Legal Updates ( April 13 – April 18, 2026 )
CASE UPDATES
Bar of pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015 does not operate in cases seeking urgent interim injunctive relief in a trademark infringement and passing off action
The Delhi High Court in the case of Daimler India Commercial Vehicles vs Getmohit Cab Pvt Ltd [CS(COMM) 379/2026] dated April 10, 2026, has held that where, in a commercial trademark suit, the plaintiff pleads and places material to show statutory rights in a registered trademark, goodwill and reputation in the mark, and prima facie demonstrates that the defendants are using an identical or deceptively similar mark/logo/trade dress in relation to identical or allied services in a manner likely to cause confusion, dilution, and passing off, the Court may grant ex parte ad interim injunction upon being satisfied that a prima facie case exists, the balance of convenience lies in favour of the plaintiff, and irreparable harm is likely to ensue if protection is denied.
The Court also pointed out that exemption from pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015 is liable to be granted where urgent relief is prayed for. In a case seeking urgent interim injunctive relief in a trademark infringement and passing off action, the bar of pre-institution mediation does not operate.
In doing so, the Bench expressly referred to the judgment of the Supreme Court in Yamini Manohar v. T.K.D. Keerthi [(2024) 5 SCC 815], as also the Division Bench judgment of the Delhi High Court in Chandra Kishore Chaurasia v. RA Perfumery Works Private Ltd. [2022 SCC OnLine Del 3529].
On the plaintiff’s substantive case, the Court noted the plaintiff’s historical lineage, the global footprint of Daimler, the establishment and Indian operations of the plaintiff, the adoption and use of the BHARATBENZ brand, the asserted relationship between BHARATBENZ and the BENZ mark, the status of BENZ as a well-known trademark, and the plaintiff’s registrations, commercial presence, sales and advertising expenditure. By recording these pleadings in detail, the Court indicated that the plaintiff had placed material to establish the pedigree of the mark, its subsistence on the register, its goodwill, reputation, and distinctiveness, all of which were relevant for assessing both infringement and passing off.
The Court also noticed the plaintiff’s specific allegation that the impugned buses bore the mark BHARATBENZ and the plaintiff’s logo on the front grille, even though the steering wheel bore the logos/emblems of another manufacturer, Leyland, and that the impugned vehicle, shown in a video on X, did not follow safety norms such as having an emergency exit and lacked air suspension and other amenities. The Court further noted the investigation that connected the impugned activity to Defendant No. 1’s websites, namely ‘www.getbookbus.com’ and ‘www.getbookcab.com’, where an image of a bus bearing the three-star logo associated with Mercedes-Benz appeared and “Bharat Benz” was mentioned as a bus type on the booking page, and that Defendants No. 1 and 2 were advertising bus booking services under the BHARATBENZ mark on online travel platforms. These facts were material because they demonstrated not only use of the impugned mark in the course of trade, but use in relation to bus booking and passenger transport services in a manner capable of misleading consumers.
The unauthorized use of a copyrighted software program, detected and proved through an inbuilt security mechanism that logs ‘Infringement Hits’ by cross-checking license keys and capturing MAC addresses, constitutes copyright infringement when the defendant fails to procure genuine licenses and maintains silence to legal notices
The Delhi High Court in the case of Dassault Systemes Solidworks Corporation vs Zoneonne Venture Private Limited [CS(COMM) 334/2021] dated April 08, 2026, has held that where any party from whom a written statement is required fails to present the same within the time permitted or fixed by the Court, the Court shall pronounce judgment against him under Order VIII Rule 10 of the CPC, and the averments in the plaint and the evidence are deemed to have been admitted requiring no further corroboration on any material aspect in terms of Rule 4 of the Delhi High Court (Original Side) Rules, 2018.
The Court ruled that the unauthorized use of a copyrighted software program, detected and proved through an inbuilt security mechanism (‘Phone Home’ technology) that logs ‘Infringement Hits’ by cross-checking license keys and capturing MAC addresses, constitutes copyright infringement when the defendant fails to procure genuine licenses and maintains silence to legal notices.
In such cases of infringement, the quantum of loss and damages can be reckoned on the basis of the loss that occurred to the plaintiff, represented by the total market costs or genuine purchase cost of the software programs for the exact number of computer systems on which the pirated/unauthorized software was used, added the Court.
The Court observed that the methodology and mechanism explained by the plaintiff appears to be a plausible manner in which it is able to focus and capture infringement of its copyrighted SOLIDWORKS software program. The plaintiff has been able to prove by cogent evidence that the defendants have infringed the copyrighted SOLIDWORKS software program of the plaintiff on 7 computers at infringement database (Exalead Portal). The deathly silence on the part of the defendant to the legal notice dated Dec 09, 2020 and continued acts of unauthorised use would constitute infringement of the copyright of the plaintiff in its SOLIDWORKS software program.
Further, the Court observed that despite having been served with the summons and having appeared, the defendant chose not to file its reply nor does any evidence impel the Court to construe that the defendants have any plausible defence. The averments in the plaint as also the depositions of the prosecution witnesses and the documents marked as exhibits by such witnesses are deemed to have been admitted requiring no further corroboration on any material aspect, in terms of Rule 4 of the Delhi High Court (Original Side) Rules, 2018.
For any expense to qualify as Insolvency Resolution Process Costs under Regulation 31 of the CIRP Regulations, the expense must ordinarily have been incurred by the Resolution Professional for the conduct of CIRP or for running the corporate debtor as a going concern, and it must also have been placed before and ratified or approved by the Committee of Creditors
The Chennai Bench of the National Company Law Tribunal (NCLT) in the case of DBS Bank India vs Orchid Pharma [A(IBC)/784/CHE/2020] dated April 02, 2026, has held that, although Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 confers residuary jurisdiction upon the Adjudicating Authority to entertain or dispose of any question of law or fact arising out of or in relation to the insolvency resolution process of the corporate debtor, such jurisdiction cannot be exercised in a manner that defeats the finality attached to a resolution plan approved under Section 31 IBC; once a resolution plan is approved, it becomes binding on all stakeholders and claims not forming part of the resolution plan stand extinguished.
The Tribunal held that, for any expense to qualify as Insolvency Resolution Process Costs under Regulation 31 of the CIRP Regulations, the expense must ordinarily have been incurred by the Resolution Professional for the conduct of CIRP or for running the corporate debtor as a going concern, and it must also have been placed before and ratified or approved by the Committee of Creditors.
Where lease rental claims are based merely on continued occupation of premises during CIRP, but the material on record does not show that the Resolution Professional formally continued the lease arrangement as part of the CIRP process or that the Committee of Creditors approved or ratified such payments as CIRP costs, such claims cannot be treated as Insolvency Resolution Process Costs and cannot be recovered after approval of the resolution plan by invoking Section 60(5).
The Tribunal referred to Regulation 31 of the CIRP Regulations and observed that IRP Costs includes expenses incurred by the Interim Resolution Professional or the Resolution Professional for running the business of the corporate debtor as a going concern and for conducting the CIRP. From a conjoint reading of the provisions of the Code and the CIRP Regulations, the Tribunal held that, for any expense to qualify as IRPC, two conditions must ordinarily be satisfied: first, the expense must have been incurred by the Resolution Professional for the conduct of the CIRP or for running the corporate debtor as a going concern; and second, such expense must have been placed before and ratified or approved by the Committee of Creditors.
Applying the test, the Tribunal held that the applicant’s claim for lease rentals, premised on continued occupation of the premises during CIRP, ordinarily fell within the category of operational debt and had to be dealt with in accordance with the provisions of the Code during CIRP. The Tribunal noted that it was not in dispute that the applicant had filed its claim before the Interim Resolution Professional in Form-B as an operational creditor claiming lease rentals due from the corporate debtor. However, the material on record did not demonstrate that the Resolution Professional had formally continued the lease arrangement as part of the CIRP process, or that payment of such lease rentals was treated as an expense necessary for running the corporate debtor as a going concern.
The Tribunal additionally found that no material had been placed on record to show that the Committee of Creditors had approved or ratified payment of such lease rentals as part of the Insolvency Resolution Process Costs. In the absence of such approval or ratification by the Committee of Creditors, the Tribunal held that the claim could not be treated as IRP Costs within the meaning of Regulation 31. It further observed that permitting the applicant to recover the alleged lease rentals as IRP Costs at that stage would effectively amount to reopening claims after approval of the resolution plan, which was impermissible under the scheme of the Code.
A purchaser of shares in a court-monitored liquidation process steps into the shoes of the transferring shareholder and is bound by the rights, obligations, and liabilities of the predecessor, including non-compete clauses contained in a Joint Venture and Share Purchase Agreement
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi in the case of GH Energy vs Flovel Hydro Technologies [Company Appeal (AT) No.87 of 2024] dated April 08, 2026, has held that a purchaser of shares in a court-monitored liquidation process steps into the shoes of the transferring shareholder and is bound by the rights, obligations, and liabilities of the predecessor, including non-compete clauses contained in a Joint Venture and Share Purchase Agreement. This is strictly applicable when the Articles of Association mandate that a transferee must agree to be bound by such obligations as a condition precedent to the transfer, and such shareholder agreements are binding even if not explicitly incorporated into the Articles, provided they are not repugnant to them.
The paramount consideration of the Tribunal under Sections 241 and 242 of the Companies Act is the interest of the company, which prevents a competitor-transferee from competing with the joint venture company in violation of the predecessor’s non-compete obligations.
The NCLAT observed that Article 22 of the Articles of Association restricts the transfer of shares to a third party unless such party agrees to be bound by the rights, obligations, and liabilities of the transferring party, “including” those defined in the Memorandum and Articles of Association. The NCLAT interpreted the word “including” to mean that the Board may look beyond the Articles and refuse to register the transfer unless the transferee adheres to obligations noted elsewhere, such as the JVSPA. The NCLAT held that shareholder agreements are binding even if they are not incorporated in the Articles, so long as they are not contrary to the Articles, and the non-compete clause is not contrary to the Articles. Flovel, having acquired the 47% shares, steps into the shoes of Mecamidi France and cannot take a stand contrary to the obligations of its predecessor, which was a party to the JVSPA.
A shareholder of the corporate debtor cannot assert an independent proprietary right in respect of project assets or leasehold rights outside the corporate entity, and upon insolvency resolution the extinguishment or dilution of shareholder interest, does not amount to unconstitutional deprivation of property under Article 300A requiring compensation
The Telangana High Court in the case of Maha Hotel Projects vs State of Telangana [Writ Appeal No.27 of 2026] dated April 09, 2026, has held that where a corporate debtor holding project rights through an Special Purpose Vehicle (SPV) undergoes insolvency resolution under the IBC, and the approved resolution plan under Section 31 contemplates transfer of shareholding and control subject to governmental consent, the State’s grant of such consent in furtherance of the approved plan is not a fresh award of State largesse, but an act undertaken within and bound by the statutory framework of the IBC; by virtue of Sections 31 and 238 of the IBC, the resolution plan is binding on all stakeholders, including shareholders and the State, and any inconsistent claims founded on prior contractual arrangements or other laws must yield to the Code.
The Court held that a shareholder of the corporate debtor cannot assert an independent proprietary or contractual right in respect of project assets or leasehold rights outside the corporate entity, since such rights vest in the company as a distinct juristic person, and upon insolvency resolution the extinguishment or dilution of shareholder interest is merely a commercial consequence of the statutory resolution process, constituting procedure established by law, and does not amount to unconstitutional deprivation of property under Article 300A requiring compensation.
Further, a resolution applicant selected through the CIRP process cannot be equated with a recipient of State largesse requiring re-tendering, and issues concerning FDI compliance fall for examination by competent regulatory authorities rather than by the writ court in the absence of manifest illegality.
The High Court treated the overriding effect of the IBC and the binding nature of the approved resolution plan as the fulcrum of the dispute. It held that the appellant’s allegation that the State had transferred a public project to respondent No. 4 without public tender ignored the statutory scheme of the IBC. Referring to Section 238, the Court observed that the IBC is a comprehensive special legislation with an overriding non-obstante clause, and noted that the legal position on primacy of the IBC was no longer res integra.
The Court observed that once a resolution plan is approved under Section 31, it becomes binding on the corporate debtor and all stakeholders. Since the plan approved by the NCLT on February 07, 2020 specifically contemplated transfer of entire shareholding and control of GJHPL and made implementation conditional upon State consent, the State’s subsequent decision dated September 22, 2025 was held to be an act in furtherance of the approved resolution plan, and not an exercise of fresh power to distribute State largesse.
The Court specifically observed that the project was implemented through GJHPL, which alone entered into the Lease Deed and DMA with the State, and therefore the rights of consortium members, including the appellant, were mediated exclusively through their shareholding in that corporate entity. The Court held that the appellant, being merely a shareholder of the corporate debtor, could not assert any independent or superior right over the project outside the corporate entity.
On the plea under Article 300A, the Court observed that the appellant had no independent or direct right in the leasehold property or the project, and whatever rights it possessed were derivative, flowing solely from its shareholding in GJHPL. The extinguishment or dilution of its interest was held to be a direct consequence of the insolvency of the corporate debtor and implementation of the approved resolution plan, and not a deprivation of property dehors authority of law. The loss suffered by the appellant was characterized as a commercial consequence of insolvency proceedings rather than compulsory acquisition by the State, and therefore compensation under Article 300A was held not to arise.
The approved resolution plan is binding on all authorities, including Revenue and Stamp Authorities and the refusal to effect mutation can be considered as contrary to the statutory mandate
The Madhya Pradesh High Court in the case of Mahan Energen Limited vs State of Madhya Pradesh [WP No. 26143 of 2025] dated April 08, 2026, has held that the approved resolution plan is binding on all authorities, including Revenue and Stamp Authorities and the refusal to effect mutation can be considered as contrary to the statutory mandate. The High Court observed that the resolution plan given by the NCLT is binding on every authority, and the authorities have failed to carry out the mutation of the company’s name in the land/revenue records. The inaction is continuing, unexplained, and contrary to the settled principle governing mutation proceedings. The binding order passed by the NCLT on 01.11.2021 continues to operate in full force, remains unimpeached, and there is no stay, suspension, or setting aside of the said order by any forum. The ROC has given recognition to the resolution by effecting the change in legal identity in the record of the ROC, changing the name to “Mahan Energen Limited” from 25.03.2022, added the Court.
The Court emphasised that the State does not dispute the title of the subject land of the petitioner as successor-in-interest and is accepting the Bhu-bhatak (land revenue) from the petitioner in the name of Mahan Energen Ltd. while refusing to record the name in the revenue record. The mutation of the name on the basis of a judicial/quasi-judicial order passed by the competent authority is ministerial and is not discretionary at all.
Thus, the Court stated that the Revenue Authorities are bound to carry out such entry once foundational facts are undisputed; they cannot convert this administrative functioning into a quorum of adjudicating collateral issues. Considering the provisions of Section 31 of IBC which gives a statutory mandate, the approved resolution plan is binding on all authorities, including Revenue and Stamp Authorities, and the refusal to effect mutation can be considered as contrary to the statutory mandate. Accordingly, the Court directed the respondent authorities (State Government) to forthwith mutate the Petitioner’s name “Mahan Energen Limited” in all relevant land/revenue records pertaining to the subject lands, subject to final adjudication of the writ petition.
Scope of interference under Section 34 and Section 37 of the Arbitration Act is extremely limited, and the Court does not sit in appeal over the findings of the Arbitrator and cannot re-appreciate evidence or substitute its own interpretation merely because another view is possible
The High Court of Chhattisgarh in the case of South Eastern Coalfields Limited vs M.K. Chaterjee [ARBA No. 27 of 2018] dated April 07, 2026, has ruled that the Arbitrator is the final authority on facts as well as interpretation of contract, unless the view taken is wholly unreasonable or beyond the scope of the contract. Thus, the scope of interference under Section 34 and Section 37 of the Arbitration Act is extremely limited, and the Court does not sit in appeal over the findings of the Arbitrator and cannot re-appreciate evidence or substitute its own interpretation merely because another view is possible. Interference is permissible only when the award is vitiated by patent illegality, perversity, or is in conflict with the fundamental policy of Indian law or the most basic notions of justice or morality.
The Court found that the Sole Arbitrator minutely examined the entire material available on record, including oral and documentary evidence, and rendered a reasoned award. Further, the Court noted that the Arbitrator did not ignore the vital/substantial evidence led by the parties and minutely appreciated the oral and documentary evidence, deciding every claim as per the evidence and entitlement of the respondent company. There is nothing on record to demonstrate that the Arbitrator has ignored vital evidence, taken into account irrelevant material, or rendered findings which are so arbitrary or irrational that no reasonable person would arrive at such conclusions.
The award reflects a plausible and reasoned view based on the material before the Arbitrator, and no valid ground was raised by the appellants which provides under Sections 34 and 37 of the Arbitration Act, added the Court.
Thus, in light of the principles laid down by the Supreme Court in Associate Builders vs. Delhi Development Authority [(2015) 3 SCC 49], the Court said that the Court cannot interfere with an arbitral award merely on the ground that another interpretation is possible or that the evidence could have been appreciated differently. The Arbitrator is the final authority on facts as well as interpretation of contract, unless the view taken is wholly unreasonable or beyond the scope of the contract.
The Court explained that the Commercial Court has rightly recorded its finding that reasons mentioned by the Sole Arbitrator were genuine and the approach of the Arbitrator is neither arbitrary nor capricious. The award is well reasoned and is in great detail on the basis of material facts and the finding rendered by it are those which fall within the terms and conditions of the contract. The findings of the Sole Arbitrator do not suffer from any patent illegality.
The power to appoint an arbitrator in an International Commercial Arbitration lies exclusively with the Supreme Court under Section 11(6) read with Section 11(12)(a) of the Arbitration and Conciliation Act, 1996
The Madhya Pradesh High Court in the case of State of Madhya Pradesh vs SMEC International [Arbitration Appeal No. 266 of 2023] dated April 08, 2026, has held that the power to appoint an arbitrator in an International Commercial Arbitration lies exclusively with the Supreme Court under Section 11(6) read with Section 11(12)(a) of the Arbitration and Conciliation Act, 1996. Hence, an order passed by the High Court appointing an arbitrator in an International Commercial Arbitration suffers from an inherent lack of jurisdiction, rendering the constituted Arbitral Tribunal a coram-non-judice and the resultant arbitral award a nullity in law. Such a defect of inherent jurisdiction strikes at the very authority of the tribunal and cannot be cured even by the consent or active participation of the parties.
The Court observed that the respondent (SMEC International) is a body corporate incorporated in Australia, making the arbitration an ‘International Commercial Arbitration’ within the meaning of Section 2(1)(f)(ii) of the Act of 1996. Part I of the Act applies to international commercial arbitrations seated in India, making the Section 34 application maintainable; however, the ground of ‘patent illegality’ under Section 34(2A) is not available for international commercial arbitrations.
On the validity of Arbitrator appointment by the High Court, the Court observed that a conjoint reading of Section 11(6) and Section 11(12)(a) of the Act makes it abundantly clear that the power to appoint an arbitrator in an ICA lies exclusively with the Supreme Court. The High Court has no jurisdiction to appoint an arbitrator in an international commercial arbitration, and such an order suffers from a complete lack of jurisdiction. This is an inherent lack of jurisdiction, not a mere procedural flaw, and it cannot be cured by the consent or participation of the parties.
A customer has zero liability in cases of unauthorized electronic banking transactions arising out of a third-party breach where the deficiency lies neither with the bank nor with the customer but elsewhere in the system, provided the customer notifies the bank within three working days of receiving communication regarding the unauthorized transaction
The Bombay High Court in the case of Subodh C. Korde vs Union of India [Writ Petition No. 11990 of 2023] dated April 06, 2026, has held that writ petition under Article 226 of the Constitution of India is maintainable against a private scheduled bank for the enforcement of the Reserve Bank of India’s circulars and guidelines issued in the public interest, as the bank discharges a public function when acting in a capacity that involves public interest and the protection of customers in electronic banking.
The High Court observed that while HDFC Bank may not be a ‘State’ or its instrumentality under Article 12 of the Constitution, a writ petition under Article 226 is maintainable against it because the Bank discharges a public function when it implements the guidelines formulated by the Reserve Bank of India (RBI) under Section 35A of the Banking Regulation Act for the protection of customers in electronic banking transactions.
The Court also clarified that under the RBI Circular dated 06/07/2017, a customer has zero liability in cases of unauthorized electronic banking transactions arising out of a third-party breach where the deficiency lies neither with the bank nor with the customer but elsewhere in the system, provided the customer notifies the bank within three working days of receiving communication regarding the unauthorized transaction.
The Court observed that the RBI Circular dated 06/07/2017 on ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’ is independent of any criminal investigation to be conducted to establish any cyber-crime, as the RBI intended to protect the customer who has suffered financial loss on account of fraudulent or unauthorized electronic banking transactions. Further, the Court noted that the burden of proving the customer’s liability in case of unauthorized electronic banking transactions lies entirely on the bank. Since the Bank failed to establish that the Petitioner was careless or negligent, or that he had shared the password or OTP with anyone, the Court observed that the Petitioner was a victim of a SIM swapping fraud, which is a sophisticated form of identity theft where fraudsters take over a victim’s phone number, resulting in the OTPs and banking alerts being received on a cloned/duplicate SIM in the hands of the fraudster.
The Court noted that the Bank’s internal investigation report clearly admitted that the transactions were not alerted because the risk score was 691, and the alert was declined despite the IP location of the disputed transactions (Chennai) being different from the genuine transaction IP location of the customer (Pune).
Since the Bank did not produce a single original log of sending messages or e-mails and its receipt by the Petitioner, but merely placed excerpts from the Log Book of a private agency to urge that the Bank had sent OTPs and e-mails, the Court concluded that since the fault lies neither with the Bank nor with the customer, but elsewhere in the system (third-party breach), and the customer notified the bank promptly, the clause fixing ‘zero liability’ on the customer gets triggered, entitling the Petitioner to a full refund.
A minority shareholder, even if a public sector undertaking, does not have a special right for differential treatment or separate valuation outside the prescribed statutory rules of the Companies Act, 2013, unless such a special right is provided under the Articles of Association
The Chennai Bench of the National Company Law Tribunal (NCLT) in the case of Tamilnadu Industrial Investment Corporation Limited vs Dipak Raj Sood [CP(CAA)/34(CHE)/2024] dated April 02, 2026, has held that takeover offer under a scheme of arrangement to acquire remaining minority shares under Section 230(11) of the Companies Act, 2013, where shares of non-promoter shareholders are taken over by promoters based on fair valuation prescribed by the Act and applicable rules, cannot be termed as ‘disinvestment’ by a State Government Company.
The NCLT held that a minority shareholder, even if a public sector undertaking, does not have a special right for differential treatment or separate valuation outside the prescribed statutory rules of the Companies Act, 2013, unless such a special right is provided under the Articles of Association or through any other instrument.
An application under Section 230(12) of the Companies Act, 2013 for grievances with respect to a takeover offer must be made when the scheme is under consideration by the Tribunal; and an application for recall or modification under Section 230(12) and Section 231(1)(b) is not maintainable once the scheme has been fully implemented and the consideration has been distributed and accepted, added the Tribunal.
The Tribunal observed that Section 230(12) of the Companies Act provides an opportunity for an aggrieved person to apply to the tribunal in respect of a grievance, if any, in the takeover offer of the company, and this application should be made when the scheme is under consideration by the tribunal. In the present case, the application was filed much after the scheme was approved and implemented.
The Tribunal observed that Section 231(1)(b) gives power to the tribunal to give directions or modify the scheme for its proper implementation; however, the scheme has been fully implemented, consideration has been distributed to all shareholders other than dormant shareholders, and the Applicant has also received its share of consideration. The Scheme of takeover under Section 230(11) of the Companies Act 2013 was approved by the tribunal after following the due process on 31.07.2024, and the valuation of shares was made as provided under Rule 3(6)(a) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
The Tribunal further observed that Section 230(11) of the Companies Act was notified on 03.02.2020, providing an opportunity for majority shareholders to squeeze out minority shareholders through a process of selective reduction. The framework set in place by the above provisions does not envisage any inherent right of minority shareholders to retain their shares in the face of fair consideration being offered to them, based on legal precedents such as the Bombay High Court judgment in Sandvik Asia Limited v. Bharat Kumar Padamsi and the Cadbury India Limited principles, which emphasize ensuring fair valuation by reference to the rate at which past offers were effected.
Moving ahead, the Tribunal observed that disinvestment is the process when the Government wants to take back the investment made by it, and the guidelines regarding getting the highest of the valuation from the five valuation methods will be applicable only then. In the present case, it is a scheme under which shares of non-promoter shareholders are being taken over by the promoters based on the fair valuation as prescribed by the Companies Act and applicable rules, so this process in no way can be termed as disinvestment.
Thus, under the Articles of Association or through any other instrument, the Applicant does not get a special right for differential treatment in case of a takeover of shares by promoters under Section 230(11) of the Companies Act 2013, added the Tribunal.
Where a decree-holder seeks attachment of a debt or bank account not in the possession of the judgment-debtor, Order XXI Rule 46 CPC empowers the executing court to attach such property by a written prohibitory order directed to the person in possession, and Order XXI Rule 46A CPC operates only after such attachment
The High Court of Telangana at Hyderabad Bench in the case of Union of India vs Krishnapatnam Railway Company Limited [Commercial Court Appeal No.7 of 2026] dated April 10, 2026, has held that where a decree-holder seeks attachment of a debt or bank account not in the possession of the judgment-debtor, Order XXI Rule 46 CPC empowers the executing court to attach such property by a written prohibitory order directed to the person in possession, and Order XXI Rule 46A CPC operates only after such attachment.
On the objection concerning Order XXI Rules 46 and 46A CPC, the Court carefully distinguished the two provisions and set out the statutory sequence. It held that Rule 46 empowers the executing court to attach a debt, share or other property not in the possession of the judgment-debtor by a written prohibitory order directed to the person in possession of the property, whereas Rule 46A applies after attachment under Rule 46 and enables the Court, on the application of the attaching creditor, to issue notice to the garnishee either to pay the debt to court or to appear and show cause.
The Court observed that, in the present case, once the garnishee bank filed a memo stating that it had complied with the attachment order and had withheld/stopped transactions in the account, proceedings under Order XXI Rule 46A became unnecessary and irrelevant. Since the garnishee in the present case did not dispute liability and confirmed compliance with the attachment order, the appellant’s challenge founded on non-compliance with Rule 46A was held to be without factual or statutory basis.
Thus, the Court said that the issuance of notice to the garnishee under Rule 46A is not mandatory and, in any event, becomes unnecessary where the garnishee has already complied with the attachment order and does not dispute liability.
Further, the High Court held that exemptions under the proviso to Section 60(1) CPC attach only to specified amounts falling within the exempted categories and not to the entirety of a bank account; the burden lies on the judgment-debtor claiming exemption to furnish specific particulars and cogent material identifying the nature, quantum, and extent of the exempt sums. In the absence of such particulars, the executing court is justified in rejecting the claim for exemption from attachment.
The High Court observed that the burden of proof lies squarely on the party seeking to avail the benefit of the exemptions under the proviso to Section 60(1) CPC, namely, the appellant/judgment-debtor, to establish that the property is not liable to attachment or sale. The Court found that the appellant had failed to furnish any particulars regarding the nature of the property, the specific exempt amounts, their quantum, or their proportion in the overall treasury account balance.
The Court observed that the proviso to Section 60(1) CPC carves out exceptions from attachment in respect of “the following particulars,” indicating that only certain specified amounts are immune from attachment, as opposed to the entire account itself. The appellant, however, sought to invoke the statutory exemption in respect of the entirety of the treasury account without segregating or identifying the protected sums.
