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1998 (4) TMI 561
Issues Involved:
1. Maintainability of the writ petition.
2. Application of Section 116(2) of the Delhi Municipal Corporation Act.
3. Validity of the notice under Section 126 of the Act.
4. Assessment order passed by an officer other than the one who gave the hearing.
Detailed Analysis:
1. Maintainability of the Writ Petition:
Although an objection was raised in the counter affidavit regarding the maintainability of the writ petition due to the provisions of appeal under Sections 169 and 170 of the Act, this objection was not pressed during the hearing. Therefore, this aspect was not further considered.
2. Application of Section 116(2) of the Act:
The petitioner challenged the revision of the rateable value, arguing that Section 116(2) of the Act does not apply to their case. The petitioner contended that the building was under reconstruction, and the land temporarily became an open piece of land due to the demolition of the existing structure. They argued that such cases should be treated as buildings under reconstruction and assessed under Sections 129 and 163 of the Act. The Corporation, however, assessed the property based on the potential market value derived from a brochure issued by the petitioner. The court noted that the building had not been completely demolished by the effective date, i.e., 1st April 1993, and thus, the plot could not be treated as an open piece of land liable to assessment under Section 116(2).
3. Validity of the Notice under Section 126 of the Act:
The petitioner argued that the notice under Section 126 was vague and invalid as it did not disclose the basis for the proposed rateable value of Rs. 15,17,52,000/-. The court emphasized the importance of the notice containing basic facts to enable the petitioner to make an effective representation. The court cited precedents where similar notices were held invalid for not providing sufficient details. The court directed the Corporation to supply the information sought by the petitioner in their objections dated 5th May 1994 within four weeks, without invalidating the notice under Section 126.
4. Assessment Order Passed by a Different Officer:
The petitioner challenged the assessment order on the ground that the hearing was given by one officer while the order was passed by another, violating principles of natural justice. The court agreed, stating that the officer who gives the oral hearing must also pass the final order to ensure the hearing is meaningful and effective. The court cited the Supreme Court's decision in G. Nageswara Rao Vs. A.P.S.R.T. Corpn., which held that the decision must be given by the same officer who heard the party concerned.
Conclusion:
The court set aside the impugned assessment order dated 11th August 1997 and remanded the matter back to the concerned authority for fresh assessment in accordance with law. The Corporation was directed to provide the petitioner with the basis for the proposed rateable value, ensuring compliance with principles of natural justice.
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1998 (4) TMI 560
Issues:
Challenge to constitutional validity of Chapter XX-C of the Income-tax Act, 1961 and order passed under Section 269UD(1) of the Act.
Analysis:
1. The petitioners challenged the constitutional validity of Chapter XX-C of the Income-tax Act, 1961 and sought to quash the order dated 18.12.1997 passed under Section 269UD(1) of the Act. They also aimed to restrain further actions by the second and third Respondents and prevent the fourth, fifth, and sixth Respondents from handing over possession of the property in question.
2. The petitioners entered into an Agreement of sale with the Vendor for a total consideration of Rs. 18,00,000, paying a partial amount upfront. They complied with the requirements under Chapter XX-C by filing Form No. 37-I with the Appropriate Authority but were not given any notice before an order was passed under Section 269UD(1) of the Act, leading to the current challenge.
3. The main contention of the petitioners was the lack of reasons provided in the impugned order regarding the valuation of the property and the absence of an opportunity for them to present their case before the decision was made. This lack of reasoning and opportunity was considered a denial of natural justice.
4. The Respondent No. 2 argued that the case fell within the parameters set by a previous Supreme Court decision, where completed transactions did not require additional notice or opportunity once possession was taken and compensation paid. The Respondent contended that the authority had already exercised its power, and the petitioners had received the compensation and possession of the property.
5. The key legal question that arose was whether the impugned order could be quashed for not providing reasons and denying the petitioners the opportunity to present their case, thus violating principles of natural justice.
6. The Supreme Court's decision in C.B. GAUTAM v. UNION OF INDIA AND OTHERS emphasized the importance of giving a reasonable opportunity to the concerned parties before passing an order with adverse consequences. However, the Court clarified that these principles did not apply to concluded transactions where possession had been taken and compensation paid.
7. In the present case, the petitioners had paid the entire consideration, taken possession of the property, and the transaction was deemed concluded. The Court held that the principles of natural justice did not apply in such concluded transactions, and the petitioners' argument based on pending writ petitions was not valid.
8. The Court referenced previous judgments to support its decision that when a transaction is concluded, possession is taken, and money exchanged without protest, the pending writ petition does not affect the finality of the transaction. Therefore, the Court dismissed the Writ Petitions, citing that the principles laid down by the Supreme Court for concluded transactions applied in this case.
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1998 (4) TMI 559
Issues Involved:
1. Classification of the product "Indrol TQ" under the correct tariff heading.
2. Eligibility for the benefit of Notification No. 120/84-C.E., dated 11-5-1984.
Issue-wise Detailed Analysis:
1. Classification of the product "Indrol TQ" under the correct tariff heading:
The primary issue was whether "Indrol TQ" should be classified under sub-heading 2710.60 as a lubricating oil or under sub-heading 2710.99 as a transmission fluid or speciality oil.
- Assessee's Argument:
The assessee initially classified "Indrol TQ" under sub-heading 2710.99 but later sought re-classification under sub-heading 2710.60, supported by expert opinions and end-use certificates indicating the product's primary function as lubrication in synchromesh gearboxes.
- Revenue's Argument:
The Revenue contended that "Indrol TQ" should be classified under sub-heading 2710.99, arguing that the product is a speciality oil with a flash point above 94^0C and contains more than 70% mineral oil. They emphasized that it is marketed as a premium quality automatic transmission fluid, not as a lubricating oil.
- Collector (Appeals) Decision:
The Collector (Appeals) found that the product's essential and predominant function was lubrication, supported by expert opinions and end-use certificates, and thus classified it under sub-heading 2710.60.
- Vice President's Dissent:
The Vice President argued that "Indrol TQ" is a lubricant rather than a lubricating oil, citing the Harmonized System of Nomenclature (HSN) which distinguishes between lubricating oils and lubricants. He concluded that the product should be classified under sub-heading 2710.99.
- Third Member's Opinion:
The Third Member concurred with the Member (Judicial), agreeing that the product should be classified under sub-heading 2710.60. The Third Member noted that the Revenue did not provide sufficient evidence to rebut the assessee's claims that the product was a lubricating oil as known by the users.
2. Eligibility for the benefit of Notification No. 120/84-C.E., dated 11-5-1984:
- Assessee's Argument:
The assessee claimed the benefit of Notification No. 120/84-C.E., which exempts blended or compounded lubricating oils and greases obtained by blending or compounding mineral oils with other ingredients.
- Revenue's Argument:
The Revenue argued that the product did not qualify for the exemption as it was a speciality oil, not a lubricating oil.
- Collector (Appeals) Decision:
The Collector (Appeals) granted the benefit of the notification, finding that the product met the criteria for exemption.
- Vice President's Dissent:
The Vice President noted that the Collector (Appeals) did not provide sufficient reasons for granting the exemption and suggested remanding the matter for reconsideration.
- Third Member's Opinion:
The Third Member agreed with the Member (Judicial) that the product was eligible for the exemption under Notification No. 120/84-C.E., as it was classified under sub-heading 2710.60.
Final Order:
In view of the majority opinion, the product "Indrol TQ" was classified under heading 2710.60 and was entitled to the benefit of Notification No. 120/84-C.E., dated 11-5-1984.
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1998 (4) TMI 558
Issues Involved: Determination of whether the arbitration proceedings are governed by the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996.
Summary:
1. The Supreme Court examined four arbitration proceedings from the High Court of Bombay to determine the applicability of the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996.
2. The Court analyzed the timeline of events leading to the arbitration suits and the rejection of claims by the respondent-authorities. It was established that the arbitration suits were filed prior to the commencement of the new Act in January 1996, thus falling under the purview of the old Act of 1940.
3. Subsequently, the Court addressed a request from the respondents regarding the qualification of the arbitrator for the four proceedings governed by the old Act. The respondents were given time to reconsider the appointment of a retired Chief Justice or Judge as the arbitrator, with the matter adjourned to a later date for further response.
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1998 (4) TMI 557
Issues involved:
Constitutional validity of Section 71 of the Co-operative Societies Act, Gujarat Act 10 of 1962.
Analysis:
The judgment dealt with the Constitutional validity of Section 71 of the Co-operative Societies Act, Gujarat Act 10 of 1962. The main contention was that Section 71 could not control the affairs of a Society engaged in banking business, as after the amendment by the Banking Laws Act of 1965, such societies fell under Central legislation. It was argued that the State Legislature's powers were limited by Article 245 of the Constitution in this regard. The Court refrained from examining factual controversies and focused solely on the legal question of whether Section 71 remained valid post the Banking Regulation Act amendment in 1965. All parties agreed that the District Co-operative Banks were Co-operative Societies under the Act, registered and conducting banking business as per the Banking Regulation Act. The argument was that the Gujarat Act's provisions could not control these banks' activities due to the Central legislation's authority over banking matters.
The argument presented was that matters concerning the incorporation, regulation, and winding up of Banking Societies, even under the Co-operative Societies Act, fell under Entry 43 of List 1 of the Seventh Schedule. It was contended that Entry 45 also covered banking activities of Co-operative Societies. However, the State Legislature's power to legislate on Co-operative Societies dealing in banking business was questioned, stating that if a subject fell under List 1, the Parliament had exclusive legislative power. The Court emphasized the need for a harmonious interpretation of conflicting entries in the Seventh Schedule. It was concluded that Co-operative Banks could fall under Entry 43 and not Entry 45, as Entry 43 excluded Co-operative Societies. The State Legislature had the authority to legislate on Co-operative Societies under Entry 32 of List II, even if engaged in banking business.
Referring to a previous Supreme Court decision, the judgment highlighted that Co-operative Societies engaged in banking retained their status under the Co-operative Societies Act. The District Co-operative Banks, registered under the Act, primarily aimed to finance other Societies. The issue arose when the Bank invested funds in a Mutual Fund without State Government permission, leading to notices under Section 148 of the Act. The Court refrained from expressing views on the investment's justifiability to avoid prejudicing subsequent proceedings. Ultimately, the Court held that the Act's provisions controlled the petitioners' affairs, and actions taken under the Act were legal and sustainable. The petitioners' requests for relief were dismissed, and they were advised to face the proceedings in accordance with the law.
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1998 (4) TMI 556
Issues involved:
The issues involved in the judgment are the grant of leave to defend in a summary suit filed under Order 37 of the Civil Procedure Code (C.P.C) and the examination of whether the defense raised is genuine or illusory.
Grant of Leave to Defend:
The appeal arose from an order by the High Court of Bombay affirming a Trial Judge's order in a summary suit under Order 37 of C.P.C, where summons for Judgment were issued against the appellants. The suit was based on bills of exchange, with the appellants being the acceptors and M/s. Khanna Sales Corporation being the drawers. The respondent bank filed the suit as the amounts under the bills were not paid within the stipulated time. The Trial Judge refused leave to defend, but the Division Bench held that the bills were not supported by consideration as no goods were actually sold to the appellants. The Division Bench found the appellants' defenses of fraud and collusion unsubstantiated, leading to the decree against them.
Legal Principles for Granting Leave to Defend:
The Court referred to previous decisions to explain the legal principles for granting leave to defend. It was stated that a defendant with a good defense on merits is entitled to unconditional leave to defend. Even if the defense is fair or reasonable, the defendant should be granted leave. If the defendant discloses facts that may entitle them to defend at trial, conditions may be imposed. However, if the defense is illusory or sham, the defendant may not be entitled to leave to defend.
Decision and Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's order and granting unconditional leave to the defendant to defend the suit. The Court found that the defense raised was not entirely defenseless or illusory, contrary to the High Court's view. Therefore, the appellants were granted leave to defend, and the summons for Judgment were dismissed. The Court emphasized the importance of examining the genuineness of the defense at the stage of granting leave to defend.
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1998 (4) TMI 555
Issues Involved:
1. Whether the appellant, Kenya Airways, can be held to be a Foreign State within the meaning of section 86 of the Code of Civil Procedure, 1908?
2. If yes, whether the first respondent was required to obtain the consent of the Central Government before filing the present suit as required by the aforesaid section?
3. Whether the third defendant has waived its right under section 86 of the Code?
4. Whether the communication dated 2nd June, 1995, addressed by the Ministry of External Affairs, Government of India, to the plaintiff entitled the plaintiff to file the present suit on the hypothesis that no consent under section 86 is required to be obtained prior to filing of the present suit?
Issue-wise Detailed Analysis:
1. Whether the appellant, Kenya Airways, can be held to be a Foreign State within the meaning of section 86 of the Code of Civil Procedure, 1908?
The court examined whether Kenya Airways qualifies as a "foreign state" under section 86 of the Code of Civil Procedure. The third defendant (Kenya Airways) was incorporated under the Companies Act in Kenya, with its share capital held by two government officials. The court considered the Memorandum and Articles of Association, which indicated that the company was fully owned and controlled by the Government of Kenya. Despite being engaged in commercial activities, the court concluded that Kenya Airways, being wholly owned by the Government of Kenya, is entitled to sovereign immunity under section 86 of the Code.
2. If yes, whether the first respondent was required to obtain the consent of the Central Government before filing the present suit as required by the aforesaid section?
The court referred to the Supreme Court's ruling that emphasized the necessity of obtaining the Central Government's consent before filing a suit against a foreign state, as mandated by section 86 of the Code. The Supreme Court's judgment in the case of "Veb Dautrfraght Seereederi Restock (D.S.P. lines) Department of the German Democratic Republic" reinforced that the trial court must first determine whether the appellant is a foreign state and if the plaintiff was required to obtain consent. The court acknowledged that the plaintiff did not obtain the necessary consent before filing the suit, which would typically render the suit non-maintainable.
3. Whether the third defendant has waived its right under section 86 of the Code?
The court noted that the defendants raised the issue of immunity under section 86 of the Code after a lapse of almost sixteen years from the date of filing the suit. The defendants had participated in the proceedings, filed written statements, and furnished undertakings without initially raising the plea under section 86. The court concluded that the defendants had submitted to the jurisdiction of the court and, by their conduct, waived their right to claim immunity under section 86. The court held that the suit is maintainable despite the lack of prior consent from the Central Government.
4. Whether the communication dated 2nd June, 1995, addressed by the Ministry of External Affairs, Government of India, to the plaintiff entitled the plaintiff to file the present suit on the hypothesis that no consent under section 86 is required to be obtained prior to filing of the present suit?
The court considered the communication from the Ministry of External Affairs, which stated that no permission under section 86 was necessary. However, the court emphasized that the communication did not alter the legal requirement of obtaining consent under section 86. The court reiterated that the third defendant's waiver of its right under section 86 was the primary reason for the suit's maintainability, rather than the communication from the Ministry.
Conclusion:
The court ultimately confirmed the trial court's finding that the suit is maintainable, though on different grounds. The appeal was dismissed with costs, and further proceedings in the suit were stayed for six weeks to allow the appellant to approach the Supreme Court.
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1998 (4) TMI 554
Issues Involved:
1. Territorial jurisdiction of the Rajasthan High Court to entertain the Habeas Corpus Petition.
2. Interpretation of Article 226(2) of the Constitution of India regarding cause of action.
Detailed Analysis:
1. Territorial Jurisdiction of the Rajasthan High Court to Entertain the Habeas Corpus Petition:
The petitioner challenged the detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The petitioner and the detenue were residents of Rajasthan but were detained in Mumbai. The petitioner claimed that the detention order was served in Jodhpur, Rajasthan, and thus filed the petition in the Rajasthan High Court.
The respondents raised preliminary objections, arguing that the activities and detention order were centered in Mumbai, thus the Rajasthan High Court lacked jurisdiction. They contended that the mere service of the detention order in Jodhpur did not confer jurisdiction on the Rajasthan High Court.
The court examined whether the factual detention of the detenue in Rajasthan, even if for the purpose of being taken to Pune, provided a cause of action for the Rajasthan High Court to entertain the Habeas Corpus Petition.
2. Interpretation of Article 226(2) of the Constitution of India Regarding Cause of Action:
Article 226(2) allows a High Court to exercise jurisdiction if the cause of action arises wholly or in part within its territorial limits. The court analyzed whether the detention in Rajasthan constituted a part of the cause of action.
The court referred to several precedents:
- P. Subramani v. State of Karnataka (1990 Cri LJ 1106): The Madras High Court held that the High Court of the state where the detention physically occurs has jurisdiction.
- Smt. Manjulaben v. C.T.A. Pillay (1976 Cri LJ 889): The Gujarat High Court ruled that initial detention within the state provided part of the cause of action.
- Ramchand Santumal Bhatia v. Tarun Roy (1988 Cri LJ 641): The Bombay High Court decided that the place where the detenue is taken into custody and served with the detention order confers jurisdiction.
The court also discussed the Division Bench decision in Sewa Ram v. Union of India (D.B. Civil Habeas Corpus Petition No. 1243/97), which held that the passing of the detention order supplied the whole cause of action, and subsequent arrest did not confer jurisdiction.
The court disagreed with the narrow interpretation in Sewa Ram's case, emphasizing that factual detention at a particular place does supply a part of the cause of action, thus giving the High Court jurisdiction.
Conclusion:
The court concluded that the service and execution of the detention order in Rajasthan provided part of the cause of action, thus conferring jurisdiction on the Rajasthan High Court. The court clarified that while it had jurisdiction, it could exercise discretion to decide whether to entertain the petition based on expediency or other grounds.
The reference was answered accordingly, affirming that the Rajasthan High Court had territorial jurisdiction to entertain the Habeas Corpus Petition. The case was sent back to the concerned Division Bench for further proceedings.
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1998 (4) TMI 553
Issues involved:
The judgment deals with the issue of whether the Collector was justified in proceeding against the appellant, a Director of a company, for defaulting in loan repayment without providing an opportunity of being heard u/s the Haryana Public Moneys (Recovery of Dues) Act, 1979.
Summary:
The appellant was a Director of a company that defaulted on loan repayments to the Haryana Financial Corporation. The Corporation sought recovery of the outstanding amount through proceedings u/s 3(3) of the Haryana Public Moneys (Recovery of Dues) Act, 1979. The appellant contended that as he had resigned as Director, no recovery could be made from him without notice. The High Court held in favor of the Corporation, but the Supreme Court found that principles of natural justice must be applied in such cases.
The Act provides for the recovery of dues as arrears of land revenue. The Managing Director of the Corporation must determine the sum due from the defaulter before issuing a recovery certificate to the Collector. The certificate is conclusive proof of the amount due, and the Collector proceeds with recovery. The Act bars civil courts from adjudicating on such matters, emphasizing the role of the Managing Director in determining the amount due.
The Supreme Court held that the determination by the Managing Director must involve hearing the alleged defaulter to ensure natural justice. The Court distinguished a previous case and emphasized the need for notice before recovery proceedings. As principles of natural justice were not followed in this case, the Court set aside the judgment of the High Court and the recovery certificate, allowing the Managing Director to initiate recovery proceedings afresh in compliance with the law.
In conclusion, the Supreme Court allowed the appeal, setting aside the previous judgment and directing the Managing Director to proceed with recovery in accordance with the law and principles of natural justice.
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1998 (4) TMI 552
Issues:
1. Termination of probationary employment.
2. Maintainability of suit under Specific Relief Act.
3. Applicability of res judicata in writ petition.
4. Entitlement to declaration of continued employment.
Analysis:
1. Termination of Probationary Employment:
The appellant, a probationary Inspector at a company, was terminated due to failure to achieve the targeted premium amount. The appellant challenged the termination through a suit for a declaratory decree. The trial court and first appellate court ruled in favor of the appellant, but the High Court dismissed the suit in a second appeal by the respondent. The High Court held that the termination was valid as per the terms of the employment contract, and the appellant was not entitled to continue as a Probationary Inspector. The Supreme Court upheld the High Court's decision, stating that the appellant failed to meet the conditions for continuation as per the appointment letter.
2. Maintainability of Suit under Specific Relief Act:
The respondent argued that the suit was not maintainable under Section 34 of the Specific Relief Act. However, the trial court, execution court, and High Court held that the suit was maintainable. The Supreme Court reiterated that the decision in a writ petition under Article 226 or 32 would operate as res judicata in subsequent proceedings, barring the respondent from re-agitating the issue of maintainability.
3. Applicability of Res Judicata in Writ Petition:
The Supreme Court emphasized that the rule of res judicata applies to writ petitions under Article 226 or 32, ensuring finality in judicial decisions. The Court cited previous judgments to support the application of res judicata in writ proceedings, preventing parties from re-litigating the same issues in subsequent stages or proceedings.
4. Entitlement to Declaration of Continued Employment:
The appellant sought a declaration that he continued to be in the employment of the respondent-company. However, the terms of the employment contract clearly stated the conditions for continuation as a Probationary Inspector. As the appellant failed to meet these conditions, the High Court correctly concluded that the suit was liable to be dismissed. The Supreme Court upheld this decision, stating that the appellant could not claim continued employment based on the contract terms.
In conclusion, the Supreme Court dismissed the appeal, upholding the High Court's decision regarding the termination of probationary employment and the maintainability of the suit under the Specific Relief Act. The Court affirmed that res judicata applied to prevent re-agitation of issues and clarified that the appellant was not entitled to a declaration of continued employment based on the contract terms.
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1998 (4) TMI 551
Issues:
Interpretation of deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 for interest on securities, subsidies, dividends, and interest from co-operative institutions as business income.
Analysis:
The case involved a cooperative society engaged in banking and credit facilities, claiming deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 for interest on securities, subsidies, dividends, and interest from co-operative institutions as business income for the assessment year 1980-81. The claim was initially rejected by the Income Tax Officer (ITO) but was allowed on appeal by the Commissioner of Income Tax (Appeals) (CIT(A)), which was upheld by the Tribunal.
The High Court referred to previous decisions in similar cases involving the same assessee, where it was held that interest on securities forming part of liquid assets maintained as per regulatory requirements constituted circulating capital and were deductible under section 80P(2)(a)(i) of the Act. The Court emphasized that such investments were realizable whenever additional funds were needed, supporting the assessee's claim.
However, the Revenue argued against the deduction based on a Supreme Court judgment involving a cooperative society's claim for deduction on interest earned from securities purchased from reserve funds. The Supreme Court held that securities from reserve funds, not readily encashable and usable only under specific circumstances, could not be considered circulating capital. The Court differentiated between investments easily withdrawable on short notice, which are part of banking business requirements, and those tied up in reserve funds.
The High Court further cited Supreme Court decisions emphasizing that interest earned on investments not related to reserve funds but considered stock-in-trade or circulating capital qualifies as business income for a bank. The Court clarified that income derived from liquid assets like securities, not reserve funds, is part of banking business income and deductible under section 80P(2)(a)(i) of the Act. The judgment favored the assessee, ruling in their favor against the Revenue's contentions.
In conclusion, the High Court answered the question in favor of the assessee, emphasizing that interest earned on investments in liquid assets like securities, forming part of circulating capital, qualifies as business income for a bank and is deductible under section 80P(2)(a)(i) of the Income Tax Act, 1961. The judgment highlighted the distinction between investments from reserve funds and those forming part of circulating capital, reaffirming the eligibility of the assessee for the claimed deductions.
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1998 (4) TMI 550
Issues Involved:
1. Eligibility for Promotion to Indian Police Service (I.P.S.) Cadre.
2. Tribunal's Power to Review its Own Decisions.
3. Finality of Tribunal's Judgment Post Supreme Court's Dismissal of Special Leave Petition.
4. Status of Review Applicants as "Persons Aggrieved".
Summary:
1. Eligibility for Promotion to Indian Police Service (I.P.S.) Cadre:
The appellant, Gopabandhu Biswal, was not considered for promotion to the I.P.S. cadre because, according to the respondents, only Deputy Superintendents of Police in the Orissa Police force were eligible for such promotion. The Central Administrative Tribunal, Cuttack Bench, initially held that the posts of Deputy Superintendent of Police and Assistant Commandant of the Orissa Military Police constituted a single cadre prior to 5th November 1980, and directed that Biswal's case be considered for promotion from 1.1.1977 to January 1980. However, this decision was later reviewed and reversed by the Tribunal, which held that the two cadres were separate from inception and that Assistant Commandants were not eligible for promotion to the I.P.S.
2. Tribunal's Power to Review its Own Decisions:
Section 22(3) of the Administrative Tribunals Act, 1985, confers on an Administrative Tribunal the same powers as a civil court under the Code of Civil Procedure, including the power of reviewing its decisions (u/s 22(3)(f)). The Tribunal's power to review is similar to that of a civil court under Order 47 Rule 1 of the Code of Civil Procedure, which allows for review on grounds such as the discovery of new evidence or an error apparent on the face of the record.
3. Finality of Tribunal's Judgment Post Supreme Court's Dismissal of Special Leave Petition:
Once a special leave petition (S.L.P.) is filed and rejected by the Supreme Court, the judgment of the Tribunal becomes final and binding. The Supreme Court held that the Tribunal could not review its decision after the S.L.P. was dismissed, as it would be "deleterious to judicial discipline." This principle was reaffirmed in several cases, including State of Maharashtra & Anr. v. Prabhakar Bhikaji Ingle and Sree Narayana Dharmasanghom Trust v. Swami Prakasananda & Ors.
4. Status of Review Applicants as "Persons Aggrieved":
The review applicants, who were not parties to the original petition or the S.L.P., claimed to be "persons aggrieved" by the Tribunal's judgment. However, the Supreme Court held that even if they were considered "persons aggrieved," they could not seek a review of a judgment that had attained finality by virtue of the Supreme Court's order. The Court emphasized that only persons directly and immediately affected by the impugned order could be considered "parties aggrieved" u/s 22(3)(f) read with Order 47 Rule 1.
Conclusion:
The Supreme Court allowed the appeals, set aside the Tribunal's order in the review applications, and remanded the Original Applications Nos. 276, 277, and 278 of 1993 for fresh consideration by the Tribunal in accordance with law. The Tribunal was directed to either follow its earlier judgment or refer the question to a larger Bench if reconsideration was deemed necessary. There was no order as to costs.
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1998 (4) TMI 549
The Allahabad High Court upheld the Trade-tax Tribunal's decision that tax realized by a dealer from customers cannot be considered as part of turnover for sales-tax levy. The Court relied on previous judgments and dismissed the revision filed by the Commissioner of Sales-tax. (1998 (4) TMI 549 - ALLAHABAD HIGH COURT)
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1998 (4) TMI 548
Issues:
1. Disciplinary proceedings against a bank officer for misconduct.
2. Non-furnishing of the inquiry report to the respondent.
3. Challenge to the order of dismissal by the High Court.
4. Legal principles regarding disciplinary actions in banking sector.
Issue 1: Disciplinary proceedings against a bank officer for misconduct:
The case involved a bank officer who faced disciplinary proceedings for various acts of misconduct, including bribery, embezzlement, and misappropriation. The officer was initially reinstated in 1982 after being dismissed in 1974 but faced suspension in 1989 due to new irregularities. The disciplinary authority conducted an inquiry, found the officer guilty, and ordered dismissal. The officer challenged this decision through various legal avenues, including a writ petition and an appeal.
Issue 2: Non-furnishing of the inquiry report to the respondent:
One of the key contentions was the non-furnishing of the inquiry report to the respondent before the order of dismissal was passed. The High Court set aside the dismissal order citing prejudice to the respondent due to not receiving the report earlier. However, the Supreme Court disagreed, stating that the respondent had the opportunity to challenge the findings in the report during the appeal and writ petition stages. The Court emphasized that the absence of the report did not cause prejudice to the respondent's case.
Issue 3: Challenge to the order of dismissal by the High Court:
The High Court had set aside the orders of dismissal by the Disciplinary Authority and the Appellate Authority, directing a fresh consideration of the case. The High Court's decision was based on the perceived prejudice caused by the non-furnishing of the inquiry report. However, the Supreme Court disagreed with this reasoning, stating that the charges against the officer were serious and warranted dismissal. The Court found no merit in the High Court's decision to set aside the dismissal order.
Issue 4: Legal principles regarding disciplinary actions in the banking sector:
The Supreme Court emphasized the importance of maintaining integrity and honesty in the banking business. It highlighted that bank employees, especially officers, must adhere to high standards of conduct to preserve public confidence. The Court stressed that serious misconduct, such as bribery and failure to perform duties diligently, could lead to dismissal. Additionally, the Court cautioned against setting aside disciplinary orders solely based on technical grounds, such as non-furnishing of reports, without considering the gravity of the misconduct involved.
In conclusion, the Supreme Court allowed the appeal, set aside the High Court's decision, and confirmed the orders of dismissal against the bank officer. The Court upheld the disciplinary actions taken against the officer for serious misconduct, emphasizing the importance of upholding integrity in the banking sector.
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1998 (4) TMI 547
Issues Involved:
1. Whether a third party in possession of a property claiming independent right as a tenant, not party to a decree under execution, could resist such decree by seeking adjudication of his objections u/r 97 of Order 21 of the Civil Procedure Code (CPC).
Summary:
1. Procedural Law and Hierarchy of Courts:
The judgment emphasizes the arduous journey through procedural law and the hierarchy of courts that seekers of justice must endure. The procedural laws are intended to filter out unwanted obstructions and ensure justice, but they also contribute to delays. The courts and legislatures are continually striving to interpret and amend procedural laws to expedite justice.
2. Case Background:
The appeal arises from the judgment of the High Court of Madhya Pradesh in Civil Revision No. 406 of 1983. The primary issue is whether a third party, claiming independent right as a tenant and not party to the decree under execution, can resist the decree by seeking adjudication of his objections u/r 97 of Order 21, CPC.
3. Facts of the Case:
Respondent No. 1 filed a suit for redemption of his mortgage against Respondent No. 2, which was decreed, directing the delivery of vacant possession of the mortgaged property. The appellants, not parties to the suit, obstructed the execution on the grounds of being tenants since 1952, prior to the mortgage in 1962. The Executing Court initially held that only symbolic possession could be given, but later, based on a Full Bench decision of the M.P. High Court, ruled that the appellants had no right to object u/r 97.
4. Legal Provisions and Interpretation:
The judgment discusses the relevant provisions: Order 21, Rule 35 (delivery of actual possession), Rule 36 (symbolic possession for tenants), and Rule 97 (resistance or obstruction to possession). The 1976 amendment to Rule 97 expanded the scope to include adjudication of claims by "any person" resisting possession, including those not bound by the decree.
5. Full Bench Decision and Its Implications:
The Full Bench decision in Smt. Usha Jain vs. Manmohan Bajaj held that the Executing Court has no jurisdiction to investigate objections by third parties u/r 97 unless applied by the decree-holder. This decision was challenged as it deprived third parties of their right to object before dispossession.
6. Supreme Court's Analysis:
The Supreme Court analyzed the provisions and concluded that the 1976 amendment intended to allow adjudication of all disputes, including those by third parties, within the execution proceedings itself. The Court emphasized that the term "any person" in Rule 97 includes tenants and others claiming independent rights, allowing them to object and seek adjudication without waiting for dispossession.
7. Precedents and Conclusion:
The Court referred to precedents like Noorduddin vs. Dr. K.L. Anand and Brahmdeo Chaudhary vs. Rishikesh Prasad Jaiswal, which supported the view that objections by third parties should be adjudicated within the execution proceedings. The Full Bench decision in Usha Jain was held to be incorrect.
8. Final Decision:
The Supreme Court quashed the orders of the High Court and the Executing Court, directing the Executing Court to consider and dispose of the appellants' objections u/r 97 of Order 21, CPC, after giving an opportunity to the parties in accordance with the law. The appeal was allowed with costs on the parties.
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1998 (4) TMI 546
Issues Involved:
1. Validity of the Kerala Government's notification withdrawing consent for CBI investigation.
2. Competency of the Kerala Government to order further investigation by its police officers.
3. Applicability of Section 21 of the General Clauses Act to the withdrawal of consent under Section 6 of the Delhi Special Police Establishment Act.
Summary:
Validity of the Kerala Government's Notification:
The Supreme Court examined whether the Kerala Government's notification withdrawing consent for the CBI to investigate Crime No. 246/94 was valid. The Court held that once the CBI had started and completed the investigation with the consent given under Section 6 of the Delhi Special Police Establishment Act, the State Government could not withdraw the consent to stop the investigation midway. The Court referred to the case of Kazi Lhendup Dorji vs. Central Bureau of Investigation, emphasizing that an investigation started by the CBI with the State Government's consent must be completed, notwithstanding the withdrawal of consent.
Competency to Order Further Investigation:
The Court analyzed whether the Kerala Government could order further investigation by its police officers after the CBI had completed its investigation and submitted the report under Section 173(2) of the Code of Criminal Procedure. The Court concluded that the State Police could not further investigate the case once the CBI had taken over and completed the investigation. The Court stated, "Further investigation is the continuation of the earlier investigation and not a fresh investigation or reinvestigation to be started ab-initio wiping out the earlier investigation altogether."
Applicability of Section 21 of the General Clauses Act:
The Court addressed whether Section 21 of the General Clauses Act applied to the withdrawal of consent under Section 6 of the Delhi Special Police Establishment Act. The Court noted that even if Section 21 were applicable, the withdrawal of consent could only have prospective operation and would not affect matters where action had already been initiated. The Court concluded that the notification withdrawing consent was invalid and unsustainable in law.
Malafide Exercise of Power:
The Court found that the Kerala Government's action in withdrawing consent was malafide. The Court highlighted several factors, including the initial request to transfer the case to the CBI due to the complexity and spread of the incidents, the detailed investigation conducted by the CBI, and the lack of any complaint from the Indian Space Research Organisation (ISRO) regarding espionage activities. The Court also noted that the Central Government supported the CBI's investigation and opposed any further investigation by the State Police.
Conclusion:
The Supreme Court allowed the appeals, quashed the impugned notification, and directed the Kerala Government to pay Rs. 1,00,000/- as costs to each of the six accused-appellants. The Court emphasized that the issuance of the notification did not conform to the principles of a responsible government bound by the rule of law.
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1998 (4) TMI 545
The Supreme Court dismissed the appeal as no evidence was presented by the appellants to establish their case. No costs were awarded. (1998 (4) TMI 545 - SC Order)
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1998 (4) TMI 544
Issues involved: Appeal against order revising assessment under section 263 for deduction allowed under section 80HHC.
Summary:
1. The dispute centered around whether to consider gross or net amount of consultancy fees for deduction under section 80HHC.
2. The CIT revised the assessment order, claiming the Assessing Officer erred in allowing deduction based on the net amount of consultancy fees.
3. The assessee argued for deduction based on net amount, citing legal precedents supporting this interpretation.
4. The Departmental Representative supported the CIT's order, advocating for deduction based on gross amount.
5. The Tribunal analyzed the statutory provisions and legal principles, concluding that deduction should be based on the net amount included in the profits and gains of business.
6. Two categories of cases were identified: where the net receipt is clear and where it is not discernible due to common expenditure.
7. The Tribunal upheld the Assessing Officer's decision to deduct 90% of the net consultancy fee included in the business income, rejecting the CIT's interpretation.
8. The Tribunal allowed the assessee's appeal, canceling the revision made by the CIT and restoring the assessment order.
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1998 (4) TMI 543
Issues Involved:
1. Disallowance of depreciation on assets.
2. Disallowance of investment allowance on the new unit.
3. Disallowance of investment allowance on additions to the old unit.
4. Imposition of penalty under section 271(1)(c) for making false claims.
Detailed Analysis:
1. Disallowance of Depreciation on Assets:
The assessee, a limited company running a Steel Mill, undertook a large-scale expansion and filed a return declaring a total income of Rs. 1,19,65,385, claiming depreciation on various assets amounting to Rs. 2,08,45,093. The Assessing Officer (AO) disallowed the entire depreciation claim, leading to a series of appeals and rectifications. The Tribunal, in its orders dated 10-8-1993 and 22-11-1995, allowed the entire depreciation claim except for the UHP Furnace. The final disallowance was limited to the depreciation on the UHP Furnace.
2. Disallowance of Investment Allowance on the New Unit:
The assessee claimed an investment allowance of Rs. 1,08,79,252 on the new unit's plant and machinery. The AO disallowed this claim, but the Tribunal, in its second order, allowed the entire investment allowance, including on the UHP Furnace.
3. Disallowance of Investment Allowance on Additions to the Old Unit:
The AO also disallowed the investment allowance of Rs. 4,65,036 on additions to the old unit. However, the Tribunal's final orders allowed the entire investment allowance claimed by the assessee.
4. Imposition of Penalty under Section 271(1)(c):
The AO initiated penalty proceedings under section 271(1)(c) for making false claims, focusing on the disallowed depreciation and investment allowance. The CIT(A) confirmed the penalty, but the Tribunal found that the penalty could not be sustained. The Tribunal emphasized that the assessee's claims were bona fide and that the disallowance of depreciation on the UHP Furnace was due to insufficient evidence, not falsity. The Tribunal noted that the AO did not conclusively prove that the UHP Furnace was not used and that the evidence provided by the assessee, including certificates from the Excise Department and the M.P. Electricity Board, was not adequately refuted by the AO. The Tribunal concluded that the penalty under section 271(1)(c) could not be imposed based on doubts and that the benefit of doubt should be given to the assessee.
The Tribunal also highlighted that the penalty notice did not specify whether the proceedings were for "concealment" or "filing inaccurate particulars" of income, which further weakened the AO's case for imposing the penalty.
Conclusion:
The Tribunal canceled the penalty under section 271(1)(c), holding that the assessee's claims were bona fide and that the disallowance of depreciation on the UHP Furnace did not justify the imposition of penalty. The appeal filed by the assessee was allowed, and the penalty was canceled.
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1998 (4) TMI 542
Issues Involved:
1. Unauthorized deductions by the bank.
2. Terms of loan repayment.
3. Charging of interest with quarterly rest.
4. Calculation errors in equated monthly installments (EMI).
5. Legality of unilateral changes to loan terms.
6. Compliance with Reserve Bank of India (RBI) circulars and Supreme Court rulings.
Detailed Analysis:
1. Unauthorized Deductions by the Bank:
The petitioners sought a writ commanding the respondent bank to forbear from making unauthorized deductions and refund the amount deducted in purported liquidation of a loan. The petitioners argued that the bank's deductions were against the terms of the agreement, contrary to the bank's own stand, and in violation of RBI circulars and Supreme Court rulings. The bank's actions were characterized as high-handed, unreasonable, and arbitrary.
2. Terms of Loan Repayment:
The loan of Rs. 12,00,000 was to be repaid in monthly installments of Rs. 18,000 over ten years, totaling Rs. 21,60,000. The repayment term did not mention charging interest with quarterly rest. The bank took possession of the premises constructed with the loan on 15.9.1984, and the ten-year repayment period was to end on 15.9.1994.
3. Charging of Interest with Quarterly Rest:
The bank's action of charging interest with quarterly rest was found to be contrary to the agreed terms and the law laid down by the Supreme Court. The Supreme Court, in State Bank of Patiala v. Harbans Singh, held that landlords taking loans for constructing premises to lease back to banks for commercial purposes need not pay interest at more than 15% per annum or with quarterly rest.
4. Calculation Errors in Equated Monthly Installments (EMI):
The bank later claimed that due to a calculation error, the EMI was wrongly fixed at Rs. 18,000 instead of Rs. 19,223.50. This resulted in the bank allegedly short-charging the petitioner by Rs. 1,46,820 over ten years. However, the figures provided by the bank did not add up correctly, showing discrepancies in the outstanding balance and the amounts recovered.
5. Legality of Unilateral Changes to Loan Terms:
The bank's unilateral modification of the loan repayment term, purportedly to correct a calculation error, was challenged as illegal under Section 22 of the Indian Contract Act. The bank's action was seen as taking unfair advantage of its dominant position. The court found considerable force in the petitioners' argument and noted that the bank had practically abandoned its initial stand.
6. Compliance with RBI Circulars and Supreme Court Rulings:
The bank's insistence on charging interest with quarterly rest was also contrary to the terms of the agreement and the Supreme Court's decision. The court noted that the bank's actions were not in line with the RBI's directions, which did not mandate quarterly rest for loans given to landlords for constructing buildings to lease back to banks.
Conclusion:
The court held that the petitioners' loan was fully satisfied on payment of the 120th monthly installment of Rs. 18,000 by 15.9.1994, plus the additional amount for interest tax from 1.10.1991 to 15.9.1994. The bank was directed to recast the petitioners' account accordingly and refund the excess amount deducted with interest. The bank's actions were criticized for not paying heed to the petitioners' protests and for making unauthorized deductions. The application was allowed with costs of Rs. 2200.
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