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2000 (1) TMI 932
Payment of family pension and death-cum- retirement gratuity to two wives of Narain Lal, who died in 1987 while posted as Managing Director, Rural Development Authority of the State of Bihar
Held that:- After the death of Narain Lal, inquiry was made by the State Government as to which of the wives of Narain Lal was his legal wife. This was on the basis of claims filed by Rameshwari Devi. Inquiry was quite detailed one and there are in fact two witnesses examined during the course of inquiry being (1) Sant Prasad Sharma, teacher, DAV High School, Danapur and (2) Sri Basukinath Sharma, Shahpur Maner who testified to the marriage between Yogmaya Devi and Narain Lal having witnessed the same. That both Narain Lal and Yogmaya Devi were living as husband and wife and four sons were born to Yogmaya Devi from this wedlock has also been testified during the course of inquiry by Chandra Shekhar Singh, Rtd. District Judge, Bhagalpur, Smt. (Dr.) Arun Prasad, Sheohar, Smt. S.N. Sinha, w/o Sri S.N. Sinha, ADM and others. Other documentary evidence were also collected which showed Yogmaya Devi and Narain Lal were living as husband and wife. Further, the sons of the marriage between Yogmaya Devi and Narain Lal were shown in records as sons of Narain Lal.
Thus Learned single Judge was correct in his judgment to held that children born to Narain Lal from the wedlock with Yogmaya Devi were entitled to share the family pension and death-cum-retirement gratuity and further that family pension would be admissible to the minor children only till they attained majority
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2000 (1) TMI 930
Issues Involved:
1. Allegations of mismanagement and mishandling of funds in Asoka Betelnut Company Pvt. Ltd.
2. Restoration of the main petition dismissed for non-prosecution.
3. Request for holding Company Law Board sittings at Madras instead of New Delhi.
Detailed Analysis:
1. Allegations of Mismanagement and Mishandling of Funds:
The case originated from disputes within the family members who were directors of Asoka Betelnut Company Pvt. Ltd. Chandrakanth, one of the directors, filed a petition under sections 397 and 398 of the Companies Act, 1956, alleging mismanagement and mishandling of funds by other directors, and sought the winding up of the company. This petition was initially addressed by a single judge, but on appeal (O.S.A. No. 221 of 1996), a Division Bench reversed the single judge's orders and dismissed the company petition.
2. Restoration of the Main Petition Dismissed for Non-Prosecution:
Following the dismissal of the initial petition, the wife and son of Chandrakanth, along with other directors, filed a new petition under sections 397 and 398. This petition was dismissed for non-prosecution, leading to the filing of C.A. No. 179 of 1998 to restore the main petition. The Principal Bench of the Company Law Board allowed the restoration, which was contested by the respondent in C.M.A. No. 1508 of 1998. The court upheld the restoration, noting that the non-appearance of counsel was due to a genuine mistake in noting the hearing date.
3. Request for Holding Company Law Board Sittings at Madras:
The appellant requested that the Principal Bench of the Company Law Board hold its sittings at Madras due to the convenience of the majority of directors residing in Coimbatore, and to avoid unnecessary travel expenses. This request was made in Company Application No. 77 of 1998 in C.P. No. 76 of 1997. The Principal Bench disposed of this application without a definitive order, leading to the filing of C.M.A. No. 1507 of 1998. The court noted that regulation 4 of the Company Law Board Regulations, 1991, allows the Principal Bench to decide the place and time of sittings, and found no merit in the appellant's grievance regarding the handling of the application.
Judgment Summary:
The court dismissed both C.M.A. No. 1507 of 1998 and C.M.A. No. 1508 of 1998. It held that the Principal Bench of the Company Law Board acted within its discretion as provided by regulation 4 of the Company Law Board Regulations, 1991, in deciding the place and time of sittings. The court also upheld the restoration of the main petition, emphasizing that the dismissal for non-prosecution was not on merits but due to a genuine mistake in noting the hearing date. The inherent powers of the Company Law Board under regulation 44 were acknowledged, but the court clarified that regulation 26, which provides for setting aside ex parte orders, was applicable in this case. The court concluded that the Principal Bench's decision to restore the petition was justified and did not find any legal error in the process.
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2000 (1) TMI 929
Issues: Disallowance of Modvat credit due to missing words on invoices.
Detailed Analysis:
1. Background: The appellants, engaged in manufacturing LPG cylinders, availed Modvat credit under Central Excise Rules but faced disallowance of Rs. 34,800/- due to missing words on invoices.
2. Disallowed Credit: The Assistant Commissioner disallowed the Modvat credit as the invoices did not clearly state "duplicate for transporter," leading to a show cause notice and subsequent disallowance.
3. Appellate Proceedings: The appellants appealed the Assistant Commissioner's decision, but the Commissioner (Appeals) upheld the disallowance, prompting the appeal to the Tribunal.
4. Contention: The main issue was the absence of specific words on the invoices, leading to the disallowance of Modvat credit, despite the appellants arguing that the invoices were valid and intended for transporters.
5. Judicial Analysis: The Tribunal examined the invoices and noted that although they did not contain the exact phrase "duplicate for transporter," the purpose and recipient of each copy (original, duplicate, triplicate, quadruplicate) were clearly indicated, with a tick mark against the duplicate meant for transporters.
6. Legal Precedent: Referring to a previous case, the Tribunal emphasized substantial compliance with the invoice format requirements, where a tick mark against relevant words sufficed, as seen in "Crazy Candies & Sweets (P) Ltd. v. CCE, 1998 (102) E.L.T. 161 (T)."
7. Decision: Relying on the legal precedent and the clear indication on the invoices, the Tribunal ruled in favor of the appellants, allowing them to claim the Modvat credit of the disputed amount, as there was substantial compliance with the law.
8. Conclusion: Consequently, the Tribunal accepted the appeal, setting aside the Commissioner (Appeals) order, and allowing the appellants to claim the Modvat credit based on the invoices in question.
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2000 (1) TMI 928
Issues:
1. Difference of opinion between Members on rectification of mistake applications.
2. Interpretation of Section 35C(2) for rectifying errors in the final order.
3. Grounds for rectification under Section 35C(2) based on limitation and errors of law.
4. Scope of "mistake apparent from records" under Section 35C(2) and the need for glaring mistakes of fact or law.
Issue 1 - Difference of opinion between Members on rectification of mistake applications:
The matter involved a difference of opinion between two Members regarding rectification of mistake applications. The applications were filed for rectification of mistakes in the final order passed by the Bench in appeal numbers E/2216-18 and 2234-2238/97-NB. The Judicial Member opined to reject the applications, while the Vice President suggested recalling the earlier order for fresh hearing on various points.
Issue 2 - Interpretation of Section 35C(2) for rectifying errors in the final order:
Section 35C(2) grants the Tribunal the power to rectify any mistake apparent from the record within four years from the date of the order. The Tribunal is not authorized to exercise appellate power or review against the order passed earlier under the guise of rectification of mistake.
Issue 3 - Grounds for rectification under Section 35C(2) based on limitation and errors of law:
The appellant argued that a ground questioning the propriety of the Department in exercising an extended period under Section 11A was not considered in the final order, thus justifying rectification under Section 35C(2). However, the Tribunal had addressed the plea of limitation in the final order, making it inappropriate to raise it again for rectification.
Issue 4 - Scope of "mistake apparent from records" under Section 35C(2) and the need for glaring mistakes of fact or law:
The Vice President highlighted that an error apparent from the record includes an error of law. However, the Tribunal's order did not contain any such glaring mistakes warranting rectification under Section 35C(2). The scope of rectification is limited to mistakes that are evident from the record without the need for argument to establish them. The application was dismissed as no mistake apparent from the record was discernible in the final order.
In conclusion, the judgment addressed the difference of opinion among Members on rectification applications, the interpretation of Section 35C(2) for rectifying errors in the final order, the grounds for rectification based on limitation and errors of law, and the requirement for glaring mistakes of fact or law under the "mistake apparent from records" provision. The application was dismissed as it did not meet the criteria for rectification under Section 35C(2).
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2000 (1) TMI 927
The Appellate Tribunal CEGAT, Mumbai allowed Modvat credit on duty paid for Blower/Electric Fan, LPG Storage Tank, and Oven, overturning the Commissioner (Appeals) decision. The Tribunal found that previous decisions cited were incorrect and granted an absolute stay on the impugned order until final disposal of the appeal.
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2000 (1) TMI 926
Issues:
1. Date discrepancy in Form EA 3 and Order-in-Review.
2. Lack of proper application for condonation of delay.
3. Exceeding the scope of authorization in the appeal.
Issue 1: Date Discrepancy in Form EA 3 and Order-in-Review:
The Ld. Advocate for the Respondents highlighted a significant date discrepancy in the appeal process. The Commissioner had shown "15-7-1999" as the date of communication of the order in Form EA 3, while the Order-in-Review signed by the Commissioner mentioned the date as "13-7-1999." This discrepancy raised doubts about the timeline of events and indicated a misrepresentation of facts. The absence of the actual date of receipt of the impugned order and failure to file a separate application for condonation of delay further weakened the appeal's maintainability. The Tribunal agreed with the Respondents' Counsel that the appeal was not properly constituted due to these discrepancies.
Issue 2: Lack of Proper Application for Condonation of Delay:
The Ld. Counsel pointed out that the Stay Application only mentioned the delay in filing the appeal without a detailed application for condonation of delay. The Commissioner had not provided a day-to-day explanation for the delay in filing the appeal, as required by the procedure. The Tribunal emphasized the necessity of a clear condonation of delay application stating the actual receipt date of the order and reasons for the delay. The failure to adhere to these requirements rendered the appeal not maintainable as per Section 35B of the Central Excise Act, 1944.
Issue 3: Exceeding the Scope of Authorization in the Appeal:
Regarding the merits of the appeal, the Ld. Counsel contended that the Dy. Commissioner had exceeded the authorization given by the Commissioner for filing the appeal. The authorization was limited to specific items - electrical switches and electronic flicker unit - with defined modvat credits. However, the appeal filed by the Dy. Commissioner included claims for modvat credits on various other items, surpassing the authorized scope. This discrepancy highlighted a lack of proper application of mind and adherence to the authorized limits. The Tribunal agreed with the Respondents' Counsel that the appeal was not maintainable due to this unauthorized extension beyond the Commissioner's authorization.
In conclusion, the Appellate Tribunal CEGAT, New Delhi, rejected the appeal due to multiple reasons, including the date discrepancy in Form EA 3 and Order-in-Review, the lack of a proper application for condonation of delay, and the appeal exceeding the scope of authorization. The judgment emphasized the importance of following proper procedures and maintaining the authorized limits in appeals to ensure their maintainability under the Central Excise Act, 1944.
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2000 (1) TMI 925
Issues:
Eligibility of Modvat credit on paper wrappers used in soap manufacturing under Notification 177/86-C, interpretation of Chapter Heading for printed soap wrappers, applicability of Notification 177/86 to the case, and validity of the Collector's order.
Eligibility of Modvat Credit:
The issue revolves around the Modvat credit availed by the appellants on paper wrappers used in soap manufacturing. The department alleges that the credit exceeded the permissible limit under Notification 177/86-C, leading to show cause notices and a demand for recovery. The appellant argues that the restriction applies only to paper and paperboards, not articles of paper like printed soap wrappers. Citing precedents, they contend that printed wrappers are articles of paper and not subject to the credit limit. The interpretation of the notification's restriction is debated, with the appellant asserting that limiting the credit to 10% is unreasonable and not the government's intention.
Interpretation of Chapter Heading:
The classification of printed soap wrappers under Chapter Headings is contested. The appellant challenges the department's classification under Heading 48.19, arguing that the wrappers fall under different sub-headings like 4823.19, 4819.12, and 4811.30. They assert that the printed wrappers are articles of paper and not plain paper or paperboards as claimed by the department. Citing a previous order, it is argued that only printed soap wrappers under Chapter 4823.19 are subject to the Modvat credit limit, not those under other headings.
Applicability of Notification 177/86:
The appellant disputes the applicability of Notification 177/86 to their case, citing differences in products and periods. They argue that if the printed wrappers are considered articles of paper, the notification does not apply. Precedents are cited to support the contention that printed soap wrappers fall under the category of articles of paper, exempting them from the notification's restrictions.
Validity of Collector's Order:
The Collector's order, which concluded that the appellant availed a higher rate of credit than legally permissible, is challenged for its vagueness and lack of discussion on why the input falls under a specific Chapter heading. The order's interpretation of Chapter 2823.19 is disputed, with the appellant arguing that the description does not cover paper wrappers. Citing a bench order and previous decisions, it is contended that the printed soap wrappers should be classified as articles of paper and not subject to the notification's restrictions.
In conclusion, the appeals are allowed, the impugned order is set aside, and the Modvat credit availed by the appellant is confirmed as valid.
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2000 (1) TMI 909
Karnataka High Court quashing a criminal proceeding instituted by the complainant-company alleging that the accused-respondent, a former director of the company committed an offence under section 630 of the Companies Act, 1956
Held that:- A bare scrutiny of the impugned judgment would indicate that the High Court has thought, as if it is trying the case, and then after weighing the materials it has come to a conclusion one way or the other. This is certainly in excess of the jurisdiction conferred on the High Court under section 482. In that view of the matter, no hesitation to come to the conclusion that the High Court by the impugned order has exceeded its jurisdiction vested under section 482 in quashing the criminal procee-ding. We, therefore, set aside the impugned order of the High Court and direct that the complaint proceeding should proceed in accordance with law.
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2000 (1) TMI 908
Issues:
1. Appointment of a receiver by ICICI in a suit.
2. Submission for not appointing a Liquidator.
3. Contrary stands taken by ICICI regarding secured and unsecured creditors.
4. Decision on the prayers in the petition and continuation of injunction.
Analysis:
Appointment of a Receiver:
The Industrial Credit and Investment Corporation of India (ICICI) filed Suit No. 3636 of 1999 seeking the appointment of a receiver as they were the debenture trustees of the company with a significant amount due. Despite the company's financial crisis due to a joint venture withdrawal, the appointment of a receiver was contested, citing potential adverse effects on the company's operations and workers. However, the court observed the common difficulty faced by financial institutions in recovering substantial amounts and appointed the receiver, a decision not challenged through an appeal.
Submission Against Liquidator Appointment:
In a subsequent petition, ICICI's counsel argued against appointing a Liquidator, highlighting that the company's assets were already under the receiver's control, limiting the company's ability to dispose of assets. ICICI proposed revival plans for the company, emphasizing the importance of not hindering these efforts by appointing a Liquidator. The company's counsel suggested selling a separate unit and immovable properties to address liabilities and prevent liquidation.
Contrary Stands by ICICI:
The court noted ICICI's contradictory stance of seeking protection through the appointment of a receiver in one instance while opposing security for unsecured creditors in the current petitions. The court found ICICI's argument unjustified, as it implied permission to sell assets already under the receiver's custody, which would not alleviate the company's liabilities towards the petitioners.
Decision on Petition and Injunction:
Considering the arguments presented, the court made the judges' summons absolute in favor of the petitioners, directing the continuation of the injunction until the Liquidator takes possession. The court dispensed with the drawn-up order and instructed the Official Liquidator to act upon a copy of the order. A request for a stay on the order's operation was rejected, further solidifying the court's decision.
This comprehensive analysis of the judgment highlights the key issues addressed by the court, including the appointment of a receiver, arguments against a Liquidator appointment, ICICI's contradictory positions, and the final decision on the prayers in the petition.
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2000 (1) TMI 907
Issues Involved:
1. Whether the respondent-company, Sharat Industries Ltd., should be wound up under sections 433(e), (f), and 439 of the Companies Act, 1956.
2. Whether the petitioner-company's claim of Rs. 100 lakhs against the respondent-company is valid.
3. Whether the cheques issued by the respondent-company were dishonored due to insufficient funds.
4. Whether there was a bona fide dispute regarding the debt claimed by the petitioner-company.
5. Whether the petitioner-company suppressed material facts in its petition.
6. Whether the petitioner-company approached the court with unclean hands.
7. Whether the dispute should be resolved by the civil court rather than through winding up proceedings.
Detailed Analysis:
1. Winding Up of Respondent-Company:
The petitioner-company filed for winding up of the respondent-company under sections 433(e), (f), and 439 of the Companies Act, 1956, due to the alleged inability of the respondent-company to pay its debts. The respondent-company opposed the petition, arguing that the petitioner suppressed material facts and that there was a bona fide dispute regarding the debt.
2. Validity of Petitioner-Company's Claim:
The petitioner alleged that the respondent-company owed it Rs. 100 lakhs with interest at 18% per annum from 18-8-1995, totaling Rs. 1,64,09,720. The claim was based on the completion of civil works for a shrimp project and the subsequent issuance of 13 post-dated cheques by the respondent-company, which were dishonored. The respondent-company disputed this claim, arguing that the petitioner failed to complete the work as per the agreed schedule and that the minutes of the meeting dated 18-8-1995, which acknowledged the debt, were fabricated.
3. Dishonored Cheques:
The petitioner presented 13 cheques issued by the respondent-company, all of which were returned with the endorsement "insufficient funds." The petitioner served legal notices under section 138 of the Negotiable Instruments Act, 1881, but the respondent-company did not comply with the demand. The respondent-company argued that the cheques were issued conditionally and were not to be presented until further instructions, which the petitioner ignored.
4. Bona Fide Dispute:
The court noted that there was a bona fide dispute between the parties, as the respondent-company had filed a suit for damages amounting to Rs. 2,10,29,178 against the petitioner-company, alleging sub-standard construction and incomplete work. The court emphasized that a bona fide dispute implies the existence of a substantial ground for the dispute raised, and the respondent-company had provided prima facie proof of facts supporting its defense.
5. Suppression of Material Facts:
The respondent-company argued that the petitioner suppressed the fact of the respondent's earlier suit (O.S. No. 21 of 1998) for damages. The court found that the petitioner did not disclose this suit in its petition, which was a material fact. The court held that the petitioner approached the court with unclean hands by suppressing material facts.
6. Petitioner's Approach with Unclean Hands:
The court observed that the petitioner-company did not mention the issuance of three cheques for Rs. 75 lakhs, which were replaced by 13 cheques for Rs. 100 lakhs. The petitioner-company's explanation for this replacement raised suspicion, and the court concluded that the petitioner did not approach the court with true facts and clean hands.
7. Resolution by Civil Court:
The court concluded that the dispute between the parties involved serious issues regarding the quality of workmanship, damages suffered, and the amount due, which should be resolved in a civil court. The court emphasized that proper evidence should be led after framing specific issues based on the pleadings. The court relegated the petitioner to the civil court to establish its claim, stating that an order for winding up could be considered only after obtaining a decree in the civil suit.
Conclusion:
The court dismissed the company petition, finding no merits in the petitioner's claims. The court held that the disputes should be resolved in the civil court, where both parties could present their defenses in detail. The court also noted that the petitioner-company approached the court with unclean hands by suppressing material facts. Consequently, the petition for winding up was dismissed without any order as to costs.
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2000 (1) TMI 906
Issues Involved:
1. Whether the respondents in the present appeals are 'consumers' within the meaning of section 2(1)(d) of the Act?
2. Whether in view of order dated 31-3-1999, passed by the Company Law Board, Western Region Bench, Mumbai, under section 45QA(2) of the Reserve Bank of India Act, 1934, the respondents/complainants could have approached a FORA constituted under the Act?
3. Whether there was no 'privity of contract' between the appellant and the respondents?
4. Whether in view of the financial crunch stated to have been faced by the appellant, the appellant, in the given facts, deserved to be given more time for the repayment of the amount in question to the respondents?
Issue-wise Detailed Analysis:
Question No. 1:
The term 'consumer' is defined under section 2(1)(d) of the Consumer Protection Act, 1986. The definition includes any person who buys goods or hires/avails services for a consideration, and also includes any beneficiary of such services. The Supreme Court in Lucknow Development Authority v. M.K. Gupta [1994] 1 SCC 243 highlighted that the term 'consumer' is comprehensive and aims to protect the economic interests of consumers. Similarly, the National Commission in Neela Vasant Raje v. Amogh Industries [1986-1995] Con. 446 (NS) emphasized a benevolent interpretation of the term to include depositors who invest in a company or firm for attractive interest rates. The Commission concluded that the respondents are 'consumers' within the meaning of section 2(1)(d).
Question No. 2:
The appellant argued that the complaints should have been dismissed in light of the Company Law Board's order dated 31-3-1999 under section 45QA(2) of the Reserve Bank of India Act, 1934. However, the West Bengal Consumer Disputes Redressal Commission in Gyan Singh v. Carry On Savings & Investments Ltd. III [1994] CPJ 9, and the Chandigarh Consumer Disputes Redressal Commission in Ms. Simran Macker v. DCM Financial Services Ltd. I [1999] CPJ 654, held that the Consumer Protection Act provides an additional remedy and does not bar complaints under the Act. The Commission agreed, stating that the jurisdiction of FORAS under the Act is not ousted by the Company Law Board's order.
Question No. 3:
The appellant contended that there was no 'privity of contract' as the deposits were made through another dealer. However, the appellant admitted in the Memorandum of Appeal that the deposits were forwarded to the appellant, which issued Fixed Deposit Receipts to the depositors. The Commission found that the Fixed Deposit Receipts constituted a contract containing all essential conditions. Thus, the plea of no 'privity of contract' was rejected.
Question No. 4:
The appellant claimed a financial crunch and requested more time for repayment. The Commission dismissed this argument, stating that the appellant is bound to repay the fixed deposits and cannot absolve its liability due to insufficient liquidity. This view aligns with the State Commission, Maharashtra's decision in Family Planning & Medical Aid Trust v. Pune Cooperative Bank Ltd. 1993 (3) CPR 370.
Conclusion:
The appeals filed by the appellant were dismissed, and the appellant was directed to pay Rs. 500 in each case to the respondents as litigation expenses. The appeals were disposed of accordingly.
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2000 (1) TMI 905
Issues:
1. Dispute over sealed premises belonging to a company in liquidation.
2. Claim for possession under the Bombay Rents, Hotel and Lodging House Rates Control Act.
3. Interpretation of a Supreme Court judgment regarding premises not being used for business purposes.
4. Sub-tenancy and consent of landlord in relation to the disputed premises.
Analysis:
1. The judgment addresses a dispute over premises sealed by the Official Liquidator, claimed to belong to the applicant and previously leased to a company in liquidation. The applicant sought possession under the Bombay Rents Act due to non-payment of rent and cessation of business activities by the company. The court considered the necessity of the premises for winding up proceedings based on a Supreme Court precedent.
2. The applicant relied on a Supreme Court judgment stating that if the premises are not used for business beneficial to winding up, they should be returned to the landlord. The court examined the pleadings in the Small Causes Court, revealing that the applicant had started a new business on the premises with the landlord's consent but under familial influence. The court determined that the company in liquidation was not in possession of the premises at the time of winding up, leading to the dismissal of one application and the approval of the other.
3. The judgment emphasized that the premises were not required for winding up purposes, as per the Official Liquidator's stance. The court dismissed one application while granting the other, directing the Official Liquidator to take charge of any assets found in the sealed premises. Importantly, the court clarified that its observations should not impact the ongoing case in the Small Causes Court, maintaining the legal separation of proceedings.
This detailed analysis of the judgment provides a comprehensive overview of the legal issues involved and the court's reasoning in resolving the dispute over the sealed premises and possession rights under relevant laws and judicial precedents.
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2000 (1) TMI 901
Issues:
1. Complaint regarding suspension of Children's Gift Growth Fund scheme.
2. Allegation of deficiency in service by the opposite party.
3. Interpretation of clause (33) of the Scheme under the Unit Trust of India Act.
4. Application of the principle of promissory estoppel.
5. Determination of benefits accruing to the child despite scheme suspension.
6. District Forum's directions for compensation and interest.
Analysis:
1. The appeals involved complaints related to the suspension of the Children's Gift Growth Fund scheme by the opposite party. The complainants alleged deficiency in service due to the suspension of the scheme, which they joined on behalf of their grandchildren or daughter. They sought directions for the scheme to continue and compensation for the inconvenience caused.
2. The opposite party defended their actions by citing clause (33) of the Scheme, which allowed them to terminate the scheme at any time by giving a notice of not less than two weeks in leading English dailies. They argued that the suspension was in line with the scheme's provisions and the Unit Trust of India Act, thus not constituting deficiency in service.
3. The interpretation of clause (33) of the Scheme was crucial in determining the legality of the scheme suspension. The clause granted the opposite party the right to terminate the scheme without assigning any reason if deemed necessary in the interest of unit holders. The public notice of suspension published in a leading daily was considered consistent with the clause, allowing the opposite party to exercise their rights.
4. The application of the principle of promissory estoppel was considered in light of the suspension of the scheme. The National Commission's decision in a similar case held that when a scheme is framed under statutory powers, the principle of promissory estoppel does not apply, supporting the opposite party's actions.
5. Despite the scheme suspension, the benefits accruing to the child under clauses (A) and (B) of the Scheme were deemed to continue. The benefits included dividends and bonuses, which were assured to the child even if the scheme was suspended, ensuring that the child's interests were protected.
6. The District Forum had directed the opposite party to refund the contributions with interest and award compensation for mental agony. However, upon finding that the scheme suspension was consistent with the scheme's provisions, the appeals were allowed, and the directions for compensation were set aside, leading to the dismissal of the complaints.
In conclusion, the judgment clarified the legality of the scheme suspension, upheld the opposite party's actions as per the scheme's provisions, and dismissed the complaints alleging deficiency in service.
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2000 (1) TMI 900
Issues:
1. Interpretation of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 in relation to proceedings under section 58A(9) of the Companies Act, 1956.
Analysis:
The appellant, a sick industry declared by the Board for Industrial and Financial Reconstruction (BIFR), challenged the order passed by a learned single judge in W.P. No. 16606 of 1990. The issue revolved around whether section 22 of the Act extends to and attracts proceedings under section 58A(9) of the Companies Act. The CLB allowed depositors' applications under section 58A(9), leading to the appellant's writ petition being dismissed by the single judge, prompting the appeal.
The key consideration was whether the claim for return of deposit could be classified as a "suit for recovery of money" against the company under revival by BIFR. The court examined the definition of 'deposit' under section 58A and referred to a Supreme Court decision in Vijay Mills Co. Ltd. v. State of Gujarat [1990] 68 Comp. Cas. 597. The Supreme Court's ruling clarified that certain amounts held in trust by a company, like sales tax collected from customers, do not fall under the ambit of section 22(1) as they are not owned by the company.
The court emphasized that a deposit by depositors is not a loan but a sum held in trust by the company until maturity. Therefore, a claim for the return of such deposits does not constitute a suit for recovery of money due. Section 22(1) prohibits specific proceedings against the company without BIFR's consent, and its restrictions do not apply to situations lacking elements of execution or distress against the company's property.
Ultimately, the court found no merit in the appeal, upholding the learned single judge's decision. The court concluded that the prohibition under section 22(1) does not extend to claims for the return of deposits made by depositors, as these do not qualify as suits for recovery of money in the context of the Act.
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2000 (1) TMI 899
Issues Involved:
1. Legitimacy of the consent order dated May 25, 1999.
2. Maintainability of the appeal against the consent orders.
3. Jurisdiction and discretionary power of the Company Law Board.
4. Timeliness of the appeal filed against the consent order.
Detailed Analysis:
1. Legitimacy of the Consent Order Dated May 25, 1999:
The appellant questioned the legitimacy of the consent order dated May 25, 1999, arguing that it was prejudicial to the interests of the company. The appellant specifically referenced the board resolution to liquidate a loan of Rs. 54,66,700 along with interest from the equity capital, claiming it would affect the company's credibility and potentially lead the company's banker to recall the loan for the hotel project. The Company Law Board, however, found that the consent order was binding and could not be recalled unless all parties agreed, and there was no evidence of fraud, coercion, or misrepresentation.
2. Maintainability of the Appeal Against the Consent Orders:
The respondents raised a preliminary objection regarding the maintainability of the appeal, asserting that no appeal is permissible against a consent order. They argued that the appellant was estopped from challenging the consensual order to which he was a party. The High Court agreed, stating that an appeal under section 10F of the Companies Act, 1956, is maintainable only on questions of law and not on findings of fact. The court emphasized that a consent order binds the parties unless it is challenged on grounds such as fraud, coercion, or illegality.
3. Jurisdiction and Discretionary Power of the Company Law Board:
The High Court noted that the Company Law Board's powers under sections 397/398 and 402 of the Companies Act, 1956, are broad and discretionary. The Board is empowered to pass orders to resolve disputes and achieve the objectives of the statute. The High Court highlighted that appellate courts should not interfere with the discretionary powers of the Company Law Board unless it is shown that the discretion was exercised on wrong principles or resulted in a miscarriage of justice. The court cited precedents from Halsbury's Laws of England and the Supreme Court of India to support this principle.
4. Timeliness of the Appeal Filed Against the Consent Order:
The High Court observed that the appeal against the order dated May 25, 1999, was time-barred as it was filed on August 23, 1999, beyond the permissible period of sixty days. The appellant did not provide sufficient cause for the delay. The court also noted that the order dated May 25, 1999, was a follow-up to the consensus order dated December 16, 1998, and thus both orders were based on mutual agreement between the parties.
Conclusion:
The High Court dismissed the appeal, affirming that the Company Law Board acted within its jurisdiction and discretion in passing the consent orders. The appeal was found to be time-barred and not maintainable against a consent order. The court emphasized the binding nature of consent orders and the limited scope of appellate interference in discretionary decisions. The decision-making process of the Company Law Board was deemed lawful and reasonable, thus requiring no interference from the High Court. The appeal was dismissed without any order as to costs.
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2000 (1) TMI 897
Issues:
Challenge against order directing change of company name under section 22 of the Companies Act, 1956.
Analysis:
1. Factual Background: The writ petitioner, a company, was directed to change its name by deleting the word 'Kalpana' by an order dated 30-6-1997 issued by the Regional Director, Department of Company Affairs, Government of India. The order was based on the contention that the use of the name 'Kalpana' by the petitioner was likely to cause confusion with another company's name, leading to an advantage derived by the petitioner.
2. Legal Submissions: The main argument presented was that the Regional Director erred in interpreting and applying section 22 of the Companies Act. It was contended that the Director considered irrelevant factors, such as the similarity in business nature and pending registration of the brand name 'Kalpana', leading to an unjust order for name change.
3. Jurisdictional Analysis: The High Court analyzed the jurisdiction of the Regional Director under section 22 and emphasized that the Director's authority must be exercised within the statutory limits. The Court highlighted that the Director's decision should not overlap with the jurisdiction of a civil court, especially in matters of passing-off actions.
4. Error in Order: The Court found that the Regional Director's order suffered from an error apparent on the face of the record. The Director exceeded his jurisdiction by considering irrelevant factors and not focusing on the core issue of inadvertence or undesirableness as per the provisions of section 22.
5. Judgment: The High Court set aside the impugned order dated 30-6-1997, directing the petitioner to change its name. The Court allowed the appeal, granting the parties the liberty to pursue their contentions in the ongoing suit before the Court. The judgment highlighted the importance of considering relevant factors and exercising jurisdiction within statutory boundaries.
6. Additional Judge's Opinion: Justice Ansari concurred with the decision, indicating agreement with the analysis and outcome of setting aside the impugned order. The judgment concluded that no costs were to be awarded in the given circumstances.
In conclusion, the High Court's judgment focused on the correct interpretation and application of section 22 of the Companies Act, emphasizing the need for statutory authorities to act within their prescribed limits and avoid errors apparent on the face of the record. The decision provided clarity on the jurisdictional boundaries of the Regional Director and the importance of considering relevant factors in such matters.
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2000 (1) TMI 876
The Appellate Tribunal CEGAT, New Delhi ruled that the product P.C. Acid, produced during the manufacture of pesticides by M/s. Gujarat Insecticides Ltd., is subject to central excise duty. The Tribunal's decision in Final Order No. 896/98-C supports this, and the appeal filed by the Revenue was allowed.
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2000 (1) TMI 868
Issues:
Allegation of professional misconduct against auditors for disclosure of information without consent to third parties.
Analysis:
The case involved a complaint by the State Bank of Travancore against auditors for alleged misconduct in disclosing information acquired during a professional engagement without consent. The auditors were accused of communicating with various high-ranking officials based on information obtained during the audit, leading to a complaint of professional misconduct. The Disciplinary Committee of the Institute of Chartered Accountants found the respondent guilty of misconduct under the Act and recommended proceedings against the respondent. However, it was noted that the respondent was in a disturbed state of mind and no mala fides were involved, indicating the absence of mens rea.
The legal provisions under Chapter V of the Act were considered, specifically focusing on misconduct as defined in section 22 and the procedure for inquiries under section 21. The Act aims to maintain professional standards and a Code of Conduct for Chartered Accountants, emphasizing honesty, good morals, and ethical conduct. The importance of professional communications and the duty of trust held by auditors were highlighted, with references to legal privileges under the Indian Evidence Act to protect client confidentiality.
The judgment discussed the concept of professional misconduct and cited legal precedents to define what constitutes unprofessional conduct in the discharge of professional duties. The court acknowledged that in a typical case of professional misconduct, a reprimand would be appropriate. However, considering the time elapsed since the incident, the respondent's mental state, and the lack of professional work, the court decided to file the proceedings as recommended by the Council. Ultimately, the court answered the reference accordingly, indicating the decision to not take further action against the respondent in light of the circumstances presented.
In conclusion, the judgment addressed the allegations of professional misconduct against the auditors, examined the legal framework governing such matters, and considered the specific circumstances of the case to determine the appropriate course of action in response to the findings of misconduct.
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2000 (1) TMI 867
Issues:
Validity of order dismissing writ petition challenging imposition of default fee by stock exchange.
Analysis:
The appellant challenged the order dismissing the writ petition regarding the imposition of a default fee by the stock exchange. The appellant, a defaulter member of the stock exchange, was aggrieved by the levy of a 10% default fee as per the bye law of the stock exchange. The Single Judge relied on a previous decision stating that the power to regulate admission or expulsion of members by stock exchanges is not amenable to writ jurisdiction. However, the appellant cited a different decision where it was held that non-statutory authorities like stock exchanges performing public duty are subject to writ jurisdiction. The main issue was whether the imposition of the default fee by the stock exchange constitutes a discharge of public duty.
The court noted that the stock exchange performs various functions, and in this case, the focus was on the imposition of the default fee. The court observed contrasting principles in different decisions regarding the functions of stock exchanges. However, the court decided not to determine the correct legal position as it was not essential for the current case. The court considered the relevant clause in the articles of association of the stock exchange which governs the internal affairs and obligations of its members. The appellant's default led to the collection of the default fee as per the articles and bye-law, which was viewed as part of the internal management of the stock exchange, not a public duty.
The appellant argued that the bye-law suffered from excessive delegation of powers, making it ultra vires of the constitution. However, since the appellant was a signatory to the articles of association, the court held that the appellant could not challenge the provisions contained therein. Consequently, the court found no merit in the writ appeal and dismissed it.
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2000 (1) TMI 866
Issues Involved:
1. Applicability of Section 446 of the Companies Act, 1956 to criminal proceedings.
2. Whether criminal proceedings under Section 138 of the Negotiable Instruments Act can be stayed under Section 446 of the Companies Act.
Summary:
Issue 1: Applicability of Section 446 of the Companies Act, 1956 to Criminal Proceedings
The appellant, Managing Director of Belhouse Associates (P.) Ltd., sought to stay the criminal proceedings u/s 138 of the Negotiable Instruments Act, 1881, invoking Section 446 of the Companies Act, 1956. The company court dismissed the application, stating that Section 446 cannot be attracted in criminal proceedings where the assets of the company are not involved. The official liquidator contended that the proceedings cannot be stayed under Section 446, as similar applications were previously dismissed by the court.
Issue 2: Whether Criminal Proceedings under Section 138 of the Negotiable Instruments Act can be Stayed under Section 446 of the Companies Act
The appellant argued that the expression "other legal proceedings" in Section 446 is wide enough to include criminal proceedings. However, the court held that criminal proceedings must be in relation to the assets of the company to be stayed under Section 446. The court referred to various precedents, including the Supreme Court's decision in Damji Valji Shah v. Life Insurance Corpn. of India, which held that provisions of a Special Act will override those of a General Act. The court concluded that criminal proceedings under Section 138 of the Negotiable Instruments Act are not in respect of the assets of the company and thus cannot be stayed under Section 446.
The court also noted that Section 141 of the Negotiable Instruments Act, which deals with offences by companies, was introduced with full knowledge of Section 446, implying that the provisions of the Negotiable Instruments Act have an overriding effect on Section 446.
Conclusion:
The appeal was dismissed, affirming that criminal proceedings under Section 138 of the Negotiable Instruments Act cannot be stayed under Section 446 of the Companies Act, 1956. The court emphasized that Section 446 is intended to avoid multiplicity of proceedings and safeguard the assets of a company, but it does not extend to criminal proceedings unrelated to the company's assets.
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