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1995 (8) TMI 332
Issues:
1. Devolution of properties under Inams of two kinds upon the death of Syed Abdulla Inamdar.
2. Claim of co-heirs as to the inheritance of the properties post the abolition of Inams.
3. Interpretation of re-grant of properties after the abolition of Inams.
4. Application of Shariat Law in the devolution of properties.
5. Claim of adverse possession by one of the heirs over a dwelling unit.
Analysis:
1. The judgment deals with the devolution of properties belonging to Syed Abdulla Inamdar, specifically agricultural lands and a dwelling unit, upon his death. The agricultural lands were assigned to the eldest son, Abubakar, as Inams of two kinds, subject to the rule of primogeniture. The co-heirs, comprising brothers and sisters, claimed a share in the lands and the dwelling unit post the abolition of Inams. The trial court partially decreed the suit, but the High Court reversed the decision, holding that the co-heirs were entitled to their respective shares in the properties.
2. The court analyzed the re-grant of properties to Abubakar after the abolition of Inams under the Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955. It was established that the properties, initially impartible due to being Inams, became partible upon re-grant. The court applied the principles of Shariat Law to determine the devolution of the properties among the heirs of Syed Abdulla, emphasizing that the rule of primogeniture no longer applied post the abolition of Inams.
3. The judgment also addressed the claim of adverse possession raised by Abubakar over the dwelling unit owned by Syed Abdulla. While the lower courts ruled in favor of Abubakar, the High Court overturned the decision, noting the lack of specific pleadings regarding hostile and notorious possession. The High Court found that the correct principles of adverse possession were not applied by the lower courts, leading to the dismissal of Abubakar's claim.
4. The court emphasized the uniform application of legal principles, regardless of the religious affiliation of the parties involved. It rejected the argument that different rules should apply based on the religion of the parties, asserting that the intent behind the re-grant of properties was to treat all subjects equally, irrespective of their religious background.
5. Ultimately, the Supreme Court dismissed the appeal, finding no merit in the arguments presented. The judgment concluded that the co-heirs were entitled to their respective shares in the properties, and the claim of adverse possession over the dwelling unit was not substantiated adequately. No costs were awarded in the case.
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1995 (8) TMI 331
Issues Involved:
1. Maintainability of the joint petition under Company Law Board Regulations, 1991.
2. Requirement of being a member to file a petition under Section 111(4) of the Companies Act, 1956.
3. Jurisdiction of the Company Law Board to decide on matters relating to allotment/non-allotment of shares.
4. Involvement of complicated questions of law and facts.
5. Entitlement of the petitioners to reliefs.
Detailed Analysis:
1. Maintainability of the Joint Petition:
The respondents argued that the joint petition filed by nine petitioners in C.P. No. 2 of 1994 is not maintainable under Regulation 14(4)(b) of the Company Law Board Regulations, 1991. The Board concluded that Regulation 14(4)(a) allows joint petitions if the petitioners have a common interest and seek identical reliefs. Regulation 14(4)(b) does not restrict this discretion unless specifically permitted by the Act. Therefore, the joint petition was deemed maintainable.
2. Requirement of Being a Member:
The respondents contended that one must be a member to file a petition under Section 111(4). The Board referred to precedents, including the judgment in Coronation Tea Co. Ltd., In re [1962] 32 Comp Cas 568 (Cal), which clarified that a person claiming title to shares can seek rectification even if not a member. The Board concluded that the term "having become a member" in Section 111(4)(b) refers to the eligibility to become a member, not actual membership. Thus, the petitioners' eligibility to become members was sufficient to file the petition.
3. Jurisdiction of the Company Law Board:
The respondents argued that the Company Law Board lacks jurisdiction over pre-allotment issues. The Board distinguished between general applications for shares and cases involving promoters' rights. It cited several judgments, including Public Passenger Services Ltd. v. M. A. Khadar [1966] 36 Comp Cas 1 (SC), which affirmed the Board's jurisdiction to decide questions related to rectification, including allotment issues. The Board concluded it had jurisdiction to address the petitioners' claims.
4. Complicated Questions of Law and Facts:
The respondents highlighted the complexity of issues such as the nature of the understanding between family members, the genuineness of declarations before tax authorities, and the source of funds. The Board acknowledged the discretion to refrain from exercising jurisdiction in cases involving complex questions. It examined the facts and found that while C.P. No. 2 of 1994 involved complicated issues, C.P. No. 9 of 1994 did not. Therefore, the Board decided to address the latter while relegating the former to civil court.
5. Entitlement to Reliefs:
For C.P. No. 9 of 1994, the Board found that SM's contribution of Rs. 6.8 lakhs was undisputed and recognized her as a promoter. The Board referred to various documents, including guarantees and undertakings with IFCI, which established her right to be a shareholder. The Board concluded that SM should be allotted 68,000 shares for her contribution. The company was ordered to rectify the register of members accordingly, ensuring the transfer of shares from respondents Nos. 2 and 3 or their group.
Conclusion:
The Board allowed the joint petition under Regulation 14(4)(a) and found that membership is not a prerequisite for filing a petition under Section 111(4). It affirmed its jurisdiction to decide on allotment issues but refrained from addressing C.P. No. 2 of 1994 due to complex questions, relegating it to civil court. For C.P. No. 9 of 1994, the Board ordered the allotment of shares to SM, directing the company to rectify the register of members. Both petitions were disposed of with no order as to costs.
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1995 (8) TMI 330
Issues Involved:
1. Whether the Registrar became functus officio after the expiry of one year as per Section 96(5) and (6) of the West Bengal Co-operative Societies Act, 1983.
2. Whether the arbitration proceedings before the third respondent stood abated.
3. Whether the civil court has the power to terminate the appointment of the third respondent and appoint another arbitrator.
Issue-wise Detailed Analysis:
1. Whether the Registrar became functus officio after the expiry of one year as per Section 96(5) and (6) of the West Bengal Co-operative Societies Act, 1983:
Section 96(5) of the Act mandates that a dispute referred to the Registrar must be decided within six months. Section 96(6) allows for an extension of up to six additional months. The High Court held that the Registrar became functus officio after this period, meaning he no longer had the authority to extend the time or take further action. However, Rule 178 of the West Bengal Co-operative Societies Rules, 1987, provides that the Registrar can withdraw the reference from the arbitrator and either decide the dispute himself or appoint another arbitrator. Thus, the Supreme Court concluded that the Registrar's power is not exhausted after one year, and he retains the authority to withdraw the dispute and appoint a new arbitrator or decide the dispute himself.
2. Whether the arbitration proceedings before the third respondent stood abated:
The High Court's view that the arbitration proceedings stood abated after one year was based on the assumption that the Registrar's powers were exhausted. However, the Supreme Court clarified that the arbitration proceedings do not abate after one year. Rule 178 allows the Registrar to withdraw the dispute from the arbitrator and either decide it himself or appoint another arbitrator. Therefore, the arbitration proceedings before the third respondent did not stand abated; instead, the Registrar could take further action to ensure the dispute is resolved.
3. Whether the civil court has the power to terminate the appointment of the third respondent and appoint another arbitrator:
The High Court had appointed a new arbitrator under the Arbitration Act, 1940, after revoking the appointment of the third respondent. The Supreme Court examined Section 46 of the Arbitration Act, which applies to statutory arbitrations unless inconsistent with the special law. The Court found that the West Bengal Co-operative Societies Act is a complete code for arbitration, and its provisions are inconsistent with the Arbitration Act. Specifically, Section 12 of the Arbitration Act, which allows the court to appoint a new arbitrator, is excluded by Section 46. Therefore, the civil court does not have the jurisdiction to terminate the appointment of the third respondent and appoint another arbitrator. The Registrar retains the authority to take necessary actions under the West Bengal Co-operative Societies Act.
Conclusion:
The Supreme Court held that the Registrar did not become functus officio after one year and retained the power to withdraw the dispute and appoint a new arbitrator or decide the dispute himself. The arbitration proceedings before the third respondent did not abate, and the civil court did not have the jurisdiction to appoint another arbitrator. The first respondent was directed to make an application to the Registrar to either decide the dispute himself or appoint another arbitrator. The Registrar was instructed to ensure the dispute is resolved expeditiously, preferably within six months.
Order:
The appeal was allowed, and the High Court's order was set aside. The Registrar was directed to take necessary actions to resolve the dispute within the specified time frame. No costs were awarded.
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1995 (8) TMI 329
Issues Involved:
1. Legitimacy of benefits granted to Dasegowda.
2. Rights and benefits entitled to Dhananjaya.
3. Compliance of the Government and Corporation with Supreme Court orders.
4. Contempt of Court by the Government for non-compliance.
Issue-wise Detailed Analysis:
1. Legitimacy of Benefits Granted to Dasegowda:
The appellant, Dasegowda, a retired Chief Engineer, challenged the Division Bench judgment of the Karnataka High Court. The Supreme Court directed that he be treated as an employee of the Corporation for all retrial benefits. Despite the unsuccessful challenge, the Court clarified that Dasegowda would retain his status and pensionary benefits.
2. Rights and Benefits Entitled to Dhananjaya:
Dhananjaya, who competed with Dasegowda and succeeded, filed an application apprehending that the benefits given to Dasegowda might deny him his rightful benefits. The Supreme Court clarified that Dhananjaya's rights, upheld by the Division Bench of the High Court and affirmed by the Supreme Court, would not be jeopardized. The Court directed that Dhananjaya be granted all benefits, including the creation of a supernumerary post if necessary. The Government was instructed to issue necessary orders.
3. Compliance of the Government and Corporation with Supreme Court Orders:
The Government directed the Corporation to implement the Supreme Court's order to grant Dhananjaya all benefits. The Corporation resolved to create a post of Engineer-in-Chief and a supernumerary post of Additional Chief Engineer to accommodate Dhananjaya. However, the Government's subsequent order indicated non-compliance with the Supreme Court's directives, leading to the filing of a contempt petition by Dhananjaya.
4. Contempt of Court by the Government for Non-compliance:
The petitioner argued that the Government's failure to grant him the benefits constituted deliberate disobedience of the Supreme Court's orders. The respondent contended that the petitioner was not eligible for the post of Chief Engineer and that the Government had complied with the rules. The Supreme Court found that the Government had deliberately circumvented its orders to deny Dhananjaya his rightful benefits. The Court held the Government in contempt for willful disobedience and sentenced the respondent to one month of simple imprisonment. Additionally, the Government was directed to implement the Corporation's resolution and grant all consequential benefits to Dhananjaya.
Conclusion:
The Supreme Court found the Government guilty of contempt for failing to comply with its orders and directed immediate implementation of the Corporation's resolution to grant Dhananjaya his entitled benefits. The Court emphasized that the Government's actions were a deliberate effort to deny the petitioner his rightful dues, warranting both punitive and corrective measures.
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1995 (8) TMI 328
Issues Involved:
1. Specific performance of the agreement dated 16th July 1974.
2. Allegation of undue advantage taken due to language barrier.
3. Payment of Rs. 16,000 by the plaintiff.
4. Entitlement to relief as prayed for by the plaintiff.
5. Order and decree.
Issue-wise Detailed Analysis:
1. Specific Performance of the Agreement Dated 16th July 1974:
The plaintiff claimed that the defendants agreed to sell the entire suit house for Rs. 16,000, evidenced by an agreement dated 16th July 1974. The defendants contended that the agreement was for the ground floor only. The Trial Court found that the agreement was for the ground floor and a part of the Wada for Rs. 12,000, not the entire house. However, the Supreme Court concluded that the entire suit house, including the first floor, was agreed to be sold for Rs. 16,000. The Court noted that the additional Rs. 4,000 paid by the plaintiff indicated a broader agreement than just the ground floor, and the entire house was mortgaged and thus intended to be conveyed. The judgment and decree of the Trial Court and High Court were modified to reflect this finding.
2. Allegation of Undue Advantage Taken Due to Language Barrier:
The plaintiff, a Maharashtrian lady, claimed she did not understand Gujarati, and the defendants took undue advantage of this by misrepresenting the terms in the agreement. The defendants denied this, asserting that the plaintiff understood Gujarati. The Trial Court found no undue advantage was taken. The Supreme Court, however, gave credence to the plaintiff's claim, considering the improbability of her agreeing to pay more for a lesser portion of the property and the clear recitals in the agreement Ex. 75.
3. Payment of Rs. 16,000 by the Plaintiff:
The Trial Court found that the plaintiff had indeed paid Rs. 16,000 to the defendants. This finding was not challenged by the defendants. The Supreme Court upheld this finding, noting that the payment of Rs. 16,000 was well established and supported the plaintiff's claim for the entire suit house.
4. Entitlement to Relief as Prayed for by the Plaintiff:
The Trial Court granted specific performance for the ground floor and part of the Wada but denied the plaintiff's claim for the entire house. The Supreme Court held that the plaintiff was entitled to specific performance for the entire suit house, including the first floor, based on the comprehensive consideration of Rs. 16,000 and the nature of the property transaction.
5. Order and Decree:
The Supreme Court modified the Trial Court's decree, directing the defendants to execute a registered Sale Deed for the entire suit house, including the first floor, in favor of the plaintiff's heirs. The rest of the Trial Court's directions were confirmed. The appeal was allowed with costs throughout, and the Court appreciated the assistance provided by the senior counsel and Advocate on Record.
Conclusion:
The Supreme Court allowed the appeal, modifying the lower courts' judgments to grant specific performance for the entire suit house, recognizing the payment of Rs. 16,000 and addressing the undue advantage taken due to the plaintiff's language barrier. The defendants were directed to execute the Sale Deed accordingly.
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1995 (8) TMI 327
Issues Involved:
1. Application for stay of winding-up proceedings under Section 466 of the Companies Act, 1956.
2. Confirmation of sale of company assets.
3. Allegations against the petitioner's own advocate.
4. Compliance with statutory duties by ex-directors.
5. Interests of creditors and commercial morality.
6. Locus standi of the purchaser to oppose the application.
Detailed Analysis:
1. Application for Stay of Winding-Up Proceedings:
The application was filed by Nilkanta Kolay under Section 466 of the Companies Act, 1956, seeking to stay the winding-up proceedings. The Court noted that the petitioner had not made any application under Order 9, Rule 13 of the Civil Procedure Code to set aside the ex parte winding-up order within the stipulated time. The petitioner failed to demonstrate any sufficient cause for not defending the winding-up proceedings earlier. The Court emphasized that the grounds for stay under Section 466 must be bona fide and supported by concrete materials, which were absent in this case.
2. Confirmation of Sale of Company Assets:
The sale of the company's assets was a significant issue. The Court detailed the sequence of events leading to the sale, including multiple offers and the eventual confirmation of the sale in favor of Shiva Shakti Iron & Steel Industries for Rs. 9.25 lakhs. The Court held that setting aside the sale at this stage would cause serious injustice to the purchaser, who had already invested substantial sums in the factory. The sale was confirmed, and the purchaser was entitled to the assets.
3. Allegations Against the Petitioner's Own Advocate:
The petitioner alleged that due to defaults by his own advocate, he could not defend the winding-up proceedings. The Court found these allegations irrelevant as the petitioner did not file any application under Order 9, Rule 13 to set aside the ex parte order. The Court stressed that the petitioner must proceed on the basis of accepting the winding-up order when applying under Section 466.
4. Compliance with Statutory Duties by Ex-Directors:
The Court noted that neither the petitioner nor the other directors had filed the required Statement of Affairs as mandated by the Companies Act, 1956. The lack of compliance with statutory duties was a critical factor against granting the stay. The Court cited previous judgments emphasizing the importance of directors fulfilling their statutory obligations before seeking any relief.
5. Interests of Creditors and Commercial Morality:
The Court highlighted that the interests of creditors and commercial morality must be considered when deciding on a stay application. The petitioner failed to provide any concrete proposal for satisfying the creditors. The Court referred to the principles laid down in previous cases, stating that mere consent of creditors or offers to pay are insufficient without a firm and accepted proposal. The Court found no evidence of a bona fide intention to revive the company for the benefit of creditors and commercial morality.
6. Locus Standi of the Purchaser to Oppose the Application:
The petitioner contended that Shiva Shakti Iron & Steel Industries had no locus standi to oppose the application. The Court rejected this argument, noting that the purchaser was directly affected by the outcome of the application. The purchaser had invested in the assets and was entitled to defend its interests. The Court confirmed the sale in favor of Shiva Shakti and allowed them to proceed with their plans for the factory.
Conclusion:
The Court dismissed the application filed by Nilkanta Kolay, vacated all restraint orders against the respondents, and confirmed the sale in favor of Shiva Shakti Iron & Steel Industries. The petitioner's request for a stay was declined, and the Court emphasized the importance of compliance with statutory duties and the interests of creditors and commercial morality in its decision.
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1995 (8) TMI 326
Issues involved:
The judgment deals with the issue of whether the Tribunal's dismissal of an application for proper pay fixation as time-barred was contrary to law.
Facts:
The appellant, who joined the service of the State of Punjab in 1967 and later the railways in 1978, claimed that his pay fixation upon joining the railways was incorrect. He sought proper pay fixation from 1.8.1978 based on specific rules. The Tribunal rejected his application as time-barred, stating that the cause of action arose at the time of initial pay fixation in 1978 or upon rejection of his representation before the Administrative Tribunals Act, 1985.
Decision:
The Supreme Court held that the appellant's grievance of incorrect pay fixation constituted a continuing wrong, giving rise to a recurring cause of action each time he received a salary not computed according to rules. The Court emphasized that the right to correct salary subsists throughout the tenure of service, akin to the right of redemption in a mortgage. The Court distinguished a previous case involving termination of service, noting that the present case involved a continuous claim for correct salary payment.
Conclusion:
The Court allowed the appeal, remitting the matter to the Tribunal for fresh consideration on the merits of the appellant's claim. The Court clarified that the issue of limitation regarding consequential reliefs and arrears, if any, should be determined separately in accordance with the law. No costs were awarded in this matter.
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1995 (8) TMI 325
Issues involved: Transfer of complaint by Chief Judicial Magistrate, Taking cognizance of the offence, Criminal breach of trust by a partner in a firm.
For the issue of transfer of complaint by Chief Judicial Magistrate:
The appellant contended that the Chief Judicial Magistrate erred in transferring the complaint without taking cognizance, as per s. 190 of the Code of Criminal Procedure. However, the Supreme Court held that the Magistrate takes cognizance of the offence, not the offender, as soon as judicial mind is applied to the offence. The power to take cognizance is not affected by the transfer process, and the Magistrate who receives the case can proceed with the matter even if the transfer was not in accordance with the law.
Regarding taking cognizance of the offence:
The Court explained that under s. 190 of the Code, any Magistrate may take cognizance of an offence upon receiving a complaint, police report, information from a person other than a police officer, or upon his own knowledge that the offence has been committed. The Court further clarified that the Chief Judicial Magistrate has the power to transfer cases and the Magistrate receiving the case on transfer can still take cognizance of the offence.
Concerning criminal breach of trust by a partner in a firm:
The appellant argued that as a partner in the complainant firm, he cannot be accused of criminal breach of trust against other partners. However, the Court stated that until the firm is dissolved and accounts settled, all partners have joint control over the firm's property and funds. The offence of criminal breach of trust is not related to the partnership property but to property specially entrusted under a contract. The Court found that the allegations in the complaint did not implicate the appellant in his capacity as a partner, but rather in relation to the specific contract with the accused firm.
In conclusion, the Supreme Court dismissed the appeal, stating that the allegations in the complaint were sufficient to proceed with the trial, and the determination of liability and defences should be addressed during the trial proceedings.
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1995 (8) TMI 324
Issues Involved:
1. Vicarious liability of the State for the actions of its employee.
2. Determination of negligence and unauthorized use of the vehicle.
3. Entitlement and quantum of compensation to the heirs of the deceased.
Issue-wise Detailed Analysis:
1. Vicarious liability of the State for the actions of its employee:
The appeal was filed by the State of Maharashtra challenging the High Court's decision that held the State vicariously liable for the accident caused by its employee. The accident occurred when a State Government jeep, driven by a clerk unauthorizedly, collided with a scooter, resulting in the death of Vijay Singh. The High Court found that the jeep was on official duty and the clerk was driving with the driver's consent. The Supreme Court affirmed that the State is vicariously liable because the jeep was being used for official purposes and the act of the clerk, though unauthorized, was within the scope of employment.
2. Determination of negligence and unauthorized use of the vehicle:
The Motor Vehicles Tribunal and the High Court concluded that the clerk was driving the jeep in a rash and negligent manner and without a license. The High Court rejected the State's claim that the clerk had snatched the keys from the driver. Instead, it was established that the driver, who was under the influence of liquor, permitted the clerk to drive. The Supreme Court held that the State cannot escape liability as the act was related to official duty and the negligence occurred within the scope of employment.
3. Entitlement and quantum of compensation to the heirs of the deceased:
The Tribunal initially awarded Rs. 1,50,000 as compensation, which the High Court increased to Rs. 2,06,000 with 12% interest per annum from the date of application till realization. The Supreme Court upheld this decision, emphasizing the need for a liberal approach in compensation for motor accidents due to the increasing number of highway accidents. The Court noted that the jurisprudence of compensation must evolve to ensure victims' families are adequately compensated, even if the act was unauthorized but connected to official duty.
Conclusion:
The Supreme Court dismissed the appeal, holding the State vicariously liable for the compensation awarded to the heirs of the deceased. The Court emphasized that the State's liability arises from the official use of the vehicle and the negligence of its employees, even if the specific act was unauthorized. The appeal was dismissed with no order as to costs.
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1995 (8) TMI 323
Issues Involved:
1. Validity of the demand notice dated May 2, 1986.
2. Requirement of a show-cause notice before issuing the demand.
3. Applicability of Section 11A of the Central Excises and Salt Act, 1944.
4. Refund of the amount paid by the Mills under interim relief.
5. Entitlement to interest on the refunded amount.
Detailed Analysis:
1. Validity of the Demand Notice Dated May 2, 1986:
The High Court quashed the demand notice dated May 2, 1986, issued by the Superintendent of Central Excise to the Mills. The demand was for Rs. 2,11,86,467.27 for the period from September 1981 to July 20, 1985, for the clearance of yarn captively consumed without payment of duty. The learned Single Judge found the demand invalid due to the lack of a show-cause notice and held it was barred by limitation. However, the appellate court found that the demand was issued in compliance with the procedure under Chapter VIIA of the Central Excise Rules, which does not necessitate a prior notice before completing the assessment under Rule 173-1.
2. Requirement of a Show-Cause Notice Before Issuing the Demand:
The Mills argued that the demand should have been preceded by a show-cause notice. The learned Single Judge agreed, stating that the provisions of Section 11A of the Act, which require a show-cause notice, were applicable. However, the appellate court disagreed, stating that Rule 173-1 of the Central Excise Rules does not require a show-cause notice before determining the duty payable. The court clarified that the term "adjudicate" used in the earlier court order meant merely calculating the duty payable based on the RT-12 returns filed by the Mills, which was an arithmetic exercise not requiring a prior notice.
3. Applicability of Section 11A of the Central Excises and Salt Act, 1944:
The learned Single Judge held that Section 11A of the Act, which deals with the recovery of duties not levied or paid, was applicable and that the demand was barred by limitation. The appellate court, however, found that Section 11A was not applicable as the duty had been levied and the Mills had voluntarily paid the amounts in instalments. The court noted that the demand was made based on the RT-12 returns filed by the Mills, and there was no dispute about the quantity of yarn cleared or the rate of duty. The court further held that the provisions of Section 11A are independent of Rule 173-1 and are applicable only in specific situations mentioned therein.
4. Refund of the Amount Paid by the Mills Under Interim Relief:
The learned Single Judge directed the department to refund Rs. 1,69,75,724.79 paid by the Mills under the interim order. However, the appellate court set aside this direction, stating that the amount was voluntarily paid by the Mills in compliance with the court's interim order. The appellate court held that the Mills could not claim a refund of the amount paid voluntarily and that the department was entitled to recover the balance amount due.
5. Entitlement to Interest on the Refunded Amount:
The Mills had also claimed interest on the refunded amount. The learned Single Judge had declined to award interest. The appellate court upheld this decision, stating that the Mills were not entitled to interest on the amount of duty voluntarily paid. Consequently, the Mills' appeal for interest on the refunded amount was dismissed.
Conclusion:
The appellate court allowed the appeal by the Revenue, setting aside the order of the learned Single Judge and dismissing the writ petition filed by the Mills. The cross-appeal by the Mills for interest on the refunded amount was also dismissed. The court directed the Mills to pay the costs of the department throughout both appeals.
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1995 (8) TMI 322
Issues:
Interpretation of the annual value of a property for tax assessment based on actual rent received vs. standard rent under relevant Rent Act; Estoppel against the statute in determining annual rental value for tax assessment.
Analysis:
The Supreme Court addressed the issue of determining the annual value of a property for tax assessment based on the actual rent received from a tenant versus the standard rent expected under the relevant Rent Act. The Court referred to previous judgments, including Diwan Daulat Rai Kapur vs. New Delhi Municipal Committee and Mrs. Shiela Kaushish v. C.I.T., which established that the standard rent determinable under the Rent Act is the correct measure for determining the annual value, not the actual rent received by the landlord. The Court emphasized that the assessing authority must arrive at its own figure of the standard rent based on the principles laid down in the Rent Act. The Court reiterated that the annual value of a property cannot exceed the standard rent determined under the Rent Act, regardless of the actual rent received.
In the case of New Delhi Municipal Committee vs. M.N. Soi and Anr., the Court further clarified that the hypothetical rent that can reasonably be expected if the property is to be let should be the legal yardstick for determining the annual value. The Court emphasized that the rating should be governed by the fixation of rent by rent control authorities and not by the actual income derived by the landlord. The Court highlighted that the expectation of rent must take into account the penal law of the State, and the standard of reasonableness should be based on the landlord's compliance with the law.
Additionally, in Balbir Singh vs. M/s M.C.D., the Court reiterated that the ratable value of a property is limited by the measure of the standard rent determined under the Rent Act and cannot exceed that figure. The standard rent arrived at by the assessing authority based on the principles of the Rent Act serves as the upper limit of the rent expected from a hypothetical tenant.
Regarding the contention of estoppel against the statute raised by the respondent, the Court held that there is no estoppel against the statute. Even if the appellants admitted to paying tax based on the actual rent received, the statutory mode of determining the annual rental value must be followed. An admission made by the landlord contrary to the statutory provision cannot be a ground to deny the statutory benefit.
Ultimately, the Court allowed the appeal, set aside the orders of the assessing authority and the appellate authority, and directed them to determine the annual value for tax assessment based on the standard rent under the Rent Act. No costs were awarded in this matter.
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1995 (8) TMI 321
Issues Involved:
1. Whether the properties vested in the International Airport Authority of India (IAAI) under the International Airports Authority Act, 1971 can be called properties of the Union under Article 285 of the Constitution of India and thus exempt from state taxes.
2. Whether the municipality can levy tax upon buildings where it cannot levy tax upon the land on which the building stands.
Summary:
Issue 1: Exemption of Properties from State Taxation under Article 285
The primary issue was whether properties vested in the International Airport Authority of India (IAAI) under the International Airports Authority Act, 1971 can be considered properties of the Union under Article 285 of the Constitution of India and thus be exempt from state and municipal taxes. The Delhi High Court ruled against the IAAI, while the Calcutta High Court ruled in its favor. The Supreme Court examined the provisions of the International Airports Authority Act, 1971, particularly Section 12, which vests properties in the IAAI, and determined that the properties vested in the IAAI are not properties of the Union of India for the purpose of Article 285. The Court noted that the IAAI is a statutory corporation with its own properties, funds, and employees, capable of borrowing and lending money, entering into contracts, and being liable for income tax under Section 31 of the Act. Therefore, the properties vested in the IAAI do not enjoy the immunity from state taxation under Article 285.
Issue 2: Levy of Tax on Buildings and Land
The second issue was whether municipalities could levy taxes on buildings if they could not levy taxes on the land on which the buildings stand. The Supreme Court found it unnecessary to address this issue directly, given its conclusion on the first issue. However, it noted that the Calcutta High Court's finding that not all land in possession of the Indian Tourism Development Corporation (I.T.D.C.) was within the limits of the Dum Dum Municipality was not based on definite material, leaving this question open for future determination by appropriate authorities.
Conclusion:
The Supreme Court dismissed the appeals by the IAAI and Air India, upholding the Delhi High Court's decision and reversing the Calcutta High Court's decision, thereby allowing the levy of property taxes by the relevant municipal bodies. The Court also dismissed the appeal against the interlocutory order of the Bombay High Court, directing the Bombay Municipal Corporation to bring this judgment to the notice of the High Court for appropriate disposal of the pending writ appeal.
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1995 (8) TMI 320
Issues Involved:
1. Whether the land acquisition proceedings lapsed in view of Section 11-A of the Land Acquisition Act.
2. Whether the proceedings dated 31.7.1984 constituted an award under the Act.
3. Whether the Society is entitled to relief despite initiating alternate proceedings.
Summary:
Issue 1: Lapse of Land Acquisition Proceedings u/s 11-A
The appellants contended that the land acquisition proceedings lapsed as no award was made within two years from the commencement of the Land Acquisition (Amendment) Act, 1984, as mandated by Section 11-A. The Court held that this plea had no force since the Government had taken possession of the land under Section 17(1) of the Act. It was noted that once possession is taken, the Government cannot withdraw from the acquisition (Section 48), and Section 11-A is not applicable. The Court cited the precedent in Stander Prasad Jain vs. State of U.P., stating that Section 11-A does not apply to acquisitions under Section 17, as the land vests in the Government upon possession.
Issue 2: Validity of Proceedings Dated 31.7.1984 as an Award
The appellants argued that the proceedings dated 31.7.1984 were not an award since they were not in Form 15 and unsigned. The Court disagreed, holding that the proceedings, though not in Form 15, constituted an award as they were signed by the District Land Acquisition Officer and contained all requisites of an award. The High Court's direction to sign and complete the award in terms of the earlier order was justified under Article 215, and the proceedings dated 31.7.1984 were deemed an award under Section 12 of the Act.
Issue 3: Entitlement to Relief Despite Alternate Proceedings
The appellants contended that the Society should not be granted relief as it had initiated alternate proceedings under the Bihar Public Land Encroachment Act, 1956, and a title suit. The Court found this plea without merit, distinguishing the case from Jai Singh vs. Union of India. The Court noted that the writ petition sought to enforce the earlier judgment in CWJC No. 3241/82, which directed the completion of the acquisition proceedings. The relief sought was not merely to remove encroachments but to implement the Court's previous orders. The High Court was justified in exercising its discretionary jurisdiction under Article 226 to ensure compliance with its earlier directions.
Conclusion:
The Supreme Court dismissed the appeals, holding that the land acquisition proceedings did not lapse, the proceedings dated 31.7.1984 constituted an award, and the Society was entitled to relief. The Court expressed distress over the prolonged delay in the acquisition process and directed the State of Bihar and its officials to complete the proceedings expeditiously. The appellants were ordered to pay costs of Rs. 10,000/- in each appeal towards the Advocate's fees for the Society.
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1995 (8) TMI 319
The appellant is entitled to retain 2.18 acres of land out of Survey Nos. 41/1 and 41/2 for convenient enjoyment of the property. The Parishad must withdraw the proposed acquisition of this land and instead acquire land from plot No. 41/4 as offered by the Corporation. The State Government must issue the required notifications accordingly. The appeal is allowed with no costs.
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1995 (8) TMI 318
Issues:
Violation of statutory provisions in permitting a nursery school to open in a park, interpretation of Sections 7 and 8 of the Delhi Development Act, misuse of power by Delhi Development Authority (DDA), cancellation of allotment in favor of respondent No.2.
Analysis:
The judgment revolves around the dispute concerning the establishment of a nursery school in a park in Sarita Vihar, allegedly in violation of the Delhi Development Act, 1957. The primary issue at hand is whether the school's location contravenes the statutory provisions outlined in Sections 7 and 8 of the Act. The appellants contend that the school's establishment in the park breaches the Act's regulations, while the DDA argues that the school's operation should not be disrupted due to financial investments and educational implications.
Upon examining Sections 7 and 8 of the Act, which pertain to the preparation of master plans and zonal development plans, the court notes the obligation of the Development Authority to designate land uses for various purposes, including schools and open spaces. The appellants argue that the land allotted for the nursery school was originally reserved for a park, emphasizing the Authority's failure to adhere to the prescribed land-use allocations.
The court delves into the interpretation of zonal development plans, highlighting the distinction between high schools, primary schools, and nursery schools. While acknowledging that nursery schools may not be explicitly indicated in the plans, the court emphasizes the necessity of reserving space for both nursery schools and parks in residential colonies like Sarita Vihar. The absence of park reservation in the layout plan of Sarita Vihar raises concerns about the legality of the school's location.
Subsequent investigations reveal that the land allotted for the nursery school was indeed part of a park, leading the court to conclude that the DDA's allocation was an abuse of power. Consequently, the court orders the cancellation of the allotment in favor of respondent No.2, emphasizing that the construction of permanent structures on unlawfully allocated land does not justify the violation of statutory provisions.
In a broader context, the court expresses concerns about unauthorized constructions and illegal allotments, emphasizing the need to hold accountable the officers responsible for such actions. The judgment calls for an inquiry by respondent No.1 to identify officers involved in unauthorized allotments and constructions, highlighting the importance of enforcing accountability to deter future misconduct.
In conclusion, the court allows the appeal, directing the cancellation of the allotment to respondent No.2 and granting a six-month period for the school's relocation. The judgment underscores the significance of upholding statutory provisions, addressing misuse of power, and ensuring accountability within statutory bodies to prevent unlawful acts.
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1995 (8) TMI 317
... ...
... ... ..... The appeals are admitted. Issue notice.
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1995 (8) TMI 316
The High Court of Allahabad upheld the Tribunal's decision that an assessee-trust is entitled to exemption under sections 11 and 12 of the Income-tax Act, as there was no violation of section 13(1)(c)(ii). The Tribunal found that the loan was adequately secured and the interest charged was adequate. The Court held that these findings are binding and ruled in favor of the assessee-trust.
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1995 (8) TMI 315
Issues Involved:
1. Determination of residency status of ABC under Article 4 of the DTAA.
2. Constitution of a permanent establishment (PE) in India under Article 5 of the DTAA.
3. Nature of payments as "royalty" and/or "fees for technical services" under Articles 13.3 and 13.4 of the DTAA.
4. Effective connection of activities outside India with the PE in India.
5. Beneficial ownership of royalties and technical fees under Article 13.6 of the DTAA.
6. Taxability of payments under Article 13.2 and Article 7 of the DTAA.
7. Attribution of profits to activities inside India under Articles 7.1 and 7.2 of the DTAA.
8. Restrictions on profit computation under Article 7.3(a) of the DTAA.
9. Deductibility of payments to the head office under Article 7.3(b) of the DTAA.
10. Withholding tax obligations under the Income-tax Act of India.
11. Computation of profits under the head "Profits and gains of business or profession" and applicability of section 115A of the Act.
Summary of Judgment:
Question No. 1:
ABC is a "person resident in France" within the meaning of Article 4 of the DTAA. ABC is liable to tax in France on account of its residence and place of management being in France, making it a resident of France for DTAA purposes.
Question No. 2:
The project head office (PHO) and project site office (PSO) of ABC in India will constitute a permanent establishment (PE) within the meaning of Article 5 of the DTAA from the first day of commencement of its business in India. ABC will be carrying on business through a PE in India once these offices are set up.
Question No. 3:
The payments made to ABC by XY under the various agreements will be in the nature of "royalties" and/or "fees for technical services" within the meaning of Articles 13.3 and 13.4 of the DTAA.
Question No. 4:
The royalties and fees for technical services in relation to the outside activities of ABC are effectively connected with the permanent establishment of ABC in India.
Questions Nos. 5 and 6:
ABC will be considered as the beneficial owner in terms of Article 13.6 of the DTAA of the royalties and technical fees received by it from XY in respect of the licence, technology, basic engineering procured, engineering services, and buying services sub-contracted to its worldwide affiliates and/or third parties.
Question No. 7:
The payments under the agreements will be taxable under Article 7 read with Article 13.6 of the DTAA.
Question No. 8:
In terms of Articles 7.1 and 7.2 of the DTAA read with paragraph 3 of the Protocol, only the profits of ABC attributable to the operations carried out by its permanent establishment in India will be liable to tax.
Question No. 9:
The words "in accordance with the provisions of and subject to the limitations of the taxation laws of the Contracting State" used in Article 7.3(a) of the DTAA would attract, in the computation of the profits under Article 7, the limitations and restrictions not merely of section 44C of the Act but of all other provisions contained in the Act as well.
Questions Nos. 10 and 11:
In view of Article 7(3)(b) of the DTAA, the payments made by the permanent establishment to the head office for procuring licence technology and basic engineering services, and in respect of engineering services and buying services sub-contracted by the head office, cannot be considered as reimbursement and will, therefore, not be deductible in computing the profits of the permanent establishment in India.
Question No. 12:
The head office of ABC will not be liable to withhold taxes under the Income-tax Act of India in respect of payments made by it to foreign suppliers (including ABC affiliates and sub-contractors) of goods, services, and technologies.
Question No. 13:
(a) If the contract and agreements between ABC and XY do not receive the approval of the Government of India under section 115A of the Act, the profits of the permanent establishment in India will have to be computed as profits and gains of business under Part D of Chapter IV of the Act and brought to tax at the rates applicable to the total income of a foreign company.
(b) If the contract and agreements are approved by the Government of India, such profits will be computed as mentioned above but will be charged to tax at 30% on the amount of royalties and fees for technical services included therein and, at the rate applicable to a foreign company, on the balance thereof, if any.
(c) However, in either of the above events, the provisions of sections 44D and 115A shall not be applicable in respect of that part of the receipts of ABC which represent payments in consideration of services under the agreements relating to construction, assembly, or like project, resulting in only the net amount of such part of the receipts (after deduction of expenses permissible against them under sections 28 to 44C or section 57 of the Act) being assessable to tax and that such net amount will be assessable not at the rate of 30% but at the rate of income-tax applicable to such income in the hands of a foreign company.
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1995 (8) TMI 314
The Supreme Court dismissed the appeal in the case. Citation: 1995 (8) TMI 314 - SC. Judges: S.P. Bharucha and K.S. Paripoornan.
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1995 (8) TMI 313
The Supreme Court dismissed the appeal in the case with citation 1995 (8) TMI 313 - SC. Justices J.S. Verma and K. Venkataswami delivered the order.
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