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Showing 121 to 140 of 677 Records
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2000 (11) TMI 1138
Issues:
1. Sanction of Scheme of Arrangement between two companies.
2. Transfer of property, rights, powers, liabilities, and duties.
3. Continuation of pending proceedings.
4. Allotment of shares to entitled members.
5. Dissolution of the transferor company without winding up.
6. Approval of the Scheme by the Calcutta High Court for the transferee company.
Analysis:
The High Court of Allahabad, in the case concerning the Scheme of Arrangement between the transferor-company and the transferee-company, approved the Scheme as presented in the petition. The Court declared the Scheme binding on all members of both companies. It was ordered that all property, rights, powers, liabilities, and duties of the transferor-company be transferred to the transferee-company without the need for further action. Additionally, all pending proceedings involving the transferor-company would continue with the transferee-company. The transferee-company was directed to allot shares to entitled members as per the Scheme. The transferor-company was given 30 days to deliver a certified copy of the order for registration, after which it would stand dissolved without winding up. Interested parties were permitted to seek necessary directions from the Court in this matter. However, the order was contingent upon the approval of the Scheme by the Calcutta High Court for the transferee-company.
Furthermore, the Court instructed the office to prepare a formal order with modifications, incorporating the schedule of properties and attaching a copy of the sanctioned Scheme. Certified copies of the order were to be issued to the petitioner company within 45 days. The judgment highlighted the meticulous process involved in approving and implementing the Scheme of Arrangement, ensuring the seamless transfer of assets and liabilities between the two companies while safeguarding the interests of their members and complying with legal requirements.
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2000 (11) TMI 1133
Issues Involved:
1. Maintainability of the suit in view of the existence of an arbitration clause.
2. Territorial jurisdiction and the interpretation of Clause 18 of the Guarantee Bond.
3. Applicability of Section 8 of the Arbitration and Conciliation Act, 1996.
4. Simultaneous legal proceedings and multiplicity of actions.
5. Impact of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) on the suit.
6. Interim relief and restraining orders.
7. Application for warrants of arrest and seizure of passport.
Detailed Analysis:
1. Maintainability of the Suit in View of the Existence of an Arbitration Clause:
The primary issue was whether the suit was maintainable given the arbitration clause in the agreements. The court noted that the plaintiff had already initiated arbitration proceedings against Defendant No. 4 (the company) and filed the present suit against the guarantors (Defendants 1 to 3) and the company. The court held that the suit was not maintainable due to the arbitration clause, emphasizing that the disputes between the plaintiff and Defendant No. 4 were already under arbitration. The court stated, "It is a well-established principle of law, admitting of no exceptions, that the simultaneous continuance of two independent legal proceedings on the same subject-matter must be assiduously avoided."
2. Territorial Jurisdiction and Interpretation of Clause 18 of the Guarantee Bond:
The plaintiff argued that Clause 18 of the Guarantee Bond, which subjected all legal proceedings to the jurisdiction of the High Court of Delhi, allowed them to file the suit. However, the court disagreed, stating that Clause 18 only confined territorial jurisdiction to Delhi and did not exclude the applicability of the arbitration clause. The court explained, "It would be reading far too much into clause 18 to construe it as indicating anything more than that the parties had agreed only to the jurisdiction of the High Court of Delhi."
3. Applicability of Section 8 of the Arbitration and Conciliation Act, 1996:
The court examined the differences between Section 8 of the Arbitration and Conciliation Act, 1996, and Section 34 of the Arbitration Act, 1940. It highlighted that under the 1996 Act, the referral to arbitration is mandatory if an arbitration agreement exists. The court stated, "The ambit of section 8 is clearly much wider than of section 34... There is a conscious shift from the Courts to the Arbitral Tribunals." The court concluded that Section 8 applied, and the parties should be referred to arbitration.
4. Simultaneous Legal Proceedings and Multiplicity of Actions:
The court emphasized avoiding multiple legal proceedings on the same subject matter to prevent conflicting decisions. It noted that the plaintiff's attempt to file a separate recovery suit against the guarantors was likely due to the registration of Defendant No. 4 as a sick industrial company by the BIFR. The court reiterated that "the simultaneous continuance of two independent legal proceedings on the same subject-matter must be assiduously avoided."
5. Impact of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) on the Suit:
The court referred to the Supreme Court's decision in Patheja Bros. Forgings & Stamping v. I.C.I.C.I. Ltd., which held that Section 22 of SICA prohibits suits for enforcement of guarantees in respect of loans granted to sick companies unless consent is obtained. The court found the plaintiff's position indefensible without such consent. The court stated, "Apart from other considerations which have prevailed on me to hold that the suit is not maintainable, the observations contained in this case make the position of the plaintiff, wholly indefensible."
6. Interim Relief and Restraining Orders:
The court addressed an application under Order XXXIX, Rules 1 and 2, read with Section 151 of the Code of Civil Procedure, where interim restraining orders were already in place. The court allowed the interim orders to remain in force for three months, during which the plaintiff could seek protection from the arbitrator. The court stated, "The interim orders shall remain in force for a period of three months. In this period the plaintiff may seek this protection from the learned arbitrator."
7. Application for Warrants of Arrest and Seizure of Passport:
The court dismissed the application for warrants of arrest and seizure of the passport of Defendant No. 1, finding no sufficient cause for such measures. The court noted that the plaintiffs already had security in the form of immovable properties. The court stated, "I am not satisfied that sufficient cause has been shown as would justify the issuance of Warrants of Arrest against defendant No. 1 and/or directing the seizure of his passport."
Conclusion:
The court allowed the application under Section 8 of the Arbitration and Conciliation Act, 1996, referring the parties to the pending arbitration before Mr. Justice P.K. Bahri (Retd.). The suit was rendered infructuous and dismissed. The court also disposed of the interim relief application with directions for the plaintiff to seek protection from the arbitrator and dismissed the application for warrants of arrest and passport seizure.
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2000 (11) TMI 1132
Issues:
Petition for winding up by two firms claiming to be creditors, appointment of provisional liquidator, transposition of Coffee Board as petitioner, liability dispute, arbitration option.
Analysis:
The petition for winding up was filed by two firms claiming to be creditors of the respondent company engaged in the business of growers and dealers in hill produces. The firms claimed the company was indebted to them for the supply of gunny bags. Upon the petition, the respondent company faced labour trouble and financial difficulties, leading to the appointment of the Official Liquidator as the provisional liquidator to take charge of the company's properties. Several interested parties, including the Coffee Board, were impleaded in the petition. The company later proposed revival, improved its financial position, paid off debts, and made arrangements with the bank. The original petitioners lost interest in prosecuting the winding up petition, and the Coffee Board sought to be substituted as the petitioner, leading to a series of legal proceedings and appeals.
The main contention of the respondent company was that the Coffee Board was not entitled to maintain the petition as a creditor under the Companies Act, as no notice was issued, and any liability arose after the original petition. The Coffee Board claimed amounts due to the pooling arrangement, with a reported shortage of coffee stock worth lakhs. The liability dispute centered on the responsibility for the shortage and damage to the stock. The Court noted that evidence was lacking to fix liability, but acknowledged the Coffee Board's claim against the company.
Regarding the requirement of a three weeks notice under section 434 for a creditor to file a winding up petition, the Court found that the original petitioners had complied by sending a notice before filing the petition. The liability could be said to have arisen after the petition due to the pooling arrangement, justifying the Coffee Board's claim. The Court held that the Coffee Board, as the substituted petitioner, was entitled to pursue the petition, and directed both parties to choose between arbitration or evidence recording in Court to determine the liability. The parties were given a deadline to decide on arbitration, with a subsequent hearing scheduled.
In conclusion, the Court directed the parties to decide on arbitration for settling the dispute or proceed with evidence recording in Court to determine the liability. The case was postposed to allow the parties to submit panels of arbitrators if they opted for arbitration.
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2000 (11) TMI 1131
Issues Involved:
1. Voluntary winding up and appointment of a voluntary liquidator.
2. Responsibility for handing over company assets and records.
3. Compliance with court orders regarding the submission of assets and records.
4. Legal implications of the directors' actions and the voluntary liquidator's role.
5. Examination of the directors under section 477 of the Companies Act.
6. Dismissal of charges against the directors under section 538 of the Companies Act.
Detailed Analysis:
1. Voluntary Winding Up and Appointment of a Voluntary Liquidator:
Ajanta Lucky Scheme & Investment (P.) Ltd. was brought under creditors' voluntary winding up by a special resolution passed on 27-9-1980, appointing Sushil Kumar as the voluntary liquidator. The Official Liquidator filed Company Petition No. 25 of 1982 under sections 440 and 515 of the Companies Act, 1956, for official winding up and removal of the voluntary liquidator. The court ordered the winding up and removal of the voluntary liquidator on 16-8-1984.
2. Responsibility for Handing Over Company Assets and Records:
In Company Petition No. 94 of 1991, the directors, Dharam Bir Bhalla and Arvind Bhalla, stated that they had handed over the assets, books of account, and records to the voluntary liquidator, Sushil Kumar. This was affirmed in their statements recorded on oath. The court directed the respondents to jointly and severally hand over possession of the assets and records to the Official Liquidator.
3. Compliance with Court Orders Regarding the Submission of Assets and Records:
The Official Liquidator's attempts to retrieve the records reached a dead-end, leading to Company Petition No. 29 of 1997, alleging that the directors were shifting their responsibility. The prayer was for the directors to be summoned, tried, and convicted under section 538 of the Act.
4. Legal Implications of the Directors' Actions and the Voluntary Liquidator's Role:
Section 538 outlines the offenses by officers of companies in liquidation, including failing to deliver up property or records to the liquidator. The learned counsel for the Official Liquidator argued that a voluntary liquidator is merely an agent representing the board of directors, and the directors' responsibilities are not negated by the appointment of a liquidator.
5. Examination of the Directors Under Section 477 of the Companies Act:
Company Application No. 668 of 1998 was filed to summon and examine the directors for particulars of Sushil Kumar. Despite notice, the directors continued to assert they had no information about Sushil Kumar's whereabouts.
6. Dismissal of Charges Against the Directors Under Section 538 of the Companies Act:
In Company Application No. 585 of 2000, the directors reasserted that all assets and records had been handed over to Sushil Kumar, who had executed a receipt on 27-9-1980. The court in Company Petition No. 93 of 1991 had already noted that the directors had filed the statement of affairs with the voluntary liquidator, and there was nothing to rebut this statement. The prosecution had not provided evidence to prove the directors were in possession of the records. The court concluded that the findings of fact from the previous order must be deemed final, and the prosecution under section 538 was misconceived.
Conclusion:
The court acknowledged the bona fides of initiating action against the respondents but found no material sufficient to establish the guilt of the directors. The proceedings were dismissed due to the prolonged unavailability of the voluntary liquidator, Sushil Kumar, and the finality of the previous findings. Company Application No. 585 of 2000 was allowed, and Company Application No. 668 of 1998 was dismissed.
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2000 (11) TMI 1130
Issues Involved:
1. Jurisdiction of the Company Court in disputes involving debtor-creditor relationships.
2. Validity of the interim order appointing a commissioner to verify the amount payable.
3. The necessity of producing original bills and supporting documents.
4. The appropriateness of using section 443(1)(c) of the Companies Act for interim orders.
5. The impact of existing civil suits on the jurisdiction of the Company Court.
Detailed Analysis:
1. Jurisdiction of the Company Court in disputes involving debtor-creditor relationships:
The appellant contended that the Company Court must first establish a creditor-debtor relationship and ascertain the amount due before invoking its jurisdiction. If the liability is disputed, the Company Court loses jurisdiction. The respondent argued that the Company Court can still proceed if the defense lacks bona fides and substance. The court found that the learned Single Judge acted within jurisdiction by appointing an auditor to verify the accounts, as the defense raised by the appellant was not bona fide.
2. Validity of the interim order appointing a commissioner to verify the amount payable:
The appellant argued that the learned Single Judge assumed the appellant had no defense and did not consider the explanations provided. The respondent countered that the Single Judge examined various documents before passing the order. The court upheld the interim order, noting that the Single Judge appointed an auditor to verify the accounts due to the exceptional circumstances, including confirmatory statements and handwritten notes from the appellant's director.
3. The necessity of producing original bills and supporting documents:
The appellant resisted payment, claiming the respondent failed to furnish original bills and supporting documents. The respondent was willing to produce these documents before the auditor. The court noted that the respondent's willingness to produce the documents negated the appellant's objection and supported the appointment of an auditor to verify the accounts.
4. The appropriateness of using section 443(1)(c) of the Companies Act for interim orders:
The appellant argued that section 443(1)(c) should only apply to orders determining the company's financial position and not to resolve civil disputes. The court disagreed, stating that section 443(1)(c) allows the court to pass any necessary interim order in the interest of justice. The court emphasized that the auditor's report would not be binding and the appellants could file objections, ensuring no injustice.
5. The impact of existing civil suits on the jurisdiction of the Company Court:
The appellant argued that the matter should be adjudicated in civil court due to an existing suit for rendition of accounts. The court rejected this argument, stating that the existence of a civil suit does not strip the Company Court of its jurisdiction. The court noted that the appellants had accepted a previous order for a detailed investigation by a chartered accountant, further supporting the current order's validity.
Conclusion:
The court found no merit in the appeals and dismissed them, supporting the learned Single Judge's interim order appointing an auditor to verify the accounts. The court emphasized that the Company Court acted within its jurisdiction and that the interim order was necessary to ascertain the correct financial position between the parties.
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2000 (11) TMI 1129
Issues:
Transfer of proceedings to Ranchi Bench by Chief Justice, Jurisdiction of Ranchi Bench, Transfer of winding up proceedings between principal seat and Circuit Bench, Creditor's entitlement to attachment and realization of debts.
Transfer of Proceedings to Ranchi Bench by Chief Justice:
The judgment addresses the issue of whether the Chief Justice could transfer proceedings to the Ranchi Bench within the same High Court. The court examined the High Court at Patna (Establishment of Permanent Bench at Ranchi) Act, 1976, and the Patna High Court Rules. It was concluded that the jurisdiction of the Ranchi Bench is defined to deal with cases from specific districts, and cases falling under the principal seat's exclusive jurisdiction should not be transferred to the Ranchi Bench. The judgment highlighted that transferring such cases would be illegal.
Jurisdiction of Ranchi Bench:
The judgment analyzed the establishment of the Ranchi Bench and the discretion of the Chief Justice to direct cases to be heard at Patna. It emphasized that the Ranchi Bench's jurisdiction is limited to cases from designated districts, and cases within the principal seat's exclusive jurisdiction should not be transferred. The judgment concluded that the order transferring the case to the Ranchi Bench was against the Act and Rules.
Transfer of Winding Up Proceedings Between Principal Seat and Circuit Bench:
The court discussed the issue of transferring winding up proceedings between the principal seat and the Circuit Bench. It highlighted that the jurisdiction for winding up proceedings is exclusive and unfettered, with only one Company Judge designated by the Chief Justice. The judgment emphasized that all winding up proceedings should be at the principal seat where the liquidation proceedings are attached, following the pattern set by law.
Creditor's Entitlement to Attachment and Realization of Debts:
The judgment briefly touched upon the creditor's contention regarding attachment and realization of debts. It indicated that the law provides for handling such situations concerning debts of corporate bodies. The court refrained from delving into the merits of the debt or strict proof liability under the law. The judgment mentioned the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and the principle of pari passu ranking among creditors. It noted that parties could address their claims and defenses within the existing legal framework.
In conclusion, the letters patent appeal was allowed, setting aside the order of the learned Judge dated 16-5-2000. The judgment highlighted the impending changes due to the Bihar Reorganisation Act, 2000, which would affect the jurisdiction and proceedings related to the case.
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2000 (11) TMI 1125
Issues:
Challenge to order of Company Law Board dismissing petition under section 113(3) of Companies Act, 1956 for bonus shares entitlement.
Analysis:
1. The appellant challenged the Company Law Board's order dismissing the petition filed under section 113(3) of the Companies Act, 1956, regarding entitlement to bonus shares. The appellant was a shareholder in the respondent-company and held 5,000 equity shares. A resolution was passed at the annual general meeting (AGM) to issue bonus shares, but the appellant had sold all his shares before the cut-off date for entitlement to bonus shares.
2. The respondent-company contended that the appellant had no right to bonus shares as his name was not in the register of members on the cut-off date. The AGM resolution did not specify that shareholders as of the AGM date were entitled to bonus shares. The Company Law Board upheld the respondent's stand, citing non-joinder of necessary parties as the bonus shares had already been issued to the transferees.
3. The appellant argued that the explanatory statement indicated entitlement to bonus shares for existing shareholders as of the AGM date. However, the resolution specified entitlement for shareholders as per the register on a date determined by the board of directors, which was after the AGM. The appellant was not holding shares on the specified date and, therefore, was not entitled to bonus shares based on the AGM resolution.
4. The appellant's contention of inconsistency between the resolution and the explanatory statement was dismissed. The resolution clearly outlined the criteria for bonus shares entitlement, and the explanatory statement did not contradict this. The appellant did not challenge the AGM notice or resolution's validity but relied on it for bonus shares claim, which was not valid as he did not hold shares on the specified date.
5. The Court agreed with the Company Law Board's finding that the appellant was not entitled to bonus shares based on the AGM resolution. The appeal was dismissed.
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2000 (11) TMI 1121
Issues Involved:
1. Constitutional validity of Section 630 of the Companies Act, 1956.
2. Applicability of Section 630 to workmen.
3. Conflict between the Industrial Disputes Act, 1947 (ID Act) and Section 630 of the Companies Act.
4. Right of the petitioner to occupy company quarters during the pendency of an industrial dispute.
Detailed Analysis:
1. Constitutional Validity of Section 630:
The petitioner challenged the constitutional validity of Section 630 on various grounds, including allegations of discrimination and violation of Article 21 of the Constitution. The court referred to the decision in *Petlad Bulakhidas Mills Co. Ltd. v. State of Gujarat* which had already upheld the constitutional validity of Section 630. The court reiterated that the section is neither discriminatory nor constitutionally invalid. The law was within legislative competence, and challenges on the grounds of discrimination and deprivation of the right to life were previously negatived.
2. Applicability of Section 630 to Workmen:
The petitioner contended that Section 630 does not cover workmen and is only applicable to officers and employees other than workmen. The court rejected this argument, stating that the term 'employee' is a wider generic term which includes workmen. The definition of 'workmen' under Section 529(3)(a) of the Companies Act supports this interpretation. The court emphasized that there is no indication that the legislature intended to exclude workmen from the scope of Section 630, which aims to provide a speedy remedy for companies to reclaim their property wrongfully withheld by any officer or employee.
3. Conflict Between the ID Act and Section 630:
The petitioner argued that the ID Act, being a special act, should prevail over the general provisions of Section 630 of the Companies Act. The court found no conflict between the two statutes. It held that the mere pendency of a reference before the Labour Court does not deprive the Criminal Court of its powers under Section 630. The Labour Court's jurisdiction to adjudicate the legality of dismissal does not interfere with the Criminal Court's authority to address the wrongful withholding of company property. The court clarified that the Labour Court's decision on the legality of dismissal does not affect the Criminal Court's proceedings under Section 630 unless the Labour Court explicitly stays the dismissal order.
4. Right to Occupy Company Quarters During Pendency of Industrial Dispute:
The petitioner claimed that during the pendency of an industrial dispute, he had the right to continue occupying the quarters and that the employer could not resort to Section 630 without the employee obtaining an interim order from the Labour Court. The court dismissed this argument, stating that upon dismissal, the employee loses all benefits associated with employment, including the right to occupy company quarters. The court noted that Section 33(1) of the ID Act, which prohibits altering conditions of service during the pendency of an industrial dispute, does not apply to cases where no industrial dispute was pending at the time of dismissal. The court concluded that the continued occupation of the quarters after dismissal was wrongful.
Conclusion:
The court dismissed the revision application, upholding the orders of the learned JMFC and the Sessions Judge requiring the petitioner to vacate the company quarters. The court found no merit in the challenge to the constitutional validity of Section 630 and affirmed that the section applies to workmen. It also found no conflict between the ID Act and Section 630 and ruled that the petitioner had no right to occupy the quarters after dismissal. The court directed that the respondent should not take coercive action until 31-12-2000 to allow the petitioner time to seek further legal recourse.
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2000 (11) TMI 1119
Issues:
- Breach of undertaking given by respondent-company leading to contempt proceedings.
- Legal implications of breaching an undertaking in court proceedings.
- Interpretation of the undertaking given by the respondent-company.
- Impact of the Sick Industrial Companies (Special Provisions) Act, 1985 on winding up proceedings.
- Comparison of breach of undertaking and consent orders in the context of contempt of court.
- Analysis of benefit accruing to the party giving the undertaking in determining contempt of court.
Breach of Undertaking and Contempt Proceedings:
The case involved a respondent-company facing a winding-up petition due to failure to pay debts. The respondent made an undertaking to make payments but failed to do so, leading to contempt proceedings. The court considered the breach of undertaking as misconduct amounting to contempt, citing legal principles from Halsbury's Laws of England and a Supreme Court judgment. The respondent's conduct was scrutinized to determine intentional breach or mere imprudence.
Legal Implications of Breaching an Undertaking:
The court emphasized that an undertaking given in court carries the same weight as a court order. Breach of such an undertaking is viewed as contempt of court, with potential consequences including imprisonment or fines. The respondent's failure to fulfill the undertaking was analyzed in light of established legal principles governing contempt proceedings.
Interpretation of Undertaking by Respondent-Company:
The respondent argued that the undertaking was not specific regarding payment timeframes but acknowledged the liability to pay. The respondent's financial constraints and compliance with the Sick Industrial Companies Act were presented as reasons for the delay in payment. The court assessed the clarity and specificity of the undertaking in determining the respondent's obligations.
Impact of Sick Industrial Companies Act on Winding-Up Proceedings:
The respondent's classification as a sick industrial company under the relevant Act affected the court's consideration of the winding-up petition. Legal provisions mandated deferral of winding-up proceedings pending consideration by the Board, influencing the court's decision-making process regarding the petition.
Comparison of Breach of Undertaking and Consent Orders:
The court distinguished between breach of undertaking and consent orders in contempt proceedings. It highlighted that contempt arises when a benefit is obtained through false representation, emphasizing the importance of the benefit accruing to the party giving the undertaking. The court's analysis considered the nature of the breach and its impact on the administration of justice.
Benefit Accruing from Undertaking in Contempt Determination:
The court referenced a Supreme Court ruling emphasizing that a breach of undertaking leading to contempt must involve a benefit to the party giving the undertaking. The absence of a benefit accruing to the respondent from the undertaking influenced the court's decision to discharge the respondent from contempt proceedings. The ruling underscored the necessity of assessing tangible benefits in contempt cases involving breaches of undertakings.
In conclusion, the judgment provided a comprehensive analysis of the legal implications of breaching an undertaking in court proceedings, considering the specific circumstances of the case and relevant legal principles governing contempt of court.
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2000 (11) TMI 1116
Issues Involved:
1. Interpretation of Section 10 of the Arbitration Act, 1940.
2. Validity of the appointment and role of Justice Avadh Behari Rohtagi in the Arbitral Tribunal.
3. Application of principles of waiver, acquiescence, and estoppel in arbitral proceedings.
4. Competence of arbitrators to de novo select an umpire.
Detailed Analysis:
1. Interpretation of Section 10 of the Arbitration Act, 1940:
The primary issue revolves around the interpretation of Section 10 of the Arbitration Act, 1940. Section 10(1) states that if an arbitration agreement provides for three arbitrators, one appointed by each party and the third by the two appointed arbitrators, the third arbitrator should act as an umpire, not as a third arbitrator. Section 10(2) provides that if the agreement specifies three arbitrators to be appointed otherwise, the majority decision prevails. The court concluded that the arbitration clause in question was a hybrid, initially suggesting a sole arbitrator if agreed upon, and if not, a tribunal of three arbitrators, indicating that Section 10(2) was intended by the parties. This interpretation validated the proceedings of the Arbitral Tribunal with Justice Avadh Behari Rohtagi as Chairman.
2. Validity of the Appointment and Role of Justice Avadh Behari Rohtagi:
The controversy arose when Justice H.L. Anand, succeeding Justice G.C. Jain, questioned the appointment of Justice Avadh Behari Rohtagi as the third arbitrator instead of an umpire. The court found that both parties had agreed on 1-6-1996 to refer all disputes to an Arbitral Tribunal consisting of Justice Avadh Behari Rohtagi (Chairman), Justice G.C. Jain, and Shri C.S. Aggarwal. This agreement, even if contrary to Section 10(1), was deemed valid as it represented a fresh agreement between the parties.
3. Application of Principles of Waiver, Acquiescence, and Estoppel:
The court discussed several precedents where principles of waiver and acquiescence validated arbitral proceedings despite procedural irregularities. The court cited cases like Khardah Co. Ltd. v. Raymon & Co. (India) (P.) Ltd., AIR 1962 SC 1810, and Union of India v. B.M. Sen, AIR 1963 Calcutta 456, emphasizing that participation in arbitration without objection implies acceptance of the arbitrator's jurisdiction. The court concluded that Ethiopian Airlines, having participated in the proceedings with Justice Avadh Behari Rohtagi as Chairman, could not later object to his role.
4. Competence of Arbitrators to De Novo Select an Umpire:
Ethiopian Airlines raised queries about the competence of the arbitrators to select a new umpire. The court clarified that Justice Avadh Behari Rohtagi shall continue as Chairman, and the decision of the majority shall prevail as per Article XVI(4) of the Agreement and Section 10(2). The two arbitrators, Justice H.L. Anand and Mr. C.S. Agarwal, were not justified or competent to select a new umpire de novo.
Conclusion:
The court directed the parties to appear before the Arbitral Tribunal comprising Justice Avadh Behari Rohtagi, Chairman, Justice H.L. Anand, and Mr. C.S. Agarwal. The tribunal was instructed to make and publish its award within four months from the recommencement of hearings, or within an extended period by mutual consent. The court allowed OMP 133 of 1999 and dismissed Suit No. 1893/1995 and all interim applications, with parties bearing their respective costs.
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2000 (11) TMI 1115
Issues:
1. Request for re-auditing the balance-sheet of the company for the financial year 1990-91.
2. Allegations of mismanagement and false balance-sheets by the respondent.
3. Dispute over bonus payments and conciliation settlements.
4. Legal provisions regarding the appointment of auditors for Government companies.
5. Binding nature of conciliation settlements on all parties involved.
Analysis:
1. The Trade Union filed a petition seeking a writ of mandamus for re-auditing the balance-sheet of the company for the financial year 1990-91. They alleged mismanagement by the respondent in projecting loss-oriented balance-sheets despite the company earning profits. The petitioner argued that an independent agency should be appointed by the Court for auditing to reveal the true financial status, leading to increased benefits for the workers.
2. The respondent contended that the petition was unsustainable, with 17 Trade Unions in the company and false allegations made by a minority union. They referred to a conciliation settlement regarding bonus payments agreed upon in meetings chaired by the Labour Commissioner and the Minister for Labour, which was certified as binding on all parties involved, including the workers represented by the petitioner.
3. Legal provisions under the Industrial Disputes Act, 1947, were cited, emphasizing the binding nature of settlements reached during conciliation proceedings on all parties to the dispute. Citing relevant case law, it was established that conciliation settlements are generally binding on all workmen, even if they were not directly involved in the dispute or did not concur with the settlement.
4. The respondent, being a Government company under the Companies Act, 1956, was subject to specific provisions regarding the appointment of auditors by the Central Government. The audit report for the year 1990-91, along with comments from the Comptroller and Auditor-General of India, was presented. The special provisions for Government companies and the power of the Central Government to direct special audits were highlighted to refute the petitioner's request for an independent audit.
5. The Court concluded that the conciliation settlement regarding bonus payments was binding on all parties, including the petitioner's union. Therefore, the petition lacked merit, and the request for appointing an independent agency for re-auditing was deemed unsustainable. Consequently, the Original Petition was dismissed.
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2000 (11) TMI 1112
Issues:
1. Sanction of scheme of amalgamation under sections 391(2) to 394 of the Companies Act, 1956.
Analysis:
The petition filed under sections 391(2) to 394 of the Companies Act, 1956 sought sanction for a scheme of amalgamation between the transferor-company, Sita World Travel (India) Ltd., and the transferee-company, Kuoni Travel (India) Ltd. The scheme proposed the transfer of the entire undertaking of the transferor-company, including all assets and liabilities, to the transferee-company. The petition detailed the incorporation dates, registered offices, main objects, authorized capital, management structure, and financial positions of both companies. It highlighted the potential benefits of the scheme, such as economies of scale, increased productivity, integrated operations, and rationalized management structure.
The court had previously dispensed with the need for a shareholders' meeting due to the unanimous approval of the scheme by the two shareholders. However, a meeting of creditors was convened, and the scheme was unanimously approved by both secured and unsecured creditors. The court received reports from the Chairman of the creditor meetings, the Official Liquidator, and the Regional Director of the Department of Company Affairs, all of whom had no objections to the scheme. The court found that the petitioner had disclosed all material facts, including the financial position of the companies and the absence of any investigations under sections 235 to 251 of the Act. Based on this, the court granted sanction to the proposed scheme of amalgamation.
The court sanctioned the scheme, declaring it binding on all shareholders and creditors of both companies. The scheme was approved from the appointed date of 1-4-2000. The court ordered the transfer of property, rights, powers, liabilities, and duties of the transferor-company to the transferee-company. It directed the continuation of all pending proceedings by or against the transferor-company with the transferee-company. The order mandated the transferor-company to deliver a certified copy of the order to the Registrar of Companies for registration within 30 days, after which the transferor-company would be dissolved. The court granted liberty to any interested person to apply for necessary directions in the matter.
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2000 (11) TMI 1091
Issues:
1. Validity of authorisation by Jurisdictional Commissioner under Section 35B(2) of the Central Excise Act, 1944.
2. Requirement of specific phrases in authorisation for filing appeals.
3. Importance of authorisation in appeals process.
4. Judicial interpretation of phrases "legal and proper" in authorisation.
5. Impact of missing mandatory phrases on appeal validity.
Validity of Authorisation by Jurisdictional Commissioner:
The judgment addresses the issue of the validity of the authorisation made by the Jurisdictional Commissioner under Section 35B(2) of the Central Excise Act, 1944. The Tribunal notes that the authorisation in question did not contain a specific opinion by the Commissioner regarding the legality or propriety of the order being challenged. This lack of specificity has led to the dismissal of several appeals by various Tribunal Benches. The Tribunal emphasizes the importance of the Commissioner's role in assessing the merits of the order and making a definitive statement regarding its legality or propriety before authorising an appeal.
Requirement of Specific Phrases in Authorisation:
The judgment highlights the necessity of including specific phrases, such as "legal or proper," in the authorisation for filing appeals. Referring to a Supreme Court order, the Tribunal emphasizes that the absence of these phrases renders the authorisation deficient and the appeal not maintainable. It is reiterated that where the law prescribes mandatory phrases to be included in the authorisation, their absence cannot be compensated by inferring intent from the language used.
Importance of Authorisation in Appeals Process:
The judgment underscores the significance of the authorisation process in the appeals system. It explains the evolution of the Commissioner (Appeals)'s role and autonomy in reviewing orders passed by subordinate officers. The amendment to the law aimed to provide greater protection to taxpayers by removing the power of review from executive Commissioners and entrusting the Commissioner (Appeals) with the responsibility of determining the correctness, legality, and propriety of orders.
Judicial Interpretation of Phrases "Legal and Proper" in Authorisation:
The Tribunal refers to judicial interpretations regarding the phrases "legal and proper" in the authorisation. It is established that the absence of these phrases renders the order a nullity, as affirmed by the Supreme Court. The judgment emphasizes that the inclusion of specific phrases is a prerequisite for the validity of the authorisation, and their omission cannot be overlooked or assumed.
Impact of Missing Mandatory Phrases on Appeal Validity:
The judgment discusses the consequences of missing mandatory phrases in the authorisation on the appeal's validity. It is clarified that where such phrases are absent, the appeal cannot survive, as seen in numerous Tribunal decisions. The Tribunal stresses the importance of judicial discipline in upholding consistent views across Benches and the possibility of referring matters to a Larger Bench in case of disagreement. Ultimately, the appeals in question are dismissed due to the deficiencies in the authorisation.
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2000 (11) TMI 1090
Issues:
- Appellants cleared parts of Cranes and machines on payment of duty at the rate leviable on complete machines.
- Demand of differential duty and penalty imposed on the appellants.
- Contention regarding clearing complete Cranes and Gangsaw machines.
- Interpretation of Circular No. 252/86/96-CX regarding removal procedure for consignments.
Analysis:
1. The appellants filed an appeal against the order-in-appeal dated 7-10-99 passed by the Commissioner (Appeals) regarding the clearance of parts of Cranes and Gangsaw machines at the duty rate applicable to complete machines. The demand for differential duty and imposition of a penalty of Rs. 5,000 were contested by the appellants.
2. The appellants argued that they were manufacturing complete Cranes and Gangsaw machines, which are bulky and transported in disassembled conditions for re-assembly at the site. They received orders for complete machines during the relevant period and cleared them under a consolidated invoice with different Challans. The contention was that duty should be levied on complete machines as they were clearing them as such.
3. The Revenue claimed that the appellants cleared parts of Cranes and Gangsaw machines separately, making them liable for duty as parts. Reference was made to Circular No. 252/86/96-CX, which outlines the procedure for the removal of consignments where complete machines are cleared in parts. It was argued that the appellants did not follow this procedure, justifying the demand for duty on machine parts.
4. The Tribunal analyzed the invoices and the show cause notice, noting that the goods were described as complete Cranes or Gangsaw machines. The Revenue had previously admitted that the appellants were clearing complete machines but in parts. Citing precedents, the Tribunal held that when complete machines are cleared in parts for transportation convenience and assembled at the site, they should be assessed as complete machines. Therefore, the demand for duty on parts was set aside.
5. Despite the favorable decision on the duty demand, the Tribunal upheld the penalty of Rs. 5,000 as the appellants did not follow the procedure outlined in Circular No. 252/86/96-CX. The appeal was disposed of with the duty demand being set aside, but the penalty being upheld due to non-compliance with the circular.
This detailed analysis of the judgment addresses the issues raised by the appellants regarding the duty demand and penalty imposition, the interpretation of the Circular for consignment removal, and the Tribunal's decision based on legal precedents and arguments presented by both parties.
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2000 (11) TMI 1086
Delay in filing appeal - Held that:- Appeal allowed. A perusal of the application shows that the reason for the delay in filing the appeal before the Tribunal was that after the Deputy Commissioner (Appeals), Lucknow Zone, disposed of the appeal, the order was despatched to a different authority and at a different place, the State Representative at Agra who did not forward the same to the correct place and that resulted in the delay which was beyond the control of the appellants. On this ground the Tribunal has rightly exercised its discretion to condone the delay. Before us the order of the Tribunal is not shown to be perverse or suffering from the vice of violation of principles of natural justice.
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2000 (11) TMI 1084
Benefit of deferment of tax - Held that:- Appeal dismissed. It is quite apparent from a reading of the "Rajasthan Sales Tax New Deferment Scheme for Industries, 1989" that even though the appellant may have been a new very prestigious industry it is still not entitled to claim deferment of tax to the extent of 90 per cent, inasmuch as the cement industry is included in annexure B which contains a list of those industries which are ineligible to get the benefit of deferment of tax.
There is a specific benefit granted to a large scale cement unit, whether it be new very prestigious unit or otherwise, and that it may have its deferment only to the extent of 50 per cent and no more.
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2000 (11) TMI 1079
Issues:
Challenge to provisos under section 20(1) and section 21(2) of the Tripura Sales Tax Act, 1976.
Analysis:
The High Court struck down the provisos to section 20(1) and section 21(2) of the Tripura Sales Tax Act, 1976, which required payment of tax assessed or penalty levied for entertaining an appeal/revision. The provisos stated that no appeal would be entertained unless the tax or penalty is paid, with discretion for the authority to permit payment of not less than 50% of the tax or penalty. The relevant sections and provisos were quoted in the judgment.
The Supreme Court referred to previous cases like Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad and Shyam Kishore v. Municipal Corporation of Delhi, where similar provisions were upheld. The Court held that the impugned provisions in this case were valid. It was emphasized that even though the Act's provisions should generally be followed, the writ jurisdiction could intervene in cases of gross injustice or high-handed illegal orders by the assessing authority to ensure substantive justice.
In conclusion, the Supreme Court allowed the appeals, setting aside the High Court's judgment without imposing any costs. The judgment clarified the validity of the challenged provisions under the Tripura Sales Tax Act, 1976, while also highlighting the exceptional circumstances where the writ jurisdiction could be invoked for ensuring justice despite statutory remedies being available.
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2000 (11) TMI 1065
Transfer of property - Held that:- Appeal dismissed. In the present case, when a customer goes to a restaurant and orders food and in respect of which he pays the price indicated therein and the said food items are supplied to him, it would clearly be a case of transfer of property in goods to the customer. Whether the customer eats the entire or part of the dish or chooses not to eat at all would make no difference if he pays for the dishes supplied. The moment the dish is supplied and sale price paid, it would amount to a sale.
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2000 (11) TMI 1056
The Appellate Tribunal CEGAT, New Delhi rejected the Revenue's application for rectification of mistake in a case involving the doctrine of unjust enrichment and captive consumption. The tribunal held that a subsequent decision of a higher court cannot be the basis for rectification of mistake.
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2000 (11) TMI 1055
Issues:
1. Classification of imported goods under sub-heading 8547.20 or Heading 39.
2. Applicability of a cited judgment to the facts of the case.
3. Interpretation of the judgment regarding the capacity of goods to shrink on application of heat.
4. Decision on the appeal and remittance of proceedings back to the Commissioner.
Classification of Imported Goods:
The case involved importers filing two bills of entry claiming goods as "material for Heat Shrinkable Sleeves." The Inner Layer was described by dimensions, while the Outer Layer was described by weight. The Assistant Commissioner classified the goods under Heading 39, not accepting the ratio of a Bombay High Court judgment. The Order-in-Appeal relied heavily on this judgment, leading to the Revenue filing the present appeal.
Applicability of Cited Judgment:
The main issue was the applicability of the cited judgment to the case. The respondents argued that the benefit extended not only to sheets for sleeves but also to base products like granules. The appellant contended that the judgment did not apply if goods were shown to be granules in the test report. The Tribunal noted a serious doubt about the judgment's applicability to granules, emphasizing the essential characteristic of shrinking on heat application.
Interpretation of Judgment:
The Tribunal examined the literature provided by the importers, detailing the production process of Heat Shrink Sleeves from granules and film. It was crucial to determine if the granules possessed the same heat-shrinking capacity as the resulting sheets. The judgment's application to granules hinged on whether they shared the shrinking ability of the sheets, necessitating consultation with chemical authorities for clarification.
Decision on Appeal:
After careful consideration, the Tribunal allowed the appeal and remitted the proceedings back to the Commissioner. The Commissioner was instructed to consider the observations made by the Tribunal and dispose of the matter in de novo proceedings. Additionally, the stay application was also disposed of in the judgment.
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