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2022 (8) TMI 1510 - ITAT DELHI
Rectification of mistake - assessee pleaded that the Bench has inadvertently missed out recording of a specific finding with regard to deletion of addition on account of unexplained cash based on the findings of ld. CIT(A) which were final and had not be challenged by the Revenue - HELD THAT:- We hold that since the decision of the ld. CIT(A) has not been disputed in the order dealt only with the jewellery found and its accountability thereof no specific finding is required. However, in the interest of justice, we clarify that the Bench had not disputed the findings of the ld. CIT(A) on this issue.
Addition on account of cash/unexplained jewellery as made by the AO confirmed by ld. CIT(A), the Tribunal give relief of 1788 gms of jewellery and sustained value to the tune 740 gms of jewellery and assessee explained that 2470 gms of jewellery belongs to Kinty Suri the wife of the assessee which needs to be considered separately - We find that this issue has been duly considered by Tribunal wherein the Wealth Tax return of Surpreet Suri and Kinty Suri have been duly considered which declared total amount of 2481 gms and the fact that Kinty Suri lockers revealed jewellery of 2470 gms and the combined locker of Kinty Suri and Surpreet Suri revealed 1151 gms of jewellery. The jewellery belonging to Kinty Suri has been given due benefit of owing to the Wealth Tax Return. It is a factual matter on record, all the case laws quoted by the assessee have been duly considered before coming to a final decision. In the result, the MA of the assessee is liable to be dismissed.
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2022 (8) TMI 1509 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Appealability u/s 421 of the Companies Act, 2013 - Contempt application - oppression and mismanagement - application filed under Section 241 and 242 of the Companies Act is a valid order passed in accordance with the law or not - Section 8 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- The issue is concluded by Judgment of Hon’ble Supreme Court in INDUS BIOTECH PRIVATE LIMITED VERSUS KOTAK INDIA VENTURE (OFFSHORE) FUND (EARLIER KNOWN AS KOTAK INDIA VENTURE LIMITED) & OTHERS [2021 (3) TMI 1178 - SUPREME COURT]. In the above case, an Appeal was filed against the Order dated 26th March, 2021 passed by the NCLT allowing an Application under Section 8 of the Arbitration and Conciliation Act, 1996. While considering challenge to said order, the Hon’ble Supreme Court has observed that against the Order passed by NCLT, Appellant ought to have availed remedy before NCLAT as provided under Section 61 of the Code.
The above judgment is clearly applicable with regard to the Appeal provided under Section 421 of the Companies Act, 2013 against an Order of NCLT. The above Judgement clears all doubts with regard to the maintainability of the Appeal against the Order under Section 421 of the Companies Act, 2013 - appeal filed against the Order is maintainable and hence had to be decided on merits.
Whether the Application CA 533 of 2020 in C.P. No. 144 of 2016 filed under Section 241/242 of the Companies Act, by the Respondent No.1 could have been allowed by the NCLT? - HELD THAT:- Company Petition No. 144 of 2016 was an Application alleging oppression and mismanagement. The remedy provided under Section 241 to any Member of a Company is a statutory remedy which has been provided to serve particular Objectives. The Tribunal has been conferred with ample power under Section 242, wide enough which encompasses expression “make such order as it thinks fit”. Sub-Section 2 of Section 242 as extracted above provides for, without prejudice to the generality of the powers, different orders which can be passed; The power under Section 242 entrusted to the Tribunal by statute are statutory powers which cannot be exercised by any arbitrator which is appointed in pursuance of any agreement between the parties.
Hon’ble Supreme Court in the matter of “A. Ayyasamy Vs. A. Paramasivam & Ors.” [2016 (10) TMI 1147 - SUPREME COURT] again considered the question as to which disputes are arbitrable and which disputes are not arbitrable. Dr. Justice D. Y. Chandrachud in his separate opinion held that the basic principle which must guide judicial decision making is that arbitration is essentially a voluntary assumption of an obligation by contracting parties to resolve their disputes through a private tribunal.
When there is a clear bar of jurisdiction to be exercised by the Civil Court in respect of any matter which the Tribunal is empowered to determine under the Companies Act, the bar is implicit to the arbitration proceeding on the subject which is covered under Section 241 and 242 - the remedy provided under the Companies Act, 241 and 242 is a specific statutory remedy which has to be decided by the Tribunal in accordance with law. The issues which has been raised in Application under Section 241 and 242 are issues which are not arbitrable and the Adjudicating Authority committed error in allowing Section 8 Application filed by the Respondent No. 1. We thus find the Order dated 31st May, 2021 unsustainable due to this reason - There are no infirmity in the Order rejecting the impleadment application of the Appellant.
The Company Petition No. 144 of 2016 be decided by the Adjudicating Authority on merits at an early date preferably within six months of the date on which copy of this order is produced before the Adjudicating Authority.
Both the parties are retrained from filing any Company Application, Affidavit or Interlocutory Application in the Company Petition No. 144 of 2016 henceforth - The Adjudicating Authority shall decide the Company Petition No. 144 of 2016 on the basis of materials already on record.
Contempt petition dismissed.
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2022 (8) TMI 1508 - KERALA HIGH COURT
Recovery of CENVAT Credit taken and utilized wrongly for payment of the Service Tax with interest and penalty - maintenance of separate records as required under the Cenvat Credit Rules or not - HELD THAT:- The core circumstance for consideration either in the appeal before the Tribunal or this Court is whether the order of Commissioner dropping further action pursuant to notice dated 18.10.2012, basing on the report of Range Officer is legal and tenable. It is not pointed out in either of the forums that the report of range officer is erroneous on any ground or circumstance. The consequence of accepting the report of Range Officer must result in the very finding recorded by the Tribunal and the commissioner.
For the assessment year 01.04.2011 to 31.03.2012, the Commissioner while seized of the matter sought a clarification from the jurisdictional Range Officer regarding the practice followed by the assessee availing Cenvat Credit and it is on the basis of the said report as well as the certificate issued by the chartered accountant, that separate accounts are being maintained the Tribunal dismissed the appeal filed by the Department and the assessee’s case was accepted. When the departmental officer himself admits that there is no violation of any of the Rules and the assessee has followed 6(2) of the Cenvat Credit Rules the Tribunal is justified in dismissing the appeal.
There are no good ground to interfere with the order of the Tribunal - appeal dismissed.
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2022 (8) TMI 1507 - BOMBAY HIGH COURT
Seeking leave to withdraw the Writ Petitions with liberty to file civil suit - HELD THAT:- The Writ Petitions stand disposed of as withdrawn. The Petitioners may file suit, as may be permissible in law.
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2022 (8) TMI 1506 - HIMACHAL PRADESH HIGH COURT
Condonation of delay in filing the appeal u/s 260-A - HELD THAT:- As respondent has submitted that the impugned order had already been recalled by the Income Tax Appellate Tribunal, Chandigarh Bench ‘B’, Chandigarh and fresh adjudication has been done vide order dated 11.10.2019. A copy of the order dated 11.10.2019 has been placed on record.
This appeal is rendered infructuous. However, the appellant would be at liberty to challenge the order dated 11.10.2019, if so advised.
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2022 (8) TMI 1505 - ITAT DELHI
Adjustment and intimation u/s 143(1) - Delayed employees’ contribution to ESI/Provident Fund - payments made after stipulated dates prescribed under relevant laws governing provident fund and ESI, but before due date of filing of return prescribed u/s 139(1) - HELD THAT:- The fact that payments by way of employees’ contribution to provident fund and ESI were made by the respective assessees after stipulated date prescribed under the relevant laws governing provident fund and ESI, but before the due date of filing of return of income prescribed u/s 139(1) of Income Tax Act; is not in dispute.
Whether the aforesaid amendments to Income Tax Act by way of Finance Act, 2021 are retrospective or prospective, is debatable and controversial.Adjustments made by Revenue u/s 143(1) of Income Tax Act, whereby aforesaid additions were made to the income of the respective assessee, were unfair, unjust and bad in law.Addition by way of adjustment and intimation u/s 143(1) of Income Tax Act on debatable and controversial issues is beyond the scope of Section 143(1) of Income Tax Act. Revenue was clearly in error in making the aforesaid adjustments.
Addition by way of adjustment and intimation u/s 143(1) of Income Tax Act, on the basis of retrospective amendment to Income Tax Act is beyond the scope of Section 143(1) of Income Tax Act.
In the present appeals before us, additions of aforesaid amount have been made by way of adjustments and intimation u/s 143(1) of Income Tax Act, on a debatable and controversial issue. Thus the aforesaid additions by way of adjustment and intimation u/s 143(1) of Income Tax Act, were beyond the scope of Section 143(1) of Income Tax Act. Thus we direct the Assessing Officer to delete the additions made by way of adjustments/intimation u/s 143(1).
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2022 (8) TMI 1504 - MADHYA PRADESH HIGH COURT
Cancellation of warrant of arrest filed by petitioner u/s 70 of sub-section (2) of Cr.P.C. - petitioner accused did not appear when the prosecution filed their charge-sheet alleging offences punishable u/S 120-B r/w Sections 407, 420, 201 of IPC and Sections 13(2) r/w Section Section 13(1)(d) of Prevention of Corruption Act, 1988 - HELD THAT:- This Court is of the considered view that since it is not disputed that the present petitioner had cooperated in the investigation which now stands concluded by filing of charge-sheet, the question of arresting the petitioner would be an exercise in futility.
Since the factum of petitioner's cooperation during investigation is not denied by the investigating agency, this petition stands disposed of with a direction to the petitioner to furnish surety and security to the satisfaction of the Trial Court, which if done latest by 26th August, 2022 shall be accepted for grant of anticipatory bail on such terms and conditions as found fit by the Trial Court, provided there is no other legal impediment.
Petition allowed.
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2022 (8) TMI 1503 - ITAT JAIPUR
Disallowance u/s. 14A for expenditure relating to exempt income - CIT(A) deleted addition - HELD THAT:- We are of the opinion that the Assessing Officer is directed to restrict the disallowance u/s. 14A read with rule 8D to Rs. 4,278/- (quantum of exempt income earned) delete the balance amount - The expenditure are higher than the exempt Income, The Ld. CIT(A) has allowed relief on the basis that the disallowance cannot be higher than the dividend income.
Disallowance of expenditure cannot exceed the amount of exempt income. Taking reliance on the Hon'ble jurisdictional Bench in the case Mount Malt Bru Ltd. [2020 (10) TMI 1381 - ITAT JAIPUR] - The matter is been covered and which are identical to the facts of the present case. We dismiss the appeal of the Revenue and uphold the orders passed by the ld. CIT(A). Decided against revenue.
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2022 (8) TMI 1502 - ITAT DELHI
Correct head of income - rental income earned from let out building space along with inbuilt infrastructure and other amenities - 'income from other sources' or 'income from house property' - HELD THAT:- Revenue has been rejecting the assessee's claim on the flimsy ground that claim has not been made in the returns but the claim is made during the course of assessment proceedings. With a view to satisfy the Revenue and to overcome the above disability, the assessee after having filed the original return for AY 2013-14 filed revised return claiming therein that the rental income is assessable under the head 'income from other sources'. Adopting the reasons given in earlier years, analyzing the nature of lease agreement, holding that the assessee is not receiving composite rent as recommended by the Hon'ble Supreme Court in Sultan Brothers Pvt. Ltd. [1963 (12) TMI 4 - SUPREME COURT] and that the lease deed is between related parties, AO made the impugned disallowance which is confirmed by the Hon'ble DRP.
We observe that this issue came up for consideration before the Tribunal pursuant to the directions of the Hon'ble Delhi High Court for AY 2011-12 and 2012-13. The Tribunal in its order [2021 (6) TMI 538 - ITAT DELHI] wherein Tribunal recorded its unequivocal finding that the lease deed under consideration was composite one and that it answered the description under section 56(2)(iii) - decided in favour of the assessee with the same directions to the AO as above.
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2022 (8) TMI 1501 - DELHI HIGH COURT
Levy of tax on ocean freight - Constitutional Validity of N/N. 8/2017-Integrated Tax (Rate) dated 28th June, 2017 and entry 10 of the N/N. 10/2017- Integrated Tax (Rate) dated 28th June, 2017 - HELD THAT:- The impugned Notification No. 8/2017-Integrated Tax (Rate) dated 28th June, 2017 and entry 10 of the Notification No. 10/2017- Integrated Tax (Rate) dated 28th June, 2017 are quashed as being ultra vires the Integrated Goods and Services Tax Act, 2017 and it is held that no tax is leviable under the Integrated Goods and Services Tax Act, 2017 on ocean freight for services supplied by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India.
The present writ petitions stand disposed of.
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2022 (8) TMI 1500 - SUPREME COURT
Illegal construction by the first Respondent to the second Respondent - unauthorized construction of rooms on a vacant site, as a result of which the access to light and air, and the right to privacy of the Appellant have been affected - civil court have the jurisdiction to entertain the suit under the provisions Section 71 read with Section 177 of the Maharashtra Housing and Area Development Act 1976 or not - HELD THAT:- Under Section 9 of Code of Civil Procedure, the civil court has the jurisdiction to try all suits of a civil nature, except those in respect of which the jurisdiction is barred either expressly or impliedly by a specific provision of law. In DHULABHAI VERSUS STATE OF MADHYA PRADESH AND ANOTHER [1968 (4) TMI 64 - SUPREME COURT], a Constitution Bench laid down the law on ouster of jurisdiction of civil courts. Chief Justice M. Hidayatullah writing for the Bench laid down the principles on bar of jurisdiction of the civil courts and held that An exclusion of the jurisdiction of the civil court is not readily to be inferred unless the conditions above set down apply.
The preamble to the Act states that it is an Act to "unify, consolidate and amend the laws relating to housing, repairing and reconstructing dangerous buildings and carrying out improvement works in slum areas". The scheme of the statute provides that the Board constituted under the statute would have the power to repair and reconstruct dilapidated buildings, conduct structural repairs and evict persons from authority premises, among others. The objective of the bodies and authorities constituted under the Act is to ensure repairing and reconstructing buildings to provide housing. Undoubtedly, the competent authority has the jurisdiction to order eviction in terms of the provisions of Section 66. But that is not the frame of the suit or the relief which has been claimed by the Appellant in the suit - The Appellant instituted the suit for injunction because her easements were infringed by the illegal construction which the first Respondent had erected on the open space. The reliefs claimed by the Appellant are beyond the scope of the Act. A suit of this nature will be maintainable before the civil court and would not be barred by Section 71 or Section 177 of the Act.
The Single Judge of the High Court was in error in upholding the plea that there was a bar of jurisdiction and reversing the findings of the trial Judge and the first appellate court. Since, however, the Single Judge of the High Court has only ruled on the absence of jurisdiction, a view which has been disapproved above, the second appeal is restored to the file of the High Court for consideration on merits - Appeal allowed.
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2022 (8) TMI 1499 - ITAT PANAJI
Treating the returns filed by the assessee as defective returns - self-assessment tax has been deposited by the assessee after the expiry of 15 days but before the completion of assessment - HELD THAT:- Admittedly, it is a fact on record that assessee has deposited the self-assessment tax on the returned income filed in respect of notices issued u/s 153A. Copies of the challans for the taxes so deposited have been produced before us also and are placed on record. In respect of treating the returns filed by the assessee as defective returns, proviso to section 139(9) provides that “provided that where the assessee rectifies the defects after the expiry of the said period of 15 days or the further periods allowed, but before the before the assessment is made, the AO may condone the delay and treat the return as valid return”.
Thus, considering the proviso to section 139(9) which empowers the AO to condone the delay where the self-assessment tax has been deposited by the assessee after the expiry of 15 days but before the completion of assessment and the fact of deposit of challans on record in terms of the said proviso to section 139(9), we find it proper to direct the AO to treat the said returns as valid returns where the defects have been removed by the assessee, by condoning the delay.
We note that assessee has made his earnest attempt by filing his requisite applications before the concerned authorities for the release of seized material and is pursuing the matter, as stated by the ld. Counsel.
Thus, we find it proper to set aside the order of ld. CIT(A) and remit the matter for all the seven years under consideration, back to the file of ld. AO for de-novo assessment considering the material submitted by the assessee, once the same is made available by the respective concerned authorities for which applications have been made for their release.
We also direct the ld. AO who is adequately empowered under the Act and has all the where-whittle to call for the information to call for the information and records for the purpose of completing the assessment proceeding, to make all the concerted efforts to make the seized material available to the assessee to substantiate his claims. Assessee is also directed to comply with the notices in respect of the assessment proceeding and be diligent by avoiding to take any adjournments except in specific unavoidable circumstances.
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2022 (8) TMI 1498 - ITAT BANGALORE
TP Adjustment - non granting of WCA - HELD THAT:- We remit the issue to the file of AO/TPO to compute the working capital adjustment after necessary examination in the light of the above observation and after allowing an opportunity of hearing to the assessee.
Comparables selection in both segments of SWD & ITes - HELD THAT:- As relying on Global Logic India Ltd [2021 (11) TMI 1090 - ITAT DELHI] exclude Inteq Software Pvt.Ltd, L&T Infotech Ltd., Infobean Technologies Ltd., Thirdware Solutions Ltd. from the final list of comparable for SWD segment.
Persistent Systems Ltd and Infosys Ltd. - With varied functions, these companies cannot be compared with assessee before us, which is a captive service provider. We accordingly direct the Ld.AO/TPO to exclude Persistent Systems Ltd., and Infosys Ltd. from the final list.
Aspire Systems (India) Pvt. company earns its revenue from power generation and it has nothing to do with the rendering of software development service. In fact, we note that this company is a full fledged entrepreneur in the business of power generation and therefore is not comparable functionally with a captive software service provider like assessee. Thus direct the Ld.AO/TPO to exclude Aspire System India Pvt. Ltd. from the final list.
Nihilent Technologies Limited - Based on the functions performed by this company as submitted by the Ld.AR and the observations of Hon’ble Mumbai Tribunal in Red Hat India Pvt. Ltd [2022 (2) TMI 1283 - ITAT MUMBAI] this comparable deserves to be excluded from the final list.
Cybage Software Pvt.Ltd Primarily is a product company and has diversified business segments. We note that this company is a full fledged entrepreneur and assumes all the risks attributable to the various business segments for which details are not available. In our view, under such circumstances, this company cannot be held to be functionally comparable with that of assessee which is a captive service provider that caters only to its AE.
SPI Technologies India Pvt.Ltd. and eClerx Services Ltd. - The assessee in Barracuda Networks India (P.) Ltd [2022 (5) TMI 322 - ITAT BANGALORE] was a captive service provider to its AE for assessment year 2016-17. Respectfully following the above, we direct Ld. AO/TPO to exclude Tech Mahindra Business Services Ltd., Infosys BPM Ltd., SPI Technologies India Pvt.Ltd., eClerx Services Ltd. for having high turnover as compared to a captive service provider like assessee under the ITES segment.
Disallowance of deduction claimed u/s 35AC and section 80G - Corporate Social Responsibility (CSR) Expenditure which lacks voluntary act/element of charity on the part of donor - HELD THAT:- As relying on Sling Media (P.) Ltd [2021 (12) TMI 762 - ITAT BANGALORE] we direct the Ld.AO verify the payments made by assessee towards CSR that also forms part of deduction u/s. 80G. Ld. AO shall then grant the deduction claimed u/s. 80G of the Act in accordance with law.
Interest u/s. 234A cannot be levied in case if assessee has filed the return of income within the time period prescribed u/s. 139(1) of the Act. The Ld.AO is directed to verify the same and consider the claim in accordance with law.
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2022 (8) TMI 1497 - ITAT DELHI
Income deemed to accrue or arise in India - revenue earned by the appellant from supply of software as “royalty” - scope of Double Taxation Avoidance Agreement (“DTAA”) between India and United Kingdom - distinction between the acquisition of a “copyright right” and a “copyrighted article” - AO held that the payments received by the assessee for supply of software is taxable as “royalty” on account of being a payment for grant of a copyright as well as payment received for allowing the use of the process inherent in the software - CIT(A) confirmed addition stating that Payment under software license agreement represents consideration for transfer of all or any right (including granting of license) in respect of copyright and other intellectual property rights and Copy of software supplied by the Appellant did not amount to sale but it is license to use the software.
HELD THAT:- The issue of royalty or not on software has been examined by the Hon’ble High Court in case of Nokia Networks OY [2012 (9) TMI 409 - DELHI HIGH COURT] where in it was held that supply of software is not ‘royalty’ despite the amendments made by Finance Act 2012 to section 9(1)(vi) of the Act. It has been observed that though Explanation 4 was added to section 9(1)(vi) by the Finance Act 2012 with retrospective effect to provide that all consideration for user of software shall be assessable as “royalty”, the definition in the DTAA has been left unchanged. Following the decision in case of Siemens AG [2008 (11) TMI 74 - BOMBAY HIGH COURT] it was held that amendments cannot be read into the treaty. Once assessee has opted to be assessed by the DTAA, the consideration cannot be assessed as “royalty” despite the retrospective amendments to the Act.
The right to reproduce and the right to use computer software are distinct and separate rights, the former amounting to parting with copyright and the latter, in the context of non-exclusive EULAs, not being so. At this juncture, we have examined the written submission of the ld. DR and find that it would not make any material difference to the fact that the buyer of the software in the instant case also has the user right only. The buyer has no right to re-sale the product and it still remained a copyrighted article which the buyer cannot alter modified, reproduced i.e. own will unless authorized. And such authorization has been given to re-supply to BSNL for their use, at the same time, keeping the all other rights with the assessee.
Holding thus, the Hon’ble Supreme Court [2021 (3) TMI 138 - SUPREME COURT] decided the issue in favour of the taxpayer and laid down that the payments made by resident Indian end-users/distributors to non-resident computer software manufacture/suppliers as consideration for use/resale of shrink-wrapped software does not amount to payment for royalty for the use of copyright in the computer software considering the definition of royalty under the DTAAs. Hence, keeping in view the judgment of Hon’ble Apex Court, we hereby allow the appeal of the assessee on merits.
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2022 (8) TMI 1496 - ITAT JAIPUR
Validity of Revision u/s 263 - order of the AO is to be established to be erroneous in so far as it is prejudicial to the interest of the Revenue before initiating revision proceedings - HELD THAT:- Provision of section 263 cannot be invoked to correct each and every type of mistake or error committed by the AO; it is only when an order is erroneous as also prejudicial to Revenue's interest, that the provision will be attracted. An incorrect assumption of the fact or an incorrect application of law will satisfy the requirement of the order being erroneous. The phrase 'prejudicial to the interest of the Revenue has to be read in conjunction with an erroneous order passed by the AO.
Every loss of revenue as a consequence of the order of the AO cannot be treated as prejudicial to the interest of the Revenue. It is pertinent to mention that if the AO has adopted one of the two or more courses permissible in law and it has resulted in loss of revenue, or where two views are possible and AO has taken one view with which the Pr. CIT does not agree, it cannot be treated as an erroneous order and it is prejudicial to the interest of the Revenue, unless the view taken by the AO is totally unsustainable in law. In this process even the AO has no power to revie his own order taking the route of proceeding under section 263 of the Act. In this regard, we draw strength from the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT]
The facts are not disputed that the assessee has submitted the books of accounts and documents related there upon and has been verified by the AO. AO has recorded his satisfaction in the assessment order that he has verified the books of account and other records produced before him and the same is verified in the light of the reasons for selection of the case under CASS. This itself shows that the AO has applied his mind on the reasons and has verified the records produced before him by the assessee and the assessee has filed a detailed submission in this proceeding that the AO has verified each and every aspect of the issue on hand and looking the facts of the case on hand the exercise of the power under section 263 via AO is nothing but a change of opinion which is not permitted in the eyes of the law. Assessee appeal allowed.
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2022 (8) TMI 1495 - DELHI HIGH COURT
Seeking exemption from instituting pre-litigation mediation, in accordance with Section 12A of the Commercial Courts Act, 2015 - seeking permanent injunction restraining the Defendants, passing off of trademark, infringement of copyright, unfair competition, rendition of accounts, damages, and other reliefs - It is the case of the Plaintiff that the Defendants are using the identical mark 'BOLT', along with the logo thereof, in relation to an identical business of provision of charging points for EVs - HELD THAT:- As per the experience seen in intellectual property cases, the relief of interim injunction, including at the ex-parte stage and ad-interim stage, is extremely important. Such matters do not merely involve the interest of the Plaintiff and the Defendants, which are the contesting parties before the Court, but also involve the interest of the customers/consumers of the products and services in question. Intellectual property cases relate to a wide gamut of businesses such as-medicines, FMCG, food products, financial services, technology, creative works such as books, films, music, etc. Recent trends also point towards large scale misuse on the internet. In some cases, due to misuse of known marks and brands, the consumers are being duped into parting with large sums of money.
The Plaintiff claims to be a globally renowned company using the mark 'BOLT' along with the logo thereof, for its services being provided globally. The mobile application of the Plaintiff is available for downloading in India and it is nigh possible that the persons travelling from India, who may have downloaded the Plaintiff's mobile application in India itself, may be using the Plaintiffs services internationally. The Defendants are using an identical mark 'BOLT' in an identical colour scheme and have made their mobile application continuously available, both on Google Play Store, as also, on Apple App Store. The consumers and mobile users can download the Plaintiff's mobile application, as also, the Defendants' mobile application, almost on a minute-to-minute basis. Thus, this Court is of the opinion that the Plaintiff would be entitled to seek urgent interim relief in the present case. However, it is made clear that the question as to whether the interim relief, as sought in the present suit ought to be granted or not, is a question on merits and is not being gone into in the present application.
The Defendants were in no way interested in an amicable resolution of the dispute. Instead, the hand of mediation which was lent by the Plaintiff was met with a tight slap. The Defendant's conduct clearly is not in the spirit of any amicable resolution-let alone mediation. Hence, the requirement of Section 12A of the CCA duly stands satisfied on both counts, in the following manner: i. Firstly, the Plaintiff had attempted an amicable resolution which was clearly refuted, rejected and condemned by the Defendants; and ii. Secondly, the Plaintiff has also sought urgent interim relief before this Court and is entitled to maintain the present suit.
The preliminary objection raised by the Defendants is, thus, liable to be rejected, along with payment of costs of Rs. 10,000/-. Let the said costs be paid by the Defendants to the Plaintiff, within one week - application disposed off.
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2022 (8) TMI 1494 - SUPREME COURT
Pre-Institution Mediation and Settlement - Whether the statutory pre-litigation mediation contemplated Under Section 12A of the Commercial Courts Act, 2015 as amended by the Amendment Act of 2018 is mandatory? - whether the Courts below have erred in not allowing the applications filed Under Order VII Rule 11 of the Code of Civil Procedure, 1908 to reject the plaints filed by the Respondents in these appeals without complying with the procedure Under Section 12A of the Act?
HELD THAT:- A mediation settlement arrived at Under Section 89 of the Code of Civil Procedure must be scrutinised by the court and only on its imprimatur being given it is effective - Since a settlement Under Section 12A of the Act is accorded the status of an award under the Arbitration & Conciliation Act, it unerringly points to the object of the legislature to make pre-litigation mediation compulsory.
Timelines are contemplated, both in the matter of pleadings and also other steps to be taken. They are geared to ensure an expeditious culmination of the proceedings. Originally, the specified value within the meaning of Section 2(i) was fixed as 'which shall not be less than one crore rupees'. Within three years of the birth of the Act, Parliament found that it was necessary to reduce the specified value from the sum of Rs. 1 crore to Rs. 3 lakhs, which is what is reflected in the present avatar of the definition of the word 'specified value'. It is simultaneously with the reduction of the specified value and by the same amendment that Section 12A came to be inserted.
Parliament is presumed to be aware of the felt necessities of the times. It best knows the manner in which the problems on the ground are redressed. Section 89 of the Code of Civil Procedure, does contemplate mediation ordered by a Court. However, it must be noticed that Section 12A contemplates mediation without any involvement of the Court as it is done prior to the institution of the suit.
Mediation can become a potent alternate dispute resolution device. There are, however, a few indispensable requirements. The first requirement is the existence of adequate infrastructural facilities and, what is more important, availability of trained and skilled Mediators. The role of the Mediator, as per Rule (5) of the Rules, is to facilitate the voluntary resolution of a commercial dispute and assist the parties in this regard - It is all well to pass a law with sublime objects as in this case. However, the goal will not be realised unless the State Governments and all other relevant Authorities bestow their attention in the matter of providing adequate facilities. Knowledge of the laws, which are the subject matter of the suits under the Act, is indispensable for a Mediator to effectively discharge his duties. His role is supreme and it is largely shaped by his own knowledge of the law that governs commercial cases. There must be training by Experts, including at the State Judicial Academies. This must be undertaken on a regular and urgent basis, particularly keeping in mind when there is a dearth of trained mediators. There is a need to have a dedicated bar for mediation. The effective participation of the bar which must be adequately remunerated for its service will assist in mediation evolving. The concerned High Court may also undertake periodic exercise to establish a panel of trained mediators in District and Taluka levels as per need.
The impugned orders must be set aside and the applications Under Order VII Rule 11 allowed. This would mean that the plaints must be rejected. Necessarily, this would involve the loss of the court fee paid by the Plaintiffs in these cases. They would have to bring a fresh suit, no doubt after complying with Section 12A, as permitted Under Order VII Rule 13. Moreover, the declaration of law by this Court would relate back to the date of the Amending Act of 2018.
The Doctrine of prospective overruling began its innings with the decision of this Court in L.C. Golak Nath and Ors. v. State of Punjab and Anr. [1967 (2) TMI 95 - SUPREME COURT]. This Court in the said case relied upon Articles 32, 141 and 142 of the Constitution and extended this doctrine which was in vogue in the United States. The principle involves giving effect to the law laid down by this Court, from a prospective date, ordinarily the date of the judgment. There is no dispute that while initially the doctrine was confined to matters arising under the Constitution, later on it has been applied to other areas of law as well.
Section 12A of the Act is mandatory and hold that any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint Under Order VII Rule 11. This power can be exercised even suo moto by the court as explained earlier in the judgment. We, however, make this declaration effective from 20.08.2022 so that concerned stakeholders become sufficiently informed. Still further, we however direct that in case plaints have been already rejected and no steps have been taken within the period of limitation, the matter cannot be reopened on the basis of this declaration. Still further, if the order of rejection of the plaint has been acted upon by filing a fresh suit, the declaration of prospective effect will not avail the Plaintiff. Finally, if the plaint is filed violating Section 12A after the jurisdictional High Court has declared Section 12A mandatory also, the Plaintiff will not be entitled to the relief.
Petition disposed off.
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2022 (8) TMI 1493 - SC ORDER
Grant of bail - petitioner is reported to be in custody since 27-1-2021 and has suffered incarceration for over 1 year 6 months and there being no likelihood of completion of trial in the near future - HELD THAT:- Taking into consideration the fact that the petitioner is reported to be in custody since 27-1-2021 and has suffered incarceration for over 1 year 6 months and there being no likelihood of completion of trial in the near future, which fact cannot be controverted by the learned counsel appearing for the State, the bail is granted.
The petitioner is, therefore, directed to be released on bail, subject to such terms and conditions which the concerned Trial Court may deem fit and find appropriate to impose upon him - SLP disposed off.
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2022 (8) TMI 1492 - SC ORDER
Grant of Regular bail - recovery of 358 bottles of cough syrup containing codein of ‘commercial quantity’ - contraband item or not - Commercial quantity or not - HELD THAT:- The questions like whether the contraband recovered from the petitioner is of ‘commercial quantity’ or whether code in phosphate is a manufactured drug or a narcotic substance, need not be go into at this stage.
The petitioner released on bail only on the ground that he has spent about two years in custody and conclusion of trial will take some time.
Consequently, without expressing any views on the merits of the case and taking into consideration the custody period of the petitioner, this special leave petition is accepted and the petitioner is ordered to be released on bail subject to his furnishing the bail bonds to the satisfaction of the Special Judge/ concerned Trial Court.
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2022 (8) TMI 1491 - DELHI HIGH COURT
Grant of Default bail - Smuggling - substance recovered is actually a banned substance under Sections 21 and 29 of the NDPS Act or not - FSL Report not presented - HELD THAT:- It has been repeatedly emphasized by various courts that the right to seek default bail is an indefeasible right provided to the accused. The object of the Default Bail is inherently linked to Article 21 of the Constitution of India, laying emphasis on safeguarding the life and personal liberty of the accused against arbitrary detention.
In SANJAY DUTT VERSUS STATE THRU. C.B.I. BOMBAY [1994 (9) TMI 351 - SUPREME COURT], the Constitution Bench of the Hon'ble Supreme Court held that the indefeasible right of the accused to be released on bail for not filing the charge sheet within the statutory period is enforceable by the accused only till the filing of the challan Further, if an accused does not avail Default Bail, they can always seek Regular Bail under Cr.P.C.
Whether the FSL report forms part of the charge sheet and is an essential prerequisite to file with the charge sheet? - HELD THAT:- In Kishan Lal vs. State [1989 (9) TMI 408 - DELHI HIGH COURT], a Division Bench of this Court observed that a police report does not need to enclose an expert opinion of Government Scientific expert with the charge sheet and thus, no bail was granted under Section 167(2) as the charge sheet was already filed within stipulated time.
A similar view was followed by the Coordinate Bench of this Court in Mohd. Arbaz vs. State of NCT of Delhi [2020 (11) TMI 1114 - DELHI HIGH COURT], wherein it was observed that the accused should not be entitled to bail in default as the charge sheet was already filed. The Court held that the report shall not form part of the charge sheet and hence, the bail under Section 167(2) was rejected.
At present, the settled law persists in the view that non filing of FSL Report with the charge sheet does not fall within the realms of Section 173(2) of the Cr.P.C. so as to consider it as "incomplete report". In the present case although FSL Report has not been filed, however, the charge sheet was already filed on 03.03.2021 within the time period as per law. Further, the amount of quantity recovered from the accused is of commercial nature baring the accused from bail under Section 37 of the NDPS Act.
The court finds no infirmity in the impugned order dated 05.05.2022. The application moved by the petitioners seeking bail in default under the provisions of Section 167(2) of the Cr.P.C. is dismissed.
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