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2008 (12) TMI 833
Issues Involved:1. Whether Paddy Husk and Rice Husk connote the same commodity or not. Summary:Issue 1: Whether Paddy Husk and Rice Husk connote the same commodity or not.The respondents, who own and operate their manufacturing units, use Paddy Husk as fuel in their respective factories. They were assessed for payment of sales tax in terms of various notifications issued by the State of Uttar Pradesh (the State) from time to time u/s 3D of the Uttar Pradesh Trade Tax Act (the Act). Section 3D of the Act is material for our purpose, and it specifies the levy of trade tax on the purchase of certain goods. The State issued notifications specifying the rate of tax and the point thereof, including a notification on 7.9.1981, which listed "Rice polish, rice bran and rice husk." Subsequent notifications amended this item, and by 6.6.1996, the entry included "Rice polish, rice bran, rice husk and paddy husk." The rate of tax was increased from 4% to 8% by a notification on 15.1.2002. Precedents from the Allahabad High Court and Madhya Pradesh High Court, such as Commissioner of Sales Tax, U.P. v. Naveen Traders, have held that rice bran is not bhusi of rice and that rice does not have any inner husk. The courts applied the common parlance test to the terminologies 'Bhusa' and 'Bhusi' and concluded that they are commodities obtained from stalk, leaves, and husk of grains. Mr. Sunil Gupta, learned senior counsel for the appellant, argued that Paddy Husk and Rice Husk denote the same commodity. He contended that dehusking of paddy is a process that leaves rice, and the subsequent sheathing process produces Rice Bran, Rice Husk, or Rice polish. He urged the court to agree with the minority opinion of the Tribunal, which held that rice bran or rice polish is not husk. On the other hand, Mr. Dhruv Agrawal and Mr. Rakesh K. Khanna, senior counsel for the respondents, argued that rice husk and paddy husk have always been treated as different commodities for sales tax purposes. They contended that the notification dated 6.6.1996, which included paddy husk for the first time, was not clarificatory but a substantive provision. The court noted that the Act is a taxing statute, and tax must be levied by authority of law. The court referred to the dictionary definition of 'husk' and concluded that paddy husk and rice husk are different commodities. The court emphasized that if an entry in a notification imposing tax is ambiguous, the benefit should be given to the assessee. The court held that paddy husk and rice husk are not the same commodity. The notifications issued by the State clearly distinguished between the two, and paddy husk was subjected to tax for the first time by the notification dated 6.6.1996. The court also noted that the Government of Uttar Pradesh still considers rice husk to be a different commodity, as evidenced by the U.P. Value Added Tax Ordinance, 2007. The court dismissed the appeals with costs, concluding that there is no merit in the contention that paddy husk and rice husk denote the same commodity.
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2008 (12) TMI 832
Issues Involved:
1. Whether the complaint of U.P. Pollution Control Board discloses any material against the first respondent, particularly his control over the decision-making process of the Company.
2. Whether the High Court was justified in quashing the complaint against the first respondent in a petition under Section 482 Cr.P.C.
Detailed Analysis:
Issue 1: Material Against the First Respondent
The Supreme Court examined whether the complaint filed by the U.P. Pollution Control Board contained sufficient material against the first respondent, Dr. Bhupendra Kumar Modi, Joint Managing Director of the Company. The complaint alleged that the Company and its officers, including the first respondent, were responsible for the discharge of untreated trade effluent into the river Sai, violating Sections 25 and 26 of the Water (Prevention & Control of Pollution) Act, 1974. The complaint specifically mentioned that the accused persons were responsible for the conduct of the business and the non-compliance with the conditions of the consent order. The Court noted that the complaint included detailed averments about the roles of the accused persons, including the first respondent, in the day-to-day affairs and decision-making process of the Company. The Court emphasized that at the stage of issuing process, the Magistrate is primarily concerned with the allegations made in the complaint and whether there are sufficient grounds for proceeding against the accused.
Issue 2: Justification of the High Court's Decision
The High Court had quashed the complaint against the first respondent on the grounds that there was no material to show that he was in charge of and responsible for the conduct of the business at the relevant time. The Supreme Court, however, disagreed with this reasoning. It referred to various precedents, including the case of U.P. Pollution Control Board v. Modi Distillery, which established that detailed examination of evidence is not required at the stage of issuing process. The Court reiterated that the inherent jurisdiction under Section 482 Cr.P.C. should be exercised sparingly and only to prevent abuse of the process of the Court or to secure the ends of justice. The Court found that the High Court had exercised its power under Section 482 Cr.P.C. in a casual manner, which was not warranted in this case involving serious environmental concerns.
Conclusion:
The Supreme Court set aside the High Court's order quashing the complaint against the first respondent. It directed the Special Judicial Magistrate (Pollution) to proceed with the complaint and dispose of the case in accordance with law. The Court also allowed the first respondent to apply for exemption from personal appearance after making the first appearance, subject to conditions deemed fit by the Special Court. The appeal was allowed, and the case was remanded back for trial without expressing any opinion on the merits of the complaint.
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2008 (12) TMI 831
Issues involved: Appeal against money decree, Insolvency proceedings, Official Assignee's role in prosecuting appeal.
Summary:
1. The appeal challenged a money decree passed by a Learned Single Judge in a Summary Suit based on promissory notes for a friendly loan of Rs. 8 lakhs. The appellants failed to repay, leading to the suit.
2. Despite a request for depositing Rs. 10 lakhs, the appellants failed to comply, leading to insolvency proceedings against them.
3. The Official Assignee contended that he cannot prosecute the appeal u/s 17 of the Presidency Towns Insolvency Act, as it does not allow taking over such proceedings without court order.
4. Section 17 of the Act vests the insolvent's property in the Official Assignee, who can realize it for creditors. Rules of the Code of Civil Procedure also apply to insolvency cases.
5. Previous cases establish that appeals related to money claims against insolvents do not fall under the Official Assignee's powers, hence the appeal did not abate.
6. The appellants failed to apply for leave to defend within the specified time, leading to the decree in favor of the respondent.
7. The appellants' claim of being uneducated and the promissory notes being fabricated were dismissed, and the appeal was ultimately dismissed for non-compliance and lack of merit.
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2008 (12) TMI 830
Issues involved: Estimation of sales turnover of a Bar attached Hotel for the assessment year 2004-2005.
Details of the judgment:
1. The assessing authority rejected the books of accounts and estimated the taxable turnover based on best judgment assessment, considering the gross profit reported by the assessee as too low. The first appellate authority confirmed the rejection of books but modified the addition of gross profit to the returned turnover to 25%. The Tribunal upheld this decision despite previous orders sustaining gross profit at 15.21%. The revision petition questioned the Tribunal's decision.
2. The assessee raised questions regarding the justification of the Tribunal in fixing the gross profit at 25%, discarding the reported gross profit, and not following its own findings from previous years. The assessing authority had rejected the books of accounts and completed the assessment through best judgment assessment.
3. The Court cited the Kerala General Sales Tax Act, stating that unless in exceptional cases, it should not substitute its best judgment assessment for that of the assessing authority. Referring to a Supreme Court case, it emphasized that the assessing authority's estimate should be rational and not vindictive or capricious.
4. The assessing authority fixed the gross profit at 40% due to the nature of the business, which was reduced to 25% by the first appellate authority. The Tribunal upheld this decision. As there was a concurrent finding by the authorities and no legal question involved, the Court declined to entertain the revision petition and confirmed the orders of the first appellate authority and the Tribunal.
5. The Court also rejected an application related to the revision petition. The orders passed in the revision petition were upheld accordingly.
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2008 (12) TMI 829
Issues Involved:
1. Whether the appellant entered the premises armed along with A-4, who killed the deceased.
2. Whether the appellant's presence armed establishes common intention to commit murder.
Summary:
Issue 1: Whether the appellant entered the premises armed along with A-4, who killed the deceased.
The appellant challenged the High Court's judgment convicting him u/s 302 read with 34 IPC, reversing the trial court's acquittal. The prosecution alleged a conspiracy among A-1 to A-8, with the appellant (A-5) and A-4 attempting robbery, during which A-4 shot the deceased. The trial court found A-4 guilty of murder but acquitted the appellant of the murder charge, convicting him instead u/s 398 and 457(1) IPC. The High Court, however, convicted the appellant for murder, asserting he entered the premises with A-4 in furtherance of a common intention to murder the deceased. The appellant's counsel argued there was no evidence of pre-meditation or common intention to murder, and the High Court erred in its judgment. The Supreme Court noted the High Court's error in reversing the trial court's acquittal without sufficient evidence that the appellant was armed or shared a common intention to murder.
Issue 2: Whether the appellant's presence armed establishes common intention to commit murder.
The Supreme Court examined whether the appellant's presence with A-4, who committed the murder, established a common intention to murder. The court found no evidence of pre-meditation or a prior meeting of minds between the appellant and A-4. The prosecution's case was that the appellant and A-4 intended to commit dacoity, not murder. The trial court's acquittal of the appellant for murder was based on the lack of evidence of common intention. The Supreme Court emphasized that for u/s 34 IPC to apply, there must be evidence of a shared common intention to commit the specific crime. The court found no such evidence, noting that the appellant did not engage in any overt act indicating a common intention to murder. The court cited precedents emphasizing the need for clear evidence of common intention for vicarious liability under u/s 34 IPC. Consequently, the Supreme Court set aside the High Court's conviction of the appellant for murder but affirmed his conviction u/s 457(1) IPC, noting he had already served the sentence. The appeal was partly allowed, and the appellant was ordered to be released unless required in another case.
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2008 (12) TMI 828
Issues involved: Appeal against dismissal of writ petition challenging penalty imposed in disciplinary proceedings.
Summary:
1. The appeal challenged the dismissal of a writ petition by the High Court, which upheld the penalty imposed on the respondent in disciplinary proceedings.
2. The respondent, an Inspector of Works, faced disciplinary action for accepting substandard quality of wood.
3. The appointment of the Enquiry Officer, a Chief Engineer from the Vigilance Department, was questioned as he was superior in rank to the Disciplinary Authority.
4. The respondent's request to summon a witness, Mr. Walia, was not addressed, and he was not examined during the proceedings.
5. The penalty of reduction in pay was initially imposed for two years, later enhanced to three years by the Appellate Authority.
6. The respondent contended that the Enquiry Officer's rank and non-examination of Mr. Walia affected the fairness of the proceedings.
7. The Tribunal and High Court upheld the need to examine Mr. Walia as a witness for a fair inquiry.
8. The principles of natural justice require fair consideration of witness requests in disciplinary proceedings.
9. Prejudice to the delinquent officer due to unfair disciplinary proceedings can lead to interference by the courts.
10. The appeal was dismissed, affirming the Tribunal and High Court's findings on the importance of fair conduct in disciplinary inquiries.
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2008 (12) TMI 827
Issues Involved:
1. Condonation of delay in filing cross-objections by the assessee.
2. Validity of the notice issued under Section 148 of the Income Tax Act.
3. Jurisdiction of the Assessing Officer to reopen the assessment under Section 147.
4. Deletion of the addition of Rs. 20,93,725 to the income of the assessee.
Issue-wise Detailed Analysis:
1. Condonation of Delay in Filing Cross-Objections by the Assessee:
The assessee filed cross-objections after a delay of 1,094 days and sought condonation of this delay. The assessee argued that the delay was due to the shifting of its head office and the lack of proper legal advice. The Departmental Representative opposed this, stating that the assessee had the necessary legal aid and records, as evidenced by the filing of other appeals during the same period. The Tribunal found no reasonable cause for the delay and noted that the objections were superfluous and amounted to filibustering, causing delay in the dispensation of justice. Thus, the application for condonation of delay was rejected.
2. Validity of the Notice Issued under Section 148:
The assessee challenged the validity of the notice issued under Section 148, arguing that it was issued beyond the four-year limitation period and without any failure on its part to disclose material facts. The Tribunal examined the reasons recorded by the Assessing Officer, which did not allege any failure by the assessee to disclose fully and truly all material facts necessary for the assessment. Citing the jurisdictional High Court's decisions, the Tribunal concluded that the notice issued under Section 148 was a nullity in the eyes of law as it lacked the necessary averment of the assessee's failure to disclose material facts.
3. Jurisdiction of the Assessing Officer to Reopen the Assessment under Section 147:
The Tribunal considered whether the Assessing Officer had the jurisdiction to reopen the assessment under Section 147. It was noted that the original assessment order was passed on 24-3-1994, and the notice under Section 148 was issued on 29-3-2001, well beyond the four-year period. The Tribunal reiterated that for reopening an assessment beyond four years, it was essential to allege a failure on the part of the assessee to disclose fully and truly all material facts. Since no such failure was alleged in the recorded reasons, the reopening of the assessment was held to be without jurisdiction.
4. Deletion of the Addition of Rs. 20,93,725 to the Income of the Assessee:
The revenue's appeal challenged the deletion of the addition of Rs. 20,93,725, which was written back to the Profit and Loss Account from the "provision for loan loss reserve." The Tribunal found that the assessee had disclosed the provision made and written back transparently in the statement of income annexed to the return. The figures were also reproduced in the original assessment order. Thus, there was no failure on the part of the assessee to disclose material facts. Consequently, the Tribunal held that the assessing officer did not have jurisdiction to issue the notice under Section 147, and the reassessment made thereon was bad in law.
Conclusion:
The Tribunal dismissed all the appeals of the revenue and the cross-objections of the assessee. The key findings were that the application for condonation of delay in filing cross-objections was rejected, the notice issued under Section 148 was invalid, the Assessing Officer lacked jurisdiction to reopen the assessment under Section 147, and the deletion of the addition of Rs. 20,93,725 was upheld.
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2008 (12) TMI 826
Issues involved:
The issues involved in the judgment are related to a motor vehicle accident compensation claim, specifically focusing on whether the deceased and injured persons were traveling as representatives of the owner of goods in a goods vehicle, and the liability of the insurance company under the Motor Vehicles Act 1988.
Details of the Judgment:
Issue 1: Representation of the deceased and injured persons
The accident occurred when the deceased and injured were traveling in a Tata 407 vehicle as members of a marriage party. The claimants argued that they were not representatives of the owner of the goods in the vehicle. The Tribunal considered the evidence and found that the deceased and injured were not gratuitous passengers but were occupying the vehicle as representatives of the owner of the goods. The High Court failed to appreciate this aspect, leading the Supreme Court to delve into the evidence and make a determination based on the facts presented.
Issue 2: Burden of proof and liability of the insurance company
The appellant contended that the deceased and injured were not representatives of the owner of the goods, while the owner's counsel argued that the burden of proof regarding breach of insurance policy conditions was not met by the insurance company. The Tribunal's findings indicated that the claimants were not gratuitous passengers, and the insurance company failed to prove any violation of insurance policy terms. The Supreme Court emphasized that the insurance company was not liable based on the evidence and legal principles, citing relevant case law to support this conclusion.
Conclusion:
The Supreme Court set aside the impugned judgment regarding the liability of the insurance company, ruling in favor of the appellant. The Court determined that the deceased and injured were traveling as gratuitous passengers, absolving the insurance company of compensation liability. The appeal was allowed, and no costs were awarded in the case.
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2008 (12) TMI 825
Issues Involved:
1. Legitimacy of the Returning Officer's actions.
2. Applicability of the doctrine of Restitution.
3. Locus standi of the appellant to file the appeal.
Summary:
1. Legitimacy of the Returning Officer's actions:
The appellant challenged the order of the learned Single Judge which declared the writ petition of respondent No. 1 as infructuous. The dispute arose when the Returning Officer rejected the nomination papers of both the appellant and respondent No. 1 for the Khultabad Taluka Co-operative Societies Constituency. Respondent No. 1's appeal against this rejection was dismissed, leading to the writ petition. The Single Judge initially directed the Returning Officer to accept respondent No. 1's nomination paper, resulting in his unopposed election. However, this order was later recalled, and the Returning Officer withdrew the election declaration. The Division Bench maintained the status quo, emphasizing that the correctness of the nomination rejection/acceptance was not adjudicated. The learned Single Judge concluded that the Returning Officer's withdrawal of the election declaration was beyond his jurisdiction, as the declaration had already been made under Rule 30 of the Maharashtra Specified Co-operative Societies Elections to Committee Rules, 1971.
2. Applicability of the doctrine of Restitution:
The appellant argued that the election of respondent No. 1 should be set aside based on the doctrine of Restitution, citing various Supreme Court judgments. However, the court found that the doctrine of Restitution was not applicable in this case, as the appellant, being an intervenor and not a direct party to the original writ petition, could not seek restitution. The court emphasized that only an aggrieved party directly affected by a court order could seek such relief.
3. Locus standi of the appellant to file the appeal:
The court held that the appellant, as an intervenor in the writ petition, did not have the locus standi to file the appeal. The intervenor's role was limited to addressing the court and not actively participating in the proceedings. The court noted that the appellant's remedy, if any, lay in filing an Election Petition before the appropriate authorities, as he was not directly connected or aggrieved by the impugned order.
Conclusion:
The appeal was dismissed, affirming the learned Single Judge's order. The court clarified that its observations should not influence any potential Election Petition proceedings, which should be decided on their own merits and in accordance with the law. The Civil Application was also disposed of as it became redundant following the dismissal of the appeal.
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2008 (12) TMI 824
Issues Involved:
1. Summoning order validity in three complaint cases.
2. Liability of individuals who are neither the drawer nor signatories of the dishonored cheques.
3. Vicarious liability of directors under Section 138 r/w Section 141 & 142 of the N.I. Act.
4. Resignation of directors and its effect on liability.
Issue-wise Detailed Analysis:
1. Summoning Order Validity in Three Complaint Cases:
The judgment addresses three separate petitions challenging the summoning orders passed by the Metropolitan Magistrate in three complaint cases. The common ground for challenging the summoning orders is that the petitioners are neither the drawer nor the signatories of the dishonored cheques.
2. Liability of Individuals Who Are Neither the Drawer Nor Signatories of the Dishonored Cheques:
In all three cases, the petitioners argued that they cannot be held liable under Section 138 of the N.I. Act as they were neither the drawer nor the signatories of the dishonored cheques. The court observed that Section 138 clearly states that a complaint can be maintained only against a person who is a drawer of the cheque and who has drawn the cheque on an account maintained by him. The court concluded that since the petitioners were not the drawers or signatories of the cheques, the complaints against them under Section 138 N.I. Act cannot be maintained.
3. Vicarious Liability of Directors Under Section 138 r/w Section 141 & 142 of the N.I. Act:
The court discussed the concept of vicarious liability under Section 141 of the N.I. Act, which creates a legal fiction whereby every person who was in charge and responsible for the conduct of the business of the company at the time of the commission of the offence can be held liable. However, the court emphasized that for vicarious liability to be fastened, the principal offender must be the company itself. The court referred to various judgments, including the Supreme Court's decision in SMS Pharmaceuticals Ltd. v. Neeta Bhalla, to highlight that necessary averments must be made in the complaint to implicate any person under Section 141.
4. Resignation of Directors and Its Effect on Liability:
In Crl MC No. 1597/2007 and Crl MC No. 1637/2007, the petitioners had resigned from the company before the issuance of the dishonored cheques. The court noted that the resignation of a director is effective from the date it is submitted and accepted by the company. Since the petitioners had resigned before the issuance of the cheques, they could not be held liable for the dishonored cheques. The court referred to the legal position that a director's duty is to inform the company about the resignation, and it is the company's responsibility to complete the formalities with the Registrar of Companies.
Separate Judgments Delivered:
The court delivered separate judgments for each petition:
- Crl MC No. 2667/2007: The petitioner, being a director at the time of the offence and having written a letter acknowledging the debt, was not held liable as the cheques were drawn by another director in his individual capacity. The summoning order was quashed, and the complaint was dismissed.
- Crl MC No. 1597/2007: The petitioner had resigned before the issuance of the cheques, which were drawn by another individual. The summoning order was quashed, and the complaint was dismissed.
- Crl MC No. 1637/2007: Similar to the previous case, the petitioner had resigned before the issuance of the cheques, and the summoning order was quashed, and the complaint was dismissed.
Conclusion:
The court allowed all three petitions, quashing the summoning orders and dismissing the complaints against the petitioners. The judgment emphasized the importance of specific averments in the complaint to hold individuals vicariously liable under Section 141 of the N.I. Act and clarified the effect of a director's resignation on liability for dishonored cheques.
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2008 (12) TMI 823
Issues involved: The judgment deals with the issue of whether the Tribunal misdirected itself in law by estimating the gross profit rate, despite the books of account not being rejected.
Summary:
The appellant, represented by Mr. J.P. Khaitan, challenged the Tribunal's decision regarding the estimation of gross profit for the assessment year 1993-94. The appellant, engaged in the paper business as a wholesaler, had shown a lower gross profit rate of 5.58% compared to previous years. Mr. Khaitan argued that the accounts were accepted by the Tribunal, and the books of accounts were not rejected, nor were any vouchers found unverifiable. The Commissioner of Appeal also acknowledged this fact in the order. Mr. Khaitan contended that the Tribunal's decision to partly allow the appeal in favor of the Department was arbitrary and lacked justification, as the profit rate and books of accounts were duly considered by the Commissioner of Appeal.
On the other hand, Mr. Siddhartha Chatterjee, representing the Department, did not contest the issue raised by Mr. Khaitan. The Court, after considering the arguments presented, concluded that the Tribunal had erred in requiring the estimation of gross profit at a specific rate. Since the books of accounts were not rejected and were taken into account in deciding the matter, the Court found no merit in the Tribunal's decision. Consequently, the appeal was allowed, and the question was answered in favor of the assessee. The Court directed all parties to act on a signed copy of the order and provided for the issuance of an urgent certified copy upon request, subject to necessary formalities.
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2008 (12) TMI 822
Issues Involved:
1. Issuance of process under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.
2. Compliance with Section 200 of the Code of Criminal Procedure, 1973.
3. Alleged false statement in the verification statement.
4. Judicial duty of the Magistrate in recording verification statements.
Detailed Analysis:
1. Issuance of Process under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881:
The petitions challenge the issuance of process by the Magistrate under Section 138 of the Negotiable Instruments Act without invoking Section 141. The petitioners argued that the process should have been issued under Section 138 read with Section 141, as they were directors of the company. The court noted that Section 141 does not create an offence but deems persons responsible for the conduct of the company's business guilty of the offence under Section 138. The court held that if the Magistrate is satisfied that a case under Section 141 is made out, he can issue process for the offence punishable under Section 138 against the company and its directors.
2. Compliance with Section 200 of the Code of Criminal Procedure, 1973:
The petitioners contended that the verification statement recorded by the Magistrate was in a pre-conceived format, which did not comply with the requirements of Section 200 of the Code. The court emphasized that the examination of the complainant under Section 200 is not an empty formality and is intended to ascertain whether there is a prima facie case. The court found that the Magistrate failed to perform his duty under Section 200 by mechanically recording the verification statement in a pre-conceived format, depriving the complainant of the opportunity to disclose material particulars on oath.
3. Alleged False Statement in the Verification Statement:
The petitioners alleged that the complainant made a false statement in the verification statement by claiming there was no reply to the statutory notice. The court observed that the petitioners did not provide evidence showing receipt of their reply by the complainant before the complaint was filed. Therefore, this issue was deemed a matter of evidence to be addressed during the trial and not grounds for dismissing the complaint at this stage.
4. Judicial Duty of the Magistrate in Recording Verification Statements:
The court highlighted that the Magistrate is obliged to put questions to the complainant to elicit the truth, which requires an application of judicial mind. The Magistrate's duty under Section 200 involves more than filling out a pre-conceived format; it requires ensuring that the complainant provides a true version on oath. The court found that the Magistrate failed to perform this duty, resulting in an erroneous approach.
Conclusion:
The court quashed the orders of process issued by the Magistrate and the subsequent judgment by the Additional Sessions Judge. The case was remanded to the Magistrate to record the verification statement afresh in accordance with the law. The court directed the Registrar to circulate a copy of the judgment to all Metropolitan Magistrates in Mumbai to ensure compliance with the proper procedure under Section 200 of the Code. The petitions were partly allowed with no orders as to costs.
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2008 (12) TMI 821
Issues involved:
The judgment involves the legality of prosecution under Section 220 of the Companies Act, violation of statutory obligations, the bar of limitation under Section 469 of Cr.P.C., and the distinction between a continuing offence and an offence committed once and for all.
Details of the judgment:
Violation of statutory obligations:
The petitioner, as the Managing Director of the accused company, challenged the prosecution on the grounds of being barred by limitation and the company's winding-up. The complaints alleged non-filing of Balance Sheet and Profit and Loss Account for the financial years 1991 to 2000, violating Section 220 of the Companies Act. The complaints contended that the offence is continuing under Section 162 of the Companies Act, punishable with a fine for each day of default.
Bar of limitation under Section 469 of Cr.P.C.:
The petitioner argued that the complaints, issued in 2004 for an offence alleged to have occurred in 1990, were hopelessly barred by limitation. Citing previous cases, the petitioner contended that the complaints should have been filed within six months of the alleged offence, which was not done in this case. The petitioner also highlighted the winding-up of the company by BIFR in 1987, asserting that the company's operations had ceased, making the filing of financial documents unnecessary.
Continuing offence vs. offence committed once and for all:
The respondent argued that the offence under Section 162 of the Companies Act is a continuing one, not subject to the bar of limitation under Section 469 of Cr.P.C. Citing the distinction between a continuing offence and an offence committed once and for all, the respondent relied on the judgment in State of Bihar v. Deokaran Nenshi and Anr. The court noted that the offence of non-compliance with Sections 159, 160, or 161 of the Companies Act is punishable with a fine for each day of default, indicating a continuing offence.
Conclusion:
The court dismissed the Criminal Original Petitions, upholding the validity of the prosecution as the offence was deemed a continuing one. The court directed the trial court to prioritize the early disposal of the cases, emphasizing that the findings were specific to the petitions and the trial court would decide the complaints on their own merit. The court refrained from adjudicating on the factual aspects of the company's winding-up, leaving it open for the petitioner to raise during trial.
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2008 (12) TMI 820
Issues involved:
The judgment involves the interpretation of Section 154(2A) of the Maharashtra Co-operative Societies Act, 1960 regarding the pre-deposit requirement for revision applications against recovery certificates issued by the Registrar under Section 101.
Details of the Judgment:
1. The petitioner had taken loans from the respondent-Bank and disputed the liability, leading to recovery proceedings under Section 101 of the Act. The petitioner filed a revision application under Section 154, which was initially set aside by the Divisional Joint Registrar but later allowed by the High Court.
2. The petitioner argued that the revisional powers under Section 154 could be invoked suo motu, and the High Court erred in applying Sub-section (2A) to the case, as the inquiry was initiated based on information received, not a formal application.
3. The respondent contended that the revision was not maintainable due to the petitioner's failure to deposit 50% of the recoverable dues as required by Section 154(2A). The Divisional Joint Registrar's decision to entertain the revision was challenged by the respondent in the High Court.
4. The respondent emphasized the importance of the pre-deposit condition for entertaining revision applications, citing precedents where timely payment was a prerequisite for considering appeals.
5. The Court examined the provisions of Section 154 and Sub-section (2A) and concluded that the petitioner's application, although not in the form of a formal Memorandum of Appeal, did not fulfill the pre-deposit requirement. The Court agreed with the respondent's argument that the revision could not be entertained without complying with the pre-condition of payment.
6. The Court dismissed the Special Leave Petition, upholding the High Court's decision to set aside the Divisional Joint Registrar's order, as the petitioner failed to meet the pre-deposit requirement under Section 154(2A).
7. The judgment highlighted the importance of complying with statutory requirements, including pre-deposit conditions, for the proper consideration of revision applications under the Maharashtra Co-operative Societies Act, 1960.
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2008 (12) TMI 819
Issues involved: Appeal against conviction and sentence under Sections 326 and 324 IPC, consideration of compromise between closely related parties, quashing of FIR and judgment u/s 482 Cr.P.C.
Judgment Summary:
Issue 1: Quashing of FIR and Judgment u/s 482 Cr.P.C.
The appeal was against the conviction and sentence of the appellants under Sections 326 and 324 IPC. During the appeal, the parties, being closely related, entered into a compromise supported by affidavits. The question was whether the FIR, judgment of conviction, and sentence could be quashed under Section 482 Cr.P.C. The Court referred to precedents stating that the power to compound can be exercised at the trial or appellate stage. The Court emphasized that the power under Section 482 Cr.P.C. is to prevent abuse of the process of the Court and secure the ends of justice. It was noted that the compromise between closely related parties was essential for harmony and orderly behavior in society. The Court held that once a matter has been compromised, proceeding with the appeal would be a waste of time and an abuse of the Court's process. Therefore, the petition under Section 482 Cr.P.C. was accepted, leading to the quashing of the FIR, judgment of conviction, and sentence, resulting in the acquittal of the appellants.
Key Takeaways:
- The Court considered the power under Section 482 Cr.P.C. to quash the FIR, judgment, and sentence.
- Precedents were cited to support the exercise of power at the appellate stage.
- Emphasis was placed on the importance of compromise for harmony in society.
- The Court highlighted that the power under Section 482 Cr.P.C. aims to prevent abuse of the Court's process and secure justice.
- The compromise between closely related parties was deemed crucial for better relations and removing bitterness.
- Proceeding with the appeal after a compromise was seen as wasteful and an abuse of the Court's process.
- Ultimately, the Court accepted the petition under Section 482 Cr.P.C., quashing the FIR, judgment, and sentence, leading to the appellants' acquittal.
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2008 (12) TMI 818
Issues Involved:
1. Recovery of Rs. 25,28,847/- with interest.
2. Limitation period for the suit.
3. Liability of defendant No. 3 as an authorized signatory.
4. Calculation of interest rate.
Summary:
Issue 1: Recovery of Rs. 25,28,847/- with interest
The plaintiff filed a suit for recovery of Rs. 25,28,847/- from the defendants jointly and severally, with pendente lite and future interest. The defendants were proceeded ex-parte, and the plaintiff led ex-parte evidence through an affidavit and documents. The plaintiff, engaged in manufacturing and marketing electronic goods, supplied goods to the defendant No. 1, with defendant No. 2 as the sole proprietor and defendant No. 3 as the authorized signatory. The plaintiff claimed a total principal sum of Rs. 18,56,527.33 (Rs. 13,51,856/- for which cheques were issued + Rs. 5,04,671.33 for the balance amount for which cheques were not issued) and interest of Rs. 6,72,320.46 at 12% per annum, making the suit for recovery of Rs. 25,28,847/-.
Issue 2: Limitation period for the suit
The court found that the entire claim of the plaintiff was not within the limitation period. U/s 3 of the Limitation Act, 1963, a suit instituted after the prescribed period "shall be dismissed, although limitation has not been set-up as a defence." The limitation for recovery of the price of goods sold and delivered is three years from the date of delivery. The suit was instituted on 12th January 2005, and none of the invoices for Rs. 5,04,671.33 were within the three-year period, making this claim barred by time. However, the issuance of cheques gave a fresh cause of action, and only cheques dated within three years prior to the suit were considered, amounting to Rs. 8,02,070/-.
Issue 3: Liability of defendant No. 3 as an authorized signatory
U/s 28 of the Negotiable Instruments Act, 1881, an agent who signs a cheque without indicating that he signs as an agent is personally liable. Defendant No. 3, having signed the cheques as an authorized signatory without disclosing that he did not intend to incur personal liability, was held liable for the amount due on the cheques.
Issue 4: Calculation of interest rate
The plaintiff claimed interest at 24% per annum but only pleaded for 12% per annum in the suit. The court found the claim for interest at 12% per annum reasonable for pre-institution interest from the date of each cheque within time until the suit's institution. However, due to the plaintiff's negligence in prosecuting the suit, the court awarded pendente lite interest at 6% per annum. For future interest, the court awarded 6% per annum from the decree date for 90 days, after which the defendants would be liable for interest at 18% per annum for any delay in payment.
Conclusion:
The court decreed the suit for Rs. 8,02,070/- with pre-institution interest at 12% per annum, pendente lite interest at 6% per annum, and future interest at 6% per annum for 90 days, increasing to 18% per annum for delays beyond 90 days. The plaintiff was also entitled to proportionate costs of the suit.
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2008 (12) TMI 817
Issues Involved:
1. Interpretation of the deed dated 27.10.1969.
2. Applicability of Section 58(c) of the Transfer of Property Act, 1882.
3. Relationship of creditor and borrower between the parties.
4. Applicability of Order 41 Rule 33 of the Code of Civil Procedure.
Summary:
1. Interpretation of the Deed Dated 27.10.1969:
The primary issue in this appeal was whether the deed dated 27.10.1969 constituted an absolute conveyance with a condition of repurchase or a mortgage with conditional sale. The High Court of Kerala, in its judgment dated 1.11.2006, interpreted the deed as a mortgage with conditional sale, thereby allowing the suit for redemption and partition filed by the respondent. The Supreme Court, however, found that the deed should be construed as an absolute sale with a condition of repurchase, considering the possession was delivered, no interest was stipulated, and the appellant was permitted to attorn to the landlord.
2. Applicability of Section 58(c) of the Transfer of Property Act, 1882:
Section 58(c) defines a mortgage by conditional sale. The Supreme Court noted that one of the ingredients for determining the true nature of the transaction is that the condition of repurchase should be embodied in the document. The Court found that this condition was satisfied in the present case. However, the Court emphasized that a document must be read in its entirety, and the intention of the parties must be gathered from the document itself and the attending circumstances.
3. Relationship of Creditor and Borrower Between the Parties:
The Supreme Court observed that no evidence was brought on record to establish a relationship of creditor and borrower between the parties. The appellant had been permitted to attorn to the landlord, which indicated that the transaction was not intended to create a mortgage but an absolute sale with a condition of repurchase.
4. Applicability of Order 41 Rule 33 of the Code of Civil Procedure:
The respondent contended that the appellant should not be permitted to raise certain contentions as no appeal was preferred against the judgment of the First Appellate Court. The Supreme Court clarified that Order 41 Rule 33 allows the appellate court to pass any decree that ought to have been passed by the trial court or grant any further decree as required. The Court held that it was legally permissible for the appellant to support the decree passed in his favor by attacking the findings of the First Appellate Court.
Conclusion:
The Supreme Court set aside the judgment of the High Court, concluding that the deed dated 27.10.1969 was an absolute sale with a condition of repurchase, not a mortgage by conditional sale. The appeal was allowed, and the impugned judgment was not sustained. No order as to costs was made.
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2008 (12) TMI 816
Issues Involved:
1. Discontinuance of the joint administrators.
2. Discharge of Mr. A.A. Halbe as Joint Administrator.
3. Appointment of a new Joint Administrator in place of Mr. A.A. Halbe.
4. Maintainability of the application for the removal of Mr. A.A. Halbe.
5. Conduct of Mr. A.A. Halbe as Joint Administrator.
Issue-Wise Detailed Analysis:
1. Discontinuance of the Joint Administrators:
The relief sought by the appellants included the discontinuance of the joint administrators. However, during the hearing, the Senior Counsel for the applicants did not press for this relief. The Court indicated that it was not inclined to vacate the direction regarding the regime of the Administrators, as the circumstances that led to their appointment continued to exist.
2. Discharge of Mr. A.A. Halbe as Joint Administrator:
The principal ground for seeking the removal of Mr. A.A. Halbe was his alleged collusion with the Plaintiff and failure to discharge his duties impartially. The Court found that Mr. Halbe had unilaterally submitted reports to diverse authorities and to the Court on matters outside his domain, thereby overreaching his authority. The Court concluded that Mr. Halbe had failed to discharge his duties with impartiality and objectivity, leading to his removal as Joint Administrator.
3. Appointment of a New Joint Administrator in Place of Mr. A.A. Halbe:
The Court appointed Hon'ble Mr. Justice S.P. Kurdukar, Former Judge of the Supreme Court of India, as the new Joint Administrator in place of Mr. A.A. Halbe. This appointment was made on the same terms and conditions as the previous appointment.
4. Maintainability of the Application for the Removal of Mr. A.A. Halbe:
The Court addressed whether the application for the removal of Mr. A.A. Halbe was maintainable, given the interim order dated 15th February 2008 and the Supreme Court's order dated 14th July 2008. The Supreme Court had clarified that parties could bring their grievances to the notice of the High Court and seek appropriate orders. The High Court interpreted this to mean that the application for the removal of Mr. Halbe was indeed maintainable.
5. Conduct of Mr. A.A. Halbe as Joint Administrator:
The Court scrutinized Mr. Halbe's conduct and found several instances where he had acted beyond his authority. Mr. Halbe had submitted reports unilaterally, timed to coincide with hearings, and had made allegations without proper investigation. Additionally, there was a serious allegation that Mr. Halbe had disclosed a report to one of the litigating parties before it was officially submitted to the Court. The Court found Mr. Halbe's explanations to be manifestly incorrect and concluded that he had failed to maintain the expected standards of impartiality and integrity.
Conclusion:
The Court ordered the removal of Mr. A.A. Halbe as Joint Administrator and appointed Hon'ble Mr. Justice S.P. Kurdukar in his place. The application for the removal of Mr. Halbe was found to be maintainable, and his conduct was deemed to have compromised the impartiality and objectivity required for the role. The regime of the Joint Administrators was not disturbed, ensuring the continued management of the Hospital amidst ongoing disputes among the Trustees.
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2008 (12) TMI 815
Issues Involved:
1. Specific performance of the contract.
2. Admissibility and enforceability of the allotment letter and subsequent modifications.
3. Payment obligations and interest on delayed payments.
4. Legality of the cancellation of allotment by the defendant.
5. Legal enforceability of the Commercial Space Buyers' Agreement.
6. Validity of clauses restricting legal proceedings.
7. Granting of decree based on admissions.
Issue-wise Detailed Analysis:
1. Specific Performance of the Contract:
The plaintiff sought specific performance of the contract contained in the letters dated 8th September 2004 and 29th October 2005, demanding possession of Shop No. G-76. The court found that a concluded contract existed, as the terms were certain and agreed upon, making the defendant's obligation enforceable.
2. Admissibility and Enforceability of the Allotment Letter and Subsequent Modifications:
The letters dated 8th September 2004 and 29th October 2005 were admitted by the defendant. These letters constituted a binding agreement, as they detailed the shop allotment, payment plan, and obligations of both parties. The court held that these documents were not merely an agreement to enter into an agreement but a complete and enforceable contract.
3. Payment Obligations and Interest on Delayed Payments:
The plaintiff made substantial payments totaling Rs. 86,45,987/-, with a minor delay in some installments. The defendant accepted these payments without protest. The court noted that the plaintiff was liable to pay interest for the delayed payments as per the agreed terms but found the defendant's demand for Rs. 13,38,424.21/- including interest to be unsubstantiated and lacking detailed breakdowns.
4. Legality of the Cancellation of Allotment by the Defendant:
The defendant canceled the allotment citing non-payment of Rs. 3,43,094.21/-. The court observed that the defendant failed to provide a detailed explanation for this amount and noted the plaintiff's consistent efforts to make payments and seek possession. The court concluded that the cancellation was unjustified, especially after accepting 97.5% of the total payment.
5. Legal Enforceability of the Commercial Space Buyers' Agreement:
The court rejected the defendant's argument that the allotment letter was not enforceable without the execution of a formal Commercial Space Buyers' Agreement. It held that the letters constituted a binding contract, and the defendant could not evade its obligations by claiming the need for a further formal agreement.
6. Validity of Clauses Restricting Legal Proceedings:
The court found that the clause in the allotment terms restricting the plaintiff from enforcing her rights in a court of law was void under Section 28 of the Contract Act, 1872. Such clauses are against public policy as they attempt to restrict legal recourse, which is not permissible.
7. Granting of Decree Based on Admissions:
Given the admitted facts and documents, the court exercised its discretion under Order XII, Rule 6 of the Code of Civil Procedure, 1908, to grant a decree of specific performance. The defendant was directed to execute the Commercial Space Buyers' Agreement and hand over possession of the shop to the plaintiff upon payment of interest for the delayed installments.
Conclusion:
The court decreed specific performance in favor of the plaintiff, directing the defendant to execute the necessary agreement and hand over possession of the shop, subject to the payment of interest on delayed installments. The plaintiff was also awarded the costs of the suit. The court dismissed the defendant's application under Order VII, Rule 11, and rendered other applications infructuous. The question of execution under the Delhi Apartments Ownership Act, 1986, was left open as it was not urged by the plaintiff.
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2008 (12) TMI 814
Issues involved:
The issues involved in the legal judgment are the validity of the disciplinary proceeding, legality of the enquiry conducted, proportionality of the termination of employment, entitlement to reinstatement with continuity of service and full back wages, and the burden of proof regarding gainful employment of the respondent.
Validity of Disciplinary Proceeding:
The respondent, a peon at a Cooperative Society running a sugar factory, was dismissed for various charges of misconduct. The Labour Court found him guilty but awarded reinstatement with 50% back wages, deeming the termination disproportionate to the charges. The Appellate Authority upheld this decision, considering the respondent's employment at a footwear shop. The High Court affirmed the decision, stating the punishment was fair and proportionate.
Legality of Enquiry Conducted:
The Labour Court examined the charges against the respondent, including late attendance, absence without leave, and indiscipline. The court found the respondent guilty of misconduct but awarded only 50% back wages, considering his employment at a footwear shop. The Industrial Court and High Court upheld this decision, emphasizing the proportionality of the punishment imposed.
Proportionality of Termination of Employment:
The respondent faced serious charges of misconduct, including unauthorized absence, late attendance, and indiscipline. The burden of proof regarding the respondent's gainful employment was placed on the appellant, contrary to legal principles. The court held that the punishment of 50% back wages was unjustified due to the seriousness of the charges and the respondent's conduct.
Entitlement to Reinstatement and Back Wages:
The respondent was reinstated with 50% back wages by the Labour Court, which was upheld by the Appellate Authority and the High Court. The courts considered the proportionality of the punishment and the respondent's employment at a footwear shop. The Supreme Court modified the judgment, directing that no back wages should have been awarded, given the circumstances of the case.
Burden of Proof on Gainful Employment:
The burden of proof regarding the respondent's gainful employment was wrongly placed on the appellant. Legal precedents emphasize that the burden lies on the workman to prove lack of gainful employment. The court found that the appellant had not properly considered evidence of the respondent's employment status, leading to an unjustified award of back wages.
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