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2004 (1) TMI 716
Issues Involved:
1. Jurisdiction of the National Commission.
2. Deficiency in service by the Opposite Parties.
3. Limitation period for filing the complaint.
4. Liability of Opposite Party No. 2 as the agent of Opposite Party No. 1.
5. Payment received by the complainant from the notified party.
Issue-wise Detailed Analysis:
A. Jurisdiction of the National Commission:
The primary contention was whether the National Commission had jurisdiction to entertain the complaint. According to Rules 29 and 33 of the Second Schedule to the Carriage by Air Act, 1972, an action for damages must be brought in the territory of one of the High Contracting Parties, either where the carrier is ordinarily resident, has its principal place of business, has an establishment by which the contract has been made, or at the place of destination. The contract for carriage was made in Bombay, and the claim exceeded Rs. 20 lakhs, which necessitated filing the complaint before the National Commission. The Commission concluded that the complaint was properly filed before it, as the Consumer Protection Act, 1986, required complaints exceeding Rs. 20 lakhs to be filed before the National Commission.
B. Deficiency in Service by the Opposite Parties:
The complainant argued that the cargo airline (Opposite Party No. 1) failed to follow the instructions in the air waybill and delivered the goods to the notifying party without obtaining bank release from the consignee bank. The air waybill indicated that the consignee was "BB SAE MADRID, SPAIN" with a specific L.C. number, implying a letter of credit by a bank. Despite this, the goods were delivered to the notifying party. The Commission found that the carrier had a duty to verify the consignee's address and deliver the goods through the bank. The failure to do so constituted a deficiency in service. The Commission also noted that the carrier did not attempt to contact the shipper for the bank's address if it was incomplete, which further demonstrated negligence.
C. Limitation Period for Filing the Complaint:
Opposite Party No. 1 contended that the complaint was barred by limitation as it was not filed within 120 days as per Clause 12 of the air waybill. However, the Commission held that Clause 12 only required the person entitled to delivery to make a complaint to the carrier within 120 days in case of non-delivery. The right to damages would be extinguished if an action was not brought within two years, as per Rule 30 of the Second Schedule. The complaint was filed within this period, making it timely.
D. Liability of Opposite Party No. 2 as the Agent of Opposite Party No. 1:
Opposite Party No. 1 argued that any fault in the preparation of the air waybill by Opposite Party No. 2, who was the agent of the shipper, absolved them of liability. The Commission rejected this argument, stating that Opposite Party No. 2 was also the agent of Opposite Party No. 1. Any mistake by the agent of Opposite Party No. 1 could not absolve it of liability. The Commission found that there was a total deficiency in service by Opposite Party No. 1 in handing over goods to the truckers without air waybills.
E. Payment Received by the Complainant from the Notified Party:
Lastly, Opposite Party No. 1 contended that the complainant had received payment from the notified party. The Commission found no evidence on record to establish that the complainant had received the said amount from the notified party.
Conclusion:
The complaint was allowed, and Opposite Party No. 1 was directed to pay a sum equivalent to US $71,615.75 with 5% interest from the date of the complaint till realization, along with costs of Rs. 1 lakh.
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2004 (1) TMI 715
Determination of compensation in a land acquisition case based on market value and relevant factors - HELD THAT:- It is settled law that one of the methods on which market value can be ascertained, is on basis of comparable sale deeds. As noted from the facts, the sale deed was for ₹ 15.40 per sq. yard. Section 92 of the Evidence Act precludes a party from leading evidence contrary to the terms of a written document. It was, therefore, not open to the respondent to urge that, even though his sale deed showed a price ₹ 15.40 per sq. yard the real market value was ₹ 120 per sq. yard. To permit a party to so urge would be to give a premium to dishonesty. Parties who undervalue their documents, for purpose of payment of stamp duty, cannot be allowed to then claim that their own documents does not reflect the correct market value. Therefore as per sale instances of the comparable lands the market value, on dates of sales, were in the region of ₹ 15.37 to ₹ 15.40 per sq. yard.
However there is evidence of high potentiality. The increase of 15% given by the High Court cannot therefore be said to be unreasonable. Of course, the 15% increase has to be on ₹ 15.40 which is the figure shown in the sale deed. It cannot be on ₹ 120 as wrongly taken by the High Court. The High Court also erred in considering only three years increase whereas in fact there is four years difference between the respondent's sale deed and the acquisition proceedings. Thus taking an increase of 60% over the price of ₹ 15.40 per sq. yard the value comes to ₹ 24.64 per sq. yard.
We accordingly set aside the order of the Reference Court and the High Court and fix value at the rate of ₹ 24.64 per sq. yard. The respondent will also to be entitled to solatium and other statutory benefits under the Land Acquisition Act, 1894. The Appeal stands disposed of accordingly. There will be no order as to cost.
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2004 (1) TMI 714
Issues Involved:
1. Liability of the collecting banker under Section 131 of the Negotiable Instruments Act.
2. Standard of care and negligence in opening a bank account.
3. Good faith and absence of negligence in collecting a cheque.
Issue-Wise Detailed Analysis:
1. Liability of the Collecting Banker under Section 131 of the Negotiable Instruments Act:
The core issue is whether the 1st Respondent bank can claim protection under Section 131 of the Negotiable Instruments Act. Section 131 states that a banker who has received payment for a customer of a cheque crossed generally or specially to himself shall not incur liability to the true owner of the cheque if the title to the cheque proves defective, provided the banker has acted in good faith and without negligence. The judgment emphasizes that the onus of proving "good faith" and "absence of negligence" lies on the banker.
2. Standard of Care and Negligence in Opening a Bank Account:
The judgment references several precedents, including Indian Overseas Bank vs. Bank of Madura Ltd., Syndicate Bank vs. United Commercial Bank, and Brahma vs. Chartered Bank, to establish the standard of care required when opening an account. The bank must make proper preliminary inquiries, obtain references regarding the identity, integrity, and reliability of the proposed customer, and follow its own rules and instructions. The judgment cites the necessity for banks to inquire from responsible parties about the new customer's integrity and respectability, as outlined in banking law texts by H. P. Sheldon and M. L. Tannan.
3. Good Faith and Absence of Negligence in Collecting a Cheque:
The judgment outlines the principles governing the liability of a collecting banker, emphasizing that negligence is a question of fact. It is noted that negligence in opening an account can be indicative of negligence in collecting a cheque, especially if the account opening and cheque deposit are part of an integrated scheme. The judgment elaborates on the standard of care expected from a banker, which does not require minute examination of the cheque but does necessitate disregarding suspicious circumstances. The court analyzed whether the 1st Respondent bank followed these principles and found that it did not.
Application of the Law to the Facts:
The court observed that the transaction involving the opening of the account, depositing the exact amount for a cheque book, depositing the cheque of Rs. 1,00,000/-, and the subsequent withdrawal of Rs. 50,000/- were all closely linked. The 1st Respondent bank failed to make necessary inquiries about the customer, K. Narayhanan, who provided a vague address and minimal initial deposit. The bank's Branch Manager admitted to several lapses, including not verifying the introducer's details and not investigating the nature of Narayhanan's business. The court concluded that the bank did not act in good faith and was negligent, thus failing to discharge its burden under Section 131.
Conclusion:
The Supreme Court set aside the High Court's judgment and restored the trial court's decree, ruling in favor of the Appellant. The 1st Respondent bank was found negligent and unable to claim protection under Section 131 of the Negotiable Instruments Act. The appeal was disposed of with no order as to costs.
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2004 (1) TMI 713
Issues:
Petition filed under Section 113 of the Companies Act, 1936 seeking directions for delivery of share certificates and launching prosecution against the Company.
Detailed Analysis:
Issue 1: Delivery of Share Certificates
The petitioner invested in the Company and was allotted shares in 1996. Despite repeated demands, the Company failed to deliver the share certificates. The petitioner's Director did not acknowledge receiving the shares or pledge them to a third party as claimed by the Company. The Company did not provide proof of delivery, and the burden of proving delivery lies with the Company under Section 113. The absence of acknowledgment raises doubts about the delivery. The Company's failure to produce evidence of delivery led to the conclusion that the Company defaulted in delivering the share certificates.
Issue 2: Company's Defense
The Company contended that the shares were delivered to the petitioner and pledged to a third party for a loan. The Company relied on an affidavit and a letter as evidence of the pledge. The Company argued that the petitioner lost title to the shares upon pledging them, making the petition not maintainable. The Company suggested that disputes regarding the pledge required a civil suit rather than CLB intervention. However, the contradictions in the evidence presented by the Company raised doubts about the validity of the pledge and the delivery of shares.
Judgment
After considering the arguments and evidence, the CLB found that the Company failed to deliver the share certificates to the petitioner. The Company's claims lacked substantial evidence, and the contradictory statements regarding the pledge cast doubt on the Company's defense. The burden of proof lay with the Company, and its failure to provide conclusive evidence led to the decision that the Company defaulted in delivering the share certificates. The CLB directed the Company to deliver the share certificates within 21 days, resolving the petition in favor of the petitioner without costs.
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2004 (1) TMI 712
Issues:
1. Alleged illegal issuance of shares by respondent company without notice to majority shareholder.
2. Interpretation of Article 9 of Articles of Association regarding the requirement of a general meeting before issuing further shares.
3. Validity of the further issuance of shares to specific respondents without notice to the petitioner.
Analysis:
Issue 1:
The petitioners filed a petition under section 397 of the Companies Act, 1956 against the respondent company, alleging that the further issuance of 28400 shares on 16.01.2003 to respondents 2, 3, 4, and 5 without notifying the majority shareholder (petitioner No. 1) was illegal and against public interest. The petitioners contended that this action reduced their shareholding from 99.95% to 23.85%, breaching their rights as majority shareholders. The respondents argued that the shares were issued by the Board of Directors against valid applications and that there was no legal obligation to notify the petitioners. However, the petitioner emphasized that the further issuance of shares should have been regulated under Article 9 of the Articles of Association, which required a general meeting of shareholders before such an issuance.
Issue 2:
The interpretation of Article 9 of the Articles of Association was crucial in determining the legality of the further issuance of shares. The respondents argued that calling a general meeting of shareholders was only necessary when selling shares at a discount under specific sections of the Companies Act, 1956. On the other hand, the petitioners contended that a general meeting was mandatory before issuing further shares, emphasizing that the respondents failed to comply with this requirement. The Board found that the plain reading of Article 9 mandated holding a general meeting before allotting additional shares, rejecting the respondents' interpretation and holding them accountable for not following the correct procedure.
Issue 3:
The Board concluded that the further issuance of 28400 shares on 16.01.2003 without notifying the petitioner and without holding a general meeting of shareholders was illegal and void ab initio under Article 9 of the Articles of Association. The Board set aside this issuance, deeming it wrongful and void. The decision highlighted the importance of following proper procedures, especially when it comes to significant corporate actions like issuing shares. The Board directed that other prayers made in the petition could be addressed in a general meeting of the shareholders of the respondent company, emphasizing the importance of shareholder participation and adherence to corporate governance principles.
In conclusion, the judgment addressed the alleged illegal issuance of shares, the interpretation of Article 9 of the Articles of Association, and the validity of the further issuance of shares without proper notification and a general meeting. The decision underscored the significance of corporate governance, shareholder rights, and adherence to the company's constitutional documents in conducting business transactions.
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2004 (1) TMI 711
Issues involved:
Jurisdiction of Civil Court to try the suit, Specific enforcement of a contract of service, Prayers in the suit seeking reinstatement and injunction.
Jurisdiction of Civil Court to try the suit:
The respondent filed a suit against the appellant seeking declaration and permanent injunction. The trial court held that it had no jurisdiction to entertain the suit, and this decision was upheld by the appellate court. However, the High Court allowed the appeal, stating that the suit was maintainable before the Civil Court. The defendant then appealed to the Supreme Court. The plaintiff was appointed by the defendant Company and was transferred, leading to a dispute. The legal question was whether a contract of service can be specifically enforced.
Specific enforcement of a contract of service:
The appellant argued that the prayers in the suit sought reinstatement of the plaintiff, amounting to specific performance of a contract of personal service, which is barred under the Specific Relief Act. The general rule is that a court will not enforce a contract of personal service, except in specific cases like public servants under Article 311 or industrial disputes. In this case, the relationship was based on a private contract, and the plaintiff challenged the transfer order. The defendant contended that the suit essentially sought enforcement of a contract for personal service, which the law does not permit.
Prayers in the suit seeking reinstatement and injunction:
The plaintiff sought a declaration that the transfer order was illegal, to continue in service, and an injunction against an inquiry by the defendant. The court analyzed the facts and found that granting these reliefs would amount to enforcing a contract of personal service, which is not permissible under the law. The court held that the suit should be dismissed at the threshold since the reliefs prayed for could not be granted due to the nature of the employment contract. The Supreme Court allowed the appeal, setting aside the High Court's judgment and restoring the decisions of the lower courts to reject the plaint.
This case involved a dispute over jurisdiction of the Civil Court to try a suit seeking reinstatement and injunction in a private employment contract. The Supreme Court held that the suit was not maintainable as it essentially sought to enforce a contract of personal service, which is generally not allowed under the law. The court emphasized that unless there is a specific term in the contract, a transfer order is a normal incidence of service, and the management has the right to hold an inquiry if an employee does not comply. Therefore, the reliefs sought by the plaintiff could not be granted, and the suit was rightly rejected by the trial court and affirmed by the lower appellate court.
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2004 (1) TMI 710
... ...
... ... ..... n and the connected papers. We do not find any merit in the same. The review petition is dismissed.
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2004 (1) TMI 709
Validity of the cut off date, fixed by the Bank for deciding the eligibility of its employees for promotion to the posts of Field Supervisors and Officers - Principle of seniority-cum-merit - backlog reserved for Scheduled Tribe Category - Procedure of dereservation - All India Backward Class Bank Employees Welfare Association ("Association") - Promotees are employees of Marathwada Gramin Bank ("Bank") - HELD THAT:- It is not the contention of the Association that procedures for effecting promotion had not been followed. The promotees were, admittedly eligible for promotion and they had, thus, legally been promoted. The only question which was raised related to compliance on the part of the Bank as regard the procedure of dereservation. The High Court, therefore, was required to consider the said question only in the event, the factual foundation therefor had been laid down in the writ petition. The Association did not file even any supplementary affidavit or an application for amendment of the writ petition praying for a relief as regard quashing of the order of dereservation or bringing the appellants herein as parties thereto in the writ petition. In absence of any challenge to the order of dereservation and in absence of the Promotees having been impleaded as parties, the impugned directions could not have been issued by the High Court, more so when the appellants herein had not been given an opportunity of being heard.
Once dereservation is made, the vacancies became available for being filled up by general category candidates and, thus, therefor the respondent Bank was not required to reexamine the question of availability of the Scheduled Tribe candidates for appointment on dereserved vacancies. The view taken by the High Court that even after dereservation was made, the Bank was required to reexamine the availability of ST candidates on the dereserved vacancies, was, therefore, not correct particularly when the High Court itself found that the cut off date being 31.8.1989 was correctly fixed by the Bank.
In the instant case, the cut off date so fixed having regard to the directions contained by the National Industrial Tribunal which had been given a retrospective effect cannot be said to be arbitrary, irrational, whimsical or capricious. It is not in dispute that a cut-off date can be provided in terms of the provisions of the statute or executive order.
An upshot of the discussions is that the High Court could not have issued the impugned directions in absence of the promotees having not been impleaded as parties. Furthermore, the order of dereservation was not under challenge.
In these appeals, this Court is not concerned with the effect of the orders passed by the High court in the writ petitions filed by 13 Scheduled Tribe candidates. We must, however, notice that it has been stated at the Bar that the said writ petitions had been disposed of only relying on or on the basis of the impugned judgment. What would be the effect of the orders passed in the said writ petitions is not a matter which we have been called upon to determine. Suffice it, however, to point out that in relation to the said orders also the requisite consequences of setting aside the judgment of the High Court must ensue and it would be open to the High Court to pass appropriate orders in accordance with law in appropriate proceedings.
As noticed hereinbefore, the Bank had categorically stated that having regard to the changed situation, they are not in a position to make any further promotions to the post of 'officers'. This Court, in the aforementioned situation, cannot, thus, issue any directions upon the Bank to change its policy decision and accommodate the Scheduled Tribe candidates in violation of its own policy decision. It is for the Bank, the Sponsor Bank as also NABARD to take an appropriate decision in this matter.
Thus, the impugned judgments of the High Court cannot be sustained which are set aside accordingly. Civil Appeal Nos. 4593-4594 and 4595-4596 of 2002 are allowed; whereas Civil Appeal No.4597 of 2002 is dismissed. No costs.
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2004 (1) TMI 708
Issues involved:
The issues involved in this case are infringement of copyright, passing off, grant of interim injunction, delay and laches in filing the suit, and dishonest adoption of a trademark.
Infringement of Copyright and Passing Off:
The Appellants filed a suit for passing off and infringement of copyright. The learned Single Judge granted an interim injunction preventing the Respondents from manufacturing, marketing, or selling insecticides, pesticides, or insect repellents under the name LAXMAN REKHA, as well as using a packing design similar to that of the Appellants' copyright. The Division Bench vacated the injunction citing delay and laches in filing the suit. However, the Supreme Court held that delay alone is not sufficient to defeat the grant of injunction in cases of infringement. The Court noted that the Respondents had worked with the Appellants and had adopted a mark similar to the Appellants' with dishonest intentions to pass off their goods.
Grant of Interim Injunction:
The law states that in cases of trademark or copyright infringement, an injunction is usually granted. The Court emphasized that if it appears prima facie that the adoption of the mark was dishonest, an injunction becomes necessary. In this case, the Appellants had been using the mark LAXMAN REKHA since 1991, and the Respondents' adoption of a similar mark with a nearly identical packing design indicated dishonest intentions. The Supreme Court held that the interim injunction should have been granted and continued, disagreeing with the Division Bench's decision to vacate it based on delay and laches.
Conclusion:
The Supreme Court set aside the impugned order of the Division Bench and restored the trial court's decision to grant the interim injunction. The Court clarified that all observations made during the proceedings were prima facie and should not influence the trial of the suit. The Appeal was disposed of accordingly with no order as to costs.
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2004 (1) TMI 707
Issues:
- Compounding of the offence under Sec.138 of The Negotiable Instruments Act
- Interpretation of Sec.147 of The N.I. Act
- Legal implications of settlement between parties
- Effect of compounding on conviction and sentence
Analysis:
1. The judgment pertains to a case where the petitioner was tried and convicted under Sec.138 of The Negotiable Instruments Act. The petitioner challenged the judgment and order of sentence in the higher courts, leading to the present Criminal Revision Application before the High Court.
2. The Court noted that the parties had settled the matter out of court, with the complainant confirming the acceptance of a certain amount and compounding the offence. The petitioner sought acquittal based on this settlement.
3. The Court considered the amendment in the N.I. Act which made the offence compoundable under Sec.147. The prosecution raised questions regarding the timing of the settlement in relation to the amendment and the relevance of the date of the offence or first conviction.
4. The Court analyzed the language of Sec.147, emphasizing that every offence under the Act shall be compoundable, allowing parties to settle the criminal wrong and request the Court for acquittal. The presence of the complainant and his withdrawal from prosecution due to the compromise led to the annulment of the conviction and sentence.
5. The Court compared Sec.147 of The N.I. Act with Sec.320 of CrPC, highlighting the straightforward compoundable nature of the offence under the former. The Court concluded that the effect of compounding is akin to acquittal, and the date of the offence or first conviction is irrelevant under Sec.147.
6. Ultimately, the Court accepted the parties' say and quashed the conviction and sentence imposed on the petitioner, acquitting them of the offence under Sec.138 of The N.I. Act. The Rule was made absolute accordingly, permitting direct service.
This detailed analysis showcases the Court's interpretation of Sec.147, the legal implications of settlement between parties, and the consequential effect of compounding on the conviction and sentence in cases under the Negotiable Instruments Act.
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2004 (1) TMI 706
Issues Involved:
1. Maintainability of the petition under Section 235(2) of the Companies Act, 1956.
2. Maintainability of the petition under Section 237(b) of the Companies Act, 1956.
3. Allegations of oppression and mismanagement in the affairs of the company.
4. Jurisdiction of the Company Law Board (CLB) to entertain the petition.
5. Application of the principles of res judicata.
Issue-wise Detailed Analysis:
1. Maintainability of the petition under Section 235(2) of the Companies Act, 1956:
The petitioner, HSBC Pvt. Equity India Fund Ltd., filed a petition under Section 235(2) read with Section 237(b) of the Companies Act, 1956, alleging oppression and mismanagement. The respondents challenged the maintainability, arguing that the petitioner did not meet the requirement of holding not less than one-tenth of the total voting power or being one of 200 members, as stipulated under Section 235(2). The total voting power of the company was Rs. 33,12,23,667, and the petitioner held only 8.63% of the total voting power, which was insufficient. The petitioner's argument that the calculation should be based on the number of shares rather than the paid-up capital was rejected.
2. Maintainability of the petition under Section 237(b) of the Companies Act, 1956:
The petitioner claimed that the petition was also maintainable under Section 237(b), which allows the CLB to investigate the affairs of a company if there are circumstances suggesting fraudulent or oppressive conduct. The respondents argued that only the Central Government could initiate such investigations. However, the CLB held that Section 237(b) confers suo-moto powers on the CLB to take information from any source, including members and creditors. Thus, the petition was maintainable under Section 237(b).
3. Allegations of oppression and mismanagement in the affairs of the company:
The petitioners alleged that the affairs of the respondent company were being conducted in a manner oppressive to its members and prayed for an investigation by an inspector. The respondents contended that the petition was barred by res judicata, as a similar petition had been dismissed earlier. The CLB noted that the previous petition was dismissed due to lack of qualification under Section 399, not on the merits of the case.
4. Jurisdiction of the Company Law Board (CLB) to entertain the petition:
The respondents argued that the CLB lacked jurisdiction to entertain the petition under Section 237(b) as it was meant to be exercised by the Central Government. The CLB rejected this argument, stating that it has the power to initiate investigations under Section 237(b) based on information from interested parties. The CLB can take assistance from any interested party to form an opinion on whether an investigation is necessary.
5. Application of the principles of res judicata:
The respondents argued that the petition was barred by res judicata as a previous petition on similar grounds was dismissed. The CLB clarified that the previous dismissal was based on technical grounds (lack of qualification under Section 399) and not on the merits. Therefore, res judicata did not apply.
Conclusion:
The CLB dismissed the petition under Section 235(2) for not meeting the requisite conditions but allowed it under Section 237(b) as the petitioner provided information as an interested party. The respondents were directed to file their reply to the petition within four weeks, and the case was scheduled for further hearing. The application of the respondent was partly allowed, and the petition was to be treated under Section 237(b). The CLB emphasized its prerogative to decide on the necessity of an investigation based on the allegations.
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2004 (1) TMI 705
Issues Involved:
1. Applicability of Order 38 Rule 5 CPC to Section 9(ii)(d) of the Arbitration and Conciliation Act, 1996.
2. Whether the court can order interim measures for security of the amount in dispute without satisfying conditions of attachment before judgment under Order 38 Rule 5 CPC.
3. Interpretation and scope of Section 9 of the Arbitration and Conciliation Act, 1996.
4. Evaluation of the facts and merits of the case for granting interim protection.
Issue-wise Detailed Analysis:
1. Applicability of Order 38 Rule 5 CPC to Section 9(ii)(d) of the Arbitration and Conciliation Act, 1996:
The court examined whether the power exercisable under Section 9(ii)(d) of the Arbitration and Conciliation Act, 1996 is restricted by the conditions of attachment before judgment as prescribed under Order 38 Rule 5 CPC. The court noted that the Act of 1996 is materially different from the Arbitration Act, 1940, which explicitly applied the provisions of the CPC to arbitration proceedings. The court emphasized that Section 9 of the Act of 1996 does not specifically make the provisions of the CPC applicable, indicating a legislative intent to create a self-contained code for arbitration.
2. Whether the court can order interim measures for security of the amount in dispute without satisfying conditions of attachment before judgment under Order 38 Rule 5 CPC:
The court held that the power under Section 9(ii)(d) of the Act of 1996 is not restricted by the stringent provisions of Order 38 Rule 5 CPC. It was noted that the court must be satisfied that an interim measure is required to protect the interest of the party seeking such an order. The court emphasized that the power to secure the amount in dispute under arbitration is not hedged by the predicates set out in Order 38, and the court must exercise its discretion based on the material before it to ensure justice.
3. Interpretation and scope of Section 9 of the Arbitration and Conciliation Act, 1996:
Section 9 of the Act of 1996 empowers the court to order interim measures before or during arbitral proceedings or any time after the making of the arbitral award but before it is enforced. The court held that Section 9 is a substantive provision that enables a party to apply for interim protection if the other party's actions are inequitable or in breach of natural justice. The court further clarified that the provisions of Order 38 Rule 5 CPC cannot be read into Section 9 as it is, and the exercise of power under Section 9 must be guided by equitable considerations and the interest of justice.
4. Evaluation of the facts and merits of the case for granting interim protection:
The court examined the specific facts of the case, where the appellant sought an order directing the respondent to deposit a sum of US$ 20,63,747 to secure the claim in the arbitration proceedings. The appellant alleged breaches of fiduciary duties by the respondent under an agency agreement. However, the court found that the factual position regarding the recovery of the amount by the respondent was seriously disputed. The court noted that the matter was sub judice before the arbitral tribunal, and it would not be appropriate to record any specific finding on the disputed amount based on the documents produced by the appellant. The court concluded that the appellant failed to establish a clear case for interim protection, and no material indicated that the respondent intended to defeat the claim of the appellant. Consequently, the court dismissed the appeal, holding that no case for interim protection by way of an order under Section 9(ii)(d) had been made out.
Conclusion:
The court dismissed the appeal, emphasizing that the power under Section 9(ii)(d) of the Arbitration and Conciliation Act, 1996 is not restricted by the conditions of attachment before judgment under Order 38 Rule 5 CPC. The court must exercise its discretion based on equitable considerations and the interest of justice, and each case must be evaluated on its own facts and circumstances. In this case, the appellant failed to make out a case for interim protection, and the appeal was dismissed with no order as to costs.
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2004 (1) TMI 704
Constitutional validity of the Bharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Act, 1996 being Assam Act 1 of 1997 published in the Assam Gazette Extraordinary dated 6th January, 1997 - delay in the completion of the project - HELD THAT:- The State Act has been enacted to take over the Bharat Hydro Power Corporation in public interest as it could not complete the project within time so that the State could efficiently supervise manage and execute the work expeditiously to subserve the common good, in the context of the acute power shortage in the State. The State after taking over the project had the power to hand it over to the Board for completing the project. Provision has been made to pay adequate compensation which is to be determined by a Commission constituted under the Act for payment of adequate compensation. Contention raised on behalf of the appellants is that Central Act makes specific provisions for compulsory purchase of undertaking and a detailed procedure has been prescribed and the State Act has created a parallel procedure for purchase of the undertaking thereby impinging on the Central Act and is therefore repugnant to the Central Act. We do not find any substance in this submission.
A combined reading of Sections 2(4A) and 2(6) makes it clear that even if the appellant No. 1 is taken to be a generating company (which is not necessary to be determined in this case) it would not be a 'licensee' because the generating company has been specifically excluded from being a licensee notwithstanding the provisions of Sections 26 or 26A of the 1948 Act. As pointed out earlier only Sections 12 to 19 of the Act of 1910 have been made applicable to a generating company. Sections 3 to 11 of Act of 1910 do not apply to a generating company.
Section 37 of Act of 1948 provides for purchase of generating stations or undertakings or main transmission lines by the Board. This Section would also not apply to the present case. The legislature in its wisdom made only certain provisions of Act of 1910 applicable to a generating company in Section 26A. Contention that the impugned Act is in violation of provisions of Act of 1910 or the Act of 1948 has no basis to stand on.
The impugned Act and the Central Acts in the instant case operate in two different fields without encroaching upon each other's field in as much as the true nature and character of the impugned State Act is to acquire the undertaking and pay compensation as provided in the Act whereas both the Central Acts (Acts of 1910 and 1948) have made general provisions with regard to supply and use of electrical energy. The provisions regarding purchase of undertaking in the Act of 1910 would not be applicable as the appellants are not licensees within the meaning of the Act of 1910. There is not even a semblance of conflict what to talk of direct conflict between the impugned State Act and the Central Acts to bring about the situation where one cannot be obeyed without disobeying the others. Both the Acts can operate simultaneously as they do not occupy the same field. As the enactments operate in two different fields without encroaching upon each other's field there is no repugnancy.
Since there is no repugnancy the question of the State Act being kept for the consideration of the President or receiving his assent did not arise.
Thus, we do not find any merit in these appeals and the same are dismissed. Parties shall bear their own costs in these appeals.
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2004 (1) TMI 703
Motor Vehicle Claims Tribunal awards - Interpretation of Section 149(2)(a)(ii) vis-a-vis the proviso appended to Sub-sections (4) and (5) of the Motor Vehicles Act, 1988 - National Insurance Company Limited (Insurer) -Defences available to the insurer under Section 149(2)(a)(ii) - Validity of driving licences and their impact on insurer liability - HELD THAT:- The liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or driver thereof has been holding the field for a long time.
We may, however, hasten to add that the Tribunal and the court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under Sub-clause (ii) of Clause (a) of Sub-section (2) of Section 149 of the Act, the insurance company shall be entitled to realise the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act. However, in the event, having regard to the limited scope of inquiry in the proceedings before the Tribunal it had not been able to do so, the insurance company may initiate a separate action therefore against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the insurer at a subsequent stage or for one reason or the other, the insurer was not given opportunity to defend at all. Such a course of action may also be resorted when a fraud or collusion between the victim and the owner of the vehicle is detected or comes to the knowledge of the insurer at a later stage.
Although, as noticed hereinbefore, there are certain special leave petitions wherein the persons having the vehicles at the time when the accidents took place did not hold any licence at all, in the facts and circumstances of the case, we do not intend to set aside the said awards. Such awards may also be satisfied by the petitioners herein subject to their right to recover the same from the owners of the vehicles in the manner laid down therein. But this order may not be considered as a precedent.
Although in most of the case, we have not issued notices in view of the fact that the question of law has to be determined; we have heard counsel for the parties at length at this stage
SUMMARY OF FINDINGS :The summary of our findings to the various issues as raised in these petitions are as follows:
(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.
(ii) Insurer is entitled to raise a defence in a claim petition filed u/s 163A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act.
(iii) The breach of policy condition, e.g. disqualification of driver or invalid driving licence of the driver, as contained in Sub-section (2)(a)(ii) of Section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time, (iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicle; the burden of proof where for would be on them.
(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case.
(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply 'the rule of main purpose' and the concept of 'fundamental breach' to allow defences available to the insured u/sn 149(2) of the Act.
(vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.
(viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree.
(ix) The claims tribunal constituted u/s 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and Se award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants.
(x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with Sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner u/s 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by Sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal.
(xi) The provisions contained in Sub-section (4) with proviso thereunder and Sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by, relegating them to the remedy before, regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.
Thus, these petitions are dismissed but without any order as to costs.
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2004 (1) TMI 702
Issues:
1. Whether the receipt of a certain amount by the assessee was a consideration for transfer, resulting in capital gains?
2. Whether the transaction between the two shareholder groups amounted to a transfer or a corporate division?
3. Whether the Tribunal's decision to set aside the assessment and refer the matter to CBDT was correct?
Analysis:
1. The case involved a company, a subsidiary, and two groups of shareholders. A memorandum of agreement was entered into for dividing the companies, where the assessee transferred shares to one group in exchange for a sum of money. The Income Tax Officer (ITO) treated this amount as consideration for transfer, resulting in capital gains. The assessee argued it was a composite transaction to equalize profitability, not a transfer. The CIT(A) upheld the capital gains assessment, but the Tribunal disagreed, considering the transaction a peculiar case of genuine hardship. The Tribunal set aside the assessment, directing the assessee to approach the CBDT for relief.
2. The Tribunal viewed the transaction as an arrangement to divide management between shareholder groups, with no change in total shareholdings or rights. The revenue contended that the amount received by the assessee should be considered as consideration. The Tribunal found it to be a case of partition among existing shareholders rather than a transfer to new owners. The Tribunal's decision to refer the matter to CBDT for relief was based on the unique nature of the transaction.
3. Upon examining the agreement and submissions, the High Court confirmed the Tribunal's decision. The Court held that the transaction did not result in a taxable event as the subsidiary company was wholly-owned by the holding company at the time of transfer. The Court agreed with the Tribunal's view that the transaction was more of an inter se arrangement among shareholders for dividing companies, akin to a partition. The Court endorsed the Tribunal's direction to approach the CBDT for finalizing the matter, concluding that the Tribunal's decision did not warrant interference.
In conclusion, the High Court upheld the Tribunal's decision, emphasizing the unique nature of the transaction and the need for relief under section 119(2)(b) from the CBDT.
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2004 (1) TMI 701
Issues:
1. Modvat Credit eligibility on preparatory machines used in the spinning process.
2. Interpretation of Rule 57 of Central Excise Rules regarding availment of Modvat Credit.
3. Admissibility of Modvat Credit for capital goods used in manufacturing intermediate products.
Analysis:
1. The appeal concerned the rejection of Modvat Credit eligibility on preparatory machines used in the spinning process. The appellants, engaged in manufacturing Cotton Yarn, claimed Modvat Credit for duty paid on draw frames used in the manufacturing of intermediate products. The Commissioner rejected the claim stating that preparatory products were not specified in the Annexure to Rule 57Q of Central Excise Rules.
2. The appellant's consultant referred to a Delhi Bench case and a Southern Bench case where it was held that Modvat Credit is admissible for capital goods used in manufacturing intermediate products. The Delhi Bench emphasized that Rule 57R(2) allows Modvat Credit on capital goods used for intermediate products, even if such products were exempt from duty at the time of manufacturing.
3. The Tribunal, after considering previous decisions, upheld the appellant's claim for Modvat Credit. It was noted that Rule 57R(2) does not deny credit for capital goods used in manufacturing intermediate products that are later used in dutiable final products. The Tribunal also cited a circular clarifying that Modvat Credit should not be denied on capital goods used in manufacturing exempt intermediate products that are further used in dutiable finished goods.
In conclusion, the Tribunal set aside the Commissioner's order and allowed the appeal, granting consequential relief. The decision was based on the interpretation of Rule 57R(2) and established principles regarding Modvat Credit eligibility for capital goods used in the manufacturing process.
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2004 (1) TMI 700
The Supreme Court dismissed the special leave petitions as withdrawn after the Attorney General sought leave to withdraw them. Key names include Mr. S.B. Sinha, Mr. S.H. Kapadia, Mr. Soli J. Sorabjee, Mr. Sanjeev Sen, Mr. B. Krishna Prasad, and Mr. Rajesh Kumar.
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2004 (1) TMI 699
The High Court directed the Settlement Commission to decide on the petitioner's application for the return of jewellery within three weeks. The petitioner sought the release of jewellery worth Rs. 52,10,120 or at least Rs. 39,53,726 held by the Department. The Settlement Commission had not yet made a decision despite an application being submitted. The writ petition was disposed of with these directions.
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2004 (1) TMI 698
Power of the Court to award compensation to victims - Scope and ambit of Section 357 of the Code of Criminal Procedure, 1973 ('the Code') - No fine imposed by the trial Court - grant of an opportunity to be heard - violation of principles of natural justice - commission of offences punishable u/s 452, 148, 323 read with Section 149, 302 read with Section 149 of the Indian Penal Code, 1860 ('the IPC') - alleged for causing death ('the deceased') - HELD THAT:- The power of the Court to award compensation to victims u/s 357 is not ancillary to other sentences but is in addition thereto. In Hari Singh v. Sukhbir Singh and Ors.[1986 (8) TMI 441 - SUPREME COURT] it was observed that the power u/s 357 is a measure of responding appropriately to crime as well as reconciling the victim with the offender. It is, to some extent, a re-compensatory measure to rehabilitate to an extent the beleaguered victims of the crime, a modern constructive approach to crimes, a step forward in our criminal justice system.
If it is found that the compensation should be ordered to be paid, then while arriving at the quantum to be paid, Courts are obliged to keep into account the capacity of the accused to pay the compensation besides taking into consideration also the nature of the crime in each case, the justness of the claim for compensation and the need for it in the context of the victim or members of the family of the victim and other relevant circumstances, if any, in so fixing or apportioning the amount of compensation. As noted above, the mode of application of the fine is indicated in sub-section (1) of Section 357. Sub-section (3) contains an independent and distinct power to award compensation.
Grant of an opportunity to be heard - It is urged by the learned counsel for the State that unlike a sentence of fine before imposition of which a Court is required to hear the accused while considering the question of quantum of sentence, it is but natural that the trial Court after hearing on the question of sentence does not impose a fine, but in terms of sub-section (3) of Section 357 proceed to award compensation, at that juncture or even during the course of hearing as to the quantum of sentence by sufficient indication made by the Court concerned, the accused gets opportunity to present his version as to the relevant criteria or norms to be applied in the context of the case before the Court on the quantum of compensation. The position cannot be said to be, in any way different while the Appellate or Revisional Court also does it in terms of sub- section (4), unless it is by any agreement or consent of the parties such compensation has been fixed.
No form or procedure should ever be permitted to exclude the presentation of a litigant's defence or stand. Even in the absence of a provision in procedural laws, power inheres in every Tribunal/Court of a judicial or quasi-judicial character, to adopt modalities necessary to achieve requirements of natural justice and fair play to ensure better and proper discharge of their duties. Procedure is mainly grounded on principles of natural justice irrespective of the extent of its application by express provision in that regard in given situation.
Accordingly, we set aside that part of the High Court judgment which relates to direction for payment of compensation by the accused- appellant and remit the matter back to the High Court, which shall grant an opportunity to the accused-appellant, and the adjudication shall be limited to that question particularly relating to the liability of the appellant only since others are said to have already paid the respective amount. It is made clear that we have not expressed any opinion on the merits of the issue to be decided u/s 357 (4) of the Code. The appeal is allowed to the extent indicated.
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2004 (1) TMI 697
Issues:
1. Interpretation of Section 71 of the Gujarat Co-operative Societies Act in relation to investments by a cooperative bank.
2. Conflict between the Gujarat Co-operative Societies Act and the Banking Regulation Act, 1949.
3. Validity of investments made by a cooperative bank in Mutual Funds.
4. Jurisdiction of the High Court in issuing a writ of mandamus for non-compliance with statutory rules.
Analysis:
1. The judgment revolves around the interpretation of Section 71 of the Gujarat Co-operative Societies Act, which specifies the institutions in which a cooperative bank can invest its funds. The appellant bank sought permission to invest in an institution outside the specified categories, but the State Government declined. Despite this refusal, the bank invested in Mutual Funds, leading to notices for non-compliance with Section 71.
2. The conflict between the Gujarat Co-operative Societies Act and the Banking Regulation Act, 1949 is analyzed. The appellant argued that as per the Banking Regulation Act, it is entitled to engage in banking activities based on the norms under that Act, not as per the investment norms under the Gujarat Co-operative Societies Act. The court examined the provisions of both Acts to determine any repugnancy or inconsistency.
3. The court emphasized that Section 71 of the Gujarat Co-operative Societies Act was not in derogation of the Banking Regulation Act but an additional provision. The State Act was considered the dominant legislation, and there was no repugnancy between the two Acts. The judgment highlighted that the State Act aimed to strengthen existing laws and protect cooperative bank members' interests by regulating investments.
4. The High Court's jurisdiction in issuing a writ of mandamus for non-compliance with statutory rules was upheld. The court affirmed that statutory norms must be followed, and any violation should be addressed by the appropriate authorities. The High Court's decision to issue a writ of mandamus directing action against the appellants for breaching Section 71 of the Act was deemed justified, emphasizing the importance of adherence to statutory regulations.
In conclusion, the appeals were dismissed as lacking merit, and parties were directed to bear their own costs. The judgment underscores the significance of complying with statutory rules, the non-repugnancy between the Gujarat Co-operative Societies Act and the Banking Regulation Act, and the authority of the High Court to intervene in cases of statutory non-compliance.
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