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Showing 141 to 160 of 1319 Records
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2021 (1) TMI 1181 - KARNATAKA HIGH COURT
Dishonor of Cheque - defence taken by the accused is that the cheque was given in the year 2006 itself in respect of some other transaction, but it has been retained by the complainant and later it was mis-used by him - Section 138 of the Negotiable Instruments Act - HELD THAT:- It is pertinent to note that though accused has taken a stand that cheque in question at Ex.P-1 was issued in the year 2006, to establish the same, what prevented the accused to summon the Cheque Issue Register from the Bank. So also, nothing prevented the accused to show that there was a previous transaction wherein he had tendered the cheque to the complainant by producing the counterfoil or the slips attached to the cheque book, wherein necessary details are entered by the accused during the usual course. When accused has taken the plea that the cheque came to be issued in the year 2006, it is for him to establish that cheque in fact was issued in the year 2006 and he has honoured the cheque which is preceding Ex.P-1 and which has been issued subsequent to Ex.P-1. But, no such evidence is placed by the accused in this regard. It is also pertinent to note that there was no reply sent by the accused to the statutory notice - In the absence of such evidence placed by the accused, this court is of the considered opinion that the finding recorded by the learned Magistrate which was upheld by the first Appellate Court that the accused has failed to establish his defence and failed to rebut the presumption available to the complainant u/s.139 of the Negotiable Instruments Act, is based on sound legal principles and does not suffer from any legal infirmity whatsoever.
The finding recorded by the learned Magistrate and the first Appellate Court that accused has committed an offence punishable under Section 138 of the Negotiable Instruments Act is not suffering from any patent defect or error of jurisdiction nor suffering from illegality.
Admittedly, the Trial Court has taken into consideration the cheque while sentencing the accused. The learned Magistrate has convicted the accused for the offence punishable under Section 138 of the Negotiable Instruments Act and ordered to pay a fine of ₹ 1,98,000/- and out of that a sum of ₹ 1,93,000/- is ordered to pay as compensation which is the cheque amount and a sum of ₹ 5,000/- is ordered to pay as fine to the State with a default sentence - In the considered opinion of this court, when the accused has failed to establish his defence, the sentence passed by the learned Magistrate and confirmed by the first Appellate Court ordering only fine amount to the extent of the cheque amount as compensation is perfectly justified in the facts and circumstances of the case. Accordingly, there is no need for interference of the order of the learned Magistrate confirmed by the first Appellate Court.
Revision petition dismissed.
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2021 (1) TMI 1180 - SUPREME COURT
Denial of anticipatory bail - allegation is that between 21 August 2015, when his successor was elected, and the assumption of office on 31 August 2015, the appellant had executed four pattas causing a deficit of ₹ 32,133 to the treasury - offences under the provisions of Sections 13(1)(c), (d) and Section 13(2) of the Prevention of Corruption Act 1988 as well as Sections 420, 467, 468 and 120B of the Indian Penal Code 1860 - HELD THAT:- Since the charge sheet has already been filed and having regard to the facts and circumstances, the grant of anticipatory bail under Section 438 would be in order.
It is directed that in the event of the arrest of the petitioner, he shall be released on bail, subject to such terms and conditions as may be imposed by the trial court, in connection with FIR No 310 of 2017 registered at PS OP Anti Corruption Bureau, Jhunjhunu, Rajasthan - appeal allowed.
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2021 (1) TMI 1179 - DELHI HIGH COURT
Requirement of listing the matter before Bench - HELD THAT:- The order, directing listing of this matter today, was passed on 4th December, 2020 by a Bench of Hon’ble Ms. Jyoti Singh. That order does not direct listing of the matter before any other Bench.
Neither is this the Bench which deals with writ petitions as per roster, nor is there any noting or direction, by the Hon’ble Chief Justice, directing listing of this matter before this Bench, available on record.
List this matter before the appropriate Bench, as per roster, subject to orders of the Hon’ble Chief Justice on 22nd January, 2021.
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2021 (1) TMI 1178 - NATIONAL COMPANY LAW TRIBUNAL- HYDERABAD BENCH
Seeking sanction of scheme of arrangement involving demerger - sections 230-232 of the Companies Act, 2013 - HELD THAT:- The scheme of arrangement is not opposed to public interest and hence the scheme of arrangement involving demerger can be approved.
Various directions with regard to holding, convening and dispensing with various meetings issued - the scheme is approved - application allowed.
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2021 (1) TMI 1177 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Fixation/ratification of the fees of IRP/RP - Commercial wisdom of COC - HELD THAT:- Fixation of fee is not a business decision depending upon the commercial wisdom of the Committee of Creditors - going by the aforesaid rationale it is amply clear that fixation of the fees of IRP/RP does not come within the domain of the Commercial wisdom of COC and, hence is justiciable. The aspect of ascertaining fees of IRP/RP is strictly guided by the mandate and parameters provided by the IBBI vide its circular dated 12.06.2018 bearing number IBBI/IP/013/2018.
The fixation of fee is not a commercial wisdom of the CoC. Hence, respondent no. 2 is directed to ratify the IRP fee claimed by the applicant/IRP to the tune of ₹ 2,10,000/- and reimburse the same - Application allowed.
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2021 (1) TMI 1176 - GAUHATI HIGH COURT
Seeking grant of bail - conspiracy to create enmity between different groups of people on grounds of religion, race, place of birth, residence, language and did acts prejudicial to maintenance of harmony - sections 120B, 124A, 153B of the Indian Penal Code (IPC) and sections 18 and 39 of the Unlawful Activities (Prevention) Act, 1967 - HELD THAT:- The Court is unable to hold that the violent protests throughout the State did not and/or could not have had any terrorizing effect on the harmony of the innocent public at large, rather, the Court is of the considered opinion that on being provoked by the appellant, as the violent protests by burning of tyres had caused rail, highway and internal road blockade, the same is sufficient to give rise to a critical law and order situation that as a whole had threatened the security of the State. The acts of violent protests were aimed to strike terror in all sections of people in India irrespective of caste creed and religion. Moreover, by burning inflammable substance, the supplies essential for life of community in the Country was disrupted. By use of violence the appellant led mob had brushed aside the noble concept of non-violent protest, which is popularly known as satyagraha and that such conduct of paralyzing the Govt. machinery, causing economic blockade, causing enmity between groups, disruption of public peace an widespread disharmony and dissatisfaction towards the Govt., are acts which are prejudicial for national integration and such acts squarely falls within the definition of "terrorist act" as defined in section 15 of the UA (P) Act.
Having regard to the requirement of section 43D (5) of the UA (P) Act, the Court is unable to record its satisfaction that the materials brought on record, in all probability, may not lead to conviction. The materials on record prima facie disclose culpability of the appellant and his involvement in the commission of alleged offences as morefully mentioned in the charge-sheet. It may be mentioned that the Court is conscious of the fact that the duty of the Court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities - The act of blocking of the public road, disrupting free flow/movement of essential goods to the public in the State, setting fire to public offices and vehicles in the garb of public protest certainly cannot be termed as peaceful democratic protests in law. In that view of the constitutional provisions, the Court is of the considered view that in the backdrop of facts and circumstances that emerged from the documents on record, it cannot conclusively be said at the present stage of trial of the case that the appellant has been unreasonably deprived of the right of Article 21 of the Constitution of India.
The materials relied upon by the prosecution prima facie shows that cadre/members of KMSS were trained in the use of firearms and explosives and that the appellant had not only led the protests, but had provoked people to join him and that upon directions issued by the appellant, the supplies essential to life of the community of the Country was disrupted in the State. The appellant's call was instrumental in violent protests, and damage or destruction to vehicles of military and para-military forces, which were to be used for defence of the Country.
The Court does not find any infirmity in the finding returned by the learned Special Judge (NIA) that there are reasonable grounds for believing that the accusation of commission of offences punishable under Chapter IV and VI of UA (P) Act against the appellant is prima face true. Considering the express bar imposed by section 43D (5) of the UA (P) Act, the appellant cannot be released on bail - Appeal dismissed.
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2021 (1) TMI 1175 - NATIONAL COMPANY LAW TRIBUNAL - HYDERABAD BENCH
Seeking direction to respondent not to deposit the amount due against them, in any bank account of respondent No. 1-company, which cannot be operated upon under the joint signature of the petitioner - siphoning of funds - illegal monetary benefits by manipulating records of the company - section 242(4) of the Companies Act, 2013 - HELD THAT:- It is the case of respondent No. 2 that the applicants are indulging in forum shopping and Bench hunting as the applicants have filed Regular Civil Suit No. 117 of 2020 before the learned Civil Judge, Senior Division, Wardha, with similar prayers, viz., to close the account of PNB and not to act upon instructions of respondent No. 1/company. However, the Wardha Court refused to grant interim relief. Similar prayer is made in the company petition as well as I. A. No. 664 of 2020 and I. A. No. 989 of 2020, which amounts to forum shopping. Respondent No. 2 further averred that the applicants failed to get any relief from either of the forums and the applicants are indulging in forum shopping and Bench hunting. Respondent No. 2 has further alleged that the applicants have siphoned off an amount of ₹ 56 crores unto themselves and their relatives. Applicant No. 1 alone had diverted ₹ 3.28 crores to himself and his related parties. Respondent No. 2 has further alleged that cause of action arose prior to filing of the company petition.
The applicant cannot raise issues, which relate prior to filing of petition, as provided under Order 2, rule 2 of the Code of Civil Procedure. Respondent No. 2 further submitted that the courts will not interfere in the internal affairs of the company as long as the company functions under the articles of association - In order to avoid more diversion of funds by the applicant acting solely, the board of directors in their meeting dated June 18, 2020 passed a resolution to receive all the funds in the account maintained with Yes Bank account and instructed the debtors accordingly.
It is directed that the bank account of respondent No. 1 maintained with Punjab National Bank (PNB), Wardha as well as the bank account maintained with Yes Bank be operated by one representative from each group, viz., one signatory from the applicants' group and one signatory from the respondents' group. Accordingly, one signatory from each group shall be nominated for operating the accounts henceforth. This arrangement shall be applicable to new accounts, if any, opened hereafter by respondent No. 1/company. This arrangement shall govern until the parties resolve the differences amicably - allegations levelled by the applicants and the respondents against each other on the financial irregularities require investigation by the Registrar of Companies. Accordingly, the Registrar of Companies are directed to conduct an investigation into the affairs of the company, initiate action against the directors or persons responsible for irregularities, if any found, for siphoning off funds as alleged.
Application disposed off.
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2021 (1) TMI 1174 - KARNATAKA HIGH COURT
Delay of 5 years or more in initiating action by the SEBI - SEBI proceedings for companies act violations - Non-payment of dividends - Show-cause notice to the Company and its Directors calling upon the noticees as to why action under Section 11 and 11B of the SEBI Act, 1992 should not be initiated for violation of Section 205(1A) of the Companies Act, 1956 - HELD THAT:- In the case on hand, complaints with regard to non-payment of dividends were registered between 2010 and 2012. Annexure-D is the screen shot of the case status. It shows that SEBI has closed the complaints between 2013 and 2014. The show-cause notice is issued in October 20, 2016. No further action is taken till issuance of communication as per Annexure-B in 2019, calling upon the petitioner to remain present during the hearing.
A perusal of the orders passed by Securities Appellate Tribunal shows that the said Tribunal has consistently held delay of five years and more in initiating action by the SEBI as unsustainable - even if petitioner is relegated to SEBI to attend the hearing as contemplated in communication Annexure-B and if petitioner were to suffer any adverse order, he can challenge the same before the Appellate Tribunal - Tribunal has decided the matter only on the point of delay without going into the merits. In this case, reckoned from the date of complaints, the delay is about four to six years in issuing the show-cause notice and seven to nine years in holding the hearing.
In this case, no useful purpose would be served in relegating the petitioner to the SEBI. Hence, this petition merits consideration and it is accordingly allowed.
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2021 (1) TMI 1173 - MADRAS HIGH COURT
Seeking direction to first respondent to pay a sum of ₹ 168,85,00,000 being the sum admitted as payable to the petitioner - bills raised for the electricity supplied on a monthly basis to the first respondent - unilateral and frivolous deductions or not - demand notice under section 8(1) of the Insolvency and Bankruptcy Code, 2016, read with rule 5 of the Insolvency and Bankruptcy Rules, 2016 - HELD THAT:- It is not in dispute that the petitioner is a Power Generating Company and is in the business of supplying power to the first respondent and a major portion of the income depends on the clearance of the payments from the first respondent. From the year 2016, the first respondent had stopped making payments to the petitioner, hence, the petitioner approached the National Company Law Tribunal to start corporate insolvency resolution process against the first respondent, however, the National Company Law Tribunal dismissed the petition.
The payments made by the first respondent after May 24, 2018 itself would establish that they treated the petitioner-company as a separate entity and not along with the other two companies. The first respondent having partly complied with the memorandum of settlement dated May 24, 2018 now they cannot take a different stand and contend that since the other two companies are liable to pay the amounts to the first respondent, the petitioner-company is not entitled to claim the amount as per the memorandum of settlement dated May 24, 2018.
After deducting the sum of ₹ 135,00,00,000 paid by the first respondent to the petitioner from the total sum of ₹ 208,85,00,000 the balance payable by the first respondent is ₹ 73,85,00,000. Therefore, the first respondent is liable to pay the balance sum of ₹ 73,85,00,000 to the petitioner - the first respondent is directed to pay the balance sum of ₹ 73,85,00,000 to the petitioner within a period of eight weeks from the date of receipt of a copy of this order.
The writ petition is partly allowed.
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2021 (1) TMI 1172 - CESTAT CHENNAI
Business Auxiliary Service - transportation facilities to the employees of companies like M/s. Ford India Ltd., M/s. Satyam Infotech Ltd. - period from 1-10-2005 to June, 2006 - Time Limitation - HELD THAT:- The department does not dispute the payment of service tax on the very same activity after introduction of BSS. As rightly pointed out by the Ld. Counsel for the appellant, BSS is not a category carved out of BAS. It is an introduction of a new entry. Thus, when the appellant has been discharging their service tax liability under BSS after its introduction, the very same activity cannot be classified under BAS for the period prior to 1-5-2006. The view taken by the department that introduction of a specific entry is not absolving the appellant from the liability for the past period is not tenable since BSS is a new entry which was introduced w.e.f. 1-5-2006 only.
In the case of SANA ENGINEERING COMPANY VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, COIMBATORE [2018 (9) TMI 1723 - CESTAT CHENNAI], it was held by the Tribunal that when a new category of activity is brought out under the service tax, the same can be taxed only with effect from the date on which the new service is brought under service tax net. Department cannot claim that the very same activity was taxable under an existing category.
Time limitation - HELD THAT:- The demand cannot sustain on the ground of limitation also. The issue is purely interpretational in nature. Appellants have been paying service tax under BSS after its’ introduction in the Finance Act, 1994. This is accepted and admitted. There is no evidence to prove that appellants wilfully suppressed facts with intention to evade payment of service tax. The appellant succeeds on limitation also.
Appeal allowed - decided in favor of appellant.
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2021 (1) TMI 1171 - SUPREME COURT
Condonation of delay of 502 days - explanation given in the application for condonation of delay which gives only a saga of moving of file from one place to the other and that too with long interludes - HELD THAT:- The objective is to complete a mere formality and save the skin of the officers who may be in default in following the due process or may have done it deliberately. We have deprecated such practice and process and we do so again. We refuse to grant such certificates and if the Government/public authorities suffer losses, it is time when concerned officers responsible for the same, bear the consequences. The irony, emphasized by us repeatedly, is that no action is ever taken against the officers and if the Court pushes it, some mild warning is all that happens.
Looking to the period of delay and the casual manner in which the application has been worded, we consider appropriate to impose costs on the petitioner(s) of ₹ 25,000/- for wastage of judicial time which has its own value and the same be deposited with the Supreme Court Advocates on Record Welfare Fund within four weeks - The Special Leave Petition is dismissed as time barred.
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2021 (1) TMI 1170 - SUPREME COURT
Condonation of delay of 1288 days in filing application - cogent or plausible ground for condonation of delay, given or not - HELD THAT:- The leeway which was given to the Government/public authorities on account of innate inefficiencies was the result of certain orders of this Court which came at a time when technology had not advanced and thus, greater indulgence was shown.
The “certificate cases” filed with the only object to obtain a quietus from the Supreme Court on the ground that nothing could be done because the highest Court has dismissed the appeal. The objective is to complete a mere formality and save the skin of the officers who may be in default in following the due process or may have done it deliberately. We have deprecated such practice and process and we do so again.
Looking to the period of delay and the casual manner in which the application has been worded, we consider appropriate to impose costs on the petitioner(s) of ₹ 25,000/- for wastage of judicial time which has its own value and the same be deposited with the Supreme Court Employees Welfare Fund within four weeks - Special Leave Petition is dismissed as time barred
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2021 (1) TMI 1169 - SUPREME COURT
Condonation of delay of 427 days in filing application - certificate cases - HELD THAT:- The casual manner in which the State Government has approached this Court without any cogent or plausible ground for condonation of delay is clear. In fact other than the lethargy and incompetence of the petitioner Government, there is nothing which has been put on record. We have repeatedly discouraged State Governments and public authorities in adopting an approach that they can walk in to the Supreme Court as and when they please ignoring the period of limitation prescribed by the Statutes as if the Limitation statute does not apply to them.
We have also categorized such kind of cases as “certificate cases” filed with the only object to obtain a quietus from the Supreme Court on the ground that nothing could be done because the highest Court had dismissed the appeal. The objective is to complete a mere formality and save the skin of the officers who may be in default in following the due process or may have done it deliberately - The irony, emphasized by us repeatedly, is that no action is ever taken against the officers and if the Court pushes it, some mild warning is all that happens.
Looking to the period of delay and the casual manner in which the application has been worded, we consider appropriate to impose costs on the petitioner/State of ₹ 25,000/- for wastage of judicial time, which has its own value and the same be deposited with the Supreme Court Advocates On Record Welfare Fund within four weeks - SLP dismissed as time barred.
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2021 (1) TMI 1168 - COMMISSIONER OF GST (APPEALS), JAIPUR
Refund of accumulated ITC on account of Inverted Tax Structure - application filed within the time limitation or not - Section 54(3) of the CGST Act, 2017 - HELD THAT:- The adjudicating authority has rejected the refund claim of the appellant given remarks in the RFD-06 that the claimant is agreed with the show cause notice that he has no objection with respect to rejection of their refund claim. Therefore, the rejection of refund claim of the appellant is correct and proper as appellant was himself agreed with the reason of show cause notice issued by the adjudicating authority.
The appellant has taken a plea that since GSTR-3B was declared as valid return under Section 39 of the CGST Act, 2017 Vide Notification No. 49/2019-Central Tax, dated 9-10-2019 hence, application of refund was duly filed by him before expiry of two years from the relevant date when the said notification came into force on 9-10-2019; Therefore, the refund application filed by him within 2 years from the date of 9-10-2019 is valid application and not a time barred application - this notification has given effect from the retrospective effect i.e. 1-7-2017 and accordingly Rule 61(5) of CGST Rules, 2017 providing the GSTR-3B is declared as valid return under Section 39 of the CGST Act, 2017.
On going through the provision under Section 54 of the CGST Act, 2017, it is found that the relevant date has been defined in sub-section (14) of Section 54 of the CGST Act, 2017 - the refund application filed by the appellant for the period October, 2017 to December, 2017 is clearly time barred as the same was filed by the appellant on 5-2-2020 i.e. after expiry of 2 years from the relevant date as mentioned in sub-section (14) of Section 54 of the CGST Act, 2017 read with sub-section (1) of Section 54 of the CGST Act, 2017.
The Adjudicating Authority has taken a view that formula applied for calculation of Net ITC refund there is no such refund was available to the appellant. In view of provisions of Rule 89(5) of CGST Rules, 2017 - the appellant has not properly gone through the provisions of Section 54 of the CGST Act, 2017 the date and time limit has been clearly mentioned in Section 54(1) read with sub-section (14) of Section 54 of the CGST Act, 2017. Therefore, the submission of the appellant that time limit has not been specifically mentioned on the refund of unutilized ITC is incorrect and not acceptable.
The refund application has been filed by the appellant on account of ITC accumulated due to Inverted Tax Structure whereas the appellant stated in the appeal that he has closed his business due to this reason the IGST paid in cash on import of goods is lying unutilized by him - the appellant has filed their refund claim in wrong category as it is not a case of Inverted Duty Structure as given in the provision under Section 54(3) of CGST Act, 2017.
The impugned order passed by the Adjudicating Authority is proper and correct - Appeal dismissed.
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2021 (1) TMI 1167 - BOMBAY HIGH COURT
Rejection of declaration of the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - seeking a direction to the respondents to accept the said declaration of the petitioner as a valid declaration - HELD THAT:- It is evident that petitioner in his letter dated 22nd May, 2018 addressed to respondent No. 3 had specifically mentioned that the service tax amount due to be paid by the petitioner was ₹ 40,95,110.00. In his declaration in terms of the scheme he mentioned the duty payable as ₹ 40,91,524.00 which amount corresponds to the quantification arrived at by respondent No. 4 post 30th June, 2019 at ₹ 40,91,524.00. When petitioner had admitted duty liability of a slightly higher figure much before the cut off date of 30th June, 2019, it would be too technical and narrow an approach to reject the declaration of the petitioner on the ground that the said figure was arrived at by the respondents after 30th June, 2019.
The impugned rejection of the declaration of the petitioner is devoid of any reason. The rejection has only be explained by the respondents in the affidavits. Having regard to the principles of natural justice petitioner ought to have been given an opportunity of hearing before rejection of the declaration.
Matter remanded back to respondent Nos. 3,4 and 5 to consider the declaration of the petitioner in terms of the scheme as a valid declaration under the category of investigation, inquiry and audit and thereafter grant the consequential relief - petition allowed by way of remand.
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2021 (1) TMI 1166 - ORISSA HIGH COURT
Seeking leave to withdraw this petition - cancellation of registration of petitioner - HELD THAT:- The writ petition is dismissed as withdrawn with the liberty prayed for.
If the appeal is filed not later than 8th February, 2021, such appeal will be disposed of in accordance with law not later than 5th April, 2021. Thereafter, it will be open to the Petitioner if aggrieved by such order to seek appropriate remedies in accordance with law.
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2021 (1) TMI 1165 - NATIONAL COMPANY LAW TRIBUNAL, KOCHI BENCH
Jurisdiction - authority of Resolution Professional to file an appeal before the Joint Commissioner, GST, as part of the verification and determination of a claim submitted by the GST department in Form B - seeking clarifications as to whether the judgement, decree or order, if any, passed by the Appellate Authority under CGST Act pursuant to the Appeal, against the Corporate Debtor shall be binding on Corporate Debtor when the moratorium declared by the Hon'ble National Company Law Tribunal Bench by virtue of section 14 of the Insolvency and Bankruptcy Code is in effect or not - seeking clarification whether the requirement of the pre-deposit mandated under Section 107 of the GST Act, shall be prejudicial to the interest of the Corporate Insolvency Resolution Process, as the said Section is inconsistent with Regulation 13 and 14 of the CIRP Regulations due to the overriding effect of Insolvency and Bankruptcy Code, 2016 over the Goods and Service Tax Act, 2017.
HELD THAT:- After considering the entire gamut of the matter, this Tribunal disposed of application directing the Resolution Professional to file an appeal before the Joint Commissioner, that too on the submission of the Resolution Professional before this Tribunal that the CoC resolved to file an appeal before the GST Commissioner for revisiting the claim amount of the applicant.
There is no error in the Order in application to be clarified by this Tribunal - application dismissed.
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2021 (1) TMI 1164 - SC ORDER
Rejection of anticipatory bail - specious reason of change in circumstances - HELD THAT:- As a matter of fact, successive anticipatory bail applications ought not to be entertained and more so, when the case diary and the status report, clearly indicated that the accused (respondent No. 2) is absconding and not cooperating with the investigation. The specious reason of change in circumstances cannot be invoked for successive anticipatory bail applications, once it is rejected by a speaking order and that too by the same Judge.
We refrain from making any further observation, except to observe, that the impugned order, to say the least, is perverse; and also because no prejudice should be caused to respondent No.2 and affect the trial against him - the impugned judgment and order is set aside. The Investigating Officer is free to take respondent No. 2 into custody forthwith.
Appeal allowed - decided in favor of appellant.
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2021 (1) TMI 1163 - ANDHRA PRADESH HIGH COURT
Seeking withdrawal of SLP - time limitation - HELD THAT:- This writ petition is dismissed as withdrawn with a liberty to the petitioner to file a fresh writ petition to the extent the law permits him. Further, considering the fact that the commodities involved in the appeal before the appellate authority are perishable commodities, the appellate authority is directed to dispose of the appeal at the earliest but not later than one month from the date of receipt of a copy of this order.
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2021 (1) TMI 1162 - NATIONAL COMPANY LAW TRIBUNAL JAIPUR BENCH (RAJASTHAN)
Seeking setting aside of the rejection of claim of the Applicant - financial debt or not in view of intercorporate deposits - seeking to declare the Applicant as a Financial Creditor - HELD THAT:- It is an undisputed fact that the Applicant has provided the amount in terms of letter dated 01.04.2014 and 01.04.2015 and such amount along with interest is due from the Corporate Debtor. The documents filed by the Applicant show that in order to avail the services from the Applicant, the Corporate Debtor has appointed Applicant as sales promoter and accepted security deposit. Deposit is not the mainstay of the agreement for any funds in respect of business purposes.
It is only an incidence of the agreement for services, Unlike as stated in order passed by a bench of this Adjudicating Authority in IA No, 02/JPR/2018 dated 28.09.2018, it is not even related to agency agreement. It is evident that the agreement between the party is not for time value of money as the crux and essence of the agreement. Interest paid by the Corporate Debtor is incidental to the blocking of deposit amount and is a resultant consequence. Also, the claim of the Applicant to be considered a financial debt in terms of the code must fall under any of the category mentioned Section 5(8) (a) to (i).
After analysing Form 26 AS annexed by the Applicant vide dairy no. 1967/2019, it is noted that the Corporate Debtor had deducted tax under Section 194A and 194H of the Income Tax Act, 1961 for FY 2013-14 and 2014-15 and for FY 2015-16 tax was deducted under Section 194A and 194J. Section 194A deals with interest other than interest on securities. Section 194H deals with income by way of commission or brokerage and Section 194 J deals with fees for professional or technical services - The above observation shows that the Corporate Debtor had deducted tax against the interest on the amount provided by the Applicant. On the other hand, the Applicant has failed to submit sufficient documents to establish that the amount was borrowed by the Corporate Debtor for commercial purpose, as it is nowhere mentioned in the letters dated 01.04.2014 and 01.04.2015 that the corporate debtor is in need of money or the said deposit will be used for its business activities.
Merely intercorporate deposit does not make it a financial debt, amidst the background and facts stated by the Applicant. Just because the interest component may have resulted in a larger income for the Applicant, or the Corporate Debtor may have acknowledged interest payable does not make it a core financial deal.
It can be concluded that the RP has rightly considered the claim of the Applicant as operational debt - Application dismissed.
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