Mentoassociates.com – Legal Articles

In 2015, the Supreme Court of India delivered a watershed judgment that forever altered the trajectory of Indian internet law. The case, Shreya Singhal v. Union of India, struck down Section 66A of the Information Technology Act, 2000, and fortified the right to freedom of expression in the digital age.

This ruling is more than a milestone—it’s a constitutional compass guiding the future of online speech, content regulation, and intermediary responsibilities in India.

Background: Section 66A of the IT Act

Section 66A criminalized sending messages via electronic means that were:

• “Grossly offensive” or “menacing”,
• “False” with the intent to cause annoyance or inconvenience,
• Likely to cause “enmity, hatred or ill will”.

The law was vague and overbroad. It allowed arrests for harmless social media posts and memes. Citizens, students, and activists were detained for expressing opinions that displeased public authorities or influential individuals.

The Supreme Court’s Verdict

In a resounding affirmation of constitutional rights, the Supreme Court ruled that:

Section 66A is unconstitutional as it violates Article 19(1)(a) of the Constitution—the right to freedom of speech and expression.

The Court held:

• The terms used in Section 66A were undefined and subjective, leading to arbitrary arrests.
• The section had a chilling effect on legitimate expression.
• Restrictions on free speech must fall within the reasonable restrictions under Article 19(2)—which Section 66A failed to satisfy.

Clarification on Intermediary Liability (Section 79)

One of the key takeaways from the judgment was its interpretation of Section 79 of the IT Act:

Intermediaries (such as social media platforms) are not required to act on user complaints alone. They are only obligated to remove content after a court order or a government directive.

This clarification protects intermediaries from being forced into private censorship while ensuring that unlawful content can still be taken down through proper legal channels.

Constitutional Principles Reaffirmed

1. Vagueness invalidates law: Laws that use vague terms like “grossly offensive” cannot be enforced fairly.
2. Freedom of expression includes online speech: Digital speech enjoys the same constitutional protections as offline speech.
3. No prior restraint without legal backing: Takedown of content requires clear legal procedures.

Lasting Impact

• Section 66A was declared null and void, ending its misuse.
• Strengthened protections for digital dissent, satire, parody, and criticism.
• Provided legal clarity on intermediary obligations under Rule 3 of the IT Rules and Section 79.
• Cited frequently in cases involving online defamation, free speech, and content moderation.

A Word of Caution: The Ghost of 66A

Despite the ruling, multiple reports show that Section 66A continues to be invoked in FIRs and chargesheets. In response, the Supreme Court in 2022 reiterated that police and trial courts must not apply the repealed section.

The battle for digital rights, therefore, is not just legal—it is institutional, procedural, and ongoing.

Conclusion

The Shreya Singhal decision remains a constitutional bulwark against overreach in digital regulation. It empowered citizens, restrained the executive, and clarified the obligations of intermediaries in an age of rapid digital communication.

It reminds us that free speech is not a luxury of democracy—it is its foundation.

Written by Mento Isac, Advocate & Founder – Mento Associates
Advising on tech law, online defamation, and digital compliance across jurisdictions.
Bengaluru, India
mentoissac@mentoassociates.com | www.mentoassociates.com

In today’s hyperconnected world, reputations are built—and sometimes destroyed—online. A single tweet, Facebook post, or LinkedIn comment can go viral within hours, leading to serious reputational and financial damage. But what does Indian law say about defamation in the digital space?

What Is Cyber/Online Defamation?

Online defamation, also known as cyber defamation, occurs when defamatory content is published on the internet with the intent to harm someone’s reputation. This includes:

• Social media posts
• Blog articles or comments
• WhatsApp forwards
• YouTube videos or comments
• Online reviews

The impact is swift, far-reaching, and often permanent.

Legal Framework in India

1. Bharatiya Nyaya Sanhita (BNS), 2023

• The BNS replaces the Indian Penal Code from 1 July 2024.
• Section 356 of BNS corresponds to the old Section 499 IPC and defines criminal defamation, including imputation through words, signs, or visible representations.
• Section 357 replaces IPC Section 500 and prescribes punishment up to 2 years imprisonment, fine, or both for criminal defamation.

2. Information Technology Act, 2000

• Although Section 66A was struck down in Shreya Singhal v. Union of India (2015), platforms and intermediaries are still regulated under Section 79, which provides safe harbor if they act promptly on valid takedown requests.

3. Civil Remedies

• Victims may also file civil defamation suits seeking monetary damages and injunctions to restrain or remove defamatory content.

Criminal Prosecution for Online Defamation

Criminal defamation under BNS Sections 356 and 357 remains a powerful remedy for reputational harm—even when it occurs online.

Section 356 BNS – Definition of Defamation

Defamation includes any imputation made by words, signs, or visible representations intended (or likely) to harm a person’s reputation. The ten exceptions from the IPC continue under BNS—truth, public good, fair comment, etc.

Section 357 BNS – Punishment

“Whoever defames another shall be punished with simple imprisonment up to two years, or with fine, or both.”

How to File a Criminal Complaint

1. File a complaint before a Magistrate.
2. Court examines the complainant’s statement and supporting evidence.
3. If a prima facie case is made out, summons are issued.
4. Trial follows under criminal procedure, with burden of proof on the complainant.

Key Case Law

• Subramanian Swamy v. Union of India (2016): Upheld the constitutionality of criminal defamation, affirming the right to reputation as part of Article 21.
• M. J. Akbar v. Priya Ramani (2021): Recognized truth and public good as valid defenses in sensitive, reputationally charged contexts.

Civil Prosecution for Online Defamation

Civil defamation suits focus on damages and content takedown, offering a vital remedy for both individuals and businesses.

Legal Basis

Civil defamation is a tort—a wrongful act leading to reputational harm. The plaintiff must prove:

• A defamatory statement,
• Publication to third parties,
• Actual or presumed harm to their reputation.

Intent is not essential in civil law; even negligent publication may suffice.

Remedies

1. Injunctions (temporary or permanent) to restrain further publication or remove content.
2. Monetary damages for harm and emotional distress.
3. Mandatory injunctions to compel platforms to take down defamatory content.

Case Law on Mandatory Injunction and Takedown Orders

One of the most impactful decisions in this domain is:

Siddharth Vashisht v. Google India Pvt Ltd & Ors., Delhi High Court, 2022

In this case, the court found that once content is judicially declared defamatory, platforms must:

• Remove not only the specific URLs but also mirror and identical content,
• Proactively prevent re-uploads,
• Act under the “actual knowledge” doctrine, making them liable upon court direction or legal notice.

Filing a Civil Suit

• Civil defamation suits must be filed in the District Civil Court having territorial and pecuniary jurisdiction.
• Karnataka High Court does not have original civil jurisdiction, unlike High Courts in Delhi, Bombay, Calcutta, and Madras.
• Plaintiffs in Karnataka must first approach the City Civil Court or District Court, based on where the defendant resides or where the defamatory act occurred.
• A legal notice is often—but not legally—required before filing.
• Courts may grant interim injunctions if urgency and reputational harm are convincingly shown.

Other Important Judgments

• Tata Sons Ltd. v. Greenpeace (2011) – Even satire may be restrained if it damages corporate reputation unfairly.
• Indian Express v. Jagmohan (1985) – Balanced freedom of the press with the right to reputation.

Practical Advice

• Preserve evidence: Screenshots, URLs, and metadata are crucial.
• Act swiftly: Delay can reduce the likelihood of getting interim relief.
• Engage legal help early: Often, a strategic legal notice or mediation can prevent long litigation.

Final Thoughts

Online defamation is no longer a grey area. With clear statutory backing under the Bharatiya Nyaya Sanhita, the IT Act, and strong judicial precedent, victims today have a well-developed legal toolkit. Whether you’re a professional, business owner, or public figure, knowing your remedies can make all the difference in protecting your digital dignity.

Written by Mento Isac, Advocate & Founder – Mento Associates
Advising on digital law, dispute resolution, and corporate litigation across India.

? mentoissac@mentoassociates.com | ? www.mentoassociates.com

The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced with the objective of protecting homebuyers and promoting transparency, accountability, and efficiency in the real estate sector. One of its most impactful contributions has been the framework it introduced for dispute resolution.

Why Was RERA’s Dispute Mechanism Needed?

Before RERA, real estate buyers often had no choice but to engage in prolonged and expensive litigation in civil courts or consumer forums. Delays in possession, non-compliance with promises, and unclear grievance mechanisms left many buyers vulnerable.

RERA filled this gap by setting up a dedicated redressal mechanism for quick, sector-specific justice.

The Three-Tier Dispute Resolution Mechanism under RERA

1. Real Estate Regulatory Authority (RERA)

• Acts as the first point of grievance redressal.
• Buyers, promoters, or agents can file complaints for delays in possession, non-adherence to project specifications, false advertisements, etc.
• Proceedings are summary in nature with an aim to deliver justice swiftly.

2. Adjudicating Officer (AO)

• Appointed under Section 71 of the Act.
• Specifically empowered to adjudicate compensation claims relating to delay, interest, or loss due to false information or non-performance.

3. Real Estate Appellate Tribunal (REAT)

• Any party aggrieved by an order of the Authority or AO can appeal here.
• The appeal must be filed within 60 days.
• Further appeals lie with the High Court, but only on substantial questions of law.

  Key Benefits of RERA’s Dispute Resolution Framework

• Speedy Resolution: Unlike traditional courts, RERA is designed to handle cases swiftly.
• Specialized Forum: Sector-specific knowledge ensures nuanced and practical decisions.
• Transparency: All decisions are published on the RERA website, enhancing accountability.
• Buyer-Centric Approach: Empowers homebuyers, often the weaker party in the transaction.

Practical Observations

• Many state RERAs have adopted a digital filing system, making the complaint process easier and more accessible.
• However, implementation varies by state — some RERAs are better staffed and more efficient than others.
• Certain grey areas still exist, especially regarding overlapping jurisdiction with consumer forums and civil courts.

 Final Thoughts

RERA has gone a long way in rebalancing the scales of justice in real estate. Its dispute resolution mechanism is far from perfect, but it’s a step toward restoring the trust of the common man in the homebuying process.

As lawyers, developers, or buyers, understanding the nuances of this system is essential not just for compliance but for upholding ethical standards in the industry.

Let’s hope that with time, resources, and consistent policy support, the RERA dispute redressal framework becomes a model of justice delivery in other sectors too.

Arbitration promises a fair, impartial, and efficient resolution of disputes. But what if one party believes that the appointed arbitrator is biased or unqualified?

The Arbitration and Conciliation Act, 1996, as amended by the 2015 and 2019 Amendments, lays down a clear procedure to challenge the appointment of an arbitrator. Here’s a practical guide for legal professionals and businesses alike.

Grounds for Challenge – Section 12(3)

An arbitrator’s appointment can be challenged only if:

• There are justifiable doubts about their independence or impartiality, or
• They lack qualifications agreed upon by the parties.

The Fifth Schedule outlines situations that may raise doubts about impartiality.

The Seventh Schedule lists grounds that render an arbitrator ineligible to be appointed—such as a close relationship with a party or prior legal/business involvement.

Mandatory Disclosure – Section 12(1)

Before appointment, an arbitrator must disclose in writing:

• Any potential conflicts of interest;
• Their ability to complete the arbitration in a timely manner.

Failure to disclose may itself be a ground for challenge.

Challenge Procedure – Section 13

Step 1: File a Written Challenge

• A party must challenge the arbitrator within 15 days of becoming aware of the issue (such as learning about a conflict or the tribunal’s constitution).
• The challenge must include a statement of reasons.

Step 2: Arbitrator’s Decision

• If the arbitrator does not withdraw and the other party disagrees, the tribunal decides on the challenge.

Step 3: If Challenge Fails

• The proceedings continue. The aggrieved party can challenge the final award under Section 34.

De Jure Ineligibility – Section 14

If the arbitrator is disqualified by law (e.g., per the Seventh Schedule), a party can:

Approach the court directly to terminate the mandate—no need to wait for the tribunal’s decision.

Substitution of Arbitrator – Section 15

Once the mandate is terminated, a new arbitrator can be appointed using the original procedure agreed upon by the parties.

Key Case Laws

• TRF Ltd. v. Energo Engg. Projects Ltd.
• Perkins Eastman Architects DPC v. HSCC (India) Ltd.

These judgments have reinforced the importance of impartiality and expanded the grounds for disqualification under the Seventh Schedule.

Conclusion

Challenging an arbitrator is a serious step. While the law protects party autonomy in selecting arbitrators, it equally upholds fairness and neutrality as foundational principles of arbitration. Knowing the procedure can safeguard your interests and ensure confidence in the arbitral process.

In recent years, the Enforcement Directorate (ED) has become a prominent enforcement body in India’s fight against economic crime. With growing public attention on money laundering cases and high-profile arrests, it’s important for legal professionals and the public alike to understand the ED’s structure, jurisdiction, and powers — as well as the safeguards that ensure accountability.

1. What is the Enforcement Directorate?

The ED is a specialised financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India. It was originally formed in 1956 to deal with violations of the Foreign Exchange Regulation Act (FERA), 1947.

Today, its main functions stem from two laws:

• Foreign Exchange Management Act (FEMA), 1999 – Civil law focused on foreign exchange violations.
• Prevention of Money Laundering Act (PMLA), 2002 – Criminal law targeting money laundering and financial crimes.

2. What Triggers ED Jurisdiction?

The ED does not act suo motu. It starts investigation only when a predicate offence — known as a Scheduled Offence — is reported.

Sources of case referrals to the ED include:

• FIR or charge sheet by agencies like CBI, State Police, Income Tax Department, Narcotics Control Bureau (NCB).
• Court directives (High Court, Supreme Court) asking ED to investigate.
• Inputs from regulatory or intelligence bodies like FIU-IND, DRI, RBI, or even foreign enforcement agencies.
• Reference from the Central Government, especially the Ministry of Finance.

After assessing such material, the ED may register an ECIR (Enforcement Case Information Report) — the internal equivalent of an FIR.

3. What are Scheduled Offences under PMLA?

Scheduled offences are the underlying crimes that give rise to proceeds of crime and trigger the ED’s powers under PMLA. They are listed in the Schedule to the Act and divided into three parts:

• Part A: Includes serious offences under IPC, NDPS Act, Prevention of Corruption Act, Arms Act, etc. No monetary threshold required.
• Part B: Applies only if the total value involved is ?1 crore or more. Covers select economic offences.
• Part C: Covers transnational and cross-border crimes.

Without a scheduled offence, the ED cannot initiate a PMLA case.

4. ED’s Powers of Investigation

Under PMLA, the ED can:

• Conduct search and seizure operations
• Provisionally attach property suspected to be proceeds of crime
• Summon individuals for evidence under Section 50
• Arrest persons involved in money laundering
• File prosecution complaints before Special PMLA Courts

The ED must place its findings before the Adjudicating Authority and Special Courts established under the Act.

5. Arrest and Bail Under PMLA

Arrest:

Under Section 19 of the PMLA, the ED may arrest a person if there is material evidence and “reason to believe” the person is guilty. The grounds of arrest must be recorded in writing and the individual must be produced before a magistrate within 24 hours.

Bail:

Bail under PMLA is governed by Section 45, which imposes a stricter test:

• The Public Prosecutor must be given a chance to oppose bail.
• If opposed, the court must be satisfied that:
  • The accused is not guilty, and
  • The accused is not likely to commit any offence while on bail.

These are called the “twin conditions” for bail and make release more difficult. However, exceptions apply to minors, women, the infirm, and cases involving less than ?1 crore.

Anticipatory Bail:

While Section 45 of the PMLA applies to regular bail, anticipatory bail (under Section 438 of the CrPC) is not explicitly barred. However, courts exercise great caution in granting it in PMLA cases due to the serious nature of offences. The Supreme Court and several High Courts have held that anticipatory bail is not entirely prohibited but subject to the twin conditions under Section 45.

An anticipatory bail application must be made before a Sessions Court or High Court, and the court may impose stringent conditions such as:

• Depositing passport
• Regular attendance before ED
• Not tampering with evidence

The scope of anticipatory bail remains a contested and evolving area in PMLA jurisprudence.

6. Legal Controversies and Safeguards

Although the ED is a powerful agency, its working has drawn criticism for:

• Non-disclosure of ECIRs to the accused
• Low conviction rates under PMLA
• Allegations of political misuse

In Vijay Madanlal Choudhary v. Union of India (2022), the Supreme Court upheld the constitutional validity of ED powers, including arrest and attachment. However, courts are increasingly scrutinising ED’s actions to ensure procedural fairness.

7. Conclusion: Need for Balance

The Enforcement Directorate plays a crucial role in upholding the integrity of India’s financial system and addressing economic crimes. However, its functioning must be balanced with the principles of natural justice, due process, and judicial oversight.

For lawyers and policymakers, it is vital to ensure that India remains tough on crime — but even tougher on protecting constitutional rights.

INTRODUCTION: The Employees’ Provident Fund (EPF) was established with the objective of safeguarding the financial welfare of employees in both the private and public sectors. It functions as a long-term savings mechanism, accumulating contributions throughout an employee’s tenure with an organization. The primary purpose of the EPF is to manage and secure retirement benefits for employees by ensuring a steady source of income after their service ends. The scheme is governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. To remain compliant with EPF regulations, employers must adhere to a range of statutory requirements and due diligence measures. Failure to comply may attract penalties, as outlined in the following sections.

1. False Statements to Avoid EPF Payments- [Section 14(1)]: If any person knowingly makes a false statement to avoid EPF payments he is liable to punishment of jail up to 1 year, or fine up to ?5,000, or both

2. Default in Depositing EPF Contributions- [Section 14(1A)]: If an employer fails to deposit employee contributions deducted from salaries, or pay administrative/inspection charges, he is liable to minimum 1 year imprisonment + ?10,000 fine, if employees’ deducted contributions are not deposited or minimum 6 months imprisonment + ?5,000 fine in other cases. Courts can reduce the jail term for valid and recorded special reasons.

3. Default in Insurance Fund or Inspection Charges – [Section 14(1B)]: On failure to pay insurance-related contributions or inspection charges, punishment includes jail from   6 months to 1 year and fine up to ?5,000. Court may reduce jail term with valid justification.

4. Other Violations Under EPF/Pension/Insurance Scheme – [Section 14(2)]: For any other non-compliance punishment is jail up to 1 year fine up to ?4,000 or both.

5. Breach of Exemption Conditions – [Section 14(2A)] : If an employer violates conditions of exemption granted under section 17, the punishment will be jail from 1 to 6 months and fine up to ?5,000

6. Offences Committed by Companies- [Section 14A]: When a company violates EPF laws, every person responsible for running the company (directors, managers, etc.) may be held liable. They can escape liability only if they prove lack of knowledge or due diligence. If the offence happened due to the consent or neglect of a specific officer, they will be held responsible.

7. Repeat Offenders – [Section 14AA]: If an individual or company repeats the same offence after a conviction, then the punishment will be jail for 2 to 5 years and fine of ?25,000

8. Cognizable Offence – [Section 14AB]: Failure to pay EPF contributions is treated as a cognizable offence, meaning the police can arrest without a warrant.

9. Legal Procedure for Prosecution – [Section 14AC]: – Legal action can begin only with a written report by an EPF Inspector, with prior approval from the Central PF Commissioner or an authorised officer. Only courts with the rank of Presidency Magistrate or First-Class Magistrate can try EPF offences.

10. Recovery of Penalty – Damages – [Section 14B]: For default in payments, the EPF Commissioner can impose penalty damages (up to the amount of arrears).Employers will be given a fair chance to be heard. In case of sick companies under rehabilitation, damages can be waived or reduced.

11. Court-Ordered Payment Deadlines – [Section 14C]: If convicted, courts can direct employers to make the payment or transfer the pending amount within a time limit. If not complied with, it will be treated as a new offence, punishable under Section 14. An additional fine of ?100 per day can also be imposed for continued delay.

CONCLUSION:

The EPF Act imposes strict penalties for employers who fail to meet their legal responsibilities. Non-compliance—whether by delay, default, or dishonesty—can attract serious consequences, including imprisonment and financial penalties. Employers are advised to ensure timely contributions, maintain proper records, and follow due process to stay compliant and avoid legal trouble.

• The Micro, Small and Medium Enterprises Development Act (MSMED) (hereinafter referred to as Act) provides a very quick and effective means of money recovery for micro and small enterprises. Section 15 to 25 of chapter V of the act covers the same. These special privileges are for micro and small enterprises. A small enterprise growing to medium can also avail these remedies for getting the delayed payments. 

• A small enterprise, if engaged in manufacture or production of goods, is one where the investment in plant and machinery is more than 25 lakh rupees but does not exceed 5 crore rupees. In the case of an enterprise engaged in providing services, it will be treated as a small enterprise where the investment is more than 10 lakhs rupees but does not exceed 2 crore rupees. 

• A micro enterprise is an enterprise engaged in the manufacture and production of goods and where the investment in plant and machinery does not exceed 25 lakh rupees. In the case of an enterprise engaged in providing or rendering of services, for a micro enterprise, the investment in equipment shall  not exceed 10 Lakh rupees. 

• As per section 15 of the act, if a supplier supplies any goods or renders any services to any buyer, the buyer shall make payment on or before the date agreed upon between him and the supplier in writing or when there is no agreement in this behalf, before the appointed day. Here a supplier means a micro or small enterprise. As per section 2(b) of the act, the appointed day means the day following immediately after the expiry of the period of 15 days from the day of acceptance or the day of deemed acceptance of any goods or services by a buyer from a supplier. The period agreed between the supplier and buyer, in writing, shall not exceed 45 days from the day of acceptance or the day of deemed acceptance.

• As per section 16 of the act, if a buyer fails to make payment of the amount to the supplier as required under the act, the buyer shall be liable to pay compound interest with monthly rests to the supplier on that amount from the time of the appointed day or from the date immediately following the date agreed upon at 3 times the bank rate notified by RBI. If the claimant has received the principal already, the claim can be filed for interest alone. 

• As per section 18 of the act, if a supplier has a dispute with a buyer, in regards to any amount due, he may make a reference to the micro and small enterprises facilitation council (MSEFC)(hereinafter referred to as Council). On receipt of a reference, the council shall either itself conduct conciliation in the matter or refer the matter for conciliation to an institution providing ADR(Alternate Dispute Resolution ) services. The provisions of the delayed payments under the act, are not applicable to foreign buyers. Even a government department as a buyer can be proceeded against in the council. 

• MSME Samadhan portal is a portal where micro and small enterprises can file their applications online regarding delayed payments. For the purpose of applying to the MSEFC, the micro or small enterprise shall have a valid UDYAM registration. The application filed online will be forwarded automatically to the concerned MSEFC which will take action on the application. The claim should be submitted in hard copy also. 

• To file an application on MSME samadhan portal, work order is compulsory. In case the purchase order is oral, an affidavit to that effect is to be submitted. A legal notice by the supplier to the buyer is not necessary before filing the case in the council. 

• If the conciliation under section 18 is not successful, the council shall either itself take up the dispute for arbitration or refer it to an institution or centre providing ADR services. For the purpose of this conciliation and arbitration, the jurisdiction of the MSEFC or the Alternate Dispute Resolution centre will be the supplier’s jurisdiction and the buyer can be located anywhere in India. Every reference to MSEFC under section 18 shall be decided within a period of 90 days from the date of making such a reference. An award passed by the MSEFC can be executed under section 36 of the arbitration and conciliation act, 1996.

• If a person wants to set aside the decree, award or order passed by the MSEFC, then they can file the application before the jurisdictional court under section 34 of the Arbitration and Conciliation Act 1996. If it is by the buyer, then he needs to deposit 75% of the amount in terms of the decree award or the order as a condition for filing the setting aside application. Furthermore, the court considering the application to set aside the decree, award or order, shall order a reasonable percentage of the amount deposited to be paid to the supplier. 

• As per section 22 of the act, where any buyer is required to get his annual accounts audited, under any law, such buyer shall furnish several information about the principal and interest amount due to any supplier at the end of each accounting year and several other connected information. If anybody intentionally contravenes the provisions of section 22, he shall be liable with fine which shall not be less than 10 thousand rupees. 

• If the buyer is claiming rejection of goods for quality deficiencies, then the rejection should be genuine within 15 days of the receipt of the goods and its immediate communication to the supplier. 

The Karnataka Court Fees and Suits Valuation Act, 1958 regulates the fees payable in courts in the state, to balance justice and financial responsibility. An important provision under the Act is refunds and exemptions from court fees. This aims to remove unnecessary financial burdens and is especially true in cases of repayment, withdrawal or procedural release. The Act also empowers State Government to remit fees either wholly or partially to foster inclusivity and fairness. The percentage of the amount to be refunded differs based on the circumstances, which can be further understood by the below mentioned sections of the Act.

1.  Refund in case of delay in presentation of plaint or delay in payment of court fees (Section 63)

When a plaint or memorandum of appeal (hereafter referred to as only plaint) is rejected on the following grounds

• Delay in re- presentation
• Fee paid on the plaint is deficient and deficiency is not made good within the allowed time granted by the court
• The delay in payment is not condoned and the plaint is rejected consequently.

The amount of one half the total fees, 50%, paid will be refunded on the grounds of delay in presentation of the plaint for the reasons stated above.

Case Law – Union of India (UOI) and Ors. Vs Willwood Chemicals Pvt. Ltd. And Ors(India Kanoon) Decided on 19-04-2022

2. Refund in case of remand (Section 64)

When a plaint or memorandum of appeal, which has been rejected by the lower court is ordered to be received, by the higher court or when a suit is remanded in appeal by the higher court for a fresh decision by the lower court, the court which made the order shall direct the refund to the appellant of the full amount of fee paid on the memorandum of appeal. Furthermore, when the

• whole decree is reversed, and the suit is remanded or
• if the remand is on second appeal, also on the memorandum of appeal in the first appellate court

then the court may direct the refund to the appellant of the full amount of fee paid on the memorandum of appeal.

No refund shall be ordered if the remand was caused due to an error made by the party.

If the order of remand does not cover the whole of the subject matter of the suit, the refund shall not exceed the amount paid originally on that part of the subject matter in respect of the suit that has been remanded.

Case Law – Manish Kumar vs Union of India (UOI) and Ors. ( India Kanoon) Decided  on 19 January 2021

3. Refund where Court reverses or modifies former decision on ground of mistake (Section 65)

If the court makes any mistakes on the face of record and an application for a review of judgment is admitted, and after rehearing the court reverses or modifies its previous decision on that ground, it shall direct the refund to the applicant the amount that exceeds the fees paid to what the needs to be paid, which is applicable in any court. If the amount to be paid rounds up 1000 due to the mistake and the original amount to be paid was 500, the difference that is 500 is the amount that will be refunded.

Case Law – P. N. Eswara Iyer vs The Registrar, Supreme Court Of India decided on 1 February, 1980 (India Kanoon)

4. Refund on settlement before hearing (Section 66)

When the court refers the parties to any of the ADR Methods– Alternate Dispute Resolution, and the dispute is settled, by the means of arbitration, conciliation, negotiation, etc., then seventy five percent of the court fees that was paid is refunded.

Originally only fifty percent of the fees was to be refunded until a recent amendment in the year 2020 which increased it to seventy five percent.

In cases which are not covered by the above-mentioned scenarios, a refund of seventy five percent of the court fees that was paid can be claimed when

• any suit is dismissed as it is settled out of court before evidence is recorded on the merits of claim.
• any suit is compromised on the comprise decree, before evidence is recorded on the merits of claim
• any appeal is disposed of before the commencement of hearing of the appeal

Case Law – Gayathri vs Indira Rajashekar decided on 14 July 2000 (India Kanoon)

5. Refund of fee paid by mistake or inadvertence (Section 67)

According to the Karnataka Court Fees and Suits Valuation Act, if a court fee is paid by mistake, the court can order a full refund of the fee paid. The plaintiff who paid the fees in error or inadvertence, should be refunded the entire amount paid mistakenly.

Unlike in some situations where a percentage of the court fee might be deducted upon refund, if the payment was clearly a mistake, the full amount should be refunded.

6. Instruments of Partition (Section 68)

If the final decree in a partition suit is engrossed on non-judicial stamps provided by the parties, the court will order a refund of the valued fee paid by the parties. The refund will be equal to the value of the non-judicial stamps provided by the parties.

When people go to court to divide property (a partition suit), they might need to pay a fee for the court process. Later, if the court decides the property division and writes the final decision on special non-judicial stamp paper (a type of official paper required for legal documents), the parties involved in the case might have provided those stamp papers themselves.

If that happens, the court will return to them the amount of money they paid earlier in court fees, equal to the value of the stamp paper they provided. Essentially, they get reimbursed for the cost of those stamp papers.

7. Exemption of certain Documents (Section 69)

Certain documents are exempt from being liable to pay court fees.

• Legal authorizations: written authorizations like mukhtarnama or vakalatnama by Armed Forces personnel, not the ones in civil employment or memorandums filed by advocates in criminal cases.
• Documents in Specific cases: Plaints filed in village courts and applications which are related to land revenue assessment before final confirmation.
• Irrigation and Land use: Applications for irrigation supply or cultivation extension and enhancement of rent or relinquishment of land.
• Witnesses and legal Proceedings: First application for summons of witness or production of evidence. Bail bonds, recognizances, and applications related to criminal proceedings.
• Petitions and Complaints: Petitions concerning offenses filed with police officers or village authorities.
• Forest and Government revenue: Applications related to cutting timber in Government forests.
• Appeals and Compensations against any municipal tax. Applications for compensation under property acquisition laws.
• Marriage and Religious matters: Petitions under Section 48 of the Indian Christian Marriage Act, 1872.
• Records of rights filed with plaints or applications.

8. Power to reduce or remit fees (Section 70)

the Karnataka Court-Fees and Suits Valuation Act, 1958 allows the State Government to reduce or remit all or part of the fees chargeable under the Act. This can be done by a notification in the official Gazette. However, the State Government cannot reduce or remit fees for specific classes of documents or for documents filed by a particular class of people. The remission may be granted based on public interest, financial hardship of litigants, or other justifiable reasons. The provision allows the government to ease the financial burden on litigants in deserving cases, ensuring access to justice for those who might otherwise struggle to afford court fees.

Authored by

ANUPA S

1st Semester BBA LLB (Hons)

Manipal Academy of Higher Education, Bangalore

Introduction Supply contracts form the backbone of trade and commerce, ensuring a steady flow of goods between sellers and buyers. In India, the Sale of Goods Act, 1930 governs these transactions, laying down the rights, duties, and remedies available to parties in case of disputes. However, when performance breaks down—due to late delivery, defective goods, non-payment, or breach of terms—supply contract disputes often end up in litigation or arbitration.

Key Legal Provisions under the Sale of Goods Act, 1930

1. Formation of the Contract – Governed by the Indian Contract Act, 1872 for offer, acceptance, and consideration. Section 4, Sale of Goods Act: A contract of sale may be absolute or conditional.
2. Implied Conditions & Warranties – Sections 14 to 17: Conditions as to title, description, quality, fitness, and sample. Breach of a “condition” allows the buyer to reject goods; breach of a “warranty” gives rise to damages but not rejection.
3. Passing of Property & Risk – Sections 18 to 26: Ownership passes as per parties’ intention; risk generally passes with property.
4. Rights of the Unpaid Seller – Sections 45 to 54: Includes lien, stoppage in transit, and resale rights.
5. Remedies for Breach – Section 55: Seller’s suit for price. Section 56: Damages for non-acceptance. Section 57: Buyer’s damages for non-delivery.

Common Causes of Supply Contract Disputes

• Delayed or Non-Delivery of Goods – Affecting production timelines and business commitments.
• Delivery of Defective or Substandard Goods – Breach of implied conditions under Sections 15 & 16.
• Payment Delays – Triggering the unpaid seller’s statutory rights.
• Ambiguity in Specifications – Leading to disputes over conformity to contract terms.
• Force Majeure Claims – Particularly post-pandemic, where supply chain disruptions became common.

Notable Case Laws

1. Varley v. Whipp (1900) 1 QB 513 Goods sold “as described” were found to be substantially different. Court held it was a breach of condition, entitling the buyer to reject.
2. K.C.N. Gowda v. K.C. Ramamurthy (AIR 1993 Kant 152) Karnataka High Court held that defective goods breaching the implied condition of merchantable quality entitled the buyer to reject them.
3. Union of India v. K.G. Khosla & Co. Ltd. (AIR 1979 SC 1160) Supreme Court upheld damages for delay in delivery under a supply contract with the Railways, reinforcing the buyer’s right to claim losses due to breach.

Dispute Resolution Mechanisms

• Negotiation & Mediation – Cost-effective and quick resolution.
• Arbitration – Common in supply contracts, especially with cross-border elements.
• Litigation – Often invoked when public sector undertakings or large-scale commercial contracts are involved.

Best Practices to Avoid Disputes

• Clearly define specifications, timelines, and quality standards.
• Incorporate dispute resolution clauses and governing law.
• Use liquidated damages provisions for delay or non-performance.
• Maintain documentation of correspondence, inspection reports, and delivery records.

Conclusion The Sale of Goods Act, 1930 continues to provide a robust legal framework for resolving supply contract disputes in India. Awareness of statutory rights, coupled with well-drafted agreements, can significantly reduce the risk of prolonged legal battles.

The Specific Relief Act, 1963 (SRA) is a cornerstone legislation in Indian contract law, governing remedies for the enforcement of civil rights. When a contractual obligation is breached, monetary damages under the Indian Contract Act may not always be adequate. In such cases, the SRA provides equitable remedies—particularly specific performance and injunctions—to ensure actual enforcement of contractual terms.

Key Provisions for Enforcement

1. Specific Performance of Contracts (Sections 10–14, 16–20) Pre-amendment vs Post-amendment: Before the 2018 amendment, specific performance was discretionary and granted only when damages were inadequate. Now, it is a general rule for eligible contracts, making enforcement stronger. Enforceable Contracts: Contracts where damages are not an adequate remedy (e.g., sale of immovable property). Contracts with unique subject matter (e.g., rare goods, intellectual property). Non-Enforceable Contracts (Section 14): Contracts dependent on personal qualifications (e.g., contracts of personal service). Contracts that are determinable in nature.
2. Injunctions (Sections 36–42) Prohibitory Injunction: Prevents a party from doing an act in breach of the contract. Mandatory Injunction: Compels performance of a specific act. Temporary vs. Permanent: Temporary injunctions are governed by the CPC (Order XXXIX), while permanent injunctions are granted under SRA.

Dispute Resolution Perspective

• Pre-litigation Negotiation & Mediation: Increasingly encouraged by courts to resolve disputes efficiently and reduce litigation backlog.
• Arbitration Clauses in Contracts: While SRA remedies are equitable, parties often approach arbitration for contractual disputes, subject to limitations where equitable relief is sought.
• Judicial Trend: Courts have shifted towards upholding contractual enforcement rather than relegating parties to damages alone, reflecting a pro-enforcement stance post-2018 amendment.

Key Judicial Precedents

1. K. Narendra v. Riviera Apartments (1999) 5 SCC 77 Specific performance may be denied where enforcement would cause undue hardship to the defendant.
2. Smt. Chand Rani v. Kamal Rani (1993) 1 SCC 519 Time is generally not of the essence in contracts for immovable property unless expressly provided, but delay may affect relief.
3. Surya Narain Upadhyaya v. Ram Roop Pandey (1999) 5 SCC 187 Readiness and willingness of the plaintiff to perform contractual obligations is a precondition for specific performance.
4. Zarina Siddiqui v. A. Ramalingam (2015) 1 SCC 705 Reinforced that damages may not be adequate for breach of contract involving unique property; specific performance was ordered.

Conclusion

The enforcement of contracts under the Specific Relief Act is now more certain and pro-performance after the 2018 amendment. For businesses and individuals, this underscores the importance of well-drafted contracts, clear timelines, and dispute resolution clauses to avoid protracted litigation. The Act’s remedies, supplemented by mediation and arbitration, offer a robust framework for resolving contractual disputes.

In business and credit transactions, trust is backed by assurance. One of the key legal tools used to secure that trust is a contract of guarantee. Whether in bank loans, supply contracts, construction projects, or leasing arrangements, guarantees are used to protect parties against defaults.

The Indian Contract Act, 1872, codifies the law relating to guarantees under Sections 126 to 147.

What is a Contract of Guarantee?

As per Section 126, a contract of guarantee is:

“A contract to perform the promise, or discharge the liability, of a third person in case of his default.”

It involves three parties:

• Principal Debtor – the person whose obligation is guaranteed
• Creditor – the person to whom the guarantee is given
• Surety – the person who gives the guarantee

Key Features of a Guarantee Contract

• May be oral or written, though banks and financial institutions insist on written guarantees.
• Can be continuing (for a series of transactions) or specific (for a single transaction).
• The surety’s liability is co-extensive with that of the principal debtor, unless otherwise agreed (Section 128).
• The surety gets certain rights against both the creditor and the principal debtor after discharging the debt.

Common Disputes in Guarantee Contracts

1. Whether the surety’s liability has been discharged (due to variation in contract or creditor’s conduct)
2. Disputes over invocation of guarantee—especially in bank and performance guarantees
3. Scope of liability—whether limited or unlimited
4. Time-barred claims—issues of limitation under the Limitation Act
5. Coercion or misrepresentation at the time of signing the guarantee

Dispute Resolution Mechanisms

Depending on the context and nature of the contract, guarantee disputes may be resolved by:

• Civil suits for recovery filed by creditors against guarantors
• Arbitration, where the guarantee arises out of a broader contract with an arbitration clause
• Insolvency proceedings—guarantors may face action under IBC
• Summary suits under Order 37 CPC in commercial cases
• Declaratory reliefs—to establish the validity or extent of the guarantee

Leading Case Laws

1. Bank of Bihar v. Damodar Prasad (AIR 1969 SC 297) The surety’s liability is immediate and does not depend on creditor first proceeding against the principal debtor.
2. State Bank of India v. Premco Saw Mill (AIR 1983 SC 1441) A continuing guarantee applies to a series of transactions unless revoked.
3. Punjab National Bank v. Bikram Cotton Mills (AIR 1970 SC 1973) The surety is discharged if the creditor acts in a manner that prejudices the surety.
4. Industrial Finance Corp. v. Cannanore Spinning & Weaving Mills (AIR 2002 SC 1841) Guarantor’s liability is not extinguished merely because the principal debtor’s liability is discharged in insolvency.
5. United Bank of India v. Naresh Kumar (1997 89 Comp Cas 20 SC) Courts upheld invocation of personal guarantees in cases of corporate default.

Practical Tips for Businesses & Professionals

 Always clearly define the scope and duration of the guarantee. Insist on written guarantees and get them stamped properly. If you are a surety, evaluate the financial risk and ask for indemnity or counter-guarantees.  In case of disputes, maintain documentation of default, notice, and demand to strengthen recovery.  Include dispute resolution clauses, especially arbitration, in the underlying contract.

Conclusion

Contracts of guarantee are essential in today’s commercial world. While they offer protection against defaults, they often lead to complex disputes involving liability, fairness, and enforcement. A clear understanding of legal principles and timely action can go a long way in avoiding litigation or strengthening your claim in court.

In the realm of civil litigation and commercial disputes, injunctions play a critical role in protecting rights and maintaining the status quo. Whether it’s preventing unauthorised construction, safeguarding intellectual property, or stopping breach of contract, injunctions offer swift and effective legal relief.

The Specific Relief Act, 1963, provides the statutory framework for grant of injunctions in India.

What is an Injunction?

An injunction is a judicial order restraining a party from doing a particular act (prohibitory) or directing them to do something (mandatory). It is a form of equitable relief granted to prevent injustice that cannot be adequately compensated through monetary damages.

Types of Injunctions under the Specific Relief Act

Under Sections 36 to 42, the Act recognises three main types of injunctions:

1. Temporary Injunctions (Section 37(1)) Granted during the pendency of a suit Governed by Order 39 Rules 1 & 2 of CPC
2. Perpetual (Permanent) Injunctions (Section 37(2) & 38) Granted by the court by way of final relief, through a decree
3. Mandatory Injunctions (Section 39) Directs the defendant to do a positive act to restore the original position or prevent breach

The Act also provides for damages in addition to injunctions (Section 40) and prohibits injunctions in certain cases (Section 41).

Injunction Disputes: Common Scenarios

Injunctions are frequently sought in:

• Real estate and construction disputes (e.g., stopping encroachments or illegal building)
• Intellectual property violations (copyright/patent infringement)
• Breach of non-compete or confidentiality clauses
• Partner/director disputes in companies
• Family property disputes (to maintain possession or prevent alienation)

Dispute Resolution Path

• Ad-Interim Injunctions: Can be sought at the very first stage of litigation.
• Injunction suits: Filed in civil courts along with main relief (like title declaration, specific performance, etc.)
• Appeals and revisions: Can be filed if injunction is refused or vacated.
• Contempt of Court: For violation of injunction orders.

In commercial contracts, parties often opt for arbitration and seek Section 9 interim reliefs under the Arbitration and Conciliation Act, which may include injunctions.

Landmark Case Laws

1. Dalpat Kumar v. Prahlad Singh (1992 Supp (1) SCC 719) ?? Laid down the three key tests for granting temporary injunction: Prima facie case Balance of convenience Irreparable injury
2. M. Gurudas v. Rasaranjan (2006) 8 SCC 367 ?? Reiterated that mandatory injunctions should not be granted lightly and only when the plaintiff’s right is clear.
3. K.K. Modi v. K.N. Modi (1998) 3 SCC 573 ?? Explained when injunctions may be refused due to suppression of facts or abuse of process.
4. Adhunik Steels Ltd. v. Orissa Manganese & Minerals (2007) 7 SCC 125 ?? The Supreme Court held that interim injunctions under Section 9 Arbitration Act are equitable and discretionary.
5. Zenith Infotech v. Union of India (2016 Bom HC) ?? Injunction refused against invoking of bank guarantee, unless clear case of fraud or irretrievable injury.

Practical Tips for Practitioners and Businesses

• Draft contracts with clear negative covenants, if future injunctions may be required.
• Collect and preserve documents, photographs, and communication that establish urgency and prima facie case.
• Approach court promptly—delay may defeat the claim.
• If you’re facing an injunction, file for vacation or modification with proper evidence and undertakings.

Conclusion

Injunctions are a powerful legal tool—capable of halting actions that may cause irreversible damage. However, their grant is discretionary and guided by equity. Courts look for clean hands, urgency, and genuine hardship. Well-drafted pleadings, supporting evidence, and clarity of relief sought can make all the difference.

In the complex web of commercial and legal relationships, the law of agency plays a pivotal role. Whether in business transactions, real estate dealings, or corporate representations, the concept of one person acting on behalf of another is both practical and powerful. In India, this principle is codified under Chapter X (Sections 182–238) of the Indian Contract Act, 1872.

What is an “Agency”?

Section 182 of the Indian Contract Act defines an “agent” as a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done is called the “principal”.

Simply put, agency is a fiduciary relationship where the agent acts on behalf of the principal and can bind the principal legally in transactions with third parties.

Formation and Types of Agency

Agency can be formed in several ways:

• Express or Implied Agreement (Section 186)
• By Estoppel (Section 237)
• By Necessity
• By Ratification (Section 196)

Agencies can be general or specific, coupled with interest, irrevocable, or created for a particular transaction.

Disputes Commonly Arising in Agency Relationships

Disputes often arise when:

• The agent acts beyond authority
• The agent acts adversely to the principal’s interest
• The agent misappropriates funds or fails to account
• There is conflict of interest or breach of fiduciary duty
• The principal refuses to honour contracts entered by the agent
• There is a disagreement on termination of agency

Dispute Resolution Mechanisms

Disputes under agency law may be resolved through:

1. Civil Suits for Breach of agency contract (e.g., non-payment of commission, unauthorised actions, breach of duty)
2. Declaratory Reliefs – to determine the validity of the agent’s actions
3. Arbitration, if the principal-agent contract contains an arbitration clause
4. Specific Performance or Injunctions, especially when agency is coupled with interest
5. Compensation Claims under Sections 222 to 225 of the Contract Act

Notable Case Laws

1. Pannalal Jankidas v. Mohanlal & Co. (AIR 1951 SC 144) The Supreme Court held that an agent is bound to act with reasonable diligence and is liable for losses caused by negligence.
2. State Bank of India v. Shyama Devi (AIR 1978 SC 1263) It was held that a person must have actual or apparent authority to bind the principal. A mere relationship does not create agency.
3. Syed Abdul Khader v. Rami Reddy (AIR 1979 SC 553) The Court clarified that implied agency may arise from conduct, relationship, or the circumstances of the case.
4. Lakshminarayan Ram Gopal & Son Ltd. v. Hyderabad Government (AIR 1954 SC 364) Differentiated between a servant, an agent, and an independent contractor — an important precedent to determine the nature of control.
5. Narayana v. Century Flour Mills Ltd. (AIR 1975 Mad 270) Reinforced that a principal is bound by acts of an agent done within the scope of apparent authority.

Practical Takeaways for Businesses

• Clearly define authority and scope in the agency agreement.
• Include dispute resolution clauses—arbitration, jurisdiction, governing law, etc.
• Maintain regular communication and document all instructions and approvals.
• Conduct periodic audits of agent conduct, especially where finance is involved.

 Conclusion Agency relationships are essential in facilitating commerce, but they come with inherent risks. Disputes can escalate quickly when expectations, roles, or limits are not clearly defined. The Indian Contract Act provides a robust legal framework, but proactive contract drafting and early dispute resolution mechanisms are key to avoiding litigation

In the world of commercial transactions, contracts often carry a risk of loss or liability. That’s where the concept of indemnity plays a critical role. Indemnity clauses are widely used in service agreements, real estate contracts, construction projects, and commercial partnerships to allocate risks between the parties.

What is a Contract of Indemnity?

Under Section 124 of the Indian Contract Act, 1872, a contract of indemnity is defined as:

“A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person.”

Thus, indemnity involves a promise to protect the other party from anticipated legal or financial losses.

Nature and Essentials of Indemnity

For a valid indemnity contract:

• There must be a promise to compensate for a loss.
• The loss must result from the conduct of the promisor or a third party.
• It can be express or implied (Section 124 recognizes only express contracts, but courts accept implied indemnity too).

Indemnity in Practice: Common Disputes

Despite clear drafting, disputes often arise over:

• When the indemnity holder can enforce the contract (before or after suffering actual loss)
• Extent of indemnity liability—whether it includes legal costs, penalties, or consequential losses
• Triggering events—what kind of breach or conduct invokes indemnity
• Third-party claims—who is liable and to what extent

Dispute Resolution Mechanisms

Disputes under indemnity clauses are resolved through:

1. Civil suits—to claim indemnity for losses suffered or legal expenses incurred
2. Declaratory reliefs—to clarify the scope of liability
3. Arbitration—where indemnity clauses are part of broader commercial contracts with arbitration clauses
4. Interim reliefs under Section 9 of Arbitration and Conciliation Act, especially when third-party claims arise
5. Set-offs and counterclaims in ongoing contractual disputes

Key Case Laws on Indemnity

1. Gajanan Moreshwar v. Moreshwar Madan (AIR 1942 Bom 302) Held that indemnity holder need not wait until actual loss is suffered—can claim as soon as liability becomes absolute.
2. Osman Jamal & Sons Ltd. v. Gopal Purshottam (1928 ILR 52 Bom 376) Reiterated that indemnity covers damages, costs, and legal expenses reasonably incurred.
3. Secretary of State v. Bank of India Ltd. (1938 Bom 447) A bank that issued an indemnity bond was held liable for payment to a third party; emphasized the broad scope of indemnity.
4. Oriental Insurance Co. Ltd. v. Narayaswamy (AIR 2005 SC 2494) Though an insurance case, it reaffirmed that an indemnifier must cover losses arising out of breach or risk covered.
5. Union of India v. Raman Iron Foundry (AIR 1974 SC 1265) Clarified that indemnity is a claim for unliquidated damages, not a debt unless quantified.

Practical Takeaways for Businesses

• Draft clear indemnity clauses with unambiguous definitions of scope, events, exclusions, and procedures.
• Include governing law and dispute resolution mechanisms, especially arbitration clauses.
• Maintain evidence of legal expenses, third-party claims, and internal losses to support indemnity enforcement.
• Understand that indemnity is civil in nature—criminal proceedings are not applicable unless fraud or cheating is involved.

Conclusion

Indemnity is a powerful risk-allocation tool in contracts. However, its enforcement often leads to disputes over timing, scope, and calculation of losses. Understanding the legal nuances under the Indian Contract Act and backing it up with well-drafted clauses and proper documentation can prevent costly litigation.

In the commercial world, contracts form the backbone of business relationships. Yet, breaches are common — whether due to unforeseen circumstances, non-performance, or deliberate disregard. The Indian Contract Act, 1872 provides the legal foundation for enforcing such obligations, offering remedies and clarity for aggrieved parties.

Let’s examine the legal contours of breach of contract and the available dispute resolution mechanisms.

What Constitutes a Breach?

A breach of contract occurs when one party fails to perform their contractual obligations without lawful excuse. It can be:

• Actual Breach – where a party fails to perform on the due date.
• Anticipatory Breach – where a party indicates, before performance is due, that they will not perform their obligations.

Under Section 73 of the Indian Contract Act, the aggrieved party is entitled to compensation for any loss or damage caused by the breach, which naturally arose in the usual course of things from such breach.

Remedies Available

1. Damages – The most common remedy. Courts award compensatory damages to place the aggrieved party in the position they would have been in had the contract been performed.
2. Specific Performance – Under the Specific Relief Act, 1963, courts may compel the defaulting party to perform their contractual promise, especially in cases involving immovable property or where monetary compensation is inadequate.
3. Injunction – To restrain a party from doing something in breach of the contract.
4. Rescission & Restitution – Canceling the contract and restoring parties to their original position.

Dispute Resolution: Litigation vs. ADR

Given the time and cost involved in litigation, Alternative Dispute Resolution (ADR) mechanisms have become the preferred choice in contractual disputes:

• Arbitration – A binding process under the Arbitration and Conciliation Act, 1996. Many commercial contracts now include arbitration clauses, with parties choosing institutional arbitration (like SIAC, ICC) or ad hoc arbitration.
• Mediation & Conciliation – Non-binding but effective in preserving business relationships. The Commercial Courts Act, 2015 encourages pre-institution mediation for commercial disputes below ?3 crores.

Notable Case Laws

1. Hadley v. Baxendale (1854) – Though English, this case is followed in India. It laid down the remoteness of damage rule: compensation is allowed only for foreseeable losses arising naturally from the breach.
2. Kailash Nath Associates v. DDA (2015) – The Supreme Court held that liquidated damages can be granted only if actual loss is proven, even when specified in the contract.
3. ONGC Ltd. v. Saw Pipes Ltd. (2003) – Expanded the scope of “public policy” for setting aside arbitral awards under Section 34 of the Arbitration Act and upheld the grant of liquidated damages if predetermined and reasonable.
4. Satyabrata Ghose v. Mugneeram Bangur & Co. (1954) – Clarified the concept of frustration of contract under Section 56 and when a contract becomes impossible to perform.

Practical Takeaways for Businesses

Always draft contracts with clear dispute resolution clauses (jurisdiction, arbitration, governing law).
 In case of breach, document communications, losses, and efforts to mitigate damage.
Prefer ADR where possible — it’s cost-effective and preserves professional relationships.
For serious breaches, don’t hesitate to pursue specific performance or legal redress, especially in property or high-value commercial transactions.

Conclusion

A breach of contract can derail business objectives, but with a solid understanding of the law and proactive contract management, disputes can be resolved efficiently. The Indian legal framework provides robust remedies — the key lies in choosing the right path, whether through the courts or ADR.

In the realm of contract enforcement, specific performance holds a vital place under Indian law. While damages are the most common remedy for breach of contract, there are instances where monetary compensation is inadequate, and the court compels the defaulting party to perform the contract as agreed.

What is Specific Performance?

Specific performance is an equitable remedy granted by courts wherein a party to a contract is directed to perform their part of the contract, rather than merely paying damages for breach. The law relating to this is codified in the Specific Relief Act, 1963, which underwent significant amendments in 2018 to streamline its application, especially in commercial contexts.

Key Provisions of the Specific Relief Act

The important sections dealing with specific performance include:

• Section 10 (as amended): Mandates specific performance when:
  • There is no standard for ascertaining actual damage; or
  • Compensation is not an adequate relief.
• Section 14: Lists contracts not specifically enforceable, such as those dependent on personal qualifications or involving continuous duty that courts cannot supervise.
• Section 16: Lays down that only a party who has performed or is willing to perform their obligations under the contract can seek specific performance.
• Section 20: Grants courts discretion to refuse specific performance, especially where enforcement would cause undue hardship.
• Post-2018 amendment: Courts are obligated to grant specific performance unless barred by Section 14 or 16, thus reducing judicial discretion and making enforcement more predictable.

Dispute Resolution in Specific Performance Cases

Specific performance disputes typically arise in the context of:

• Real estate contracts
• Joint ventures or commercial arrangements
• Sale of unique goods or immovable properties

Modes of Resolution

1. Civil Suit: Plaintiffs file a suit in civil court seeking specific performance. The relief may be combined with an alternative prayer for damages.
2. Commercial Courts: With the advent of the Commercial Courts Act, 2015, many disputes involving commercial contracts now fall under these courts, ensuring faster adjudication.
3. Arbitration: While arbitral tribunals may award damages, they cannot generally enforce specific performance unless explicitly permitted under the contract and arbitration agreement.
4. Mediation: Increasingly encouraged by courts to resolve performance disputes amicably.

Important Case Laws

K. Narendra v. Riviera Apartments (1999) 5 SCC 77

Held that specific performance can be refused if it would cause undue hardship to the defendant or if circumstances have materially changed.

K.S. Vidyanadam v. Vairavan (1997) 3 SCC 1

Emphasized that time is an important factor. If there’s delay and lack of readiness/willingness, specific performance may be denied.

Surya Narain Upadhyay v. Ram Roop Pandey, (2000) 8 SCC 633

Reiterated that plaintiff must always be ready and willing to perform their part of the contract — a fundamental requirement under Section 16(c).

Indian Oil Corporation Ltd. v. Amritsar Gas Service (1991) 1 SCC 533

Held that if a contract is determinable in nature, it is not specifically enforceable.

Tata Sons v. Siva Industries (2021)

Delhi High Court observed that in commercial contracts, post-amendment, specific performance is more likely to be granted unless barred by law.

Conclusion

With the 2018 amendment to the Specific Relief Act, India has made a decisive shift toward enforceability of contracts, especially in commercial contexts. Specific performance is no longer a matter of discretion but a rule, unless exceptions apply. This enhances contractual certainty and aligns Indian contract law with global commercial expectations.

For businesses and legal practitioners, this means:

• Draft contracts carefully with enforcement in mind.
• Document performance and readiness to perform.
• Be aware that non-performance may no longer be solved with just damages — you may be compelled to perform.

Corporate governance serves as the backbone of any organization, ensuring ethical conduct, accountability, and transparency. The Companies Act, 2013 (the “Act”) offers a comprehensive framework for corporate governance, yet violations still persist. These violations, if not properly addressed, can lead to disputes that affect the company’s integrity, its operations, and its stakeholders. This article explores corporate governance violations under the Companies Act, 2013, and focuses on the dispute resolution mechanisms available.

What Constitutes Corporate Governance Violations?

Corporate governance violations typically relate to any action or inaction that undermines transparency, accountability, and ethical conduct within a company. These violations may involve breaches of fiduciary duties, mismanagement, or inadequate financial disclosures. Below are some common violations under the Companies Act, 2013:

1. Non-Compliance with Board Composition and Functioning
   • Section 149 of the Companies Act mandates that every company should have a Board of Directors with a proper mix of executive and independent directors. Violations occur when companies fail to comply with these provisions, resulting in a lack of independent oversight.
2. Misrepresentation of Financial Statements
   • Under Section 134, companies are required to prepare and present true and fair financial statements. Misleading or fraudulent financial reporting constitutes a violation, jeopardizing the interests of stakeholders.
3. Violation of Shareholder Rights
   • The Companies (Amendment) Act, 2017, strengthens shareholder rights, particularly by ensuring that companies adhere to provisions regarding the conducting of Annual General Meetings (AGMs) as per Section 96. Failure to conduct AGMs or delays in declaring dividends can lead to disputes.
4. Conflict of Interest & Insider Trading
   • Section 184 requires directors to disclose any conflict of interest. Violations, such as insider trading or acting in personal interests rather than the company’s, violate not only the Act but also the Securities and Exchange Board of India (SEBI) guidelines.
5. Failure to Comply with Corporate Social Responsibility (CSR)
   • Section 135 mandates that companies with a net worth exceeding Rs. 500 crore, or an annual turnover of Rs. 1000 crore, must spend at least 2% of their average net profit over the last three years on CSR activities. Failure to do so can attract penalties.

Dispute Resolution Mechanisms under the Companies Act, 2013

When corporate governance violations occur, they often result in disputes that can cause significant harm to the company’s reputation and financial stability. Fortunately, the Companies Act, 2013 provides robust mechanisms for resolving these disputes. These mechanisms are designed to ensure that shareholders, directors, and other stakeholders can seek redress for violations in a timely and effective manner.

1. National Company Law Tribunal (NCLT)
   • The NCLT, established under Section 408 of the Companies Act, is the primary forum for adjudicating corporate governance disputes. NCLT’s powers include addressing violations like mismanagement, oppression of minority shareholders, and failure to comply with statutory provisions.
   • Case Law: Shakti Tubes Limited v. Union of India (2017), where the NCLT upheld its jurisdiction to pass orders regarding the mismanagement and oppression of shareholders, reinforcing the tribunal’s pivotal role in corporate governance issues.
2. Registrar of Companies (RoC)
   • The RoC, under Section 92 and Section 137, ensures that companies comply with their filing requirements, including financial statements, board resolutions, and annual returns. The RoC can issue warnings, impose penalties, or even initiate legal action if violations are detected.
   • Case Law: In Dalal Street Investment Journal Pvt. Ltd. v. Securities and Exchange Board of India (2017), the RoC was empowered to take strict action against a company for failing to disclose vital financial information, demonstrating the enforcement power vested in this office.
3. Mediation and Arbitration
   • Companies are encouraged to resolve disputes through mediation and arbitration under Section 89 of the Act. These alternative dispute resolution (ADR) mechanisms are becoming increasingly popular for resolving shareholder disputes, especially in cases involving governance violations.
   • Case Law: In Sahara India Real Estate Corporation Ltd. v. Securities and Exchange Board of India (2012), the Supreme Court emphasized the importance of ensuring the dispute resolution mechanism outlined by the parties, particularly in corporate matters.
4. Whistleblower Mechanism
   • Section 177 mandates listed companies to establish a whistleblower policy. This enables employees and stakeholders to report any unethical practices, including violations of corporate governance standards. A robust whistleblower system can resolve issues before they escalate into legal disputes.

Challenges in Dispute Resolution

While there are several dispute resolution avenues under the Companies Act, 2013, challenges remain in effectively addressing corporate governance violations:

1. Delays in the Legal Process
   • The NCLT and NCLAT (National Company Law Appellate Tribunal) are often overloaded with cases, leading to delays in adjudication. This can result in prolonged disputes that affect business continuity.
2. Complexity of Corporate Governance Issues
   • Corporate governance violations often involve intricate issues such as conflicts of interest, insider trading, and misrepresentation. The complexity of these issues requires specialized legal expertise, which can delay resolution.
3. Minority Shareholder Rights
   • Section 241 of the Companies Act provides a mechanism for minority shareholders to approach the NCLT if they believe their rights are being violated. However, the challenge lies in effectively protecting these rights, as minority shareholders often have limited control over the company’s governance.

Case Laws Highlighting Corporate Governance Violations

1. Ravi Kumar Jain v. K.K. Goyal & Co. (2014):
   This case highlighted a violation of corporate governance when the majority shareholders of a company disregarded minority shareholders’ rights, resulting in oppression. The NCLT ruled in favor of minority shareholders, showcasing the importance of governance adherence.
2. Tata Consultancy Services Ltd. v. Cyrus Mistry (2016):
   The infamous battle between the Tata Group and Cyrus Mistry highlighted several corporate governance violations, including unfair removal of directors and non-compliance with fiduciary duties. The Supreme Court intervened, ordering that the removal of Mistry was not in compliance with the governance standards expected under the Companies Act.
3. Vodafone International Holdings v. Union of India (2012):
   This case dealt with the failure of the company to comply with tax governance regulations and disputes arising out of cross-border mergers. The dispute resolution process through litigation highlighted the broader implications of governance violations for multinational corporations.

Conclusion

Corporate governance is not just a legal obligation; it is fundamental to the credibility and longevity of a business. Violations of governance standards undermine public trust and can lead to significant financial and legal consequences. The Companies Act, 2013 provides a robust framework to tackle corporate governance violations, but timely dispute resolution is key.

By leveraging mechanisms such as NCLT, RoC, and alternative dispute resolution (ADR), companies can effectively address governance violations and restore stakeholder confidence. Furthermore, preventive measures like strong internal audits, whistleblower policies, and continuous legal compliance can help businesses mitigate governance issues and avoid costly disputes.

In the complex landscape of corporate governance, the role of company directors is both pivotal and scrutinized. The Companies Act, 2013 imposes stringent conditions for eligibility, conduct, and accountability of directors. When a director crosses the line—whether through negligence, fraud, or systemic failure—the consequences can be severe: disqualification, civil liabilities, and in some cases, criminal prosecution.

But what happens when allegations are disputed? What is the recourse when a director claims innocence, or when disqualification arises from procedural lapses rather than culpability? This is where dispute resolution becomes not just a legal remedy, but a strategic shield.

Grounds for Disqualification: Key Highlights

Under Section 164 of the Companies Act, a person is disqualified from being appointed as a director if:

• He/she is of unsound mind, an undischarged insolvent, or convicted of an offence involving moral turpitude (?6 months).
• The company fails to file financial statements or annual returns for 3 consecutive financial years.
• The company fails to repay deposits, redeem debentures, or pay declared dividends.

Additionally, Section 167 mandates that a disqualified director must vacate office in all companies (except in some specified circumstances).

Director Liability: Civil and Criminal

Directors may be held liable for:

• Fraud (Section 447) – Misstatement in prospectus, diversion of funds, or deceit.
• Mismanagement (Section 241–242) – Prejudicial conduct or oppression of minority shareholders.
• Breach of Duties (Section 166) – Failure to act in good faith, misuse of position.

Penalties can include monetary fines, imprisonment, and personal liability in case of fraudulent conduct, especially in cases where directors acted with intent or gross negligence.

Dispute Resolution Avenues: The Legal Safeguard

Disqualification and liability often stem from complex facts. The law acknowledges this, offering multiple dispute resolution mechanisms:

1. National Company Law Tribunal (NCLT)

• A director aggrieved by disqualification under Section 164(2) may seek relief under Section 252 (for revival of a struck-off company) or file a writ to challenge the validity of the disqualification.
• Section 241/242 petitions also serve as tools to combat oppressive boardroom tactics or to reinstate directors wrongfully removed.

2. High Court Writ Jurisdiction

• Where the MCA (Ministry of Corporate Affairs) updates the ROC portal disqualifying directors without a hearing, directors can approach the High Court under Article 226, challenging violation of natural justice.

3. Appeals under Section 454/ Appeals to NCLAT

• Penalties imposed by adjudicating officers under administrative proceedings can be appealed before the NCLAT.

4. Compounding of Offences (Section 441)

• Where the violation is technical or non-wilful, compounding before the NCLT/RD is a practical route to settle disputes and regularize defaults.

Recent Trends: Courts on the Director’s Side

Judicial pronouncements have brought in much-needed balance:

• Mukut Pathak & Ors. v. Union of India (Delhi HC): Disqualification under Section 164(2) cannot have retrospective effect for directors of defaulting companies prior to 2014 amendment.
• Yogesh Gupta v. ROC (Bombay HC): ROC must provide a hearing before declaring disqualification.

Such rulings reinforce the role of courts and tribunals as arbiters of fairness and proportionality in director disputes.

Practical Takeaways for Directors

1. Stay compliant: Regular filings, transparent governance, and documented decisions reduce liability.
2. Seek timely legal advice: Many disqualifications can be pre-empted or resolved early through representation before ROC or NCLT.
3. Use dispute resolution proactively: Don’t wait for prosecution—file for compounding, appeal disqualification, or seek rectification under the right sections.
4. Negotiate wisely: In internal disputes, consider mediation or board-level settlements before resorting to litigation.

Conclusion

Director disqualification is not merely a punitive tool—it is a governance checkpoint. However, due process, natural justice, and dispute resolution remain integral to the Companies Act framework.

As corporate governance tightens, directors must be both vigilant and proactive. Legal mechanisms—when used wisely—offer not just protection, but vindication.