Banking and Insurance News, Law Insights | Expert News at LegalWiki

Banking & Insurance

Minor Driving is Fundamental Insurance Breach: Madhya Pradesh High Court

The Madhya Pradesh High Court held that permitting or negligently allowing a minor without a valid licence to drive constitutes a fundamental breach of the insurance policy under the Motor Vehicles Act, 1988.

The case arose from an accident caused by a minor, prompting the Court to examine liability. Emphasising that driving requires legal competence and maturity, the Court stated that elders have a clear duty to prevent minors from operating vehicles.

The Court ruled that such a breach disentitles the insurer from liability, thereby placing responsibility for compensation on the minor driver and the vehicle owner. The Tribunal’s contrary findings were set aside accordingly.

[Branch Manager United Insurance Pvt. Ltd. v Maneesh Kumar Singrore]

Read Order / 4 days ago

MananBookmark

Kerala High Court Clarifies DRAT’s Discretion on Pre-Deposit Under SARFAESI Act

The Kerala High Court has clarified that the Debt Recovery Appellate Tribunal (DRAT) has the discretion to direct a pre-deposit of up to 50% of the debt due in appeals under Section 18 of the SARFAESI Act, depending on the subject matter.

It clarified that the Debt Recovery Appellate Tribunal (DRAT), while determining the amount to be deposited, shall take into consideration the subject matter of the appeal.

The court emphasised that the tribunal must exercise this discretion judiciously, considering factors like the appellant's financial capacity and the merits of the case, rather than imposing the maximum deposit automatically.

[Glenny C.J. and Anr. v. Authorised Officer, Canara Bank and Anr.]

Read Judgement / 5 days ago

YashashviBookmark

Post-Dated Cheques Given As Security Can Attract Section 138 NI Act Once Liability Crystallizes: Delhi HC

The Delhi High Court has dismissed a plea seeking to quash proceedings under Section 138 of the Negotiable Instruments Act concerning a post-dated cheque issued as security.

Justice Neena Bansal Krishna held that penal liability can arise if a legally enforceable debt exists on the date of cheque presentation. Relying on the Supreme Court’s ruling in Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd. (2016), the Court found that the petitioner’s liability had crystallised.

Accordingly, it ruled that post-dated security cheques can attract Section 138 once the liability becomes due.

[Manmohan Gaind v. Negolice India Pvt. Ltd.]

Read Order / 6 days ago

MamiraBookmark

Appreciation in Assets from Criminal Funds Also ‘Proceeds of Crime’: Delhi High Court

The Delhi High Court ruled that any appreciation in the value of shares or assets derived from criminal activity constituted “proceeds of crime” under the Prevention of Money Laundering Act, 2002.

The Court held that the Enforcement Directorate could attach such gains even if the increase resulted from market or economic factors.

The case arose from falsified financial data used to secure a coal block allocation, leading to profits through preferential share allotment.

The Court observed that once criminally acquired funds were invested in shares, the entire appreciated value remained liable for attachment.

[Directorate of Enforcement v M/s Prakash Industries Ltd]

Read Details / 14 days ago

KhushaliBookmark

Delhi High Court Dismisses PIL Seeking Probe Into Hyatt Regency Loan Settlement

The Delhi High Court dismissed a Public Interest Litigation demanding an investigation into the one-time loan settlements between Hyatt Regency’s owners, Asian Hotels Pvt Ltd, and their lenders, Punjab National Bank (PNB) and Bank of Maharashtra (BOM).

The Court observed that both banks had acted in line with RBI guidelines and found no “contumacious or culpable financial impropriety” in their decision to enter into the settlements.

It held that commercial loan arrangements between private entities do not justify judicial scrutiny through a PIL unless a public law element or statutory violation is shown.

[Infrastructure Watchdog v Union of India and Ors.]

Read Judgement / 14 days ago

YashashviBookmark

IRDA Told To Provide Insurance Policy Terms In Vernacular Languages: Ernakulam Commission

The Ernakulam District Consumer Disputes Redressal Commission directed the Insurance Regulatory and Development Authority of India (IRDAI) to ensure that insurance policy terms and conditions are made available in vernacular languages.

The directive arose from a complaint against Kotak Mahindra Old Mutual Life Insurance, where the complainant, unable to read English, was misled into believing that the premium would be refunded at the end of the policy term.

The Commission emphasised that policy contracts, product details, and crucial clauses relating to lapses, revival, and surrender must be presented in the proposer’s preferred language to ensure fairness, transparency, and informed consent.

[Name Withheld v Kotak Mahindra Old Mutual Life Insurance]

17 days ago

KhushaliBookmark

Allahabad High Court Upholds ₹126 Cr Adani Award, Allows Use In Other Arbitration

The Allahabad High Court, comprising Chief Justice Arun Bhansali and Justice Jaspreet Singh, upheld an arbitral award of over ₹126 crores in favour of Adani Enterprises Ltd. and held that an arbitral award rendered in one proceeding could be used as evidence in another.

The Court clarified that while such an award did not constitute conclusive proof, it carried significant evidentiary value depending on context. It noted that the tribunal’s findings were supported by oral and documentary evidence and that no procedural irregularity existed.

Holding that the tribunal had not exceeded its jurisdiction, the Court dismissed UCM Coal’s appeal under Section 34 of the Arbitration and Conciliation Act, 1996.

Read Details / 19 days ago

MamiraBookmark

Madras High Court Quashes Customs Notice Restricting GST Collection

The Madras High Court quashed a notice issued by the Customs Department restraining Container Freight Stations (CFS) from collecting Goods and Services Tax (GST) on auctioned or uncleared cargo.

Justice N. Anand Venkatesh ruled that the Department had acted ultra vires its authority and that the impugned notice contravened the provisions of the Central Goods and Services Tax Act, 2017.

The respondents contended that the directive unlawfully interfered with their statutory duty to collect GST under the Act, a position the Court upheld.

Concluding that the Customs Department lacked jurisdiction to issue such directions, the Court declared the notice wholly unsustainable in law.

[M/s. National Association of Container Freight Stations v. Joint Commissioner of Customs]

Read Order / 21 days ago

KhushaliBookmark

Delhi High Court Quashes Cheque Bounce Case Over Security Cheques

The Delhi High Court ruled that cheques issued purely for security purposes, and not meant for bank deposit, cannot be treated as instruments for discharging any existing debt or liability.

Justice Neena Bansal Krishna held that such cheques “could not have been encashed for a liability which may have subsequently arisen.”

The Court allowed five petitions against summons in cheque dishonour cases filed by Magnifico Minerals Pvt. Ltd. The Court found the cheques were issued only as security and quashed proceedings under Section 138 of the Negotiable Instruments Act, 1881.

[Sri Sai Sapthagiri Sponge Pvt. Ltd. v The State (GNCT of Delhi) & Anr]

Read Order / 21 days ago

MamiraBookmark

Karnataka High Court Questions Maintainability of Vijay Mallya’s Plea on Debt Details

The Karnataka High Court orally remarked that the petition filed by fugitive businessman Vijay Mallya seeking disclosure of outstanding debts and recoveries related to Kingfisher Airlines and United Breweries Holdings Limited was not maintainable.

Justice Lalitha Kanneganti observed that Mallya should have approached the Company Court instead, noting that the writ petition resembled an RTI request rather than a legal challenge.

The Court was informed that liquidation proceedings and a misfeasance petition against Mallya are already pending before the Company Court.

Granting time for the appearance of senior counsel, the Court indicated it would hear the matter on November 4 before issuing further orders.

[Vijay Mallya v Recovery Officer-II & Ors.]

Read Details / 22 days ago

YashashviBookmark

Bank Ordered to Refund Buyer for Concealing Property Dispute: Telangana High Court

The Telangana High Court ruled that the Union Bank of India suppressed crucial facts and violated Rule 9 of the Security Interest (Enforcement) Rules while proceeding against a borrower’s property.

The Court directed the Bank to refund ₹2,16,25,000 to K. Indra Mohan, who had paid 25% of the sale consideration, noting that the Bank failed to disclose pending litigation concerning the property.

The Court held that the creditor’s conduct lacked transparency and breached mandatory procedural requirements under the debt recovery framework.

The Court emphasised the importance of full disclosure and fairness in enforcement actions, and set aside the Bank’s proceedings to safeguard borrower rights.

[K. Indra Mohan v Union of India]

22 days ago

YashashviBookmark

Unconditional Stay on ₹250 Crore Arbitral Award Refused : Bombay High Court

The Bombay High Court declined to grant an unconditional stay on the ₹250.82 crore arbitral award rendered in favour of L&T-STEC JV against the Mumbai Metro Rail Corporation Limited (MMRCL)

The dispute arose from the Mumbai Metro tunnel and station construction. The tribunal awarded ₹229.56 crore GST and ₹21.26 crore for additional works; MMRCL challenged it as perverse, seeking an unconditional stay.

The Court, finding no apparent perversity, held that a stay would operate only upon deposit of the entire amount with interest within eight weeks.

[Mumbai Metro Rail Corporation Limited v. L&T-STEC JV, Mumbai].

Read Details / 25 days ago

MamiraBookmark

Mortgaged Properties Can’t Be Attached Under PMLA Without Proven Link to Crime: Karnataka High Court

The Karnataka High Court has ruled that properties mortgaged to banks can be attached under the Prevention of Money Laundering Act (PMLA) only if they are directly connected to the proceeds of crime.

The Court clarified that simply mortgaging a property does not make it subject to attachment unless the transaction itself involves laundered money.

The Court emphasised that funds advanced by banks constitute public money lent in good faith and could not be regarded as tainted assets, thereby safeguarding legitimate financial transactions from the arbitrary application of the PMLA.

[Deputy Director v Asadullah Khan]

27 days ago

YashashviBookmark

SC/ST Act Cannot Restrict Banks From Enforcing Mortgage Rights : Delhi High Court

The Delhi High Court held that provisions of the SC/ST (Prevention of Atrocities) Act, 1989, could not be invoked to prevent banks from enforcing lawful mortgage rights. Justice Sachin Datta stayed proceedings initiated by the National Commission for Scheduled Tribes against Axis Bank and its MD and CEO.

The case arose from a ₹16.69 crore loan to Sundev Appliances Ltd, secured by mortgaged property, which turned non-performing. The Court held that Sections 3(1)(f) and (g) of the Act do not affect lawful bank recovery, and the summons to Axis Bank officials was without jurisdiction.

[Axis Bank Ltd v National Commission for Scheduled Tribes & Ors]

Read Details / 27 days ago

KhushaliBookmark

Borrowers Cannot Claim One-Time Settlement as Right : Bombay High Court

The Nagpur Bench of the Bombay High Court has ruled that borrowers or guarantors cannot claim a One-Time Settlement (OTS) as an enforceable right against banks.

The Court, while hearing a plea filed by the director of N Kumar Housing and Infrastructure Pvt. Ltd., upheld the Indian Bank’s decision to reject her OTS proposal.

The Court clarified that courts cannot compel banks to disclose their internal criteria or benchmarks for considering settlements, and noted that such decisions fall within the commercial discretion of banks, not judicial oversight.

[Archana Wani v Bank of India]

Read Order / 28 days ago

KhushaliBookmark