Saturday, 26 September 2026

The dispute. The registered owner of MV Nereus Progress terminated a bareboat charterparty for unpaid hire, relegating the defaulting charterer to a gratuitous bailee. Weeks later, a maritime claimant against the charterer obtained an ex-parte arrest order against the vessel at Tuticorin Port. The High Court dismissed the owner's application and sustained the arrest, prompting this statutory appeal before the Supreme Court.

The reasoning. A contractual termination notice immediately extinguishes demise charterer status without requiring physical repossession. Holding the vessel as a gratuitous bailee cannot sustain an admiralty arrest under Section 5(2) against the owner.

For your practice. Claimants seeking vessel arrest under Section 5(2) must verify continuing charterer status, as prior termination shields owners from third-party maritime claims.

The order. The Supreme Court allowed the appeal, set aside the High Court judgment, vacated the arrest order, directed immediate release of the vessel, and awarded costs to the appellant.

Section 5(2), Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017

Case

OWNERS AND PARTIES INTERESTED IN M.V. NEREUS PROGRESS vs OM FREIGHT FORWARDERS LTD.

Citation

Supreme Court of India · C.A. No.-013134-013134 - 2026 · 2026 INSC 1055 · 25.09.2026

Bench

Joymalya Bagchi, V. Mohana

The dispute. Tax authorities seized 15.4 lakh rupees from the premises of the petitioner's husband during a fraudulent input tax credit inquiry. Three years after his death, the department issued a show-cause notice to the petitioner as his legal representative and imposed a penalty. The widow filed a writ petition challenging the notice and penalty order, asserting that proceedings could not originate after the taxpayer's death.

The reasoning. Section 93 permits initiating tax or penalty proceedings after death without requiring prior commencement during the deceased's lifetime. Confining recovery strictly to the estate's capacity provides a rational basis that defeats arbitrariness challenges.

Section 93 does permit proceedings to be commenced after death, provided the conditions prescribed by the provision are satisfied.

For your practice. Practitioners must now scrutinize departmental claims of lawful retention of seized assets in posthumous GST cases, demanding complete accounts of funds, interest earned, and statutory basis for retention, as mere characterization as 'voluntary submission' is insufficient to justify indefinite holding.

The order. Writ Petition disposed of with liberty to appeal under Section 107 CGST Act within four weeks; Respondents must identify precise statutory provision, liability sought, computation, and basis for enforceability against estate of deceased.

Section 93, Central Goods and Services Tax Act, 2017

Case

JAIWANTI vs UNION OF INDIA & ors.

Citation

Delhi High Court · W.P.(C)-7254/2025 · 2026:DHC:8282-DB · 25.09.2026

Bench

Anil Kshetarpal, Vimal Kumar Yadav

The dispute. A supplier presented a firm's signed cheque nearly ten months after the managing partner of the two-partner firm passed away. The bank returned the instrument endorsed account blocked, but the supplier nevertheless filed a criminal complaint against the surviving partner. The surviving partner petitioned the High Court under Section 482 seeking to quash the trial court's order taking cognizance of the complaint.

The reasoning. A return endorsement reading account blocked does not satisfy the statutory ingredient of insufficiency of funds. A two-partner firm dissolves on a partner's demise, barring criminal liability for cheques presented on frozen accounts.

For your practice. Equips defence counsel to seek immediate quashing of cheque dishonour complaints where bank return memos cite blocked accounts rather than insufficient funds.

The order. The High Court allowed the petition and quashed the criminal complaint pending against the petitioner before the magistrate. It terminated all proceedings arising from the cheque without awarding costs or compensation.

Section 138, Negotiable Instruments Act, 1881

Case

V. B. NAGARAJ vs M/S. PEREGRINE PHOSPHATE (P) LTD

Citation

Karnataka High Court · CRL.P/4428/2019 · 25.09.2026

Bench

H.P. Sandesh

The dispute. The Airports Authority of India awarded a construction contract to Ahluwalia Contracts in 2009. After the authority levied Rs 1.45 crore in compensation, Ahluwalia initiated arbitration, where an arbitrator unilaterally appointed by the authority awarded claims to the contractor. The Single Judge set aside the award holding the unilateral appointment void, which the contractor challenged in appeal.

The reasoning. Section 12(5) renders an ineligible arbitrator void ab initio unless waived by an express post-dispute written agreement. Unilateral appointment and subsequent participation in proceedings cannot substitute for the mandatory statutory writing.

For your practice. Parties defending awards cannot rely on arbitral participation to cure unilateral appointments absent an express post-dispute written agreement.

The order. The High Court dismissed the appeal, upholding the order setting aside the arbitral award and leaving parties to pursue contractual remedies without costs.

Section 12(5), Arbitration and Conciliation Act, 1996

Case

M/S AHLUWALIA CONTRACTS (INDIA) LIMITED (ACIL) vs AIRPORTS AUTHORITY OF INDIA (AAI)

Citation

Delhi High Court · FAO(OS) (COMM)-246/2026 · 2026:DHC:8252-DB · 25.09.2026

Bench

Anil Kshetarpal

The dispute. Homebuyers booked a Gurgaon apartment and paid over twenty-six lakh rupees before halting further instalments over alleged discrepancies in usable carpet area. The builder cancelled the allotment for non-payment, forfeited excessive earnest money, and returned only a portion of the deposited sum. The buyers approached the National Commission seeking a full refund with interest and compensation for alleged unfair trade practices.

The reasoning. A real estate developer cannot forfeit earnest money exceeding ten percent of the basic sale price without demonstrating actual loss. Any partial refund made by the builder must first be allocated to accrued interest before adjusting the remaining principal.

We accordingly hold that Opposite Party No.1 could not have forfeited more than 10% of the Basic Sale Price.

For your practice. Lawyers must now cap earnest money claims at 10% of the basic sale price unless actual loss is demonstrated, ensure that any refunds are first allocated to interest before principal, and note the three-month enforcement window with escalating interest on delay.

The order. The Commission allowed the complaint in part, limiting Experion’s earnest money retention to 10% of the basic sale price.

Section 2(1)(g), Consumer Protection Act, 1986

Case

ANITA YADAV & ors. vs EXPERION DEVELOPERS PRIVATE LIMITED & ors.

Citation

National Consumer Disputes Redressal Commission · NC/CC/327/2019 · 25.09.2026

Bench

Sudip Ahluwalia, Sadhna Shanker

The dispute. An insolvent jute mill owed over thirteen crore rupees in unpaid employees' state insurance contributions accrued before insolvency. The approved resolution plan treated the statutory dues as ordinary operational debt, allocating only one percent towards full settlement. The insurance corporation appealed to the NCLAT challenging the adjudicating authority's approval of the debt resolution plan.

The reasoning. ESI contributions held by a corporate debtor are trust monies excluded from the liquidation estate under Section 36(4)(a)(i). Filing operational claim forms is purely procedural and cannot subject statutory trust funds to the Section 53 waterfall.

For your practice. Protects statutory employee benefit dues from resolution plan haircuts by establishing that trust funds cannot be diluted as ordinary operational claims.

The order. The NCLAT set aside the plan's one percent payout on the thirteen crore rupee claim. It directed the resolution professional to re-determine and disburse the excluded statutory dues.

Section 36(4)(a)(i) of the Insolvency and Bankruptcy Code, 2016

Case

Employees State Insurance Corporation vs Sri Lakshmi Srinivasa Jute Mills Pvt. ...

Citation

National Company Law Appellate Tribunal · Company Appeal (AT) (CH) (Ins) No.410/2022 (IA Nos.1005 & 1060/2022) · 25.09.2026

Bench

N. Seshasayee, Jatindranath Swain

The dispute. A borrower availed a personal loan of three lakh rupees repayable in monthly instalments due by the seventh of each month. The bank presented electronic clearance instructions on the first of the month, triggering bounce charges and penalties despite adequate credit balances in his account. The District Commission disallowed penalties for most months but excluded two instalments, prompting the borrower to appeal for a full refund.

The reasoning. Levying cheque bounce penalties before the contractual due date constitutes an unfair trade practice when the borrower maintains sufficient account balance.

As per the aforementioned Clause 6 of the Loan Agreement dated 25.09.2005 between the parties, it clear that the due date of the payment of installments is the 7th of every month, however, the cheques for the installments of March, 2006 and July, 2006 have bounced on the 1st day of the month itself, therefore, it is clear that the penalty charges were wrongly levied on the Appellant.

For your practice. Practitioners must now examine loan agreement clauses to determine the exact due date for EMI repayment and challenge any bounce charges levied before that date; they should rely on account statements to prove sufficiency of funds and avoid relying on oral allegations of default.

The order. Refund of penalty charges for all 24 instalments (including March 2006 and July 2006) directed; compensation of Rs.20,000 and litigation cost of Rs.10,000 to be paid by respondent; compliance within 30 days of receipt of order; if delayed, simple interest at 9% per annum from date of order applies.

Section 2(1)(r), Consumer Protection Act, 1986

Case

R.P. KAPUR vs M/S CITIBANK N.A. & ors.

Citation

State Consumer Disputes Redressal Commission · SC/7/A/131/2019 · 25.09.2026

Bench

Sangita Dhingra Sehgal, Bimla Kumari