Mentoassociates.com – Legal Articles

Arbitration promises a fair, impartial, and efficient resolution of disputes. But what if one party believes that the appointed arbitrator is biased or unqualified?

The Arbitration and Conciliation Act, 1996, as amended by the 2015 and 2019 Amendments, lays down a clear procedure to challenge the appointment of an arbitrator. Here’s a practical guide for legal professionals and businesses alike.

Grounds for Challenge – Section 12(3)

An arbitrator’s appointment can be challenged only if:

• There are justifiable doubts about their independence or impartiality, or
• They lack qualifications agreed upon by the parties.

The Fifth Schedule outlines situations that may raise doubts about impartiality.

The Seventh Schedule lists grounds that render an arbitrator ineligible to be appointed—such as a close relationship with a party or prior legal/business involvement.

Mandatory Disclosure – Section 12(1)

Before appointment, an arbitrator must disclose in writing:

• Any potential conflicts of interest;
• Their ability to complete the arbitration in a timely manner.

Failure to disclose may itself be a ground for challenge.

Challenge Procedure – Section 13

Step 1: File a Written Challenge

• A party must challenge the arbitrator within 15 days of becoming aware of the issue (such as learning about a conflict or the tribunal’s constitution).
• The challenge must include a statement of reasons.

Step 2: Arbitrator’s Decision

• If the arbitrator does not withdraw and the other party disagrees, the tribunal decides on the challenge.

Step 3: If Challenge Fails

• The proceedings continue. The aggrieved party can challenge the final award under Section 34.

De Jure Ineligibility – Section 14

If the arbitrator is disqualified by law (e.g., per the Seventh Schedule), a party can:

Approach the court directly to terminate the mandate—no need to wait for the tribunal’s decision.

Substitution of Arbitrator – Section 15

Once the mandate is terminated, a new arbitrator can be appointed using the original procedure agreed upon by the parties.

Key Case Laws

• TRF Ltd. v. Energo Engg. Projects Ltd.
• Perkins Eastman Architects DPC v. HSCC (India) Ltd.

These judgments have reinforced the importance of impartiality and expanded the grounds for disqualification under the Seventh Schedule.

Conclusion

Challenging an arbitrator is a serious step. While the law protects party autonomy in selecting arbitrators, it equally upholds fairness and neutrality as foundational principles of arbitration. Knowing the procedure can safeguard your interests and ensure confidence in the arbitral process.

In recent years, the Enforcement Directorate (ED) has become a prominent enforcement body in India’s fight against economic crime. With growing public attention on money laundering cases and high-profile arrests, it’s important for legal professionals and the public alike to understand the ED’s structure, jurisdiction, and powers — as well as the safeguards that ensure accountability.

1. What is the Enforcement Directorate?

The ED is a specialised financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India. It was originally formed in 1956 to deal with violations of the Foreign Exchange Regulation Act (FERA), 1947.

Today, its main functions stem from two laws:

• Foreign Exchange Management Act (FEMA), 1999 – Civil law focused on foreign exchange violations.
• Prevention of Money Laundering Act (PMLA), 2002 – Criminal law targeting money laundering and financial crimes.

2. What Triggers ED Jurisdiction?

The ED does not act suo motu. It starts investigation only when a predicate offence — known as a Scheduled Offence — is reported.

Sources of case referrals to the ED include:

• FIR or charge sheet by agencies like CBI, State Police, Income Tax Department, Narcotics Control Bureau (NCB).
• Court directives (High Court, Supreme Court) asking ED to investigate.
• Inputs from regulatory or intelligence bodies like FIU-IND, DRI, RBI, or even foreign enforcement agencies.
• Reference from the Central Government, especially the Ministry of Finance.

After assessing such material, the ED may register an ECIR (Enforcement Case Information Report) — the internal equivalent of an FIR.

3. What are Scheduled Offences under PMLA?

Scheduled offences are the underlying crimes that give rise to proceeds of crime and trigger the ED’s powers under PMLA. They are listed in the Schedule to the Act and divided into three parts:

• Part A: Includes serious offences under IPC, NDPS Act, Prevention of Corruption Act, Arms Act, etc. No monetary threshold required.
• Part B: Applies only if the total value involved is ?1 crore or more. Covers select economic offences.
• Part C: Covers transnational and cross-border crimes.

Without a scheduled offence, the ED cannot initiate a PMLA case.

4. ED’s Powers of Investigation

Under PMLA, the ED can:

• Conduct search and seizure operations
• Provisionally attach property suspected to be proceeds of crime
• Summon individuals for evidence under Section 50
• Arrest persons involved in money laundering
• File prosecution complaints before Special PMLA Courts

The ED must place its findings before the Adjudicating Authority and Special Courts established under the Act.

5. Arrest and Bail Under PMLA

Arrest:

Under Section 19 of the PMLA, the ED may arrest a person if there is material evidence and “reason to believe” the person is guilty. The grounds of arrest must be recorded in writing and the individual must be produced before a magistrate within 24 hours.

Bail:

Bail under PMLA is governed by Section 45, which imposes a stricter test:

• The Public Prosecutor must be given a chance to oppose bail.
• If opposed, the court must be satisfied that:
  • The accused is not guilty, and
  • The accused is not likely to commit any offence while on bail.

These are called the “twin conditions” for bail and make release more difficult. However, exceptions apply to minors, women, the infirm, and cases involving less than ?1 crore.

Anticipatory Bail:

While Section 45 of the PMLA applies to regular bail, anticipatory bail (under Section 438 of the CrPC) is not explicitly barred. However, courts exercise great caution in granting it in PMLA cases due to the serious nature of offences. The Supreme Court and several High Courts have held that anticipatory bail is not entirely prohibited but subject to the twin conditions under Section 45.

An anticipatory bail application must be made before a Sessions Court or High Court, and the court may impose stringent conditions such as:

• Depositing passport
• Regular attendance before ED
• Not tampering with evidence

The scope of anticipatory bail remains a contested and evolving area in PMLA jurisprudence.

6. Legal Controversies and Safeguards

Although the ED is a powerful agency, its working has drawn criticism for:

• Non-disclosure of ECIRs to the accused
• Low conviction rates under PMLA
• Allegations of political misuse

In Vijay Madanlal Choudhary v. Union of India (2022), the Supreme Court upheld the constitutional validity of ED powers, including arrest and attachment. However, courts are increasingly scrutinising ED’s actions to ensure procedural fairness.

7. Conclusion: Need for Balance

The Enforcement Directorate plays a crucial role in upholding the integrity of India’s financial system and addressing economic crimes. However, its functioning must be balanced with the principles of natural justice, due process, and judicial oversight.

For lawyers and policymakers, it is vital to ensure that India remains tough on crime — but even tougher on protecting constitutional rights.

INTRODUCTION: The Employees’ Provident Fund (EPF) was established with the objective of safeguarding the financial welfare of employees in both the private and public sectors. It functions as a long-term savings mechanism, accumulating contributions throughout an employee’s tenure with an organization. The primary purpose of the EPF is to manage and secure retirement benefits for employees by ensuring a steady source of income after their service ends. The scheme is governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. To remain compliant with EPF regulations, employers must adhere to a range of statutory requirements and due diligence measures. Failure to comply may attract penalties, as outlined in the following sections.

1. False Statements to Avoid EPF Payments- [Section 14(1)]: If any person knowingly makes a false statement to avoid EPF payments he is liable to punishment of jail up to 1 year, or fine up to ?5,000, or both

2. Default in Depositing EPF Contributions- [Section 14(1A)]: If an employer fails to deposit employee contributions deducted from salaries, or pay administrative/inspection charges, he is liable to minimum 1 year imprisonment + ?10,000 fine, if employees’ deducted contributions are not deposited or minimum 6 months imprisonment + ?5,000 fine in other cases. Courts can reduce the jail term for valid and recorded special reasons.

3. Default in Insurance Fund or Inspection Charges – [Section 14(1B)]: On failure to pay insurance-related contributions or inspection charges, punishment includes jail from   6 months to 1 year and fine up to ?5,000. Court may reduce jail term with valid justification.

4. Other Violations Under EPF/Pension/Insurance Scheme – [Section 14(2)]: For any other non-compliance punishment is jail up to 1 year fine up to ?4,000 or both.

5. Breach of Exemption Conditions – [Section 14(2A)] : If an employer violates conditions of exemption granted under section 17, the punishment will be jail from 1 to 6 months and fine up to ?5,000

6. Offences Committed by Companies- [Section 14A]: When a company violates EPF laws, every person responsible for running the company (directors, managers, etc.) may be held liable. They can escape liability only if they prove lack of knowledge or due diligence. If the offence happened due to the consent or neglect of a specific officer, they will be held responsible.

7. Repeat Offenders – [Section 14AA]: If an individual or company repeats the same offence after a conviction, then the punishment will be jail for 2 to 5 years and fine of ?25,000

8. Cognizable Offence – [Section 14AB]: Failure to pay EPF contributions is treated as a cognizable offence, meaning the police can arrest without a warrant.

9. Legal Procedure for Prosecution – [Section 14AC]: – Legal action can begin only with a written report by an EPF Inspector, with prior approval from the Central PF Commissioner or an authorised officer. Only courts with the rank of Presidency Magistrate or First-Class Magistrate can try EPF offences.

10. Recovery of Penalty – Damages – [Section 14B]: For default in payments, the EPF Commissioner can impose penalty damages (up to the amount of arrears).Employers will be given a fair chance to be heard. In case of sick companies under rehabilitation, damages can be waived or reduced.

11. Court-Ordered Payment Deadlines – [Section 14C]: If convicted, courts can direct employers to make the payment or transfer the pending amount within a time limit. If not complied with, it will be treated as a new offence, punishable under Section 14. An additional fine of ?100 per day can also be imposed for continued delay.

CONCLUSION:

The EPF Act imposes strict penalties for employers who fail to meet their legal responsibilities. Non-compliance—whether by delay, default, or dishonesty—can attract serious consequences, including imprisonment and financial penalties. Employers are advised to ensure timely contributions, maintain proper records, and follow due process to stay compliant and avoid legal trouble.

• The Micro, Small and Medium Enterprises Development Act (MSMED) (hereinafter referred to as Act) provides a very quick and effective means of money recovery for micro and small enterprises. Section 15 to 25 of chapter V of the act covers the same. These special privileges are for micro and small enterprises. A small enterprise growing to medium can also avail these remedies for getting the delayed payments. 

• A small enterprise, if engaged in manufacture or production of goods, is one where the investment in plant and machinery is more than 25 lakh rupees but does not exceed 5 crore rupees. In the case of an enterprise engaged in providing services, it will be treated as a small enterprise where the investment is more than 10 lakhs rupees but does not exceed 2 crore rupees. 

• A micro enterprise is an enterprise engaged in the manufacture and production of goods and where the investment in plant and machinery does not exceed 25 lakh rupees. In the case of an enterprise engaged in providing or rendering of services, for a micro enterprise, the investment in equipment shall  not exceed 10 Lakh rupees. 

• As per section 15 of the act, if a supplier supplies any goods or renders any services to any buyer, the buyer shall make payment on or before the date agreed upon between him and the supplier in writing or when there is no agreement in this behalf, before the appointed day. Here a supplier means a micro or small enterprise. As per section 2(b) of the act, the appointed day means the day following immediately after the expiry of the period of 15 days from the day of acceptance or the day of deemed acceptance of any goods or services by a buyer from a supplier. The period agreed between the supplier and buyer, in writing, shall not exceed 45 days from the day of acceptance or the day of deemed acceptance.

• As per section 16 of the act, if a buyer fails to make payment of the amount to the supplier as required under the act, the buyer shall be liable to pay compound interest with monthly rests to the supplier on that amount from the time of the appointed day or from the date immediately following the date agreed upon at 3 times the bank rate notified by RBI. If the claimant has received the principal already, the claim can be filed for interest alone. 

• As per section 18 of the act, if a supplier has a dispute with a buyer, in regards to any amount due, he may make a reference to the micro and small enterprises facilitation council (MSEFC)(hereinafter referred to as Council). On receipt of a reference, the council shall either itself conduct conciliation in the matter or refer the matter for conciliation to an institution providing ADR(Alternate Dispute Resolution ) services. The provisions of the delayed payments under the act, are not applicable to foreign buyers. Even a government department as a buyer can be proceeded against in the council. 

• MSME Samadhan portal is a portal where micro and small enterprises can file their applications online regarding delayed payments. For the purpose of applying to the MSEFC, the micro or small enterprise shall have a valid UDYAM registration. The application filed online will be forwarded automatically to the concerned MSEFC which will take action on the application. The claim should be submitted in hard copy also. 

• To file an application on MSME samadhan portal, work order is compulsory. In case the purchase order is oral, an affidavit to that effect is to be submitted. A legal notice by the supplier to the buyer is not necessary before filing the case in the council. 

• If the conciliation under section 18 is not successful, the council shall either itself take up the dispute for arbitration or refer it to an institution or centre providing ADR services. For the purpose of this conciliation and arbitration, the jurisdiction of the MSEFC or the Alternate Dispute Resolution centre will be the supplier’s jurisdiction and the buyer can be located anywhere in India. Every reference to MSEFC under section 18 shall be decided within a period of 90 days from the date of making such a reference. An award passed by the MSEFC can be executed under section 36 of the arbitration and conciliation act, 1996.

• If a person wants to set aside the decree, award or order passed by the MSEFC, then they can file the application before the jurisdictional court under section 34 of the Arbitration and Conciliation Act 1996. If it is by the buyer, then he needs to deposit 75% of the amount in terms of the decree award or the order as a condition for filing the setting aside application. Furthermore, the court considering the application to set aside the decree, award or order, shall order a reasonable percentage of the amount deposited to be paid to the supplier. 

• As per section 22 of the act, where any buyer is required to get his annual accounts audited, under any law, such buyer shall furnish several information about the principal and interest amount due to any supplier at the end of each accounting year and several other connected information. If anybody intentionally contravenes the provisions of section 22, he shall be liable with fine which shall not be less than 10 thousand rupees. 

• If the buyer is claiming rejection of goods for quality deficiencies, then the rejection should be genuine within 15 days of the receipt of the goods and its immediate communication to the supplier. 

The Karnataka Court Fees and Suits Valuation Act, 1958 regulates the fees payable in courts in the state, to balance justice and financial responsibility. An important provision under the Act is refunds and exemptions from court fees. This aims to remove unnecessary financial burdens and is especially true in cases of repayment, withdrawal or procedural release. The Act also empowers State Government to remit fees either wholly or partially to foster inclusivity and fairness. The percentage of the amount to be refunded differs based on the circumstances, which can be further understood by the below mentioned sections of the Act.

1.  Refund in case of delay in presentation of plaint or delay in payment of court fees (Section 63)

When a plaint or memorandum of appeal (hereafter referred to as only plaint) is rejected on the following grounds

• Delay in re- presentation
• Fee paid on the plaint is deficient and deficiency is not made good within the allowed time granted by the court
• The delay in payment is not condoned and the plaint is rejected consequently.

The amount of one half the total fees, 50%, paid will be refunded on the grounds of delay in presentation of the plaint for the reasons stated above.

Case Law – Union of India (UOI) and Ors. Vs Willwood Chemicals Pvt. Ltd. And Ors(India Kanoon) Decided on 19-04-2022

2. Refund in case of remand (Section 64)

When a plaint or memorandum of appeal, which has been rejected by the lower court is ordered to be received, by the higher court or when a suit is remanded in appeal by the higher court for a fresh decision by the lower court, the court which made the order shall direct the refund to the appellant of the full amount of fee paid on the memorandum of appeal. Furthermore, when the

• whole decree is reversed, and the suit is remanded or
• if the remand is on second appeal, also on the memorandum of appeal in the first appellate court

then the court may direct the refund to the appellant of the full amount of fee paid on the memorandum of appeal.

No refund shall be ordered if the remand was caused due to an error made by the party.

If the order of remand does not cover the whole of the subject matter of the suit, the refund shall not exceed the amount paid originally on that part of the subject matter in respect of the suit that has been remanded.

Case Law – Manish Kumar vs Union of India (UOI) and Ors. ( India Kanoon) Decided  on 19 January 2021

3. Refund where Court reverses or modifies former decision on ground of mistake (Section 65)

If the court makes any mistakes on the face of record and an application for a review of judgment is admitted, and after rehearing the court reverses or modifies its previous decision on that ground, it shall direct the refund to the applicant the amount that exceeds the fees paid to what the needs to be paid, which is applicable in any court. If the amount to be paid rounds up 1000 due to the mistake and the original amount to be paid was 500, the difference that is 500 is the amount that will be refunded.

Case Law – P. N. Eswara Iyer vs The Registrar, Supreme Court Of India decided on 1 February, 1980 (India Kanoon)

4. Refund on settlement before hearing (Section 66)

When the court refers the parties to any of the ADR Methods– Alternate Dispute Resolution, and the dispute is settled, by the means of arbitration, conciliation, negotiation, etc., then seventy five percent of the court fees that was paid is refunded.

Originally only fifty percent of the fees was to be refunded until a recent amendment in the year 2020 which increased it to seventy five percent.

In cases which are not covered by the above-mentioned scenarios, a refund of seventy five percent of the court fees that was paid can be claimed when

• any suit is dismissed as it is settled out of court before evidence is recorded on the merits of claim.
• any suit is compromised on the comprise decree, before evidence is recorded on the merits of claim
• any appeal is disposed of before the commencement of hearing of the appeal

Case Law – Gayathri vs Indira Rajashekar decided on 14 July 2000 (India Kanoon)

5. Refund of fee paid by mistake or inadvertence (Section 67)

According to the Karnataka Court Fees and Suits Valuation Act, if a court fee is paid by mistake, the court can order a full refund of the fee paid. The plaintiff who paid the fees in error or inadvertence, should be refunded the entire amount paid mistakenly.

Unlike in some situations where a percentage of the court fee might be deducted upon refund, if the payment was clearly a mistake, the full amount should be refunded.

6. Instruments of Partition (Section 68)

If the final decree in a partition suit is engrossed on non-judicial stamps provided by the parties, the court will order a refund of the valued fee paid by the parties. The refund will be equal to the value of the non-judicial stamps provided by the parties.

When people go to court to divide property (a partition suit), they might need to pay a fee for the court process. Later, if the court decides the property division and writes the final decision on special non-judicial stamp paper (a type of official paper required for legal documents), the parties involved in the case might have provided those stamp papers themselves.

If that happens, the court will return to them the amount of money they paid earlier in court fees, equal to the value of the stamp paper they provided. Essentially, they get reimbursed for the cost of those stamp papers.

7. Exemption of certain Documents (Section 69)

Certain documents are exempt from being liable to pay court fees.

• Legal authorizations: written authorizations like mukhtarnama or vakalatnama by Armed Forces personnel, not the ones in civil employment or memorandums filed by advocates in criminal cases.
• Documents in Specific cases: Plaints filed in village courts and applications which are related to land revenue assessment before final confirmation.
• Irrigation and Land use: Applications for irrigation supply or cultivation extension and enhancement of rent or relinquishment of land.
• Witnesses and legal Proceedings: First application for summons of witness or production of evidence. Bail bonds, recognizances, and applications related to criminal proceedings.
• Petitions and Complaints: Petitions concerning offenses filed with police officers or village authorities.
• Forest and Government revenue: Applications related to cutting timber in Government forests.
• Appeals and Compensations against any municipal tax. Applications for compensation under property acquisition laws.
• Marriage and Religious matters: Petitions under Section 48 of the Indian Christian Marriage Act, 1872.
• Records of rights filed with plaints or applications.

8. Power to reduce or remit fees (Section 70)

the Karnataka Court-Fees and Suits Valuation Act, 1958 allows the State Government to reduce or remit all or part of the fees chargeable under the Act. This can be done by a notification in the official Gazette. However, the State Government cannot reduce or remit fees for specific classes of documents or for documents filed by a particular class of people. The remission may be granted based on public interest, financial hardship of litigants, or other justifiable reasons. The provision allows the government to ease the financial burden on litigants in deserving cases, ensuring access to justice for those who might otherwise struggle to afford court fees.

Authored by

ANUPA S

1st Semester BBA LLB (Hons)

Manipal Academy of Higher Education, Bangalore

The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) is one of India’s most stringent laws, designed to combat drug abuse and trafficking. While the Act’s objectives are laudable, its harsh penal provisions, strict bail regime, and rigorous procedural requirements demand close scrutiny, especially from legal practitioners and rights advocates.

In this article, we highlight the core provisions dealing with arrest, bail, punishment, and the procedure of search and seizure under the NDPS Act.

Definitions: Cannabis, Narcotic Drugs & Psychotropic Substances

A clear understanding of the substances covered by the NDPS Act is foundational:

Cannabis [Section 2(iii)]

Includes:

• Charas: resin or hashish oil.
• Ganja: flowering/fruiting tops (excluding seeds and leaves).
• Any preparations with charas or ganja.

Bhang is excluded unless local state laws specify otherwise.

Narcotic Drugs [Section 2(xiv)]

Includes:

• Opium, morphine, heroin, codeine, cocaine, etc.
• Both natural and synthetic derivatives notified by the government.

Psychotropic Substances [Section 2(xxiii)]

Includes:

• Mind-altering substances like LSD, MDMA, methamphetamine, diazepam, etc.
• Listed in the Schedule notified by the Central Government.

Punishments under the NDPS Act: Quantity Matters

The Act adopts a graded punishment system, based on the type and quantity of the substance:

Quantity	Punishment
Small quantity	Up to 1 year or fine up to ?10,000 or both
More than small but less than commercial	Up to 10 years + fine up to ?1 lakh
Commercial quantity	10–20 years rigorous imprisonment + fine ?1–2 lakh

Common Penal Sections:

• Section 20: Cannabis-related offences
• Section 21: Manufactured drugs (e.g., heroin)
• Section 22: Psychotropic substances
• Section 23: Illegal import/export
• Section 25: Permitting use of premises for offence
• Section 27: Consumption
• Section 27A: Financing illicit traffic and harbouring offenders
• Section 29: Abetment and conspiracy

Section 27A and offences involving commercial quantity attract the heaviest penalties.

What Are Small and Commercial Quantities?

The government notifies specific thresholds. A few examples:

Substance	Small Quantity	Commercial Quantity
Heroin	5 grams	250 grams
Charas	100 grams	1 kg
Ganja	1 kg	20 kg
Cocaine	2 grams	100 grams
LSD	0.1 gram	0.1 gram or more

Quantities in between fall under the intermediate range and invite medium-level punishment.

Search, Seizure, and Arrest: Procedures Must Be Followed

Procedural compliance is the cornerstone of NDPS jurisprudence. The Supreme Court has repeatedly held that failure to follow procedure may vitiate the prosecution.

Section 42: Search in Private Premises

• Officers must record information and reasons in writing, especially for night searches.
• Must be forwarded to a superior officer.

Section 43: Search in Public Places

• Applies to public areas (e.g., railway stations, streets).
• Can be done without a warrant.

Section 50: Personal Search

• The accused must be informed of the right to be searched in presence of a Magistrate or Gazetted Officer.
• Mandatory compliance – non-observance is grounds for acquittal (Tofan Singh v. State of Tamil Nadu).

Section 52: Arrest

• Grounds of arrest must be disclosed.
• The accused and articles seized must be produced promptly before the Magistrate.

Section 57: Reporting

• Arrest and seizure must be reported to the superior within 48 hours.

Courts have held that procedural lapses, especially under Sections 42, 50, and 57, can invalidate the case against the accused.

Bail Under NDPS: A Steep Road

The NDPS Act’s bail provisions, particularly under Section 37, are among the strictest in Indian law, especially for offences involving commercial quantity or under Section 27A.

To grant bail, the court must be satisfied:

1. The accused is not guilty, and
2. The accused is not likely to commit another offence while on bail.

This effectively reverses the presumption of innocence.

Offence	Bailable?	Cognizable?
Small quantity possession (Sec 20, 21, 22)	Yes	? Yes
Commercial quantity or 27A offences	No	? Yes
Consumption (Sec 27)	Yes	? Yes
Abetment/conspiracy (Sec 29)	Depends on main offence	? Yes

Conclusion

The NDPS Act serves an essential function in addressing drug-related offences, but it must operate within the framework of due process and constitutional safeguards. Given the harsh punishments, the non-bailable nature of offences, and the shift in burden of proof, even a minor procedural lapse can become a decisive legal battleground.

As legal professionals, our role is to ensure that:

• Accused individuals are not unjustly deprived of liberty.
• Procedural safeguards are strictly enforced.
• The distinction between drug traffickers and addicts is not blurred.

If you’re a legal practitioner, policymaker, or law student, your views and experiences on navigating NDPS cases—especially relating to bail and procedural compliance—are most welcome. Let’s keep the conversation alive and nuanced.

The Prevention of Money Laundering Act, 2002 (PMLA) is a law enacted by the Indian Parliament to combat money laundering and to provide for the confiscation of property derived from or involved in money laundering.

The key objectives of the act are to prevent and control money laundering, confiscate and seize property obtained from laundered money and to deal with any matters connected with or incidental to the crime.

Section 3 of the act defines, Money Laundering. Accordingly, it refers to directly or indirectly attempting to indulge in, knowingly assisting, or being involved in any activity connected with the proceeds of crime, including its concealment, possession, acquisition, or use.

As per section 5, authorities can provisionally attach property suspected to be involved in money laundering for 180 days, subject to confirmation by the Adjudicating Authority. Adjudicating Authority is a special body appointed to decide if the attached property is involved in money laundering. Appeals against the Adjudicating Authority’s decisions can be made to the Appellate Tribunal and further to the High Court.

Special Courts are designated courts under the Act to try offences of money laundering, set up in consultation with the Chief Justice of the High Court.

Banks, financial institutions, and intermediaries are required to verify the identity of clients, maintain records, and report suspicious transactions to the Financial Intelligence Unit – India (FIU-IND).

Enforcement Directorate (ED) is the primary agency responsible for investigating offences under PMLA. If one or more transactions are part of a series and one is proved to be involved in money laundering, it is presumed that all are involved. The accused must prove that the property in question is not the proceeds of crime.

Amendments: The PMLA has been amended several times (notably in 2005, 2009, 2012, and 2019) to expand the list of predicate offences (scheduled offences), to empower the ED with more authority and to enhance punishments and compliance requirements.

Punishment: Rigorous imprisonment for 3 to 7 years (may extend to 10 years for offences under the NDPS Act). Fine (no upper limit).

INTRODUCTION: The Employees’ Provident Fund (EPF) was established with the objective of safeguarding the financial welfare of employees in both the private and public sectors. It functions as a long-term savings mechanism, accumulating contributions throughout an employee’s tenure with an organization. The primary purpose of the EPF is to manage and secure retirement benefits for employees by ensuring a steady source of income after their service ends. The scheme is governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. To remain compliant with EPF regulations, employers must adhere to a range of statutory requirements and due diligence measures. Failure to comply may attract penalties, as outlined in the following sections.

1. False Statements to Avoid EPF Payments- [Section 14(1)]: If any person knowingly makes a false statement to avoid EPF payments he is liable to punishment of jail up to 1 year, or fine up to ?5,000, or both

2. Default in Depositing EPF Contributions- [Section 14(1A)]: If an employer fails to deposit employee contributions deducted from salaries, or pay administrative/inspection charges, he is liable to minimum 1 year imprisonment + ?10,000 fine, if employees’ deducted contributions are not deposited or minimum 6 months imprisonment + ?5,000 fine in other cases. Courts can reduce the jail term for valid and recorded special reasons.

3. Default in Insurance Fund or Inspection Charges – [Section 14(1B)]: On failure to pay insurance-related contributions or inspection charges, punishment includes jail from   6 months to 1 year and fine up to ?5,000. Court may reduce jail term with valid justification.

4. Other Violations Under EPF/Pension/Insurance Scheme – [Section 14(2)]: For any other non-compliance punishment is jail up to 1 year fine up to ?4,000 or both.

5. Breach of Exemption Conditions – [Section 14(2A)] : If an employer violates conditions of exemption granted under section 17, the punishment will be jail from 1 to 6 months and fine up to ?5,000

6. Offences Committed by Companies- [Section 14A]: When a company violates EPF laws, every person responsible for running the company (directors, managers, etc.) may be held liable. They can escape liability only if they prove lack of knowledge or due diligence. If the offence happened due to the consent or neglect of a specific officer, they will be held responsible.

7. Repeat Offenders – [Section 14AA]: If an individual or company repeats the same offence after a conviction, then the punishment will be jail for 2 to 5 years and fine of ?25,000

8. Cognizable Offence – [Section 14AB]: Failure to pay EPF contributions is treated as a cognizable offence, meaning the police can arrest without a warrant.

9. Legal Procedure for Prosecution – [Section 14AC]: – Legal action can begin only with a written report by an EPF Inspector, with prior approval from the Central PF Commissioner or an authorised officer. Only courts with the rank of Presidency Magistrate or First-Class Magistrate can try EPF offences.

10. Recovery of Penalty – Damages – [Section 14B]: For default in payments, the EPF Commissioner can impose penalty damages (up to the amount of arrears).Employers will be given a fair chance to be heard. In case of sick companies under rehabilitation, damages can be waived or reduced.

11. Court-Ordered Payment Deadlines – [Section 14C]: If convicted, courts can direct employers to make the payment or transfer the pending amount within a time limit. If not complied with, it will be treated as a new offence, punishable under Section 14. An additional fine of ?100 per day can also be imposed for continued delay.

CONCLUSION:

The EPF Act imposes strict penalties for employers who fail to meet their legal responsibilities. Non-compliance—whether by delay, default, or dishonesty—can attract serious consequences, including imprisonment and financial penalties. Employers are advised to ensure timely contributions, maintain proper records, and follow due process to stay compliant and avoid legal trouble.

The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, has played a crucial role in protecting the interests of micro and small enterprises. Various judicial pronouncements have clarified its provisions and established precedents. Below are some significant case laws that have shaped the interpretation of the MSMED Act:

• The Indur District Co-operative Marketing Society Ltd. v. Microplex (India), Hyderabad (2016) (3) ALD 588

The Court held that the supplier need not be registered or have a registered office within the jurisdiction of the Facilitation Council; it is sufficient if the supplier is located within the Council’s jurisdiction.

• Silpi Industries v. Kerala State Road Transport Corporation and Anr. (2021) SCC OnLine SC 439

The Supreme Court ruled that registration under the MSMED Act at the time of contract performance is essential.

• Uttarakhand Power Corporation Ltd. v. Mahaveer Transmission Udyog Pvt. Ltd.

The Court, relying on Goodyear India Limited v. Norton Intech Rubbers Pvt. Ltd., held that deposits under Section 19 must be made in cash, and alternative modes such as bank guarantees are not permissible.

• Kotak Mahindra Bank Ltd. v. Girnar Corrugators Pvt. Ltd. (2023) LiveLaw (SC) 12

The Madhya Pradesh High Court ruled that the MSMED Act prevails over the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, due to the overriding effect of Sections 15 to 23.

• Bajaj Electricals Ltd. v. Chanda S. Khetawat and Anr.

The Bombay High Court emphasized that the MSMED Act was enacted to ensure smooth and timely payments to micro and small enterprises and has overriding authority over conflicting laws.

• Magnus Opus IT Consulting Pvt. Ltd. v. Artcad Systems (2022) LiveLaw (Bom) 354

The Bombay High Court observed that if the MSME Facilitation Council fails to conclude arbitration within 90 days, as mandated by Section 18(5), the arbitration process becomes ineffective, and the aggrieved party must seek recourse under Section 29A of the Arbitration and Conciliation Act.

• NBCC (India) Ltd. v. State of West Bengal and Prs. (2022) LiveLaw (Cal) 214

The Calcutta High Court ruled that objections to the applicability of the MSMED Act to works contracts must be raised and resolved within arbitration proceedings before the MSME Council.

• Gujarat State Civil Supplies Corporation v. Mahakali Foods Pvt. Ltd. (2022) LiveLaw (SC) 893

The Supreme Court held that a reference to the MSME Facilitation Council is valid even when an independent arbitration agreement exists, allowing the Council to proceed under Section 18.

• Steel Authority of India & Anr. v. MSEFC AIR (2012) Bom 178

The Bombay High Court clarified that arbitration under Section 18 of the MSMED Act does not invalidate an independent arbitration agreement unless inconsistencies arise.

• Reliance Communications Ltd. v. State of Bihar, Patna HC WP 8077/2018

The Patna High Court ruled that Section 18(3) does not imply that a conciliator can act as an arbitrator unless agreed upon by the parties.

• Cummins Technologies India Pvt. Ltd. v. Micro and Small Enterprises Facilitation Council, WP 7785/2020 Allahabad HC

The Allahabad High Court held that Section 18(3) of the MSMED Act, which allows the MSEFC to arbitrate disputes, overrides Section 80 of the Arbitration Act.

• Ved Prakash v. P. Ponram, OSA No. 231/2019 Madras HC

The Madras High Court confirmed that, while the MSME Council may proceed with arbitration after conciliation, the same member cannot act as both conciliator and arbitrator without mutual consent.

• Indian Oil Corporation Ltd. v. FEPL Engineering (P) Ltd. C.M. No. 19356/2019 Del HC

The Delhi High Court clarified that the location of the supplier determines the arbitration venue, whereas the arbitration agreement dictates the arbitration seat.

• Fives Stien India Project Pvt. Ltd. v. State of Madhya Pradesh, MANU/MP/0565/2018

The Madhya Pradesh High Court ruled that the 90-day limit for MSME Council arbitration is directory, not mandatory.

• Goodyear India Ltd. v. Norton Intech Rubbers Pvt. Ltd. (2012) 6 SCC 345

The Supreme Court, relying on Snehadeep Structures Pvt. Ltd. v. Maharashtra Small-Industries Development Corpn. Ltd. (2010) 3 SCC 34, held that courts cannot waive or reduce the mandatory 75% pre-deposit requirement under Section 19, but they may allow instalment payments.

Chapter I of Part II of the Arbitration and Conciliation Act, 1996 (Sections 44 to 52) deals with the recognition and enforcement of foreign arbitral awards under the New York Convention (1958) by Indian courts. On the whole, Indian  Courts have a pro-enforcement stand making  India an arbitration-friendly jurisdiction, aligning with global arbitration standards.

Section 44 defines a foreign award as an arbitral award arising from disputes of a commercial nature, made in a country that is a signatory to the New York Convention and notified by the Indian government. As per Section 45, if a party initiates a legal suit despite an arbitration agreement, the court must refer the parties to arbitration, unless the agreement is invalid. Again Section 46 says that a foreign award is considered binding and can be relied upon in any legal proceedings in India.

The Enforcement Procedure of a foreign award is dealt in Sections 47 to 49. As per Section 47 a party seeking enforcement must submit:

1. The original or certified copy of the award.
2. The original or certified arbitration agreement.
3. A certified translation if the award is in a foreign language.

As per Section 48, the Courts may refuse enforcement of a foreign award only on limited grounds, similar to Article V of the New York Convention, including:

1. Lack of proper notice to a party.
2. Incapacity of parties or invalid agreement.
3. Award beyond the scope of arbitration.
4. Violation of natural justice or improper procedure.
5. Award set aside in the country where it was made.
6. Violation of Indian public policy (e.g., fraud, corruption, or fundamental legal principles).

As per Section 49, if no valid objections are raised under Section 48, the award is deemed a decree of an Indian court and is enforceable as a domestic court judgment.

As per Section 50, an appeal can be filed against a court decision refusing enforcement of a foreign award but not against a decision allowing enforcement. Section 52 clarifies that other laws and treaties concerning foreign awards remain unaffected.