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2018 (12) TMI 1992 - BOMBAY HIGH COURT
Initiation of an enquiry - whether this Court can in its testamentary and intestate jurisdiction on a report of a administrator order an inquiry as sought? - Siphoning of funds from the estate of the deceased - HELD THAT:- The scope of Section 247 of the Succession Act empowers the Court to appoint an administrator with rights and powers of general administration excluding the right to distribute the estate. The administrator in question shall be subject to the immediate control of the Court and shall act under the directions of the Court. Needless to mention, administration as contemplated in Section is pendente lite. There is now no doubt that in the facts of the present case the appointment of the administrator was justified inasmuch as it is now final, with all challenges to his appointment having been repelled - This Court in the case of Rupali Mehta v/s Tina Narinder Sain Mehta [2006 (8) TMI 698 - BOMBAY HIGH COURT] dealt with the scope of Section 269 observing that Section confers special powers of the Court to interfere with the protection of property till probate is granted provides the deceased was not a Hindu, Mahomedam, Buddhist, Sikh, Jaina or an Indian christian. Ione following the excluded persons.
In the present case the administrator has been appointed and we are concerned with an application seeking ordering an investigation pursuant to the appointment of the administrator. In effect, it is an application to assist or further empower the administrator. Post the appointment of an administrator, the question to be considered is whether the Court is required to by judicial orders to empower the administrator to adopt appropriate proceedings - It is not as if the remedy of the suit is ousted by the application or vice versa. If the remedy of the suit was not ousted one of the aspects to be considered is whether there is justification in the instant case for ordering an enquiry or investigation. In the case at hand, there are no doubt that the defendant/notices have been non-cooperative and such behaviour, despite appointment of the Administrator is causing material prejudice to the estate and the administration of justice.
Under section 340(3)(a) where the Court making the complaint is a High Court, an officer of that court may be appointed to make that complaint. Since the High Court is exercising its testamentary jurisdiction, it is therefore permissible for an officer of High Court registry to make that complaint. The object and scope of section 340 is to institute an enquiry and ascertain whether any offence affecting administration of justice has been committed in relation to any document produced and given as evidence in Court. Section 340 of the Code has been held to be applicable to all proceedings in all Courts in criminal cases or civil cases irrespective of the fact that whether the matter in court is one involving an offence mentioned in Section 195 - In the present case, the parties involved, not having faithfully disclosed the extent of their involvement and have undoubtedly held back in making a full and proper disclosure and have been engaged in deceitful conduct.
The question that arises is whether the Administrator should stand by in anticipation of compliance by the defendant/notices. The conduct of the defendant that of the trustees and all those associated with the Trust and those inter-meddling with the estate leaves much to be desired and that the disclosures are neither complete nor entirely truthful. Attempts are made to frustrate the exercise undertaken by the Administrator and the attitude of the defendants and the respondents is obstructive - The conduct of defendant no. 1 is undoubtedly obstructive of the administration of justice and the earlier affairs under administration are probed, the more beneficial it will be for the estate. The Court must also ensure that the Administrator is provided with all necessary assistance to complete the task in hand. Given the non co-operative, obstructive and misleading conduct demonstrated over the past few years it is time to ensure that the protection of the estate is complete in all respects both by securing the estate as presently stands and by recovery of all that has been taken away from it to meet the ends of justice and to ensure proper administration of justice.
An independent investigation is required to be carried out as to the scope of the investigation, after the complaint contemplated in this order is filed, it would be for the investigating agency to seek appropriate directions from this court time to time should the need so arise. It is necessary to ensure that the enquiry is conducted in a focused and purposive manner. The administrator will therefore be required to provide all necessary support - The resistance to an enquiry does not appear justified in view of the first defendants contention that the administrator may if he so desires file complaints.
The Administrator appointed by this Court shall draw up a complaint to be filed and provide the draft complaint to the Prothonotary and Senior Master within a period of four weeks from today - Upon the draft complaint being lodged and subject to scrutiny of its contents the Prothonotary and Senior Master shall forward the complaint on behalf of the Administrator to the Commissioner of Police, Mumbai who shall nominate a suitable team of officers to initiate an investigation into the complaint and the affairs of deceased Purvez Burjor Dalal. The progress of the investigation after it commences shall be reported to the Prothonotary and Senior Master on a fortnightly basis - This Report shall be listed for further hearing after eight weeks.
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2018 (12) TMI 1991 - SC ORDER
Appropriate forum - forum conveniens - The High Court of Delhi [2018 (12) TMI 443 - DELHI HIGH COURT] has, by the impugned judgment, decided that as a matter of forum conveniens, the petitioners should approach the High Court of Bombay - HELD THAT:- It is agreed upon with the High Court - The interim protection, that has been granted by the High Court of Delhi till 15.12.2018, will continue for one more month from today so that the petitioners may approach the High Court of Bombay and ask for interim relief.
SLP disposed off.
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2018 (12) TMI 1990 - MADRAS HIGH COURT
Assessment u/s 153A - Proceedings on the basis of the statement made by one K. Srinivasalu, who was linked with the business concern under the name and style of SRS Mining - petitioner further contend that he was aware that the said K. Srinivasalu had retracted his statement and he was doubly sure that the entire proceedings of the Department were baseless - HELD THAT:- The fact that the witness had turned hostile would only stand to the benefit of the petitioner as the entire evidence of the witness could be considered and this Court is unable to understand as to how it would be adverse to that of the petitioner. Even if the respondent was to rely on that part of the evidence of K. Srinivasalu which is in their favour they have to let in other reliable evidence to corroborate the same. During the course of the arguments, it was informed by the learned Senior Counsel that copies of the evidence had not been provided to the petitioner and this Court directs the respondents to give copies of the evidence to the petitioner.
No infirmity in the order of the respondent in refusing the request for cross examination since the witness had turned hostile to the respondent's contentions. Needless to state that in the light of the amendment to Section 154 by insertion of Sub Section (2) by Act 2 of 2006 w.e.f. 16.04.2006, it is well open to the petitioner to work out his right in accordance with law on receipt of the evidence directed to be given. WP dismissed.
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2018 (12) TMI 1989 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Furnishing of documents - promoter/director is hiding information from the Resolution professional as to ensure that the transaction entered into with the related companies; its subsidiaries and third parties are not shown as receivables/debts payable to the Corporate Debtor - HELD THAT:- The Appellant is directed to allow the Liquidator to inspect the records of ‘Urban Rupi Infrastructure Private Limited’ and ‘Neelkanth Palm Realty Private Limited’ to trace out if any of the records of the Corporate Debtor are available therein or records as mentioned in the Chart given. If any of the record of the Subsidiary Company related with the Corporate Debtor as recorded in the chart aforesaid is traced, the Appellant will hand over the copies of same to the Resolution Professional/ Liquidator.
It is made clear that the Resolution Professional/ Liquidator has no jurisdiction to take over any asset of the subsidiary company of the Corporate Debtor including ‘Urban Rupi Infrastructure Private Limited’ and ‘Neelkanth Palm Realty Private Limited’, therefore, the Resolution Professional cannot take the original documents available with the subsidiary companies though he may take authenticated photocopies of those documents.
Part of the impugned order dated 26th April, 2018 wherein observation has been made against the Appellant is set aside and stands modified to this effect - appeal disposed off.
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2018 (12) TMI 1988 - CESTAT ALLAHABAD
Leviable to Excise Duty or not - waste & scrap of paper arising during the course of manufacturing of cigarettes - HELD THAT:- The said issue came up before this Tribunal in appellant’s own case for the earlier period INTERNATIONAL TOBACCO CO. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GHAZIABAD [2003 (10) TMI 171 - CESTAT, NEW DELHI] wherein this Tribunal held that the waste and scrap of paper arising during the course of manufacturing of cigarette is not a process of manufacture. Therefore, the said waste and scrap does not attract Central Excise duty. Therefore, following the precedent decision of the Tribunal in appellant’s own case, it is held that the appellant is not liable to pay duty on waste & scrap of paper arising during the manufacture of cigarettes.
The impugned order is set aside - the appeal is allowed.
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2018 (12) TMI 1987 - ALLAHABAD HIGH COURT
Maintainability of petition on behalf of the auction purchaser seeking relief of refund of the sale consideration deposited by the auction purchaser is maintainable before the High Court under Article 226 of the Constitution of India, or he has remedy of appeal under Section 17 of the SARFAESI Act - imposing a condition “as is where is” "as is what is” the bank is not under obligation to hand over vacant physical possession of the secured assets to the auction purchaser - requirement to hand over the physical possession of the secured asset to the auction purchaser, who has fulfilled all the conditions and paid the entire sale consideration as per the terms of the bid.
HELD THAT:- The entire gamut of remedies provided under Section 17 of the SARFAESI Act is to oversee that the statutory provisions of Section 13(4) read with Rule 8 and 9 of the Rules, 2002 are adhered to, and the Debt Recovery Tribunal would immediately step in, whenever it finds any infraction by the secured creditor.
There is no dispute between the auction-purchaser and the Bank with regard to any of the measures under section 13 (4) of the SARFAESI Act read with rule 8 and 9 of the Rules, 2002. Here, the petitioner, who is a auctionpurchaser has deposited the entire amount of bid and the Bank has issued a sale certificate dated 15/07/2017, wherein it has been recorded that “the undersigned acknowledges the receipt of the sale price of Rs. 60 lakhs in full and handed over the delivery in possession of the schedule property”. The said sale certificate issued under rule 9(6) has been signed by Authorised Officer, Allahabad bank. The Bank has stated that though the sale certificate has not been received by the petitioner, but the Bank is ready to hand over the sale certificate to the petitioner.
In view of the the judgment of the Hon’ble apex court in the case of Agarwal Tracom Pvt Ltd vs Punjab National Bank and Others [2017 (11) TMI 1523 - SUPREME COURT] is clearly distinguishable on facts, and in the peculiar set of facts and circumstances of this case, the petitioner does not have any efficacious alternative remedy under the SARFAESI Act.
It may be clarified here that the District Magistrate has not passed any order in excise of powers conferred upon him under Section 14 of the SARFAESI Act, despite 59 dates having been fixed in this regard, and strong disapproval is recorded in the manner in which the District Magistrate has not taken any action on the application of the bank - the inaction on part of the District Magistrates will have a detrimental effect in securing the possession of the properties and therefore effective mechanism must be taken by respondent no.1 in this regard.
Whether the clause contained in the advertisement for e-auction, which provides that the property was being sold on “as is where is Basis, as it is where it is Basis and whatever there is”, which according to the Bank, dis-entitles the petitioner from seeking any claim against the respondent bank? - HELD THAT:- The third-party, who comes forward to purchase the secured asset must have the confidence that he would get the property at the earliest and in case, considerable long time is consumed in transferring the property not only it would defeat the purpose of the Act but would also cause colossal loss and injury to a auctionpurchaser, like the petitioner - by merely inserting a clause “as is where is” and "as is what is” the responsibility of the Bank does not get diluted nor it can in any manner assist the bank in denying physical possession to the auction purchaser.
It was a duty of the respondent Bank to deliver vacant possession of the secured asset to the petitioner within a reasonable time. Having failed to deliver possession, the petitioner has rightly exercised his option to get refund of the bid amount deposited with the Bank along with interest and damages. As noticed above, in the Recovery Management Policy 2017– 2018 there is a provision of refunding the amount of EMD/sale proceeds, if the Bank is not able to deliver physical possession of the property beyond six months from the date of auction - the reasonable period for giving physical possession of the auction property to the auction purchaser would be six months, keeping in view that under section 13(4) the District Magistrate is under a statutory obligation to decide the application of the Bank within a maximum period of 60 days, and even taking into account certain delay in moving the application and other administrative delays, the possession of the property ought to have been handed over to the auction purchaser at least within a period of six months from the date of the auction.
This writ petition is allowed with the direction to the respondent bank to refund Rs. 60 lakhs, which was deposited by the petitioner being the auction-purchaser of the aforesaid property, to the petitioner within a period of one month, along with interest @ 9 percent.
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2018 (12) TMI 1986 - MADRAS HIGH COURT
Dishonour of Cheque - principles of vicarious liability - whether necessary allegations have been made in the complaint against the petitioners by satisfying the requirements under Section 141 of the Negotiable Instruments Act? - HELD THAT:- From the judgments in NATIONAL SMALL INDUSTRIES CORPN. LTD. VERSUS HARMEET SINGH PAINTAL [2010 (2) TMI 590 - SUPREME COURT], POOJA RAVINDER DEVIDASANI VERSUS STATE OF MAHARASHTRA & ANOTHER [2014 (12) TMI 1070 - SUPREME COURT] and ASHOKE MAL BAFNA VERSUS M/S UPPER INDIA STEEL MFG. & ENGG. CO. LTD. [2017 (3) TMI 907 - SUPREME COURT], it is very clear that it is not enough if the words used under Section 141 of the Negotiable Instruments Act, is merely extracted. In order to make a Director of a Company is liable for the offence committed by the Company under Section 141 of the Negotiable Instruments Act, there must be a specific averment against the Director to show as to how and in what manner the Director was responsible for the conduct of the business of the Company. This composition has been reiterated by the Hon'ble Supreme Court consistently.
This Court is not in agreement with the submission made by the learned counsel for the respondent. If it is enough to mechanically repeat the requirement under Section 141 [1] of the Negotiable Instruments Act, any number of Directors can be made as an accused in a complaint filed under Section 138 of the Negotiable Instruments Act. This will lead to a situation where the Directors who have nothing to do with the day-to-day affairs of the Company, Nominee Directors etc., being made to face a criminal complaint just because there is a repetition of the words found under Section 141 [1] of the Negotiable Instruments Act. This may lead to an abuse of process of Court and any person who is shown as a Director will be made to undergo the ordeal of trial.
The allegations made in the complaint does not satisfy the requirements of Section 141 of the Negotiable Instruments Act, and the requirements reiterated by the Hon'ble Supreme Court, insofar as these petitioners are concerned, and therefore this Court has to necessarily interfere with the proceedings in exercise of its jurisdiction under Section 482 of Cr.P.C. - Petition allowed.
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2018 (12) TMI 1985 - ITAT DELHI
TP Adjustment - international transaction pertaining to availing support and management services by the Appellant from its Associated Enterprise (“AE”) - HELD THAT:- It is noticed that a similar issue having identical facts was a subject matter of the assessee’s appeals for the preceding assessment years 2012-13 and 2013-14 [2018 (8) TMI 126 - ITAT DELHI] respectively wherein the matter has been restored to the file of the TPO wherein TPO is directed to decide the issue afresh after considering the detailed submissions/documentary evidences furnished by the assessee. Assessee is directed to furnish the details of services utilised by it for which it has made the payments to its AEs. Assessee is further directed to demonstrate what benefits it has received from its AEs. TPO is directed to consider the same and decide the issue afresh after giving reasonable opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes.
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2018 (12) TMI 1984 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Violation of moratorium in terms of Section 14 of the IBC - termination of Mining Lease during declaration of moratorium - request for Deemed Extension of the said Mining Lease rejected - HELD THAT:- Based on the enquiry, an Order came to be issued on 26.09.2018 by the Under Secretary to Government, Commerce & Industries Department (Mines}, State of Karnataka whereby the Application filed for Deemed Extension of Mining Lease bearing ML No.2293 by the IRP was rejected in spite of the recommendations of the Director, Department of Mines and Geology, Bangalore.
Therefore, the Order dated 26.09.2018 issued by the Under Secretary to Government, Commerce & Industries Department (Mines), State of Karnataka rejecting Deemed Extension of Mining Lease bearing ML No.2293 is hereby set aside, as the same is in violation of the Moratorium declared by this Authority on 12.03.2018 under Section 14(1) of the I&B Code, 2016. Consequently, the Respondent Nos. 1 to 3 are directed to execute Supplement Deeds extending the period of the Mining Lease bearing ML No.2293 upto 31.03.2020, in accordance with Sec. 8 A (6) of the M.M.D.R Act, 1957 as amended under the Mines and Minerals (Development and Regulation) Amendment Act, 2015, within a period of two weeks from the date of the receipt of the certified copy of this Order.
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2018 (12) TMI 1983 - CESTAT CHANDIGARH
Rejection of refund on account of education and higher education cess - denial of Cenvat on account of value addition - denial of Cenvat credit on the input procured from EOU.
Rejection of refund on account of education and higher education cess - HELD THAT:- This issue is settled by Hon’ble Supreme Court in the case of M/S. SRD NUTRIENTS PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE GUWAHATI [2017 (11) TMI 655 - SUPREME COURT] which has subsequently followed by various decisions where it was held that The appellants were entitled to refund of Education Cess and Higher Education Cess which was paid along with excise duty once the excise duty itself was exempted from levy. Following the aforesaid judgement, the order passed by the ld. Commissioner (Appeals) is not sustainable in law.
Denial of Cenvat credit on the input procured from the EOU - HELD THAT:- This issue also stands settled in favour of appellant following the decision of coordinate bench of this Tribunal in the case of M/S METACLAD INDUSTRIES VERSUS CCE, MUMBAI-II [2012 (11) TMI 244 - CESTAT MUMBAI] where it was held that Under sub-section (1), an additional duty of customs is levied which is equal to the excise duty levied on like articles produced in India. Under sub-section (5), another additional duty of customs is levied at a rate not exceeding four per cent of the value of the imported article so as to counterbalance the sales tax/value added tax or any other charges on a like article on its sale, purchase or transportation in India. Both the levies are “additional duty of customs” and therefore, there is no warrant to restrict the scope of the term additional duty of customs occurring in the formula to only the additional duty leviable under sub-section (1) of section 3 and not to the additional duty leviable under sub section (5) thereof.
Rejection of refund claim on account of education cess and higher education cess - rejection of refund on value addition - HELD THAT:- The case of value addition is covered by the judgement of M/S RECKITT BENCKISER VERSUS UNION OF INDIA AND OTHERS [2010 (12) TMI 237 - JAMMU AND KASHMIR HIGH COURT] where it was held that Notification no. 19/2008 CE dated 27-3-2008 shall stand quashed. The petitioner-units shall continue to avail the benefit of exemption from payment of excise duty as provided in terms of the notification No.56/2002-CE dt. 14th of Nov’02. The respondent-State, however, shall be at liberty to take appropriate action in .accordance with the relevant rules against those unscrupulous manufacturers who are involved in illegal activities of alleged bogus production - This issue is also stands settled in favour of the appellant.
The order passed by the ld. Commissioner (Appeals) is not sustainable and, therefore the impugned order set aside - appeal allowed.
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2018 (12) TMI 1982 - TELANGANA HIGH COURT
Default in repayment of Term Loan - account classified as NPA - Failure of auction three times - requirement to give 30 days time from the date of issue of notice under Rule 8(6) before the issue of the sale notice under Rule 9(1) of SARFAESI Rules - property brought to sale was admittedly an agricultural land and hence Section 31(i) of the Act was attracted or not - fixation of reserve price violating the law laid down by the Supreme Court in J. RAJIV SUBRAMANIYAN & ANR. VERSUS M/S. PANDIYAS & ORS [2014 (6) TMI 17 - SUPREME COURT].
Non-availability of a gap of 30 days between the date of issue of notice under Rule 8(6) and the sale notice under Rule 9(1) - HELD THAT:- In any case, the first argument of the learned counsel for the petitioner is about the failure of the Bank to issue a notice under Rule 9(1). If the petitioner was serious about this contention, he should have come up with a writ petition or gone before the Debts Recovery Tribunal by way of appeal challenging the first notice of sale dated 10-7-2017. The petitioner did not challenge the first notice of sale. He did not challenge even the subsequent 6 notices of sale. He came to Court only after the sale was effected on the 7th occasion. Therefore, a person who took advantage of the failure of 6 auctions, cannot come to Court after the completion of a successful auction on the 7th occasion, complaining that the first auction was defective. The impugned sale did not take place pursuant to the first auction notice, but took place pursuant to the 7th notice. Therefore, the defect, even if any, in the first notice, got wiped out. Hence, the first contention deserves to be rejected.
Whether the mortgaged property is an agricultural land and that therefore Section 31(i) of the Securitisation Act, 2002, prohibits the invocation of the provisions of the Act, for the enforcement of security interest in an agricultural land? - HELD THAT:- A person who made a representation of a crucial fact in the form of a Sworn Affidavit and thereby induced a Bank to sanction a term loan, cannot go back on the representation made by him in his Affidavit. If the petitioners had refused to swear to an Affidavit in April, 2011, the Bank would not have sanctioned the facilities at all. After having held out a particular form of representation to the Bank and after having derived a benefit on account of such representation, the petitioner cannot now turn around and contend that what was made out by him/her was a misrepresentation.
A vain attempt was made by the learned counsel for the petitioner to contend that the petitioner had to swear to such an Affidavit in April, 2011, because they were in need of money. But the learned counsel for the petitioner does not want to label the representation made by the petitioners as a misrepresentation, as the same would expose them to other consequences. If the petitioners had made a false representation in order to induce the Bank to sanction limits to them, they cannot go back on those representations, with a view to deprive the Bank of their dues. No amount of Case Law would go to the rescue of such a person. Therefore, the second contention is also liable to be rejected.
Market Value - contention of the petitioner is that the valuation obtained way back on 22-02-2011 was Rs. 462.50 lakhs and that therefore the valuation obtained before the last auction sale was abysmally low - HELD THAT:- It is true that the securing of the best possible price by the secured creditor, would be beneficial to both parties. But ideal situations do not arise in auction sales. The Bank could not get a buyer for the property in 6 auction sales. It was only in the 7th auction that the Bank succeeded. Therefore, the petitioner cannot make an issue out of the valuation report. Therefore, the third contention is also liable to be rejected.
All the three contentions raised by the learned counsel for the petitioner are liable to be rejected. The Debts Recovery Tribunal has applied its mind to all the three contentions and chose to reject them with its own reasons - Petition dismissed.
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2018 (12) TMI 1981 - RAJASTHAN HIGH COURT
Adjustment of petitioner against the post of Teacher Grade – III (Level-2) and be paid his due salary from August, 2018 - HELD THAT:- In the overall circumstances of the case, wherein the petitioner has, relying on various circulars issued by the respondents themselves and orders, wherein the said circulars/instructions have been complied with, whereas the petitioner has been dealt with differently vide order dated 27.11.2018 (Annex.-9) and representations made by the petitioner are pending consideration with the respondents and so far as order pursuant to the impugned order dated 27.11.2018, has not been issued, the respondents i.e. the Joint Director, School Education, Udaipur Division, Udaipur is directed to look into the various applicable circulars and orders passed in this regard qua other Teachers and treat the petitioner similarly with those Teachers and pass appropriate order.
It would be required of the Joint Director, School Education, Udaipur Division, Udaipur to pass a speaking order dealing with the grievance of the petitioner.
Petition disposed off.
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2018 (12) TMI 1980 - CENTRAL ADMINISTRATIVE TRIBUNAL, NEW DELHI
Seeking reinstatement into service on expiry of 90 days from the date of initial suspension - smuggling of red sanders - whether the suspension of an employee can be extended beyond 90 days? - HELD THAT:- It was held in Dr. Rishi Anand's case [2017 (9) TMI 2005 - DELHI HIGH COURT] that the very fact the observations of the Supreme Court that the suspension cannot be continued beyond 90 days in case no charge sheet is filed within that time, were not applied in that case; would lead to the conclusion that the said principle cannot be ascribed the status of ratio decidendi.
Further, there would not have been any necessity for us to undertake any discussion on this aspect had Rule 10(7) of the CCS (CCA) Rules, 1965 was interpreted or any portion of it was struck down, denuding the Government of the power to continue the suspension beyond 90 days if no charge sheet is filed.
The authority of a precedent and its binding nature is certainly high, when the issue decided therein is not covered by any provision of law or by an earlier precedent. The Courts subordinate to the one which authored the precedent, have to religiously follow it, till any legislation is made to the contrary, in accordance with law. If the issue is covered by a provision of law, the precedent would retain its strength, if the provision is taken into account and is interpreted. The judgment then becomes a guiding tool for the interpretation or understanding the provision of law.
The endeavor of Hon'ble Supreme Court, for decades together was to ensure transparency in Government services and public life, and even new statutory agencies, like CVC, have been brought into existence in compliance of the directions of the Supreme Court. Radical changes were brought as regards the functioning of CBI is to ensure that no laxity is exhibited in the context of dealing with the cases where allegations of corruption or misconduct of serious nature exist. The applicant is facing serious allegations. Whatever be the reasons for default in issuing charge sheet, that should not become an advantage for the applicant to get reinstated into service.
The respondents shall make endeavor to file the charge memo within a period of three months from the date of receipt of copy of this order and when the Suspension Review Committee meets next, it shall specifically address the question as to whether it is desirable at all to continue the suspension, and whether the interests of the State and of the applicant would be served in case he is transferred to any other place by reinstating him - appeal dismissed.
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2018 (12) TMI 1979 - SECURITIES AND EXCHANGE BOARD OF INDIA
Non–executive director liability on omissions or commissions by a company - Noticees had failed to exercise reasonable care and had failed to act diligently - ad-interim ex-parte order could be passed by SEBI in the interests of investors or the securities market - Noticee no. 4, 6, 7 & 8 have contended that they were past non–executive directors of the company, and hence they cannot be held liable for the violations committed by the company - HELD THAT:- It is pertinent to note that the interim order in the present case was passed under the provisions of sections 11(1), 11(4) and 11B of the SEBI Act. The second proviso to section 11(4) clearly provides that “Provided further that the Board shall, either before or after passing such orders, give an opportunity of hearing to such intermediaries or persons concerned”. Further, various courts while considering the aforesaid sections of the SEBI Act have also held that principles of natural justice will not be violated if an interim order is passed and a post-decisional hearing is provided to the affected entity.
Noticees by their own admission, have stated that they became directors of the company to recover the loans (loan details recorded in paras 7 (A) (ii) and 7 (B) (xii) of this order) provided by them to Mr. Pankaj Goel. They have not adduced any evidence to show that they have taken any corrective measures as regards the violations committed by F6 Finserve. It is only in 2018, after SEBI started examining the affairs of F6 Finserve and its other directors namely, Mr. Pankaj Goel and Ms. Meenu Goel i.e. after the inspections of F6 Finserve conducted by NSE and SEBI that the Noticees have taken steps against Noticee nos. 1, 2, 3 and 5 as stated in their reply and additional submissions which are recorded in para 7 and 9 of this order.
All the directors of the company including Noticee nos. 4, 6, 7, 8, 9 and 10 who are non- executive directors had provided their personal properties as security for the loan availed by F6 Finserve and had also given personal guarantee. These properties were also used as security for the overdraft facility limit of Rs. 2 Crore to F6 Commodities. From the aforesaid, it is difficult to conclude being directors of the company, having mortgaged their personal properties and acting as guarantors for the company, the Noticees were not aware of the way the affairs of the company were being conducted and the violations committed by the company as stated in para 2 and 3 of this order.
As in exercise of the powers conferred u/s 19 of the SEBI Act, read with Sections 11(1), 11(4) and 11D thereof, hereby confirm that the directions issued vide ad interim ex parte order as against the Noticees shall continue until further orders.
In the matter of Amrapali Aadya Trading & Investment Pvt. Ltd. decided on October 31, 2018 wherein similar circumstances existed, to protect the interest of clients/ investors it was directed that a separate demat account and separate interest bearing bank account shall be opened wherein the securities and funds belonging to the Noticee therein would be transferred. In the extant matter, the interim order dated May 29, 2018 directed the depositories, Registrar and Transfer Agents and banks that no debits/ transfer is made from the accounts of the Noticees. I, therefore, direct as under:
a. Since the claim value is higher at NSE, NSE Defaulters Committee shall, as expeditiously as possible, open and operate a dedicated demat account where all the securities lying in the demat accounts of F6 Finserve shall be transferred.
b. The NSE Defaulters Committee shall open and operate a dedicated interest bearing bank account with a Nationalized Bank where all the funds lying in various bank accounts held in the name of F6 Finserve, Mr. Pankaj Goel and Ms. Meenu Goel, shall be transferred.
c. Since the claim value is higher at MCX, the MCX’s Defaulters Committee shall, as expeditiously as possible, open and operate a dedicated demat account where all the securities lying in the demat accounts of F6 Commodities shall be transferred.
d. The MCX’s Defaulters Committee shall open and operate a dedicated interest bearing bank account with a Nationalized Bank where all the funds lying in various bank accounts held in the name of F6 Commodities shall be transferred.
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2018 (12) TMI 1978 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI
Right of Operational Creditors to claim representation in the meeting of the Committee of Creditors - HELD THAT:- Taking into consideration facts and circumstances of case, the representative of ‘Operational Creditor’ allowed only to watch the proceedings of the ‘Committee of Creditors’ as agreed by the learned counsel for the ‘Resolution Professional’. The representative cannot object or participate in the proceedings of the ‘Committee of Creditors’ and if any contrary decision is taken, in such case, the ‘Operational Creditor’ may move proper application before appropriate forum at proper stage. ‘Operational Creditor’ may obtain the name of the representative who may watch the proceedings - This order cannot be cited as precedence in any other case.
Appeal disposed off.
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2018 (12) TMI 1977 - ITAT HYDERABAD
Non perusal of appeal by assessee - notice of hearing was duly served on the assessee, but none appeared on the said date nor was an application filed for adjournment - HELD THAT:- As held in the case of B.N. Bhttachargee & Anr. [1979 (5) TMI 4 - SUPREME COURT] that appeal does not mean only filing of memo of appeal but also pursuing it effectively. In cases where the assessee does not want to pursue the appeal, Court/Tribunal have inherent power to dismiss the appeal for non-prosecution as held in the case of M/s Chemipol Vs. Union of India [2009 (9) TMI 177 - BOMBAY HIGH COURT].
Therefore, respectfully following decision and also of the Tribunal in the case of Multiplan (India) Ltd., [1991 (5) TMI 120 - ITAT DELHI-D] and Late Tukojirao Holkar [1996 (3) TMI 92 - MADHYA PRADESH HIGH COURT] we dismiss the appeal of the assessee for want of prosecution.
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2018 (12) TMI 1976 - DELHI HIGH COURT
Nature of receipt - Refund of excise duty claimed from DGFT - Business receipt or capital gain - whether is not income under Section 5 read with Section 28(iii)(b) in the hands of Assessee Company as held by ITAT? - HELD THAT:- The issue raised in the present appeal by Revenue which relates to assessment year 2011-12 is covered against them by decision of MAITHON POWER LTD. [2015 (7) TMI 784 - DELHI HIGH COURT] as held refund or drawback would go to ultimately reduce the cost of the project and had therefore to be treated as a capital receipt.
This being the accepted and admitted position, no substantial question of law arises for consideration before this Court.
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2018 (12) TMI 1975 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - notice beyond a period of four years - long term capital gain on listed securities and claimed exemption under section 10(38) - Assessee submitted that in the absence of failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment, the assumption of jurisdiction on the part of the AO is invalid - Also AO has proceeded on a factually incorrect premise insofar as the value of Alpha Graphics Scrip is concerned as well as on the incorrect premise that no scrutiny assessment was made in the year under consideration.
HELD THAT:- Having regard to the submissions advanced by the learned advocate for the petitioner, Issue Notice returnable on 5th February, 2019. By way of ad-interim relief, the respondent is permitted to proceed further with the assessment; he, however, shall not pass the final order without the permission of this court.
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2018 (12) TMI 1974 - ITAT MUMBAI
Rectification u/s 154 - disagreement with the determination of book profit made by the assessee under Section 115JB - book profit u/s 115JB determined at amount as against NIL determined by the assessee - dHELD THAT:- When the assessee carried the matter in appeal before the CIT(A), he assailed the action of the AO on points of law as also on facts. In particular, assessee pointed out that the necessary computation of book profit u/s 115JB was duly available in Form 29B at the time of assessment before the AO and in terms thereof, no liability arose.
Therefore, if AO was to take a different view, the same could not be done by invoking Sec. 154 of the Act, which permitted the AO merely to rectify apparent mistakes. Points of difference between computation of book profit made by the Assessing Officer and that by the assessee were such, which involved debatable issues, and thus was outside the purview of Sec. 154 of the Act.
So far as the assessee was concerned, it had cleared its stand which was very much before the Assessing Officer when he passed the original assessment order. Thus, the error of assessee not having declared its manner of computation of book profit under Section 115JB of the Act is not something which is reflected by the record.
No doubt, the CIT(A) is justified in referring to the amendment made by the Finance (No. 2) Act, 2009 prescribing that Provision for bad and doubtful debt is not deductible for computing book profit, yet that is not the basis on which the Assessing Officer invoked the jurisdiction under Section 154 of the Act. Secondly, even if this aspect of the matter is held in favour of the Revenue, yet the other two aspects brought out by the assessee before the CIT(A), namely, non-consideration of prior period items of expenses and non-consideration of adjustment for lower of depreciation or loss, are issues which are well supported and consistent with the requirement of Sec. 115JB of the Act; and, the same have been unjustly denied by the lower authorities. If these aspects are kept in mind, the determination of book profit made by the Assessing Officer under Section 115JB of the Act is clearly untenable.Appeal of the assessee is allowed.
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2018 (12) TMI 1973 - ITAT MUMBAI
Capital gain computation - application of Section 50C by AO for the purpose of the valuation of the land assessee has got interest in the said property to the extent of 1/12th as been acquired as executor of will of her mother - assessee had not taken full value of consideration as per Section 50C resulting in to short disclosure of LTCG HELD - THAT:- As conveyance deed as executed between the vendors and THPCL was inextricably linked with Sale Agreement dated 10/03/1971. The purchaser had acquired certain rights in the said property in the year 1971 when the possession was also handed over by the seller acting for himself as well for other owners. In other words, the seller had already transferred certain rights out of bundle of rights in the said property in favor of the purchaser in the year 1971 by entering into sale agreement as well as by handing over the possession of the property.
Therefore, the assessee had inherited only the remaining rights in the aforesaid property and not an absolute owner of the property. The conveyance deed was one of the right attached to the property which has been transferred by the assessee in favor of the purchaser against certain consideration and therefore, the same could not be attributed towards sale of land as concluded by lower authorities. Assessee had received compensation against sale of residuary rights in the said property. This being the case, the provisions of Section 50C had no applicability to the facts of the case.
Having reached aforesaid conclusion, we are of the considered opinion that the cost of acquisition of the said right in the hand of the assessee was to be taken as Nil since the property under question was acquired by the owner way back in 1966 and the same was sold by the owner in the year 1971 and it was that time when the benefit of cost of acquisition was available to the seller.
We hold that the LTCG earned by the assessee during the year being net sale consideration received by the assessee upon conveyance. The benefit of cost of acquisition was not available to the assessee. The Ld. AO is directed to recompute the income of the assessee in terms of our above order.
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