Birbal’s Update
April 2018
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Key Updates


Recent Judgements


Court can’t refer parties to Arbitration on Oral consent given by their counsel: SC


The Supreme Court while delivering a judgement on 09.03.2018, in the case of Kerala State Electricity Board V. Kurien E Kalathil, considering one of the question raised that whether a High Court was right to refer the parties to arbitration on the oral consent of their counsel without any written instruction from the party, held that if there is an absence of any arbitration agreement between the parties, then in that situation the courts cannot refer the parties to Arbitration, without a joint memo or a joint application of the parties. The supreme court observed that when the parties are referred to arbitration only by way of oral consent given by the counsel and without a written memo of instruction, in that case the requirements of Section 89 of CPC are not fulfilled. The court referred to its earlier judgement in Afcons Infrastructure Ltd. & Anr V. Cherian Varkey Construction (P) Ltd., it was held that the parties can only be referred to arbitration when they agree to settle the dispute through arbitration by a joint affidavit or a joint application before the court



No Regular Bail to be granted just on the basis that the accused was earlier granted Anticipatory Bail: SC

In the instant case of Satpal Singh V. The State of Punjab [SLP (Crl) No. 8184 of 2017], Supreme Court on 27.03.2018 setting aside the order of the High Court of Punjab and Haryana & Session Court, observed that merely because an accused was granted an Anticipatory Bail under section 438 of Cr.P.C does not entitles the accused to get Regular Bail under section 439 of the Cr.P.C. Supreme Court Bench stated that, “The satisfaction of the court for granting protection under Section 438 Cr.P.C is different from the one under Section 439 Cr.P.C while considering regular bail.” The protection under section 438 of Cr.P.C is available only until the court summons the accused based on the charge sheet filled under section 173(2) of Cr.P.C, thereafter on appearance the accused has to file an application for Regular Bail under section 439 of Cr.P.C. Subsequently the court while considering such application has to consider the same on its own merit.


Policy Updates


RBI


Discontinuance of Letters of Undertaking (LoUs) and Letters of Comfort (LoCs) for Trade Credits


RBI by its Circular [A.P. (DIR Series) Circular No. 20] dated 13.03.2018, had notified that from the date issuance of this circular no Authorised Dealer Category-I (AD Category-I) bankswill no more issue Letters of Understanding (LoU) and Letters of Comfort (LoC) for Trade Credits for imports into India under delegated powers of AD banks.


Prohibition on dealing in Virtual Currencies (VCs)


RBI vide it’s circular [RBI/2017-18/154] dated 06.04.2018 prohibited any type of dealing in Virtual Currencies (VCs). Due to various risks associated with the dealings done through the virtual currencies, including Bitcoins, it has been decided by the RBI that entities which are regulated by the Reserve Bank shall not deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs. The regulated entities which are already providing such services shall exit the relationship within three months from the date of this circular. Such services include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer / receipt of money in accounts relating to purchase/ sale of VCs.



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