Therefore, the auction sale was set aside by the Supreme Court in the case, M V Janardhan Reddy vs Vijaya Bank. The bank had filed a suit against M/s Kran Organics Chemicals Ltd, which was in liquidation. It was decreed and the court allowed the bank to execute the decree.

The company judge of the Andhra Pradesh high court allowed the sale of the property. Meanwhile, the case was referred to the debt recovery tribunal and the recovery officer confirmed the auction sale. The company judge set aside the sale as it was confirmed without his order. He ordered the official liquidator to sell the property. Reddy appealed to the Supreme Court. It rejected his arguments but allowed refund of some part of the amount he had lost in the deal.

The judgment said: "If the recovery officer could not have confirmed the sale, obviously all actions taken in pursuance of confirmation of sale, such as, issuance of sale certificate, registration of documents, etc., would be of no consequence. Since the company was in liquidation and the official liquidator was in charge of the assets of the company, he ought to have been associated with the auction proceedings, which was not done."

Insurance company liable only after cheque towards premium encashed

The Supreme Court has ruled that an insurance company would be liable to pay a claim only after a cheque issued towards the policy premium is encashed.

"A contract of insurance like any other contract, is a contract between the insured and the insurer. The amount of premium is required to be paid as a consideration for arriving at a concluded contract," the court said while allowing appeal of National Insurance Company Ltd against the order of the Karnataka high court judgment.

The high court had ruled that the liability of the insurer would commence from the date of issuance of the cheque and not from the date when it is encashed. Setting aside that ruling and interpreting Section 64VB of the Insurance Act, the Supreme Court said that a contract of insurance comes into being only after the insurer gets the premium in advance.

Courts could set things right, says SC

The Supreme Court has stated that though the courts should not normally interfere in the award of an arbitrator, if it is based on wrong law and it is apparent from the face of the record, the courts could set things right.

In the case, Satna Stone & Mines Ltd vs Union of India, the company was provided a siding for clearance of its goods. Later the railways steeply raised the maintenance charges, which was objected to. The arbitrator accepted the claim of the company. The railway moved the high court. It set aside the award. The company appealed to the Supreme Court which rejected its arguments.

SC exonerates Raymond from restrictive trade practice charge

The Supreme Court has exonerated Raymond Ltd from the charge of indulging in restrictive trade practice and tie-up sale. The Monopolies & Restrictive Trade Practices Commission had passed a 'cease and desist' order against the textile company on a complaint by a retail dealer.

According to him, he would be supplied certain fast-selling ready-made garments only if he also placed orders for other slow-moving items. The court clarified that a 'cease and desist' order can be passed only if the practice alleged is "prejudicial to public interest" and discourages competition to any material degree. In this case, there was no such wide-ranging impact, the judgment said.