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Indian Laws - Case Laws
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2025 (4) TMI 1592
Nature and scope of administrative actions initiated in pursuance of the Master Directions vis-à-vis criminal proceedings initiated, against the respondents - requirement of adherence to the principles of natural justice (audi alteram partem rule) - HELD THAT:- The principles of natural justice are not applicable at the stage of reporting a criminal offence. It has further been clarified that providing an opportunity of being heard prior to the commencement of a criminal action (i.e. registration of an FIR), would frustrate the very purpose of initiating a criminal proceeding, which is to meet the ends of justice. More specifically, para 98.1 of Rajesh Agarwal’s case [2023 (3) TMI 1205 - SUPREME COURT ] explicitly states that no opportunity of being heard is required before an FIR is lodged or registered.
In the cases being dealt with in the instant appeals, where the Appellant-CBI has not been added as a party-Respondent before the High Court despite being a necessary party, it is directed that they be impleaded before the High Court by way of a suo moto order being passed by this Court, since these matters are being remitted for fresh consideration.
Conclusion - High Courts exceeded jurisdiction in quashing FIRs without proper challenge or without impleading investigating agencies.
Appeal allowed.
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2025 (4) TMI 1591
Quashing of FIR - Seeking investigation against alleged dishonest and fraudulent acts of Respondent No. 1/Company and its concerned Directors/Decision makers including Respondent No. 2 - HELD THAT:- No discussion is complete on the use of inherent powers of the High Court under Section 482 of CrPC without referring to the decision of this court in State of Haryana v. Bhajan Lal [1990 (11) TMI 386 - SUPREME COURT] wherein this Court had enumerated certain circumstances where the powers under Section 482 of the CrPC can be exercised to prevent abuse of the process of the court or to secure the ends of justice.
Though the High Court has unfettered powers conferred by the CrPC for exercising its inherent jurisdiction under Section 482., the same is expected to be used very sparingly and only in exceptional circumstances. There cannot be any straight jacket formula as to when the High Court would be justified to exercise jurisdiction under Section 482 of CrPC and each case is required to be dealt with on its own merits.
In the present case, the High Court quashed the proceedings on the premise that there were long business transactions between the parties and initiation of criminal proceedings was an armtwisting tactic to extract the pending dues from Respondent Company - the High Court committed a serious error, in quashing the proceedings on a premise, that there were long business transactions between the parties, and initiation of criminal proceedings was an arm-twisting tactic to extract the pending dues from respondent company. It may not be out of place to state the High Court was apprised with a factum aspect that the directors of the company, established certain dummy/shell companies and the monetary transaction were circulated to these shell/dummy companies.
It is true that there is a growing tendency of parties to rope in their counterparts to harass and extract monetary transaction, it is the duty of the Court to consider the facts of each case, in its proper perspective and then to arrive at the conclusion as to whether the case warrants investigation or the proceedings are required to be quashed. The peculiar facts and circumstances of the present case warrants thorough investigation as there was a huge amount involved. As we have already stated that when the petitioner approached the High Court for quashing of the FIR, the investigation was at its initial stage and subsequent to filing of the present Special Leave Petition in this Court it seems that the investigation was concluded by filing the chargesheet.
Conclusion - The High Court is not justified in exercising its jurisdiction under Section 482 of CrPC.
The appeals are accordingly allowed.
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2025 (4) TMI 1590
Cognizance of an offence under Section 174-A of the Indian Penal Code (IPC) can be taken by the Court without a complaint in writing by the concerned public servant, as mandated by Section 195(1)(a)(i) of the Code of Criminal Procedure (Cr.P.C.) - gravamen of the petitioners’ challenge to the charges framed under section 174-A IPC was that cognizance of offence under the same could only be taken on a complaint in writing by the public servant concerned and the bar under Section 195(1)(a)(i) Cr.P.C. would apply - HELD THAT:- For offences under Section 188 IPC, the Supreme Court in in C. Muniappan [2010 (8) TMI 1091 - SUPREME COURT] reiterated that there must be a complaint by a public servant whose lawful order has not been complied with, which must be in writing, since the provisions of Section 195 C.r.P.C were mandatory. It was stated that Court cannot assume cognizance of the case without such complaint and the trial/conviction was, therefore, void ab initio. Accordingly, it underscored that the law does not permit taking cognizance of an offence under Section 188 IPC, in view of the bar under Section 195 C.r.P.C, in absence of a complaint, as prescribed under the provision. Therefore, logically and fundamentally, Section 188 IPC being cognizable, the same reasoning would also apply to an offence under Section 174-A IPC, which is also cognizable.
It is settled law that one cannot assume a careless omission by the legislature and proceed to fill in by judicial interpretation, a casus omissus. In any event the rule of strict and literal interpretation of statutes will prevail.
It could be argued that, since now the legislature has sought to exclude the equivalent of Section 174-A IPC, the legislative intent even prior to BNS and BNSS was the same, although not specified in the statute in IPC/Cr.P.C. This, however, will remain in the realm of legislative speculation and it would be encroaching upon the legislative function by providing such interpretation by judicial dicta, which is not permissible. Reference may be made inter alia to Supreme Court’s opinion in Sangeeta Singh v. Union of India [2005 (8) TMI 660 - SUPREME COURT].
Conclusion - The petition challenging the framing of charges under Section 174-A IPC without a written complaint under Section 195 Cr.P.C. is allowed. The impugned order dismissing the revision petition is set aside, reaffirming the mandatory requirement of a written complaint for cognizance of Section 174-A IPC offences.
Petition allowed.
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2025 (4) TMI 1575
Deduction of liquidated damages by the respondent from the appellant's contractual dues, in view of the extensions of time granted for completion of the contract work - seeking to set aside the arbitral award, upholding such deduction - HELD THAT:- Respondent had established that the loss suffered by it indeed occurred due to delay in handing over the new premises. Clause 26 of the contract agreement permitted the respondent to levy liquidated damages. It also provided as to how the quantum of liquidated damages should be arrived at. According to the arbitral tribunal, the quantum was at the rate of 0.5% per week of delay. Delay in this case was more than ten months. Bulk of the delay was for reasons within the control of the appellant. The figure of Rs. 82,43,499.00 was correctly quantified and deducted as liquidated damages by the respondent. Therefore, the arbitral tribunal held that the liquidated damages were legally and contractually valid.
A conjoint reading of Sections 55, 73 and 74 would indicate that in a contract whether time is of the essence or not, if the contractor fails to execute the contract within the specified time, the contract becomes voidable at the option of the promisee and the promisee would be entitled to compensation from the promisor for any loss occasioned to him by such failure. However, in case of a contract where time is of the essence, the contract becomes voidable on account of the contractor’s failure to execute the contract within the agreed time. The promisee cannot claim compensation for any loss occasioned by such breach of the contract unless he gives notice to the promisor of his intention to claim compensation. This is made more specific in Section 73. Section 74 contemplates a situation where penalty is provided for and quantified as compensation for breach of contract. In such a case, the party complaining of the breach is entitled to compensation whether or not actual damage or loss is proved to have been caused thereby but such compensation shall not exceed the quantum of penalty stipulated.
Scope of Section 34 of the 1996 Act is now well crystallized by a plethora of judgments of this Court. Section 34 is not in the nature of an appellate provision. It provides for setting aside an arbitral award that too only on very limited grounds i.e. as those contained in sub-sections (2) and (2A) of Section 34. It is the only remedy for setting aside an arbitral award. An arbitral award is not liable to be interfered with only on the ground that the award is illegal or is erroneous in law which would require re-appraisal of the evidence adduced before the arbitral tribunal - The award as such cannot be touched unless it is contrary to the substantive provisions of law or Section 34 of the 1996 Act or the terms of the agreement.
The learned Single Judge had clearly gone beyond the grounds provided in Section 34 of the 1996 Act to set aside the arbitral award. Learned Single Judge exceeded the jurisdiction under Section 34 of the 1996 Act. There was no justification for setting aside the arbitral award by taking a different view. View taken by the arbitral tribunal is certainly a possible and plausible view. A different interpretation of clause 26 other than the one taken by the arbitral tribunal is possible but that will not bring the challenge to the arbitral award within the four corners of Section 34. In any view of the matter, mere setting aside of the arbitral award did not confer any benefit to the appellant. In the circumstances, the Division Bench was justified in reversing the order of the learned Single Judge under Section 37 of the 1996 Act.
Conclusion - The arbitral award upholding the deduction of liquidated damages restored, and the Single Judge's order setting aside the award set aside as beyond jurisdiction.
Appeal dismissed.
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2025 (4) TMI 1530
Contempt of Court - Non-payment of arrears of use and occupation charges for period between 20.09.2021 and 31.11.2022 in six monthly instalments - Respondent-Contemnor's plea of financial incapacity to comply with the Court's order is a valid defense against the charge of contempt or not - HELD THAT:- All throughout, the Respondent-Contemnor had been in possession of the said Property and had been utilising the income generated from running of the said resort. Acceptance on the part of the Respondent-Contemnor with regard to the viability of the project is apparent from the Order dated 07.11.2022 and his conduct. This would not permit the Respondent-Contemnor to now turn around and state that he is unable to make payment of not only the monthly dues for use and occupation charges after passing of the Order dated 07.11.2022 but also the arrears as per which terms and conditions were fixed by this Court in accordance with the prayer made by him. Non - fulfilment of the mandate and direction of this Court which were at the request of the Respondent-Contemnor himself reflects the intent on the part of the Respondent- Contemnor to not to comply with the order rather to violate with the same with impunity. The conduct clearly reflects that the intention of the Respondent-Contemnor was to gain the benefit by running the resort in the subject property without paying the current liability, what to say of the arrears.
The malafide is therefore writ large and reflect the misuse of the process of the Court. After seeking an order from this Court where benefit has been conferred on the basis of the submissions of the Respondent-Contemnor, not complying therewith amounts to contempt of Court - The power and jurisdiction of this Court to initiate and punish for its contempt has not been disputed. It is well settled by now and it is apparent from the provisions of the Contempt of Court Act that Civil contempt means wilful Contempt Petition (C) No. 712 of 2023 Page 14 of 19 disobedience of judgment, decree, or direction, order, writ or other process of the Court or wilful breach of an undertaking given to the Court.
A party, misguiding the Court to pass an order which was never intended to be complied with, would constitute an act of overawing the due process of law and, thus, commit contempt of Court. In the instant case, the opportunity having been availed, time having been sought and granted by the Court further reflects the intent on the part of the Respondent-Contemnor to discard and tarnish the judicial process by polluting it. Disobedience of the order of the Court in such circumstances would be the only result and thus, civil contempt.
The Respondent-Contemnor cannot be allowed to go scot free after having taken this Court at a stage where his conduct leaves this Court with no option but to take strict action and to punish him for the contempt committed by him, i.e., non-compliance of the directions issued by this Court vide Order dated 07.11.2022.
Shaji Augustine-Respondent is guilty of Civil Contempt and impose punishment of Simple Imprisonment for three months along with fine of INR 20,000/- to be deposited in two weeks, and in case of default, further Simple Imprisonment for one month - Giving one more opportunity to the Respondent- Contemnor to purge the contempt, 30 days time is granted to him to comply with the Order dated 07.11.2022 and submit compliance report to the Registrar Judicial of this Court a week thereafter.
Conclusion - The Respondent-Contemnor is found guilty of civil contempt for wilful and deliberate disobedience of the Court's order dated 07.11.2022.
The contempt proceedings are disposed of.
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2025 (4) TMI 1529
Dismissal of appellant’s petition under Section 482 of the Code of Criminal Procedure - appellant, who was not the authorized officer at the relevant time of the auction and issuance of sale certificate under the SARFAESI Act, can be held criminally liable for the alleged cheating and forgery in relation to the sale of mortgaged property or not - HELD THAT:- It is evident that the sale certificate was issued by the appellant’s predecessor and, at the relevant time, the appellant was not the authorized officer empowered to issue the certificate. In fact, right from the initiation of the auction process to the issuance of sale certificate, no direct involvement of the appellant can be seen as he was not the authorized officer during the said period and assumed the office of Manager only in November, 2014. Therefore, it becomes clear as day that the appellant had no role to play in the transaction leading to the FIR as he was not a signatory to the sale certificate. Since the appellant was neither the authorized officer at the relevant time nor responsible for the auction process or issuance of the sale certificate, the allegations against him are baseless and do not attract criminal liability.
The continuation of the instant criminal proceedings against the appellant shall lead to abuse of process of law, cause nothing but miscarriage of justice and inordinately harass the appellant who has been implicated without due cause.
Conclusion - The criminal proceedings against the appellant are quashed as he was not the authorized officer or involved in the auction or sale transaction at the relevant time, and continuation of proceedings would constitute abuse of process and miscarriage of justice.
Appeal allowed.
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2025 (4) TMI 1528
Rejection of Interim Application filed by the petitioner herein under Section 5 of the Limitation Act, 1963 - declination to condone the delay of 301 days in filing the main appeal under Section 13(1-A) of the Commercial Courts Act, 2015 - HELD THAT:- One of the avowed objects of the provisions of the Commercial Courts Act read with amended provisions of CPC applicable to the Commercial Courts is to ensure that there is no unnecessary delay in disposal of the commercial suit. Once specific time lines are fixed and there is a strict procedure provided in terms of the Commercial Courts Act, parties are by the statute put to notice that they have to very carefully contest the suits filed as commercial suits and that failing to comply with statutory timelines and a strict procedure, certain adverse consequences may flow on account of lack of application by a contesting party.
Merely because Order XX Rule I enjoins a duty upon the commercial courts to provide the copies of the judgment that does not mean that the parties can shirk away all responsibility of endeavoring to procure the certified copies thereof in their own capacity. Any such interpretation would result in frustrating the very fundamental cannons of law of limitation and the salutary purpose of the Act, 2015 of ensuring timely disposals.
Conclusion - The High Court did not err in rejecting the condonation of delay application. The limitation period for filing the appeal commenced from the date of pronouncement of the judgment, irrespective of whether the certified copy was provided or not. The petitioners' failure to apply for the certified copy within the limitation period and their inaction for over 300 days constituted negligence.
Petition dismissed.
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2025 (4) TMI 1527
Demolition of the appellants' residential structures by the Prayagraj Development Authority (PDA) under Section 27 of the Uttar Pradesh Urban Planning and Development Act, 1973 - HELD THAT:- As noted by this Court in the order issuing notice, against an order of demolition made under sub-section (1) of Section 27 of the 1973 Act, an appeal has been provided under sub-section (2) of Section 27. The demolition order passed on 8th January, 2021, was not served upon the appellants. It was allegedly served by affixing only. What was served was a subsequent communication dated 1st March, 2021. Within 24 hours of the service of the said communication, an action of demolition was taken on a Sunday. This deprived the appellants of their opportunity to avail of the remedy of appeal under sub-Section (2) of Section 27 of the 1973 Act.
Therefore, the demolition action is completely illegal, which violates the appellants' right to shelter guaranteed by Article 21 of the Constitution of India. The action is completely arbitrary. Moreover, carrying out demolition of residential structures in such a highhanded manner shows insensitivity on the part of the statutory development authority. This is one more case of bulldozer justice. The officers of the PDA have forgotten that the rule of law prevails in our country. Unfortunately, the State Government has supported the PDA.
Today, the learned senior counsel and the learned counsel appearing for the appellants, on instructions, stated that the appellants are not in a position to reconstruct the structures. In view of this statement, there is now there is no occasion to direct the planning authority to follow the due process of law in these cases. However, considering the inhuman and illegal action of demolition carried out, the planning authority must be saddled with costs. The costs of Rs. 10,00,000/- quantified in each case.
Conclusion - The demolition carried out by PDA was illegal, arbitrary, and violative of constitutional rights.
Appeal allowed.
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2025 (4) TMI 1526
Seeking quashing/setting aside of order of cognizance as well as summoning order - Criminal conspiracy - Whether a public servant "against whom sanction for prosecution under the Prevention of Corruption Act, 1988 has been expressly declined by the competent authority, where the denial of sanction has not even been challenged by the prosecuting agency and who is not charged with any independent or substantive offence under the Indian Penal Code" can nonetheless be prosecuted solely for criminal conspiracy u/s 120-B IPC, when the sole object of that conspiracy is the commission of an offence under the PC Act?
HELD THAT:- In the present case, the foundation of the alleged conspiracy rests entirely on an offence under the PC Act. With sanction expressly refused by the competent authority, to which no challenge has been made by the prosecuting agency, any attempt to prosecute the petitioner for conspiracy alone when the object of that conspiracy is itself legally non-prosecutable amounts to a colourable exercise of power. It constitutes a clear attempt to achieve indirectly what the law prohibits directly, thereby undermining the statutory mandate and rendering the protection under Section 19 illusory.
This Court has perused the material placed on record, including the transcripts of telephonic conversations. On a prima facie evaluation, there is no cogent or credible material to suggest any express or tacit agreement between the petitioner and the co-accused to demand or accept illegal gratification. In fact, the charge sheet itself, particularly paragraph 16.44 which stands extracted hereinunder, records that the petitioner declined the request made on behalf of the associate of the complainant and proceeded with lawful enforcement action. Such conduct negates, rather than supports, the inference of a conspiratorial understanding.
Thus, the central question "whether the petitioner, a public servant not charged with any substantive offence under the PC Act and against whom sanction has been expressly refused, can be prosecuted for conspiracy alone" must be answered in the negative when admittedly no other distinct IPC offence has been alleged against the petitioner. The attempt to invoke Section 120-B IPC in such a scenario amounts to a colourable exercise of power intended to circumvent the statutory protection under Section 19 of the PC Act.
It is a well-settled principle of law that what cannot be done directly cannot be done indirectly. Allowing the prosecution of a public servant under Section 120-B IPC for conspiracy to commit an offence under the PC Act, despite the denial of sanction, would effectively render the provision of Section 19 of the PC Act nugatory. Such an approach would circumvent the legislative safeguards designed to protect public servants by enabling a colorable prosecution under Section 120-B IPC, bypassing the procedural requirement of sanction.
Conclusion - i) This Court is of the considered view that a public servant, in respect of whom sanction to prosecute has not been granted under Section 19 of the PC Act, and who is, therefore, not charged with any substantive offence under the said Act, cannot be proceeded against solely under Section 120-B of the IPC, when the alleged object of the conspiracy is the commission of offences under the PC Act. ii) The charge of conspiracy under Section 120-B of the IPC, in such circumstances, is legally unsustainable, as it amounts to an indirect prosecution for an offence which is otherwise barred by statute.
Petition allowed.
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2025 (4) TMI 1525
Constitution of the Selection Committee for appointment of the Vice-Chancellor of the Himachal Pradesh Krishi Vishwavidalaya (HPKV) - compliance with the mandatory provisions of Section 24 of the Himachal Pradesh University of Agriculture, Horticulture and Forestry Act, 1986 - HELD THAT:- The nomination can only be made by the Chancellor and the Chairman, University Grants Commission, whereas the Director General, ICAR, is mandatorily required to be one of the members of the Selection Committee, to be constituted by the Chancellor.
The constitution of the Selection Committee is clearly in contravention and breach of the provisions as contained in Section 24 of the Act and the same, therefore, cannot be said to be a legal constituted Committee as it is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way.
Once this Court concludes that the constitution/ composition of the Selection Committee is against the law i.e. Section 24 of the Act, any action taken by such committee in furtherance thereof, is obviously a nullity or nonest.
Conclusion - The constitution of the Selection Committee is clearly in contravention and breach of the provisions as contained in Section 24 of the Act and the same, therefore, cannot be said to be a legally constituted Committee.
Petition allowed.
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2025 (4) TMI 1387
Setting aside of arbitral award - binding nature of Development Agreement dated 10.03.1998 entered into between the Respondent and the Claimants - coercion and economic duress on the claimants - breaches of the fundamental terms of the Development Agreement - downsizing/ exit of the business of real estate development and not to pay EDC or commence development work - non provisions of security of the development site and unprovoked unilateral abandonment of the site by L&T - termination of development agreement for the reasons stated in the letter of termination - obligation to commence construction in phase I - termination of the contract by the Claimants amounts to wrongful repudiation - Respondent is entitled to be relieved of its obligations under the Tripartite Agreement or not - liability to compensate the Claimants under the agreement of indemnity - authority to institute the instant claim petition and to carry out acts necessary to prosecute the instant claim petition on behalf of Claimants other than Puri Construction Limited.
Power of the Court under Section 34 of partly setting aside the award - HELD THAT:- This issue was dealt with by this Court in the case of Project Director, National Highways No. 45 E and 220, National Highways Authority of India v. M. Hakeem and Another [2021 (7) TMI 1343 - SUPREME COURT]. This Court, in the said decision, considered its earlier decision in the case of McDermott International Inc. v Burn Standard Co. Ltd. & Ors. [2006 (5) TMI 442 - SUPREME COURT] - Ultimately, in paragraph 42, this Court held 'Even otherwise, to state that the judicial trend appears to favour an interpretation that would read into Section 34 a power to modify, revise or vary the award would be to ignore the previous law contained in the 1940 Act; as also to ignore the fact that the 1996 Act was enacted based on the Uncitral Model Law on International Commercial Arbitration, 1985 which, as has been pointed out in Redfern and Hunter on International Arbitration, makes it clear that, given the limited judicial interference on extremely limited grounds not dealing with the merits of an award, the “limited remedy” under Section 34 is coterminous with the “limited right”, namely, either to set aside an award or remand the matter under the circumstances mentioned in Section 34 of the Arbitration Act, 1996.'
The Development Agreement is a contract between PCL and L&T. Clause 4 of the Development Agreement refers to the obligations of PCL under the agreement entered into by it on 30th July, 1997 with ITCREF. It refers to the fact that PCL had agreed to hand over 1,95,000 sq. ft. of built-up area in the Schedule ‘A’ property, after its development, comprising high-rise and low-rise buildings, inclusive of a car park, to ITCREF - The Agreement provides that L&T shall complete the construction of the building on the Schedule ‘B’ property within 60 months or such mutually extended period from the date of obtaining sanction for the building plan, or tax clearance under Section 37-I of the Income Tax Act, and making the said property available for development, whichever is later. It has also stipulated that construction shall be carried out in phases. After completion of phase of 3,00,000 sq. ft. on Schedule ‘B’ property, L&T, in consultation with PCL, by mutual consent, shall have the option and liberty to renew and revise the specifications/amenities and built-up area of the balance development and extend the period of completion by a further period of 12 months, depending upon the prevalent market conditions.
In the recital of the Supplementary Agreement, it is mentioned that L&T has made only partial compliance with the requirement under the Development Agreement to pay EDC to DTCP. Moreover, L&T has failed to furnish a bank guarantee for the balance payment of EDC. In fact, it records that L&T had taken a stand that in view of the adverse market conditions, the project had become unviable and sought further time from PCL to allow the prevailing real estate market conditions to improve - Clause (I) of the Supplementary Agreement makes it very clear that the Supplementary Agreement shall come into effect only upon the occurrence of the four events specified therein. That is how the Supplementary Agreement remained a non-starter.
It is apparent from the recitals in the Supplementary Agreement as well as Tripartite Agreement that as L&T did not discharge its obligation under the Development Agreement to pay EDC, the Bank was required to be brought into the picture so that it could advance a sum of Rs. 6 crores by way of loan for making payment of the said amount to DTCP.
The Division Bench referred to Section 16(3) of the Contract Act which provides that where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that there was no undue influence is on the person in a position to dominate the will of the other - After examining the evidence, the Division Bench held that there was no patent illegality in the findings recorded by the Arbitral Tribunal that the Supplementary Agreement and the Tripartite Agreement were tainted by coercion. On consideration of the facts discussed before, such a view by the Arbitral Tribunal cannot be said to be contrary to justice and morality.
Whether the Claimants committed breaches of the fundamental terms of the Development Agreement dated 10.03.1998 to enable the Respondent to resile from the agreement of development? - HELD THAT:- The Tribunal found that L&T committed a breach of Clause 19 of the Development Agreement by not making payment of a single instalment of EDC. Moreover, interest free deposit of Rs. 5 crores in terms of Clause 12 of the Development Agreement was not paid by L&T to PCL. The Tribunal found that there was no Development work carried out and not a single floor of any residential building was constructed for which development plans were sanctioned. Therefore, the finding recorded by the Tribunal that L&T committed fundamental breaches of the agreement cannot be interfered within the limited jurisdiction under Section 34 of the Arbitration Act.
Whether the respondent's Board of directors in pursuance of reports of Boston Consulting Group (for short ‘BCG’). Richard Ellis and Jones Lang La Salle decide to downsize/ exit the business of real estate development and not to pay EDC or commence development work? - Whether there had been non provisions of security of the development site and unprovoked unilateral abandonment of the site by L&T. If so whether such actions had resulted in encroachments causing monetary loss to the Claimants and in the event of such monetary loss caused to the Claimants what is the extent of such loss? - HELD THAT:- The powers of the Appellate Court under Section 37 of the Arbitration Act are not broader than those of the Court under Section 34 of the Arbitration Act. Therefore, what cannot be done in the exercise of the powers under Section 34 cannot be done in an Appeal under Section 37. An Arbitral Award cannot be modified. Thus, even after recording the conclusions in paragraph no. 119, the Division Bench has not modified the Award by partly setting aside the Judgment under Section 34 - the remedy of PCL has been kept open to pursue appropriate course of action under law as there cannot be a remand to the Arbitral Tribunal for quantification of monetary claim. As the finding of the Arbitral Tribunal regarding breaches committed by L&T was affirmed, the Division Bench has rightly segregated that part of the Award by which, cost of arbitration was ordered to be paid to PCL by L&T. This part has been severed from rest of the Award. Therefore, this part of the Award must be complied with by L&T, if not already done. As documents of title were deposited with the Registrar, the direction to hand over the same to PCL cannot be faulted with.
Conclusion - i) The conditions precedent in Clauses (I), (II), and (III) of the Supplementary Agreement were not fulfilled. Therefore, the Supplementary Agreement was a non-starter, hence, only the Development Agreement was binding on the parties which was not novated by the Supplementary Agreement. ii) The Supplementary Agreement and the Tripartite Agreement were tainted by coercion. iii) L&T committed fundamental breach of the Development Agreement by unilaterally abandoning the project, failing to pay EDC, and not fulfilling its obligations towards statutory authorities, ITCREF, and the Bank. iv) The termination of the Development Agreement by PCL was justified and did not amount to wrongful repudiation entitling L&T to rescind or claim damages. v) The courts under Sections 34 and 37 of the Arbitration Act do not have the power to modify or partially set aside arbitral awards; they may only uphold or set aside in entirety or remand under limited circumstances. vi) The authority of the claimant's representative to institute arbitration was valid and unchallenged.
Appeal dismissed.
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2025 (4) TMI 1386
Maintainability of suit - issue as regards the maintainability of the suit, raised on the ground that a partner of an unregistered partnership firm could not have filed the Suit for recovery of money, being hit by Section 69 of the Indian Partnership Act, 1932 - HELD THAT:- It is evident from a reading of sub-sections (1) and (2) of Section 69 that it assumes a mandatory character. Section 69(1) prohibits a suit amongst the partners of an unregistered partnership firm, for the enforcement of a right either arising from a contract or conferred by the Act, unless the suit amongst the partners is in the nature of dissolution of the partnership firm and/or rendition of accounts. Section 69(2) prohibits the institution of a suit by an unregistered firm against third persons for the enforcement of a right arising from a contract. As a consequence, a suit filed by an unregistered partnership firm and all proceedings arising thereunder, which fall within the ambit of Section 69 would be without jurisdiction.
This Court in Seth Loonkaran Sethiya and Others v. Mr. Ivan E. John and Others [1976 (10) TMI 160 - SUPREME COURT] had categorically held that Section 69 is mandatory in character and a suit instituted by a plaintiff in respect of a right which was vested in him by virtue of a contract and entered into in his capacity as a partner of a partnership firm, would be void, if such a firm was unregistered.
In the case on hand, the petitioners (original plaintiffs) had filed the suit for recovery of money in their capacity as partners of an unregistered partnership firm, against the respondent (original defendant) in her capacity as a partner of the same unregistered partnership firm. The Trial Court itself had arrived at a finding that the agreement executed between the parties was in fact a partnership deed and not a bond as claimed by the petitioners.
It is a clear as a noon day that the present suit had not been instituted by or on behalf of the firm against any third persons so as to fall under the ambit of Section 69(2). The petitioners have also not filed the instant suit for enforcing any statutory right conferred under any other law or a common law right so as to exempt the application of Section 69. Hence, the rigours of Section 69(1) would apply on such a suit and the partnership firm being unregistered would prevent the petitioners from filing a bare suit for recovery of money from the respondent.
The defence that the partnership business had not yet commenced and thus, such a suit for dissolution could not have been preferred, would not be of any avail to the petitioners, particularly for overcoming the jurisdictional bar under Section 69(1). The High Court is right in taking the view that a suit of such nature could not be said to be maintainable in the absence of the registration of the partnership firm.
Conclusion - The suit filed by the petitioners, partners of an unregistered partnership firm, against another partner for recovery of money arising from the partnership agreement is not maintainable under Section 69(1) of the Indian Partnership Act, 1932.
There are no error not to speak of any error of law could be said to have been committed by the High Court in passing the impugned order - SLP dismissed.
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2025 (4) TMI 1385
Maintainability of petition - survival of terms of the allotment letter after the execution of the lease deed - cancellation of the allotment letter has the consequent effect of cancelling the lease deed, in absence of specific reference to the lease deed - petitioner's prior writ petition challenging proportionate cancellation disentitles it from challenging the present cancellation on proportionality grounds - cancellation of the entire allotment for non- payment of some dues is excessive administrative action and hit by the doctrine of proportionality - cancellation of the entire allotment was only on account of non-payment of dues or also on the account of purported defaults in development/construction - cancellation of allotment was on account of purported defaults in development/ constructions -subsistence of homebuyers and banks' sub-leases without validity of lease.
Whether the writ petition is maintainable? - HELD THAT:- The impugned order of cancellation is being challenged as an illegal, arbitrary and disproportionate executive fiat. The petitioner is not seeking to establish any new right but attempting to safeguard its rights under the allotment made in its favour. The impugned order itself recites that it was passed not only to protect the interest of YEA but also the sub-lessees and homebuyers. It thus seeks to subserve larger public interest. As such, it cannot be said that the writ petition is liable to be thrown out on the ground of maintainability. However, the exercise of power of judicial review shall have to be within the well established parameters - the issue is answered against YEA and in favour of the petitioner holding the writ petition as maintainable.
Whether the terms of the allotment letter, except those, specifically referred to and incorporated by reference in the lease dead, survive after the execution of the lease deed? - Whether the impugned cancellation of the allotment letter by letter dated 12.02.2020 has the consequent effect of cancelling the lease deed, in absence of specific reference to the lease deed? - HELD THAT:- The provisions relating to sub-lease as contained in the letter of allotment also find mention in the reservation letter (vide Clauses 9.12, 9.13, 9.14). The allottee was also given right to mortgage the property for arranging funds for implementation of the project subject to certain conditions. The allottee was required to complete minimum 40% of the permissible covered area earmarked for core activity within five years from the date of execution of lease deed. In special circumstances, the said period could be extended. The provisions of U.P. Industrial Area Development Act, 1976 and regulations framed thereunder were made applicable.
The power under Section 14 of the Act, 1976 is not confined to transfer by lease only. It also applies to transfer by other modes contemplated under Section 7 of the Act, 1976, i.e., sale, auction, allotment or otherwise. Therefore, the legislation has not provided any specific procedure for exercise of the power of resumption of the site or building (except implicit requirement of compliance of the principles of natural justice) unlike Section 111(g) of the Transfer of Property Act, 1882. All that is required is that the order should reveal that the building site is being resumed for breach of any express condition of the lease/transfer.
The instant case is not a case of absolute transfer by sale and, therefore, Sections 10 and 11 of the Transfer of Property Act on which A.P. Industrial Infrastructure Corporation Limited was grounded are not applicable. Moreover, it was a case based on sole interpretation of the terms of contract. In the instant case, as already discussed, the respondent-Corporation, even independent of Clause 4.2 of the Allotment letter, continued to have power to cancel the lease in view of Clause 38 of the lease deed which saved all rights conferred on YEA under any law for the time being in force including Section 14 of the Act, 1976. The statutory power under Section 14 to resume the site was not whittled down in any manner.
The allotment letters existed for limited purposes alongwith the lease deeds and, irrespective of Clause 4.2 of the Allotment letters, the YEA had the power to resume the site by virtue of Section 14 of UPIAD Act, independent of, and read with Clause 38 of the lease deeds. The impugned order, thus, has the effect of cancelling the lease deeds.
Whether the petitioner's earlier Writ C- No. 47262/2017 challenging the decision taken by the respondent in its meeting dated 04.09.2017 for cancelling proportionate land would disentitle the petitioner from challenging present cancellation on the ground of proportionality? - HELD THAT:- The challenge in the earlier Writ Petition No. 47262 of 2017 was essentially based on the ground that there was no occasion even to proportionately cancel the land in view of the fact that the default in payment was due to various actions of the respondents themselves such as not approving building plans, etc. - the issue is answered in favour of the petitioner and is decided accordingly
Whether the cancellation of the entire allotment for non- payment of some dues is excessive administrative action and hit by the doctrine of proportionality? - Whether the cancellation of the entire allotment was only on account of non-payment of dues or also on the account of purported defaults in development/construction? - Whether, if the cancellation of allotment was on account of purported defaults in development/ constructions, the cancellation is illegal? - HELD THAT:- The basic ground for cancellation was default on part of the petitioner- Company in failing to pay the dues of the Development Authority. Even, last show-cause notice dated 09.12.2019 was for alleged non- payment of the dues of the Authority and not on account of non- development and, therefore, we agree with the submission of learned Senior Counsel for the petitioner that non-development could not be a ground for cancellation.
While holding that the recital regarding non-development was not ground for cancellation it was a relevant consideration while cancelling the allotment in entirety, even, on ground of non-payment of dues. Likewise, the obligation of the petitioner-Company to the homebuyers, another important stakeholder of the SDZ policy, was also duly kept in mind. It shows that the Authority consciously took into consideration different factors, which were necessary for attaining the goal of planned development of the area and objectives of the SDZ policy. This, in fact, is a strong countervailing factor in favour of the Authority to repel the contention that its action was arbitrary and taken in undue haste.
The sole and primary objective of the allotment under the SDZ policy was to ensure planned development along the Yamuna Expressway. The respondent being the nodal agency to oversee proper implementation of SDZ project and as a Development Authority for the area while deciding what action was to be taken in the facts of the instant case should be given sufficient leeway to decide what specific measure would be in larger public interest. For the said purpose, it was competent to, and had rightly, considered different aspects regarding non-development, interest of homebuyers and sub-lessees.
The cancellation of entire allotment is not hit by doctrine of proportionality nor was illegal for any other reason - while passing the cancellation order, the Authority had considered several factors including default in development/construction but the cancellation was primarily on ground of non-payment of the dues of the Authority.
Whether homebuyers and banks' sub-leases can subsist without validity of lease? - HELD THAT:- Undoubtedly, the homebuyers are one of the major stakeholders in the present dispute. In fact, the main ground which impelled YEA to resort to the extreme step of resumption of the leased land is inordinate delay on part of JAL in abiding by the timelines prescribed for completing the constructions, resulting in immense difficulties to the homebuyers. Further, as noted, YEA has also filed affidavit reiterating its commitment to safeguard the interest of the homebuyers and the steps it would take in this respect. It is therefore necessary to issue directions to ensure that YEA fulfills its commitment and interest of the allottees/homebuyers is protected.
Undoubtedly, the Financial Institutions cannot be expected to engage in development of land and construction activity. The sub-lease was obtained by the Financial Institutions to protect the money advanced to JAL. The same was admittedly with the consent of YEA and in terms of the provisions of the allotment orders/lease deeds, YEA is committed to protect interest of the sub-lessees, which would apply to all sub-leases including the lease in favour of financial institutions. It is opined that the Financial Institutions should be permitted to assign their interest in favour of third party.
Conclusion - i) The writ petition challenging cancellation is maintainable. ii) The allotment letters and lease deeds coexist; cancellation of allotment cancels leases. iii) The cancellation order dated 12.02.2020 effectively cancelled the lease deeds. iv) The earlier writ petition challenging proportionate cancellation does not bar present challenge. v) Cancellation of entire allotment is lawful, not violative of proportionality, given persistent defaults and public interest. vi) Cancellation was primarily for non-payment, but non-development was a relevant factor. vii) Money deposited by petitioner is not forfeited automatically and must be refunded to be dealt with under insolvency. viii) Homebuyers' and sub-lessees' interests must be protected; directions issued for their protection and project completion. ix) Sub-leases in favour of financial institutions stand protected with option to obtain leases directly from Authority. x) Insolvency proceedings continue; claims and funds to be managed under IBC framework.
The impugned cancellation order dated 12.02.2020 is upheld.
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2025 (4) TMI 1315
Dismissal of contempt petition filed by the Appellants - failure to discharge his obligation under the MoU inasmuch as the Respondent has started operating another entity from the premises of the company, is siphoning off plant and machinery which was owned by the company and is defaulting in paying instalments of the term loan - HELD THAT:- The learned Single Judge of the High Court while passing the impugned judgment and final order dated 3rd July 2024 has reviewed the entire order of the learned Single Judge dated 5th December 2023. After the order was passed on 5th December 2023, another learned Single Judge could have only considered whether the Respondent had purged the contempt and if not purged the contempt, as to whether he should be punished or not under the Contempt of Courts Act, 1971. It was not permissible for the learned Single Judge to have revisited the issue as to whether the Respondent has in fact committed contempt or not.
If the Respondent was of the view that the order passed by the learned Single Judge dated 5th December 2023 holding him to be guilty of contempt was not correct in law, the only option available to him was to file an appeal under the provisions of Section 19 of the Contempt of Courts Act, 1971. Having accepted the order dated 5th December 2023, the Respondent could not have contended, or for that matter, the learned Single Judge could not have held that the Respondent has not committed contempt of the Court.
It is a different matter as to whether the Court while considering the provisions of Sections 12 and 13 of the Contempt of Courts Act, 1971 could have arrived at a finding as to whether the Respondent was liable to be punished or not or whether in the facts of the case he should be discharged or the punishment awarded was liable to be remitted on apology made to the satisfaction of the Court or not. The order of the learned Single Judge of the High Court by holding that the Respondent had not committed contempt amounts to sitting in an appeal over the order passed by the coordinate Bench dated 5th December 2023.
It is also contrary to the well settled principles of judicial propriety. When one Judge of the same Court has taken a particular view holding the Respondent to be guilty of contempt, another Judge could not have come to a finding that the Respondent was not guilty of contempt.
Conclusion - i) A coordinate Bench of the same Court cannot overturn or revisit the findings of another coordinate Bench on the question of contempt guilt except through proper appellate procedure. ii) After a finding of contempt and grant of time to purge, subsequent proceedings before another Judge should be limited to whether contempt is purged or punishment is warranted.
The matter is remitted back to the learned Single Judge of the High Court for considering the issue from the stage of the passing of the order dated 5th December 2023 - appeal allowed by way of remand.
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2025 (4) TMI 1314
Dishonour of Cheque - discharge of burden by accused u/s 118 (a) and 139 of the N.I. Act - rebuttal of presumption - whether the High Court was justified in overturning the order of acquittal passed by the Trial Court? - HELD THAT:- Section 118 (a) assumes that every negotiable instrument is made or drawn for consideration, while Section 139 creates a presumption that the holder of a cheque has received the cheque in discharge of a debt or liability. Presumptions under both are rebuttable, meaning they can be rebutted by the accused by raising a probable defence. This Court through various pronouncements, has consistently clarified the nature and extent of these presumptions and the standard of proof required by the accused to rebut them.
A three-Judge Bench of this Court in Rangappa [2010 (5) TMI 391 - SUPREME COURT] had the occasion to consider Section 139 elaborately. The Court reiterated that where the signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence.
The cheques issued were against an enforceable debt and held by the complainant as such, even though there was no paperwork to that effect. The onus, as such, was shifted upon the other party, i.e., the accused, to raise a probable defence against such presumption.
It has also come on record that the cheque, subject matter of controversy, was given to the complainant in the presence of common well-wishers. However, none of the above statements stands scrutiny. The alleged well-wishers who could have proved the discussion and context in which the cheque was given, remained unexamined. As stated by the complainant himself, there is no official record, such as income tax documents which would show that such an amount was extended by way of a loan to the accused, neither have the books of account, which the complainant allegedly maintained, being produced to evidence the seven or eight transactions inter se the parties totalling the claimed amount.
Conclusion - It cannot be said that the complainant was able to discharge the burden once it had shifted back upon him, with the accused having discharged the burden of Sections 118 and 139 of the N.I. Act.
The Trial Court was correct in recording a finding of acquittal in favour of the accused and reversal thereof by the High Court in terms of the impugned judgment, with particulars as in Para 1, was unjustified - Appeal allowed.
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2025 (4) TMI 1313
Rejection of application filed under Order VII Rule 11(a) and (d) of the Code of Civil Procedure - plaint filed based on an agreement to sell discloses a cause of action under Order VII Rule 11(a) of the Code of Civil Procedure, 1908 (CPC) or not - interest in the suit schedule property as per Section 54 of the Transfer of Property Act, 1882 - HELD THAT:- Order VII Rule 11 CPC serves as a crucial filter in civil litigation, enabling courts to terminate proceedings at the threshold where the plaintiff's case, even if accepted in its entirety, fails to disclose any cause of action or is barred by law, either express or by implication. The scope of Order VII Rule 11 CPC and the authority of the courts is well settled in law. There is a bounden duty on the Court to discern and identify fictitious suit, which on the face of it would be barred, but for the clever pleadings disclosing a cause of action, that is surreal. Generally, sub-clauses (a) and (d) are stand alone grounds, that can be raised by the defendant in a suit. However, it cannot be ruled out that under certain circumstances, clauses (a) and (d) can be mutually inclusive. For instances, when clever drafting veils the implied bar to disclose the cause of action; it then becomes the duty of the Court to lift the veil and expose the bar to reject the suit at the threshold.
The power to reject a plaint under this provision is not merely procedural but substantive, aimed at preventing abuse of the judicial process and ensuring that court time is not wasted on fictitious claims failing to disclose any cause of action to sustain the suit or barred by law. Therefore, the appeal requires careful consideration of the scope of rejection of the plaint under Order VII Rule 11 CPC, particularly, in the context of the suit filed based on an agreement to sell against third parties in possession.
Undoubtedly, a sale deed, which amounts to conveyance, has to be a registered document, as mandated under Section 17 of the Registration Act, 1908. On the other hand, an agreement for sale, which also requires to be registered, does not amount to a conveyance as it is merely a contractual document, by which one party, namely the vendor, agrees or assures or promises to convey the property described in the schedule of such agreement to the other party, namely the purchaser, upon the latter performing his part of the obligation under the agreement fully and in time. Section 54 of the Transfer of Property Act, 1882 explicitly lays down that a contract for sale will not confer any right or interest - The protection under Section 53-A is not available against a third party who may have an adversarial claim against the vendor. Therefore, unless and until the sale deed is executed, the purchaser is not vested with any right, title or interest in the property except to the limited extent of seeking specific performance from his vendor. An agreement for sale does not confer any right to the purchaser to file a suit against a third party who is either the owner or in possession, or who claims to be the owner and to be in possession. In such cases, the vendor will have to approach the court and not the proposed transferee.
In the instant case, admittedly, no sale was originally effected and only part consideration was made, which was not even to the appellant, but rather to a third party. Upon discovering that the property did not belong to the third party, the respondents instituted a suit. It must be noted that the appellant has been in possession of the suit schedule property for several decades - The public interest implications of this case are significant consideration. Such institutions must be protected from speculative litigation that can drain their resources and impede their charitable work. Moreover, allowing suits like the present one to proceed to trial, would not only waste judicial time and resources, but also encourage similar speculative and extortionate litigations. Hence, this is a fit case for the imposition of costs on the respondents under Section 35A of the Civil Procedure Code, 1908.
Conclusion - The plaint ought to have been rejected under Order VII Rule 11(a) and (d) CPC. Hence, the orders passed by the High Court as well as the trial Court rejecting the application filed by the appellant, cannot be sustained in law and deserve to be set aside.
The impugned judgment of the High Court dated 02.06.2022 and the order of the trial Court dated 11.06.2021 are set aside - the application filed under Order VII Rule 11(a) and (d) CPC is allowed - appeal allowed.
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2025 (4) TMI 1312
Dishonour of Cheque - maintainability of prosecution of the appellant for offences u/s 420 IPC, without arraigning the company as an accused, given the business dealings were between companies - applicability of principles of res-judictata - vicarious liability. non-application of mind.
Maintainability of prosecution of the appellant for offences u/s 420 IPC, without arraigning the company as an accused - HELD THAT:- It is to be noted that in 138 NI Act proceedings against Tyagi, he raised a specific defence that there is no outstanding debt qua 07 cheques as the amount involved therein has already been paid by separate demand drafts. Learned Magistrate in its order dated 25.10.2002 rejected the said defence by recording a finding that no request was made by Tyagi to the complainant company to return the bounded cheques to the accused company when the demand drafts were allegedly sent by the accused persons to the complainant company - It is thus apparent that the finding recorded by the jurisdictional criminal court in 138 NI Act proceedings between the parties would be binding to both the parties in any subsequent proceedings involving the same issue.
Applicability of principles of res-judictata - HELD THAT:- In Pritam Singh [1955 (11) TMI 35 - SUPREME COURT], a three Judge Bench of this Court speaking through Natwarlal Harilal Bhagwati, J. placing reliance on Sambasivam vs. Public Prosecutor, Federal of Malaya, decided by a Bench of Five Judges of the Judicial Committee, opined that maxim res judicata is no less appliable to criminal than to civil proceedings. In the said matter, accused Pritam Singh was earlier tried for an offence under the Arms Act basing recovery of a weapon from him. In the said case Pritam Singh was acquitted. In a subsequent trial, the same recovery was again sought to be used by the prosecution as one of the circumstances in an offence of murder.
It is absolutely clear that Tyagi cannot maintain a prosecution on the basis of allegations which were precisely his defence in the earlier proceedings wherein he was an accused. Thus, the present criminal proceedings deserve to be quashed on this ground alone.
In the matter of Delhi Race Club (1940) Ltd. & Ors. vs. State of Uttar Pradesh & Anr. [2024 (8) TMI 1200 - SUPREME COURT], this Court has held that a person cannot be vicariously prosecuted, especially for offences under the IPC, merely on account of the fact that he holds a managerial position in a company without there being specific allegations regarding his involvement in the offence.
Conclusion - i) The prosecution is barred by the principle of res judicata as the issues were conclusively decided in earlier NI Act proceedings. ii) The prosecution without arraigning the company is impermissible and violates settled legal principles governing vicarious liability. iii) The summoning order is set aside for non-application of mind.
The present is a fit case for allowing the appeal to quash the impugned criminal proceedings instituted against the appellant for offences under Section 420 of the IPC - appeal allowed.
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2025 (4) TMI 1311
Breach of reciprocal contractual obligations - Forfeiture of the Appellant’s payments by Respondent No. 1, namely the Housing and Urban Development Corporation Limited (HUDCO) - entitlement of interest on refund of the forfeited amount.
Whether Respondent No. 1/HUDCO was in breach of its reciprocal contractual obligations qua the Appellant? - HELD THAT:- Respondent No. 1, even after the receipt of the first instalment, did not take any tangible steps to secure the necessary statutory approvals. It is obvious that the said failure led to breach of Clause 5(viii) and (ix) also, as admittedly, no ‘agreement to sublease’ was executed in favour of the Appellant, owing to the nonexecution of a perpetual lease by Respondent No. 2 in favour of Respondent No. 1. Nonetheless, it is proceeded to examine the contention of the Appellant that Respondent No. 1 also concealed the fact that it did not have the title and authority to execute the ‘agreement to sub-lease’ in favour of the Appellant.
Respondent No. 1 being incapable of fulfilling its reciprocal promises, was not entitled to demand payment for the second instalment until the perpetual lease deed was executed in its favour. Respondent No. 1’s failure to execute the sub-lease in favour of the Appellant, owing to the lack of its authority and title, also amounts to a breach of their contractual obligations - there is some merit in the Appellant’s grievance of differential treatment when compared to the Ansals.
There are no doubt that Respondent No. 1 was in breach of several obligations as contemplated in the Allotment Letter, viz. failure to execute documents for securing approval under the ULCR Act and the IT Act; failure to execute the sub lease agreement in favour of the Appellant and; failure to secure the approval of the revised layout plan for the construction of the hotel.
Whether the Appellant is entitled to a refund of the forfeited amount under Clause 5(vi) of the Allotment Letter? - HELD THAT:- Clause 5 (vi) of the Allotment Letter, which deals with the monies paid by the Appellant, provides that Respondent No. 1 will execute all required documents to obtain approval from the Competent Authority under the ULCR Act and also from the Appropriate Authority as envisaged in Chapter XX C of the IT Act, failing which, Respondent No. 1 will refund the amount paid without any interest - it is imperative to maintain the sanctity of the terms of the agreement between the parties. It is a settled position of law that a commercial document ought not to be interpreted in a manner that arrives at a complete variance with what may originally have been the intention of the parties. As a result, Respondent No. 1 is liable to refund the amount of Rs. 28,11,31,939 (First instalment of Rs. 27.04 Crores along with interest for three months amounting to Rs. 1,04,81,939/- and Rs. 2.5 Lakhs towards maintenance corpus) deposited by the Appellant pursuant to the Allotment Letter.
Whether the Appellant is entitled to interest on refund of the forfeited amount? - HELD THAT:- The material on record sufficiently indicates that the Appellant did not approach the Court with clean hands and instead attempted to hoodwink the judicial process by creating a facade to subterfuge their inability to meet their contractual obligations - It needs no emphasis that whosoever comes to the court claiming equity, must come with clean hands. The expression ‘clean hands’ connotes that the suitor or the defendant have not concealed material facts from the court and there is no attempt by them to secure illegitimate gains. Any contrary conduct must warrant turning down relief to such a party, owing to it not acting in good faith and beguiling the court with a view to secure undue gain. A court of law cannot be the abettor of inequity by siding with the party approaching it with unclean hands. This also brings to mind the oft-quoted legal maxim—he who seeks equity must do equity.
The instant case is found to be fit to justify a deviation from the established standards. In the facts and circumstances, though we have held Respondent No. 1 to be in breach of several contractual obligations, the conduct of the Appellant is rife with instances where it has also sought to undermine the authority and integrity of the judicial process, by treating the Court with disregard, and attempting to exploit procedural mechanisms for personal gain. The Appellant is not entitled to any discretionary relief of interest under Section 34 of CPC.
Conclusion - i) Respondent No. 1/HUDCO, was in breach of its reciprocal contractual obligations, thereby disentitling them from forfeiting the monies already paid by the Appellant towards the first instalment as enshrined in Clause 5 (iii) of the Allotment Letter dated 31.10.1994. ii) Given that the Appellant has blatantly engaged in forum shopping, and considering that their overall conduct does not in any manner reflect an approach aligning with the clean hands doctrine, they are not entitled to grant of any discretionary relief of interest in their favour.
The Impugned Judgement dated 03.06.2016 passed by the High Court is set aside - appeal disposed off.
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2025 (4) TMI 1310
Building Tax - Seeking for a direction to quash Ext.P3 - seeking also for a direction to reconsider Ext.P2 and assess building tax on petitioner's building as per the plinth area in the plan approved by the local authority - HELD THAT:- The Kerala Building Tax Act, 1975 provides for assessment of building tax. Once an order of assessment is passed, the assessing authority becomes practically functus officio for the purpose of building tax. The remedy of a person aggrieved by an order of assessment is to prefer statutory appeal and revision as provided under the Act. In the absence of any statutory remedy invoked by the petitioner, the assessment order became final. Therefore recourse to Article 226 of the Constitution of India is not proper.
In the instant case, petitioner had even acquiesced into the order by paying the first instalment and thereafter he has turned around and now requests for acceptance of a portion of the amount in satisfaction of the entire tax assessed. Such a procedure is unheard in law. Once tax has been assessed, the entire amount has to be paid, unless there are amnesty schemes.
There are no merit in this writ petition and it is dismissed without prejudice to the remedies, if any available under the Act.
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2025 (4) TMI 1309
Smuggling of Ganja of commercial quantity - contraband item - offences punishable under Section 8(c), 20(b)(ii)(c), 22 and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 - HELD THAT:- There is no dispute that commercial quantity in relation to NDPS Act for ‘ganja’ means any quantity greater than 20 kg. The Section 2(iii) (b) and (c) defines ‘Ganja’ as the flowering or fruiting tops of the cannabis plant (excluding the seeds and leaves when not accompanied by the tops), by whatever, name they may be known or designated, and any mixture, with or without any neutral material, of any of the above forms of cannabis or any drink prepared therefrom.
There is nothing on record to prima facie show that before carrying weight of the seized plant of ganja, the investigating officer had segregated the seeds or the other parts of the plant in order to ascertain the exact quantity of ganja. In fact, none of the paper mentions that the said contraband articles which were seized includes the flowering or fruiting tops of cannabis plant. This fact becomes further clear from the panchanama also - on perusal of the material on record shows that what was seized was plant i.e. leaves, seeds, stems and stalks and without separating the same, the ganja was weighed. As the seized material was not weighed and after separating the leaves and the other parts and moreover it is not along with the flowering or fruiting tops. Therefore, it is difficult to ascertain whether quantity can be said to be commercial.
After perusal of the investigating papers, prima facie, the material complied with the chargesheet, it is difficult to accept that the alleged prohibited substance is within the definition of ganja under the NDPS Act. Since the only flowering or fruiting tops of cannabis plant are classified as ganja, in absence of the said substance being seized from the applicant, prima facie involvement of the applicant is difficult to hold. Moreover, there is inordinate delay in conducting the trial and, therefore, the right of the accused of speedy trial is affected. Recently, the Hon’ble Apex Court in the case of Ankur Chaudhary Vs. State of Madhya Pradesh [2024 (5) TMI 1463 - SC ORDER], by referring the earlier decisions held that inordinate delay in trial is affecting the right of the accused of a speedy trial, which is violation of article 21 of the Constitution of India.
Conclusion - There is nothing on record to prima facie show that before carrying weight of the seized plant of ganja, the investigating officer had segregated the seeds or the other parts of the plant in order to ascertain the exact quantity of ganja. In absence of the said substance [flowering or fruiting tops] being seized from the applicant, prima facie involvement of the applicant is difficult to hold.
The applicant- Mohammad Jakir Nawab Ali, be released on bail subject to fulfilment of conditions imposed - bail application allowed.
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