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2009 (2) TMI 914
Issues involved:
The petitioners invoked Article 226 of the Constitution to quash a complaint registered as FIR I-C.R. No. 92 of 2008 at Jaipur City (South) Mahila Thana, Rajasthan, for alleged offences u/s 498-A and 406 of Indian Penal Code, 1860 against the complainant's husband and his parents, alleging events in Gujarat, Rajasthan, and Madhya Pradesh.
Jurisdictional Issue:
The preliminary issue of territorial jurisdiction of the High Court was addressed first. The husband and wife, both in Indian Administrative Services, were married in Jaipur, following which they pursued their careers separately in Gujarat and Mussoorie. Disputes arose, leading to a divorce petition and the impugned complaint in Rajasthan. The petitioners argued that the complaint was an afterthought, filed in Rajasthan due to the complainant's influential father, while most events occurred in Gujarat. The Court considered the cause of action, emphasizing that even if a part of it arises in a different state, that state's High Court may have jurisdiction.
Legal Precedents:
Counsel cited judgments emphasizing that the place where the alleged offence occurred is crucial for determining territorial jurisdiction. The Court noted that the cause of action for quashing the FIR arose in Rajasthan, where it was registered, even if consequences were felt in Gujarat. The distinction between the cause for filing a complaint and the cause for quashing it was highlighted, with the Court dismissing the petition solely on jurisdictional grounds.
Judicial Discipline:
The Court highlighted the importance of judicial discipline, cautioning against multiple High Courts intervening in cases with events spanning different states. It stressed that only the High Court where the complaint is filed or the criminal case is pending should entertain related petitions to avoid conflicting directions.
Conclusion:
The petition was summarily dismissed based on jurisdictional grounds, without delving into the merits of the case. The Court emphasized that the cause of action for quashing the FIR was deemed to have arisen exclusively in Rajasthan, despite events occurring in multiple states, and rejected arguments of forum shopping or ulterior motives.
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2009 (2) TMI 913
The Supreme Court of India dismissed the Curative Petitions as no case was made out within the parameters indicated in a previous court decision (Rupa Ashok Hurra v. Ashok Hurra & Anr., 2002).
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2009 (2) TMI 912
Issues Involved:
1. Double Jeopardy under Article 20 of the Constitution of India and Section 300 of the Code of Criminal Procedure.
2. Jurisdiction and applicability of Indian laws versus US laws.
3. Interpretation of "offence" under Indian and US legal frameworks.
Summary:
Issue 1: Double Jeopardy under Article 20 of the Constitution of India and Section 300 of the Code of Criminal Procedure
The appellant contended that the proceedings in India amounted to double jeopardy as he had already been tried and convicted in the USA for the same set of facts. Article 20(2) of the Constitution states, "No person shall be prosecuted and punished for the same offence more than once," and Section 300 of the Code prohibits a second trial if the person has been convicted or acquitted. The appellant argued that the offences in India were identical to those in the USA, thus invoking the principle of double jeopardy.
The Court, however, held that the offences for which the appellant was tried in the USA were distinct from those in India. The US conviction was for "conspiracy to possess with intent to distribute controlled substances" under Section 846 of Title 21 USC, while the Indian charges involved importation, possession, and export of Hashish under the NDPS Act, 1985. The Court concluded that the principle of double jeopardy did not apply as the offences were separate and distinct.
Issue 2: Jurisdiction and Applicability of Indian Laws versus US Laws
The appellant's counsel argued that the trial in the USA should preclude further prosecution in India, citing international covenants and the broad interpretation of Article 20. The Court disagreed, emphasizing that the jurisdiction of the US courts was limited to offences committed within the USA, whereas the Indian courts had jurisdiction over offences committed on Indian soil.
The Court noted that the NDPS Act, 1985, extends to the whole of India and applies to all citizens of India outside India. Thus, the appellant could be tried in India for offences related to the importation and export of Hashish, which were not covered by the US trial.
Issue 3: Interpretation of "Offence" under Indian and US Legal Frameworks
The appellant's counsel argued that the term "offence" should be interpreted broadly to include any act punishable by law, regardless of jurisdiction. The Court, however, maintained that the definition of "offence" under Indian law must be understood within the context of Indian statutes and jurisdiction.
The Court referred to Sections 3 and 4 of the Indian Penal Code, which allow for the trial of offences committed beyond India if they are punishable under Indian law. The Court concluded that the offences for which the appellant was being tried in India were distinct from those in the USA and did not attract the principle of double jeopardy.
Conclusion:
The Supreme Court upheld the Bombay High Court's decision, rejecting the appellant's plea of double jeopardy. The Court found that the offences for which the appellant was tried in the USA were distinct from those in India, and thus, the principle of double jeopardy under Article 20 of the Constitution and Section 300 of the Code did not apply. The appeal was dismissed.
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2009 (2) TMI 911
Issues Involved:
1. Liability of the official liquidator to pay post-liquidation property and water taxes.
2. Interpretation of the sale terms "as is where is whatsoever there is basis".
3. Applicability of Section 530 of the Companies Act and Rule 154 of the Companies (Court) Rules.
Summary:
1. Liability of the official liquidator to pay post-liquidation property and water taxes:
The official liquidator admitted a sum of Rs. 2,79,955 as preferential claim for property tax and Rs. 2,162 for water tax up to the winding-up period, rejecting the balance claims as they pertained to the post-liquidation period. The Nigam challenged this, and the company court set aside the liquidator's adjudication, holding that the official liquidator is liable to pay post-liquidation taxes from the sale proceeds. The court emphasized that post-liquidation liabilities are part of the winding-up costs and get priority over other liabilities.
2. Interpretation of the sale terms "as is where is whatsoever there is basis":
The court held that the sale terms did not explicitly state that the purchaser would bear the liability for property and water taxes. The expression "as is where is whatsoever there is basis" was interpreted to mean that the purchaser is not responsible for statutory charges unless explicitly stated. The court noted that the terms protected the official liquidator regarding the quality, quantity, and specification of the assets but did not extend to tax liabilities.
3. Applicability of Section 530 of the Companies Act and Rule 154 of the Companies (Court) Rules:
The court found that Section 530, which deals with preferential payments, and Rule 154, which deals with the estimation of debts and claims, were not applicable to the present dispute. Section 530 pertains to taxes due up to the winding-up order, not post-liquidation taxes. The court concluded that the official liquidator's reliance on these provisions to reject the Nigam's claims was misplaced.
Conclusion:
The court dismissed the appeals, affirming that the official liquidator is liable to pay the post-liquidation property and water taxes from the sale proceeds. The court directed future sale notices to explicitly state any liabilities to avoid similar disputes. The decision of the learned judge was upheld, and the appeals were found to be without merit.
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2009 (2) TMI 910
The Supreme Court of India dismissed the Civil Appeal as the appellants did not have a statutory first charge over the property secured by the respondent Bank under the Securitisation Act, 2002. No order was given regarding costs.
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2009 (2) TMI 909
Issues Involved:
1. Scope and applicability of Sections 482 and 397 of the Criminal Procedure Code, 1973.
2. The legality of the orders of taking cognizance by the Magistrates.
3. The nature of the orders (interlocutory or final) and their impact on the available legal remedies.
4. The inherent powers of the High Court and their limitations.
Detailed Analysis:
1. Scope and Applicability of Sections 482 and 397 of the Criminal Procedure Code, 1973:
The judgment primarily addresses whether the inherent powers of the High Court under Section 482 CrPC can be invoked when there is an alternative remedy available under Section 397 CrPC. The court noted that Section 397 allows the High Court or any Sessions Judge to call for and examine the record of any proceeding before any inferior Criminal Court to ensure the correctness, legality, or propriety of any finding, sentence, or order. However, Sub-section (2) bars the exercise of this power in relation to interlocutory orders, and Sub-section (3) prohibits a second revision by the same person. Section 482, on the other hand, preserves the inherent powers of the High Court to make orders necessary to give effect to any order under the Code, prevent abuse of the process of any court, or secure the ends of justice.
2. Legality of the Orders of Taking Cognizance by the Magistrates:
In Criminal Misc. Petition No. 289/2006, the petitioner was accused of cheating and obtaining a hotel on rent under false pretenses, which included purchasing cars in the name of the hotel business and selling them to other persons, thus obtaining tax relief and committing customs duty theft. The Magistrate took cognizance based on the chargesheet filed by the police. In Criminal Misc. Petition No. 41/2008, the petitioner was accused of misbranding an insecticide product. The Magistrate took cognizance based on a complaint filed by the Assistant Director of Agriculture & Insecticides Inspector. The petitioners challenged the orders of taking cognizance, arguing that the cases were either civil in nature or void ab initio.
3. Nature of the Orders (Interlocutory or Final) and Their Impact on Available Legal Remedies:
The court emphasized that the order of taking cognizance is not an interlocutory order but a final one, as it initiates proceedings and puts the accused on trial. This view is supported by the Supreme Court's decision in Madhu Limaye v. State of Maharashtra, which held that orders initiating proceedings or framing charges are not interlocutory. Therefore, such orders can be challenged through revision under Section 397 CrPC, and the inherent powers under Section 482 CrPC should not be invoked if there is a specific remedy available under the Code.
4. Inherent Powers of the High Court and Their Limitations:
The court reiterated that the inherent powers under Section 482 CrPC should be exercised sparingly and only when necessary to prevent abuse of the process of any court or to secure the ends of justice. The principles laid down in Madhu Limaye's case were cited, emphasizing that inherent powers should not be used if there is a specific provision in the Code for redressal, and they should not be exercised against the express bar of law in any other provision of the Code. The court also referred to various Supreme Court judgments to underline that the inherent powers are not meant to bypass the specific remedies provided under the Code.
Conclusion:
The court concluded that the orders of taking cognizance in both cases were final orders and not interlocutory. Therefore, the appropriate remedy for the petitioners was to file a revision under Section 397 CrPC rather than invoking the inherent powers under Section 482 CrPC. The petitions were dismissed, with the court noting that the period consumed in the petition should not affect the limitation period for filing a revision.
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2009 (2) TMI 908
Issues involved: Appeal against acquittal under Section 138 of the Negotiable Instruments Act, 1881.
Summary:
The Complainant lent a sum of Rs. 1.10 lacs to the accused against a pronote and a blank signed cheque. The completed cheque was dishonoured due to insufficient funds in the accused's account. The accused claimed to have made partial payments, supported by passbooks and cash payments. The trial Court found discrepancies in the evidence, noting that the Complainant admitted receiving only Rs. 8,000 from the accused. The Court also highlighted that the Complainant did not have authority to complete the cheque for Rs. 1.10 lacs. Citing a previous case, the Court emphasized that if a cheque is issued for an amount exceeding the due sum, Section 138 of the Act does not apply. Consequently, the accused successfully rebutted the presumption that the cheque was issued to settle the debt. The appeal was dismissed, and the Complainant was ordered to pay Rs. 5,000 as costs to the accused.
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2009 (2) TMI 907
Issues involved: Suit for recovery of amount, acknowledgment of liability, limitation period.
Details of the judgment:
1. The plaintiff filed a suit against the defendants for recovery of a specific amount. The defendants filed an application for dismissal of the suit on the grounds of limitation.
2. The plaintiff, a company under the Indian Companies Act, placed a purchase order with the defendants for furniture to renovate its restaurant in London. The defendants raised a bill for the furniture supplied, which the plaintiff partially paid. Disputes arose regarding sales tax liability and alleged defective supplies.
3. The plaintiff claimed that the cause of action for the suit arose on various dates, including when the purchase order was placed, bill raised, and defective material received. The last alleged cause of action was on 5.8.2002 when a meeting was held where the defendants allegedly acknowledged the defects.
4. The plaintiff argued that the suit was not barred by limitation as the acknowledgment of liability by the defendants in the meeting of 5.8.2002 extended the limitation period. However, it was found that the acknowledgment was not in writing as required by Section 18 of the Limitation Act.
5. The court held that even if the alleged acknowledgment was accepted, the suit would still be barred by limitation as it was not recorded in writing. Therefore, the suit filed on 18.12.2003, regarding causes of action prior to three years, was dismissed as barred by limitation.
6. The court allowed the application filed by the defendants and dismissed the main recovery suit of the plaintiff as barred by limitation, with each party bearing their own costs. The order specified that it would not influence the decision of the suit pending before the Civil Judge, Delhi.
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2009 (2) TMI 906
Issues involved: Appeal against acquittal u/s 406 IPC based on breach of contract, arbitration award, and criminal nature of the case.
Summary:
The Supreme Court heard an appeal challenging the judgment of the Punjab and Haryana High Court, which upheld the acquittal of the accused by a Judicial Magistrate in a case involving an alleged offence u/s 406 IPC. The accused, partners of a rice mill, were charged with misappropriating paddy entrusted to them by the Punjab State Civil Supplies Corporation Ltd. The trial Court acquitted them, deeming it a civil matter arising from a breach of contract. The High Court affirmed this view without providing reasons.
In the appeal, the State argued that the High Court's decision lacked reasoning and that a breach of contract does not necessarily preclude criminal prosecution. It was contended that the trial Court and High Court failed to analyze the elements of u/s 406 IPC, despite an arbitration award in favor of the Corporation.
The Court explained that u/s 406 IPC, the prosecution must prove entrustment of property to the accused, followed by misappropriation or dishonest disposal of the property. Referring to legal precedents, the Court emphasized that a civil transaction does not exempt an act from criminal liability. The Court also highlighted that arbitration cannot replace criminal prosecution for an offense, as the investigating agency should have the freedom to probe all allegations.
Consequently, the Supreme Court set aside the High Court's judgment and remitted the matter for fresh consideration, emphasizing that a criminal case can proceed even if a breach of contract is involved. The Court criticized the High Court's summary dismissal of the appeal and directed a more thorough review in accordance with the law. The appeal was allowed in part.
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2009 (2) TMI 905
Issues involved:
The judgment deals with the challenge to the condition imposed by the High Court requiring the appellant to pay maintenance to his wife and child while granting anticipatory bail to him and his parents in a case involving alleged offenses under Sections 498A and 406 read with Section 34 of the Indian Penal Code.
Details of the Judgment:
*Issue 1: Anticipatory Bail Condition*
The appellant challenged the condition imposed by the High Court for him to pay maintenance to his wife and child while granting anticipatory bail. The complaint filed by the wife alleged offenses under Sections 498A and 406 read with Section 34 of the Penal Code, citing mental and physical cruelty and misappropriation of dowry. The High Court initially directed the parties to mediation but later imposed the condition of maintenance based on the appellant's salary slip.
*Issue 2: Legal Provisions*
The judgment referred to Section 438 of the Code of Criminal Procedure, which allows conditions to be imposed for granting anticipatory bail. The Court highlighted that conditions should be necessary, just, and efficacious, focusing on securing the accused's presence, preventing flight from justice, tampering with evidence, or intimidating witnesses. Imposing irrelevant or harsh conditions is beyond the Court's jurisdiction under Section 438.
*Issue 3: Maintenance in Anticipatory Bail*
The Court emphasized that in a proceeding under Section 438, awarding maintenance to the wife and child is not justified. The appellant's argument that his wife was employed and not entitled to maintenance was considered. The Court noted that the question of maintenance should be decided in a competent court based on evidence, and the High Court should not have granted maintenance while granting anticipatory bail.
*Conclusion*
The appeal succeeded, and the direction for the appellant to pay maintenance was deleted. The Court maintained other directions in the order but clarified that any amount received by the wife need not be refunded and will be adjusted based on the result of the maintenance application under Section 125 of the Code before the appropriate Court.
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2009 (2) TMI 904
The High Court of Bombay dismissed the appeal based on findings of fact regarding reimbursement of expenditures and cited a previous judgment for Question 5.4.
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2009 (2) TMI 903
Reversal of acquittal passed by High Court - Whether the High Court is justified in interfering with the order of acquittal passed by the ld trial Court? - Conviction of accused persons u/s 147, 307/149, u/s 323/149 I.P.C. and imprisonment for life u/s 302 r/w Sec. 149 of I.P.C. by the trial court - incident taken place between the accused and members of the complainant party over share in plot No. 165/2 measuring 1.88 decimals - Chhakkoo and his brother Panchu were original tenure holders of the said plot along with some other plots - members of the complainant party tried to forcibly dispossess them.
HELD THAT:- The High Court came to the conclusion that PW.3 Sahadeo and PW.4 Narayan cannot be said to be totally independent witnesses as the defence had filed documentary evidence to show that Lalloo, the father of the accused persons had lodged an FIR against these witnesses for an offence u/s 308 IPC. These witnesses were, therefore, also somewhat inimical to the accused persons and their evidence cannot be given due weight especially with regard to the use of Lathi and Danda by the prosecution witnesses, particularly when such an important fact had not been stated by them in their statements recorded u/s 161 Cr.P.C. and the statements being contradictory to each other with regard to the use of Danda by the prosecution witness. The High Court arrived at the conclusion that the injuries of the accused persons have not been satisfactorily explained.
This Court, in a recent judgment in Ghurey Lal v. State of Uttar Pradesh [2008 (7) TMI 951 - SUPREME COURT] considered earlier cases and laid down that the appellate court should, therefore, reverse an acquittal only when it has "very substantial and compelling reasons".
Following are some of the circumstances in which perhaps this Court would be justified in interfering with the judgment of the High Court, but these are illustrative not exhaustive.
i) The High court's decision is based on totally erroneous view of law by ignoring the settled legal position;
ii) The High court's conclusions are contrary to evidence and documents on record.
iii) The entire approach of the High court in dealing with the evidence was patently illegal leading to grave miscarriage of justice;
iv) The High court's judgment is manifestly unjust and unreasonable based on erroneous law and facts on the record of the case;
v) This Court must always give proper weight and consideration to the findings of the High Court.
vi) This Court would be extremely reluctant in interfering with a case when both the Sessions Court and the High Court have recorded an order of acquittal.
When we apply these parameters laid down by a number of cases decided by this Court to the facts of this case, then conclusions become irresistible and no interference is warranted by this Court. Consequently, the appeal filed by the State of UP being devoid of any merits, is accordingly dismissed.
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2009 (2) TMI 902
1. ISSUES PRESENTED and CONSIDERED The core legal issues in this judgment are: - Whether the action of the respondents in bringing the properties claimed by the petitioners for sale by public auction is valid and in accordance with the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004.
- Whether the procedural requirements under the Act, particularly concerning the attachment and sale of properties, have been adhered to.
- Whether the rights of the petitioners, as property owners or agreement holders, have been violated due to the lack of notice and opportunity to be heard.
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of the Sale Notification under the Act - Relevant Legal Framework and Precedents: The Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004, particularly Sections 3, 5, 10, 11, and 12, outlines the procedure for attachment and sale of properties belonging to financial establishments that default on returning deposits.
- Court's Interpretation and Reasoning: The court emphasized that the procedural requirements under the Act must be strictly followed due to the serious consequences of property attachment. The Act mandates specific procedures for investigation, notification, and judicial oversight before properties can be sold.
- Key Evidence and Findings: The court found that the government did not publish the order of attachment in the Official Gazette or newspapers, nor was it affixed to the properties. Additionally, the Competent Authority failed to file an application before the Special Court as required.
- Application of Law to Facts: The court concluded that the procedural lapses rendered the actions of the government, Competent Authority, and Special Court illegal and without jurisdiction.
- Treatment of Competing Arguments: The respondents argued that the actions were in the public interest to protect depositors. However, the court held that procedural compliance is essential to uphold legal standards, regardless of the intended objectives.
- Conclusions: The court quashed the impugned notifications, allowing the petitioners to contest any future proceedings and urging the respondents to adhere to the Act's provisions.
Issue 2: Procedural Compliance and Rights of Property Owners - Relevant Legal Framework and Precedents: Article 300A of the Constitution of India, which mandates that no person shall be deprived of property save by authority of law, was pivotal in this issue.
- Court's Interpretation and Reasoning: The court underscored the necessity of following due process to ensure that property owners' rights are not unjustly infringed.
- Key Evidence and Findings: The court noted the absence of notices to the petitioners and the lack of an order making the attachment absolute by the Special Court.
- Application of Law to Facts: The failure to notify the property owners and the absence of a judicial order making the attachment absolute invalidated the sale proceedings.
- Treatment of Competing Arguments: The respondents' argument of acting in public interest was insufficient to override the procedural deficiencies and the petitioners' rights.
- Conclusions: The court allowed the writ petitions, emphasizing the need for procedural adherence and the petitioners' right to contest future attachment orders.
3. SIGNIFICANT HOLDINGS - Preserve Verbatim Quotes of Crucial Legal Reasoning: "As the effect of such an order of attachment has a serious consequence of depriving the right of the owner in the said property, it is imperative that the procedure prescribed under law has to be strictly followed."
- Core Principles Established: The judgment reiterates the importance of procedural compliance under the Act and the protection of property rights under Article 300A of the Constitution.
- Final Determinations on Each Issue: The court quashed the notifications for sale, underscoring the necessity for the government and Competent Authority to act within the legal framework and provide due process to property owners.
The judgment highlights the balance between protecting depositors' interests and ensuring that property owners' rights are not violated through procedural lapses. It underscores the judiciary's role in safeguarding legal processes and property rights. The court's decision serves as a reminder of the importance of adhering to statutory requirements and respecting constitutional mandates in property-related matters.
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2009 (2) TMI 901
Section 138 of the Negotiable Instruments Act, 1881 - Dishonour of Cheque - acquittal of the accused - amount advanced was an ''unaccounted amount'' which was not disclosed to the Income Tax Authority - cheques issued towards discharge of legally enforceable debt or not? - 1st respondent accepted the liability to repay the loan but denied her signatures on the bill of exchange as well as the cheque - presumption u/s 139 - HELD THAT:- The presumption u/s 139 regarding existence of debt or liability is not rebutted, in order to attract Section 138, the debt or liability has to be a "legally recoverable" debt or liability. As held by the Apex Court in the case of Krishna Bhat [2008 (1) TMI 827 - SUPREME COURT] there is no presumption u/s 139 that the debt is a legally recoverable debt. In the case of Goa Plast (P) Ltd. v. Chico Ursula D'Souza [2003 (11) TMI 336 - SUPREME COURT], the Apex Court reiterated that a debt or liability subject-matter of Section 138 means a legally enforceable debt or liability.
Admittedly the amount allegedly advanced by the applicant was entirely a cash amount and that the amount was "unaccounted". He admitted not only that the same was not disclosed in the Income Tax Return at the relevant time but till recording of evidence in the year 2006 it was not disclosed in the Income Tax Return. By no stretch of imagination it can be stated that liability to repay unaccounted cash amount is a legally enforceable liability within the meaning of explanation to Section 138. The alleged debt cannot be said to be a legally recoverable debt.
Considering the admission of the applicant, the conclusion recorded by the ld trial Judge that the applicant has failed to establish that the cheque was issued towards discharge of a legally recoverable debt is correct.
Therefore, Application is rejected.
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2009 (2) TMI 900
Issues involved: Direction sought for legal action against Real Estate Developers and Builders for duping farmers, investigation by Crime Branch of Haryana Police, remedial measures by Collector, formation of Special Investigating Team (SIT).
Legal Action Against Real Estate Developers and Builders:
The petitioners sought a direction for legal action against respondents No.3 to 5, Real Estate Developers and Builders, who allegedly duped farmers in Yamuna Nagar by promising to pay sale consideration through cheques which later bounced. Despite a substantial part of the sale consideration remaining unpaid, intervention by police authorities ensured full payment to the petitioners. A formal FIR under Sections 420/467/468/120-B of the Indian Penal Code was registered at Police Station City Jagadhari, District Yamuna Nagar.
Investigation by Crime Branch of Haryana Police:
Considering the gravity of the situation where multiple farmers were allegedly cheated of crores of rupees by the respondents and other builders, the court deemed it necessary for the investigation to be conducted by a senior police officer of the Crime Branch. The involvement of revenue officers in connivance with the builders was also highlighted. The Collector, Yamuna Nagar was directed to take immediate remedial measures to prevent further harm to victim-farmers and ensure no rush to the Court. Additionally, a Special Investigating Team (SIT) was to be constituted by the Additional Director General of Police, Crime Branch, comprising officers of specific ranks to investigate all related allegations fairly and conclude the process within three months.
Remedial Measures by Collector:
The Collector, Yamuna Nagar was mandated by the court to address issues such as prevention of third-party rights creation, change in land nature, or farmer dispossession due to unpaid sale consideration. Immediate and necessary actions were to be taken to protect the interests of victim-farmers and avoid unnecessary legal proceedings.
Formation of Special Investigating Team (SIT):
A Special Investigating Team (SIT) was directed to be formed by the Additional Director General of Police, Crime Branch, consisting of officers of designated ranks to investigate not only the petitioners' allegations but also those of other affected farmers. The SIT was expected to conduct a fair, impartial, and prompt investigation, ensuring completion within three months for efficient resolution of the matter.
This judgment emphasizes the importance of thorough investigation, prompt remedial actions, and protection of the rights of victim-farmers in cases of alleged fraud by Real Estate Developers and Builders, highlighting the role of law enforcement agencies and administrative authorities in ensuring justice and preventing further harm.
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2009 (2) TMI 899
Issues Involved:
1. Alleged oppression by the second respondent.
2. Appointment of the fourth respondent as an additional director.
3. Increase in authorized share capital and issuance of rights shares.
4. Shifting of registered office without proper procedure.
Issue-wise Detailed Analysis:
1. Alleged Oppression by the Second Respondent:
The petitioner alleged that the second respondent acted oppressively by excluding her from the management and decision-making processes, contrary to the quasi-partnership understanding that she would hold 50% shares without further financial contribution. The petitioner claimed that the second respondent breached this understanding by offering rights shares, knowing she could not afford them, thus diluting her shareholding.
2. Appointment of the Fourth Respondent as an Additional Director:
The petitioner contested the appointment of the fourth respondent, alleging it was fabricated and violated the company's articles of association. She argued that the appointment disturbed the board's equality and was done without her consent. The respondents countered that the fourth respondent was appointed as a nominee of the third respondent, which had provided substantial funds to the company. Evidence showed that the petitioner had attended several board meetings with the fourth respondent, indicating her knowledge and implicit consent.
3. Increase in Authorized Share Capital and Issuance of Rights Shares:
The petitioner challenged the validity of the extraordinary general meetings that increased the authorized share capital and issued rights shares, claiming she did not receive proper notice. The respondents provided courier receipts and acknowledgments signed by the petitioner's employee, proving notice was given. The court found the increase in share capital and rights issue justified due to the company's financial needs and liquidity crunch. The petitioner's failure to subscribe to the rights shares, despite being offered, negated her claim of oppression.
4. Shifting of Registered Office Without Proper Procedure:
The petitioner argued that the registered office was shifted without her knowledge or consent and without following the proper procedure under Section 17A of the Act. The respondents claimed the shift was done with her consent due to the illness of her husband, where the original registered office was located. The court noted procedural lapses but did not find the act oppressive as it was in the company's interest.
Conclusion:
The court found that the petitioner failed to establish her allegations of oppression and mismanagement. The appointment of the fourth respondent, the increase in authorized share capital, and the issuance of rights shares were all justified and in the company's interest. The petitioner was given the option to invest in rights shares to maintain her 50% shareholding or accept compensation for her shares and unsecured loan. The petitions were disposed of with no order as to costs.
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2009 (2) TMI 898
Issues Involved:
1. Whether the bail granted to the appellant was valid despite the complainant not being heard.
2. Whether the principles of natural justice were violated in granting bail.
3. Whether the High Court was justified in canceling the bail granted by the Judicial Magistrate.
Summary:
Issue 1: Validity of Bail Granted Without Hearing the Complainant
The appellant was accused in Criminal Complaint No. 1604 of 2005 for alleged offences u/s 499 and 500 of the Indian Penal Code. The Judicial Magistrate granted bail on December 1, 2006, without hearing the original complainant. The High Court of Madhya Pradesh canceled this bail on March 24, 2008, citing a violation of natural justice principles. The Supreme Court noted that u/s 436 of the Code of Criminal Procedure, 1973, a person accused of a bailable offence is entitled to bail as a matter of right. The Court emphasized that the officer or court is bound to release the accused on bail if he is willing to abide by reasonable conditions, and there is no requirement to hear the complainant in such cases.
Issue 2: Violation of Principles of Natural Justice
The Supreme Court held that the principles of natural justice do not necessitate hearing the complainant before granting bail in bailable offences. The Court stated that the right to bail in bailable offences is an "absolute and indefeasible right" and that the complainant's hearing is not mandated by Section 436 of the Code. The Court further clarified that natural justice principles are not a "mantra" to be applied in all cases and must be considered based on the specific facts of each case.
Issue 3: Justification of High Court's Cancellation of Bail
The Supreme Court found that the High Court erred in canceling the bail granted by the Judicial Magistrate on the ground of not hearing the complainant. The Court reiterated that bail in bailable offences can only be canceled if the accused misuses his liberty, interferes with the investigation, tampers with evidence, threatens witnesses, or engages in similar activities. The Court concluded that the High Court's decision to cancel the bail was not justified as the complainant's hearing was not a requisite condition for granting bail in bailable offences.
Conclusion:
The Supreme Court set aside the High Court's order dated March 24, 2008, and restored the Judicial Magistrate's order dated December 1, 2006, granting bail to the appellant. The appeal was disposed of accordingly.
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2009 (2) TMI 897
Issues involved: Disallowance of interest on interest-free advances diverted to group concerns.
Summary:
The Appeals before the Bombay High Court concerned the disallowance of interest on loans advanced to sister companies. The Assessing Officer disallowed interest for the current assessment year, despite not doing so in previous years. The CIT (A) upheld the disallowance, leading to the Appeals before the Tribunal. The Tribunal, after considering the source of funds and commercial benefits derived by the assessee, held that no disallowance was warranted. The Revenue appealed this decision.
Regarding the first advance to a subsidiary company, it was found that the interest could not have been disallowed as the loan was for commercial expediency, utilized for repayment of Inter Corporate Deposits (ICD). Similarly, for the loan to another company, it was established that the loan was also for commercial expediency, and the interest could not be disallowed based on the source of funds.
The High Court noted that the loans were given from the company's surplus and emphasized the concept of commercial expediency in advancing loans to sister companies. Citing the case of S.A. Builders Ltd. vs. Commissioner of Income Tax, the Court highlighted that loans for commercial expediency are permissible. The Court concluded that since the loans were not used to give loans to sister companies and were for commercial expediency, there was no merit in the Appeals, which were subsequently dismissed.
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2009 (2) TMI 896
Issues Involved:
1. Constitution of a Water Disputes Tribunal under Section 4 of the Inter-State Water Disputes Act, 1956.
2. Interim relief to restrain the State of Andhra Pradesh from continuing construction of the Side Channel Weir and Flood Flow Canal Project at Katragada.
Detailed Analysis:
1. Constitution of a Water Disputes Tribunal:
The State of Orissa filed a writ petition under Article 32 of the Constitution of India, seeking a direction to the Central Government to constitute a Water Disputes Tribunal under the Inter-State Water Disputes Act, 1956. The petition was based on a complaint dated 13th February 2006, alleging that the State of Andhra Pradesh's construction of a Side Channel Weir and Flood Flow Canal Project on the river Vansadhara would adversely affect Orissa's water supply and the livelihood of its people, violating Article 21 of the Constitution. The river Vansadhara flows through both states, with significant portions in Orissa, and the dispute centers on the equitable sharing of its waters.
Orissa's contention was that the dispute qualified as a "water dispute" under Section 2(c) of the 1956 Act, which includes disputes regarding the use, distribution, or control of inter-state river waters. Orissa argued that Andhra Pradesh's project would deprive its inhabitants of necessary water, thus necessitating the constitution of a Tribunal for adjudication.
The Central Government, as per its counter affidavit, had taken steps for a negotiated settlement but had not constituted a Tribunal. The Supreme Court emphasized that the amendment to Section 4 of the 1956 Act, effective from 28.3.2002, mandates the constitution of a Tribunal within one year of receiving a request if negotiations fail. The Court noted the inaction of the Central Government despite the lapse of almost three years since the complaint.
The Court referred to a precedent in the Tamil Nadu Cauvery Neerppasana Vilaiporulgal Vivasayigal Nala Urimai Padhugappu Sangam v. Union of India, where it was held that the Central Government must constitute a Tribunal under Section 4 of the 1956 Act. The Court concluded that the dispute between Orissa and Andhra Pradesh constituted a water dispute under Section 2(c)(i) of the 1956 Act and directed the Central Government to constitute a Tribunal within six months.
2. Interim Relief:
Orissa also sought an interim order to restrain Andhra Pradesh from continuing construction until the Tribunal's constitution. The Court recognized that without interim protection, Orissa's objections would become infructuous, rendering the Tribunal's formation redundant. The Court noted that while Section 9 of the 1956 Act empowers the Tribunal to grant interim orders, the Supreme Court under Article 32 has jurisdiction to pass interim orders to preserve the status quo until the Tribunal is constituted.
In response to Andhra Pradesh's argument that the Supreme Court lacked jurisdiction under Section 11 of the 1956 Act, the Court clarified that the bar on jurisdiction applies only after the Tribunal is constituted. Until then, the Court can provide interim relief to prevent irreparable harm.
The Court directed Andhra Pradesh to maintain the status quo regarding the construction of the Side Channel Weir and Flood Flow Canal at Katragada until the Tribunal is constituted. Once constituted, the parties could seek further interim orders from the Tribunal.
Separate Judgment by Markandey Katju, J.:
Justice Markandey Katju concurred with the judgment and added observations on the broader issue of water scarcity in India. He highlighted the severe water shortages despite India's vast water resources and the need for scientific solutions. He recommended the Central Government constitute a body of eminent scientists to find inexpensive methods for converting saline water to fresh water, utilizing Himalayan ice, managing rainwater, and harnessing floodwaters. He emphasized that the right to water is part of the right to life under Article 21 and urged immediate action to address the water crisis.
Conclusion:
The Supreme Court allowed the writ petition, directing the Central Government to constitute a Water Disputes Tribunal within six months and ordered Andhra Pradesh to maintain the status quo on construction until the Tribunal's formation. The judgment underscores the importance of timely adjudication of inter-state water disputes and the need for interim measures to prevent irreparable harm.
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2009 (2) TMI 895
Issues Involved:
1. Legality of the CIT(A)'s order.
2. Adoption of valuation by Stamp Valuation Authority (SVA) for computing capital gains.
3. Rejection of the cost of improvement claim.
4. Reliability of the DVO's report.
5. Treatment of alleged agricultural income as undisclosed income.
6. Charging of interest under section 234B and initiation of penalty proceedings under section 271(1)(c).
Detailed Analysis:
1. Legality of the CIT(A)'s Order:
The appellants contended that the order passed by the CIT(A)-I, Lucknow, was illegal and against the facts of the case. However, the Tribunal found that the CIT(A) had confirmed the order of the AO after due consideration of the facts and evidence presented.
2. Adoption of Valuation by SVA for Computing Capital Gains:
The appellants argued against the adoption of the valuation by the SVA, citing several reasons including the tenanted nature of the property, the applicability of the U.P. Rent Control Act, and the actual sale consideration being lower. The AO invoked section 50C(1) of the IT Act, 1961, and substituted the apparent sale consideration with the valuation by the SVA, which was Rs. 2,48,19,410. The DVO's valuation was even higher at Rs. 2,60,74,000. The Tribunal upheld the AO's decision to adopt the SVA's valuation as per section 50C(3), noting that the DVO's valuation was higher and thus the SVA's valuation was correctly adopted.
3. Rejection of the Cost of Improvement Claim:
The appellants claimed a cost of improvement of Rs. 18 lakhs, which was rejected by the AO due to lack of evidence. The CIT(A) also rejected this claim, noting the absence of supporting documents such as bills and vouchers, and the fact that one co-owner did not claim any expenditure on improvement. The Tribunal agreed with the CIT(A), emphasizing that credible evidence was necessary to substantiate the claim.
4. Reliability of the DVO's Report:
The appellants questioned the reliability of the DVO's report, arguing that it did not follow the proper valuation methods prescribed under the Wealth Tax Act and Rules. The Tribunal found that the DVO had appropriately rejected the rent capitalization method due to the significant unbuilt area and had reasonably adopted the land and building method. The Tribunal upheld the DVO's valuation and consequently the SVA's valuation as per section 50C(3).
5. Treatment of Alleged Agricultural Income as Undisclosed Income:
In the case of one appellant, the AO added Rs. 50,000 to the income, treating it as income from undisclosed sources due to lack of evidence of agricultural operations. The CIT(A) confirmed this addition, and the Tribunal upheld the decision, noting that no evidence was provided to justify the receipt of agricultural income.
6. Charging of Interest under Section 234B and Initiation of Penalty Proceedings under Section 271(1)(c):
The appellants contested the charging of interest under section 234B and the initiation of penalty proceedings under section 271(1)(c). The Tribunal held that charging of interest under section 234B was consequential and would be worked out based on the assessed income. The initiation of penalty proceedings was deemed premature and academic, thus requiring no specific adjudication at this stage.
Conclusion:
The Tribunal dismissed all the appeals, confirming the orders of the CIT(A) and the AO on all grounds. The valuation by the SVA was upheld for computing capital gains, the cost of improvement claim was rejected due to lack of evidence, the DVO's report was deemed reliable, and the treatment of alleged agricultural income as undisclosed income was confirmed. The charging of interest under section 234B and the initiation of penalty proceedings under section 271(1)(c) were also upheld.
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