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In a significant development on Monday, the Delhi High Court addressed the troubling practice of placing hoardings and posters for candidates in the bar elections of the national capital. The court, led by Acting Chief Justice Manmohan and Justice Tushar Rao Gedela, denounced this practice as a “menace” and urged that such expenditures in bar elections cease immediately.

The remarks came during a hearing of a Public Interest Litigation (PIL) advocating for a 33% reservation of seats for women lawyers in the Bar Council of Delhi (BCD), Delhi High Court Bar Association (DHCBA), and all District Bar Associations in Delhi. Senior Advocate Mohit Mathur, President of DHCBA, along with representatives from BCD and the Coordination Committee of district bar associations, attended the session.

The court expressed strong disapproval of the current electoral practices, emphasizing that hoardings and posters are detrimental and contribute to an unhealthy electoral culture. Acting Chief Justice Manmohan underscored that such practices should not be seen as investments for electoral returns and called on senior bar leaders to actively curb these practices.

“This poster hoarding business must stop,” ACJ Manmohan asserted. He urged senior counsels to take proactive measures and warned candidates of potential disqualification to deter them from engaging in these practices. “We owe it to the young generation of lawyers to set a proper example,” he added.

Earlier this year, a full bench had banned the use of hoardings, posters, and parties in bar elections to maintain electoral purity and curb the influence of money. During the recent hearing, the Shahdara Bar Association expressed support for the PIL concerning women’s reservation, and other district bar associations also showed backing for this initiative.

Senior Advocate Mathur highlighted that applying a reservation of one-third seats for women in the DHCBA’s Executive Committee might not be suitable given the association’s large membership base. He suggested that more time be needed to address this matter comprehensively.

The court has scheduled a meeting between the DHCBA and the Coordination Committee of district bar associations to further deliberate on the issue. The case will resume in September.

The PIL underscores the lack of effective representation of women in key positions within the BCD and other bar associations, arguing that this under-representation impacts women’s rights and the overall effectiveness of the justice system. The plea notes that despite an increasing number of women lawyers, their participation in prestigious roles remains minimal due to various professional barriers.

The petition asserts that reserving 33% of seats for women would ensure equal representation and provide women lawyers with opportunities for advancement and addressing grievances. “For 64 years since its establishment, women’s representation in the Bar Council of Delhi, Delhi High Court Bar Association, and District Bar Associations has been almost non-existent. Only two female lawyers have served on the Delhi Bar Council, with neither holding high-ranking positions. This reveals a persistent inequality towards women lawyers,” the plea concludes.

Title: Shobha Gupta Advocate v. Bar Council of Delhi & Ors.

In a significant ruling, the Supreme Court has clarified that the limitation period for filing a specific performance suit begins from the date fixed for the performance of the contract, rather than from the expiry of the agreement’s validity.

This decision came as the bench, comprising Justices Vikram Nath and Prasanna B Varale, set aside the concurrent findings of both the High Court and the First Appellate Court. The courts below had incorrectly relied on a clause that stated the agreement would remain valid for five years from the date of execution. However, the Supreme Court emphasized that this clause was irrelevant to determining the date of performance.

The bench observed:

“The First Appellate Court and the High Court went on the consideration that the agreement further recorded that this agreement would remain valid for a period of five years from today’s date i.e., date of the execution of the agreement to sell. Placing reliance on this clause, in our considered opinion, is totally irrelevant. The performance was to take place within one month. The validity of the agreement is something different and does not change the date of performance. What was the reason for incorporating this clause of validating the agreement for five years is not spelled out in the agreement, but in any case, it does not change the date fixed for the performance.”

The court referred to Article 54 of the Limitation Act, 1963, in reaching its conclusion. In the present case, the sale deed was supposed to be executed within one month from the date of the agreement, dated 17.12.1989. This meant the performance should have occurred by 16.01.1990, and therefore, the limitation period for filing a suit would expire three years later on 16.01.1993.

However, the respondent filed the suit for specific performance in September 1993, well beyond the three-year limitation period. The respondent contended that the limitation period should be counted from the expiry of the agreement’s five-year validity, but the Supreme Court rejected this argument, reiterating that the date of performance, not the validity period, determines the start of the limitation period.

In conclusion, the court held that the period of limitation is to be calculated from the date fixed for performance as outlined in the agreement. The appeal was accordingly allowed, and the lower courts’ judgments were set aside.

Case Details:

– Case Name: Usha Devi & Ors. versus Ram Kumar Singh & Ors.
– Civil Appeal No.: 8446 of 2024

usha-devi-v-ram-kumar-singh-validity-of-agreement-have-no-role-to-determine-the-period-of-limitation-554852

The Hon’ble High Court of Delhi recently, in Rites Ltd. Versus Ahluwalia Contract (India) Ltd. & Anr. [OMP (COMM.) 56 of 2019], was concerned with the grant of interest by the Arbitrator on delayed payments, while the contract expressly provided against the grant of interest on account of delayed payments.

The Claimant in the present case had raised a final bill on 20.02.2013. The said bill was certified by the Respondent on 19.07.2014 for a certain amount out of which the Claimant was only paid some of the amount. The Claimant, on account of partial and belated payment, claimed recovery of the balance principal amount of the bill and interest for delayed payment, both on the unpaid amount and the amount already paid. The Respondent, who was the Petitioner before the Hon’ble Court, was specifically aggrieved by the grant of Claim no. 3 in favor of the Claimant, i.e., grant of interest from 21.08.2013 until the date of actual payment, on the outstanding due.

Clause 9 of the Contract specifically provided that the Contractor would not be entitled to any compensation or claims or damages by way of interest in case of delayed payment. The Dispute Resolution Clause contained in Clause 25 of the Contract also specifically excluded the grant of interest in case the award is for payment of money, from the ambit of Arbitrator’s powers. While the Petitioner argued against the grant of interest specifying the particular clauses of the Contract barring the award of interest, placing reliance upon the judgments of the Hon’ble Supreme Court in Garg Builders vs. BHEL [(2022) 11 SCC 697] and Union of India vs. Manraj Enterprises [(2022) 2 SCC 331],which expressly held that interest cannot be awarded by an arbitrator when the contract explicitly provided against the same, the Respondent strongly argued that the interest has been granted by the Ld. Arbitrator as “compensation” for delayed payment.

Discussing the law settled by the Hon’ble Supreme Court in Garg Builders (supra), the Hon’ble High Court observed that the Hon’ble Apex Court in Garg Builders (supra) dealt with a contractual provision that excluded payment of interest on earnest money deposit, security deposit, or any monies due to the contractor. The Ld. Arbitrator had awarded interest, which was set aside by the Hon’ble High Court. The Supreme Court had upheld the decision of the Hon’ble High Court observing that “The provisions of the 1996 Act give paramount importance to the contract entered into between the parties and categorically restrict the power of an arbitrator to award pre-reference and pendente lite interest when the parties themselves have agreed to the contrary.”

The Hon’ble Supreme Court also discussed Section 31(7)(a) of the 1996 Act, which specifically deals with the arbitrator’s power to grant interest, which reads as:-

“31. (7)(a) Unless otherwise agreed by the parties, where and insofar as an arbitral award is for the payment of money, the Arbitral Tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.”

The opening words of Section 31(7)(a) “Unless otherwise agreed by the parties….” make it evident that the power to grant interest is subject to the agreement entered between the parties, and if the parties by way of an agreement have made a categorical provision against an award of interest (pre-reference or pendente-lite or both), the Arbitrator would be bound by such agreement and would further be barred from giving any relief to the contrary. In addition to this, the inclusion of the word “may” makes the payment of interest discretionary and when read together with the phrase “Unless otherwise agreed by the parties…..”, it can easily be concluded that the Arbitrator would be bound by the contractual terms and the limitations imposed thereunder. Thus, the Arbitration Act, by introducing Section 31(7)(a), has clarified the position w.r.t. the binding nature of the contractual terms, which extends not only to the parties but also to the Arbitrator adjudicating the disputes between the parties.

The Hon’ble Single Judge of Delhi High Court also discussed the law laid down in Manraj Enterprises (supra), which relied upon the judgment rendered in Garg Builders (supra) and Union of India vs. Bright Power Projects (India) Ltd. [(2015) 9 SCC 695]. In Bright Power projects, a three-judge bench of the Hon’ble Apex Court had categorically held that if the parties by express agreement exclude the provision of interest, it will bind the parties as well as the Arbitral Tribunal and the parties cannot later claim interest before any forum.

The Hon’ble High Court, thus, after duly discussing the law settled by the Hon’ble Supreme Court, concluded that since the contractual provisions in the instant case expressly barred the award of interest, as such the Arbitrator Tribunal could not have digressed beyond those terms and awarded interest. To sum up, the Hon’ble Court upheld the supremacy of the terms of the contract and the principle that an Arbitrator is bound by the terms and conditions of a contract and cannot give what has been expressly barred under a contract.

The Delhi High Court has established comprehensive templates for the affidavit of assets and income of judgment-debtors to be submitted at the commencement of execution proceedings. In its decision dated August 5, 2020, the Court also issued detailed directives for the Executing Court, emphasizing that this approach aims to minimize delays and facilitate the prompt resolution of execution proceedings.

Concerning the affidavits of assets and income, the High Court underscored the need for special attention to the execution of decrees and awards. It expressed concern that prolonged delays in execution proceedings could hinder decree-holders from enjoying the benefits of the decrees or awards. The Court highlighted that Form 16A of Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure does not provide a comprehensive means to ascertain all the assets, income, expenditure, and liabilities of the judgment-debtor.

In a modification to its previous judgment dated December 5, 2019, the Court appended revised formats for the affidavit of assets and income of the judgment-debtor, as well as for proprietorship firms, partnership firms, HUFs, companies, trusts who are judgment-debtors. This modification, executed under Sections 30 and 151 and Order XXI Rule 41 of the Code of Civil Procedure, alongside Sections 106 and 165 of the Indian Evidence Act and Article 227 of the Constitution of India, applies to pending execution cases.

The Court specified that in pending execution cases where the judgment-debtor has not filed the affidavit of assets and income, the Executing Court must instruct the judgment-debtor to comply with the terms outlined in the judgment.

Guidelines

The judgment in the case of Bhandari Engineers & Builders Pvt. Ltd. v. Maharia Raj Joint Venture & Ors. not only introduced the revised affidavit formats but also detailed the procedures for the Executing Court. The Court directed the Executing Court to:

• shall direct the judgment-debtor, at the first instance i.e. first date of filing, to file the affidavit of assets on the date of cause of action, date of the decree/award as well as on the date of the swearing of the affidavit. Oral prayer/application of the decree-holder for issuance of such direction shall be sufficient;
• to restrain the judgment-debtor from discharging any financial liability, other than the liabilities of Banks/financial institutions, without the permission of the Executing Court;
• to ensure presence of judgement-debtor before the Court initially by issuing bailable warrants and thereafter, by issuing non-bailable warrants as per law;
• to consider detention of the judgment-debtor in civil prison, in case the latter defaults to file affidavit within stipulated time;
• can direct the Directors/Promoters (other than independent/non-executive and nominee directors) of the judgment-debtor company to disclose their personal assets and income, in case any ground for lifting of the corporate veil of a judgment-debtor company is made out as per law;
• grant reasonable time to the judgment-debtor to remove the defects/deficiencies and simultaneously act on the information available in the deficient affidavit as per law;
• may order investigation by a government agency including a forensic audit, cost of which shall be borne by the decree-holder;
• shall ensure the compliance of Sections 60 to 64 and Order XXI Rules 41 to 57 of the Code of Civil Procedure with respect to the attachment of properties in execution of decrees;
• pass appropriate order of restitution to reimburse the loss suffered by the decree-holder on account of delay and obstruction in the execution proceedings caused by the judgment-debtor;
• may impose real costs equal to the deprivation suffered by the rightful person, and also order prosecution.

The High Court emphasized that these directives and guidelines are applicable to all execution proceedings, including those under Section 36 of the Arbitration and Conciliation Act, before Motor Accident Claims Tribunals, before SDMs empowered to execute decree/award as arrears of land revenue, before Debt Recovery Tribunals, and under the Consumer Protection Act.