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2017 (2) TMI 1527
Allocation of sum of Rs. 10 Crores for payment to the affected employees for payment on account of various reasons such as marriage of daughters, ailment, old age disease, payment of loan etc. - Company incorporated under the Companies Act is a juristic person which has a distinct and separate entity or not - Whether the State of Bihar being a sole shareholder of the Boards, Corporations or the Companies incorporated under the Companies Act, 1956 have the responsibility to pay salary and allowances of the employees of the Boards, Corporations and Companies who are unable to pay salary on account of financial constraints? - HELD THAT:- A precedent is a judicial decision containing a principle, which forms an authoritative element termed as ratio decidendi. An interim order which does not finally and conclusively decide an issue cannot be a precedent. Any reasons assigned in support of such non-final interim order containing prima facie findings, are only tentative. Any interim directions issued on the basis of such prima facie findings are temporary arrangements to preserve the status quo till the matter is finally decided, to ensure that the matter does not become either infructuous or a fait accompli before the final hearing.
The resume of the precedents on the issue of the liability of the State Government to pay salary and allowances of the employees of the Boards, Corporations and the Companies of which State is a shareholder and are State within the meaning of Article 12, that there is unanimity that the State Government is not liable to pay salary and allowances as they are separate juristic entity. Therefore, neither in law, as the companies are separate and distinct juristic entity than the State Government, the State cannot be directed to pay salary and wages of the employees of such juristic entity.
The judgments in Kapila Hingorani [2003 (5) TMI 359 - SUPREME COURT] and Kapila Hingorani [2005 (1) TMI 754 - SUPREME COURT] have left the question of liability of the State Government to pay salary and allowances open. The intervention of the Supreme Court was to address humane problem of financial stringency suffered by such employees. Therefore, neither the Kapila Hingorani [2003 (5) TMI 359 - SUPREME COURT] nor Kapila Hingorni [2005 (1) TMI 754 - SUPREME COURT] or Harihar Yadav's case [2013 (11) TMI 1795 - SUPREME COURT] unequivocally holds the State Government responsible for payment of salary and allowances to the employees of the Boards, Corporations and the Companies, if such Boards, Corporations and the Companies are not able to pay salary and allowances due to financial stringency on any ground whatsoever.
Whether there is any final direction on the basis of interim orders passed in Kapila Hingorani [2003 (5) TMI 359 - SUPREME COURT] and Kapila Hingorani [2005 (1) TMI 754 - SUPREME COURT], when the matter was remitted back to this Court to examine the legal issues? - HELD THAT:- In Barak Upatyaka's case [2009 (3) TMI 992 - SUPREME COURT], the Supreme Court has observed that the observations and directions in Kapila Hingorani [2003 (5) TMI 359 - SUPREME COURT] and Kapila Hingorani [2005 (1) TMI 754 - SUPREME COURT] are the interim directions based on tentative reasons and have no value as precedent. Such interim directions were given in extraordinary power under Article 142 of the Constitution - The final order of the Supreme Court is a direction to the High Court to examine the legal issues and that the legal issue requires to be examined by this Court is as to whether the State can be called upon to pay salary and allowances to the workers of the Boards, Corporations and Companies incorporated at one stage by the State Government. Therefore, the issue as to whether the State Government is liable for payment of salary and allowance has been left open by the Supreme Court for appropriate decision by this Court.
Whether the observations made in Kapila Hingorani cases are to address the humane problems faced by certain employees of the Boards and Corporations alone? - HELD THAT:- The observations in Kapila Hingorani (I) and Kapila Hingorani (II) are in fact to address the humane problem as it left the question of liability of the State open - Even in Harihar Yadav's case, the dispute was on account of bifurcation of the State and consequently, the liability of the State of Bihar and Jharkhand but again the problem was addressed as a humane problem.
Whether the judgment in Harihar Yadav's case [2013 (11) TMI 1795 - SUPREME COURT] mandates the State of Bihar to pay salary of the employees of all Boards, Corporations and Companies having huge financial burden and whether such financial burden can be passed on to the State of Bihar when the financial allocation towards the salary and allowances of the Boards, Corporations and Companies is a policy decision in economic matters? - HELD THAT:- There are no merit in the Letters Patent Appeal filed by the writ-applicants bearing L.P.A. No. 1940 of 2015. The learned Single Bench has ordered the State to deposit Rs. 10 crores to meet any financial emergency required by any of the employees is without any mechanism as to how any claim of any of the employees can be examined and paid. It is not found that such direction warrants any interference in the present Letters Patent Appeals as it is to address the humane problem but we direct that Hon'ble Mr. Justice Udai Sinha shall constitute one member Committee to disburse the said amount in accordance with law and the procedure to be devised by him.
Both the Letters Patent Appeals are dismissed.
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2017 (2) TMI 1521
Dishonor of Cheque - prayer is that the sentences awarded to him in 14 different cases for the offence punishable under section 138 of the Negotiable Instruments Act, details of which are being provided in later part of this order, may be ordered to run concurrently - whether the High Court exercising powers under Section 482 Cr.P.C., invoke Section 427 Cr.P.C. and order that sentences awarded in two different cases shall run concurrently? - HELD THAT:- In all the 14 complaints filed against the petitioner, he has been convicted for the offence punishable under section 138 of the N.I. Act and different sentences have been awarded. The maximum sentence awarded to the petitioner is 2 years' simple imprisonment along with fine.
As per sub-section (1) of section 427 CrPC when a person already undergoing a sentence of imprisonment is sentenced on a subsequent conviction to imprisonment, such imprisonment shall commence at the expiration of the imprisonment to which he has been previously sentenced, unless the Court directs that the subsequent sentence shall run concurrently with such previous sentence - the intention of legislature is that even the life convicts have been held entitled to benefit of subsequent sentence, being run concurrently, be it life term or of any lesser term then the different yardstick cannot be applied for those persons, who have been awarded sentence of lesser duration than life unless there are compelling reasons to do so.
There are no compelling reason to order that all the sentences awarded to the petitioner in all 14 cases would run consecutively.
It would not be inconsistent with the administration of criminal justice if the petitioner is allowed the benefit of discretion contained in section 427 of the Code to meet the ends of justice - it is ordered that the substantive sentences awarded to the petitioner in the above referred 14 cases would run concurrently, however, the petitioner will have to serve default sentences as the provisions of section 427 of the CrPC do not permit a direction for concurrent running of substantive sentences with the sentences awarded in default of payment of fine/compensation.
Appeal allowed.
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2017 (2) TMI 1518
Error in evaluation of answer book - without evaluating the position with regard to availability of vacancy right of other candidate, it is stated that the direction issued by the learned writ Court cannot be implemented in the manner - HELD THAT:- Admittedly, the results of the examinations were declared on 29.8.2013 and thereafter according to petitioner's own showing appointment orders were started to be issued in 2014 itself. The petitioner received the answer-book under the Right to Information Act in December 2013 and at that point of time even before the appointment orders were made the petitioner was of the know in the matter of illegalities committed in evaluating her answer-book. That being so, the question as to what relief could be granted to the petitioner in the light of the delay caused, if any, between December 2013 to May 2015 and the consequential action of the Department in making appointment has not been adverted to by the learned Writ Court while issuing the direction contained in para 12 of the writ petition.
In fact once there was an objection specifically raised in this regard in writing before the learned writ Court, we are of the considered view that this issue should have been addressed by the learned writ Court, even though this issue could be gone into by us, but, in this writ appeal the materials for deciding this issue are not available inasmuch as the effect of preparation of the revised merit list, availability of vacancy, right which had accrued to candidate who has been appointed and adverse effect on their appointment if any are all to be looked into and as the material for deciding these issues are not available in this writ appeal, it thought appropriate to remand the matter back to consider this limited question of granting relief to the petitioner based on the objection for delay raised by the respondent.
The order passed by the learned writ Court in the matter of error in evaluating the answer-book is upheld, but, the matter is remanded back to the learned writ Court to reconsider the question of grating an appropriate relief to the petitioner in the light of the objection raised by the Public Service Commission and the State Government in the matter of delay, if any, caused on the part of the petitioner in seeking the relief - appeal allowed in part.
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2017 (2) TMI 1510
Maintainability of prosecution - Food Adulteration - Parachute coconut oil manufactured by the Marico Industries Limited, Mumbai found to be adulterated - offences punishable under Sections 2(ia)(e) punishable under Section 7(i) and 16(1)(a) of Prevention of Food Adulteration Act - HELD THAT:- As the Marico Industries Limited, Mumbai has not been arraigned as an accused, therefore, the prosecution of the applicant in his official capacity is not permissible because he cannot be vicariously held liable for the offence committed by the Company unless and until, the Company which is a juristic entity is arraigned as an accused.
Petition allowed.
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2017 (2) TMI 1503
Compliance with the directions - HELD THAT:- A detailed affidavit of the Director, CBI shall be filed in this regard informing compliance of the directions contained in the order dated 18.04.2015 as well as directions contained in the order dated 23.09.2016.
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2017 (2) TMI 1492
Dishonor of Cheque - vicarious criminal liability of a Director or other Officer of a Company - Section 141 of the N.I. Act - HELD THAT:- In the present complaint filed before the learned S.D.J.M. and in the affidavit evidence-in-chief as per Section 145 of the N.I. Act by the complainant, it is clearly averred that accused No. 2 (Managing Director) of the accused company has the absolute controller the business of the Company and he is responsible for the day-today activities. In respect of the petitioner, it is simply averred that she is the Director of the accused-company and, therefore, all the accused persons are jointly liable for the offence.
There is no averment whether the petitioner was a Director of the accused-company on the date of issuance of the cheques in question, which were admittedly signed by accused No. 2, the Managing Director. There is no other specific allegation against the petitioner.
The question whether the accused-company committed the offence is quite distinct from the question whether the complaint against the company is maintainable or not. The questions need not be gone into in the present proceeding which has been initiated by the petitioner, a Director of the accused-company - Application disposed off.
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2017 (2) TMI 1451
Recovery towards liquidated damages together with interest - whether the complaint lodged by the defendant was without any probable and reasonable cause to maintain a suit for malicious prosecution? - HELD THAT:- It is well settled that in a suit for malicious prosecution, the entire burden lies on the plaintiff to establish the case. Similarly, it is also well settled that a Civil Court has to conduct independent enquiry before satisfying itself with regard to the absence of reasonable and probable cause for lodging the First Information Report. Therefore, it is the duty of the Court to assess materials independently to satisfy itself as to the absence of probable and reasonable cause. If the Expert was examined before the Court and established that only the defendant has signed the pay slip and signature found in the pay slip is that of the defendant, then it can be easily concluded that the defendant having signed the pay slip, fraudulently implicated the plaintiff in a false case.
It is not the case of the plaintiff that defendant having signed the pay slip, has filed a false complaint. Whereas, it is the contention of the defendant that on verification of the accounts and seeing debit entry in her account, she found that a sum of ₹ 2,25,000/- was withdrawn and her signature has been forged. She has given a complaint on genuine apprehension. That being the case, it is the duty of the plaintiff to establish that the pay slip infact was signed by the defendant and thereafter, the defendant has falsely given a complaint. Without establishing the same, it cannot be contended by the plaintiff that there is no probable and reasonable cause for lodging a complaint. When some amounts have been debited from one account, it is normal conduct of any human being to lodge a complaint to the lawful authorities to investigate the matter. The above complaint cannot be construed as a false complaint without any probable and reasonable cause and the same has been made with malicious intention.
Merely because, the defendant has not got into the box, the same is not a ground to hold that the plaintiff case is true. Even drawing adverse inference against the defendant at the most this Court can hold that defence of the defendant is not true. Still the plaintiff is not relieved from the initial burden of establishing her case of malicious prosecution. It is for the plaintiff to establish that the complaint lodged against her was without probable and reasonable cause. Admittedly, except the police report and the closure report by the Magistrate, as discussed above, no other evidence is available. Further, it is not established by the plaintiff that the defendant has in fact signed the pay slip by examining the expert or the Investigating Officer. Therefore, this Court is of the view that merely because the defendant has not been examined, the plaintiff cannot succeed automatically.
The issues are answered against the plaintiff - suit dismissed.
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2017 (2) TMI 1443
Dishonor of cheque - Wilful Defaulters - vicarious liability in case of a company or firm under Section 141, NI Act - HELD THAT:- The Petitioner was appointed as an independent non executive nominee director in 2009 and he subsequently resigned from the company in the year 2015. In terms of Section 149(12) of the Companies Act, 2013 he shall be held liable, only in respect of such acts of omission or commission by the company which had occurred with his knowledge or consent or connivance or where he had not acted diligently attributable through Board processes. Thus specific averments are required to be made in the complaint to show that the offence was committed with the knowledge/ consent/ connivance of the Petitioner.
Merely because the petitioner is the Director of Sequoia India Investment Holding which finances Vasan Health Care and by virtue thereof is a nominee independent director of Vasan Health Care, he cannot be held to be responsible for the day-to-day affairs of Vasan Health Care. Even otherwise the contentions now raised during the course of arguments and in the reply affidavits are not part of the complaints - Admittedly, the petitioner is not the Managing Director of Vasan Health Care nor the signatory to the cheque. He is also not the person responsible for day-to-day functioning of Vasan Health Care. No vicarious liability can be fastened on the petitioner in the absence of specific role being attributed to the petitioner.
Petition allowed.
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2017 (2) TMI 1425
Validity of Arbitral Award - date of limitation - HELD THAT:- The onus to prove that there were any hindrances caused by JSPL on account of which GNCL was prevented from performing its obligations, was on the petitioners. The averments made by petitioners in its suit filed in the Calcutta High Court could not be accepted without GNCL establishing the same. Clearly, JSPL’s claim could not be rejected on the basis of averments made by the petitioners in another proceeding without the petitioners proving the same.
The court had found that the arbitrator had passed an award without assigning any reason and without even recording a finding that the respondent therein had suffered a loss - In the present case, a plain reading of the impugned award would indicate that the arbitrator has discussed the pleadings, the evidence led and thereafter made the award indicating detailed reasons for the sums awarded.
The present petition is dismissed on account of delay as well as on merits.
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2017 (2) TMI 1417
Maintainability of Discharge application - HELD THAT:- The jurisdiction of the trial court while exercising power under Section 245 Cr.P.C. is to look into the allegations made in the complaint, statement of witnesses and documentary evidence. The charges can be framed also on the basis of strong suspicion. Marshaling and appreciation of evidence is not within the domain of this Court to go into merits and demerits of the allegation simply because the applicant alleges malus animus against the complainant-opposite party no.2. This Court would also refrain from making imaginary journey in the realm of possible harassment which may have caused to the applicants on account of filing the complaint.
Revision dismissed.
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2017 (2) TMI 1381
Production of Running License before the Collector - case of petitioner is that the running licence issued to him could not be located to be produced before the Collector, but since then he has located it and is available now - Held that:- The petitioner will file a fresh application before the Panchayat Council, (at present, the Commissioner) and a decision will be taken in respect of the same within a period of three (3) weeks from the date of the application - petition allowed.
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2017 (2) TMI 1376
Arbitration award - compliance with conditions of Section 34(1) of the Arbitration and Conciliation Act, 1996 - Held that:- The arbitration award was passed on 29.8.2011. That means the arbitration proceedings commenced long before 23.10.2015. This is thus a case where the arbitration proceedings commenced before 23.10.2015 and the parties did not agree otherwise. Therefore Section 34(5) of the Act has no application to the present case. The requirements therein need not to be complied with by the appellant to apply under Section 34(1) - appeal allowed - decided in favor of appellant.
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2017 (2) TMI 1338
Decree for specific performance of contract - Case of petitioner is that the application (Exhibit No.22) filed by him under Order VI Rule 17 of the Code of Civil Procedure be decided before the application (Exhibit No.18) filed by the defendant is considered - Held that: - the learned trial Judge has committed an error in rejecting the application (Exhibit No.27) and refusing to consider the application (Exhibit No.22) before considering the application (Exhibit No.18) - the provisions of Order VII Rule 13 of the Code of Civil Procedure lay down that if the plaint is rejected under Order VII Rule 11 of the Code of Civil Procedure, then the plaintiff is not precluded from presenting a fresh plaint in respect of the same cause of action.
The learned trial Judge has not only committed patent illegality but has failed to exercise the jurisdiction vested in him by refusing to consider the application (Exhibit No.22) before considering the application (Exhibit No.18) - application allowed.
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2017 (2) TMI 1298
Revision application - case of applicant is that neither in the statutory notice nor in the complaint or in the chief examination of the complainant before the trial Court, the receipt sums of ₹ 1 lakh on 23.01.2009 and ₹ 5,00,000/- on 05.03.2009 had been informed - Held that: - Courts below erroneously have dealt with the issue by informing that even if the payments of ₹ 6,00,000/- is taken into account, the amounts reflected in the cheque will still be owing from the petitioner. The concern of the Court is whether the complainant has approached it with unclean hands. When the answer is in the affirmative, the complainant would suffer the dismissal of his complaint - revision allowed.
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2017 (2) TMI 1288
Non-payment of processing fee - The emphatic stand of the Petitioner is that on 01.12.2015 he was present before the trial Court and since NBW was pending against the Respondent, on 30.12.2015, C.C.No.77 of 2007 was dismissed by the trial Court mainly on the ground that on behalf of the Petitioner/Appellant/Complainant, a process fee was not paid and also there was no representation on his side and also that, the Petitioner/Complainant had not appeared before the trial Court continuously and there was also no representation etc.
Held that: - It is to be borne in mind that the High Court has requisite power to review at large the whole gamut of materials available on record in a given trial Court's case and while so doing, it will take into consideration the views of the trial Judge. Also that, in the present case, the trial Court had dismissed the main case, because of the reason that on behalf of the Petitioner/Appellant/ Complainant, there was no representation in the main case in C.C.No.77 of 2007 and also that, no process fee was paid in regard to the execution of NBW.
In fact, a crime is essentially a wrong against the Society and the State. As such, any compromise between the Complainant and an Accused ought not to absolve the Accused from Criminal responsibility, if the offences are of private nature and not serious ones. It can be compounded, if it is punishable offences and in respect of others compoundable can be effected with the permission of the Court.
Maintainability of Complaint - Held that: - In a Complaint under Section 138 of the Negotiable Instruments Act, the Complainant is having a very vital stake in the matter. Therefore, the Complaint ought not to be dismissed in a mechanical, routine or in a cavalier fashion.
This Court is of the considered view that the order of dismissing the complaint in C.C.No.77 of 2007 passed by the trial Court on 30.12.2015 needs to be examined by this Court in a threadbare fashion with a view to find out whether there are prima facie sufficiency of cause/materials on the side of the Petitioner/Complainant.
Matter on remand.
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2017 (2) TMI 1287
Prayer of quashing the enitre proceedings of case no. 866/05 under Section 138 Negotiable Instruments Act, pending before Special Judicial Magistrate (Pollution) Lucknow along with a prayer to quash the order dated 10.5.2007 - Admittedly, a complaint under Section 138 Negotiable Instruments Act was filed by the opposite party no.2 wherein the learned Magistrate has taken cognizance and summoned the petitioners along with other co-accused. An application was moved by the petitioners under Section 245 (2) CrPC which was rejected by the learned Magistrate. This order of rejection is also under challenge
Held that: - the admitted position in law is that in those cases where the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction, it is mandatory on the part of the Magistrate to conduct an inquiry or investigation before issuing the process. Section 202 of the Cr.P.C. was amended in the year by the Code of Criminal Procedure(Amendment) Act, 2005, with effect from 22nd June, 2006 by adding the words that ''and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction'. There is a vital purpose or objective behind this amendment, namely, to ward off false complaints against such persons residing at a far off places in order to save them from unnecessary harassment. Thus, the amended provisions casts an obligation on the Magistrate to conduct inquiry or direct investigation before issuing the process, so that false complaints are filtered and rejected.
In the present case the opposite party no.2 has not complied the provisions of Section 141 of Negotiable Instruments Act. An essential requirement of Section 141 of the Negotiable Instruments Act has not been made wherein it was necessary to specifically aver in the complaint that at the time the offence was committed the present accused was incharge of, and responsible for the conduct of business of the company. The requirement of Section 141 is that the person sought to be made liable should be incharge of and responsible for the conduct of the business of the company at the relevant time. Necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A clear case should be spelled out in the complaint against the person sought to be made liable. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. Merely being described as a Director in a company is not to satisfy the requirement of Section 141 of Negotiable Instruments Act. Since no compliance of Section 141 of Negotiable Instruments Act has been made by the opposite party no.2, hence, the complaint itself is not maintainable under the law.
The power under Section 482 Cr.P.C. is not to be exercised in a routine manner, but it is for limited purposes, namely, to give effect to any order under the Code, or to prevent abuse of process of any Court or otherwise to secure ends of justice. Time and again, Apex Court and various High Courts, including ours one, have reminded when exercise of power under Section 482 Cr.P.C. would be justified, which cannot be placed in straight jacket formula, but one thing is very clear that it should not preampt a trial and cannot be used in a routine manner so as to cut short the entire process of trial before the Courts below.
Compliance of the provisions of Section 141 Negotiable Instruments Act has not been made by the opposite party no.2 which can and should be seen by this Court in a petition under Section 482 CrPC, hence, I do not find any force in the argument of the learned counsel for the opposite party.
Petition allowed - decided in favor of petitioner.
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2017 (2) TMI 1278
Arbitration and Conciliation - foreign award unenforceable on account of non stamping - Held that:- The contentions raised by the respondent that the foreign award is unenforceable on account of non stamping, stands rejected.
Violation of the principles of natural justice - legality of foreign award - Held that:- On a perusal of the impugned award, factually it appears otherwise and the Arbitral Tribunal considered this objection and rendered its finding from paragraph 179 onwards and ultimately held that APL and CIAL are not parties to the arbitration agreement in Clause 17 of the arbitration agreement. This arbitration had commenced under the agreement and the agreement alone and accordingly, the Arbitral Tribunal held that it has no jurisdiction in respect of the claims against APL and CIAL.
Admittedly, the award has become final and the respondent has not challenged the same. Any endeavour of this Court to go into the factual aspects would amount to sitting in judgment over the award passed by the Arbitral Tribunal. This has been frowned upon by the Courts in several decisions, some of which have been referred to above.
The contention stating that there was no opportunity to cross examine and other related matters are all touching upon the merits of the award and in this petition under Section 47 of the Act, seeking enforcement of the award, all that is required to be seen is as to whether the award is (a) contrary to the fundamental policy of India. The respondent has not been able to substantiate such a plea while resisting the petition under Section 47 of the Act; (b) contrary to the interests of India. No arguments were advanced on this aspect; (c) contrary to justice or morality. The plea of violation of the principles of natural justice, the lack of opportunity, etc., are sought to be read into this aspect by stating that the fundamental policy of India as well as the public policy of India having not been defined, one of the pre-requisites is to have a judicial approach. When such judicial approach is lacking in a quasi judicial decision, the same can be interfered with.
This Court would, once again, point out that the present proceeding is not a proceeding to set aside the award under Section 34 of the Act. The respondent cannot seek to import the principles of challenge to an award under Section 34 of the Act, into these proceedings where a foreign award is sought to be implemented.
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2017 (2) TMI 1233
Appointment of Court Commissioner - bearing of fee of the Court Commissioner - Held that:- Once the plaintiff is willing to bear the costs of the Commission subject to final order as to costs in the suit, the objection of the defendant no.1 does not come in the way, especially when the Joint Registrars are burdened with recording of evidence.
Accordingly, Mr. Dinesh Dayal, Additional District Judge (Retd.) (Ph. No.9810100200) is appointed as the Court Commissioner to record evidence in the suit.
The fee of the Court Commissioner, besides out of pocket expenses is tentatively fixed at ₹ 1,00,000/- to be initially borne by the plaintiff subject to final orders as to costs in the suit.
The Court Commissioner is requested to record the evidence within the Court Complex and to complete the same within one year of the date of first appearance of the parties before him. He is granted liberty to have the matter placed before the Court, if any of the parties are found delaying recording of the evidence.The Registry is directed to send the file of the suit at the place and time fixed by the Court Commissioner for recording of evidence.
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2017 (2) TMI 1203
Validity of arbitration ward - whether the negation of the challenge by the AT was valid? - Held that:- The Petitioners would be barred in terms of Article 33 of the ICC Rules from raising any objection as to the constitution of the AT since they chose not to adhere to that requirement in respect of their own nominee i.e. M2. In Rail India Technical and Economic Services Limited v. Ravi Constructions (2001 (10) TMI 1170 - KARNATAKA HIGH COURT), the Supreme Court explained the consequences of such waiver. It was observed there that: “even if there is any violation or irregularity, by subjecting itself to the jurisdiction of Arbitrator, without challenging his appointment, RITES is also barred under the principles of estoppel and waiver from challenging the award of the Arbitrator on the ground that the Arbitrator was not appointed in terms of the appointment procedure.”
Consequently, this Court rejects the submission of the Petitioners that the AT was improperly constituted thereby vitiating the impugned Award. Challenge on merits
There is no merit in the contention that the impugned Award is an attempt by the Respondents to enforce the put option rights under Clause 5.2 of RSHA. The pleadings make it clear that the Respondents did not choose to enforce the “put option.” The Petitioners were bound by the clauses of the contract. In the decision of State of Haryana v. Jage Ram AIR [1980 (4) TMI 300 - SUPREME COURT ], the Supreme Court observed that “those who contract with open eyes must accept the burdens of the contract along with its benefits.”
No ground has been made out by the Petitioners to demonstrate that the impugned majority Award suffers from any legal infirmity attracting Section 34 of the Act. The threshold for a successful challenge to an Award in a petition under Section 34 of the Act is indeed very high and unless the reasoning in the impugned Award is so perverse as to shock the judicial conscience or lead to violation of Section 28 (3) of the Act the Court, the Court would not like to interfere. In the present petition, none of the grounds under Section 34 of the Act stand attracted.
The impugned Award is, accordingly, upheld and the petition is dismissed with costs of ₹ 50,000 which would be paid by the Petitioner to the Respondents within four weeks from today.
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2017 (2) TMI 1154
Auction sale - Notification of incumbrances on the property sold - Held that:- When rules permit sale, with encumbrance and without, contention of the learned counsel for the appellant that the sale should be free from encumbrance, cannot be accepted. On the facts and circumstances of the instant case, what is required to be considered by us, is whether the Bank has notified the encumbrances on the property sold.
In the light of the above we are unable to accept the contentions of the bank that by imposing a condition, "as is where is" and "as is what is", the Bank has no obligation to mention in the auction notice, the encumbrance of the property, sought to be sold and it is suffice to contend that in the auction notice, the Bank has clearly stated that the property sold was in "as is where is" and "as is what is" condition and that the same would satisfy the requirements of Rule 8(6) of the Security Interest (Enforcement) Rules, 2002, which states that the authorised officer shall state the description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor. In Jai Logistics's case (2010 (7) TMI 1118 - MADRAS HIGH COURT ), defence of the Bank that the encumbrance was not known to them, and hence, could not be published on the sale notice, to sustain the order of forfeiture, was not accepted by this Court.
On the facts and circumstances of the case, the Bank may be right in contending that physical possession need not be taken before bringing the mortgaged property for auction, but they cannot shirk their duty to hand over possession to the auction purchaser. If the bank was not in a position to take physical possession, before sale, then recourse ought to have been taken under Section 14 of the Act and under the scheme of the Act, the Bank cannot be permitted to contend that there is no statutory obligation, on its part, to put the auction purchaser in possession.
Ordinarily, a sale is completed, on receipt of the entire sale consideration and handing over possession. But if encumbrance is specifically mentioned in the sale notice and if the auction purchaser with eyes open, had purchased the property, then there could be a cause to contend that it is the purchaser, who had taken the risk. While issuing a sale notice, it is the duty of the Bank to mention all the encumbrances in the property. The condition, "as is where is" or "as is what is" may indicate that when the property is sold, everything is not clear. But at the same time, the purchaser cannot be expected to know that the property sold was already mortgaged to another bank, viz., Nedungadi Bank and that there was a decree in O.S.No.328 of 1999, dated 10.07.2000, on the file of Subordinate Judge, Poonamallee.
Though the appellant has taken a demand draft dated 02.09.2009 in favour of Punjab National Bank, the respondent herein and also sent a telegram that he was ready to hand over the draft, subject to the bank handing over vacant possession of the property and time for remittance was granted up to 22.02.2009, bank has stuck to its stand of 'as is where is' or 'as is what is' condition and not committed to hand over physical and vacant possession of the auctioned property, which in our view is contrary to the scheme of the Act. In the light of the above discussion and decisions, forfeiture of the amount is erroneous. Appellant has made out a case for interference.
In the result, order made in W.P. is set aside. The respondent bank is directed to refund, a sum of ₹ 3,30,000/- to the appellant, with interest at the rate of 9% per annum, within a period of four weeks, from the date of receipt of a copy of this order.
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