Court Diary

Name: SWATI

Enrollment Number: 22017703818

Semester and Section VII – D

Course: (Integrated) B.A. LL.B.

Name of the Advocate/Law Firm: ADV. S.K. GARG

Submitted for

Subject Code: LLB 451

VIVEKANANDA INSTITUTE OF PROFESSIONAL STUDIES

GGSIP UNIVERSITY

NOVEMBER, 2021

1
INDEX

S.No. Date Name of the case/ Research Page No.

1. 01/06/21 Interim Measures to facilitate Arbitration 4-10
2. 02/06/21-S Securing the amount in dispute w.r.t interim 10-12
03/06/21 award u/s.9 of the Arbitration and Conciliation
act, 1996

3. 04/06/21 Multiple Agreements are signed where some 12-14

contain an arbitration clause and others don’t,
constitute composite transaction
4. 07/06/21- Private Placement Allotment 15-18
08/06/11
5. 09/06/21 An Employee of a Company post-resignation 18-21
– shared screenshots of company’s internal e-
11/06/21 mails on social media platforms even after
being warned from the company. What legal
remedies can the company adopt against such
ex-employee?
6. 14/06/21 Foreign Judgements on stopping a shareholder 21-23
– calling an EGM on unlawful grounds.
17/06/21
7. 18/06/21 Party invoking arbitration must expedite 23-24
– arbitration
21/06/21
8. 22/06/21 Section 8 & 11(2) of the POCSO act mentions 25
– remedy for a male child, find precedents in
24/06/21 reference to Section 8 or 11(2) used for girl
child victims as well

2
9. 29/06/21 Recent judgement regarding tort claim referred 26-28
– to arbitration
30/06/21

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TASK 1:
TOPIC OF RESEARCH: Interim Measures to facilitate Arbitration

DATE ON WHICH IT IS ASSIGNED: 01/06/21

IS IT CONTINUING WORK: No

TOOLS USED IN RESEARCH:

1. the Arbitration & Conciliation Act, 1996

2. Various Websites
3. SCC/ Manupatra/ LexisNexis

RESEARCH:

In India, the Arbitration & Conciliation Act, 1996 (“Act”) which was formulated on the basis
of UNCITRAL Model Law on International Commercial Arbitration, 1985 (“Model Law”),
provides for interim measures under Sections 9 and 17 by courts and arbitral tribunals
respectively.

Sundaram Finance Ltd. v. NEPC India Ltd., (1999) 2 SCC 479: “...when an application
under Section 9 is filed before the commencement of the arbitral proceedings, there has to be
manifest intention on the part of the applicant to take recourse to the arbitral proceedings if,
at the time when the application under Section 9 is filed, the proceedings have not
commenced under Section 21 of the 1996 Act.”

Section 9 provides for interim measures of protection not just before the commencement of
arbitral proceedings and during the arbitral proceedings but also post the arbitral award has
been rendered (but prior to its enforcement). Section 9 of the Arbitration and Conciliation
Act, 1996 provides Interim measures, etc. by Court

(1) A party may, before or during arbitral proceedings or at any time after the making of

the arbitral award but before it is enforced in accordance with section 36, apply to a

court— 

(i) for the appointment of a guardian for a minor or person of unsound mind for the

purposes of arbitral proceedings; or 

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(ii) for an interim measure of protection in respect of any of the following matters,

namely:—

 (a) the preservation, interim custody or sale of any goods which are the subject-matter of
the arbitration agreement;

 (b) securing the amount in dispute in the arbitration;

 (c) the detention, preservation or inspection of any property or thing which is the subject-

matter of the dispute in arbitration, or as to which any question may arise therein
and authorising for any of the aforesaid purposes any person to enter upon any land or
building in the possession of any party, or authorising any samples to be taken or any
observation to be made, or experiment to be tried, which may be necessary or expedient for
the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver; 

(e) such other interim measure of protection as may appear to the Court to be just
and convenient, and the Court shall have the same power for making orders as it has for
the purpose of, and in relation to, any proceedings before it.

S. 9(1) provides three time periods when interim measure is available –

before arbitral proceedings or,

during arbitral proceedings or,  at any time after the making of the arbitral award but before it
is enforced in accordance with section 36.

Also, there are six different circumstances for interim measure

(2) Where, before the commencement of the arbitral proceedings, a Court passes an order for
any interim measure of protection under sub-section (1), the arbitral proceedings shall be
commenced within a period of ninety days from the date of such order or within such further
time as the Court may determine. 

(3) Once the arbitral tribunal has been constituted, the Court shall not entertain an application
under sub-section (1), unless the Court finds that circumstances exist which may not render
the remedy provided under section 17 efficacious.

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S. 9(2) and (3) are included in 2015 Amendment. S.9(2) provides when the arbitral
proceedings are not started yet and Court has passed interim measure then it is necessary that
arbitral proceedings should be started within 90 days. 

S.9(3) is when arbitral tribunal is constituted, Court will not entertain any application for
interim measures. Court will entertain only when the circumstances exist that remedy under
S.17 is affected. There should be prima facie proof of arbitration agreement to claim
interim measures. The expression ‘before the arbitral proceedings’ means the arbitral
proceedings are actually contemplated or manifestly intended and positively going to
commence within a reasonable time.

Purpose of interim measures- to protect the interest of the parties. Section 17 provides the
Interim measures ordered by the Arbitral Tribunal

(1) A party may, during the arbitral proceedings or at any time after the making of the

arbitral award but before it is enforced in accordance with section 36, apply to the arbitral

tribunal— 

(i) for the appointment of a guardian for a minor or person of unsound mind for the purposes

of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters,

namely:—

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the

arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-
matter of the dispute in arbitration, or as to which any question may arise therein
and authorising for any of the aforesaid purposes any person to enter upon any land or
building in the possession of any party, or authorising any samples to be taken, or any
observation to be made, or experiment to be tried, which may be necessary or expedient for
the purpose of obtaining full information or evidence; 

(d) interim injunction or the appointment of a receiver;

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(e) such other interim measure of protection as may appear to the arbitral tribunal to be just
and convenient, and the arbitral tribunal shall have the same power for making orders, as the
court has for the purpose of, and in relation to, any proceedings before it. 

(2) Subject to any orders passed in an appeal under section 37, any order issued by the
arbitral tribunal under this section shall be deemed to be an order of the Court for all purposes
and shall be enforceable under the Code of Civil Procedure, 1908 (5 of 1908), in the same
manner as if it were an order of the Court. Sec. 17 allows Interim measures by arbitral
tribunal only in two situation:- During the arbitral proceedings or at any time after the making
of the arbitral award but before it is enforced in accordance with section 36. 

Prior to 2015, all the five different circumstances were not included. Now, Interim measure
by tribunal shall be deemed to be an order of the Court for all purposes and shall
be enforceable under CPC, 1908.

Important Judgements:

Alka Chandewar vs Shamshul Ishrar Khan, (2017) 16 SCC 119 Section 17(2) was added

by the Amendment Act 2015, so that the cumbersome procedure of an Arbitral Tribunal
having to apply every time to the High Court for contempt of its orders would no longer
be necessary. Such orders would now be deemed to be orders of the Court for all purposes
and would be enforced under the Civil Procedure Code, 1908 in the same manner as if they
were orders of the Court. Thus, we do not find Shri Rana Mukherjee’s submission to be of
any substance in view of the fact that Section 17(2) was enacted for the purpose of providing
a “complete solution” to the problem

State of Gujarat  v. Amber Builders [Judgment dated January 8, 2020 in Civil Appeal

No.8307 of 2019]

The Court held that on a conjoint reading of the Acts together, it is clear that the powers
vested in the Tribunal in terms of Section 17 of the A&C Act are concerned, such powers can
be exercised by Arbitral Tribunal constituted under the Gujarat Act because there is no
inconsistency in these two Acts as far as the grant of interim relief is concerned.
Sona Corporation India Private Limited v. Ingram Micro India Private
Limited [Judgment dated 20.01.2020 in ARB. A. (COMM.) 4/2019, Delhi HC] the Court
held that there was no bar in law for an arbitral tribunal to pass an order in a subsequent
application filed before it under Section 17 of the Arbitration Act, in variation of an order

7
passed in the original Section 17 application, if it could be demonstrated that material
subsequent developments had occurred in the interregnum. Relied u/s 9 can be granted even
before commencement of arbitration

In the case of M/s. Sundaram Finance Ltd. v. M/s. NEPC India Ltd., AIR 1999 SC 565,
Supreme Court was to examine the issue whether u/s 9 of the Arbitration and Conciliation
Act, 1996, the Court has jurisdiction to pass interim orders even before arbitral proceedings
commence and before an arbitrator is appointed. SC held that it is not necessary that arbitral
proceedings must be pending or at least a notice invoking arbitration clause must have been
issued before an application under Section 9 is filed

Interim measures u/s 9 and u/s 17 are distinguishable

In firm Asok Traders v. Gurumukhdas Saluja AIR2004 SC 1433, the Apex court
observed that section 17 would operate only during the existence of the Arbitral Tribunal.
During that period power conferred on Arbitral Tribunal u/s 17 and power of court u/s 9 may
overlap to some extent but so far as the pre and post the arbitral proceedings are concerned,
party seeking interim measures of protection has to approach only court.

2015 Amendment

The Amendment Act 2015 has introduced certain changes to the provisions on interim reliefs
with respect to kind of reliefs available and the time-frame for seeking such reliefs before
courts, i.e., if an order of interim relief has been granted by a court prior to the constitution of
the arbitral tribunal, parties are required to initiate arbitral proceedings within a period of
ninety days. Once arbitral proceedings have commenced, the parties would have to seek
interim reliefs before the arbitral tribunal. A court would ordinarily not entertain a petition for
interim reliefs in such a situation unless the party is able to prove the existence of
circumstances that make a relief granted by an arbitral tribunal inefficacious. After an award
has been rendered by the arbitral tribunal, the successful party may also choose to approach
courts for interim reliefs to secure and safeguard the effectiveness of the arbitral award prior
to its enforcement. The application would generally have to be made before a court prior to
the enforcement of the award in case of both domestic and international commercial
arbitrations. Interim measures ordered by arbitral tribunal set out in Section 17 of the Act, are
also essentially based on Article 17 of the Model Law. The operation of this provision is
triggered only at the request of a party to the arbitral proceedings, only after the constitution
of the tribunal. A party may seek interim reliefs up to the point in time at which an award is

8
made by the tribunal. Previously, there was a debate whether the powers of an arbitral
tribunal to grant interim reliefs were narrower compared to the power of a court under
Section 9 of the Act. However, with the amendments in place, the powers of an arbitral
tribunal to grant interim reliefs have been made at par with those of the court under Section 9
of the Act. Certain interim measures may be necessary to protect a party’s rights. The nature
of interim reliefs sought by the parties may vary based on the facts and circumstances of the
dispute. In certain situations, the effective provision of interim reliefs may involve directions
to third parties also. With the changes introduced by the Arbitration and Conciliation
Amendment Act, 2015 (“Amendment Act 2015”), arbitral tribunals have now been vested
with wider powers to grant interim measures. Once arbitral proceedings have commenced,
the parties would have to seek interim reliefs before the arbitral tribunal. A court would
ordinarily not entertain a petition for interim reliefs in such a situation unless the party is able
to prove the existence of circumstances that make a relief granted by an arbitral tribunal
inefficacious.

Interim measures in proceeding outside India

S. 2(2) proviso Provided that subject to an agreement to the contrary, the provisions of
sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of section 37 shall
also apply to international commercial arbitration, even if the place of arbitration is outside
India, and an arbitral award made or to be made in such place is enforceable
and recognised under the provisions of Part II of this Act.  This is included in 2015 Amdt.
Section 9 of the Arbitration Act, 1996, a Division Bench of the Bombay
High Court in Dirk India Pvt. Ltd. v. Maharashtra State Power Generation Company 
Ltd. 2013 SCC OnLine Bom 481 held that when an interim measure of protection is sought
before or during arbitral proceedings, such a measure is a step-in aid to the fruition of
the arbitral proceedings. When sought after an arbitral award is made but before it
is enforced, the measure of protection is intended to safeguard the fruit
of the proceedings until the eventual enforcement of the award. Here again, the measure of
protection is a step-in aid of enforcement. It is intended to ensure that enforcement of the
award results in a realizable claim and that the award is not rendered illusory by dealings that
would put the subject of the award beyond the pale of enforcement.”

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 Who can apply for interim measures?

Any party to the arbitration agreement can make an application for interim measures in the
course of the arbitral proceedings. However, after making of the arbitral award, only
successful party which is entitled to seek the enforcement of the award can apply to the cour
under Section 9 for protection in terms of Section 9 (ii) of the Act.

TASK 2:
TOPIC OF RESEARCH: Securing the amount in dispute w.r.t interim award u/s.9 of the

Arbitration and Conciliation Act, 1996

DATE ON WHICH IT IS ASSIGNED: 02/06/21- 03/06/21

TOOLS USED IN RESEARCH:

1. Arbitration and Conciliation Act, 1996

2. Various Websites
3. SCC/ Manupatra/ LexisNexis

RESEARCH:

Section 9 of the Act describes the type of interim relief that may be sought by a party. The
application for interim relief may include several reliefs one of which is “Securing the amount of
claims”.

The Act consequently permits the parties, before executing the award, to use the court for
securing the issue of the arbitral award to safeguard the decretal amount, in order that the
awarded individual cannot evade the obligations under the award and create the realization of
the award illusory. Relying on the recent judgments of the Supreme Court and considering the
facts of the case, the Court directed deposit of 100% of the awarded amount with the registry of
the high court in Power Mech projects Ltd. v. Sepco electric power Construction
Corporation (2019 SCC OnLine Del 11914)

In Shipping Company of Saudi Arabia v. Sentrans Industries Limited, Mumbai (AIR 2004
Bom 136) The court while considering an application for interim protection under section 9(ii)
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(d) is guided by equitable consideration and each case has to be considered in the light of its
facts and circumstances. The interim protection order is granted by the court to
protect the interest of the party seeking such order until the rights are finally adjudicated
by the arbitral tribunal and to ensure that the award passed by the arbitral tribunal is capable of
enforcement.

In Ganesh Benzoplast Ltd v Sundaram Finance Ltd, 2002 (2) Arb LR 512, the party filed an
application under this section read with O XXXVIII R 5, CPC for directions to the appellant to
furnish security for the said amount and for a simultaneous order of conditional attachment of
property, it was held that this section empowers the court to order interim measure
without the necessity of reliance on O XXXVIII R 5, CPC. The court held only when a statute
requires a plea should be in a particular form then it should be complied with
strictly. The provisions of this section are neither similar to O XXXVIII R 5 of the CPC nor
to section 18 of Arbitration Act, 1940.

In International Ltd v Union Territory of J&K, 2020 SCC OnLine J&K 29 the court said
that the interim measures that can be ordered by the court under section 9 or by the Arbitral
Tribunal under section 17 may, inter alia, relate to securing the amount in dispute of arbitration.
Neither the Court acting under section 9 of the Act nor arbitral tribunal exercising its power
under section 17 of the Act is empowered to direct a party to release payment in favour
of the party making an application by way of interim measure of protection. Such request
of the party applying before the arbitrator/arbitral tribunal for seeking direction to the other party
to release the admitted payments cannot be issued by the Court under section 9 of the Act or
by the arbitral tribunal under section 17 of the Act. If at all, there are certain claims of payments
regarding which the parties are not at dispute, the arbitral tribunal may well pass an interim
award, which, if passed could only be challenged by way of application under section 34
of the Act.

In Steel Authority of India v. AMCI Pty Ltd 2011 (3) Arb. LR 502 (“SAIL”) the Delhi High
Court took the view that principles contained in Order XXXVIII Rule 5 would only serve as
guiding principles for the exercise of power by the court. A party seeking reliefs under Section 9
would essentially have to satisfy the court that the furnishing of security was paramount to
safeguard its interests.

In Delta Constructions v Narmada Cement (2002) 1 Mah LJ 684, the court held that under
Section 9(ii)(b) of the Act, a party can seek to protect its financial interests by securing the

11
amount in dispute, including by way of guarantees furnished by the opposite party. For an order
for securing the amount in dispute it would be necessary to show that the amount is a part
of the claim, but not where there is no reference of the amount to arbitration, nor there is any
intention to do so. Parmali Wallace Ltd. v. Union of India, (1998) 3 RAJ 348 (Del)

TASK 3:
TOPIC OF RESEARCH: Multiple Agreements are signed where some contain an
arbitration clause and others don’t, constitute composite transaction.

DATE ON WHICH IT IS ASSIGNED: 04/06/21

IS IT CONTINUING WORK: No

TOOLS USED IN RESEARCH:

1. Arbitration & Conciliation Act, 1996

2. Various Websites

RESEARCH:

CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT WATER PURIFICATION

INC. & ORS. (2013) 1 SCC 641

Facts of the case: The facts involved a dispute between an Indian and foreign party. There
was a network of several inter-linked agreements, each dealing with a different aspect of the
commercial relationship between the parties. The Shareholder’s Agreement was the principal
or parent agreement. The Shareholders Agreement had an arbitration clause, which provided
for London as the seat of arbitration and English law as the governing law. The other
agreements included an International Distributor Agreement (jurisdiction of court in
Pennsylvania), Managing Director’s Agreement (no arbitration clause), Financial and
Technical Know-how License (ICC arbitration London), Export Sales Agreement (AAA

12
arbitration in Pennsylvania), Trademark Registered User License Agreement (No arbitration
clause). Not all these agreements had the same parties, but were part of a composite
transaction, all stemming from the Shareholders Agreement or the mother agreement.

Issue raised: Whether in a case where multiple agreements are signed between different
parties and where some contain an arbitration clause and others don’t and further the parties
are not identically common in proceedings before the Court (in a suit) and the arbitration
agreement, a reference of disputes as a whole or in part can be made to the arbitral tribunal,
more particularly, where the parties to an action are claiming under or through a party to the
arbitration agreement?

Ratio: In the present case, the corporate structure of the respondent companies as well as that
of the appellant companies clearly demonstrates a legal relationship which not only is inter-
legal relationship but also intra-legal relationship between the parties to the lis or persons
claiming under them. They have contractual relationship which arises out of the various
contracts that spell out the terms, obligations and roles of the respective parties which they
were expected to perform for attaining the object of successful completion of the joint
venture agreement. This joint venture project was not dependant on any single agreement but
was capable of being achieved only upon fulfilment of all these agreements. It is nothing but
one single chain consisting of different components. The parties may choose to sign different
agreements to effectively implement various aforementioned facets right from managing to
making profits in a joint venture company. A party may not be signatory to an agreement but
its execution may directly be relatable to the main contract even though he claims through or
under one of the main parties to the agreement. In such situations, the parties would aim at
achieving the object of making their bargain successful, by execution of various agreements,
like in the present case

Another aspect of the case is that all these agreements were executed simultaneously on 16th
November, 1995 which fact fully supports the view that the parties intended to have all these
agreements as a composite transaction. Furthermore, when the parties signed the
Supplementary Collaboration Agreement in August 1997, by that time all these agreements
had not only been signed and understood by the parties but, in fact, had also been acted upon.

FACTORS TO DETERMINE IF MULTIPLE AGREEMENTS CONSTITUTE

COMPOSITE TRANSACTION

13
In cases involving execution of such multiple agreements, two essential features exist; firstly,
all ancillary agreements are relatable to the mother agreement and secondly, performance of
one is so intrinsically inter-linked with the other agreements that they are incapable of being
beneficially performed without performance of the others or severed from the rest. The
intention of the parties to refer all the disputes between all the parties to the arbitral tribunal is
one of the determinative factors.

Held: Court directed all the disputes arise in the suit and from the agreement between the
parties to be referred to arbitral tribunal and be decided in accordance with the Rules of ICC

Can a non-signatory or third party be subjected to arbitration?

In Chloro Controls, this Court held that a non-signatory or third party could be subjected to
arbitration without their prior consent, but this would only be in exceptional cases. The court
will examine these exceptions from the touchstone of:

 direct relationship to the party signatory to the arbitration agreement,

 direct commonality of the subject-matter and the agreement between the parties being
a composite transaction.
 The transaction should be of a composite nature where performance of the mother
agreement may not be feasible without aid, execution and performance of the
supplementary or ancillary agreements, for achieving the common object and
collectively having bearing on the dispute
 Besides all this, the court would have to examine whether a composite reference of
such parties would serve the ends of justice. Once this exercise is completed and the
court answers the same in the affirmative, the reference of even non-signatory parties
would fall within the exception afore-discussed.”

Normally, arbitration takes place between the persons who have, from the outset, been parties
to both the arbitration agreement as well as the substantive contract underlining that
agreement. But it does occasionally happen that the claim is made against or by someone who
is not originally named as a party. Arbitration, thus, could be possible between a signatory to
an arbitration agreement and a third party. Of course, heavy onus lies on that party to show
that, in fact and in law, it is claiming ‘through’ or ‘under’ the signatory party as contemplated
under Section 45 of the 1996 Act.

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TASK 4:
TOPIC OF RESEARCH: Private Placement Allotment

DATE ON WHICH IT IS ASSIGNED: 07/06/21- 08/06/11

IS IT CONTINUING WORK: No

TOOLS USED IN RESEARCH:

1. Various Websites

RESEARCH:

Offers can be made only to persons whose names are recorded by the company prior to the
offer. A complete information about an offer has to be filed with the Registrar within a period
of 30 days of circulation of the relevant private placement offer letter. [S. 42(7)] A company
offering securities under this section is not to release any public advertisements or utilise any
media, marketing distribution channels or agents to inform the public about the offer. [S.
42(8)] After making allotments, the company has to file with the Registrar a return of
allotment in the prescribed manner, including the complete list of all security holders, with
their full names, addresses, number of securities allotted and also any other prescribed
information. [S. 42(9)] Consequences of default [S. 42(10)].—Any contravention of the
section would make the company, its promoters and directors liable to a penalty which may
extend to the amount involved in the offer, or two crore rupees whichever is higher. The
company has also to refund all monies to subscribers within a period of 30 days of the order
imposing the penalty. Section 46 speaks in plain language of the object of a share certificate,
"A share certificate under the common seal of the company, specifying any shares held by
any member, shall be primafacie evidence of the title of the member to such shares." Thus,
the share certificate being prima facie evidence of title, it gives the shareholder the facility of
dealing more easily with his shares in the market. It enables him to sell his shares by showing
at once a marketable title.

1. Estoppel as to title.—a share certificate once issued binds the company in two ways. In the
first place, "it is a declaration by the company to all the world that the person in whose name
the certificate is made out, and to whom it is given, is a shareholder in the company. In other
words, the company is estopped from denying his title to the shares. Suppose A, by practising
fraud on a company, obtains a share certificate in his name as the holder of some shares. He

15
then sells them in the market. B, purchasing them in good faith applied to the company to
have the shares registered in his name. The company, having discovered the fraud, refuses.
The company must compensate B for the loss he has sustained by acting on the faith of the
share certificate. The measure of damages would be the market price of the shares at that
time. In a case of this kind: The plaintiff applied for 300 shares in a company. A clerk in the
company who owned no shares executed a transfer in favour of the plaintiff. The company
without requiring the clerk to produce his certificate registered the transfer and issued a new
certificate to the plaintiff. The company was held liable to the plaintiff in damages irregular
allotment

1. An allotment shall be irregular when, it is made by the company a. Without receiving the
minimum subscription or the application money subject to a minimum of 5% of the nominal
value of the share, or b. Without filing a statement in lieu of prospectus at least three days
before the allotment, if no prospectus is issued.

2. Where an application has been made to Stock Exchange(s) as per Sec. 73 of the Companies
Act for the purpose of listing the shares and the permission has not been granted before the
expiry of 10 weeks from the date of closing of subscription list the allotment is void.

3. Where the allotment is made before the expiry of the fifth day after the publication of the
prospectus, the allotment is valid, but the Company and its officers in default are liable to a
fine. It has one effect 1. Voidable at the option of the Shareholder An allotment which is not
made after complying with the statutory requirements cited above shall be considered as an
invalid allotment and is void. But an irregular allotment is not an invalid allotment or a void
allotment. An irregular allotment is only voidable at the instance of the allottee. I don’t think
the situation can qualify under so this does not fall in irregular allotment can’t be void

Pre-requisite for Compounding

 Offences which are punishable with fine only, can be compounded either by Regional
Director (RD) or by National Company Law Tribunal (NCLT).
 Offence which are punishable with imprisonment or fine, or offence punishable with
imprisonment or fine or both shall be Compoundable with permission of Special
Court.
 Offences which are punishable with imprisonment only or imprisonment and fine
cannot be Compounded. If a company makes an offer or accepts monies in

16
 contravention of this section, the company, its promoters and directors shall be liable
for a penalty which may extend to the amount involved in the offer or invitation or
two crore rupees, whichever is higher, and the company shall also refund all monies
to subscribers within a period of thirty days of the order imposing the penalty.

Procedure of making Compounding Application

 An application for compounding of offence shall be made before the Registrar of

Companies (ROC) where the registered office of the company is situated. A Form
GNL-1 has to be filed.
 The Registrar of Companies (ROC) shall, after going through the contents of the
application forward the application to Regional Director (RD) or National Company
Law Tribunal (NCLT) as the case may be. • Office of RD/ CLB/Tribunal shall fix the
date and time of personal hearing for the company or officer of the company who is
seeking compounding of offence.
 After hearing the matter, RD/NCLT shall pass an order compounding the offence. The
proviso to sub-section 3 of Section 42 explicitly provides that the private placement
offer and application shall not carry any right of renunciation. The person to whom
the offer is made can either accept or reject the offer. There is no right for
renunciation. Compounding application u/s 441

Benefit of compounding

1. No personal appearance for officer in default, as in case of prosecution for an offence in a

criminal court
2. No further prosecution shall be initiated either by registrar or shareholder or any other
person in respect of that offence after compounding.
3. Summary proceeding, less time consuming.
4. The Compounding fee cannot be more than the maximum fine levied under the relevant
provision
5. No Appeal against order of Composition as the Order is passed with the consent of the
parties

In this regard, I have perused the application form for the issue of NCDs of the company
which states that the offer is being made on a private placement basis and cannot be accepted
by any person other than those to whom it has been offered.

17
Nothing is shown as to how Respondent No. 4,an outsider was selected for making Private
Placement of shares to him and that too at par. Looking to Section 42 as well as Section 62(1)
(c) of the new Act read with the rules mentioned above, it appears necessary that before
decision is taken for allotment by way of private placement, it would be necessary to follow
the procedures of selecting the person’s to whom issue of Private Placement offer letter is to
be made and then further comply with provision of section 42. If this is done, it would reflect
in decision of general body. In present matter, this does not appear to be there. Again, the
Board of Directors Resolution dated 26.11.2016 does not show how money had been
received and if section 42(5) had been complied. Records do not show that for Respondent
No.4, compliances as per section 42(7) had been made. Therefore, to the best of my
understanding, it cannot be irregular void but we can do the compounding of application and
get it registered.

TASK 5:

TOPIC OF RESEARCH: An Employee of a Company post-resignation shared screenshots

of company’s internal e-mails on social media platforms even after being warned from the
company. What legal remedies can the company adopt against such ex-employee?

DATE ON WHICH IT IS ASSIGNED: 09/06/21 – 11/06/21

IS IT CONTINUING WORK: No

RESEARCH:

NATURE OF ALLEGATION

Defamation

Breach of Lawful Contract

LEGAL REMEDIES AVAILABLE

1. Whether the act constitutes defamation?

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If the Screenshots shared, contains per se defamatory content or were shared to harm the
reputation of the company such content cannot be said to be bona fide. The employee can be
sued for defamation.

Defamation is of two types:

Civil & Criminal

Civil: Under civil law, defamation is the publication of a statement which tends to lower a
person in the estimation of the right-thinking members of the society.

The remedy for civil defamation is stated under the Law of Torts. In a civil defamation case,
the person who is defamed can move either to the High Court or subordinate courts and seek
damages in the form of monetary compensation from the accused.

Criminal: Whoever, by words either spoken or by signs or by visible representations, makes

or publishes any imputation concerning any person intending to harm, or knowing or having
reason to believe that such imputation will harm, the reputation of such person, is said to
defame that person.

The Indian Penal Code gives an opportunity to the defamed individual to also move
a criminal court, asking the latter to take cognizance of his complaint. It’s a bailable, non-
cognizable and compoundable offence, which means no police can register a case and start
investigation without the court’s permission.

 Relevant case law:

Tata Value Homes Ltd v. Nityanand Sinha, Suit (L) No. 1040 of 2015, Bombay High
Court

2. If the act doesn’t constitute as defamation

If the screenshots shared by the employee doesn’t comply with any ingredient of
defamation, then the act wouldn’t be called a defamatory act and a different legal
remedy would be adopted.

3. Civil Remedies available to the employer in the circumstances:

a. where the employer apprehends a breach of the confidentiality agreement by the
employee:

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  The employer may approach the jurisdictional civil court, and apply for a prohibitory

injunction against such receiver, under section 38 of the Specific Relief Act, 1963.
 The employer can also seek for grant of interim prohibitory injunction under
Order 39, Rule 1 & 2 of the CPC, until an application for a prohibitory injunction is
finally heard and a decree is passed.

a. Where the employee has already breached the non-disclosure agreement, either
before or after the prohibitory injunction of the court
 The employer may file a suit for recovery of damages under Section 73 or Section 74
of the Indian Contract Act, 1872.
S.73 deals with Compensation for loss or damage caused by breach of contract.
S.74 deals with Compensation for breach of contract where penalty is already
stipulated in the contract

b. Penal Remedies available to the employer

 S.72(a) of the Information Technology Rules, 2011 punishes a person for breach of
a lawful contract, by disclosing personal information of a person received under a
contract for providing particular services.

RELEVANT CASE LAWS:

If NDA is not signed by the employee & the shared screenshot contains confidential
information

Courts have held in various judgements that “the law on this subject does not depend on any
implied contract. It depends on the broad principles of equity that who has received
information in confidence shall not take unfair advantage of it “. (John Richard Brady And
Ors. vs Chemical Process Equipments AIR 1987 Delhi 372)

In a recent judgement, the court held that "If a defendant is proved to have used confidential
information, directly or indirectly obtained from a plaintiff, without the consent, express or
implied of the plaintiff, he will be guilty of an infringement of the plaintiff's rights." (M/S
Inphase Power Technologies ... vs M/S Abb India Limited)

CONCLUSION:

20
Various penal and legal remedies suggests that the employer can sue the employee on various
grounds including defamation, breach of lawful contract, etc and may file a suit for recovery
of damages.

Indian courts have generally followed the law of equity that, even in the absence of a
contract, a person obtaining sensitive information in trust should not take undue advantage.

TASK 6:
TOPIC OF RESEARCH: Foreign Judgements on stopping a shareholder calling an EGM
on unlawful grounds

DATE ON WHICH IT IS ASSIGNED: 14/06/21 – 17/06/21

IS IT CONTINUING WORK: No

TOOLS USED IN RESEARCH:

1. SCC/ Manupatra

RESEARCH:

Valid Requisition

Foreign Judgements

 Isle of Wight Rly Co v Tabourdm

SCC citation: [1884] 25 Ch D 320 at 330 (CA)

FRY, L.J.:

I am entirely of the same opinion. If the object of a requisition to call a meeting were such,
that in no manner and by no machinery could it be legally carried into effect, the directors
would be justified in refusing to act upon it. But if the object stated in the requisition be such
that by any form of resolution or by any machinery sanctioned by the Act, it can be carried
into effect, then it is the bounden duty of the directors to call the meeting.

21
  National Roads & Motorists' Association v. Parker., Supreme Court
of

New South Wales, 19 September 1986

National Roads & Motorists Association v. Parker It has been held (and this was not
challenged on behalf of the defendant) that if one object of a requisition by members of a
company for an extraordinary general meeting is an object which cannot be lawfully
effectuated at such a meeting, the directors are entitled to omit that object from the notice of
the meeting (Turner v. Berner (1977- 1978) CLC 40-421; (1978) 1 N.S.W.L.R. 66 at p.
72). It follows, in my opinion, that if such an object is the sole object of such a requisition,
then the directors are entitled to decline to act on the requisition at all (see e.g. Isle of Wight
Railway Co. v. Tahourdin (1883) 25 Ch.D. 320 at p. 334 per Fry L.J. I should add
parenthetically that this last-mentioned decision must be read bearing in mind that under the
statute there relevant, a general meeting had much more extensive powers than under modern
statutes, as was pointed out in Automatic Self-Cleansing Filter Syndicate Co.
Ltd. v. Cuninghame (1906) 2 Ch. 34 at pp. 43 and 46). The submission that the object
contained in the requisition could be effected by the resolution set out in the defendant’s
letter was rejected. It is no part of the function of the members of a company in general
meeting to express an opinion by resolution as to how a power vested by the constitution of
the company in some other body or person ought to be exercised by the other body or person

 Queensland Press Ltd v Academy Instruments (No 3) Pty Ltd

Queensland Press Ltd. v. Academy Investments

Declaring the requisition as invalid (following National Roads and Motorists’ Association v

Parker) the court held that if the only objects stated in a requisition are such that the general
meeting is invited to do something which at law it has no power to do, the directors are
entitled to refuse to convene the meeting. Shareholders in general meeting have no part to
play in the actual exercise of the powers vested in the directors.

Indian Judgement citing foreign judgement

 Centron Industrial Alliance Ltd. vs Pravin Kantilal Vakil

PARA21:

22
Lord Justice Lindley has, in the case of Isle of Wight Railway Co. v. Tahourdin [1884] 25
Ch.D. 320 (CA), in his guarded language, expressed a view that if the resolution proposed to
be passed at the requisitioned meeting were wholly illegal, then the board of directors would
be under no obligation to call a meeting requisitioned for the purpose of passing such as
illegal resolution. Left to myself, I would rather lend may humble support of to the wittily
pronouncement of Lord Justice Lindley rather than to the stand taken by learned brother,
Desai J. when he stated that the requisitioned meeting musts be cased, even if the resolution
proposed at the requisitioned meeting was illegal. To my mind, there can be no point in
calling a meeting for passing are solution which illegal.

TASK 7:
TOPIC OF RESEARCH: Party invoking arbitration must expedite arbitration

DATE ON WHICH IT IS ASSIGNED: 18/06/21 – 21/06/21

IS IT CONTINUING WORK: No

TOOLS USED IN RESEARCH:

1. SCC/ Manupatra

RESEARCH:

Expedited arbitration is a faster procedure than the arbitration procedure under the Arbitration
Rules. The expedited arbitration procedure is appropriate for disputes of a simpler nature.
The Arbitration and Conciliation Amendment Act 2015 introduced Fast Track Arbitration in
India to speed up the arbitration process in India and is not regulated by ordinary rules and
regulations. Parties to an arbitration agreement choosing to resolve their disputes through
the fast-track procedure can do so, at any stage, before or during the appointment of the
arbitral tribunal, and by a written agreement referring to the resolution of disputes by the fast-
track procedure. The parties may agree for an arbitral tribunal consisting of a sole arbitrator

23
which is to be chosen by them. While a sole arbitrator is preferable for expeditiously moving
through the proceedings, the provision does not make it mandatory to have a sole arbitrator
which becomes beneficial where the parties do not agree on one. Hamara Pump Mithoura
HPCL Petrol Pump v. Chairman-Cum-Managing Director

Hindustan Petroleum and Ors. 2018 (1) ADJ 363,

Facts: A dispute between the parties was referred to arbitration. The Applicant made an
application regarding appointment and continuance of the arbitrator and prayed for a
direction of Fast Track Arbitration to be adopted by the appointed arbitrator.

Issue: Whether the mandate of the Arbitral Tribunal stands terminated and whether
circumstances exist which would warrant this Court to affect the appointment by exercising
its powers conferred by Section 11 (6) of the Act.

Ratio: Consensus between the Parties for Fast Track Arbitration. The High Court held that
there must be consensus between the parties to the fast-track procedure of arbitration. In
absence of a mutual agreement between the parties for the same, the Court cannot direct the
parties for a Fast-Track Arbitration. It also noted that the Court did not reach the stage of
constituting an Arbitral Tribunal and hence, could not direct for fast-track proceedings.

Crayons Advertising Private Limited v. Bharat Sanchar Nigam Limited 2018 (2)

ArbLR 252 (Delhi) 

Facts: This case was regarding a dispute between two parties being resolved by arbitration.
They appointed an Arbitrator to conduct the proceedings as per the Fast-Track Arbitration
under Section 29B of the Act with the consent of both the parties. The Arbitrator however,
failed to pronounce an award within 6 (six) months which lead to expiry of the Arbitrator’s
mandate. The Petitioner did not give consent for extension of the time period for making the
Arbitral Award but rather, filed an application intimating the mandate of the arbitrator stood
terminated by efflux of time and recorded its disinclination to consent for extension of time
period.

Ratio: High Court held that consent of both the parties is required to extend the time period
for making an award. In the absence of mutual consent, the mandate of the arbitrator stood
terminated and the Court appointed a fresh Arbitrator to continue with the proceedings
between the parties.

24
TASK 8:

TOPIC OF RESEARCH: Section 8 & 11(2) of the POCSO act mentions remedy for a male
child, find precedents in reference to Section 8 or 11(2) used for girl child victims as well

DATE ON WHICH IT IS ASSIGNED: 22/06/21 – 24/06/21

TOOLS USED IN RESEARCH:

1. SCC/ Manupatra

RESEARCH:

Mohan v. State (Govt. of NCT of Delhi), 2016 SCC OnLine Del 2476

Facts: At around 10.00 a.m., the appellant kidnapped the prosecutrix ‘X’ (name withheld)
aged around 11 years from the lawful guardianship of her parents and took her towards
bushes adjacent to the wall of Bhalla factory, Sultan Puri and committed aggravated
penetrative sexual assault by penetrating his penis into her vagina and anus. He also allegedly
deprived the victim of Rs. 500/- dishonestly. In the alternative, charge under Section 376(2)
(i) IPC was framed. The victim, thus, levelled allegations of attempt to rape and of unnatural
sex against an ‘unknown’ assailant. She categorically disclosed that the assailant had
attempted to insert his penis in her vagina and anus.

Issue: Whether the statement of the victim before the court is voluntarily expression of the
victim and that she was not under the influence of others

Held: The above said act of the accused would clearly fall within Section 11(ii) of the
POCSO Act. The expression making the child to exhibit her body’ as employed in Section
11(ii) of the POCSO Act, is a larger term which would include the removing of the child's

25
wearing dress so as to get the body of the child exposed. Therefore, the appellant is liable to
be convicted under Section 12 of the POCSO Act for committing offence under Section
11(ii) of the POCSO Act. The conviction is accordingly altered to Section 11(ii) of the
POCSO Act.

Conclusion: In this case, the victim was a girl and the accused was convicted u/s. 12 for
committing an offence u/s. 11(2) of the POCSO ACT which proves that S.11(2) of the
POCSO act doesn’t just include male children as victims but also female children.

TASK 9:

TOPIC OF RESEARCH: Recent judgement regarding tort claim referred to arbitration

DATE ON WHICH IT IS ASSIGNED: 29/06/21 – 30/06/21

TOOLS USED IN RESEARCH:

1. SCC/ Manupatra

RESEARCH:

Gemini Bay Transcription Pvt. Ltd v. Integrated Sales Service Ltd. & Anr.

Facts: A representation agreement dated 18 September 2000 (‘RA’) was entered between
Integrated Sales Services Ltd. (‘ISS’), a Hong Kong corporation and DMC Management
Consultants Ltd. (‘DMC’), an Indian company with principal place of business at Nagpur.
Under the RA, ISS was to assist DMC to sell its goods and services to prospective customers,
and in consideration thereof was to receive a commission as per the payment terms envisaged
therein. Moreover, ISS was to identify potential sources of investment and investors and
assist DMC in negotiating the terms of purchase, sale and/or investment.

RA was signed by Shri Rattan Pathak as Managing Director of DMC, and by Shri Terry
Peteete, Director of ISS. Subsequently, amendment to the RA was executed by Shri Arun
Dev Upadhyaya, Chairman of DMC, and Shri Terry Peteete on behalf of ISS. Interestingly,
the RA did not have a fixed tenure and no specific period of validity was contemplated. RA
was governed by laws of Delaware, USA and contained an arbitration clause which stipulated

26
that any dispute between the parties was to be referred to a single arbitrator in Kansas City,
Missouri, USA.

Disputes arose between the parties, and a notice for arbitration was sent by ISS to Arun Dev
Upadhyaya, followed by a statement of claim filed before the Ld. Arbitrator naming Arun
Dev Upadhyaya, DMC (India), DMC Global, Gemini Bay Consulting Limited (‘GBC’) and
Gemini Bay Transcription Private Limited (‘GBT’) as respondents. The disputes pivoted on
ISS’s allegation that Arun Dev Upadhyaya was the chairman of DMC and was in fact the
person controlling the affairs of DMC and other respondents. The board of directors of the
respondent companies namely GBC, GBT and DMC, was essentially owned by Mr.
Upadhyaya’s family, and would act as per his instructions. ISS contended that it introduced
two customers namely MedQuist Transcriptions Ltd, of New Jersey and AssistMed, Inc. of
California to DMC and that Mr. Upadhyaya used other respondent companies to divert the
business of the above two customers away from DMC to GBT and GBC with an intent to
deprive ISS of its commission. As such, ISS claimed 20% commission in terms of the RA on
the gross revenues earned by respondent companies from these transactions.

On 28 March 2010, the Ld. Arbitrator awarded damages totalling USD 690 million to ISS
jointly payable by DMC, DMC Global, Arun Dev Upadhyaya, GBC and GBT finding that
the ‘alter ego’ doctrine was appropriate justification for lifting the corporate veil in this case.
The Ld. Arbitrator also held that the RA was not challenged by either party and hence was
valid and enforceable. Pursuantly, ISS knocked at the doors of learned Single Judge of the
Bombay High Court to enforce the award under Section 48 of the Arbitration and
Conciliation Act, 1996 (‘Act’). The Single Judge held that the arbitral award was enforceable
only against DMC and not against Arun Dev Upadhyaya and GBC & GBT as they were non-
signatories to the arbitration agreement even though such non-signatories may participate in
the arbitration, as no acquiescence or estoppel can apply to issues relatable to jurisdiction.

However, on appeal, the Division Bench of the High Court reversed the judgment of the
Single Judge holding that the award could only be challenged under Section 48 if the
Delaware law has not been followed on the alter ego principle. Being satisfied that the
arbitrator had properly applied the Delaware law on the facts of this case, it was held that
none of the grounds contained in Section 48 of the Act would apply to resist enforcement of

27
the foreign award. Aggrieved, GBC & GBT and Arun Dev Upadhyaya approached the
Supreme Court by way of special leave petitions resisting enforcement of the award.

Held: Justice R.F. Nariman observed that Section 44 recognises the fact that tort claims may
be decided by an arbitrator provided they are disputes that arise in connection with the
agreement. Relying on Renusagar Power Co. Ltd. v. General Electric Co, it was observed
that the relevant question is not whether a claim lies in tort but whether even though it has
lain in tort it “arises out of” or is “related to” the contract. Simply put, whether the claim
arises out of the terms of the contract or is consequential upon any breach thereof. Reliance
was also placed on Tarapore & Co. v. Cochin Shipyard Ltd. and Astro Vencedor Compania
Naviera S.A. of Panama v. Mabanaft GmbH to finally conclude that this contention has no
legs to stand.

__________________________________________________________________________

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Internship Certificate

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