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2020 (8) TMI 944
Repayment of loan - Letter of Comfort - can that Letter of Comfort be fairly read to be a guarantee by the 1st Defendant to repay a loan that the Plaintiff gave to another entity? - Does it accord with the requirements of a guarantee under Section 126 of the Contract Act, 1872? - Does it contain an unequivocal commitment or assumption by the 1st Defendant to repay the loan on the principal borrower's default? - HELD THAT:- In a given case, a letter of comfort may indeed amount to a guarantee. Not every letter of comfort is ipso facto a guarantee. The nomenclature is unimportant, as is the absence of the word 'guarantee' - The ordinary rules of construction and interpretation relating to contracts apply to LoCs - The document is to be construed as a whole, read in a reasonable commercial sense, and in context of events and associated documents - Yet, to be a guarantee, it must conform to the provisions of Section 126 of the Contract Act.
Whether the document in question is a guarantee or not depends upon the exact terms to which the guarantor binds himself. In law, no guarantor is liable for more than what the guarantor has undertaken - Where the terms of a written contract are unambiguous and clear, they cannot be altered by addition or subtraction. The terms of a written guarantee cannot be so altered to foist on a party a liability beyond that which the party has undertaken. The contract cannot be rewritten at the instance of one party - The conduct of the parties is a relevant factor in assessing the construction of any contract.
Broad allegations of commercial infidelity, immorality or amorality have no role at all to play in the construction of commercial contracts--especially where parties are well-equipped with legal and financial services (as opposed to an uneducated indigent or individual), and the resultant documentation is complex, and has carefully considered, well-defined provisions. A court will look to the nature of the bargain struck and the role that each of the parties was to play, and when, in what manner, and to what extent. The fact that one or more of the contracting parties are interlinked is not necessarily relevant.
The Interim Application is utterly without merit. It should be dismissed - Application dismissed.
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2020 (8) TMI 943
Conspiracy - illegal mining activities - cognizance of the offences under the MMDR Act and MCD Rules without the complaint being lodged by any competent authority as per the mandate in Section 22 of the MMDR Act and Schedule-I of the OMPTS Rules - HELD THAT:- It is true that none of the petitioners have challenged or are questioning the power of Government to issue the Notification dated 14.01.2010 authorising Vigilance Police in that respect. Undisputedly the validity of notification dated 14.1.2010 is not questioned. The averments and submissions made on behalf of the petitioners are completely silent about the said Notification made in favour of the Vigilance Police. On the other hand, as seen from the Notification dated 14.01.2020 issued by the Government in Home Department and the Notification dated 19.12.2009 issued by the Steel and Mines Department, Government of Odisha, they are neither overlapping to each other nor the Notification dated 14.01.2010 is found in conflict with the provisions of the MMDR Act or the OMPTS Rules.
A bare perusal of the notification dated 14.01.2010 clearly shows that it has given power to the Vigilance Police to investigate or lodge complaint for such offences under the MMDR Act and other relevant Acts/Rules. Therefore, in view of the specific authorization made in favour of the Vigilance Officials in that respect, the contentions of the petitioners cannot be accepted that the Dy. Superintendent of Police (Vigilance) is not authorized to file the complaint for the offences against the requirement of Section 22 of the MMDR Act. Therefore, the complaint at the instance of Vigilance Police and investigation conducted by them against the petitioners is maintainable.
A further contention is made on behalf of the petitioner Jitendranath Patnaik that in absence of all legal heirs of the lessee Late Bansidhar Patnaik, the prosecution against him alone is not maintainable. This contention has no leg to stand because as per the allegation he is the only legal heir of late Bansidhar Patnaik, who applied for renewal by producing the forged WILL and is also the beneficiary of the ill-got minerals. When other legal heirs have not played any role in such illegal mining, they need not be brought into the sphere of prosecution because only being the legal heirs under the law will not attract any offence itself, without actus reus and mens rea.
The CRLREVs are found devoid of any merit and accordingly all these Criminal Revisions stand dismissed.
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2020 (8) TMI 942
Authority of the Monitoring Committee to seal the residential premises on the private land - used for the commercial purpose or not - Whether the Monitoring Committee could have sealed these residential premises? - HELD THAT:- It is apparent from the various orders passed by this Court from time to time and from the various reports of the Monitoring Committee that it was never authorized by this Court to take action against the residential premises that were not being used for commercial purposes. It was appointed only to check the misuser of the residential properties for commercial purposes. After that, this Court directed that the Monitoring Committee should also look into the matter of “encroachment on the public land” and “unauthorized colonies” that have come up on the public land and were wholly unauthorized without sanction. At no point in time, this Court had empowered the Monitoring Committee to act visàvis to the purely residential premises.
The power of sealing of property carries civil consequences. A person can be deprived of the property by following a procedure in accordance with law. The Monitoring Committee is not authorized to take action concerning the residential premises situated on the private land. If there is unauthorized construction or in case of deviation, the requisite provisions are under the DMC Act, such as sections 343, 345, 347(A), 347(B). The mode of action and adjudication under the Act is provided including appellate provisions and that of the Tribunal. It would not be appropriate to the Monitoring Committee to usurp statutory powers and act beyond authority conferred upon it by the Court. The Monitoring Committee could not have sealed the residential premises, which were not misused for the commercial purpose as done vide Report No.149, nor it could have directed the demolition of those residential properties.
After going through the report of the Monitoring Committee and other reports which have been relied upon by the Amicus Curiae, there is no scintilla of doubt that the Monitoring Committee in the past at any point of time did not seal any residential premises being used for residential purposes, situated on the private land nor it could have ordered demolition.
Let the property sealed be desealed, and possession be restored to the owners forthwith. Let this order be complied with within three days - Issue notice.
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2020 (8) TMI 940
Direction to handover the legal possession of the unit along with all the promised facilities and amenities to the complainant - Interpretation and implementation of the terms of the builder buyer's agreement - complainant has multiple bookings which prove that the complainant is not covered under the definition of ‘consumer’ as provided in the Consumer Protection Act 1986 - HELD THAT:- The complaints have been filed mainly for two reasons. The first is that the opposite party has demanded extra money for excess area and second is the delay in handing over the possession. In respect of excess area, the complainant has made a point that without any basis the opposite party sent the demand for excess area and the certificate of the architect was sent to the complainant, which is of a later date. The justification given by the opposite party that on the basis of the internal report of the architect the demand was made for excess area is not acceptable because no such report or any other document has been filed by the opposite party to prove the excess area. Once the original plan is approved by the competent authority, the areas of residential unit as well as of the common spaces and common buildings are specified and super area cannot change until there is change in either the area of the flat or in the area of any of the common buildings or the total area of the project (plot area) is changed. The real test for excess area would be that the opposite party should provide a comparison of the areas of the original approved common spaces and the flats with finally approved common spaces/ buildings and the flats. This has not been done. In fact, this is a common practice adopted by majority of builders/developers which is basically an unfair trade practice.
There is no harm in communicating and charging for the extra area at the final stage but for the sake of transparency the opposite party must share the actual reason for increase in the super area based on the comparison of the originally approved buildings and finally approved buildings. Basically the idea is that the allottee must know the change in the finally approved layout and areas of common spaces and the originally approved lay-out and areas.
Hon’ble Supreme Court in DLF HOMES PANCHKULA PVT. LTD. AND ORS. VERSUS D.S. DHANDA AND ORS. [2019 (5) TMI 2006 - SUPREME COURT] has clearly observed that when the contract/agreement has been signed by the builder and the allottee, both of them are bound by the terms of the agreement and from this aspect, the allottee is only entitled to get the compensation as mentioned in the agreement. The Hon’ble Supreme Court has given some compensation for mental agony and harassment to such allottee. In the present case, a compensation of Rs.7.50/- per sq.ft. per month is agreed between the parties for delay in possession and therefore, in the light of the decision of the Hon’ble Supreme Court in DLF Homes Panchkula Pvt. Ltd. & anr. Vs. D S Dhanda, ETC; it is difficult to compensate the complainant by ordering interest on the amount paid by the complainant.
The demand for excess area is cancelled and the opposite party is directed to send revised demand excluding for the demand of excess area without adding any new demand within a period of 30 days along with the offer of possession - Opposite party is directed to hand over the possession within a period of 30 days from the date of issue of such offer letter. The possession should be complete in all respects as per the agreement.
Complaint allowed in part.
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2020 (8) TMI 934
Dishonour of Cheque - case is posted for marking of the documents from the respondent's side and for cross-examination after recording petitioner's statement under Section 313 of the Code of Criminal Procedure - HELD THAT:- There is a procedural irregularity inasmuch as the statement of the petitioner under Section 313 of Cr.P.C. is recorded much before the completion of the respondent's evidence. The Section 313 statement should have been after the respondent's evidence was completed including his cross-examination. This irregularity renders the entire proceeding from the stage of recording the accused’: plea vitiated. Therefore, neither of the impugned judgments can be sustained. The learned counsel relies upon a decision of this Court in Crl.R-P. No. 100241/2018 decided on 13th March 2019 in support of his submission that the impugned judgments will have to be set aside and the case remanded for re-trial from the stage of cross-examination of the respondent.
The case is restored to the Beard of VI JMPC, Belagavi, for re- trial commencing with the cross-examination of the respondent. The parties shall appear before the VI JMPC. Belagavi without further notice, on 14 of September 2020 - The revision petition is accordingly allowed.
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2020 (8) TMI 933
Judgment-debtor has the means to satisfy the money decree or not - Ascertainment of assets and income of the judgment-debtor - Form 16A of Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure - requirement of modifications in the judgements and formats of affidavit.
HELD THAT:- This Court is of the view that the directions issued by this Court in the judgment dated 05th December, 2019 and formats of the affidavits (Annexures A, B and C) formulated by this Court require modification, in order to make them more comprehensive. The judgment dated 05th December, 2019, is hereby modified.
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2020 (8) TMI 921
Recovery of dues - priority of settlement of dues - Reluctance to transfer property - execution proceedings initiated by Recovery Officer (RO) pursuant to Decree/Recovery Certificate (RC) obtained by Punjab National Bank (PNB or Secured Creditor), inter alia on the ground that the erstwhile owner/borrower has to pay certain dues to the Central Excise Department.
Whether the dues of the secured creditor are to be paid in priority, by sale of secured assets specifically charged to it, vis-à-vis the arrears of outstanding dues under the Central Excise Act, 1944? - HELD THAT:- The undisputed legal position which emerges is that a conjoint reading of the relevant provisions of all the three enactments, i.e. Recovery Act, 1993, Securitisation Act, 2002 and Central Excise, 1944 would show that the secured creditor shall have a prior right of recovery from the sale of the secured assets, over and above the right of Central Excise.
Further, in UNITED BANK OF INDIA VERSUS ABHIJIT TEA CO. (P.) LTD. [2000 (9) TMI 928 - SUPREME COURT] and NAHAR INDUSTRIAL ENTERPRISES LTD. AND OTHERS VERSUS HONG KONG & SHANGHAI BANKING CORPORATION AND OTHERS [2009 (7) TMI 1193 - SUPREME COURT], Recovery Act, 1993 has been noticed to be a procedural Act, since, it precisely lays down, the manner and procedure of recovery of debts due to Banks and Financial Institutions. Since both Recovery Act, 1993 and Securitisation Act, 1993 are procedural in nature and complimentary to each other, therefore, the ratio of law, with regard to the applicability of principle of retroactive operation of the provisions of the Securitisation Act, 2002 would apply with equal force to the amendment under the Recovery Act, 1993 as well, and the above judgments would apply with equal force, to the amendment brought under the Recovery Act, 1993 as well.
There are no hesitation in concluding that the argument of the Central Excise, that the demands of Central Excise having been made/confirmed earlier than the aforesaid amendments under the aforesaid enactments which would have prospective operation in nature, and thus the demands under the Central Excise Act, 1944 would have precedence, is misplaced and hence is rejected.
It is well settled that, it is only when a charge is created by act of parties or exists by operation of law, upon the property, that question of priority arises to be determined. In the present case, the property in question had never been attached nor a charge was created by the Central Excise. Further, there is no provision which provides for creation of charge upon immovable property of assessee by operation of law. Therefore, Central Excise had no charge upon the property in question. Consequently, it had no locus to thwart/negate the entitlement of the secured creditor to sell the secured asset or deny the auction purchaser to enjoy natural fruits of the sale, upon which mortgage has been created in favour of secured creditor by creation of mortgage in terms of section 58 of the Transfer of Property Act, 1882, which mortgage has been upheld by DRT on issuance of Recovery Certificate - on account to conspicuous absence of charge or attachment upon the secured asset in favour of Central Excise in the manner so provided under the Act, 1944, it could not even have claimed priority of charge vis-à-vis the claim of the secured creditor.
Issue is answered in affirmative, and it is held, that the dues of the secured creditor are to be paid in priority by sale of secured assets specifically charged to it vis-à-vis the arrears of outstanding dues under the Central Excise Act, 1944.
Charges being claimed by various third parties, including Government and Semi-Government entities upon the property (secured asset) by enforcing their claim/s, of the dues recoverable from the erstwhile owner/borrower of the property - HELD THAT:- These are claimed by way of act of attachment being effected upon the secured asset, either pursuant-to dues being claimed under various enactments, or through the process of recovery where attachment orders are passed by the courts/authorities, on the application of 'the claimants or by operation of law. These encumbrances shall include, dues which are claimed, by third party entities like Central Excise, Government dues, Semi Government, dues of private individuals seeking attachment on the property of the defaulter/borrower etc. It would thus be fruitful to discuss these claims broadly by their respective classification.
It is to be noticed that the rights of the auction purchaser, on purchasing the secured asset, are virtually derivative rights from the secured creditor. Thus, if the auction purchaser has purchased the property from the secured creditor, it is the secured creditor which has exercised its right of priority to sell the secured asset to recover and appropriate its dues and hence the auction purchaser cannot be called upon to pay the dues of the previous owner/borrower.
While the banks proceed to sell the mortgaged property to recover the secured debts, it is noticed that due to attachments orders obtained by the agencies upon the secured asset/s, it does not get adequate buyers because of the encumbrance of attachment. If at all, it is able to sell it, the auction purchaser faces difficulty in getting the property transferred in its favour. Such attachments upon the property, which are obtained by the agencies or such other similarly placed entities, from the courts or arbitral tribunals are all unsecured attachments. Such unsecured debts/claims cannot have precedence over the secured debts by virtue of prior mortgage rights of having been created in favour of the secured creditor by the owner/mortgagor and consequently cannot be treated as an encumbrance either for the secured creditor or for the auction purchaser. The auction purchaser who has purchased such property from the secured creditor cannot be put to any disadvantageous position because of the such third party attachments.
Section 48 of the Act, 1882 would protect the right of the secured creditor and the also the subsequent rights created in favour of the auction purchaser purchasing the property from such secured creditor - an auction purchaser purchasing such property from the secured creditor would not be liable for the dues being claimed by such plaintiff nor can he interject right of enjoyment of the property purchased by the auction purchaser, merely on the basis of an attachment order for an unsecured debt. Even section 48 of the TP Act, 1882 would also protect the right of the secured creditor in whose favour prior mortgage rights exist and the consequent right of the auction purchaser from such attachments upon the secured asset.
Dues which emanate but of utilization of the property (secured asset) itself by the erstwhile occupier/owner/borrower, that are sought to be recovered from the auction purchaser - HELD THAT:- The most common claim is that of the Electricity Department against the auction purchaser towards unpaid bills of supply/use of electricity by the previous occupier/owner of the secured asset. Hence,' it requires to be dealt with specifically. It is to be noticed that it is consequent upon purchase of property in a public auction conducted by or on behalf of a secured creditor, that the auction purchaser realizes that previous electricity dues, consumed by the erstwhile owner has not been cleared due to which, re-connection or fresh electricity connection is denied. The Electricity Department, raises a demand and a condition, of clearance of previous dues, before the subsequent purchaser could claim a connection or a restoration thereof, which leads to an issue as to whether the auction -purchaser would be liable to clear the dues of the electricity consumed by the previous owner/occupier of the property.
As regards, other dues are concerned including transferable and recoverable statutory dues, pending installments due and payable to the allotting agency, Internal and External Development Charges payable to Development Authority, Extension fee/non-construction charges. Water and Sewerage dues etc., which are directly emanating out of the usage of the -property in question, would also be payable by the auction purchaser, where the properties are being sold on "as is where is basis".
The issue is answered in negative and it is held petitioner being successful auction purchaser, pursuant to an auction conducted by DRT under Recovery Act, 1993 would not be liable to pay the dues being claimed by Central Excise originally payable by the erstwhile owner/assessee/borrower.
Whether respondent No. 3 could have refused the transfer of the property in question in the name of the petitioner? - HELD THAT:- A perusal of the writ petition would reveal that petitioner submitted request letter dated 04.10.2019, vide diary No. 3921 to Respondent No. 3, pursuant to which, it issued the impugned letter dated 15.10.2019 (P-3), vide which transfer of property is sought to be resisted by Respondent No. 3 predominantly on five grounds. The first one being, that Urban Ceiling Officer Ludhiana vide letter dated 1275 dated 28.09.1987, has restricted the transfer of the property in question, and the decision in that regard is sought to be intimated to it. Petitioner has replied to the same, vide letter dated 16.10.2019 (P-4), stating that Urban Ceiling Law, is not applicable to the property in question. Since, Urban Land (Ceiling and Regulation) Act, 1976, was repealed by the Parliament by passing Urban Land (Ceiling and Regulation) Repeal Act, 1999 (Act No. 15 of 1999), therefore, the same cannot be an objection to resist the transfer of the property in favour of petitioner.
The respondent No. 3-GLADA is directed, that in case if it insists on compulsory registration in-spite of the aforesaid statutory provision, to decide the issue, after giving an opportunity of hearing to the petitioner and passing a speaking and reasoned order within four (04) weeks from the receipt of certified copy of the order, failing which the competent authority, shall be liable for proceedings for contempt under the Contempt of Courts Act, 1971.
Petition allowed.
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2020 (8) TMI 911
Dishonor of Cheque - existence of debt or liability or not - rebuttal of presumptions - complaint was filed after the period of 15 days - Condonation of delay in filing complaint - HELD THAT:- The notice herein has not been issued to the drawer of these two cheques within the mandatory period of fifteen days of the receipt of information on 07.03.1997 by the complainant from the bank regarding the return of the cheque as unpaid and as such the notice is defective in respect of the said two cheques as it is not in accordance with the provision of Section 138(b) of the N.I. Act.
Reliance placed upon the photo copy of the reply given by the Advocate of the accused in response to his letter dated 15.04.1997 which proved the service of the said notice - admissibility of evidences - HELD THAT:- It is this document which has been filed and relied upon by the complainant in support of his due service of notice. It is seen from the said copy of the letter that the alleged notice dated 15.04.1997 gave a notice to pay the cheque amount within seven days from the receipt of letter dated 15.04.1997. And the said statement has not been denied by the complainant. From the copy of the letter that has been relied upon, this court finds that the demand to pay the said amount within seven days is in clear violation of the provision of Section 138(c) of the N.I. Act 1881.
The power of the court to condone the delay, on a prayer under Section 142 (1) (b) is in respect of filing of a complaint under Section 138 of the N.I. Act and not in respect of issuance of notice under Section 138 of the N.I. Act. The present case has been filed on 14.05.1997 and thus with in the period of limitation. The complainant has also admitted that the mother of the accused has filed a suit against the complaint’s elder brother Nirmal Guchait and the said suit is still pending. This shows that there is on going dispute between the parties.
The present case is under Section 138 of the N.I. Act, wherein the mandatory requirement in a case under this provision, is the notice, which initiates the total process and is the base/foundation of such a case. The notice in this case has to be complete in all respect as required under the said Section. Any defect in the said notice including its service and contents and requirements is vital in a case of this nature. In the present case, the findings of the Trial Court that the notice in this case is insufficient, vague and illegal is found to be correct and this Court also finds that the notice in this case is not in accordance with law being in violation of the provisions under Section 138(b) and (c) of the N.I. Act and hence the judgment under appeal needs no interference.
The appeal against acquittal stands dismissed.
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2020 (8) TMI 909
Robery and attempt to murder - Recovery of prohibited buttondar knife from the appellant and his co-accused - conviction under Section 394 of IPC - HELD THAT:- Mere production of photocopy of an OPD card and statement of mother on affidavit have little, if any, evidentiary value. In order to successfully claim defence of mental unsoundness under Section 84 of IPC, the accused must show by preponderance of probabilities that he/she suffered from a serious-enough mental disease or infirmity which would affect the individual’s ability to distinguish right from wrong - Further, it must be established that the accused was afflicted by such disability particularly at the time of the crime and that but for such impairment, the crime would not have been committed. The reasons given by the High Court for disbelieving these defences are thus well reasoned and unimpeachable.
Regardless thereto and given the ingrained principles of our criminal law jurisprudence which mandates that substantive justice triumph limitations of procedure, this Court on 22.07.2020 tried to enquire into the mental health of the appellant, by requesting the learned Additional Solicitor General to get the appellant mentally examined. However, notwithstanding such efforts, the appellant who had been granted bail by this Court earlier, is untraceable.
Given such inability of the appellant to establish juvenility or insanity, raise any doubt regarding guilt; and considering the detailed reasons accorded by the High Court, the reliable testimony of twelve witnesses as well as the leniency shown in sentencing, there are no reasons to interfere with the impugned order(s) - appeal dismissed.
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2020 (8) TMI 899
Dishonor of Cheque - non-impleading the partnership firm as an accused - cheque was issued by the partnership firm - respondent did not issue any statutory notice to the partnership firm - HELD THAT:- The cheque was issued on behalf of partnership firm, namely Sanjey Heavy Engineering partnership firm. Whereas, the respondent caused statutory notice only to the partner who signed the cheque, namely the petitioner herein. Admittedly, the respondent did not issue any notice to the partnership firm and also did not implead the partnership firm as an accused in the complaint lodged for the offences under Section 138 of NI Act. Even according to the respondent, the partnership firm purchased materials and issued cheque towards part payment of the balance amount. Therefore, the complaint impugned is not at all maintainable as against the partner without impleading the partnership firm as an accused.
In the case on hand, admittedly the alleged cheque was issued by the partnership firm and the respondent did not issue any statutory notice to the partnership firm and also did not implead the partnership firm as an accused. There are two partners in the firm, in which the petitioner is being one of the partners only impleaded as an accused.
Petition allowed.
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2020 (8) TMI 883
Seeking for issue of Writ of Mandamus - initiation of action with regard to the destruction of residential building and other properties of Accused-Vikas Dubey and to safeguard the life of the Accused - conflict of interest - HELD THAT:- The entire basis for making the allegations as contained in the miscellaneous petition is an Article relied on by the Petitioner said to have been published in the newspaper. There is no other material on record to confirm the truth or otherwise of the statement made in the newspaper. In our view this Court will have to be very circumspect while accepting such contentions based only on certain newspaper reports. This Court in a series of decisions has repeatedly held that the newspaper item without any further proof is of no evidentiary value. The said principle laid down has thereafter been taken note in several public interest litigations to reject the allegations contained in the petition supported by newspaper report.
In the case on hand, the Petitioner is a lawyer by profession who practices in Mumbai and has come up by way of Public Interest Litigation. Therefore, the allegations of bias made by him against the members of the Commission merely on the basis of newspaper reports and nothing more, are liable to be rejected outright.
The Petitioner herein is an advocate who practices law in Mumbai, Maharashtra and is in no way connected to the incident in question which took place in U.P. However, the petition filed by him in public interest was accepted and the Commission of Inquiry consisting of persons who had held high position has been constituted. The enquiry held would be in public domain and the Petitioner has already been granted the liberty of participating therein. The report of the enquiry is ordered to be filed in the petitions which were filed before this Court. Therefore, there would be sufficient safeguard to the manner in which the inquiry would be held - the Petitioner has been raising unnecessary apprehensions and repeated applications are being filed which in fact is hampering the process of inquiry.
The instant petition/application is without any merit and the same is accordingly dismissed.
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2020 (8) TMI 881
Seeking issuance of Solvency Certificate - appellant's account was classified as NPA or not - power of Revenue Department to issue the Solvency Certificate - HELD THAT:- Among other defence, learned counsel for the respondent therein, has raised a preliminary objection that the writ petition is not maintainable, because the grant of solvency certificate is regulated by Government instructions, which are non-statutory. In support of his contention learned counsel for the respondent therein has relied on two decisions of the Hon'ble Supreme Court, the State of Assam v. Ajit Kumar Sharma, in [1964 (10) TMI 104 - SUPREME COURT] and G.J. Fernandez v. State of Mysore, [1967 (4) TMI 200 - SUPREME COURT] wherein, it was held mere administrative instructions do not confer any right on any member of the public, to ask for a writ against the Government to enforce the same.
Question considered by the Hon'ble Madhya Pradesh High Court in Pt. Girija Shankar Sharma's case [1973 (8) TMI 174 - MADHYA PRADESH HIGH COURT] was whether a public body enjoined with a public duty has to act fairly, and whether the discretion conferred on such public authority Collector therein, had discharged his duties, no matter, whether he has governed by administrative instructions or not. In Pt. Girija Shankar Sharma's case, it is evident that the exercise of power by the Collector was found to be erroneous and hence the court set aside the order impugned therein. There cannot be any doubt that Collector is exercising a public duty. Question as to whether bank is discharging public duty or not, was not a question raised therein. Said judgment is totally inapposite to the case on hand. It cannot be treated as a precedent to the instant writ petition.
The bank is not performing any public duty and hence, writ petition is not maintainable - Appeal dismissed.
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2020 (8) TMI 875
Seeking pre-arbitration interim relief - Sinister sequence of events - Section 9 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Section 9 of the 1996 Act contemplates "interim measures, etc.", by the Court. The expression "etc.", used at the end of a definition clause has been held, in several decisions, to be required to be interpreted noscitur a sociis and ejusdem generis (the latter principle applying where the words, preceding the word "etc.", constituted a genus, and the former principle applying more universally, in all cases), the words preceding it.
The Court, while exercising its power under Section 9 of the 1996 Act, has to be acutely conscious of the power, vested in the arbitrator/arbitral tribunal, by Section 17 of the same Act. A reading of Section 9, and Section 17, of the 1996 Act, reveals that they are identically worded. The "interim measures", which can be ordered by the arbitral tribunal, under Section 17, are the very same as those which can be ordered by the Court under Section 9. It is for this reason that sub-section (3) of Section 9 proscribes grant of interim measures, by the Court, consequent on constitution of the arbitral tribunal, save and except where the Court finds that circumstances exist, which may not render the remedy, under Section 17, to be efficacious. The Court, while exercising jurisdiction under Section 9, even at a pre-arbitration stage, cannot, therefore, usurp the jurisdiction which would, otherwise, be vested in the arbitrator, or the arbitral tribunal, yet to be constituted.
There is no whisper of any denial, in the aforesaid response, dated 8th July, 2020, from the petitioner to the Respondent, of the allegations that the petitioner had failed to maintain the Required Security Cover, and to liquidate all Outstanding Amounts by the final Redemption Date, i.e. 10th July, 2019. The fact of failure, on the part of the petitioner, to pay the Outstanding Amounts by the cutoff date of 10th July, 2019, stands, in fact, expressly acknowledged and admitted, by the petitioner, in its letter dated 30th June, 2020. The approach of the petitioner, in its response dated 8th July, 2020, was to maintain a studied silence thereon, and, instead, to allege "market manipulation" by KKR and its confederates. Even in the present petition, before this Court, the petitioner has remained completely silent, regarding the allegation of non-maintenance of the Required Security Cover, and of failing to repay all Outstanding Amounts, to the Debenture Holders, on or before 10th July, 2019. Prima facie, therefore, "Events of Default" had taken place, within the meaning of Clause 1.1.41 of the Debenture Trust Deeds, read with Clause 3.4 and S. No. 2 and 14 of the "Events of Default", enumerated in Schedule 3 to the Debenture Trust Deed.
The very contention, of the petitioner, that the price of the CGP shares had fallen owing to a misleading report, by Vaish & Co., too, is entirely presumptuous in nature, amounting to nothing more than speculation. There are myriad and manifold considerations, which operate to raise, or lower, the prices of stocks in the stock market. Fluctuation of the stock market, as is axiomatic in macroeconomic theory, is one of the most unpredictable of all unpredictable sciences - the dispute is entirely foreign to the issue of default, by the petitioner, to honour its obligations under the Debenture Trust Deeds, and the resultant right, of the Respondent to invoke the pledged shares, and sell them in the stock market, for realisation of the outstanding amounts.
The dispute, between the petitioner and the respondent, which could legitimately form the basis of an arbitral proceeding and, consequently, of the present proceedings under Section 9 of the 1996 Act, is the alleged infraction, by the petitioner, of the covenants of the Debenture Trust Deeds, and the right of the respondents, on that basis, to proceed against the shares, pledged by the petitioner by way of security. That dispute has nothing to do with good faith or bad faith. The "want of good faith", on the part of the respondents-as alleged by the petitioner-is in the manner in which the respondents allegedly depressed, artificially, the price of the CGP shares, before purchasing them in the open market - the prayers of the petitioner, in the present petition cannot, therefore, be granted, in exercise of the power conferred on this Court by Section 9 of the 1996 Act.
Petition dismissed.
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2020 (8) TMI 871
Grant of partial grant of award by the learned Arbitrator - Section 34 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- The logic of the learned Arbitrator, as reflected from the award impugned herein, gives clear justification for the interest as awarded. It was entirely within the bounds of logic and reason to divide the award into several time-periods, being the pre-award, pendente lite and post-award periods, each of which would have to focus on interest on the sum due at that stage. As such, since the principal awarded carried interest for the pre-litigation period, there is no bar in considering the principal sum, for the purpose of interest pendente lite at the next stage to be the sum total of the pre-litigation interest added to the interest thereon. By similar logic, each of the stages entitled the award-holder to interest and the interest component, along with the principal, of each previous stage would be taken as the principal "sum" for the purpose of levying interest for the next.
There is no justification in finding fault with such ratio of the arbitrator in imposing interest, all the more since the scope of interference under Section 34 is extremely limited.
Corroborative evidence in support of the 5th RA Bill work being done - HELD THAT:- The same cannot hold water, since the RA Bill, by its very definition and nature, is a running account bill which is raised from time to time. The amount on the 1st to 4th bills were not claimed since the same was already credited to the account of the claimant. As such, the question of abandonment of work being a basis of refusal of such amount does not arise - The TDS certificate, read in conjunction with the RA bill itself, particularly in view of the clearance of the previous RA Bills, clearly weigh the preponderance of probability in favour of amount claimed on the 5th RA Bill being justifiable.
It is a fallacious argument that different yardsticks were followed in respect of refusal of the claims on the 1st to 4th RA bills while granting the 5th RA bill dues. This is for the simple reason that the 1st to 4th bill amounts were already credited by the respondent company to the claimant's account and there was no claim in the arbitral proceeding, as such, for the said amount. Any question of the claimant being not entitled to the previous bill dues would be superfluous in the context. The arbitrator sufficiently applied his mind in considering the relevant materials on record in conjunction with each other and was justified in granting the partial award, including interest, in the present case.
The stringent tests of Section 34(2) of the 1996 Act are not satisfied at all in the instant case to justify interference under the said provision - petition dismissed.
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2020 (8) TMI 866
Decree of recovery of possession of the suit premises - Refusal of relief of possession especially when the Lower Appellate Court granted relief of mesne profits till delivery of possession - entitlement to a declaration in respect of half of the suit property overlooking the pleadings and the documents of title - substantial question of law or not - burden of proof - HELD THAT:- To be “substantial”, a question of law must be debatable, not previously settled by the law of the land or any binding precedent, and must have a material bearing on the decision of the case and/or the rights of the parties before it, if answered either way - To be a question of law “involved in the case”, there must be first, a foundation for it laid in the pleadings, and the question should emerge from the sustainable findings of fact, arrived at by Courts of facts, and it must be necessary to decide that question of law for a just and proper decision of the case.
Where no such question of law, nor even a mixed question of law and fact was urged before the Trial Court or the First Appellate Court, as in this case, a second appeal cannot be entertained - Whether a question of law is a substantial one and whether such question is involved in the case or not, would depend on the facts and circumstances of each case. The paramount overall consideration is the need for striking a judicious balance between the indispensable obligation to do justice at all stages and the impelling necessity of avoiding prolongation in the life of any lis.
The First Appellate Court examined the evidence on record at length, and arrived at a reasoned conclusion, that the Appellant-Defendant was owner of a part of the suit premises and the Respondent-Plaintiff was owner of the other part of the suit premises. This finding is based on cogent and binding documents of title, including the registered deeds of conveyance by which the respective predecessors-in-interest of the Appellant-Defendant and Respondent-Plaintiff had acquired title over the suit premises. There was no erroneous inference from any proved fact. Nor had the burden of proof erroneously been shifted.
The second question of law, that is, the question of whether the First Appellate Court was right in holding that the plaintiff was entitled to a declaration of title in respect of half of the suit property, has, as observed above, been decided in favour of the Respondent Plaintiff, based on pleadings and evidence. The conclusion of the First Appellate Court, of the entitlement of the Respondent Plaintiff to a declaration in respect of his half share in the suit property does not warrant interference in a second appeal - The first question framed by the High Court, that is, the question of whether the Lower Court /Appellate Court was right in refusing the Respondent Plaintiff relief of possession, when the Appellate Court had granted mesne profits to the Respondent Plaintiff, is based on the erroneous factual premises that the First Appellate Court had granted mesne profits to the Respondent Plaintiff, which the First Appellate Court had not done.
The High Court erred in law in proceeding to allow possession to the Respondent-Plaintiff on the ground that the Appellant-Defendant had not taken the defence of adverse possession, ignoring the well established principle that the Plaintiff’s claim to reliefs is to be decided on the strength of the Plaintiff’s case and not the weakness, if any, in the opponent’s case - the Appellant-Defendant claimed the right of ownership of the suit property on the basis of a deed of conveyance, executed over 75 years ago. The Appellant- Defendant has claimed continuous possession since the year 1966 on the strength of a deed of release executed by his father. In other words, the Appellant-Defendant has claimed to be in possession of the suit premises, as owner, for almost 28 years prior to the institution of suit.
When no substantial question of law is formulated, but a Second Appeal is decided by the High Court, the judgment of the High Court is vitiated in law.
The judgment and order of the High Court under appeal is set aside - Appeal allowed.
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2020 (8) TMI 863
Interpretation of law - admission and continuation in postgraduate medical degree courses - HELD THAT:- It is directed that the doctors who are already undergoing the postgraduate degree courses on the basis of being successful in the original writ petition filed in the High Court at Calcutta shall not be disturbed from pursuing the said course. The same direction shall also cover successful medical students who have already undertaken admission in postgraduate medical degree courses following the applicable admission process and are pursuing their postgraduate studies in the States of Gujarat, Haryana, Kerala, Maharashtra and Tamil Nadu.
Application disposed off.
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2020 (8) TMI 860
Seeking grant of Bail - HELD THAT:- There is no dispute that the applicant-petitioner has already surrendered. The interim order/relief granted to the petitioner was passed without taking into account the fact that the petitioner was in custody on that day. Therefore, the order preventing any coercive steps is hereby recalled, as redundant.
The applicant-petitioner is given liberty to apply for bail before the appropriate court - Application disposed off.
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2020 (8) TMI 859
Money Laundering - scheduled offence - the respondents from taking any precipitate action against the petitioner in pursuance of the Enforcement Case Information Report i.e. ECIR/0I/HIU/20I9 dated 25.01.2019 ECIR solely on the ground that the charge-sheet did not advert to a scheduled offence - HELD THAT:- On the previous date i.e. 08.07.2020, I had restrained the respondents from taking any precipitate action against the petitioner in pursuance of the Enforcement Case Information Report i.e. ECIR/0I/HIU/20I9 dated 25.01.2019 [ECIR] solely on the ground that the charge-sheet did not advert to a scheduled offence.
Mr. Mahajan says that since the investigation is on, there is a possibility of not only the petitioner being charged under Section 420 of the IPC, but also qua other scheduled offence(s) as well - what is clear is that there is nothing on record before the concerned Court, which points in the direction that the petitioner has infracted a provision of the IPC, which is a scheduled offence.
The only direction that can been issued, whereby the interests of both the petitioner and the respondents are protected, is that the subject ECIR be closed with liberty to the respondents to revive the same if a supplementary charge-sheet is filed and/or a charge is frame qua the petitioner concerning scheduled offence(s) - petition disposed off.
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2020 (8) TMI 858
Arbitration proceedings - Foreign Final Award - the extent to which HSBC could be said to have a strong prima facie case in the enforcement proceedings Under Section 48 which are pending before the Bombay High Court? - whether irreparable prejudice would be caused to HSBC if protective orders were not issued in its favour, and generally, whether the balance of convenience tilts in its favour and to what extent?
HELD THAT:- Where arbitral proceedings are ongoing, such proceedings become invalid the moment legal proceedings upon the whole of the subject matter of the reference have been commenced between all the parties to the reference and a notice thereof has been given to the arbitrators or umpire. As against this, Sections 5, 8 and 16 of the 1996 Act reflect a completely new approach to arbitration, which is that when a judicial authority is shown an arbitration Clause in an agreement, it is mandatory for the authority to refer parties to arbitration bearing in mind the fact that the arbitration Clause is an agreement independent of the other terms of the contract and that, therefore, a decision by the arbitral tribunal that the contract is null and void does not entail ipso jure the invalidity of the arbitration clause.
There can be no doubt whatsoever after reading the issues and some of the material findings in the Foreign Final Award that the issues raised and answered are the subject matter of civil as opposed to criminal proceedings. The fact that a separate criminal proceeding was sought to be started and may have failed is of no consequence whatsoever - a reading of the Foreign Final Award in this case would show that a strong prima facie case has indeed been made out as the Award holds the BBC transaction as a basis on which the contract was entered into and the USD 60 million paid by HSBC, which would clearly fall within fraudulent inducement to enter into a contract Under Section 17 of the Contract Act. Such a contract would be voidable at the instance of HSBC. Also, the findings on the siphoning off of monies that were meant to be allocated for the performance of the BBC contract would attract the tort of deceit. The measure of damages for such fraudulent misrepresentation is not the difference between the value of the shares on the date of making the contract and the value HSBC would have received, if it had resold those shares in the market, after the purchase.
The matter is remanded to the ADJ, Mohali for fresh disposal in accordance with law.
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2020 (8) TMI 854
Interim order for Liquidation - it is the case of the respondents that the impugned order has been passed under section 102(1)(c)(ii) and (iv) of the Maharashtra Co-operative Societies Act, 1960, it may not be necessary to delve into the circumstances covered by clauses (a) and (b) - order for winding up of the petitioner society was passed - HELD THAT:- What section 102(1)(c) contemplates is that if the Registrar of his own motion in the case of a society which has not commenced working or has ceased working or possesses shares or members' deposits not exceeding five hundred rupees or has ceased to comply with any conditions as to registration and management as provided in the Act or the rules or the bye-laws, is of the opinion that a society ought to be wound up, he may issue an 'interim order' directing it to be wound up. Adverting specifically to the facts of the present case where respondent No. 1 has invoked clause (c)(ii) and (iv) of sub-section (1) of section 102, what therefore falls for consideration is that the Registrar must suo motu form an opinion that a society should be wound up because it has ceased working or it has ceased to comply with any conditions as to registration and management as provided under the Act or the rules and bye-laws framed thereunder then he may issue an 'interim order' directing the society to be wound up.
The show cause notice was issued on 19.05.2020 to which petitioner submitted reply on 15.06.2020. Immediately on the next day, i.e., on 16.06.2020, the impugned order was passed. Impugned order says that though the petitioner had submitted its reply, no documents were annexed with it. It is stated that though reference was made to an affidavit regarding payment of dues to the workmen, neither copy of such affidavit nor any other evidence were produced. Regarding agreement entered into with Amul, again it is stated that no evidence to that effect was produced. On that basis, it was held that the written reply was not at all satisfactory and that liquidation process should be initiated.
Having regard to the stand taken by the petitioner society in its show cause reply, if respondent No. 1 wanted or desired further materials to be considered in support of the contentions, it could have very well sought for the same from the petitioner society. After all directing liquidation of a society is a drastic measure and ordinarily should be taken only as the last option. Non-seeking of materials/evidence from the petitioner society more so in the context of the petitioner society seeking a hearing does not appear to be justified; rather it appears that impugned action has been taken in undue haste without calling for and examining the related materials.
When an order is set aside by a superior authority, the consequence thereof is that it becomes inoperative; it is rendered null and void; it is erased from the record book as if it was never passed - to contend that the impugned order dated 16.06.2020 is a continuation of the previous proceeding which led to passing of final order dated 24.08.2016 is clearly an untenable proposition and certainly does not stand to reason. When respondent No. 1 says that the terms and conditions of the appellate order dated 12.05.2017 have not been complied with and for that reason he seeks to invoke the suo motu jurisdiction under section 102(1)(c), he has firstly to clearly state and point out as to what are the non-compliances and to what extent.
The impugned order dated 16.06.2020 passed by respondent No. 1 cannot be sustained being wholly untenable in law as well as on facts - petition allowed.
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