023 issued by SEBI on introduction of Legal Entity Identifier (LEI) for issuers who have listed and\/or propose to list non-convertible securities, securities debt instruments and security receipts.<\/em><\/strong><strong>\u00a0<\/strong><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li>According to Circular dated 03.05.2023 issued by SEBI issuers having outstanding listed non-convertible securities as on 31.08.2023 shall report\/ obtain and report the LEI code (a unique 20 &#8211; character code to identify legal distinct entities that engage in financial transactions) in the Centralized Database of corporate bonds, on or before 01.09.2023. Similarly, issuers having outstanding listed securitized debt instruments and security receipts as on 31.08.2023 shall report\/ obtain and report the LEI code to the Depository(ies), on or before 01.09.2023.<\/li>\n<li>Further, issuers proposing to issue and list non-convertible securities on or after 01.09.2023 shall report the LEI code in the Centralized Database of corporate bonds at the time of allotment of the ISIN. Also, issuers proposing to issue and list securitized debt instruments and security receipts, on or after 01.09.2023 shall report the LEI code to the Depositories at the time of allotment of ISIN.<\/li>\n<li>Entities can obtain the LEI code from any of the Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF). In India the LEI Code can be obtained from Legal Entity Identifier India Limited (LEIL) which has been recognized by the RBI as an issuer of LEI under the Payment and Settlement Systems Act, 2007 and is accredited by the GLEIF as the LOU for issuance and management of LEI codes.<\/li>\n<li>The Depositories are also required to map the LEI code to the existing ISINs by 30.09.2023 and for future issuances, map the LEI code provided by the issuers with the ISIN at the time of activation of the ISIN.<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong><em>Notification dated 10.05.2023 issued by the Ministry of Corporate Affairs (MCA) on the Companies (Removal of Names of Companies from the Registrar of Companies) Second Amendment Rules, 2023.<\/em><\/strong><strong style=\"font-size: revert;\">\u00a0<\/strong><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li>The Ministry of Corporate Affairs issued notification dated 10.05.2023 on the Companies (Removal of Names of Companies from the Registrar of Companies) Second Amendment Rules, 2023.<\/li>\n<li>Vide the notification dated 10.05.2023 3 new provisos were inserted under Rule 4 of the said Rules to the effect that:\n<ol>\n<li>No company shall file an application unless it has filed overdue financial statements under section 137 and overdue annual returns under section 92, up to the end of the financial year in which the company ceased to carry its business operations;<\/li>\n<li>In case a company intends to file the application after the action under sub-section (1) of section 248 has been initiated by the Registrar, it shall file all pending financial statements under section 137 and all pending annual returns under section 92, before filing the application;<\/li>\n<li>Once notice under sub-section 5 of section 248 has been issued by the Registrar for publication pursuant to the action initiated under sub-section (1) of section 248, a company shall not be allowed file the application under this sub-rule.<\/li>\n<\/ol>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong><em>Circular dated 22.05.2023 issued by Securities and Exchange Board of India on Dematerialization of securities of Hold Cos and SPVs held by Infrastructure Investment Trusts (InvITs).<\/em><\/strong><strong>\u00a0<\/strong><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li>In order to promote dematerialization of securities, encourage ease of doing business, improve transparency in the dealings of securities of Hold Cos\/ SPVs, it has been decided that InvITs shall henceforth hold securities of Hold Cos and SPVs in dematerialized form only.<\/li>\n<li>As per the circular dated 22.05.2023 issued by SEBI, regulation 14(4)(r) of SEBI (Infrastructure Investment Trusts) Regulations, 2014 provides that the units of InvIT shall be issued only in dematerialized form to all applicants.<\/li>\n<li>For existing securities held by InvITs in Hold Cos and SPVs in physical form, it is directed that the Investment Managers are required to dematerialize the securities the securities so held by the InvIT on or before 30.06.2023.<\/li>\n<\/ul>\n<h3 style=\"text-align: center;\"><span style=\"color: #ab2430;\"><strong><em>Real Estate Brief<\/em><\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong>Circular dated 09.05.2023 issued by Goa Real Estate Regulatory Authority regarding Landlord\/Investor having area revenue share in real estate project to be treated as promoter and opening of separate bank account by such landowner \/promoter or investor \/promoter to open a separate bank account for deposit of 70% of the sale proceeds realized from the allotees of their share.<\/strong><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li>Goa Real Estate Regulatory Authority vide its circular dated 09.05.2023 re-examned its circular dated 13.02.2018 and partial modified the same to incorporate the following:\n<ol>\n<li>Under joint development agreement route, land owner who has provided the land for construction and the promoter who has invested the money for construction shall be deemed to be the promoters and will be joint liable for the responsibilities and the functions.<\/li>\n<li>Only one separate escrow account shall be opened in a scheduled bank to park the seventy percent amount realized for the real estate project from the allottees from time to time to cover the cost of construction.<\/li>\n<li>The landowner\/promoter even though entitled to a share of the total area to be developed under &#8220;Joint Development Agreement&#8221; route shall not be permitted to open a separate bank account.<\/li>\n<\/ol>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong>Order dated 15.05.2023 issued by Maharashtra Real Estate Regulatory Authority regarding verification by MahaRERA to ascertain authenticity of commencement certificates and occupation certificates which are submitted by promoters.<\/strong><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li>Maharashtra Real Estate Regulatory Authority (\u201cMaha-RERA\u201d) vide its order no. 45\/2023 dated 15.05.2023 issued directions verification by MahaRERA to ascertain authenticity of commencement certificates and occupation certificates which are submitted by promoters.<\/li>\n<li>Following guidelines have been laid down in the said order:\n<ol start=\"19\">\n<li>With effect from 19.06.2023, the commencement certificate along with registration application submitted by the promoter shall be compared for authenticity with the application and certificate attached and forwarded to the designated email of MahaRERA.<\/li>\n<li>Subsequently, on the confirmation of the authenticity of the certificate being issued by the competent authority, the application submitted by the promoter for registration of real estate project shall be processed for further grant of MahaRERA project registration certificate.<\/li>\n<li>The above mentioned procedure shall be followed until the respective competent authorities integrate their website with the website of MahaRERA.<strong style=\"font-size: revert; color: initial;\">\u00a0<\/strong><\/li>\n<\/ol>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong>Circular dated 23.05.2023 issued by Goa Real Estate Regulatory Authority regarding Anti money \u2013 laundering, counterfeiting the financing of terrorism , and combating proliferation financing guidelines for Real Estate Agents, 2023.<\/strong><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li>Goa Real Estate Regulatory Authority vide its circular dated 23.05.2023 issued guidelines regarding Anti money \u2013 laundering, counterfeiting the financing of terrorism , and combating proliferation financing for Real Estate Agents, 2023. Please refer to <a href=\"https:\/\/rera.goa.gov.in\/reraApp\/resources\/staticpage\/Circular%20Anti%20Money%20Laundering.pdf\">https:\/\/rera.goa.gov.in\/reraApp\/resources\/staticpage\/Circular%20Anti%20Money%20Laundering.pdf<\/a> for the update.<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong>Order dated 24.05.2023 issued by Rajasthan Real Estate Regulatory Authority regarding documents required for acceptance of completion certificate. <\/strong><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li>Rajasthan Real Estate Regulatory Authority vide its amending order dated 24.05.2023 issued directions in respect of documents required for acceptance of completion certificate.<\/li>\n<li>Under the said order following categorization was done for submission of documents:\n<ol>\n<li>Plotted Development Projects (situated in urban area and are approved as per Township Policy) &#8211; Mortgage Free Letter from the local authority, or in case plots are not mortgaged promoters must provide evidence to the Authority if plots are not included in the approved layout plan, such as a letter from the Local Authority or an RTI application for a certificate confirming no plot mortgages. A Completion Certificate from a Chartered Engineer may also be accepted by the Authority.<\/li>\n<li>Plotted Development Projects ( situated in rural area) \u2013 Completion Certificate issued by the committee headed by Collector or the SDO as the case may be in accordance with Government of Rajasthan Revenue (Group-IV) No. F.6(6)Rev.6\/92\/Pt. \/ 14 dated 02.04.2007 and as amended by Government of Rajasthan Revenue (Group-IV) No. F.6(6)Rev.6\/2014\/50 dated 29.06.2021, as per amended rule 9.<\/li>\n<li>Other than plotted development project &#8211; Completion Certificate issued by Local Authority, or Completion Certificate issued by Empanelled Architect in the prescribed format along with the check list along with fee receipt and acknowledgement letter of submission of CC in Local Authority.<\/li>\n<\/ol>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong>Order dated 29.05.2023 issued by Maharashtra Real Estate Regulatory Authority regarding display of QR code in promotions\/ advertisements material relating to Real Estate projects registered with MahaRERA.<\/strong><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li>Maharashtra Real Estate Regulatory Authority (\u201cMaha-RERA\u201d) vide its order no. 46\/2023 dated 29.05.2023 issued directions in respect of display of QR code in promotions\/ advertisements material relating to Real Estate projects registered with MahaRERA.<\/li>\n<li>In the said order it has been mentioned that promoters are bound to display QR Code on each and every advertisement or promotion done for that particular project. This shall apply on every advertisement made in a newspaper, magazines, printed flyers, standees on project sites and sales office, websites or webpages of project.<\/li>\n<li>Further, QR code must be published in a way that is legible and readable for homebuyer and also detectable with software application. And it should be published besides MahaRERA registration number and the website address.<\/li>\n<\/ul>\n<h3 style=\"text-align: center;\"><span style=\"color: #ab2430;\"><strong><em>NCLT Brief<\/em><\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong>Whether a Section 9 petition under IBC is maintainable on an award which is under challenge under Section 34 of Arbitration &amp; Conciliation Act, 1996?<\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><strong><u>BRIEF FACTS <\/u><\/strong><\/p>\n<p style=\"text-align: justify;\">An appeal was filed by the M\/s. KK Ropeways Ltd. (\u201c<strong>Appellant<\/strong>\u201d) before the National Company Law Appellate Tribunal, Chennai Bench <strong>(\u201cNCLAT\u201d)<\/strong> challenging the impugned order dated 27.04.2021 passed by the National Company Law Tribunal, Bengaluru Bench (\u201c<strong>Adjudicating Authority<\/strong>\u201d) whereby the Adjudicating Authority had dismissed the application filed by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 (\u201c<strong>IBC <\/strong>\u201d)<\/p>\n<p style=\"text-align: justify;\">On 29.11.2018 an arbitral award was passed by the Arbitrator under Arbitration and Conciliation Act, 1996, in the arbitration proceedings between the Appellant and M\/s. Billion Smiles Hospitality Pvt. Ltd. (\u201c<strong>Corporate Debtor<\/strong>\u201d) in favor of the Appellant for recovery of Rs. 26,33,022\/- along with interest @15% per annum from the Corporate Debtor.\u00a0 The date from which such debt fell due was 19.01.2018. The arbitral award was passed on account of non-payment of the rental dues as per the lease agreement by the Corporate Debtor to the Appellant.<\/p>\n<p style=\"text-align: justify;\">Being aggrieved by the arbitral award, the Corporate Debtor had filed an appeal under Section 34 of Arbitration &amp; Conciliation Act, 1996 before High Court of Delhi assailing the arbitral award, during the pendency of the Section 9 IBC proceedings before the Adjudicating Authority.<\/p>\n<p style=\"text-align: justify;\"><strong><u>QUESTION OF LAW<\/u><\/strong><\/p>\n<p style=\"text-align: justify;\">Whether the petition under Section 9 of IBC filed by the Appellant is maintainable on an arbitral award which is under challenge u\/s 34 of Arbitration and Conciliation Act, 1996?<\/p>\n<p style=\"text-align: justify;\"><strong><u>OBSERVATIONS BY NCLAT <\/u><\/strong><\/p>\n<p style=\"text-align: justify;\">The Hon\u2019ble NCLAT observed that as per the provisions of IBC \u2018dispute\u2019 means and includes raising a dispute before a court of law or an arbitral tribunal before the receipt of the demand notice under Section 8 of IBC. The dispute shall truly exist and should not be spurious, imaginary and hypothetical. Further, it was observed that the Appellant had secured an ex-parte award in its favour against which the Corporate Debtor has filed an appeal under Section 34 of the Arbitration and Conciliation Act, 1996.<\/p>\n<p style=\"text-align: justify;\">In the present case, the arbitral award was based on the rental dispute and when the appeal was filed by the Corporate Debtor against the arbitral award, the operational debt is considered to be under dispute. The Hon\u2019ble Tribunal further opined that so long as the arbitration award was challenged, the operational debt in the instant appeal is considered to be under dispute and hence, the arbitration and insolvency proceedings cannot go on together.<\/p>\n<p style=\"text-align: justify;\"><strong><u>CONCLUSION<\/u><\/strong><\/p>\n<p style=\"text-align: justify;\">The Hon\u2019ble NCLAT came to the conclusion that the view arrived by the Adjudicating Authority while dismissing the Section 9 petition under IBC for recovery of the sum awarded in the arbitration proceeding is free from any errors. Hence, the Hon\u2019ble NCLAT dismissed the instant appeal.<\/p>\n<p style=\"text-align: justify;\"><strong>Case referred \u2013 M\/s. KK Ropeways Ltd. v. M\/s. Billion Smiles Hospitality Pvt. Ltd. [Comp. App (AT) (CH) (INS.) No. 246 of 2021]. <\/strong><\/p>\n<h3 style=\"text-align: center;\"><span style=\"color: #ab2430;\"><strong><em>Litigation Brief <\/em><\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong>NO CONVICTION CAN BE MADE IN A TRIAL IN THE APPELLATE COURT WITHOUT CALLING ON RECORDS OF THE CASE FROM THE TRIAL COURT<\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><strong>CASE ANALYSIS: JITENDRA KUMAR RODE V. UNION OF INDIA [PRONOUNCED BY THE HON\u2019BLE SUPREME COURT OF INDIA IN 2023 SCC OnLine SC 485]<\/strong><\/p>\n<p style=\"text-align: justify;\">In the captioned appeal in the Hon\u2019ble Supreme Court against a judgement of the Hon\u2019ble High Court of Allahabad High Court, the Division Bench consisting of Justice Krishna Murari and Justice Sanjay Kaul, while upholding the conviction of an accused under Prevention of Corruption Act, 1988 laid down that the court of appeal should mandatorily call on record for the case of respective trial court which should be an obligation as well as duty laid under interpretation of Section 385 of Code of Criminal Procedure, 1973.<\/p>\n<p style=\"text-align: justify;\"><strong><em>Brief Background: <\/em><\/strong><\/p>\n<p style=\"text-align: justify;\">In the current case, the trial court had convicted the accused way back in 1999 and sentenced him to a rigorous imprisonment of one year with fine of \u20b9500 under Section 7 of Prevention of Corruption Act and that of 2 years conviction and fine of \u20b9500 under Section 13(2) of the abovementioned act.<\/p>\n<p style=\"text-align: justify;\">This was challenged by the appellant in Allahabad court of appeal criticizing the trial court\u2019s order of conviction against him. The Hon\u2019ble High Court of Allahabad summoned the trial court to furnish on record the case of the Appellant and the explanation as to how they took the decision against the Appellant, to which no reply was received from their end.<\/p>\n<p style=\"text-align: justify;\">The Hon\u2019ble High Court of Allahabad concluded that the trial court lost all records against the appellant being non-traceable and the information sent is non-relevant to the case of the appellant. The trial court was found non-compliant with the rules as well as the records they served were not endorsed by the Central Bureau of Investigation. However, the Hon\u2019ble High Court of Allahabad High Court convicted the appellant with the same charges, despite the gross misconduct of the trial court.<\/p>\n<p style=\"text-align: justify;\"><strong><em>Observation and Decision of the Supreme Court: <\/em><\/strong><\/p>\n<p style=\"text-align: justify;\">The Apex court noted that despite instructions by the Hon\u2019ble High Court, documents such as the witness statements, statements under Section 313 CrPC were neither available nor were reconstructed. Therefore, upholding conviction in the absence of such documents cannot be said to be in consonance with due process of law and fairness. The onus to produce the missing record was put on the Appellant which is an erroneous decision taken by the Hon\u2019ble High Court. It is the right of the appellant to have the documents perused on record by the trial court.<\/p>\n<p style=\"text-align: justify;\">The Apex court laid down in this judgment that it is not the duty of the court of appeal to hinge on the decision of the lower court, but there should be a proper scrutiny of the process of law by calling on record the documents and the arguments advanced should be observed and analyzed before making a conclusion.<\/p>\n<p style=\"text-align: justify;\">The Hon\u2019ble Supreme Court further held that protection of the rights under Article 21 entails the right to life and liberty and there should be protection of liberty from any restriction. Therefore, in the absence of fair trial and legal procedure which includes the opportunity for the person filing an appeal to question the order of the lower court and the same can only be done when the record is available with the Court of Appeal.<\/p>\n<p style=\"text-align: justify;\">Concluding the judgment, the Apex court held that there is no straitjacket formula to the procedure of court, but the non-compliance of the mandate leads to the violation of Article 21 of the Constitution of India which is erroneous in the eyes of law and should not be done.<\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #ab2430;\"><strong>\u201cVivad Se Vishwas II\u201d: Government Issues Scheme to Settle Contractual Disputes <\/strong><\/span><\/p>\n<p style=\"text-align: justify;\"><strong>Objective of the Scheme<\/strong><\/p>\n<ol style=\"text-align: justify;\">\n<li>The Scheme has been issued by the Ministry of Finance, Government of India on 29.05.2023. A one- time settlement scheme, \u201cVivad se Vishwas\u201d, has been launched with the intent to clear the backlog of old litigation cases which are holding back fresh investment, reducing the ease of doing business with the government, tying up scarce working capital and indirectly reducing competition for newly floated tenders.<\/li>\n<\/ol>\n<ol style=\"text-align: justify;\" start=\"2\">\n<li>The purpose\/objective of this Scheme is to settle and end certain disputes, where one of the parties is the Government of India or its entities where the judgement\/award has been passed by an adjudicating authority, by paying certain percentage of the awarded sum, to avoid further litigation and save government resources.<\/li>\n<\/ol>\n<p style=\"text-align: justify;\"><strong>Details:<\/strong><\/p>\n<ol style=\"text-align: justify;\" start=\"3\">\n<li>The scheme shall come into force from 15.07.2023 and claims can be submitted by the contractors by 31.10.2023.<\/li>\n<li><u>Eligibility for availing the Scheme:<\/u><\/li>\n<li>The dispute must have arisen out of a contract whereon of the parties is Government of India\/its entities including Central Public Sector Enterprises (CPSEs), Autonomous Bodies of the Government of India, public sector banks and public sector financial institutions, Union Territories without legislature and all agencies\/ undertakings thereof; all organisations, like Metro Rail Corporations, where Government of India has shareholding of 50%<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a> (referred to as the \u201cProcuring Entities\u201d).<\/li>\n<li>CPSEs, who are contractors to the aforesaid procuring entities, are also eligible to file their claim under this Scheme.<\/li>\n<li>Scheme is applicable to all kinds of procurement including procurement of goods, services and works.<\/li>\n<li>The claim\/award shall only be for monetary value passed by a court\/arbitral tribunal.<\/li>\n<li>Cases should only relate to domestic arbitration, cases under international commercial arbitration are not eligible to be settled under the Scheme.<\/li>\n<li>Cases where Arbitral Awards have been passed upto 31.01.2023 and Court Awards passed upto 30.04.2023.<\/li>\n<li>Contractors can also opt for this Scheme in cases where awards direct payment of money from them to the Procuring Entities.<\/li>\n<li><u>Amount payable under the Scheme: <\/u><\/li>\n<li>For Court Awards passed upto 30.04.2023 \u2013 85% of the net amount awarded\/upheld by the Court or 85% of the claim lodged by the contractor under this scheme, whichever is lower.<\/li>\n<li>For Arbitral Awards passed upto 31.01.2023\u2013 65% of the net amount awarded\/upheld by the Court or 85% of the claim lodged by the contractor under this scheme, whichever is lower.<\/li>\n<li>Interest at the rate of 9% shall be payable on the 85%\/65% amount, as the case may be, irrespective of any rate of interest as provided in the award\/judgement.<\/li>\n<li>In case the Government of India\/its entities challenge an arbitral award, 75% of the award amount has to be paid to the contractor, against a Bank guarantee (BG) of equivalent amount, before filing of the challenge in the court. Such amounts paid to the contractor shall be adjusted with the amounts due under the present scheme. However, no reimbursement of BG charges will be made to the contractor.<\/li>\n<li>The Government of India\/its entities shall be obligated to accept the claims lodged by a contractor and make an offer under this scheme if the claims do not exceed Rs. 500 Crores. Only if claims exceeding Rs. 500 crores can the Government of India\/its entities refuse the contractors request to settle. Such denial shall be communicated to the contractor within 60 days of the settlement request.<\/li>\n<\/ol>\n<p style=\"text-align: justify;\"><strong>Procedure:<\/strong><\/p>\n<ol style=\"text-align: justify;\" start=\"7\">\n<li>Contractors should submit their claims through Government e-Marketplace (GeM) online portal. For non- GeM contracts of Ministry of Railways, contractors should register their claims on IREPS (<a href=\"http:\/\/www.ireps.gov.in\">ireps.gov.in<\/a>).<\/li>\n<li>The registered contractor shall list out the eligible disputes, which it is willing to settle under this scheme, on the portal and provide details of the dispute including contract number, contracting authority, paying authority, net award amount (as detailed in para 10 (a) and 10 (b) of the scheme), claim amount with details thereof and the status of the dispute.<\/li>\n<li>GeM to initiate these details to the Government of India\/its entities and such entity shall verity the claim details and update the same if required.<\/li>\n<li>The Government of India\/ its entities shall evaluate the settlement amount due, as per this scheme, and make an offer to the contractor within two weeks of receipt of claims on the portal which shall either be accepted or rejected by the contractor within 30 calendar days. Immediately on acceptance of the settlement offer under the scheme, an automatic acknowledgement email shall be received by the parties.<\/li>\n<li>The contractor shall within 45 days (or longer period if permitted by the entity) from the date of the acknowledgement email file application for withdrawal of the case before the court.<\/li>\n<li>Thereafter, the settlement agreement may be digitally signed by both the parties which shall have the same effect as a settlement agreement consequent to successful conciliation as per the Arbitration and Conciliation Act, 1996. The Government of India\/its entities or the contractor, as the case may be, shall make payments within 30 days of the execution of the settlement agreement.<\/li>\n<li>If the contractor does not accept the offer, the ongoing litigation process may continue.<\/li>\n<\/ol>\n<p style=\"text-align: center;\"><span style=\"color: #800000;\">****<\/span><\/p>\n<p style=\"text-align: justify;\">Disclaimer:<\/p>\n<p style=\"text-align: justify;\"><em>For private circulation to the addressee only and not for re-circulation. Any form of reproduction, dissemination, copying, disclosure, modification, distribution and\/ or publication of this Newsletter is strictly prohibited. This Newsletter is not intended to be an advertisement or solicitation. The contents<\/em><em> of this Newsletter are solely meant to inform and is not a substitute for legal advice. Legal advice should be obtained based on the specific circumstances of each case, before relying on the contents of this Newsletter or prior to taking any decision based on the information contained in this Newsletter. ZEUS Law disclaims all responsibility and accepts no liability for the consequences of any person acting, or refraining from acting, on such information. If you have received this Newsletter in error, please notify us immediately by telephone. <\/em><em>Copyright \u00a9 2014 ZEUS Law. All rights reserved<\/em>. Replication or redistribution of content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of ZEUS Law.<\/p>\n<p style=\"text-align: justify;\"><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> These organizations can opt out of this scheme with approval of the Board of Directors.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Highlights: Corporate Brief Notification dated 03.05.2023 issued by the Ministry of Finance on transactions done by Chartered Accountants (CA), Company [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5056,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[24,31],"tags":[41],"_links":{"self":[{"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/posts\/5140"}],"collection":[{"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/comments?post=5140"}],"version-history":[{"count":0,"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/posts\/5140\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/media\/5056"}],"wp:attachment":[{"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/media?parent=5140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/categories?post=5140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zeus.firm.in\/wp-json\/wp\/v2\/tags?post=5140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}