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2020 (5) TMI 743 - SUPREME COURT
Right of a stranger to challenge a decree passed on a compromise - challenge to the proceedings in a separate suit - restraint from entering into peaceful possession of the suit property - whether the suit filed by the Appellant-Plaintiff in seeking a declaration against the decree of compromise dated 15th September, 1994 passed by the High Court of Patna in Second Appeal was maintainable in view of the provisions of Order 23 Rule 3 and Rule 3A Code of Civil Procedure? - HELD THAT:- By introducing the amendment to the Code of Civil Procedure (Amendment) 1976 w.e.f. 1st February, 1977, the legislature has brought into force Rule 3A to Order 23, which create bar to institute the suit to set aside a decree on the ground that the compromise on which decree is based was not lawful. The purpose of effecting a compromise between the parties is to put an end to the various disputes pending before the Court of competent jurisdiction once and for all.
Rule 3A of Order 23 Code of Civil Procedure put a specific bar that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. The scheme of Order 23 Rule 3 Code of Civil Procedure is to avoid multiplicity of litigation and permit parties to amicably come to a settlement which is lawful, is in writing and a voluntary act on the part of the parties. The Court can be instrumental in having an agreed compromise effected and finality attached to the same. The Court should never be party to imposition of a compromise upon an unwilling party, still open to be questioned on an application under the proviso to Rule 3 of Order 23 Code of Civil Procedure before the Court.
In the present case, the partition suit was filed in 1978 and after the decision of the trial Court, the matter went in first appeal and eventually, Second Appeal No. 495/86 before the High Court. During the pendency of first appeal being continuation of the suit as stated, one of the parties to the pending proceedings, namely, Sampatiya allegedly entered into a sale deed with the Appellant on 6th January, 1984.
It is well settled that the compromise decree passed by the High Court in the second appeal would relate back to the date of institution of the suit between the parties thereto. In the suit now instituted by the Appellant, at the best, he could seek relief against Sampatiya, but cannot be allowed to question the compromise decree passed by the High Court in the partition suit - The trial Court in any case would not be competent to adjudicate the grievance of the Appellant herein in respect of the validity of compromise decree dated 15th September, 1994 passed by the High Court in the partition suit.
In the instant case, the suit was instituted in the year 1995 and 25 years have rolled by now and after the finding has been recorded in reference to issue No. 7 regarding the right, title and interest of the suit property against the Appellant by the learned trial Judge devolved on the basis of a stated sale deed dated 6th January, 1984 and not interfered by the Court of Appeal preferred at the instance of the Appellant, in the given circumstances, remitting the matter back to the learned trial Court to examine the suit filed at the instance of the Appellant-Plaintiff independently for protection of his right, title or interest being devolved on the basis of the stated sale deed dated 6th January, 1984 which as alleged to have been executed by one of the party to the compromise (Sampatiya) in the changed circumstances may not serve any purpose more so after the concurrent finding of Courts below have been recorded against the Appellant-Plaintiff.
The appeal is without substance and the same is accordingly dismissed.
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2020 (5) TMI 742 - DELHI HIGH COURT
Breach of contractual obligations - Whether COVID-19 can provide succour to a party in breach of contractual obligations? - Whether the invocation of the Bank Guarantees is liable to be injuncted on the ground of occurrence of a force majeure event i.e., COVID-19, if the breach occurred prior to the said outbreak?
Breach of contractual obligations - HELD THAT:- The question as to whether COVID-19 would justify non-performance or breach of a contract has to be examined on the facts and circumstances of each case. Every breach or non-performance cannot be justified or excused merely on the invocation of COVID-19 as a Force Majeure condition. The Court would have to assess the conduct of the parties prior to the outbreak, the deadlines that were imposed in the contract, the steps that were to be taken, the various compliances that were required to be made and only then assess as to whether, genuinely, a party was prevented or is able to justify its nonperformance due to the epidemic/pandemic - It is the settled position in law that a Force Majeure clause is to be interpreted narrowly and not broadly. Parties ought to be compelled to adhere to contractual terms and conditions and excusing non-performance would be only in exceptional situations.
In response to the Force Majeure argument of the Contractor, the Company’s stand is that activity related to petroleum projects were exempted as per the letter of DGH Hydrocarbon dated 26th March, 2020. The Contractor’s stand is that only petroleum production is exempted and not other construction/ project completion activity. However, there is nothing on record to show as to what steps the Contractor took toward mitigation, which was necessary as per the Force Majeure clause.
The past non-performance of the Contractor cannot be condoned due to the COVID-19 lockdown in March 2020 in India. The Contractor was in breach since September 2019. Opportunities were given to the Contractor to cure the same repeatedly. Despite the same, the Contractor could not complete the Project. The outbreak of a pandemic cannot be used as an excuse for nonperformance of a contract for which the deadlines were much before the outbreak itself.
Invocation of Bank Guarantee - HELD THAT:- As far as the Advance Bank Guarantees are concerned, a perusal of Clause 9.2(f) shows that upon termination, the Company would be entitled to draw upon the advance payment bond in the amount of the unrecovered portion of the advance payment. The `unrecovered portion’ is not yet determined. The invocation letters simply state that the amounts of the advance Bank Guarantees are unrecovered. A perusal of the petition shows that as per paragraph 3.23, it is the case of the contractor that approximately 6.6 million dollars has already been invoiced and is yet to be paid by the company - The Contractor has clearly defaulted in performance despite repeated opportunities by the Company. The Bank Guarantees are unconditional and irrevocable. All the Bank Guarantees are valid. The language of the financial and performance Bank Guarantees makes it clear that simply on demand, the bank would have to make payment.
At the time when the ad-interim order was passed by the ld. Single Judge the pleadings between the parties were not complete. In fact, most of the relevant correspondence was not filed by the Contractor and has now come on record by way of the reply and the rejoinder and further submissions filed by the parties. Thus, the submission on behalf of the Contractor that the ad-interim order ought to be continued is not tenable. The said order being ad-interim in nature, was prior to pleadings between the parties and does not deserve to be continued in favour of the Contractor - insofar as the invocation of three sets of Bank Guarantees are concerned, no case is made out for passing of any interim order staying the invocation or encashment thereof.
However, reconciliation of accounts would be required to determine as to what would be the component of the Advance Bank Guarantees recoverable by the Company. There are no pleadings as to what exactly is the amount recoverable. Accordingly, insofar as the Advance Bank Guarantees are concerned, this Court is of the opinion that the amount recoverable by the Company ought to be ascertained. Accordingly, it is directed that the amount of only the Advance Bank Guarantees which have been invoked, upon being encashed, shall be placed in a separate `Joint Account’ which shall be jointly held by the Contractor and the Company.
The ad-interim order dated 20th April, 2020 (as modified on 24th April 2020), stands vacated in the above terms. The present petition and all pending applications are disposed of.
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2020 (5) TMI 741 - DELHI HIGH COURT
Gift instrument - Impounding the document treating the same to be as a Gift under Article 33 of Schedule IA of the Indian Stamp Act, 1899 as applicable to the Union Territory of Delhi - Release Deed deficiently stamped - HELD THAT:- In RANGANAYAKAMMA & ANR, VERSUS KS. PRAKASH (D) BY LRS. & ORS. [2008 (5) TMI 635 - SUPREME COURT], the Supreme Court observed that renunciation in the Indian context may be for consideration or may not be for consideration. Whether the instrument amounts to a release document or not is not a pure question of law.
In Chief Controlling Revenue Authority, Referring Officer v. Rustorn Nusserwanji Patel, [1967 (2) TMI 113 - MADRAS HIGH COURT], the Full Bench of the Madras High Court held that the nomenclature given to the instrument is not decisive nor is the language which the parties may choose to employ in framing the document. What is decisive is the actual character of the transaction and the precise nature of the rights created by means of the instrument. It further held that where two parties are co-owners, with a title which cannot be demarcated or fixed and there is joint possession and commonality of title, the documents transferring/releasing the title by one of the co-owners to the other would be a document of release. It further rejected the argument that a releaser cannot validly state in the instrument that he is effacing his rights in the property in favour of another named individual.
A reading of Recitals and Covenants/warranties would clearly show that the Relinquishment Deeds were indeed documents of conveyance and not Release simplicitor - By the order dated 15.05.2013, the respondent no. 2, apart from claiming the deficient Stamp Duty, has imposed a penalty of Rs. 1 lakh on the petitioner. The order does not give any reason for imposition of such penalty and its amount. It is noted that the deceased late Shri Jagdish Prashad Sharma is claimed to have left behind his Will bequeathing his share in the property to the petitioner. The Relinquishment Deeds have also been executed by the sisters in favour of the petitioner. Therefore, an intent to evade Stamp Duty on part of the petitioner is not evident.
The Impugned Order dated 01.03.2013 passed by the respondent no. 3 and the Impugned Order dated 15.05.2013, in so far as it demands deficient Stamp Duty of Rs. 6,60,257/- from the petitioner, are upheld. The Impugned Order dated 15.05.2013, in so far as it levies penalty of Rs. 1 lakh on the petitioner, is set aside - petitioner claims to have deposited the penalty amount with the respondents. The same be refunded to the petitioner along with interest at the rate of 6% per annum from date of deposit till its refund. Such refund shall be made within four weeks.
Petition allowed in part.
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2020 (5) TMI 740 - DELHI HIGH COURT
Illegal gratification - Criminal misconduct - sub-clauses (ii) and (iii) of clause (d) of sub-section (1) of section 13 read with sub-section (2) of section 13 of the Prevention of Corruption Act, 1988 - whether it was necessary for the prosecution to establish that the appellant had demanded illegal gratification, for securing the appellant's conviction for committing an offence under section 13(1)(d) of the PC Act? - HELD THAT:- A plain reading of sub clause (ii) and sub-clause (iii) of clause (d) sub-section (1) of section 13 of the PC Act indicates that a public servant would commit an offence of criminal misconduct if he, by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage. A plain reading of the sub-clauses of clause (d) of section 13(1) of the PC Act do not indicate that a demand of illegal gratification is a necessary ingredient of the offence of criminal misconduct. Thus, there is no reason to read-in such a condition in the said sub-clauses.
In P. Satyanarayana Murthy v. District Inspector of Police and Anr. [2015 (9) TMI 1666 - SUPREME COURT], the Supreme Court reiterated that the proof of demand of an illegal gratification is the gravamen of an offence under section 7 and sub-clauses (i) and (ii) of section 13(1)(d) of the PC Act.
The legislative intent is not to punish a public servant for any erroneous decision; but to punish him for corruption. The preamble of the PC Act indicates that it was enacted "to consolidate and amend the law relating to the prevention of corruption and for matters connected therewith." Thus, to fall within the four corners of Sub-clause (ii) of clause (d) of Sub-section (1) of Section 13 of the PC Act, the decision/conduct of the public servant must be dishonest amounting to corruption. Transparency International defines corruption as\"the abuse of entrusted power for private gain" - Mens rea, the intention and/or knowledge of wrongdoing, is an essential condition of the offence of criminal misconduct under Section 13(1)(d)(ii) of the PC Act. Section 20 of the PC Act does not apply to offences under Section 13(1)(d) of the PC Act and therefore, mens rea cannot be presumed. It is, thus, necessary for the prosecution to establish the same.
Whether the appellant is liable to be acquitted in view of the enactment of the PC (Amendment) Act, 2018? - HELD THAT:- The provisions of Section 13 of the PC Act were substituted by virtue of the PC (Amendment) Act, 2018. It is well settled that the effect of substitution of a statutory provision by another is that the earlier provision is repealed and is replaced by the provisions so enacted. The provisions existing prior to the substitution cease to exist and the provisions enacted in substitution of the earlier provisions replace the earlier ones. Subject to any savings provision, the effect would be to write down the substituted provision in the Act as originally enacted.
This Court is unable to accept that if it is established beyond reasonable doubt that the appellant had abused his position for securing a pecuniary advantage to VISUL, the benefit of any beneficial construction of the PC (Amendment) Act, 2018 could be extended to him - In the present case, the contention on behalf of the appellant is that the prosecution had failed to establish any relationship between Sh. Vijay Joshi and the appellant and, therefore, the appellant is liable to be acquitted is a matter of evaluating the evidence. Whilst the contention advanced by the appellant is prima facie merited, this Court does not consider it apposite to consider this aspect in any detail at this stage.
Clearly, if the wider opinion is that persons charged with crimes ought to be disqualified from contesting elections to public offices, it would not be apposite for this Court to stay the appellant's conviction to overcome the disqualification incurred by him.
It would not be apposite to facilitate the appellant to contest elections for any public office, till he is finally acquitted - Application dismissed.
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2020 (5) TMI 739 - ALLAHABAD HIGH COURT
Doctrine of forum non-conveniens - Territorial jurisdiction of this Court - place of cause of action - It was argued that no cause of action or part of cause of action has accrued to the petitioners within the State of U.P. and merely because the appellate and the revisional order had been communicated to them at their respective home districts in the State of Uttar Pradesh, same would not confer jurisdiction upon this Court to entertain the writ petitions.
HELD THAT:- What would constitute a cause of action obviously would depend upon the nature and character of the proceedings under Article 226 of the Constitution. Under Article 226 of the Constitution, the High Court can exercise powers to issue direction, order or writs for enforcement of any of the fundamental rights conferred by Part III of the Constitution or for any other purpose. If the cause of action wholly or in part had arisen within the territory in relation to which it exercises jurisdiction, it can entertain the writ petition to pass orders or directions notwithstanding that the seat of the Government or authority or the residence of the person against whom the direction, order or writ is issued is not within its territories.
'Cause of action' implies a right to sue. The material facts which are imperative for the suitor to allege and prove constitutes the cause of action. It has been interpreted to mean that every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. The question as to whether the Court has territorial jurisdiction to entertain a writ petition, has to be decided on the basis of averments in the petition, truth or otherwise thereof, however, would be immaterial.
Mere service of notice would not give rise to a cause of action unless service of notice is an integral part of the cause of action. The answer to the question whether service of notice is an integral part of the cause of action within the meaning of Article 226(2) of the Constitution must depend upon the nature of the impugned order giving rise to the cause of action. In order to confer jurisdiction on a High Court to entertain a writ petition, it must be disclosed that the integral fact pleaded in support of the cause of action do constitute a cause so as to empower the Court to decide the matter and the entire or a part of it arose within its jurisdiction - the doctrine "forum conveniens" has a limited application and the same by itself may not be considered to be a determinative factor compelling the High Court to decide the matter on merit. In appropriate cases, the Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens.
The reference itself is not merited as there is no conflict of opinion in the decisions referred by the learned Single Judge - Reference disposed off.
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2020 (5) TMI 738 - SUPREME COURT
Rejection of claim for interest on deemed loan component - HELD THAT:- There is no dispute that the PPA which the parties entered into specifically referred to the notification of 30.03.1992 and further went on to state that for the first Kwh/KW, a plant load factor of 68.5% fixed charges and variable charges were deployed. For generation achieved over and above this by the concerned unit – CLP, an incentive @ 5.75% for every 1% increase over and above the fixed and variable charge payable was agreed to. Significantly, the fixed and variable charges are in consonance with the statutory notification of 30.03.1992 (which was also later amended on 17.01.1994). This much is clear from a plain reading of clause 7.1 of the Schedule VII to the PPA itself. In view of the fact that the notification amended on 06.11.1995 was a statutory one, there cannot be any doubt that it was binding upon the parties - the change of law provision (Clause 6.5 of the PPA) clearly contemplated that any amendment to the prevailing tariff notification (dated 30.03.1992) would bind the parties. Since Note (2) was an amendment, which dealt with the issue of incentive, it cannot now be said that it was inapplicable. The findings of the lower authorities, therefore, are correct; no interference is called for.
Whether the GERC and APTEL fell into error in granting restricted refund calculable for the 3 year period prior to Gujarat Urja's application? - HELD THAT:- There was no admission on the part of CLP, at least of the kind, that extended the time for preferring an application for recovery of excess payments. It has been consistently ruled by this court that repeated letters, or exchange of communications, do not extend the period of limitation, provided by law.
Payment of interest on deemed equity - HELD THAT:- The parties did not harbor any doubt about the period for which the specified interest was payable on such deemed loan. The rate of interest was fixed; likewise, the date from which payment obligations were to arise, too were known. Also, the date upto which the interest on such deemed loan payments were to be made, was known and fixed. In these circumstances, CLP's claim that the payment of interest for a prior period was outstanding, and constituted Gujarat Urja's liability, is insubstantial.
In the present case, the clear agreement between the parties was that interest on the sum of ₹ 53.90 crores was payable for the specified period 01.07.2003 to 31.12.2009.Therefore, CLP's claim that any amount was payable, for any period prior to 01.07.2003, was not tenable. Had CLP wished so, nothing prevented it to claim for it during negotiations and have it included as a term of the contract. Once having settled for a specified sum, on an amount (₹ 53.90 crores) that was only fictionally a loan - and treated as such, for purpose of fixing interest payable, considering the equity infused, in excess of the tariff regulations, the absence of any like item, such as interest for prior period, precludes a claim. But it was really part of the equity component. Therefore, interest was per se not payable, but could be paid in terms of the tariff notification or the agreement. No claim on any other legal or equitable considerations could have been made.
Appeal dismissed.
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2020 (5) TMI 737 - DELHI HIGH COURT
Seeking cancellation of bail granted - accused/respondent is alleged to have played a major role in fixing the matches - HELD THAT:- While it is no doubt correct that cancellation of bail is no longer limited to the occurrence of supervening circumstances and in the absence of any such supervening circumstances, the court dealing with an application for cancellation of bail is empowered to consider the soundness of the bail order, it should not act capriciously and without good reason to cancel the bail once granted as liberty of an individual is at stake.
The State has every right to be aggrieved with the grant of bail to the accused, particularly when much effort has gone into his production before the court of law. All this seems to be a factor that tilts this case to a degree in favour of the State. The first warrant is stated to have been issued in the year 2004 against the present respondent/accused. 21 days before the FIR was registered, the respondent/accused, who was an Indian Passport holder and an Indian citizen at that time, left for the U.K.. The extradition process took a long time and then the respondent/accused could be extradited only on an assurance given by the Government as to the environment in which the respondent/accused would be detained in Tihar Jail. One cannot therefore doubt the genuineness of the concern of the State that releasing the respondent/accused on bail would lead to a situation where he is able to distance himself and jeopardise trial.
The State has come before this Court for seeking cancellation of bail immediately upon the grant of bail and, therefore, there has been no occasion for a disclosure through action or words, that the respondent/accused has/intends to thwart the process of justice or prevent fair trial. Liberty being precious to human life, bail once granted ought not to be lightly cancelled. The existence of supervening circumstances or other circumstances as listed hereinabove in their absence, must be strictly ascertained by the court before it cancels the bail already granted. The present case is not one such case where these circumstances exist as discussed above. The State has not succeeded in making out a case for cancellation of bail of the respondent/accused.
The present petition for cancellation of bail is accordingly dismissed.
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2020 (5) TMI 736 - BOMBAY HIGH COURT
Recovery with future interest on the basis of written contract and negotiable instrument - It was contended that in view of the commencement of the proceedings under the SARFAESI Act there was a bar to institution of the suit - HELD THAT:- There can be no quarrel with the proposition that once the Pawnee invokes the pledge and sells the security the Pawnee is in law bound to give credit to the Pawner of the value of the sale proceeds. If the value of the sale proceeds exceeds the amount of debt the Pawnee is bound to refund the said excess amount to the Pawner. He would be entitled to institute an action to recover the balance amount of debt only.
During the subsistence of the pledge the voting rights in respect of the pledged securities were to be exercised by Defendant Nos. 4 and 5. However, once the pledge was invoked the voting rights in respect of the pledged securities were to be transferred and exercisable by the Plaintiff. This stipulation by itself does not amount to the sale of the pledged securities. It is nobody’s case that the Plaintiff has in fact sold the pledged securities and realized the value thereof - A mere stipulation in the agreement of pledge that after the invocation of the pledge, the Pawner would exercise the rights in respect of the pledged securities does not ipso facto amount to sale of the pledged securities by the Plaintiff unto itself.
The pronouncement of the Supreme Court in the case of IDBI TRUSTEESHIP SERVICES LTD. VERSUS HUBTOWN LTD. [2016 (11) TMI 1529 - SUPREME COURT], especially the proposition expounded in para 17.6 that, “if any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court” governs the facts of the case - conditional leave to defend the suit granted subject to deposit of the principal amount of Rs. 29 Crore and interest of Rs.3,94,71,781/- at the agreed rate of 13.50% p.a. as of 10th January, 2019.
Summons disposed off.
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2020 (5) TMI 735 - ALLAHABAD HIGH COURT
Grant of Anticipatory Bail - it is alleged that the applicant had made a tweet on website Twitter.com which was allegedly defamatory towards the Chief Minister of Uttar Pradesh - HELD THAT:- The concept of anticipatory bail was introduced in Cr.P.C. by 1973 amendment. The said provision can be invoked by a person who has a "reasonable apprehension" that he may be arrested for committing a non-bailable offence. The main purpose for incorporating Section 438 in Cr.P.C. was that the liberty of an individual should not be unnecessarily jeopardised. Right to life and personal liberty are one of the important fundamental rights guaranteed by the constitution and therefore, no person should be confined or detained in any manner unless he has been held guilty.
From the collection and scheme of Chapter XXXIII and Section 438 Cr.P.C., it becomes explicitly clear that the legislature intended to bring anticipatory bail within the category of bail and not to treat it as something different from bail - The 'bail' means as per Wharton's Law Lexicon, to "set at liberty a person arrested on security being taken for his appearance'.
In Nagendra v. King Emperor [1923 (10) TMI 1 - CALCUTTA HIGH COURT], it is held that the object of the bail is to secure the attendance of the accused at the time of the trial and that the proper test to be applied for the solution of the question whether bail should be granted or not is whether it is probable that the party will appear to take his trial.
Thus, it is clear that the object of the bail is to secure the attendance of the accused at the trial. The accused person who enjoys freedom is in a much better position to look after his case and to properly defend himself in, the trial than if he is in custody. In other words, as the Apex court holds, a presumed innocent person must have his freedom in the form of bail to enable him to establish his innocence at the trial - In Savitri Agarwal and Ors. vs. State of Maharashtra & Ors. [2009 (7) TMI 1383 - SUPREME COURT], the Hon'ble Supreme Court has held that while exercising the power under sub-section 1 of Section 438 Cr.P.C., the Court must be satisfied that the applicant invoking the provision has reasons to believe that he is likely to be arrested for committing non-bailable offence and such believe must be founded for reasonable grounds.
The applicant has stated on the affidavit that there are very reasonable and sufficient apprehension of being arrested for non-bailable offence. In the affidavit accompanying accompanying the bail application, it has been contended that the apprehension of the applicant is further fortified by the conduct of Uttar Pradesh Police, which has already sent two notices under Section 41(A) of Cr.P.C. - there are merit in the argument advanced by learned Additional Advocate General.
The instant anticipatory bail application under Section 438 Cr.P.C. is allowed.
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2020 (5) TMI 734 - MADRAS HIGH COURT
Seeking grant of Bail - allegation of idol theft - benefit of Section 167(2) of Cr.P.C - COVID-19 situation - HELD THAT:- On considering the antecedent of the accused, crime alleged, abscondance of few more accused persons and non-recovery of the remaining stolen property this court finds that the petitioner does not deserve bail at this juncture.
Whether the petitioner is entitle to avail the benefit of Section 167(2) of Cr.P.C? - HELD THAT:- Taking note of the Covid-19 situation and realising the gravity of the pandemic, the Hon'ble Supreme Court in IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2020 (5) TMI 418 - SC ORDER] passed order extending the period of limitation to obviate the difficulties faced by the litigants who are supposed to personally come to the court and file their petition/application/suits/in all other proceedings until further orders - No doubt in the above order the Honourable Supreme Court has not specifically mentioned that police investigation should also be covered by the said order. However, the Apex Court while invoking its extraordinary power conferred in Article 142 of the Constitution during an extraordinary circumstances has clearly expressed his intention and reason for passing such order. The order has been passed to obviate the difficulties faced by the litigants across the country in filing their petitions/applications/suits/appeals/ all other proceedings(emphasis added). Therefore it is appropriate for any prudent person to appreciate the order of the Honourable Apex Court in a holistic perspective.
Section 167 of Cr.P.C envisages completion of investigation within the period of 60 days or 90 days, as the case may be, depending upon the gravity of the offence and the extent of punishment. If the investigation not completed within period prescribed, the person accused of the offence is entitled for bail as if he has committed bailable offence. Thereafter the Provisions of Chapter XXXIII of the Code will apply. In other words, Section 167 of the Code of Criminal Procedure mandates the investigating agency to complete the investigation within the time prescribed. If they fail to complete the investigation, statutory right blossom to the person in custody to seek release from prison on bail as matter of right.
Currently, the State has restricted free movement of the Public. The Law Enforcing Agencies are directed to ensure complete lock down. Access to places restricted either partially or absolutely. Government mechineries has almost come to stand still. Courts gates are locked. Public access is prohibited. All judicial proceedings are conducted through video conference. Administration wings of the Court yet to resume the physical functioning. In such a circumstances, the wings of the investigating agency are clipped; their legs are tied. They are unable to conduct the investigation and complete the same. Even if they complete the investigation, courts are not open to receive it. This is not their fault. Covid-19 situation is the cause for not completing the investigating within the time fixed under the Statute.
Violators of law cannot take undue advantage of the extra ordinary situation and enjoy the liberty while the entire nation is under lock down and crippled from carrying on their normal activities - The spirit behind the order of the Apex Court is to do complete justice. Conscious to the fact that there are several legislations prescribing limitation, the Honourable Supreme Court has generally stated the period of limitation prescribed under general law of limitation or under special laws shall be extended until further order. Therefore it is needless to mention that the limitation under Section 167 for investigation also get extended.
The petitioner is arrested for the theft of three idols in the temple. One idol has been recovered based on the confession of the co- accused and two idols are yet to be recovered. Out of seven accused four have been arrested and three more are at large. In view of the order passed by the Honourable Supreme Court extending the limitation, the time prescribed for completing investigation under Section 167(2) gets eclipsed. The petitioner cannot harp on the limitation prescribed under Section 167(2) of Cr.P.C and pray release on bail.
Petition dismissed.
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2020 (5) TMI 733 - SUPREME COURT
Domestic award between two Indian entities - Patent illegality - HELD THAT:- After considering the Constitution Bench decision in DURGA SHANKAR MEHTA VERSUS THAKUR RAGHURAJ SINGH AND OTHERS. [1954 (5) TMI 25 - SUPREME COURT] and number of other judgments, in BUSSA OVERSEAS & PROPERTIES (P) LTD. & ANOTHER VERSUS UNION OF INDIA & ANOTHER [2016 (1) TMI 914 - SUPREME COURT], the Court held that consistency is the cornerstone of the administration of justice and courts have evolved and formulated a principle that if the basic judgment is not assailed and the challenge is only to the order passed in review, the Supreme Court is obliged not to entertain such special leave petitions.
Patent illegality as a ground for setting aside a domestic award was first expounded in the judgment of OIL & NATURAL GAS CORPN. LTD. VERSUS SAW PIPES LTD. [2003 (4) TMI 438 - SUPREME COURT] where this Court was dealing with a domestic award. This Court gave a wider interpretation to the ‘public policy of India’ in Section 34(2)(b)(ii) in Part I of the 1996 Act. The Court held that an award would be “patently illegal”, if it is contrary to the substantive provisions of law; or, provisions of the 1996 Act; or, terms of the contract.
The present case arises out of a domestic award between two Indian entities. The ground of patent illegality is a ground available under the statute for setting aside a domestic award, if the decision of the arbitrator is found to be perverse, or, so irrational that no reasonable person would have arrived at the same; or, the construction of the contract is such that no fair or reasonable person would take; or, that the view of the arbitrator is not even a possible view - In the present case, the High Court has referred to the judgment in ASSOCIATE BUILDERS VERSUS DELHI DEVELOPMENT AUTHORITY [2014 (11) TMI 1114 - SUPREME COURT] at length and arrived at the correct conclusion that an arbitral award can be set aside under Section 34 if it is patently illegal or perverse.
In the present case, the High Court in paragraph (51) has held that no reasonable person could have arrived at a different conclusion while interpreting Clauses 2.7 and 3.4 of the BoQ and Clauses 32(ii)(a) and 33(iii) of the Conditions of Contract. Any other interpretation of the above clauses would definitely be irrational and in defiance of all logic - Even though the High Court referred to various judgments, the case has been decided on the ground that the arbitral award is a perverse award and on a holistic reading of all the terms and conditions of the contract, the view taken by the arbitrator is not even a possible view.
While dealing with the appeal under Section 37 of the Act, the High Court has considered the matter at length, and held that while interpreting the terms of the contract, no reasonable person could have arrived at a different conclusion and that the awards passed by the arbitrator suffer from the vice of irrationality and perversity.
SLP dismissed.
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2020 (5) TMI 732 - ITAT DELHI
TP Adjustment - AMP expenditure - International transaction - HELD THAT:- In the instant case, there is not an iota of material on the file apart from applying the BLT and by taking the view that the taxpayer has incurred huge AMP/sales expenses to the tune of 6.42%, no cogent material is there to treat the incurring of AMP expenses as international transaction more particularly when basis for treating the AMP expenses as international transaction i.e. BLT is not a legally sustainable method.
Undisputedly, there is no change in the FAR of the taxpayer company since AY 2010-11 and the taxpayer is performing same functions. In AY 2010-11, the coordinate Bench of the Tribunal vide [2019 (4) TMI 1774 - ITAT DELHI] held that the Revenue has failed to prove that AMP expenditure by the taxpayer is a separate international transaction.
In view of what has been discussed above and following the order passed by the Tribunal in taxpayer’s own case in AY 2010-11, when there is no international transaction no separate benchmarking qua AMP expenditure can be made, hence liable to be deleted.
In view of what has been discussed above, the appeal filed by the taxpayer is allowed.
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2020 (5) TMI 731 - ITAT DELHI
TP Adjustment - comparable selection - RPT filter @ 25% - HELD THAT:- We are of the considered opinion that this matter requires verification at the level of TPO for determination of the inclusion and/or exclusion of this comparable on the basis of RPT filter as adopted by the assessee and the TPO. We, therefore, deem it proper to restore this issue to the file of the AO/TPO for deciding this issue afresh after verification of the RPT from the financials already furnished by the assessee. Ground of appeal No.1 is accordingly allowed for statistical purposes.
Adjustment on account of difference of working capital employed by the assessee company and the comparables - HELD THAT:- Both the sides agreed that this issue needs to go back to the file of AO/TPO for correct determination of computation of working capital adjustment. We, therefore, deem it proper to restore the issue to the file of AO/TPO for determination of the working capital adjustment. Ground No.3 of the assesseee is accordingly allowed for statistical purposes.
Inclusion/exclusion of certain comparables - Companies functionally dissimilar with that of assessee or any extraordinary events on account of amalgamation need to be deselected from final list.
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2020 (5) TMI 730 - SC ORDER
Seeking approval of the ‘Resolution Plan’ - Categorized as ‘Unsecured Financial Creditor’ - correct or not - Section 30(6) r/w Section 31 of the Insolvency and Bankruptcy Code, 2016
NCLAT has dismissed the appeal [2019 (12) TMI 1490 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], stating that, "As the case of the Appellant- ‘Tourism Finance Corporation of India Limited’ was not covered by any of the grounds mentioned in Section 61(3) and this Appellate Tribunal cannot decide the question of fact relating to whether it is a ‘Secured Creditor’ or ‘Unsecured Creditor’, we are not inclined to interfere with the impugned order dated 27th February, 2019."
Supreme court dismissed the appeal stating that, "We find no merit in this appeal. "
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2020 (5) TMI 729 - KERALA HIGH COURT
Dishonor of Cheque - accused is guilty for the offence punishable under Section 138 of the Negotiable Instruments Act or not - acquittal of the accused - statutory notice received by the accused does not contain the signature of the Advocate - whether a lawyer notice issued, without the signature of the lawyer can be treated as a defective notice?
HELD THAT:- There is no form of notice is prescribed under Clause (b) of the proviso to Section 138 of the Negotiable Instruments Act. The proviso only says that "the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque". There is nothing in clause (b) of the proviso to Section 138 of the Negotiable Instruments Act to show that, it should be a lawyer notice and the notice should be a signed notice. The literal meaning of 'notice' as per Chambers 20th Century Dictionary is "intimation:announcement:information:warning:a writing, placard, board etc. conveying an intimation or warning." - From the literal meaning of 'notice', it is clear that, nowhere it is stated that, a notice should be in a signed form. As stated above, Clause (b) of proviso to Section 138 of the Negotiable Instruments Act also not stipulates a signed notice in writing. What is stated in the proviso is "giving a notice in writing" and not "by giving a notice in writing with signature." For this simple reason, the finding of the learned Magistrate that Ext. P5 notice issued by the complainant is defective, cannot be accepted.
The omission on the part of a lawyer to put his signature in the notice issued under Clause (b) of proviso to Section 138 of the Negotiable Instruments Act, cannot be treated as defective notice. That is not a reason to acquit an accused in a prosecution under Section 138 of the Negotiable Instruments Act, especially when the Section does not stipulate that, a signed notice in writing is necessary for initiating a prosecution under Section 138 of the Negotiable Instruments Act.
The defective notice is the main reason for acquitting the accused in this case. In this case, even though notice was issued by this Court to the accused, the accused refused to appear before this Court. Since the offence involved in this case is under Section 138 of the Negotiable Instruments Act and if the accused is intending to settle the issue, it is opined that, an opportunity is to be given to him - After giving an opportunity to adduce evidence to both sides, the learned Magistrate should hear the parties and pass appropriate orders in accordance to law, in the light of the findings in this judgment.
The case is remanded to the trial court. The trial court will dispose of the same in accordance with the law - appeal allowed.
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2020 (5) TMI 728 - BOMBAY HIGH COURT
Territorial Jurisdiction - part of cause of action has arisen within the jurisdiction of this Court or not - Article 226(2) of the Constitution of India - HELD THAT:- The place of residence or work of petitioner and/or respondent may not be much relevant in determining the jurisdictional aspect. The determinative fact is the place of accrual of cause of action or part of cause of action. This Court can issue directions against the respondents situated beyond the territorial jurisdiction of this Court provided part of cause of action has arisen within the jurisdiction of this Court.
The Apex Court in case of Election Commission Vs. Venkat [1953 (2) TMI 39 - SUPREME COURT] and subsequent judgments took a view that it was location or residence of the litigant which gave territorial jurisdiction to the High Court under Article 226. The situs of the cause of action being immaterial. It appears that, judgment of the Apex Court propelled, the parliament to amend Article 226 and insert clause 1A by the 15th Amendment 1967 and subsequently renumbered clause 2 of Article 226 of the Constitution by Constitution's (Forty Second) Amendment Act. The said amendment provided that the High Court within which the cause of action arise wholly or in part would also have jurisdiction to entertain the petition under Article 226 of the Constitution.
Seeking employment with Municipal Council, Roha, Dist. Raigad on compassionate ground - HELD THAT:- The area of operation of Municipal Council, Roha is limited to Roha taluka. It does not extent beyond Roha taluka. Roha Taluka is beyond the territorial jurisdiction of this Court. No part of cause of action arose within the territorial jurisdiction of this Court. As even small fraction of cause of action has not arisen within the jurisdiction of this Court, this Court would not exercise its territorial jurisdiction.
Seeking information under the Right to Information Act with respondent Nos. 4 and 5 - HELD THAT:- The office of the respondent Nos. 4 and 5 is situated at Pune. The appeal filed before the respondent No. 3 is allowed. The same is also situated at Pune. The petitioner seeks directions against respondent Nos. 4 and 5 to provide for the information. In the said writ petition also no part of cause of action has arisen within the territorial jurisdiction of this Court.
The writ petitions need not be entertained - The petitioners are at liberty to file appropriate proceedings for the same cause of action before appropriate forum possessing territorial jurisdiction - writ petition disposed off.
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2020 (5) TMI 727 - SUPREME COURT
Effect of enactment of National Green Tribunal Act, 2010 - Solid Waste Disposal and Management project - harmful to the health of the citizens of the Panchkrosh - Suit property is not convenient for the Solid Waste Disposal and Management Project or not? - Plaintiffs have established that objections and obstructions have been caused in his legal rights or not? - Plaintiffs are entitled to seek relief in the Civil Court or not? - Plaintiffs are entitled to get the Permanent injunction Order or not?
HELD THAT:- 2010 Act is an Act to provide for establishment of a National Green Tribunal (NGT) for effective and expeditious disposal of cases relating to, amongst others, environmental protection including enforcement of any legal right relating to environment and giving relief and compensation for damages to persons and property and for matters connected therewith or incidental thereto. Chapter III of the Act delineates the jurisdiction, powers and proceedings of the Tribunal.
The question is whether the suit as filed in the year 2005 would be affected by the coming into force of the 2010 Act with effect from 2.6.2010 and in particular consequent to establishment of the Tribunal (NGT) on 18.10.2010. Indeed, the present suit was filed prior to that date. However, it was pending before the civil Court even after the establishment of the Tribunal (NGT). For, the trial Court decided the suit only on 31.1.2011. Concededly, the trial Court has not even adverted to the express provision in the form of Section 29 regarding bar of jurisdiction of the civil Court. On perusal of the tenor of the plaint and the subject matter of the present suit, it is indisputable that the case plainly involved substantial question relating to environment including enforcement of legal right relating to environment - The fact that the suit was filed in earlier point of time, does not mean that the civil Court could have continued with the action (in this case, first appeal before the first appellate Court and the second appeal before the High Court being continuation of the suit) concerning the substantial question relating to environment including enforcement of legal right relating to environment. In any case, there remained no tittle of doubt after the exposition of this Court that such pending cause/action ought to be transferred to the NGT for adjudication thereof.
The civil suit, as filed by the respondent Nos. 1 to 19 (plaintiffs) ought to have been dismissed, as was rightly done by the trial Court. Indeed, the dismissal of the suit would not come in the way of the plaintiffs or any other person affected by the proposed Project to make representation to the appropriate authority, considering the proposal for grant of statutory permissions under the concerned environment laws, and if that decision is not acceptable, to carry the matter further in appeal before the NGT or any other forum, as may be permissible by law.
Appeal allowed.
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2020 (5) TMI 726 - DELHI HIGH COURT
Seeking quashing of Look Out Circulars issued - petitioners are willing to co-operate in the proceedings - case of the petitioners is that based on a complaint of their estranged daughter-in-law Mrs.Natasha Kapoor against them and their son namely Mr.Dirshan Vanmali Patel, under Sections 498A/406/34 of the IPC - HELD THAT:- In view of the fair stand taken by the learned counsel for the respondent as also for the complainant, the petition is allowed and the captioned two LOCs issued against the petitioners are quashed; the same would be subject to the petitioners remitting a sum of Rs.40 lakhs to the complainant’s bank account by 3 P.M. tomorrow, i.e. 21.05.2020.
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2020 (5) TMI 725 - NATIONAL COMPANY LAW TRIBUNAL KOLKATA
Replacement of the Resolution Professional - whether this application without supporting any resolution for removal/replacement of the RP is maintainable u/s 22(2) or 27(2) of the Code? - HELD THAT:- Admittedly the applicant had never moved any resolution in the CoC as per section 22(2) or u/s 27(2) of the Code, and therefore, there was no resolution being adopted for such replacement. It appears that in the said circumstance this Adjudicating Authority could not entertain an application of this nature.
It is significant to note that this application was heard by the Bench No 2 and Ld. Bench vide its interim order dated 12/03/2020 observed that "we require more than 66% of CoC members for changing the Resolution Professional" and for want of proof of passing a resolution for replacement of the RP the Bench has not granted the relief asked for and adjourned the application for hearing the RP and listed on 13.04.2020. Since there was no regular court sitting due to disruption of judicial work due to COVID-19 pandemic, this application was not taken up for hearing on 13.04.2020 and taken up on today at the request of the applicant. Admittedly the CoC was reconstituted. After reconstitution, the applicant holds only 25.07% voting share while the other financial creditor is holding 74.93% voting share.
Whether the reconstitution is proper or legal is not at all to be determined in this application.
If the applicant is disputing the integrity of the RP, it can approach IBBI. It can also moves resolution before the CoC for replacement of the RP at any time during the CIRP, and can file appropriate application for removal if the applicant succeeds in getting required vote share for his removal. This application being found not maintainable for want of passing a resolution by the CoC for the replacement of the RP, is liable to be dismissed, with a liberty to move fresh application if applied for in accordance with the provisions of the Code and Regulations.
Application dismissed.
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2020 (5) TMI 724 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH-IV
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - application of time limitation - HELD THAT:- Section 19 of the Limitation Act, 1963 provides that where a party, on account of an outstanding debt, makes payment prior to the expiration of the prescribed period of limitation, a fresh period of limitation shall be computed from the time when the payment was made - In the light of the position of section 19 of the Limitation Act, the limitation period for filing the present claim, as calculated from the date of last payment, that is, 04.01.2016, will end on, 03.01.2019, whereas the present Petition was filed before this Bench on 06.11.2018. Therefore, the claim made in the Petition is not barred by the limitation.
The IBC is a complete Code in its itself, and sec 60(1) thereof is not subject to contract between parties so as to dispossess this Bench of its territorial jurisdiction. Therefore, the objections raised in this behalf by the Corporate Debtor in oral submission are untenable and therefore rejected. The judgments cited by the Ld. Counsel for the Corporate Debtor pertain to the period prior to commencement of the IBC and involve situations where more than one court has jurisdiction. In such cases, any agreement between parties that only one of them shall have jurisdiction, shall have to be given due cognisance. However, such is not the case here, and sec 60(1) of the Code is unambiguous that it is the situs of the Registered Office of the Corporate Debtor alone that would confer jurisdiction on the NCLT - No defence has been raised by the Corporate Debtor vis-à-vis the merits of the case, in spite of many opportunities given in this regard.
The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees that was the limit stipulated under section 4(1) of the IBC at the relevant point of time. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor.
Petition admitted - moratorium declared.
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