Due Date for filing e-form CRA-2 extended up till May 31, 2019: MCA
The Ministry of Corporate Affairs (“MCA”) has issued a General Circular on 4th April, 2019, whereby it has extended the last date for filing e-form CRA-2 without payment of additional fees up till 31st May, 2019 for cases where the filing company has been mandated to get its cost records audited for the first time under Companies Act, 2013 (“Act”) on account of Companies (Cost Records and Audit) Amendment Rules, 2018 (“Amendment”) as notified through G.S.R 1157(E) dated 3rd December, 2018.
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E-form CRA-2 is filed by the company to provide notice to the central government regarding the appointment of a cost auditor in pursuance of Section 148(3) the Act.
The MCA had received several representations requesting for the extension of the time period for filing CRA-2 and this notification comes as a welcome relief for companies who have been obligated to undertake audits of their cost records for the first time after the Amendment in 2018.
Interim relief may be granted even if the contract containing the Arbitration Clause is inadequately stamped: Bombay HC
The Bombay High Court in the cases of Gautam Landscapes Private Limited v. Shailesh S Shah and Vijay Sharma v. Vivek Makhija and Another, passed a combined judgment addressing the treatment of arbitration clauses that form a part of insufficiently stamped documents and held that:
- An interim or ad-interim relief may be granted in an application under Section 9 (Interim measures etc. by Court) of the Arbitration and Conciliation Act, 1996 (“Act”) even if the document containing the arbitration clause is unstamped or insufficiently stamped; and
- A final order may be passed on an application under Section 11(6A) (Appointment of Arbitrators) of the Act without awaiting the stamp authorities’ adjudication with regards to the document being adequately stamped.
The High Court highlighted that the Act provides that an arbitration clause is severable from other clauses of the contract and is to given effect independently as a separate agreement between the parties. The Court further noted that an arbitration agreement does not require registration or stamp duty.
The High Court went on to distinguish the facts of the instant case from an earlier Supreme Court judgment in the case of SMS Tea Estates (P) Ltd. v. Chandmari Tea Co. (P) Ltd. whereby the Apex Court while adjudicating an application under Section 11 of the Act had stated that a Court cannot act upon an insufficiently stamped instrument and the arbitration clause within such instrument. The High Court noted that the earlier Supreme Court judgment was on an application under Section 11, while the instant case pertains to an application under Section 9 of the Act, and that awaiting adequate stamping before granting interim relief under Section 9 could lead to irreparable damage while adding that inadequate stamp duty is a curable defect under the Indian Stamp Act, 1899.
Here it is noteworthy that, Section 9 of the Act pertains to applications requesting interim measures by the court before or during the arbitral proceedings, or at any time between the making of arbitral award and its enforcement. On the other hand, Section 11 of the Act covers provisions governing the appointment of arbitrators.
While addressing the issue pertaining to the application under Section 11 (6A) of the Act, the High Court referred to a judgment from the Supreme Court in the case of M/s Duro Felguera vs. Gangavaram Port Ltd., and noted that the addition of sub-section 6A through the Arbitration and Conciliation (Amendment) Act, 2015 has restricted the powers of the courts to only examining the existence of the arbitration agreement leaving all preliminary issues, including the sufficiency of the stamp duty, for the Arbitral Tribunal to decide.
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The High Court’s judgment is based out of a consideration of the principal that arbitration is essentially a voluntary assumption of an obligation to resolve their disputes by the contracting parties through a private tribunal and the duty of the court is to impart a sense of business efficacy to that commercial understanding. The Court also noted that the Indian Stamp Act, 1899 and Maharashtra Stamp Act, 1958 are fiscal statutes, and struck a balance between the objectives of each statute while taking commercial realities into consideration. It needs to be seen if the judgment will be taken up on appeal and what its fate would be thereon.
Contracts are not binding if the accepting party had no option but to agree with the offered terms: SC
The Supreme Court in the case of Pioneer Urban Land & Infrastructure Ltd Vs Govindan Raghavan has passed a judgment stating that a contract shall not be deemed to be final or binding if it is shown that the flat purchasers executing the contract had no other option besides signing the contract as framed by the builder.
The Court further added that one-sided clauses in an agreement by a developer amount to unfair trade practice under Section 2(r) of the Consumer Protection Act, 1986 (“Consumer Act”) and noted the recommendation of The Law Commission of India (“Commission”) in its 199th Report whereby the Commission provided a draft legislation to counter ‘Unfair (Procedural & Substantive) Terms in Contract’ and stated that “A contract or a term thereof is substantively unfair if such contract or the term thereof is in itself harsh, oppressive or unconscionable to one of the parties.”
In the instant case, the developer failed to apply for the occupancy certificate even after a considerable amount of time after the promised date of delivery. Therefore, the buyer sought a refund of the purchase amount along with interest and compensation and also filed a consumer complaint to seek relief.
Thereafter, the developer filed a statutory appear under Section 23 of Consumer Act against an judgment of the Consumer Act National Consumer Disputes Redressal Commission (“NCDRC”) which had ordered the developer to refund the money with an additional interest at the rate of 10.7% per annum towards compensation and ruled that the buyer cannot be forced to take possession of the fact even if the developer had acquired the occupancy certificate during the pendency of the trial, given that there was a delay of more than 2 years since the promised date of delivery and also since the buyer had already invested in other property.
The Supreme Court dismissed the developer’s appeal and upheld the above-mentioned order from the NCDRC and granted a period of 3 months to the developer for refunding the amount to the buyer.
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The Court’s decision involved an analysis of the agreement as a whole and noted the stark differences between the remedies available to both the parties, especially with regards to right of cancellation, rate of interest, refunds etc. Furthermore, the Court ignored the rate of interest contractually agreed upon between the parties and applied interest in terms of the Real Estate (Regulation and Development) Act, 2016, (“Act”) despite the Act not being applicable to the agreement in question.
The Court’s decision is a clear indication of its intention to prioritize the welfare of consumers who lack sufficient bargaining power while entering into contracts and are often left at the mercy of bigger corporations drafting these agreements.
Simultaneously, this judgment should act as a reminder for all businesses, irrespective of their industries, to ensure that the contracts offered by them to their consumers do not contain any unreasonable or harsh terms. Consequently, while it is understandable that businesses should draft contracts that safeguard their interests, the same should not come at a cost of harassing the consumer.
Disclaimer: This post has been prepared for informational purposes only. The information/or observations contained in this post does not constitute legal advice and should not be acted upon in any specific situation without seeking proper legal advice from a practicing attorney.