Page 15 - Banking Finance JANUARY 2017

LEGAL UPDATE

Bombay HC: Action sale of a property can't be can-
HC not to review evi-
dence under WC Act in celled on basis of affected value

case of accident The Bombay High Court has stated an Reconstruction of Financial Assets and
auction sale of a property of a defaulter Enforcement of Security Interest
When a commissioner under the cannot be cancelled be- (SARFAESI) Act and auc-
W o r k m a n ' s
cause the coastal regula- tioned it.
Compensation tions and other restrictions
Act decides the had affected its value. The However, the buyer later
amount based buyer has an obligation for learnt that the property
on the injuries due diligence probe, espe- could not be fully enjoyed
suffered by an cially when the property is sold on "as due to coastal regulations
employee, the is where is and as is what is basis". In and municipal plan for a recreation
high court this case, Asset Reconstruction Co vs ground. So it wanted to cancel the sale
should not review the evidence and Florita Buildcom Ltd, the latter com- though it had paid part of the value.
change the order, the Supreme Court pany bought property mortgaged by a The Debt Recovery Tribunal rejected
has ruled in Golla Rajanna vs Divi- the request but the appellate tribunal
firm which defaulted in the repayment set aside the sale, leading to the peti-
sional Manager. of loan.
tion in the high court by the asset re-
The Act permits only a limited role to The bank invoked the Securitisation & construction company.
the high court and allows it to exam-
ine the appeal if it raises "substantial HC dismisses plea of compensation due to
questions of law".
demonetisation
In this case, six employees were se-
verely injured in a mishap caused by The Karnataka High Court has dis- cash withdrawals.
a truck. They petitioned the commis- missed a batch over 20 Dismissing the petitions,
writ petitions moved by
sioner who found that they had suf- led by the Korangrapady
fered disabilities ranging from 35 to cooperatives of farmers, Coop vs Union of India,
40 per cent, based on medical certifi- fishermen, tappers and the high court cited Su-
others seeking compensa-
cates. The commissioner found that preme Court judgments to
tion for the losses suffered
the disabilities had affected their ca- assert that it is open to
pacity to earn income. by its members due to demonetisation. the state to take economic and man-
They had demanded quashing of the agement decisions depending upon the
Therefore, compensation was
government notification of November exigencies of the situation, guided by
awarded based on medical evidence.
However, the insurance company 8, suitable rate of interest for retain- the appropriate financial policy notified
appealed to the Andhra Pradesh high ing their current accounts and barring in public interest.
court, which drastically reduced the SC stress respect for foreign orders as far as possible
amount. It went into the evidence
and commented that "the entire ex- "It is to the reciprocal advantage of the courts of all nations to enforce foreign
ercise by the petitioners before the rights as far as practicable. To this end, broad recognition of substantive rights
should not be defeated by some vague assumed limitations of the court. The
commissioner is to create a make-
believe situation to show that indeed necessity of maintaining the foreign rights outweighs the practical difficulties
they had suffered serious injuries." involved in applying the foreign remedy," the Supreme Court observed while dis-
missing the appeal of an Indian company against execution of an English court in
When the victims appealed to the Su- a dispute originating in patent. In this case, Alcon Electronics Ltd versus Celem S
preme Court, it restored the order of A of France, the English court granted a favour of the French corporation. When
the commissioner and criticised the the foreign firm sought execution of the money decree in Nasik district court,
high court for not following the prin-
the Indian company opposed it on several grounds, including that it was not a
ciples laid down by the welfare law. final order considering merits but in the nature of an interim order.

BANKING FINANCE | JANUARY | 2017 | 15

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