AKP Dispute Resolution Digest August 17, 2026

We are delighted to share this month's AKP Dispute Resolution Monthly Digest. Please feel free to write to us with your feedback at info@akandpartners.in.

1.    Prevention of Money Laundering

1.1.    Fintech Industry

1.1.1. Delhi High Court denies bail to alleged operator of forex-conversion money-laundering network linked to cross-border investment fraud

The Hon’ble High Court of Delhi has denied regular bail to Rohit Vij, who is alleged to have operated two forex-conversion companies, M/s Ranjan Moneycorp Pvt. Ltd. and M/s KDS Forex Pvt. Ltd., through dummy directors to launder proceeds of a cross-border online investment fraud. The case arises out of an ECIR registered on the basis of an FIR alleging cheating through an investment app named 'LOXAM', which the Enforcement Directorate ("ED") traced through a chain of shell entities, including two companies allegedly set up at the direction of a Chinese national, before the funds reached companies controlled by the applicant and were converted into foreign currency and hawala remittances abroad. The applicant argued that he was not named in the original FIR or chargesheet, that the underlying proceeds of crime amounted to only INR 1.16 lakh, and that Section 45 of the Prevention of Money Laundering Act, 2002 ("PMLA") therefore did not apply, particularly since the original FIR had since been compromised and quashed. The issues before the Hon’ble Court were whether a PMLA prosecution survives the compromise and quashing of the predicate offence, and whether the quantum of the originally defrauded sum limits the scope of 'proceeds of crime' under Section 2(1)(u) of the PMLA. The Court held that the compromise appeared to lack bona fides, noting the complainant's subsequent statement alleging coercion, and that in any event the ED's investigative scope is not confined to the four corners of the predicate offence, particularly once 24 additional FIRs had been added to the ECIR by way of addendum. Relying on statements recorded under Section 50 of the PMLA implicating the applicant as the person finalising rates and commissions for the conversion racket, together with the applicant's suppression of the ED's summons from a court that had permitted him to travel abroad and his subsequent interception at the airport, the Court held that a formidable case existed and that the applicant was a flight risk and accordingly rejected the bail application.

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2.    Insolvency and Bankruptcy

2.1.  Power and Infrastructure

2.1.1. Supreme Court rules subsistence of an Engineering, Procurement, and Construction  contract does not create a continuing cause of action for limitation under the IBC

The Hon’ble Supreme Court has held that an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) is barred by limitation once the underlying default has crystallised more than three years before filing, even where the parties’ contract remains formally subsisting. This ruling came in an appeal filed by Srinivasa Reddy Velagala against Sravanthi Infratech Pvt. Ltd., arising out of an Engineering, Procurement and Construction (“EPC”) contract for a 225 MW gas-based power station in Andhra Pradesh, under which the respondent had suspended works in 2011 after the appellant defaulted on payments due at the first three milestones. The National Company Law Tribunal and the National Company Law Appellate Tribunal (“NCLAT”) had both admitted the respondent’s Section 9 application, reasoning that since neither party had terminated the EPC contract, it continued to subsist and gave rise to a continuing cause of action. The issue before the Supreme Court was whether the mere subsistence of a contract, absent termination, extends the limitation period available to an operational creditor to invoke the IBC. The Court held that ‘default’ under Section 3(12) of the IBC occurs at a singular point in time, and that though an unpaid debt may cause continuing damage, it does not cause continuing legal injury. It further held that unanswered legal notices cannot revive a time-barred claim in the absence of a written acknowledgment of liability under Section 18 of the Limitation Act, 1963. The Court also clarified that only crystallised milestone dues qualify as ‘operational debt’ under Section 5(21) of the IBC, while suspension, idling and demobilisation charges remain in the nature of damages requiring prior adjudication by a competent forum. Setting aside the NCLAT’s order, the Court allowed the appeal and granted the respondent liberty to pursue its claims before the arbitral forum stipulated in the EPC contract.

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3.    Arbitration Law

3.1.    Infrastructure and Construction

3.1.1. Supreme Court rules unsuccessful award debtor may seek Section 9 relief in rare cases

The Hon’ble Supreme Court has held that a party whose claims have been dismissed by an Arbitral Tribunal, an “award debtor”, can, in rare and compelling cases, maintain an application under Section 9 of the Arbitration and Conciliation Act, 1996 (“1996 Act”) even after the award. This ruling came in an appeal filed by National Projects Construction Corporation Ltd. (“NPCC”), which had encashed bank guarantees furnished by Ishvakoo (India) Pvt. Ltd. after Ishvakoo failed to keep them alive, following which the Arbitral Tribunal dismissed Ishvakoo’s claims and NPCC had filed no counter-claim. Ishvakoo then invoked Section 9 seeking a direction that NPCC deposit an amount equivalent to the encashed guarantees, pending its challenge to the award under Section 34. The issue was whether an unsuccessful party, with no award in its favour, could invoke Section 9 to secure funds already realised by the successful party. Relying on Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi[2] the Court held that the threshold for such relief is higher for an award debtor, but that it may nonetheless be granted where refusal would leave the party remediless and cause irreparable prejudice pending the Section 34 challenge. The Court found that no counter-claim had been filed, the Tribunal had not addressed discharge of the guarantees, and permitting NPCC to retain the amount would unjustly enrich it.

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4.    Banking and Finance Law

4.1.    Banking and Financial Services

4.1.1. Supreme Court rules suspense-account interest remains recoverable as part of bank's “debt”

The Supreme Court has held that interest accrued on a loan account after its classification as a non-performing asset (“NPA”) and separately tracked in a bank’s suspense account remains part of the recoverable “debt” and cannot be ignored merely because it does not appear in a later settlement certificate. This ruling came in an appeal filed by Punjab National Bank (“PNB”) against an Orissa High Court order that had accepted a charitable trust’s plea, based on a “to whom it may concern” certificate, that its outstanding dues stood at only INR 29,55,678.02, in supersession of the Debts Recovery Appellate Tribunal’s (“DRAT”) determination of INR 54,90,413/. The issue was whether the High Court could recompute the dues by relying on the certificate figure alone, without accounting for the bank’s accounting practice of tracking post-NPA interest in a separate suspense account. The Court held that “debt” under Section 2(g) of the Recovery of Debts and Bankruptcy Act, 1993 includes interest, and that Section 21A of the Banking Regulation Act, 1949 bars courts from reopening a bank’s contractual interest rate as excessive. The trust’s shifting positions across the DRT, DRAT and High Court were held to be self-serving.

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5.    Electricity Law

5.1. Power and Electricity Sector

5.1.1. Supreme Court rules electrocution claims attract strict, not absolute, liability

The Hon’ble Supreme Court has held that electricity transmission utilities are strictly liable, not absolutely liable, for injuries and deaths caused by electrocution, meaning recognised exceptions to liability remain available. This ruling came in appeals filed by Karnataka Power Transmission Corporation Limited (“KPTC”) against Karnataka High Court orders that had awarded compensation, computed on a Motor Vehicles Act multiplier basis, in two separate electrocution incidents one arising from contact with an 11 KV line and the other from contact with a 66 KV line while retrieving a cricket ball. The Hon’ble High Court had held the claims maintainable in writ jurisdiction and applied the standard of absolute liability. The issue was whether writ petitions were maintainable where the facts such as contributory negligence and compliance with statutory clearance norms were disputed, and which standard of liability governed. Relying on Chairman, Grid Corp. of Orissa Ltd. v. Sukamani Das[3], the Court held that disputed questions of fact render a writ petition an inappropriate remedy. On liability, distinguishing absolute liability from strict liability, the Court held that strict liability, subject to established exceptions, applies to power utilities. It further held that the Motor Vehicles Act multiplier method does not apply to electrocution compensation.

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6.    Motor Accident Compensation

6.1.    Motor Accident Claims Sector

6.1.1. Supreme Court rules legal representatives entitled to consortium irrespective of financial dependency

The Hon’ble Supreme Court has held that a deceased person’s legal representatives, including major and earning children, are entitled to compensation under the head of “consortium” in a motor accident death claim, irrespective of their financial dependency on the deceased. This ruling came in an appeal filed by Sameem Begum and her three children, the widow and heirs of Shaik Janimiya, a security guard who died in a 2012 road accident, against a Telangana High Court order enhancing compensation from INR 8,44,000/- to INR 11,00,672/- without separately awarding parental consortium to the children. The issue was the correct basis for computing spousal and parental consortium under the Motor Vehicles Act, 1988. Relying on National Insurance Co. Ltd. v. Pranay Sethi[4] and Magma General Insurance Co. Ltd. v. Nanu Ram[5], the Court held that consortium comprises distinct spousal, parental and filial components, each independently compensable and subject to a 10% enhancement every three years. The Hon’ble Tribunal and the Hon’ble High Court had each under-awarded on this head.

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[1] BAIL APPLN. 4461/2025 & CRL.M.(BAIL) 490/2026, 2026:DHC:6498 (Delhi High Court, decided 10.08.2026)

[2] SLP (C) NO. 29972/2015

[3] (1999) 7 SCC 298

[4] SPECIAL LEAVE PETITION (CIVIL) NO. 25590 OF 2014

[5] CIVIL APPEAL NO.   9581   OF 2018 (Arising out of SLP (Civil) No. 3192 of 2018)

[6] SLP (C) No.18553 of 2023)

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Disclaimer

The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.

For further queries or details, you may contact:

Mr. Anuroop Omkar

Partner, AK & Partners

info@akandpartners.in