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Indian Laws - Case Laws
Showing 41 to 60 of 27617 Records
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2025 (4) TMI 945
Adjustment of refund - legality of impugned notices and associated demand notices - It is the petitioner’s case that demands in respect of AY 2009-10, AY 2011-12 and AY 2012-13 are reflected as due from the petitioner on account of defaults committed by its employer (Kingfisher Airlines Limited) - HELD THAT:- The demands for AY 2009-10, AY 2011-12 and AY 2012-13 raised as per notice dated 21.01.2022 are quashed. Respondents/Revenue are not entitled in law to adjust the demand raised for AY 2009-10, AY 2011-12 and AY 2012-13 against any other AY. It is ordered accordingly.
The present petition is allowed and the Revenue is restrained from adjusting any refund due to the petitioner against any demand reflected for the AY 2009-10, AY 2011-12 and AY 2012-13.
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2025 (4) TMI 944
Rejection order - violation of Articles 14, 16 and 21 read with Article 300A of the Constitution of India read with RBI Master Circular dated 6.7.2017 - restoration of the amount illegally siphoned off from the Petitioner's SBI savings Account - territorial jurisdiction of the Court - whether the victim i.e., the petitioner was negligent so as to fall prey to the scamsters? - HELD THAT:- The record shows that he had never shared the payment credentials, which fact is fortified from the written submissions filed by the respondents that the OTPs were not shared by the petitioner as such. It is merely upon clicking on a link received on his mobile phone after he was duped into believing that his SMS services would be blocked, that the said unauthorised transactions took place.
The petitioner was a ‘victim’ of cyber fraud and he cannot be said to be ‘negligent’ in any manner under the notions of the civil law or for that matter under the criminal law. Negligence implies “the duty to take care” that would be expected from a person of ordinary prudence. The negligent act on the part of the customer should be such which is gross, utterly reckless and unconscionable. In the present case, the petitioner had taken care not to share the OTPs, in fact he had no occasion do so, and if that is the case, it would imply that even the most hyped 2 Factor Authentication [“2FA”] was breached as the same was not secure, which is directly attributable to deficiency in service provided by the respondent no. 2 & 3 SBI.
Tony Enterprises v. Reserve Bank of India [2019 (10) TMI 1610 - KERALA HIGH COURT] was a case where the Kerala High Court dealt with two cases wherein the customer’s mobile had been dysfunctional since a duplicate SIM card had been issued by the service provider to a fraudster impersonating as the real mobile holder, which enabled the fraudster to withdraw a huge amount from the bank account of the customer through on line transfer.
In the instant case, respondents No. 2 and 3 demonstrated a glaring service deficiency. Despite prompt intimation from the petitioner about the account breach, they showed no urgency. Respondents No. 2 and 3 failed to exercise due care, neglecting their duty to act swiftly upon notification of the fraudulent withdrawal. Consequently, they took no steps towards chargeback, retrieval, or freezing the suspicious accounts maintained with IDFC Bank and One 97 Communication.
It is evident that the security protocols such as ‘2FA’ or OTP verification had been breached by a simple ‘malware’ deployed by the cyber fraudsters. Evidently, the online banking service of the petitioner was linked with his mobile number, which was being used to authenticate his banking transactions, and the security apparatus of the respondent Bank failed to detect any unusual logging activity from a different Internet Protocol Address that was being used by the fraudsters. It has to be presumed that it is on account of the failure on the part of the bank to put in place a system which prevents such withdrawals, that the petitioner suffered monetary losses.
It is well established under the Common Law, that funds in a bank account belong to the bank, but the bank acts as an agent for the principal (the customer). Consequently, the bank cannot refuse to process an online transfer if it appears to be authorized by the customer, however, upon detecting fraud, the bank has an implied duty to exercise reasonable care and take prompt action. Unhesitatingly, there was patent deficiency in services on the part of the bank, inasmuch as the response of the bank was lukewarm, defective, and not prompt. The respondent No. 2 i.e., SBI failed to take immediate measures to take up the issue with the other REs to whom the online payment had been remitted.
Conclusion - This Court finds that the Banking Ombudsman (BO) has failed to judiciously consider the entire gamut of the controversy. The ‘BO’ overlooked the aforesaid key aspects of the matter and completely misdirected itself in law - the impugned order dated 20.10.2021 is legally unsustainable.
Petition allowed.
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2025 (4) TMI 878
Allotment of flats on payment of balance due to the builder and also requisite registration charges to be paid to the Competent Authority - HELD THAT:- It is almost 2 years and 10 months and according to the learned counsel for the builder not a single flat has been sold by the Court Commissioner so appointed by the NCDRC. The submission made by the learned counsel on behalf of the builder is that in case liberty is granted to the builder to sell the flats directly and the direction contained in the order dated 18th April 2022 of not permitting the builder to sell and further provide that the sale to take place through Court Commissioner be modified as the same is not benefitting either of the parties. He further submitted that the builder would sell the apartments within one year and deposit the entire sale consideration with the NCDRC for being disbursed to the claimants. The above liberty may be granted subject to terms and conditions as may be fixed by this Court.
There are substance in the submission of the builder. However it is not inclined to fix any terms and conditions and would leave it for the NCDRC to determine the same. Accordingly, the order dated 18th April 2022 is modified and withdraw the directions to the NCDRC to put the sale of flats through Court Commissioner and further we withdraw the direction restraining the builder or any associate from selling the flats.
Conclusion - The NCDRC is empowered to regulate the sale of flats, impose appropriate conditions, and monitor the proceedings to protect the rights of buyers and the builder alike.
Application disposed off.
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2025 (4) TMI 877
Copyright infringement - parameters for determining whether a work or an article falls within the limitation set out in Section 15(2) of the Copyright Act - setting aside the order of the Commercial Court and rejecting the application under Order VII Rule 11 of the CPC.
What are the parameters for determining whether a work or an article falls within the limitation set out in Section 15(2) of the Copyright Act, thereby classifying it as a ‘design’ under Section 2(d) of the Designs Act? - HELD THAT:- A two-pronged approach is formulated in order to crack open the conundrum caused by Section 15(2) of the Copyright Act so as to ascertain whether a work is qualified to be protected by the Designs Act. This test shall consider: (i) whether the work in question is purely an ‘artistic work’ entitled to protection under the Copyright Act or whether it is a ‘design’ derived from such original artistic work and subjected to an industrial process based upon the language in Section 15(2) of the Copyright Act; (ii) if such a work does not qualify for copyright protection, then the test of ‘functional utility’ will have to be applied so as to determine its dominant purpose, and then ascertain whether it would qualify for design protection under the Design Act.
The courts, while applying this test, ought to undertake a casespecific inquiry guided by statutory provisions, judicial precedents, and comparative jurisprudence. It must be kept in mind that the overarching objective is to ensure that rights granted under either regime serve their intended purpose without unduly encroaching upon the domain of the other.
Whether the High Court erred in setting aside the order of the Commercial Court and thus rejecting the application under Order VII Rule 11 of the CPC? - HELD THAT:- The Commercial Court allowed LNG Express’s application on the ground that the ‘Proprietary Engineering Drawings’ qualified as a ‘design’ under Section 2(d) of the Designs Act, and therefore, no suit for copyright infringement could be maintained in favour of Inox - However, the High Court, having disagreed with the finding of the Commercial Court, initially remanded the matter for reconsideration. When the Commercial Court reiterated its earlier conclusion, the High Court again intervened and rejected LNG Express’s application, with a direction to the Commercial Court to consider Inox’s plea for an interim injunction under Order XXXIX Rules 1 and 2 of the CPC.
The reasoning of the High Court is agreed upon that the question as to whether the original artistic work would fall within the meaning of ‘design’ under the Designs Act cannot be answered while deciding an application under Order VII Rule 11 of the CPC. This stage would involve only a prima facie inquiry as to the disclosure of cause of action in the plaint. The question pertaining to ascertaining the true nature of the ‘Proprietary Engineering Drawings’ involves a mixed question of law and fact and could not have been decided by the Commercial Court at a preliminary stage based upon such a casual appraisal of the plaint averments.
The Commercial Court is directed to consider the issue afresh and conduct trial by adopting an Occam’s Razor approach to ascertain the true nature of the ‘Proprietary Engineering Drawings’. Additionally, the Commercial Court would also need to independently assess the claims related to infringement of the Literary Works, confidential information, know-how etc. so as to resolve the matter comprehensively.
Conclusion - i) The decision of the High Court rejecting the application under Order VII Rule 11 of the CPC is upheld. ii) The Commercial Court is directed to deliver its decision on the pending application seeking interim injunction preferred by Inox, within a period of two months. iii) The Commercial Court is further directed to conduct trial and discern the true nature of the Proprietary Engineering Drawings based upon the test laid down in paragraph 60 of this judgement, as also the other related IP right infringements claimed by Inox, within a period of one year, given that it has already wasted significant judicial time on this issue.
Petition disposed off.
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2025 (4) TMI 749
Conspiracy / Bribery - VAT officers - Initiation of prosecution against the accused - Whether barred under the Kerala Value Added Tax Act (KVAT Act) due to statutory limitations or prior proceedings? - materials produced by the prosecution are sufficient to establish a prima facie case against the accused, particularly accused Nos. 1 and 8, under the Prevention of Corruption Act, 1988 (PC Act) and Indian Penal Code, 1860 - illegal gratification in the absence of direct evidence of bribery - HELD THAT:- The prosecution has a definite allegation that following payment of such an illegal gratification the compounding tax of Rs. 13,06,29,613/- was reduced to Rs.7,00,68,469/-. More conspicuously on payment of that amount all documents and the account statements pertaining to the transactions of M/s. Nano Excel company were returned to the company without retaining even copies. When the prosecution alleges that such an act disabled the department from checking even the correctness of the action of fixing the compounding tax that certainly is another circumstance pointing to the conspiracy.
The circumstances mooted by the prosecution which are mentioned above, if proved, would establish payment of illegal gratification. Whether there occurred infraction from law while imposing compounding tax on M/s. Nano Excel company has only a secondary importance being one of the circumstances proposed to be proved. In the above circumstances, it is unable to accept the contentions of the 1st accused in support of his plea to quash the final report in C.C. No. 7 of 2022 as against him.
Car bearing registration No. KL 08 AN 8081 belongs to accused No.8 is not disputed. Sufficient evidence is proposed to prove that the said car was used to carry Rs. 1.5 crores from the office of M/s. Nano Excel company to Pearl Regency hotel for being handed over in terms of the instructions of accused No. 7. But, no evidence has been collected to establish that accused No.8 knew that his car was availed for the purpose of carrying such a sum and also that he was a party to the conspiracy of bribing accused Nos. 1 to 4. In the statement filed by the investigating officer also, no such evidence has been pointed out. Therefore, prosecution of accused No.8 for the offences punishable under Section 13 (1) (d) r/w Section 13 (2) of the PC Act and Section 120 B of the IPC cannot be justified. Such an exercise will end only in futility.
Conclusion - i) The contentions regarding statutory bars under the KVAT Act were previously considered and dismissed, and cannot be revisited at this stage. ii) The prosecution's materials, while lacking direct evidence of bribery, present sufficient circumstantial evidence to justify proceeding against accused No. 1 under the PC Act and IPC. iii) The use of accused No. 8's car in the alleged crime, without evidence of his knowledge or involvement, does not justify prosecution under the conspiracy charges.
Applcation dismissed.
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2025 (4) TMI 748
Dishonour of Cheque - petitioner-accused could be acquitted of the conviction under Section 138 of the Negotiable Instruments Act, 1881, following a compromise with the complainant - compounding of offence - HELD THAT:- Having taken note of the fact that the petitioneraccused and the respondent (complainant) have settled the matter, vide Compromise Deed Annexure A-1, and the complainant/respondent has no objection in compounding the offence, therefore, this Court sees no impediment in accepting the prayer made on behalf of the accused-petitioner for compounding of offence while exercising power under Section 147 of the Act as well as in terms of guidelines issued by the Hon’ble Apex Court in Damodar S. Prabhu vs. Sayed Babalal [2010 (5) TMI 380 - SUPREME COURT], wherein the Hon’ble Apex Court has held 'Section 147 of the Negotiable Instruments Act, 1881 is in the nature of an enabling provision which provides for the compounding of offences prescribed under the same Act, thereby serving as an exception to the general rule incorporated in sub-section (9) of Section 320 of the CrPC which states that ‘No offence shall be compounded except as provided by this Section’. A bare reading of this provision would lead us to the inference that offences punishable under laws other than the Indian Penal Code also cannot be compounded. However, since Section 147 was inserted by way of an amendment to a special law, the same will override the effect of Section 320(9) of the CrPC, especially keeping in mind that Section 147 carries a non obstante clause.'
In K. Subramanian vs. R. Rajathi [2009 (11) TMI 1013 - SUPREME COURT], it has been held by the Hon’ble Apex Court that in view of the provisions contained in Section 147 of the Act read with Section 320 of Cr.P.C., compromise arrived at can be accepted even after recording of the judgment of conviction.
Since, in the instant case, the petitioner-accused after being convicted under Section 138 of the Act, has compromised the matter with the complainant/respondent, prayer for compounding the offence can be accepted in terms of the aforesaid judgments passed by the Hon’ble Apex Court.
Conclusion - i) Section 147 of the Negotiable Instruments Act allows for the compounding of offenses, overriding the general rule under the CrPC. ii) The Court has the discretion to reduce the compounding fee based on the financial condition of the petitioner and the specific facts of the case. iii) Compounding of the offense is permissible even after conviction if both parties agree to a settlement.
The present matter is ordered to be compounded and the impugned judgment of conviction and order of sentence dated 08.12.2023, passed by learned Judicial Magistrate First Class, Nahan, District Sirmaur, H.P., are quashed and set-aside and the petitioner-accused is acquitted of the charge framed against him under Section 138 of the Act. Bail bonds, if any, stand discharged - petition disposed off.
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2025 (4) TMI 747
Dishonour of Cheque - territorial jurisdiction of Trial Magistrate to entertain the complaint under Section 138 of the Negotiable Instruments Act - HELD THAT:- A complaint for offence under section 138 Negotiable Instruments Act can be inquired into and tried only by the court within whose local jurisdiction a cheque is delivered for collection i.e. the branch of the bank of the payee or the holder in due course or if the cheque is presented for payment otherwise through an account, the location of the branch of the drawee bank where the drawer maintains the account would be determinative of the territorial jurisdiction.
Reliance placed in the judgement of Supreme Court in the case of Bridgestone India Pvt. Ltd. v Inderpal Singh [2015 (12) TMI 777 - SUPREME COURT] in which, it has been held that Section 142(2) of the Negotiable Instruments Act amended by the Negotiable Instruments (Amendment) Second Ordinance 2015, leaves no room for any doubt, specially in view of the Explanation thereunder, that with reference to an offence under section 138 of the Negotiable Instruments Act, the place where cheque is delivered for collection i.e. branch of the bank of the payee or holder in due course, where the drawee maintains an account, would be determinative of the place of territorial jurisdiction.
Thus, it is clear that inquiry trial or other proceedings in respect of a case under section 138 Negotiable Instruments Act can be held only by a court within whose local jurisdiction the cheque is delivered for collection i.e. the branch of the bank of the payee where the payee or the holder in due course, as the case may be, maintains the account.
Adverting to the facts of the present case, it is clear that the respondent/complainant had presented the cheque in his bank account maintained at ICICI, Sector 128 Noida (UP) which is beyond the local territorial jurisdiction of the learned Trial Magistrate. It is not a case where the respondent/complainant had presented the cheque for payment otherwise through an account, in that case even the location of the branch of drawee bank where the drawer maintains the account would have been determinative of the territorial jurisdiction. Thus, it is clear that the learned Trial Magistrate did not have territorial jurisdiction to entertain the complaint which is subject matter of the present petition.
Having held that the learned Trial Magistrate had no jurisdiction to entertain the complaint filed by the respondent against the petitioner and the co-accused, and consequently he had no jurisdiction to issue process against the petitioner and the co-accused, it is not necessary to go to the second ground of challenge urged by the learned counsel for the petitioner.
Conclusion - The order of the Trial Magistrate is set aside due to lack of territorial jurisdiction. The complaint is ordered to be returned to the respondent for filing before the competent magistrate.
Petition allowed.
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2025 (4) TMI 746
Validity of sale of the property to the petitioner - subsequent discovery of a prior sale and possession by another party - refund of the amounts paid, along with interest, due to the failure of respondent No. 1 to deliver clear title and possession of the property - whether in view of the pendency of the proceedings before the learned DRT, this writ petition is maintainable or not? - HELD THAT:- This Court has no hesitation in answering that the present writ petition is certainly maintainable because the dispute as between the petitioner and the respondent No.1 cannot be encompassed within the scope and ambit of the SARFAESI Act.
The respondent No.1 claimed the schedule property as a ‘security interest’ for the realization of its debts from the primary borrowers viz., due in account of M/s. Dass Brothers and M/s. Simran Traders, whose accounts had become non-performing assets. Consequently, respondent No. 1 proposed to sell the property by inviting tenders and conducting an auction. The home loan agreement executed by the petitioner on 24.12.2013 is not the subject matter of the proceedings before the learned DRT. Instead, the proceedings concern the competing rights and claims of two different financial institutions/banks over the scheduled property, with each asserting it as its ‘security interest.’ - the proceedings against the present petitioner are not in the nature of Section 13 of the SARFAESI Act, i.e., they do not pertain to the enforcement of a security interest per se, and therefore, this Court finds no hesitation in holding that pendency of proceedings before the learned DRT does not render the present petition non maintainable before this Court.
In terms of Rule 8(7)(f) it is manifest that the respondent No.1 failed to supply all the relevant details regarding the encumbrances in respect of the schedule property by or in favour of other financial institutions. There was a patent failure on the part of respondent no. 1 to conduct due diligence before auctioning the scheduled property. Regardless of whether respondent No. 1 was aware of the encumbrances on the property in question, this is immaterial, as the petitioner acted in good faith based on the declarations made by respondent No. 1. As a result, respondent No. 1 has not only unjustly enriched itself but has also caused irreparable harm to the petitioner - In the instant case, respondent No.1 has not only failed to act in accordance with the provisions of the Act but has also acted in blatant disregard of the fundamental principles of judicial procedure.
The petitioner lodged a complaint with the Ombudsman/respondent No.2 within the period of limitation prescribed under the Limitation Act, 1963. It cannot be concluded that the complaint was abusive, frivolous or vexatious. The petitioner undeniably had a legitimate grievance against respondent No.1, as he fell victim to a misleading declaration in the Auction Notice. Respondent No. 1, without conducting proper due diligence, managed to sell the subject property to the petitioner for valuable consideration. This led to the petitioner being trapped into entering a home loan agreement, leaving him a victim of the high- handed actions of Respondent No. 1. Repeatedly, and at the cost of redundancy, despite giving repeated assurances, the officials of Respondent No. 1 failed to address the petitioner’s genuine and legitimate grievance.
Conclusion - i) The sale certificate dated 24.12.2013 was quashed and declared null and void. ii) The petitioner was entitled to a refund of Rs. 9,93,752.94 with 12% interest per annum from 2013. iii) The loan account was to be foreclosed, and any installments paid were to be refunded with interest. iv) Respondent No. 1 was ordered to remove the freeze on the petitioner's savings account. v) The Reserve Bank of India was directed to inquire into the arbitrary actions of respondent No. 1 and issue corrective guidelines. vi) Respondent No. 1 was ordered to pay Rs. 5,00,000 as compensation for the petitioner's prolonged litigation and distress. vi) The Court emphasized the importance of due diligence and disclosure in auction sales under the SARFAESI Act.
Petition disposed off.
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2025 (4) TMI 686
Dismissal of application filed by the petitioner under Section 156 (3) of the Code of Criminal Procedure, 1973 - whether the petitioner having already availed the remedy of revision should be allowed to take recourse to Section 482 of the CrPC as a substitute for initiating a second revisional challenge which is clearly barred under Section 397 (3) of the CrPC? - HELD THAT:- While it is settled law that a second revision cannot be filed in terms of the bar under Section 397 of the CrPC, the inherent power of this Court under Section 482 of the CrPC has a wide ambit and can be exercised in the interest of justice.
It is the case of the petitioner that the complaint discloses commission of cognizanble offences and it was thus incumbent on the police officers as well as the Courts below to direct registration of FIR. Reliance has been placed on the case of case of Lalita Kumari v. Govt. of U.P. [2013 (11) TMI 1520 - SUPREME COURT]. The Hon’ble Apex Court in the said case has categorically held that FIR ought to be registered by the police when the allegations clearly disclose commission of a cognizable offence.
The Magistrate, after application of mind, can also decide to take cognizance and proceed under Section 202 of the CrPC instead of issuing directions under Section 156 (3) of the CrPC.
In the present case, the learned Trial Court has straightaway taken cognizance under Section 190 (1) (a) of the CrPC instead of ordering an investigation under Section 156 (3) of the CrPC. - It is well settled that for the same set of facts, parallel proceedings, seeking both civil and criminal remedies, can continue simultaneously. Thus, merely because a civil remedy is available to a litigant, the same cannot preclude the continuance of criminal proceedings.
For exercising powers under Section 156 (3) of the CrPC and directing the registration of an FIR, the Magistrate needs to ensure that a cognizable offence is disclosed from the allegations mentioned in the application and the essential elements of the alleged offences thereof are prima facie satisfied. Apart from the same, the Magistrate also needs to satisfy himself as to whether intervention of police is required and if the complainant will not be in a position to adduce the relevant evidence without assistance of police.
It is apparent that the petitioner is merely seeking the assistance of the police to conduct a fishing and roving inquiry. As has been noted by the learned Trial Court as well as the learned Revisional Court, all pertinent facts and evidence are within the petitioner’s knowledge and reach, and it can present such information during the inquiry conducted by the learned Trial Court pursuant to Section 200 of the CrPC. Given these factors, the need for police involvement in evidence collection appears to be minimal, as the complainant is well-equipped to facilitate the presentation of evidence on its own behalf - when the allegations are not particularly severe, and the complainant already possessed sufficient evidence to support their claims, there may be no necessity to pass orders under Section 156 (3) of the CrPC.
Conclusion - In the instant case, this court is of the opinion that no exceptional circumstances have been presented to warrant the exercise of its extraordinary jurisdiction under Section 482 of the CrPC. There is no indication of any miscarriage of justice or legal irregularity in the proceedings undertaken by the two lower courts, and the petitioner has not been able to point out any such deficiencies.
There are no infirmity in the impugned judgment and the same cannot be faulted with.
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2025 (4) TMI 685
Validity of SCN - correctness of legal notice issued u/s 138(b) of the Negotiable Instruments Act, 1881 (NI Act) - the inclusion of an additional demand beyond the cheque amount, thereby invalidating the proceedings under Section 138 of the NI Act - HELD THAT:- The Hon’ble Supreme Court in Suman Sethi Versus Ajay K. Churiwal and another, [2000 (2) TMI 822 - SUPREME COURT] has laid down the legal test for determining the validity of a demand notice under Section 138 of the NI Act by holding that 'If in a notice while giving the break up of the claim the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. would be superfluous and these additional claims would he severable- and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonored cheque, notice might well fail to meet the legal requirement and may be regarded as bad.'
From the above pronouncement, it is evident that a notice is legally valid as long as it specifies the cheque amount separately and any additional claim, such as interest or costs, is severable.
Turning to the facts of the present case, a perusal of the legal notice (Annexure P-3) demonstrates that it explicitly demands the cheque amount of Rs.3 lakhs and separately specifies an additional amount of Rs.22,000/- as cost of the notice. Since the additional demand is severable and does not obscure the primary claim for the cheque amount, the notice cannot be said to be omnibus in nature.
Conclusion - A legal notice under Section 138(b) of the NI Act is valid if it specifies the cheque amount separately and any additional claims are severable. An additional demand does not invalidate the notice as long as it does not obscure the primary claim.
The argument that the notice is invalid, is devoid of merit. The present petition stands dismissed.
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2025 (4) TMI 684
Dishonour of Cheque - acquittal of accused - Rebuttal of presumption u/s 139 of NI Act - HELD THAT:- The present case, however, relates to acquittal of an accused in a complaint under Sections 138 read with 142 of the NI Act. The restriction on the power of the Appellate Court in regard to other offence does not apply with the same vigour in the offence under provisions of the NI Act which entails presumption against the accused.
It is also well settled that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque received the said cheque in discharge of a legally enforceable debt or liability are raised against the accused.
Since the appellant failed to provide any cogent documentary evidence in corroboration of his testimony, the learned MM held that the defence raised by the accused is a probable one to rebut the presumption under Section 139 of the NI Act and that the complainant had failed to discharge the onus, which shifted upon him, to show the existence of a legal financial liability.
In the present case, the accused/ Respondent No. 2 has sought to prove his case by controverting that the cheques in question were not issued in discharge of any legally enforceable debt. It has been contended that the said signed cheques were stolen from his office drawer by the appellant, and that the same were misused. It was also argued that the appellant, as per his own deposition, stated that his annual turnover was Rs. 13,00,000/- in the year 2016, besides other rental and agricultural income, which makes it apparent that the appellant did not have the financial capacity to advance the said loan - It is seen that no complaint of the signed cheques being stolen from the office drawer of Respondent No. 2 was made by him. The learned MM erred in noting that Respondent No. 2 was successful in rebutting the presumptions insofar as he did not lead any evidence to corroborate that the signed cheques were forcibly taken from his possession or were misused.
In the instant case, upon a consideration of the totality of circumstances, it is evident that Respondent No. 2 had failed to rebut the presumptions under Sections 118 and 139 of the NI Act, resultantly, the question of source of the loan advanced by the appellant and his financial capacity does not arise - The onus cannot be said to be shifted on the complainant to prove his financial capacity merely because the accused makes a vague bald assertion. Merely denying liability does not suffice to dislodge the presumptions raised under Section 118 and 139 of the NI Act.
In terms of the dictum of the Hon’ble Apex Court in Bir Singh v. Mukesh Kumar [2019 (2) TMI 547 - SUPREME COURT], mere admission of the signature of the drawer on the cheque is sufficient to activate the presumption under Section 139 of the NI Act. It is not a pre-requisite that the drawer must also admit the execution of the entire contents of the cheque.
Conclusion - The onus was on the accused/ Respondent No. 2 to rebut the presumptions. It was not for the complainant/ appellant to establish that he had the means to advance the loan, or that the signed cheques were issued in discharge of any legally enforceable debt. Having failed to rebut the presumptions, the contention of Respondent No. 2 that the burden was on the appellant to establish his financial means do not bolster the case of the complainant.
The impugned judgment dated 30.08.2019, acquitting Respondent No. 2 of the offence under Section 138 of the NI Act is accordingly set aside - List on 01.05.2025 for further directions.
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2025 (4) TMI 683
Dishonour of cheque - legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act - rebuttal of presumption under Sections 118 and 139 of the Negotiable Instruments Act - HELD THAT:- It is trite that a Court exercising revisional jurisdiction will interfere with orders or judgments of the courts below only if those orders or judgments are suffering from incorrectness, illegality or impropriety. Unless the judgment passed by the learned Magistrate or by the Appellate Court is perverse or the view taken by the Court is unreasonable or there is non-consideration of any relevant material, or there is palpable misreading of records, the revisional Court will not be justified in interfering with the judgment. The revisional Court cannot act like an Appellate Court.
The Negotiable Instruments Act raises some presumptions in favour of the complainant under Sections 118 and 139 of the said Act. The presumptions under Sections 118 and 139 are rebuttable presumptions. These presumptions are available only if execution of the cheque is admitted by the accused or only if it is proved by the complainant that the cheque is drawn by the accused. Whether the presumptions are rebutted or not would depend upon the facts and circumstances of the case. If the basis for drawing the presumptions exists, the court shall draw the presumptions under the said sections, in which case it is the burden of the accused to rebut those presumptions.
There are no sufficient circumstance to reach to a conclusion that the trial court as well as the appellate court failed to appreciate the evidence on record in a proper perspective. The comparison of signature of the accused done by the appellate court is also assuming no importance for the reason that even otherwise the evidence adduced from the side of the complainant proves that the accused issued Ext.P1 cheque in discharge of a legally enforceable debt.
Conclusion - The complainant has successfully demonstrated the existence of a legally enforceable debt, and the accused's defenses were insufficient to rebut the statutory presumption.
The revision petition is allowed in part, modifying the sentence while upholding the conviction and compensation order.
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2025 (4) TMI 682
Seeking initiation of contempt proceedings against respondents for violating the directions contained in order dated 03.04.2024 passed by learned Coordinate Bench - HELD THAT:- By way of abundant caution only, respondent No.1 undertakes to send communication in writing to the concerned SHO/Investigating Officer apprising him about the above said order in ARB.P. No.396/2024 and O.M.P. (I) (Comm.) 39/2024 within five days.
It is clarified that the onus upon respondent No.1 is merely to communicate the concerned SHO/IO about the above said order and specific directions, and nothing beyond.
Thus, nothing further survives in the present contempt petition - petition disposed off.
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2025 (4) TMI 508
Quashing the criminal proceedings against respondent No.1 - prima facie evidence to proceed with the charges against the respondent or not - invocation of inherent powers under Section 482 Cr.P.C. - HELD THAT:- The contours of exercise of the powers under Section 482 Cr.P.C. have been expressed in various judgments. In the well known case of State of Haryana v. Bhajan Lal [1990 (11) TMI 386 - SUPREME COURT] this Court, while recognizing that it would not be possible to account for all possibilities, detailed seven circumstances where the exercise would be justified.
What is, therefore, to be seen is whether, in the present facts, any of the seven circumstances/situations mentioned in Bhajan Lal [1990 (11) TMI 386 - SUPREME COURT] are justifiably met. One of the submissions advanced on behalf of respondent No.1 was that reliance solely on the statement of the co-accused is not justified. It is found that this submission to be incorrect for presently, respondent No.1’s own statement also presents some corroboration for the statement of accused No.1.
When his own statement acknowledges the possibility that he had received money from accused No.1, which the latter has also alluded to, there prima facie appears to be a connection. This, however, is not the only connection between these two persons. It was on accused No.1’s recommendation that respondent No.1 ‘appointed’ one Ritesh Merugu, who is accused No.2, as Accounts Manager. Furthermore, it is surprised by the fact that the CFO of a company and an alleged chartered accountant, both readily agreed to not put ink to paper to formalise this relationship between them, and sans the same found it completely alright to share all financial details and books of accounts.
Conclusion - The inherent powers under Section 482 Cr.P.C. should be exercised with caution, ensuring that prima facie evidence is not disregarded without due trial.
The proceedings are revived and restored to the file of III Additional Chief Metropolitan Magistrate, Bengaluru - application disposed off.
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2025 (4) TMI 507
Recovery of financial benefits - Principles of natural justice - whether recovery of the amount extended to the appellants while they were in service is justified after their retirement and that too without affording any opportunity of hearing? - HELD THAT:- The law in this regard has been settled by this Court in catena of judgments rendered time and again; Sahib Ram vs. State of Haryana [1994 (9) TMI 373 - SUPREME COURT], Shyam Babu Verma vs. Union of India [1994 (2) TMI 329 - SUPREME COURT], Union of India vs. M. Bhaskar [1996 (5) TMI 450 - SUPREME COURT] and V. Gangaram vs. Regional Jt. Director [1997 (4) TMI 550 - SUPREME COURT] and in a recent decision in the matter of Thomas Daniel vs. State of Kerala & Ors. [2022 (5) TMI 1674 - SUPREME COURT].
This Court has consistently taken the view that if the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee or if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous, such excess payments of emoluments or allowances are not recoverable. It is held that such relief against the recovery is not because of any right of the employee but in equity, exercising judicial discretion to provide relief to the employee from the hardship that will be caused if the recovery is ordered.
In the case at hand, the appellants were working on the post of Stenographers when the subject illegal payment was made to them. It is not reflected in the record that such payment was made to the appellants on account of any fraud or misrepresentation by them. It seems, when the financial benefit was extended to the appellants by the District Judge, Cuttack, the same was subsequently not approved by the High Court which resulted in the subsequent order of recovery. It is also not in dispute that the payment was made in the year 2017 whereas the recovery was directed in the year 2023. However, in the meanwhile, the appellants have retired in the year 2020. It is also an admitted position that the appellants were not afforded any opportunity of hearing before issuing the order of recovery. The appellants having superannuated on a ministerial post of Stenographer were admittedly not holding any gazetted post as such applying the principle enunciated by this Court in the above quoted judgment, the recovery is found unsustainable.
Conclusion - The recovery of excess payments from retired employees, particularly without a hearing, is unsustainable.
Appeal allowed.
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2025 (4) TMI 506
Dishonour of Cheque - vicarious liability of petitioner, having retired from the partnership - Section 138 read with Section 141 of the Negotiable Instruments Act (NI Act) - main thrust of the petitioner’s argument is that he was not the person responsible for the conduct of the accused firm at the time of issuance of the subject cheque - HELD THAT:- Concededly, the petitioner, at the time of the issuance of the security cheque, was a partner in the accused firm. The subject cheque is claimed to be given in exchange of the cheque which was issued at the time when the petitioner being partner was the person responsible for the conduct of the accused firm. Whether the petitioner can be held liable for dishonor of the replaced cheque, even if it is to be presumed that he had retired by that time, is a mixed question of facts and law which cannot be decided at this stage, without the evidence being led by the parties. Moreover, the retirement of the petitioner from the accused firm is also disputed and is subject matter of other litigations initiated by other partners. The said fact, thus, is not of such sterling nature to be considered while exercising power under Section 482 of the CrPC.
Therefore, from the totality of facts, it cannot be said at this stage that the petitioner was not the person responsible at the time of commission of offence committed by the accused partnership firm. To quash the proceedings by petition filed under Section 482 of CrPC, the petitioner is to place some unimpeachable and uncontroverted evidence which is beyond suspicion or doubt.
The factual issues that serve as defences in the case are not appropriate for determination under the powers conferred by Section 482 of the CrPC at this stage. It is well-established that this Court should refrain from expressing any views on disputed questions of fact in proceedings under Section 482 of the CrPC, as doing so could pre-empt the findings of the trial court.
Conclusion - Considering the material on record, the documents adduced by the petitioner cannot be said to be of such sterling and unimpeachable quality that it merits the quashing of the summons and consequential proceedings thereof. This Court can exercise its jurisdiction only upon unimpeachable and uncontroverted evidence being placed on record, however, in the absence of such evidence, the fact whether the accused person is responsible for the affairs of the accused company becomes a factual dispute, which is to be seen during trial.
This Court finds no reason to interfere with the impugned order passed by the learned Trial Court - Petition dismissed.
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2025 (4) TMI 505
Dishonour of Cheque - discharge of a legally enforceable debt or merely as a security instrument - simultaneous invocation of SARFAESI proceedings bar the criminal complaint under Section 138 of the NI Act or not.
HELD THAT:- It is relevant to note that the inherent jurisdiction of the Court under Section 482 of the CrPC ought to be exercised sparingly especially when the matter is at the stage of issuance of summons as the same has the effect of scuttling the proceedings without the parties having an opportunity to adduce the relevant evidence. The Hon’ble Apex Court, in the case of Rathish Babu Unnikrishnan v. State (NCT of Delhi) [2022 (4) TMI 1434 - SUPREME COURT] adverting to a catena of judgments, had underscored the parameters for exercising inherent jurisdiction to quash the proceedings at the stage of the summoning order.
In the present case, Respondent No. 2 had filed a complaint under Section 138 of the NI Act. The learned MM relying upon the complaint supported by the affidavit of the complainant, took cognizance under Section 138 of the NI Act, and passed the summoning order dated 02.07.2018 - the allegations made in the complaint, at the stage when the complaint is sought to be quashed at the outset, are to be taken as correct unless evidence of unimpeachable character has been produced.
Whether the subject cheque was issued in discharge of a Legally Enforceable Debt? - HELD THAT:- It is well-settled law that the presumption under Section 139 of the NI Act, applies once the execution of the subject cheque is undisputed. The burden is on the drawer to rebut the presumption that the cheque was issued for a legally enforceable debt or liability which is required to be established during trial.
In the present case, the petitioners contended that the subject cheque was in the nature of security and not against an accrued or existing liability at the time of its issuance. According to the petitioners, the cheque was provided solely to secure the transfer of title deeds from Yes Bank to Respondent No. 2 and was not intended to be presented for encashment. It is further submitted that upon the successful transfer of those title deeds, the underlying purpose of the cheque stood extinguished, and as such, its dishonour cannot attract penal consequences under Section 138 of the NI Act - In the present case, no material has been placed on record to prima facie demonstrate that Respondent No. 2 had agreed not to present the cheque after receipt of the title deeds. In the absence of such evidence, the liability under the subject cheque cannot be said to have been extinguished, and the consequences of its dishonour must follow the mandate of law—subject, of course, to the findings at trial.
In the present case, the loan account of the petitioners was declared NPA, and they failed to regularize their payments, prompting Respondent No. 2 to present the subject cheque for payment. Whether the subject cheque was given as security for facilitating the transfer of property documents from Yes Bank and not towards repayment of any legally enforceable liability constitutes defence of the accused and is a matter of trial. No unimpeachable material has been placed on record to indicate that the subject cheque was issued solely for securing the release of title deeds or that it was never intended to be presented for payment. The purpose behind the issuance of the cheque, and whether it was connected to a subsisting liability or merely a collateral assurance, is a disputed question of fact, which cannot be conclusively determined while exercising power under Section 482 of the CrPC.
Whether the simultaneous invocation of SARFAESI proceedings bar the criminal complaint under Section 138 of the NI Act? - HELD THAT:- The loan extended by financial institutions does not become the personal asset of the borrower; rather, it is disbursed in a fiduciary capacity, sourced from public funds contributed by taxpayers. Recognizing the need for a swift and effective mechanism to recover non-performing assets (NPAs), the legislature enacted the SARFAESI Act. This law empowers banks and financial institutions to recover dues without court intervention, ensuring financial stability - Conversely, the NI Act is a codified statute governing promissory notes, bills of exchange, and cheques. It establishes criminal liability for dishonour of cheques to uphold the sanctity of negotiable instruments and prevent financial misconduct. The SARFAESI Act and the NI Act serve distinct legislative purposes, addressing civil debt recovery and criminal liability for dishonoured cheques, respectively.
In the present case, the petitioners are not corporate debtors, nor are proceedings pending under the IBC. The SARFAESI Act contains no provision that bars or stays criminal prosecution under the NI Act. The pendency of SARFAESI proceedings, therefore, does not impede the continuation of proceedings under Section 138 of the NI Act.
Conclusion - It is well settled that the inherent powers should be exercised sparingly, with circumspection, and in the rarest of rare cases when the Court is convinced, on the basis of material on record, that allowing the proceedings to continue would be an abuse of the process of law. The inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice. At this stage, this Court cannot go into the merits and/or come to the conclusion that there was no existing debt or liability.
In the present case, prima facie, it is evident that the principal grounds of challenge by the petitioners are all matter of defence at the trial - there are no illegality or irregularity in the impugned order. The present petition is dismissed.
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2025 (4) TMI 434
Validity, interpretation and materiality of insurance contract - special condition in the insurance contract, stipulating that the voyage should commence and complete before the monsoon sets in - dismissal of consumer complaint on the ground that doctrine of Uberrima Fidei being compromised - HELD THAT:- There is no doubt that the policy was taken for a period of one month (16.05.2013 to 15.06.2013) to cover the voyage from Mumbai to Kolkata. Further, as per the DGS Circular, foul weather commences on 1st May itself on the East Coast. The Respondent’s contention that they had no knowledge of the voyage and that they believed that the Vessel would be laid up at the Kolkata harbour during the foul season is unacceptable and is to be rejected. The Appellant had mentioned in the form that the purpose of insurance is to undertake the voyage from Ghodbunder Jetty in Mumbai to Kolkata harbour. The only logical conclusion of the information provided is that the insurance was availed to cover the foul weather period along the west and east coast. Even if the voyage was undertaken immediately, i.e. on 16.05.2013, the Vessel would have arrived at the Kolkata harbour in the first week of June 2013, i.e. after the commencement of foul weather season on the east coast. There is absolutely no permutation and combination in which the Appellant could have fulfilled this condition under the policy, given its voyage from Mumbai (west coast) to Kolkata (east coast) via several coastal States.
Further, the special condition necessitates that the voyage commences and is completed before monsoon sets in. If the condition is to be interpreted strictly, then the assured would be unable to make a claim in case of a marine accident where the vessel is unable to complete its voyage due to a peril, rendering the special condition impossible to comply with. Ultimately, the assured would be without any remedy under the insurance. This amounts to an absurdity, vitiating the very purpose behind an insurance contract. As a result, we hold that the special condition cannot be treated as a condition precedent to waive any liability under the policy. It has been impliedly waived by the parties due to its non-material nature. It is probably a term used in all contracts by the Respondent as a part of its standard form, and it failed to exclude the same from the policy availed of by the Appellant.
Conclusion - The Respondent is not entitled to repudiate the claim of the Appellant on the ground of breach of the special condition. The Respondent has raised several other objections, including allegations of forgery and breach of other conditions, which may affect the sum awarded. However, the same would have to be looked into on its own merits and proved before the NCDRC.
The impugned order dated 13.04.2021 passed by the NCDRC is set aside. The matter is remanded to the NCDRC with a direction to determine the extent of the insured sum liable to be paid by the Respondent to the Appellant - Appeal allowed by way of remand.
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2025 (4) TMI 433
Seeking quashing of FIR - refusal to quash the proceeding inter alia holding the allegations prima facie divulging ingredients of offence under Section 415 IPC - criminal offence or commercial dispute - HELD THAT:- Materials collected during investigation do not show the present case falls in the category of commercial disputes which would attract penal consequences. Investigating officer had recorded statements of two bankers and a builder. The bankers disclosed the appellant and his relations had substantial landed properties which had been mortgaged to them in 2014. The appellant had repaid the loan regularly till 2016 thereafter defaulted. Notwithstanding default, in 2018 an additional loan was also sanctioned to him.
These materials support the appellant’s representation that he was a businessman of substance and as late as on 2018, his bankers reposed confidence in his financial liquidity to extend additional loans. Nothing is placed on record to disclose utter insolvency or bankruptcy of the appellant, which he had knowingly suppressed and persuaded the 2nd non-applicant to enter into the commercial arrangement. The High Court erred in not taking into consideration these relevant aspects, which shows the representation of the appellant that he was a creditworthy businessman cannot be labelled as ‘deception’ merely on the ground that the appellant had failed to honour the terms of the subsequent agreement. The High Court came to the conclusion that the appellant had intention to deceive from the inception of the transaction. This reasoning is wholly fallacious. Mere breach of promise to repay per se does not infer dishonest intention.
The proposition of law declared in Mohsinbhai Fateali vs Emperor [1931 (11) TMI 7 - BOMBAY HIGH COURT] does not help the 2nd non applicant. In the said case, the Bench held merely because the accused had subsequently filed for insolvency, it cannot be held that he had no reasonable expectation to pay for the goods on the date of contract.
In Khoda Bakhsh vs Bakeya Mundari [1905 (6) TMI 1 - CALCUTTA HIGH COURT], the accused had deceived the complainant to part with money on the assurance to liquidate a mortgage debt and utilized the money to repay another debt which he had suppressed. No such divergence of funds/ goods is made out in the factual matrix to show ‘deception’ by the appellant.
Conclusion - A commercial dispute does not automatically translate into a criminal offense unless there is clear evidence of fraudulent intent at the inception of the transaction.
The impugned order is set aside and the proceeding arising out of FIR is quashed - appeal allowed.
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2025 (4) TMI 432
Rights of driver holding an LMV license - driver holding an LMV license (for vehicles with a gross vehicle weight of less than 7,500 kgs) as per Section 10(2)(d), which specifies 'Light Motor Vehicle', can operate a 'Transport Vehicle' without obtaining specific authorization under Section 10(2)(e) of the MV Act, specifically for the 'Transport Vehicle' class or not - second part of Section 3(1) which emphasizes the necessity of a driving license for a 'Transport Vehicle' overrides the definition of LMV in Section 2(21) of MV Act or not - additional eligibility criteria prescribed in the MV Act and MV Rules for 'transport vehicles' would apply to those who are desirous of driving vehicles weighing below 7,500 kgs and have obtained a license for LMV class under Section 10(2)(d) of the MV Act - effect of the amendment made by virtue of Act 54 of 1994 w.e.f. 14.11.1994 which substituted four classes under clauses (e) to (h) in Section 10 with a single class of Transport Vehicle' in Section 10(2)(e) - decision in Mukund Dewangan(2017) is per incuriam for not noticing certain provisions of the MV Act and MV Rules or not?
The Purpose of the MV Act, 1988 - HELD THAT:- The MV Act, 1988 is fundamentally a social welfare legislation enacted with the objective of providing a mechanism for victims and their families to seek compensation for loss or injury resulting from road accidents. Additionally, its provisions regarding licensing and penalties for traffic violations serve the broader purpose of promoting road safety. Being a welfare legislation, it must be interpreted in a manner so as not to deprive the claimants of the benefit of the legislation. Any interpretation of its provisions must reflect the dual purpose, of not only as a mechanism for ensuring timely compensation and relief for victims of road accidents but also in promoting overall road safety.
The issue in this reference is whether an individual holding an LMV license can legally drive a transport vehicle if it falls within the stipulated weight limit of 7,500 kgs. The genesis of the issue stems from disputes regarding the payment of claims by insurance companies for accidents involving 'transport vehicles' operated by individuals holding licenses to drive 'light motor vehicles'. The question before this Court is not one of statutory interpretation but also involves concerns of road safety and public welfare. In interpreting any statute, it is always prudent to keep an eye on the object and purpose of the statute, as well as the underlying reason and the spirit behind it. However, we are conscious of not overstepping into the policy domain which is essentially the prerogative of the legislature. The legislature is uniquely positioned to examine the broader social, economic and safety considerations that underlie transportation policy and any changes to the law must be rooted in comprehensive public discourse and analysis. Having noted the broader objective of the MV Act, let us now discuss the statutory scheme.
Brief Overview of the MV Act and MV Rules - HELD THAT:- The MV Rules contain the procedure concerning driving licenses in Chapter II. It covers, inter alia, general provisions, evidence as to the correctness of address and age, medical certificate, educational qualifications, preliminary test, application for a driving license, driving test, form of driving license, renewal, driving schools and establishments, duration of license, duplicate license as well as the training syllabus - The MV Act and MV Rules work in tandem, like two wheels in the same axle, to form a comprehensive legal framework governing motor vehicles in India. While the Act provides the backbone, the Rules provide specific provisions for implementation.
Construing Section 2(21), Section 3 and Section 10 - HELD THAT:- A person holding a LMV license is equally competent to drive a Transport Vehicle, provided of course the vehicle's gross weight does not exceed 7,500 kgs. The reference to 'transport vehicle' in Section 3(1) and other sections of the Act and Rules should therefore be understood as applying to only those vehicles which fall beyond the scope of the sensu stricto definition, under Section 2(21). This interpretation would ensure that no provision or word is rendered otiose and the licensing regime remains coherent with the legislative intent.
Discussion on the 8 Conflicting decisions - HELD THAT:- The judgments where the Court has held that a separate endorsement for a 'transport vehicle' may not be necessary i.e. in Ashok Gangadhar Maratha [1999 (9) TMI 974 - SUPREME COURT], Nagashetty [2001 (8) TMI 1463 - SUPREME COURT], S. Iyyapan [2013 (7) TMI 1249 - SUPREME COURT] and Kulwant Singh 2014 (10) TMI 1086 - SUPREME COURT] are found to align with our reasoning and interpretation and they are therefore upheld. In consequence, the three judgments which concluded otherwise i.e. Prabhu Lal [2007 (11) TMI 715 - SUPREME COURT], Roshanben Rahemansha Fakir [2008 (5) TMI 764 - SUPREME COURT] and Angad Kol [2009 (2) TMI 935 - SUPREME COURT] are overruled based on the reasoning provided in this judgment. The decision in Annappa Irappa Nesaria [2008 (1) TMI 983 - SUPREME COURT] is partially overruled to the extent that the position even post-amendment would remain the same.
Is Mukund Dewangan(2017) per incuriam? - HELD THAT:- The decision in Mukund Dewangan (2017) was doubted for not noticing certain provisions of the MV Act and MV Rules. These include, inter alia, Section 4(1), 7, 14, the second proviso to Section 15 and Section 180 and 181 of the MV Act. It was therefore argued before this Court that the said decision is per incuriam. To begin with, it is useful to refer to some decisions that have expounded on the principle of per incuriam.
The judgment in Mukund Dewangan (2017), shows that the 3 Judge Bench considered Section 2(21), 2(47) read with Section 10 of MV Act. The Court also examined the legislative intent behind the 1994 amendment to Section 10, noting that while the amendment introduced the term "transport vehicle" under Section 10(2)(e), it did not amend the definition of LMVs under Section 2(21). It was further observed that the newly inserted provision of Section 10(2)(e) would only subsume those classes of vehicles that were contained in Sections 10(2)(e) to 10(2)(h) of the un-amended Act i.e. medium goods vehicle, medium passenger vehicle, heavy goods vehicle and heavy passenger vehicle, and which now stand deleted by virtue of the amendment of 1994. Since no amendment was carried out in Section 10(2)(d) of the Act which contains the class for 'Light Motor Vehicles', the scope of Section10(2)(d) would remain intact as is contained in Section 2(21) of the Act, which is to say that LMV would include 'Transport Vehicles' in cases where the gross weight of such vehicle is less than 7500 Kgs. It further noted that the syllabus does not provide separate training for transport vehicles but includes them under the relevant vehicle class based on the vehicle's weight. It considered Rule 75 which deals with 'State Register of motor vehicles' as provided in Form 41. Form 41 categorizes vehicles on the basis of, inter alia, gross vehicle weight, unladen weight etc. Likewise, the Court observed that Section 41, pertaining to registration, mandates the inclusion of relevant information as specified in Form 20, which outlines details such as the class of vehicle, gross vehicle weight, and unladen weight, among other factors.
It is true that Mukund Dewangan (2017) did not analyse the provisions that distinguish transport and non-transport vehicles, as noted in the reference orders. The statutory scheme of MV is more nuanced than the simple weight-based distinction made in the said judgment. Moreover, the Court failed to notice Section 31(2) and 31(3) which specify 'Transport' and 'Non-Transport' vehicles. However, the judgment gave due consideration to the important statutory provisions - A harmonious interpretation, would lead to the same conclusion but fortified with some additional reasoning based on the consideration of all the relevant provisions. The overlooked provisions would not, alter the eventual pronouncement. Importantly, there are no glaring error or omission that would alter the outcome of the case. Therefore, the ratio in Mukund Dewangan (2017) should not be disturbed by applying the principles of per incuriam.
Impact on road safety - HELD THAT:- Road safety is a serious public health issue globally. It is crucial to mention that in India, over 1.7 lakh persons were killed in road accidents in 2023. The causes of such accidents are diverse, and assumptions that they stem from drivers operating light transport vehicles with an LMV license are unsubstantiated. Factors contributing to road accidents include careless driving, speeding, poor road design, and failure to adhere to traffic laws. Other significant contributors are mobile phone usage, fatigue, and non-compliance with seat belt or helmet regulations.
Driving a motor vehicle is a complex task requiring both practical skills and theoretical knowledge. Safe driving involves not only technical vehicle control but also proficiency in various road conditions, including managing speed, turns, and spatial awareness relative to other vehicles. Additionally, handling road gradients demands skill, particularly with brakes and maneuvering. Effective driving requires awareness of road signs, adherence to traffic rules, and a focus on the road free from distractions. The core skills expected of all drivers apply universally, regardless of whether the vehicle falls into transport or non-transport categories.
At this juncture, it is also essential to note the scheme devised in accordance with Section 75 of MV Act whereby the pre- requisites in the form of 'General Conditions' to be maintained by the 'holder of license' ensure safety and compliance. Certain guidelines have also been enacted in so far as aggregators are concerned whereby chapters outlining 'Conditions for grant of licence for Aggregator', 'Compliance with regard to Drivers', 'Compliance with regard to Vehicles' as also 'Compliances to ensure safety' further address the speculative concerns raised on behalf of the counsel for insurance companies.
Conclusion - i) A driver holding a license for Light Motor Vehicle (LMV) class, under Section 10(2)(d) for vehicles with a gross vehicle weight under 7,500 kg, is permitted to operate a "Transport Vehicle' without needing additional authorization under Section 10(2)(e) of the MV Act specifically for the 'Transport Vehicle' class. For licensing purposes, LMVs and Transport Vehicles are not entirely separate classes. An overlap exists between the two. The special eligibility requirements will however continue to apply for, inter alia, e-carts, e- rickshaws, and vehicles carrying hazardous goods. ii) The second part of Section 3(1), which emphasizes the necessity of a specific requirement to drive a 'Transport Vehicle,' does not supersede the definition of LMV provided in Section 2(21) of the MV Act. iii) The additional eligibility criteria specified in the MV Act and MV Rules generally for driving 'transport vehicles' would apply only to those intending to operate vehicles with gross vehicle weight exceeding 7,500 kg i.e. 'medium goods vehicle', 'medium passenger vehicle', 'heavy goods vehicle' and 'heavy passenger vehicle'. iv) The decision in Mukund Dewangan (2017) is upheld but for reasons as explained by us in this judgment. In the absence of any obtrusive omission, the decision is not per incuriam, even if certain provisions of the MV Act and MV Rules were not considered in the said judgment.
The reference is answered in the above terms. The Registry is directed to list the matters before the appropriate Bench after obtaining directions from Hon'ble the Chief Justice of India.
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