Common Law

In various rulings of NCLT and NCLAT, while deciding Section 9 Petition under IBC, a view is taken that “Settlement Agreement” do not constitute “Operational debt” within the meaning of Section 5(21) of IBC. (The latest ruling appears to be of Trifigura India Pvt Ltd versus TDT Copper Ltd. NCLAT Order / Judgment dated 15.9.2022, passed in Company Appeal (AT) (Insolvency) No. 742 of 2020) With greatest respect to the Learned Members at the Bench, all such rulings are ex-facie erroneous. 1.        Section 5(21) of IBC says Operational Debt "means a “Claim” and then sets out the class of debts that are considered as “Operational debts”. What is covered are (1) claims in respect of the provision of goods or services (2) claims in respect of Employment and (3)   A debt in respect of the payment of dues arising under any law payable to the Central Government, any State Government or any local authority. 2.        Now the C...

Can we Claim it in existing legal framework ? The property tax is a kind of impost / tax levied by Local bodies / Municipalities, upon lands and buildings, situate in their territorial jurisdiction. Due to the peculiar nature of tax, the property tax are regarded as “rate”, and not as “tax” or “fee”. The Apex Court in a case before it (AIR 1963 SC 1742), had the occasion to distinguish the rate from tax or fee, wherein it was stated that rate is an hybrid of tax and fee, as it has the elements of both, and is more in the nature of compensation paid for the services availed, although not directly attributable to the measurable benefits of the services availed. The first elementary principle which governs any Municipal taxation is – the Tax levied by Municipal Corporation / Local bodies are compensatory in nature. Municipalities levy taxes under respective State legislations. In area of Municipal taxation, the State Govts do not enjoy the same freedom and latitude as otherwise bein...

Section 11 of Maharashtra Ownership of Flats Act, 1963, (MOFA) r/w Rule 9 of MOFA Rules, 1964, obligates upon Developers to execute conveyance in favour of the Society within four months from the date on which the co-operative Society is duly constituted. The Conveyance to Housing Societies and other Societies, is a pressing issue in Mumbai; and rest of India may not be an exception. The Developers do not Convey land to in favour of Societies to retain control over the administration of the Building; and probably to claim further development rights over the said land, which may accrue in future. The Hon’ble Bombay High Court in the Case of Ratna Rupal CHS [2011 (5) BCR 561, also referred in 2015 (5) MhLJ 318, 2016 (5) MhLJ 102] have made some very interesting observations: Para 10: The Conveyance had to be executed within the specified period. The conveyance was not executed for a number of years. The Plaintiff (Society) must be taken to have had full title in the en...

The subject of taxation is a “Rocket Science”. The constitution of Nine Judges Bench in the Mafatlal Industries Case, Reported in (1997) 5 SCC 536, running into more than 500 pages; the extremely contested Vodafone litigation; and the present Judgment of Bombay High Court running into 310 Pages, at least furnishes some justification to this statement of Rocket Science. There are umpteen Judgments, some of which are relied herein also (Para 147), that whilst dealing with challenge to Taxation laws, greater latitude is shown by Constitutional Courts, only for the reason that Taxation / Economic Legislation, by their very nature, are very complex. And hold on, the Regime of Property Tax based on Capital Value of the Property, was brought in force, on the recommendations of Tata Institute of “Social Sciences”. (Para 33 of the Judgment) Did these Social Scientist, nevertheless very respectable, would appreciate an Inch of what was discussed in 310 Pages of Judgment, even assuming t...