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2024 (5) TMI 1
Interest on the penalty amount - for the period when the initial order was stayed - demand on the ground that Respondent/CCI could not have directed payment of interest on the penalty amount without following the procedure laid down under the Competition Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2011 - HELD THAT:- It is pertinent to mention that the amount of interest which is stipulated in the notice is the amount that is stipulated in Regulation 5 of the 2011 Regulations. Regulation 5 also specifically states that if the amount specified in the demand notice is not paid within the period specified then interest is leviable. It is further fortified that the demand notice also stipulates that the amount has to be paid within 30 days of the receipt of the demand notice under Form-I. These provisions are, therefore, completely mandatory.
The Apex Court in SRI MOHAN WAHI VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [2001 (3) TMI 4 - SUPREME COURT] while considering on the power to impose interest on the delayed payment of penalty amount, has observed 'once the demand ceased to exist and the fact was brought to the notice of the Tax Recovery Officer by the assessee, the former should have cancelled the recovery certificate and, therefore, with effect from that date till the date of refund, the interest should be paid by revenue.'
The interest can be levied only in a manner provided by the statute. Further, the Hon’ble Apex Court in a number of Judgments has held that when there is a power, coupled with duties, to do a thing in a particular way it should be done in that way only and other modes are forbidden.
The Impugned Order is set aside inasmuch as it levies interest on the delayed payment of penalty amount from 10.12.2018 till the date of payment - Petition allowed.
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2024 (4) TMI 1085
Integrity of the electoral process - suspicion of infringement of a right - Seeking direction to return to the paper ballot system - in alternative it is sought that printed slip from the Voter Verifiable Paper Audit Trail machine be given to the voter to verify, and put in the ballot box, for counting - in alternative it is sought that there should be 100% counting of the VVPAT slips in addition to electronic counting by the control unit.
As held by SANJIV KHANNA, J.
HELD THAT:- In-detail review of the administrative and technical safeguards of the EVM mechanism conducted - The discussion aims to address the uncertainties and provide assurance regarding the integrity of the electoral process. A voting mechanism must uphold and adhere to the principles of security, accountability, and accuracy. An overcomplex voting system may engender doubt and uncertainty, thereby easing the chances of manipulation. In the considered opinion, the EVMs are simple, secure and user-friendly. The voters, candidates and their representatives, and the officials of the ECI are aware of the nitty-gritty of the EVM system. They also check and ensure righteousness and integrity. Moreover, the incorporation of the VVPAT system fortifies the principle of vote verifiability, thereby enhancing the overall accountability of the electoral process.
Thera are no doubt, but to only further strengthen the integrity of the election process, following directions are given:-
(a) On completion of the symbol loading process in the VVPATs undertaken on or after 01.05.2024, the symbol loading units shall be sealed and secured in a container. The candidates or their representatives shall sign the seal. The sealed containers, containing the symbol loading units, shall be kept in the strong room along with the EVMs at least for a period of 45 days post the declaration of results. They shall be opened, examined and dealt with as in the case of EVMs.
(b) The burnt memory/microcontroller in 5% of the EVMs, that is, the control unit, ballot unit and the VVPAT, per assembly constituency/assembly segment of a parliamentary constituency shall be checked and verified by the team of engineers from the manufacturers of the EVMs, post the announcement of the results, for any tampering or modification, on a written request made by candidates who are at SI. No. 2 or Sl. No. 3, behind the highest polled candidate. Such candidates or their representatives shall identify the EVMs by the polling station or serial number. All the candidates and their representatives shall have an option to remain present at the time of verification. Such a request should be made within a period of 7 days from the date of declaration of the result. The District Election Officer, in consultation with the team of engineers, shall certify the authenticity/intactness of the burnt memory/ microcontroller after the verification process is conducted. The actual cost or expenses for the said verification will be notified by the ECI, and the candidate making the said request will pay for such expenses. The expenses will be refunded, in case the EVM is found to be tampered.
As per Dipankar Datta, J.
HELD THAT:- A citizen's right 'to freedom of speech and expression' Under Article 19(1) is not absolute; the State by virtue of Article 19(2) can place reasonable restrictions on these rights. There can be no doubt that the electorate has a right to be informed if the votes, as cast, are accurately recorded. The dispute, in the present writ proceedings, centres around the modality of delivering the information. The Petitioners have characterised the present procedure, wherein the voter after pressing the 'blue button' and casting his/her vote can see his VVPAT slip for 7 seconds through an illuminated glass window, as inadequate for the voter to verify if his/her vote, as cast, is recorded.
To buttress their submission, the Petitioners have relied on the proviso to Rule 49M(3) of the Conduct of Election Rules, 1961. The Petitioners urge that the ECI is not following the statutory mandate provided in the Election Rules - as long as there is no allegation of statutory breach, there can be no substitution of the Court's view for the view of the ECI that the light in the VVPAT would be on for 7 (seven) seconds and not more.
Upon the conclusion of polling, there exists yet another remedy Under Rule 56-D, for a candidate to apply for a count of the VVPAT slips, should any discrepancy be suspected. Thus, it is manifest that there is in place a stringent system of checks and balances, to prevent any possibility of a miscount of votes, and for the voter to know that his/her vote has been counted. There can be no doubt that such a system, which is distinctly more satisfactory compared to the system of the yester-years, suitably satisfies the voter's right Under Article 19(1)(a) to know that his/her vote has been counted as recorded.
The Republic has prided itself in conducting free and fair elections for the past 70 years, the credit wherefor can largely be attributed to the ECI and the trust reposed in it by the public. While rational scepticism of the status quo is desirable in a healthy democracy, this Court cannot allow the entire process of the underway General Elections to be called into question and upended on mere apprehension and speculation of the Petitioners. The Petitioners have neither been able to demonstrate how the use of EVMs in elections violates the principle of free and fair elections; nor have they been able to establish a fundamental right to 100% VVPAT slips tallying with the votes cast.
The Petitioners' apprehensions are misplaced. Reverting to the paper ballot system, rejecting inevitable march of technological advancement, and burdening the ECI with the onerous task of 100% VVPAT slips tallying would be a folly when the challenges faced in conducting the elections are of such gargantuan scale.
The mere suspicion that there may be a mismatch in votes cast through EVMs, thereby giving rise to a demand for a 100% VVPAT slips verification, is not a sufficient ground for the present set of writ petitions to be considered maintainable. To maintain these writ petitions, it ought to have been shown that there exists a tangible threat of infringement; however, that has also not been substantiated. Thus, without any evidence of malice, arbitrariness, breach of law, or a genuine threat to invasion of rights, the writ petitions could have been dismissed as not maintainable. But, considering the seriousness of the concerns that the Court suo motu had expressed to which responses were received from the official of the ECI as well as its senior counsel, the necessity was felt to issue the twin directions in the greater public interest and to sub-serve the demands of justice.
While maintaining a balanced perspective is crucial in evaluating systems or institutions, blindly distrusting any aspect of the system can breed unwarranted scepticism and impede progress. Instead, a critical yet constructive approach, guided by evidence and reason, should be followed to make room for meaningful improvements and to ensure the system's credibility and effectiveness.
Be it the citizens, the judiciary, the elected representatives, or even the electoral machinery, democracy is all about striving to build harmony and trust between all its pillars through open dialogue, transparency in processes, and continuous improvement of the system by active participation in democratic practices. Our approach should be guided by evidence and reason to allow space for meaningful improvements. By nurturing a culture of trust and collaboration, we can strengthen the foundations of our democracy and ensure that the voices and choices of all citizens are valued and respected. With each pillar fortified, our democracy stands robust and resilient.
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2024 (4) TMI 1084
Abatement of suit claiming injunction - effect on suit when the plaintiff seeking injunction, dies - disheritance by deceased-plaintiff - whether cause of action in an injunction suit will survive to the legal heirs of deceased plaintiff and whether upon death of the plaintiff, the relief of injunction would be rendered nugatory?
HELD THAT:- There is a distinction between the death of the plaintiff and the death of the defendant. The injunction is operative against the defendants. Upon death of the defendant, the question of binding his legal representatives by injunction would not arise. But in a case where the plaintiff, who is seeking injunction dies, the same position will not hold good. The right of injunction does not die with the death of plaintiff.
In the instant case, the plaintiff i.e. deceased-Usha Tiwari had sought injunction that the petitioners herein should not interfere in her possession over the property in dispute. A suit claiming injunction of this nature does not abate on death of the plaintiff. The cause of action would survive to his/her legal representatives, who come in possession of the said property - One thing is clear that if the respondent and his son succeed in proving before the trial court that petitioner No. 1 has been disinherited from the suit property and that original plaintiff had executed a Will in favour of Yujure Tiwari, her grandson, they have a right to obtain an injunction against the petitioners. Therefore, it cannot be stated that right to suit does not survive in their favour.
The learned civil judge has not discussed the matter in detail and has simply noted that as per the plaintiff, cause of action does not survive and that no application has been moved for impleadment of legal representatives though period of 90 days is over. On this ground, the learned civil judge has concluded that the suit stands abated. The order passed by the civil court does not deal with the merits of the issue relating to abatement of the suit. The said observation of the learned civil judge could not have precluded the learned appellate court from considering the issue on its merits and for taking a different view.
Thus, it cannot be stated that the learned appellate court has, while passing the impugned order, either committed any illegality or it has acted with material irregularity - The revision petition is without merit and is dismissed as such.
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2024 (4) TMI 1007
Validity of Arbitral Award - Ordering the petitioner to repay advances for rejected testing kits with interest and legal costs - Grievance of the petitioner is that the petitioner could not reexport the testing kits as the seals of the testing kits had been tampered/broken - HELD THAT:- Scope of interference under Section 34 of the Arbitration and Conciliation Act, 1996 is very limited.
This Court can neither sit as a Court of appeal or re-appreciate the evidence placed before the Arbitral Tribunal or substitute the finding of the Arbitral Tribunal with its own conclusion on facts or evidence. In this connection, the decision of the Honourable Supreme Court in PROJECT DIRECTOR, NATIONAL HIGHWAYS NO. 45 E AND 220 NATIONAL HIGHWAYS AUTHORITY OF INDIA VERSUS M. HAKEEM & ANR. [2021 (7) TMI 1343 - SUPREME COURT] is invited wherein, it was held that the power to set aside an Arbitral Award under Section 34 of the Arbitration And Conciliation Act, 1996 does not include the authority to modify the award. It further held that an award can be 'set aside' only on limited grounds as specified in Section 34 of the Act and it is not an appellate provision. It further held that an application under Section 34 for setting aside an award does not entail any challenge on merits to an award.
The Honourable Supreme Court in Ssangyong Engineering and Construction Co Ltd versus National Highway Authority of India [2019 (5) TMI 1879 - SUPREME COURT] has held that an award can be set aside on the ground of patent illegality under Section 34 (2-A) of the Arbitration And Conciliation Act, 1996 only where the illegality in the award goes to the root of the matter. It further held that erroneous application of law by an Arbitral Tribunal or the re-appreciation of evidence by the Court under Section 34 (2-A) of the Arbitration and Conciliation Act, 1996 is not available - The Court held that the above ground is available only where the view taken by the Arbitral Tribunal is an impossible view while construing the contract between the parties or where the award of the Tribunal lacks any reasons.
The records also indicate that the petitioner had been promised to return the balance as and when payment were received from the buyer on the export made by the petitioner. Therefore, even on this count, theory put forward before this Court that the Impugned Award suffers from patent illegality is not acceptable. Therefore, the impugned Award does not call for any interference - There is nothing on record to show that there is a patent illegality in the impugned award or to infer a conclusion that the impugned award is in conflict with the public policy of India. The impugned award indicates that the evidence was examined and there was an admission by the petitioner to refund the amount on the returned 1,48,800 test kits.
The interpretation placed by the arbitral tribunal in so far as proviso to Section 16 (1) of the Sale of Goods Act, 1930, also does not call for any interference.
This original petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 has to fail - Therefore, this original petition is liable to be dismissed and is accordingly dismissed.
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2024 (4) TMI 954
Food Safety and Standards - Inadequate labeling - Misbranding - Adulteration of foods or not - sugar boiled confectionaries - packets did not show the prescribed particulars such as complete address of the manufacturer and the date of manufacturing - violation of Rule 32(c) and (f) of the Prevention of Food Adulteration Rules, 1955.
Appellants would argue that the entire case of the prosecution is liable to be dismissed for the simple reason that the Appellants were charged Under Rule 32(c) and (f) of the Rules but these provisions were not related to misbranding and were regarding something else.
HELD THAT:- The Prevention of Food Adulteration Act, 1954 was repealed by the introduction of the Food Safety and Standards Act, 2006 where Section 52 provides a maximum penalty of Rs. 3,00,000/- for misbranded food. There is no provision for imprisonment.
Whether the Appellant can be granted the benefit of the new legislation and be awarded a lesser punishment as is presently prescribed under the new law? This Court in T. Barai v. Henry Ah Hoe [1982 (12) TMI 186 - SUPREME COURT], had held that when an amendment is beneficial to the Accused it can be applied even to cases pending in Courts where such a provision did not exist at the time of the commission of offence.
The present Appellant No. 2, at this stage, is about 60 years of age and the crime itself is of the year 2000, and twenty- four years have elapsed since the commission of the crime. Vide Order dated 06.08.2018, this Court had granted exemption from surrendering to Appellant No. 2. Considering all aspects, more particularly the nature of offence, though the findings of the Courts below regarding the offence is upheld, but the sentence of Appellant No. 2 from three months of simple imprisonment along with fine of Rs. 1,000/- is convertred to a fine of Rs. 50,000/-. The sentence of Appellant No. 1 which is for a fine of Rs. 2000/- is upheld.
The appeal is partly allowed.
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2024 (4) TMI 953
Dishonour of cheque - insufficient funds - vicarious liability - liability of group companies - liability common Directors of the group, namely, Right Choice Group of Companies - Lifting of the corporate veil - HELD THAT:- Section 141 of the NI Act is neither intended nor extends the vicarious liability on the group companies. It is intended to create vicarious liability only on the persons and officers who are either in-charge of the company, which is the main accused, or have connived or are negligent, resulting in the accused company committing the offence under Section 138 of the NI Act. Section 141 of the NI Act, therefore, cannot extend to the group companies - Section 138 of the NI Act, in fact, creates liability only on the ‘drawer of the cheque’. As it creates a criminal liability, there is no scope of lifting of the corporate veil. It is only because of the application of Section 141 of the NI Act, that the liability, in case the offence under Section 138 of the NI Act is committed by a company, has been extended by a deeming fiction on the person in-charge of or holding an office, making them equally liable for the offence. The said provision, however, cannot extend to other corporate entities or group of companies.
This Court in Yashovardhan Birla v. CECIL Webber Engineering Ltd., [2023 (4) TMI 706 - DELHI HIGH COURT], has reiterated that large business conglomerates may have a number of companies under them, which may be ultimately managed by a particular family or group of investors, but to run the day-to-day affairs, officers and professionals are appointed in such companies. In such cases, the head of the Company cannot be made liable and taken into the purview of Section 141 of the NI Act, doing so would unfairly and unnecessarily expand the provisions of vicarious liability under the NI Act.
Thus, the respondent no. 3 could not have been proceeded against only on the allegation that it is a group company of the accused no. 1, which is the drawer of the cheque in question.
Liability of common Directors of the group, namely, Right Choice Group of Companies - HELD THAT:- The petitioner has placed no document on record to show that the respondent nos. 1 and 2 were the Directors of the accused no. 1, which is the drawer of the cheque. There is no averment in the complaint that the respondent nos. 1 and 2 were persons in-charge of or responsible to the accused no. 1 for the conduct of its business. Apart from stating that the respondent nos. 1 and 2 have acted in connivance with accused nos. 1 and 3 or that the accused no. 3 has acted on their express instructions, there is no material placed on record by the petitioner for the said averment - The only reliance of the petitioner even in the present petition is on the alleged LinkedIn profile of respondent no. 1, which inter alia claims respondent no. 1 to be the Director of the Right Choice Group. However, accused no. 1 is not the Right Choice Group but Right Choice Marketing Solutions JLT.
There are no merit in the challenge made by the petitioner in the present petition - petition dismissed.
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2024 (4) TMI 897
Legal implication of a promotional trailer - promotional trailer is an offer or a promise - unfair trade practice - absence of specific content from the trailer in the movie - whether there is any ‘deficiency’ in the provision of the entertainment service that the consumer has availed by paying the consideration through the purchase of a ticket? - HELD THAT:- A promotional trailer is unilateral. It is only meant to encourage a viewer to purchase the ticket to the movie, which is an independent transaction and contract from the promotional trailer. A promotional trailer by itself is not an offer and neither intends to nor can create a contractual relationship. It is well-established in contractual jurisprudence that an advertisement generally does not constitute an offer and is merely an ‘invitation to offer’ or ‘invitation to treat’.
Since the promotional trailer is not an offer, there is no possibility of it becoming a promise. Therefore, there is no offer, much less a contract, between the appellant and the complainant to the effect that the song contained in the trailer would be played in the movie and if not played, it will amount to deficiency in the service. The transaction of service is only to enable the complainant to watch the movie upon the payment of consideration in the form of purchase of the movie ticket. This transaction is unconnected to the promotional trailer, which by itself does not create any kind of right of claim with respect to the content of the movie.
In various decisions, LAKHANPAL NATIONAL LTD. VERSUS M.R.T.P. COMMISSION AND ANOTHER [1989 (5) TMI 321 - SUPREME COURT], KLM ROYAL DUTCH AIRLINES VERSUS DIRECTOR GENERAL OF INVESTIGATION AND REGISTRATION [2008 (10) TMI 353 - SUPREME COURT]. This Court has held that a false statement that misleads the buyer is essential for an ‘unfair trade practice’. ibid. A false representation is one that is false in substance and in fact, and the test by which the representation must be judged is to see whether the discrepancy between the represented fact and the actual fact would be considered material by a reasonable person.
The ingredients of ‘unfair trade practice’ under Section 2(1)(r)(1) are not made out in this case. The promotional trailer does not fall under any of the instances of “unfair method or unfair and deceptive practice” contained in clause (1) of Section 2(1)(r) that pertains to unfair trade practice in the promotion of goods and services. Nor does it make any false statement or intend to mislead the viewers - There is another important distinction that we must bear in mind, i.e., the judicial precedents on this point do not relate to transactions of service relating to art. Services involving art necessarily involve the freedom and discretion of the service provider in their presentation. This is necessary and compelling by the very nature of such services. The variations are substantial, and rightly so.
The findings of the impugned order that there is deficiency of service and unfair trade practice is set aside - appeal allowed.
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2024 (4) TMI 896
Dishonour of Cheque - territorial jurisdiction - Foreign instrument - Cheque not made payable in India; and, was not drawn on a bank in India - whether the presentation of the subject cheque at the Branch in Greater Kailash-I, New Delhi will be sufficient to invoke the provisions of Section 138 of the NI Act and make the complaint filed by the respondent no. 2 as maintainable? - HELD THAT:- In the present case, the cheque in question is not made in India; it was not made payable in India; and, was not drawn on a bank in India. It is, therefore, not an ‘inland instrument’ - In the present case, the cheque in question is therefore, a ‘foreign instrument’.
While it is true that in the absence of stipulation that the cheque can only be presented for payment at Dubai, the cheque could be deposited by the respondent no. 2 at its bank in India as far as Section 135 of the NI Act, it requires the cheque to be specifically made payable at a place different from where it was made or indorsed. In my opinion, therefore, merely because there is no prohibition on the cheque being presented for payment at a place different from where it is made or indorsed, Section 135 of the NI Act cannot be attracted - as far as a cheque is concerned, unless specifically made payable at some other place, it must be presented at the bank upon which it is drawn, that is, where the bank of the drawer is situated. This would also have the effect on the place where the offence under Section 138 of the NI Act is said to have been committed, as shall be discussed herein below.
In DASHRATH RUPSINGH RATHOD VERSUS STATE OF MAHARASHTRA & ANOTHER [2014 (8) TMI 417 - SUPREME COURT], the Supreme Court has held that a reading of Section 138 of the NI Act in conjunction with Section 177 of the Cr.P.C. leaves no manner of doubt that the return of the cheque by the drawee bank alone constitutes the commission of the offence and indicates the place where the offence is committed. It held that the place, situs or venue of judicial inquiry and trial of the offence must logically be restricted to where the drawee bank is located. It held that the complainant is statutorily bound to comply with Section 177, etc., of the Cr.P.C. and therefore, the place or situs where the Section 138 complaint is to be filed is not of his choosing; the territorial jurisdiction is restricted to the court within whose local jurisdiction the offence was committed, which is where the cheque is dishonoured by the bank on which it is drawn.
The offence under Section 138 of the NI Act is deemed to have been committed at a place where a cheque is delivered for collection at the branch of the bank of the payee or holder in due course, and the offence shall be inquired into and tried only by a court within whose local jurisdiction, if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated.
In the present case, the cheque was presented for payment by the respondent at Delhi. There is no prohibition of the cheque being deposited by the respondent no. 2 for collection in Delhi. Therefore, in terms of Section 142(2) of the NI Act, the Court at Delhi shall have jurisdiction to inquire into and try the offence under Section 138 of the NI Act.
In the present case, due to the amendment in Section 142 of the NI Act, now the dishonour of the cheque, due to its presentation for payment at the bank of the respondent no. 2 at Delhi, is deemed to have taken place at Delhi. Though, Section 134 of the NI Act states that in absence of a contract to the contrary, the liability of the drawer of a foreign cheque is regulated in all essential matters by the law of the place where he made the cheque, there is nothing in the said provision which would exclude the application of Section 138 of the NI Act read with Section 142 of the NI Act. Merely because the payee or holder in due course of a foreign cheque chooses to present the cheque in India out of mala fide, the application of the provision of Section 138 of the NI Act and the jurisdiction of the court where such cheque is deposited for payment, cannot be ousted.
The unexplained delay itself is sufficient ground for this Court to refuse to exercise its inherent jurisdiction under Section 482 of the Cr.P.C. to quash the complaint at this belated stage.
There are no merit in the present petition, the same is dismissed.
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2024 (4) TMI 870
Arbitral Proceedings - Computation of one-year period for completing the proceedings - Rejection of request of the petitioner to extend the time and proceeded to post the proceedings for issues - exclusion of days during which the proceedings were stayed, for calculation of timeline of twelve months for completion of proceedings - HELD THAT:- From the order sheet of the Arbitral proceedings, it is seen that the petitioner who is respondent before the Arbitral Tribunal, took more than three to four adjournments to file its objection statement and also to file counterclaim. Thereafter, it took several adjournments and also sought extension of time to file surrejoinder. Admittedly, the Arbitral Tribunal entered reference on 17.11.2022, since then, the petitioner has filed six writ petitions challenging different interlocutory orders passed by the Arbitral Tribunal.
It is deemed appropriate to dismiss the present writ petition with costs of Rs. 25,000/-, payable to the ‘Karnataka State Legal Services Authority’. The above cost shall be paid within two weeks from today and shall produce receipt for having paid before the Arbitral Tribunal - the question of maintainability of writ petition raised by respondents need no perusal.
There is no merit in the writ petition - Petition dismissed.
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2024 (4) TMI 783
Dishonour of Cheque - Scope of interim compensation - Liability of the Director the Company - Provisions of Section 143A of the NI Act is mandatory in nature or not - HELD THAT:- In the present case, the Impugned Order dated 24.07.2021 reflects that the learned Trial Court was of the opinion that Section 143A of the NI Act, is ‘mandatory’ in nature and interim compensation has to be granted to the complainant in terms of the same as a rule and not as an exception. This view of the learned Trial Court cannot be upheld in view of the judgment of the Supreme Court in RAKESH RANJAN SHRIVASTAVA VERSUS THE STATE OF JHARKHAND & ANR. [2024 (4) TMI 719 - SUPREME COURT].
The Impugned Orders do not reflect any consideration of the learned Trial Court to the plea of the petitioners that the respondent no. 2 also holds security in form of the flats and in form of a statement made in the course of the proceedings before the High Court of Judicature at Bombay that the said company will not be disposing of the flats or creating any third-party rights in the plot of land which is the subject property. This was an important consideration which should have been taken into account by the learned Trial Court while deciding on the application filed by the respondent no. 2 under Section 143A of the NI Act.
What is also relevant is that Section 143A of the NI Act empowers the Court to pass a direction for payment of interim compensation only against the “drawer of the cheque”. In the present case, admittedly, the drawer of the cheques is the company and not the petitioners. The petitioners have been arrayed as accused invoking Section 141 of the NI Act.
The Impugned Order dated 11.03.2022, however, relies upon Section 141 of the NI Act to hold that a direction to pay the interim compensation under Section 143A of the NI Act can be made even against persons who, though are not the ‘drawer of the cheque’, are still deemed to have committed the offence under Section 138 of the NI Act. This view of the learned Trial Court cannot be sustained.
The Impugned Orders, having been premised on incorrect appreciation of law and having ignored vital and relevant considerations for passing an order under Section 143A of the Act, cannot be sustained - petition allowed.
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2024 (4) TMI 782
Dishonour of Cheque - compounding of offences - amicable settlement of disputes - Sections 138 and 147 of the Negotiable Instruments Act - HELD THAT:- In the facts of the instant case and the statutory provisions and the mandate of the Hon’ble Supreme Court, in cases of Kanchan Mehta [2017 (10) TMI 218 - SUPREME COURT] and P. Mohanraj [2021 (3) TMI 94 - SUPREME COURT], once the proceedings under Section 138 have been held to be proceedings in the form of a civil sheep in a criminal wolf’s clothing, therefore, once the petitioner-accused has amicably decided to settle/liquidate/discharge his liability, though, the transaction-proceedings have a tinge of criminal liability, then, on settling the entire liability in view of Section 147 of the Negotiable Instruments Act, the compounding of offences, on discharge of liability, appears to be genuine, which is certainly is a step towards securing the ends of justice. It is relevant to observe that once the Respondent-Complainant who had initiated the proceedings under Section 138 of the Negotiable Instruments Act, 1881, has received his cake then, no useful purpose will be achieved in continuing the criminal proceedings, against the accused-petitioner who has discharged/liquidated his liability.
Notably, the object of Section 147 of the Negotiable Instruments Act, 1881, is that in case the accused under the aforesaid enactment remits/discharges or liquidates his liability then such a person can be absolved of the criminal action-prosecution by permitting compounding of offence in proceedings under Section 138 of the Act. Moreover, once the petitioner-accused has discharged/liquidated his liability towards Respondent- Complainant, therefore, the continuance of criminal proceedings will not serve any purpose. The compounding of an offence would enable both the parties to lead life of respect and dignity in the society. Once, no dispute remains between the parties to the lis, then obviously the law cannot be so harsh so as to stand as a wall between the parties notwithstanding the amicable settlement inter se the parties - The power to do complete justice is the very essence of every judicial justice dispensation system. It cannot be diluted by distorted perceptions and is not a slave to anything, except to the caution and circumspection, the standards of which the Court sets before it, in exercise of such plenary and unfettered power inherently vested in it while donning the cloak of compassion to achieve the ends of justice.
This Court on the basis of the material placed on record is satisfied that the petitioner-accused [Sunil Kumar] and Respondent No.1-Complainant have settled the dispute and Respondent No.1-Complainant has no grudges against the petitioner accused, who has liquidated/discharged/remitted his liability in favour of the complainant. In these circumstances, allowing the judicial prosecution to continue will result in disturbing the peace and harmony but will also create or give rebirth to bitterness and enmity amongst them. Moreover, the ends of justice would be satisfied in case, the parties herein are allowed to compromise.
Since, the petitioner-accused [Sunil Kumar] is suffering custody in Sub Jail, Nurpur, District Kangra, [H.P.]; therefore, the Respondents-State Authorities are directed to release the petitioner-accused [Sunil Kumar], if not required in any other case. Release warrants be prepared and consequential action be taken expeditiously in accordance with law - Petition disposed off.
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2024 (4) TMI 719
Dishonour of Cheque - grant of interim compensation - whether the provision of sub-section (1) of Section 143A of the Negotiable Instruments Act, 1881 (for short, ‘the N.I. Act’), which provides for the grant of interim compensation, is directory or mandatory? - factors to be considered while exercising powers under sub-section (1) of Section 143A of the N.I. Act.
HELD THAT:- In the case of Section 143A, the power can be exercised even before the accused is held guilty. Sub-section (1) of Section 143A provides for passing a drastic order for payment of interim compensation against the accused in a complaint under Section 138, even before any adjudication is made on the guilt of the accused. The power can be exercised at the threshold even before the evidence is recorded. If the word ‘may’ is interpreted as ‘shall’, it will have drastic consequences as in every complaint under Section 138, the accused will have to pay interim compensation up to 20 per cent of the cheque amount. Such an interpretation will be unjust and contrary to the well-settled concept of fairness and justice. If such an interpretation is made, the provision may expose itself to the vice of manifest arbitrariness - there are no manner of doubt that the word “may” used in Section 143A, cannot be construed or interpreted as “shall”. Therefore, the power under sub-section (1) of Section 143A is discretionary.
Section 143A can be invoked before the conviction of the accused, and therefore, the word “may” used therein can never be construed as “shall”. The tests applicable for the exercise of jurisdiction under sub-section (1) of Section 148 can never apply to the exercise of jurisdiction under subsection (1) of Section 143A of the N.I. Act.
Factors to be considered while exercising powers under sub-section (1) of Section 143A of the N.I. Act - HELD THAT:- When the court deals with an application under Section 143A of the N.I. Act, the Court will have to prima facie evaluate the merits of the case made out by the complainant and the merits of the defence pleaded by the accused in the reply to the application under sub-section (1) of Section 143A. The presumption under Section 139 of the N.I. Act, by itself, is no ground to direct the payment of interim compensation. The reason is that the presumption is rebuttable - While deciding the prayer made under Section 143A, the Court must record brief reasons indicating consideration of all the relevant factors.
In the present case, the Trial Court has mechanically passed an order of deposit of Rs.10,00,000/- without considering the issue of prima facie case and other relevant factors. It is true that the sum of Rs.10,00,000/- represents less than 5 per cent of the cheque amount, but the direction has been issued to pay the amount without application of mind. Even the High Court has not applied its mind - the Trial Court is directed to consider the application for grant of interim compensation afresh. In the meanwhile, the amount of Rs. 10,00,000/- deposited by the appellant will continue to remain deposited with the Trial Court.
The impugned orders are set aside, and the application made by the complainant under Section 143A (1) of the N.I. Act is restored to the file of Judicial Magistrate First Class, Bokaro - appeal allowed in part.
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2024 (4) TMI 669
Dishonour of Cheque - Plea to expedite the trial of a complaint - Case of applicant is that though this complaint under the Act, 1881 was filed in the year 2022, but the trial could not be concluded - Section 143(2) of NI Act, 1881 - HELD THAT:- The Apex Court in the case of INDIAN BANK ASSOCIATION AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2014 (5) TMI 750 - SUPREME COURT], has issued direction for expeditious disposal of the cases under the Act, 1881 where it was held that We, therefore, direct all the criminal courts in the country dealing with Section 138 cases to follow the above-mentioned procedures for speedy and expeditious disposal of cases falling under Section 138 of the Negotiable Instruments Act.
From the above mentioned judgements of Hon'ble Apex Court, it is clear that the Apex Court for expeditious disposal of cases under the Act, 1881 has issued several directions which the concerned court/Magistrate has to follow while deciding the cases under the Act, 1881. From the observations of the Apex Court as well as analysis of Sections 138 & 143 of the Act, 1881, it is expedient that all the proceedings under the Act, 1881 should be concluded expeditiously without going into unnecessary technicality.
This Court directs the Chief Judicial Magistrate, Sant Kabir Nagar to conclude the trial of Complaint Case No. 10260 of 2022 (Shyam Ji Vs. Bhagwandas Chaudhary) u/s 138 Negotiable Instrument Act, P.S. Bakhira, District Sant Kabir Nagar, keeping in mind the direction of the Apex Court, expeditiously preferably within a period of six months from the date of receipt of certified copy of this order, strictly in accordance with statutory provision of Sections 143(2) and 143(3) of the Act, 1881, if there is no legal impediment.
Application disposed off.
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2024 (4) TMI 668
Dishonour of Cheque - Grant of Bail - Mandate to deposit of a minimum of twenty percent of the fine or compensation awarded by the trial court - failure to consider the Statutory Provisions as enshrined U/S 148(1) & 148 (2) of NI Act 1881 - HELD THAT:- In the instant case, the Appellate court although vide order dated 29.02.2024 had admitted the appeal and also allowed the Bail Application moved by the appellant/petitioner but by the same order despite admitting the appeal preferred by the appellant/petitioner had erroneously rejected the stay and operation of the impugned order dated 16.02.2024 passed by the trial court and thereby, rejected the stay application (Paper No.5B) and further directed him to deposit amount of fine imposed by the trial court within a period of ten days' from the date of the order and also provided that in case of non-deposition of fine by the appellant/petitioner, the order of granting bail to the appellant/petitioner shall stand automatically cancelled, thus, the appellate court while passing the impugned order dated 29.02.2024 by which it has rejected to stay the operation of the order dated 16.02.2024 passed by the trial court has failed to consider the Statutory Provisions as enshrined under Section 148(1) and 148(2) of the Negotiable Instrument Act, 1881, which resulted in miscarriage of justice.
This Court finds that the Appellate Court has erred in law while rejecting the stay application of the appellant/petitioner, by which it was prayed by the appellant/petitioner to stay the fine of Rs.4,00,000/- imposed by the trial court while convicting him under Section 138 of the Negotiable Instruments Act, 1881 till the disposal of the appeal preferred by the appellant/petitioner before the Appellate Court.
Petition disposed off.
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2024 (4) TMI 600
Regularization of petitioners who had served as casual/daily wage workers for a period of more than 10 years when decision in Uma Devi was pronounced by Apex Court [2006 (4) TMI 456 - SUPREME COURT] - Reason for Tribunal's disinclination to grant relief was that no material could be brought on record to establish that appointment of petitioners was not illegal but merely irregular.
HELD THAT:- It is not dispute at the Bar by learned counsel for employer that the petitioners are equally situated as Ravi Verma & Ors [supra] for having completed more than 10 years of casual/daily wage services on the date 10.04.2006 when decision in Uma Devi was pronounced by Apex Court [2006 (4) TMI 456 - SUPREME COURT]. It is also not disputed by the learned counsel for employer that the petitioners herein were also appointed in similar manner as the case of Ravi Verma & Ors. and thus their appointments were not illegal but merely irregular and, therefore this Court is of the considered view that the benefit flowing from the decision of Uma Devi specially the directions in paragraph 53 of the said judgment squarely apply to the petitioners who are thus entitled to the same relief as extended by the Apex Court to Ravi Verma & Ors.
The period of 10 years which was pre-requisite for consideration for regularization as one time measure vide para 53 of Apex Court decision in Uma Devi, has been completed by all the petitioners herein. Therefore, the case of the petitioners is identical to the case of Ravi Verma and Ors. Accordingly, the objection raised by Shri Gopi Chourasia - Advocate on behalf of appellant stands rejected.
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2024 (4) TMI 557
Maintainability of curative petition - restoration of arbitral award which had been set aside by the Division Bench of the High court on the ground that it suffered from patently illegality.
Curative Jurisdiction may be invoked if there is a miscarriage of justice - HELD THAT:- In RUPA ASHOK HURRA VERSUS ASHOK HURRA & ANOTHER [2002 (4) TMI 889 - SUPREME COURT], a Constitution Bench of this Court dwelt on whether any relief is available against a final judgement of this Court after the dismissal of a petition seeking review of the judgement. Two opinions were authored. The main judgment was by Justice Syed Shah Quadri (on behalf of Chief Justice S P Bharucha, Justice Variava, Justice Shivraj Patil and himself). A concurring opinion was authored by Justice U C Banerjee - In his concurring opinion, Justice Banerjee also laid down a similar test of ‘manifest injustice’ to exercise the jurisdiction of this Court under Article 142 while entertaining a curative petition. In essence, the jurisdiction of this Court, while deciding a curative petition, extends to cases where the Court acts beyond its jurisdiction, resulting in a grave miscarriage of justice.
Scope of interference of courts with arbitral awards - HELD THAT:- The contours of the power of the competent court to set aside an award under Section 34 has been explored in several decisions of this Court. In addition to the grounds on which an arbitral award can be assailed laid down in Section 34(2), there is another ground for challenge against domestic awards, such as the award in the present case. Under Section 34(2-A) of the Arbitration Act, a domestic award may be set aside if the Court finds that it is vitiated by ‘patent illegality’ appearing on the face of the award.
In ASSOCIATE BUILDERS VERSUS DELHI DEVELOPMENT AUTHORITY [2014 (11) TMI 1114 - SUPREME COURT], a two-judge Bench of this Court held that although the interpretation of a contract is exclusively within the domain of the arbitrator, construction of a contract in a manner that no fair-minded or reasonable person would take, is impermissible. A patent illegality arises where the arbitrator adopts a view which is not a possible view. A view can be regarded as not even a possible view where no reasonable body of persons could possibly have taken it. This Court held with reference to Sections 28(1)(a) and 28(3), that the arbitrator must take into account the terms of the contract and the usages of trade applicable to the transaction. The decision or award should not be perverse or irrational. An award is rendered perverse or irrational where the findings are (i) based on no evidence; (ii) based on irrelevant material; or (iii) ignores vital evidence. Patent illegality may also arise where the award is in breach of the provisions of the arbitration statute, as when for instance the award contains no reasons at all, so as to be described as unreasoned.
While adjudicating the merits of a Special Leave Petition and exercising its power under Article 136, this Court must interfere sparingly and only when exceptional circumstances exist, justifying the exercise of this Court’s discretion - Unlike the exercise of power under Section 37, which is akin to Section 34, this Court (under Article 136) must limit itself to testing whether the court acting under Section 37 exceeded its jurisdiction by failing to apply the correct tests to assail the award.
The award was patently illegal - HELD THAT:- In the case at hand, the Division Bench found the award to be perverse, irrational and patently illegal since it ignored the vital evidence of CMRS certification in deciding the validity of termination. This, the Division Bench held, overlooked the statutory certification deeming it irrelevant without reasons and thus the award was patently illegal according to the test in Associate Builders - The Tribunal did not appreciate the individual import of the two phrases separately from each other. This was not a matter of mere “alternate interpretation” of the clause, but an unreasonable and uncalled for interpretation of the clause, which frustrated the very provision, and which no reasonable person would have accepted considering the terms of the clause. It is clarified that Tribunal could have still arrived at the conclusion that the steps taken during the cure period were not effective within the meaning of the clause for certain reasons. However, such discussion and reasoning is conspicuously absent.
In essence, therefore the award is unreasoned. It overlooks vital evidence in the form of the joint application of the contesting parties to CMRS and the CMRS certificate. The arbitral tribunal ignored the specific terms of the termination clause. It reached a conclusion which is not possible for any reasonable body of persons to arrive at. The arbitral tribunal erroneously rejected the CMRS sanction as irrelevant. The award bypassed the material on record and failed to reconcile inconsistencies between the factual averments made in the cure notice, which formed the basis of termination on the one hand and the evidence of the successful running of the line on the other. The Division Bench correctly held that the arbitral tribunal ignored vital evidence on the record, resulting in perversity and patent illegality, warranting interference.
The parties are restored to the position in which they were on the pronouncement of the judgement of the Division Bench. The execution proceedings before the High Court for enforcing the arbitral award must be discontinued and the amounts deposited by the petitioner pursuant to the judgment of this Court shall be refunded.
The Curative petitions must be and are accordingly allowed.
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2024 (4) TMI 556
Dishonour of Cheque - issuance of statutory notice to proper person or not - acquittal of respondent No. 2 - ‘not giving findings by the trial court’ will affect the outcome of the case or not.
HELD THAT:- In this case, admittedly the cheques are issued on a Bank account maintained by the Company with the Federal Bank. It was not a Bank Account in the name of Respondent No. 2. He has signed as a Director of Respondent No. 1. The issue in Aneeta Hada’s case is slightly different. It is on the point of necessity of joining Company when the cheques are drawn on an account maintained by the Company. The Company has to be joined - In this case, Company is joined as an Accused along with the signatory who is its Director. The issue is different. The issue is about issuance of a notice to proper person. The proviso (b) contemplates issuance of a notice to a drawer. In this case, cheques are drawn by Respondent No. 2 as a Director of Respondent No. 1 and that too on an account standing in Bank’s record in the name of Respondent No. 1. It is not in dispute that notice is not issued to the Company and Respondent No. 2 as Director of Respondent No. 1.
There is a liability in between the complainant and Accused No. 1. But he has not issued the cheques in his personal capacity on an account maintained by him in his person but he has chosen to draw the cheques on a Bank account maintained by his Company. The complainant has failed to issue notice to Company and Respondent No. 1 as Director. The provisions of clause (b) of Section 138 are mandatory. When the consequences of a particular Act are deterrent, the provisions have to be followed and interpreted strictly.
The complainant has failed to adhere to the provisions of the proviso (b) of Section 138 of the NI Act. So even though I have given finding in favour of the complainant on the other aspect, the contention of learned Advocate Shri Khanchandani cannot be accepted. Respondent No. 2 is a Director in Respondent No. 1 Company but law recognizes both these entities as separate.
The judgment of acquittal need no interference - appeal dismissed.
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2024 (4) TMI 466
Sale of mortgaged (scheduled) properties which was to be conducted by the Authorized Officer (Respondent No.2) of the Respondent-Bank - default in repayment of loan by the Borrower - HELD THAT:- This Court has clearly held that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. It has been held that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. The Court clearly observed that, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court.
In the present case, it can clearly be seen that though it was specifically contended on behalf of the appellant herein that the writ petition was not maintainable on account of availability of alternative remedy, the High Court has interfered with the writ petition only on the ground that the matter was pending for sometime before it and if the petition was not entertained, the Borrower would be left remediless - the High Court has failed to take into consideration the conduct of the Borrower. It is further to be noted that, though the High Court had been specifically informed that, on account of subsequent developments, that is confirmation of sale and registration thereof, the position had reached an irreversible stage, the High Court has failed to take into consideration those aspects of the matter.
The High Court ought to have taken into consideration that the confirmed auction sale could have been interfered with only when there was a fraud or collusion. The present case was not a case of fraud or collusion. The effect of the order of the High Court would be again reopening the issues which have achieved finality.
Thus, the High Court has grossly erred in entertaining and allowing the petition under Article 226 of the Constitution - impugned order set aside - appeal allowed.
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2024 (4) TMI 465
Time limitation - Refusal to condone the delay in challenging the Order passed by the Competent Authority and Administrator, SAFEM(FOP)A, 1976 and NDPS Act, 1985, New Delhi - HELD THAT:- A perusal of the judgments in CHHATTISGARH STATE ELECTRICITY BOARD VERSUS CENTRAL ELECTRICITY REGULATORY COMMISSION AND OTHERS [2010 (4) TMI 1031 - SUPREME COURT] and M/S. PATEL BROTHERS VERSUS STATE OF ASSAM AND OTHERS [2017 (1) TMI 330 - SUPREME COURT] show that if a special Act provides for a special period of limitation then Sections 4 to 28 of the Limitation Act cannot be made applicable and, therefore, there is no power in the Appellate Tribunal to condone the delay. In the facts of the present case, admittedly the last date for filing the appeal had expired on 04.08.2023 and the appeal was filed on 20.09.2023 and, therefore, the Appellate Tribunal Could not have condoned the delay between 04.08.2023 and 20.09.2023.
It is equally well settled that the High Courts while exercising jurisdiction under Article 226 of the Constitution of India cannot go beyond the framework of a statute.
This Court does not find any reason to interfere with the Order dated 21.11.2023 passed by the Appellate Tribunal refusing to entertain the appeal filed by the Petitioner herein beyond the prescribed period of limitation.
The writ petition is dismissed.
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2024 (4) TMI 425
Interpretation of a contract condition, which required the measurement of quantities used for payment for embankment construction with soil or with pond ash - Section 34 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- This Court, in VOESTALPINE SCHIENEN GMBH VERSUS DELHI METRO RAIL CORPORATION LTD. [2017 (2) TMI 1239 - SUPREME COURT] commenting on the value of having expert personnel as arbitrators, emphasized that "technical aspects of the dispute are suitably resolved by utilising their expertise when they act as arbitrators."
The prevailing view about the standard of scrutiny- not judicial review, of an award, by persons of the disputants' choice being that of their decisions to stand- and not interfered with, [save a small area where it is established that such a view is premised on patent illegality or their interpretation of the facts or terms, perverse, as to qualify for interference, courts have to necessarily chose the path of least interference, except when absolutely necessary]. By training, inclination and experience, judges tend to adopt a corrective lens; usually, commended for appellate review. However, that lens is unavailable when exercising jurisdiction Under Section 34 of the Act. Courts cannot, through process of primary contract interpretation, thus, create pathways to the kind of review which is forbidden Under Section 34 - As long as the view adopted by the majority was plausible- and this Court finds no reason to hold otherwise (because concededly the work was completed and the finished embankment was made of composite, compacted matter, comprising both soil and fly ash), such a substitution was impermissible.
It is evident that a dissenting opinion cannot be treated as an award if the majority award is set aside. It might provide useful clues in case there is a procedural issue which becomes critical during the challenge hearings. This Court is of the opinion that there is another dimension to the matter. When a majority award is challenged by the aggrieved party, the focus of the court and the aggrieved party is to point out the errors or illegalities in the majority award. The minority award (or dissenting opinion, as the learned authors point out) only embodies the views of the arbitrator disagreeing with the majority. There is no occasion for anyone- such as the party aggrieved by the majority award, or, more crucially, the party who succeeds in the majority award, to challenge the soundness, plausibility, illegality or perversity in the approach or conclusions in the dissenting opinion - the so-called conversion of the dissenting opinion, into a tribunal's findings, [in the event a majority award is set aside] and elevation of that opinion as an award, would, with respect, be inappropriate and improper.
The awards, which were the subject matter of challenge, and to the extent they were set aside, are hereby upheld and restored. The direction in the awards, to the extent they required compounded monthly interest payments, are modified. Instead, the NHAI shall pay uniform interest on the amounts due, on the head concerned, i.e., construction of embankment, to the extent of 12% from the date of award to the date of payment, within eight weeks from today.
Appeal allowed.
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