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2004 (4) TMI 649
Issues Involved:
1. Constitutionality of Sub-rule (3) of Rule 24 of the Kerala State Lotteries and On-line Lotteries (Regulation) Rules, 2003.
2. Validity and legality of the public notice dated 8.11.2003 issued by the Director of State Lotteries, Kerala.
3. Ultra vires nature of Sub-rule (3) of Rule 3 and Sub-rule (10) of Rule 24 of the Rules.
4. Jurisdiction of the High Court to adjudicate the dispute between the State of Kerala and other States.
5. Compliance requirements for marketing and selling lottery tickets within Kerala.
Detailed Analysis:
1. Constitutionality of Sub-rule (3) of Rule 24:
The appellants contended that Sub-rule (3) of Rule 24 is unconstitutional as it imposes a prohibition on marketing lotteries until appropriate orders are issued by the Secretary to Government, Taxes Department. The court held that the Rules were made by the Government of Kerala with competence and jurisdiction under Section 12 of the Lotteries (Regulation) Act, 1998. The Rules, including Sub-rule (3) of Rule 24, are regulatory measures to ensure compliance with the Act. Therefore, Sub-rule (3) is not unconstitutional.
2. Validity and legality of the public notice dated 8.11.2003:
The public notice cautioned the general public about potential cheating/fraud in lotteries run by other States, including On-line Lotteries. The court found that the Director of State Lotteries was competent and justified in issuing the notice to protect the public interest. The notice was deemed legal and necessary given the allegations of violations of the Act by other States' lotteries.
3. Ultra vires nature of Sub-rule (3) of Rule 3 and Sub-rule (10) of Rule 24:
The appellants argued that these provisions were ultra vires the Act. The court held that Sub-rule (3) of Rule 3, which vests the authority to monitor the sale of lotteries of other States, is a regulatory measure to ensure compliance with the Act. Sub-rule (10) of Rule 24, which allows temporary suspension of lottery sales pending Central Government action, is also regulatory and not a prohibition under Section 5 of the Act. Both provisions were found to be within the rule-making power of the Government of Kerala and not ultra vires.
4. Jurisdiction of the High Court:
The learned Advocate General argued that the High Court lacked jurisdiction to adjudicate disputes between States, which should be under the Supreme Court's purview as per Article 131 of the Constitution. However, since the court decided the claims on merits, it did not delve deeply into this jurisdictional issue.
5. Compliance requirements for marketing and selling lottery tickets within Kerala:
The court emphasized the necessity for other States to submit required documents and obtain approval from the Secretary to Government, Taxes Department, before marketing lotteries in Kerala. This regulatory framework ensures that lotteries comply with the Act, protecting public interest and preventing violations. The court rejected the appellants' argument that existing lotteries should be exempt from these requirements, stating that all lotteries must comply with the Rules post their enforcement.
Conclusion:
The court upheld the validity of Sub-rule (3) of Rule 24, Sub-rule (3) of Rule 3, and Sub-rule (10) of Rule 24 of the Kerala State Lotteries and On-line Lotteries (Regulation) Rules, 2003. It affirmed the legality of the public notice dated 8.11.2003 issued by the Director of State Lotteries, Kerala. The appellants were directed to comply with all provisions of the Act and Rules while marketing and selling lottery tickets within Kerala. The Writ Appeals were dismissed, and interim orders vacated.
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2004 (4) TMI 648
Issues Involved:
1. Whether a new tenancy comes into existence, between the parties, on possession being restored to the tenant over the newly erected building or any part thereof, which would entitle the landlord to settle the rent and other terms of lease afresh?
2. What is the period of limitation for filing an application by the tenant seeking enforcement of the order of the Rent Controller made under Section 12 of the Act?
Issue-wise Detailed Analysis:
1. New Tenancy and Rent Settlement:
The court examined whether a new tenancy arises when the tenant is restored possession of the newly erected building, which would allow the landlord to set new rent and lease terms. The court clarified that under Section 12 of the A.P. Buildings (Lease, Rent and Eviction) Control Act, 1960, the lease does not end when the tenant delivers possession to the landlord for repairs or reconstruction. The tenancy continues to survive, and the tenant retains the right to re-occupy the premises on the same terms and conditions as before. The rent obligation is suspended during the period the landlord is in possession for repairs or reconstruction. Upon re-entry, the tenant is liable to pay the same rent as before, unless the landlord seeks a revision of rent as permitted by law. The landlord cannot condition the tenant's re-entry on the payment of a higher rent. The court underscored that the tenant's right to re-occupy the premises is protected, and any increase in rent must follow the procedure outlined in Section 5 of the Act.
2. Period of Limitation for Tenant's Application:
The court addressed the period of limitation for filing an application by the tenant seeking enforcement of the Rent Controller's order under Section 12. The court distinguished between the landlord's application for execution of the order and the tenant's application for re-entry. The landlord's application is governed by Rule 23, which requires filing within six months from the date of the order. However, the tenant's application is not for execution but for enforcing the landlord's undertaking. Therefore, it is governed by Article 137 of the Limitation Act, 1963, which provides a three-year period from the date the right to apply accrues. The court emphasized that the tenant must act within the time specified by the Controller or within a reasonable time upon receiving the landlord's offer. The court overruled previous decisions that incorrectly applied Rule 23 to the tenant's application.
Conclusion:
The court dismissed the appeals, affirming that the tenant's application for re-entry was within the limitation period and that the landlord could seek fair rent as permitted by law. The court also noted that third parties currently occupying the premises must be given notice and heard before the High Court's order is implemented. The court's decision reinforces the tenant's right to re-occupy the premises on the original terms and conditions and clarifies the applicable limitation period for enforcing this right.
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2004 (4) TMI 647
Interpretation of special provisions for election of officers of specified societies u/s 144Y of the Maharashtra Cooperative Society Act, 1960 - Validity of election process for the Chairman of a cooperative society; Grant of interim relief in a writ petition challenging election process - HELD THAT:- The present one is a case where we are fully satisfied that a foolproof case for the grant of interim relief was made out in favour of the petitioner in the High Court on the basis of the material available before the Court. There was only one nomination filed which was found to be in order and was not withdrawn. The time appointed for filing nominations, scrutiny and withdrawal was over. There was no contest. Nothing had remained to be done at the meeting of the Committee which was to be convened only for the purpose of declaring the result. Nothing was to be put to vote. Holding of a meeting was only for the purpose of performing the formality of declaring the appellant as elected. In fact the election programme, as notified, itself contemplated the meeting at 1400 hours for voting and counting 'if felt necessary'. The provision as to quorum lost all its significance. It did not make any difference whether there were eight directors to hear the declaration of result or just four or even none. May be the directors having learnt of there being a single valid nomination and that too not withdrawn, also knew that the result of the election was a fait accompli, and therefore, did not want to take the trouble of even coming to the venue of the meeting.
Unless something was brought to the notice of the Court either by way of material in the shape of documents or affidavits or even by way of a plea raised before the Court which could come in the way of the relief being granted to the writ petitioner, in the case of such a nature, the interim relief ought to have been granted. The writ petitioner-appellant is right in submitting that the election was for a period of one year out of which a little less than half of the time has already elapsed and in the absence of interim relief being granted to him there is nothing which would survive for being given to him by way of relief at the end of the final hearing.
It is pertinent to note that in spite of the respondents having been noticed by this Court none has made appearance excepting the State of Maharashtra and the State too has not chosen to file any counter affidavit.
The appeal is allowed. The impugned order dated 5.1.2004, in so far as it rejects the prayer for the grant of interim relief, is set aside. The prayer for the grant of interim relief as made by the writ petitioner/appellant is allowed. The respondents are directed to announce the result of election in accordance with the election programme dated 11.12.2003 post haste and act accordingly.
The High Court while deciding the writ petition on merits would obviously do so on the basis of pleadings and documents produced and submissions made before it; the High Court need not feel inhibited by anything said in this order.
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2004 (4) TMI 646
Issues Involved:
1. Competence and jurisdiction of the Public Service Commission to frame rules.
2. Validity of selection criteria under Rule 51 of 1980 Rules vis-`a-vis Rule 8 of 1979 Rules.
3. Counting ad hoc experience as valid experience for eligibility.
4. Reasonableness of marks allocation for viva voce test.
5. Legality and arbitrariness of the selection process.
Detailed Analysis:
1. Competence and Jurisdiction of the Public Service Commission to Frame Rules:
The High Court held that the Commission has the competence and jurisdiction to frame rules for conducting its business, such as the 1980 Rules, even though no such power is expressly conferred. This power is impliedly granted by the enactment.
2. Validity of Selection Criteria Under Rule 51 of 1980 Rules Vis-`a-Vis Rule 8 of 1979 Rules:
The High Court opined that Rule 8 of 1979 Rules, which prescribes the statutory method of recruitment, prevails over Rule 51 of 1980 Rules. The Commission did not properly follow and apply the method of selection relating to the service as prescribed under Rule 8 of 1979 Rules.
3. Counting Ad Hoc Experience as Valid Experience for Eligibility:
The High Court noticed that some respondents did not possess the requisite two years of experience as Registrar, Demonstrator, or Senior Resident. For example, Respondent No. 3 had only 22 months of experience, and Respondent No. 8 had 20 months and 27 days of experience, both less than the required two years.
4. Reasonableness of Marks Allocation for Viva Voce Test:
The High Court answered in the affirmative that 100 marks earmarked for the viva voce test and 40 marks for the record are excessive and contrary to the law laid down by the Supreme Court. The statutory method of selection under Rule 8 of 1979 Rules was not comprehensively followed, necessitating the re-casting of Rule 51.
5. Legality and Arbitrariness of the Selection Process:
The High Court found that the selection process was arbitrary and illegal as the criteria laid down in Rule 51 of 1980 Rules were applied, ignoring Rule 8 of 1979 Rules. Marks for research experience, publications, or previous record of work were not considered, and the petitioner, despite having higher qualifications, was given minimum marks in the viva voce test, turning his merit into demerit.
Conclusions:
The High Court's judgment was upheld, directing the State to fully comply with the High Court's directions by giving all benefits to the appellant, including monetary benefits and seniority, placing him above Respondents 3 and 9 in the select list. The Court acknowledged the lapse of time and the ongoing service of the private respondents but emphasized restoring confidence in statutory bodies by strict compliance with legal requirements. The appeals were disposed of accordingly, with costs borne by the State of Jammu and Kashmir.
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2004 (4) TMI 645
Limitation for filing objections to the arbitration award - Validity and quantum of various claims made by the respondent - Interest awarded by the arbitrator - Costs of arbitration - HELD THAT:- When there was no dispute as to the fact that materials had been used for the purpose of the project and the value thereof, the claim made by the appellant having been duly examined by the arbitrator and after giving due allowance to the advances that have been made the award made by the arbitrator cannot be stated to be as one suffering from any error apparent on the face of the award. Therefore, this conclusion also cannot be interfered with.
It is not unusual for the contractors to claim loss of profit arising out of diminution in turn over on account of delay in the matter of completion of the work. What he should establish in such a situation is that had he received the amount due under the contract, he could have utilised the same for some other business in which he could have earned profit. Unless such a plea is raised and established, claim for loss of profits could not have been granted. In this case, no such material is available on record. In the absence of any evidence, the arbitrator could not have awarded the same. Therefore, we have no hesitation in deleting a sum of ₹ 6,00,000/- awarded to the claimant.
So far as interest that is payable is concerned, the arbitrator has appropriately considered the same and no real objection can be raised in this regard. As regards arbitration costs also there cannot be any serious dispute. Therefore, except for the sums coming under the heading No. 5, that is, Refund of Sales Tax and claim for payment of losses arising out of turn over due to prolongation of work, other part of the award having been upheld by us, the award made by the arbitrator shall stand modified accordingly.
In similar terms in respect of second contract, for the very reasons stated in this part of the order, we disallow the claim for refund of sales tax and compensation for losses arising out of on account of prolongation of work. In other respects, we maintain the award made by the arbitrator.
The civil appeals stand disposed of in the aforesaid terms.
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2004 (4) TMI 644
Issues Involved:
1. Whether the use and occupation of the property by the appellant after 10.3.1987 was wrongful and illegal and in the nature of trespass.
2. Whether the arbitrator had failed to take into account relevant factors in assessing damages awarded in favor of the respondent.
Issue-wise Detailed Analysis:
1. Wrongful and Illegal Use and Occupation of Property:
The appellant contended that the possession of the property after 10.3.1987 was not illegal but permissive, as the Supreme Court had allowed them to remain in possession until 31.3.1993. The respondent argued that the possession was wrongful and in the nature of trespass since the acquisition proceedings were struck down by the High Court, and the appellant was liable to pay damages for wrongful use and occupation. The Court noted that the arbitrator had assessed damages on the assumption that the possession was illegal and in the nature of trespass, which was incorrect because the appellant was permitted by the Court to remain in possession until 31.3.1993. Therefore, the possession was not illegal, and damages should have been assessed on the basis of fair rent rather than mesne profits.
2. Assessment of Damages:
The appellant argued that the arbitrator had erred in assessing damages without considering relevant factors such as the dilapidated condition of the property, the rent accepted by the respondent until February 1988, and the expenses for maintaining the property. The respondent maintained that the arbitrator was correct in assessing damages based on the income/profit method, considering the commercial potential of the property. The Court found that the arbitrator had not taken into account several relevant factors, including the age and condition of the property, the fair rent previously accepted, and the municipal assessment. The arbitrator also failed to consider the expenses for maintaining the property and the lack of evidence supporting the assessed rates. Consequently, the Court held that the arbitrator had mis-conducted the proceedings by ignoring material documents and not applying correct principles of valuation.
Conclusion:
The Supreme Court allowed the appeal, quashed the High Court's judgment, and set aside the arbitrator's award. The matter was remitted to the arbitrator for reassessment of damages in accordance with the law. If the original arbitrator was unavailable, the High Court was directed to appoint another arbitrator to decide the matter within three months. There was no order as to costs.
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2004 (4) TMI 643
Issues Involved:
1. Entitlement to renewal of lease under the Burmah Shell (Acquisition of Undertakings in India) Act, 1976.
2. Applicability of Section 107 of the Transfer of Property Act.
3. Interpretation of Section 5(2) and Section 7(3) of the Burmah Shell Act.
4. Overriding effect of the Burmah Shell Act over other laws.
Detailed Analysis:
1. Entitlement to Renewal of Lease under the Burmah Shell Act:
The primary issue was whether the appellant was entitled to a renewal of the lease under the Burmah Shell (Acquisition of Undertakings in India) Act, 1976. The appellant claimed tenancy based on the Act, which transferred all rights of Burmah Shell to the Central Government and subsequently to the appellant. The appellant exercised its option to renew the lease, invoking Sections 5(2) and 7(3) of the Act.
2. Applicability of Section 107 of the Transfer of Property Act:
The lower courts held that Section 107 of the Transfer of Property Act required a registered instrument for renewal of the lease. However, the appellant argued that the provisions of the Burmah Shell Act, particularly Section 11, should prevail over the Transfer of Property Act. The Supreme Court concluded that the Burmah Shell Act, being a special statute, overrides the general provisions of the Transfer of Property Act.
3. Interpretation of Section 5(2) and Section 7(3) of the Burmah Shell Act:
Section 5(2) of the Burmah Shell Act mandates that upon the expiry of a lease, it shall be renewed on the same terms and conditions if desired by the Central Government or the Government company. The Court emphasized that this provision creates a right of renewal for the appellant. Section 7(3) extends this right to government companies. The Court interpreted these sections to mean that the lease would automatically renew upon the appellant expressing its desire to do so.
4. Overriding Effect of the Burmah Shell Act over Other Laws:
Section 11 of the Burmah Shell Act contains a non-obstante clause, giving it overriding effect over any other inconsistent laws. The Supreme Court held that this clause ensures the provisions of the Burmah Shell Act take precedence over the Transfer of Property Act. The Court cited precedents to reinforce the principle that special statutes override general statutes.
Findings:
The Supreme Court found that the Burmah Shell Act, being a special statute, overrides the Transfer of Property Act. The appellant's right to renew the lease was upheld based on Sections 5(2) and 7(3) of the Burmah Shell Act. The Court emphasized the legislative intent to ensure continuity in the distribution and marketing of petroleum products through established outlets.
Conclusion:
The impugned judgments of the lower courts were set aside. The Supreme Court directed that the appellant's lease be renewed on the same terms and conditions. Additionally, the appellant was ordered to pay a sum equivalent to 10 times the original rental from the date the original lease expired. The Court noted that this order should not be treated as a precedent. The appeals were allowed with no order as to costs.
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2004 (4) TMI 641
Challenge the judgment of High Court in the refusal of leave to appeal - difference between the appeal provided for against convictions u/s 374 of the CrPC and an appeal provided for u/s 378, CrPC - HELD THAT:- Any judicial power has to be judiciously exercised and the mere fact that discretion is vested with the court/forum to exercise the same either way does not constitute any licence to exercise it at whims or fancies and arbitrarily as used to be conveyed by the well known saying 'varying according to the chancellors foot'. Arbitrariness has been always held to be the anathema of judicial exercise of any power, all the more so when such orders are amenable to challenge further before higher forums.
This Court has repeatedly laid down that as the First Appellate Court the High Court even while dealing with an appeal against acquittal was also entitled and obliged as well to scan through and if need be reappreciate the entire evidence, though while choosing to interfere only the court should find an absolute assurance of the guilt on the basis of evidence on record and not merely because the High Court could take one more possible or a different view only. Except the above, in the matter of the extent and depth of consideration of the appeal is concerned, no distinctions or differences in approach are envisaged in dealing with an appeal as such merely because one was against conviction or the other against an acquittal.
It has been on more than one occasion reiterated that Article 136 of the Constitution does not confer any right of appeal in favour of any party as such and it is not that any and every error is envisaged to be corrected in exercising powers under Article 136 of the Constitution of India. The powers of this Court under Article 136 of the Constitution are special and extra ordinary and the main object is to ensure that there has been no miscarriage of justice. That cannot be said to be the same with an appeal envisaged u/s 378 CrPC. despite the fact that it is made subject to the obtaining of leave to file the appeal. The requirement to obtain leave does not render the nature, extent or the scope of the appeal under the code a precarious one as sought to be assumed, on behalf of the appellant. Consequently, this appeal is allowed and the order of the High Court is set aside.
Conclusion: The judgment underscores the importance of recording reasons for decisions, particularly in cases involving the refusal of leave to appeal. It clarifies the differences between various types of appeals and emphasizes the need for a thorough and just judicial process.
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2004 (4) TMI 640
Issues:
Challenging High Court observations casting doubt on credibility and bonafides of human rights activists assisting riot victims. Violation of principles of natural justice and grossly violated rights. Request for deletion of offending portions from the judgment.
Analysis:
The judgment in question revolved around three appeals challenging observations made by the High Court of Gujarat that questioned the credibility and bonafides of human rights activists assisting riot victims. The appellants claimed to be anti-fundamentalists and public activists aiming to help victims of communal violence and uphold the nation's secular image. They assisted victims in legal matters and were criticized by the High Court for their involvement in the "Best Bakery case." The High Court's caustic remarks, including terms like "super investigators," "anti-social," and "anti-national," were considered unnecessary, contrary to truth, and a violation of natural justice.
The Supreme Court emphasized the importance of the rule of law, stating that no one should be condemned unheard, and criticized the High Court for making irrelevant observations that did not pertain to the subject matter of the dispute. The Court highlighted the need for judicial decorum, restraint, and the avoidance of unwarranted besmirching of individuals' reputations. It stressed that courts should refrain from making disparaging remarks unless absolutely necessary for deciding a case, and cautioned against using strong language or imputing corrupt motives, especially towards lower judiciary officers.
Citing previous judgments, the Supreme Court reiterated the significance of judicial restraint, particularly when dealing with matters before higher courts. It emphasized the need to set right errors without belching diatribe at lower judicial officers and warned against damaging the administration of justice by publicly expressing lack of faith in the judiciary. The Court directed the deletion of the offending portions from the High Court's judgment, emphasizing that the decision only pertained to the appellants and did not affect other claims before the High Court or the Supreme Court in related appeals.
In conclusion, the Supreme Court allowed the appeals to the extent of expunging the impugned observations from the High Court's judgment, ensuring that the remarks casting doubt on the appellants' credibility and bonafides were treated as if they never existed.
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2004 (4) TMI 639
Issues Involved:
1. Jurisdiction and Powers of the Settlement Commission.
2. Applicability of Section 154 of the Income Tax Act to the Settlement Commission.
3. Finality and conclusiveness of the Settlement Commission's orders.
4. Qualifications and appointment of Members and Chairpersons of the Appellate Tribunal for Foreign Exchange.
5. Validity of rules under the Appellate Tribunal for Foreign Exchange (Recruitment, Salary and Allowances and Other Conditions of Service of Chairperson and Members) Rules, 2000.
6. Separation of powers between the judiciary and executive.
Detailed Analysis:
1. Jurisdiction and Powers of the Settlement Commission:
The judgment clarifies that the Settlement Commission has exclusive jurisdiction to exercise the power and perform the functions of an Income Tax authority under the Act in relation to cases pending before it until an order is passed under sub-section (4) of Section 245D. After such an order, the Commission ceases to have jurisdiction.
2. Applicability of Section 154 of the Income Tax Act to the Settlement Commission:
The court held that the Settlement Commission, after passing an order under Section 245D(4), becomes functus officio and cannot reopen the case under Section 154 of the Act for rectification of mistakes. The court referenced the Supreme Court's decision in Anjum M.H. Ghaswala, which stated that the Commission does not have the power to reduce or waive interest statutorily payable under Sections 243A, 243B, or 243C.
3. Finality and conclusiveness of the Settlement Commission's orders:
Section 245-I makes the order of settlement conclusive regarding the matters stated therein, and such orders cannot be reopened in any proceeding under the Act or any other law, except as provided in Chapter XIX-A. The court emphasized that the Settlement Commission's orders are final and conclusive and cannot be reopened, except in cases of fraud or misrepresentation.
4. Qualifications and appointment of Members and Chairpersons of the Appellate Tribunal for Foreign Exchange:
The court examined the qualifications for appointment under Section 21 of the Foreign Exchange Management Act, 1999. It was determined that a person qualified to be a District Judge can be appointed as a Member, while a member of the Indian Legal Service holding a Grade I post can only be appointed as a Special Director (Appeals) and not as a Member of the Tribunal.
5. Validity of rules under the Appellate Tribunal for Foreign Exchange (Recruitment, Salary and Allowances and Other Conditions of Service of Chairperson and Members) Rules, 2000:
The court found that Rule 5 of the Rules, which allows for part-time members, is ultra vires Section 21(1)(b) of the Act. The rule-making authority exceeded its powers by providing for full-time and part-time members, which is not contemplated by the Act. Consequently, the appointments of part-time members were quashed.
6. Separation of powers between the judiciary and executive:
The judgment stressed the importance of maintaining the independence of the judiciary from the executive. It was noted that appointments to judicial positions should not include individuals from executive services, as this undermines judicial independence. The court referenced historical practices and constitutional provisions to support this stance.
Relief Granted:
The court quashed the first and second provisos to Rule 5 of the Rules as ultra vires Section 21(1)(b) of the Act. Consequently, the appointments of the respondents as part-time members and the appointment of one of the respondents as Chairperson were quashed. The petitions were allowed to the extent of these findings, with costs awarded to the petitioners.
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2004 (4) TMI 638
Issues Involved:
1. Legality and constitutionality of Ordinance No. 2 of 2004.
2. Authority of the Governor to promulgate the Ordinance.
3. Financial management by the Caretaker Government.
4. Invocation of Articles 355, 356, and 360 of the Constitution of India.
Detailed Analysis:
1. Legality and Constitutionality of Ordinance No. 2 of 2004:
The petitioner in W.P. No. 6249 of 2004 challenged the legality and constitutionality of Ordinance No. 2 of 2004 issued by the Government of Andhra Pradesh on 31.3.2004. The petitioner argued that the Ordinance was illegal, unconstitutional, and without any legal or constitutional authority. The Ordinance authorized the State Government to withdraw money from the Consolidated Fund of the State to meet the estimated expenditure for a part of the financial year commencing on 1st April 2004. The petitioner contended that the Constitution prescribes a method for spending or drawing funds from the Consolidated Fund of the State, which requires legislative approval as provided in Article 204. The petitioner emphasized that no money shall be drawn except by law made in accordance with the provisions of Article 204, which necessitates the existence of a House and its approval.
2. Authority of the Governor to Promulgate the Ordinance:
The petitioner argued that the Governor's power to promulgate an Ordinance under Article 213 does not extend to infracting or violating constitutional prescriptions. The petitioner contended that the dissolved House can never have a recess, and therefore, the Ordinance-making power was not available to the State of Andhra Pradesh at the time. The court, however, found no substance in this argument. It held that Article 213 allows the Governor to promulgate an Ordinance "at any time" when the Legislative Assembly is not in session. The court clarified that the power of the Governor to promulgate an Ordinance is not limited to the recess of the Legislature and can be exercised even when the Assembly stands dissolved and fresh elections have been notified.
3. Financial Management by the Caretaker Government:
The petitioner argued that the Caretaker Government cannot take a policy decision, and issuing an Ordinance permitting the withdrawal of money from the Consolidated Fund of the State constitutes a major policy decision. The court, however, found that the Ordinance had the same force and effect as any Act of the State Legislature and that there was no prohibition in the Constitution against promulgating an Ordinance during the period when the Assembly is dissolved and a new Assembly has not yet been constituted. The court held that the Ordinance was validly promulgated and that it was an exercise of the Legislative Assembly's power as envisaged under Articles 205 and 206 of the Constitution.
4. Invocation of Articles 355, 356, and 360 of the Constitution of India:
The petitioner in W.P. No. 6250 of 2004 sought a direction against the Government of India to take appropriate steps under Articles 355 and 356 of the Constitution, alleging a constitutional breakdown and financial bankruptcy in the State of Andhra Pradesh. The petitioner also sought a direction to the Union of India to invoke its powers under Article 360 to declare a financial emergency. The court found no merit in this argument, holding that the Ordinance was validly promulgated and that there was no situation warranting the exercise of powers under Articles 355, 356, or 360 of the Constitution.
Conclusion:
The court dismissed all three writ petitions, holding that the Ordinance No. 2 of 2004 was validly promulgated by the Governor under Article 213 of the Constitution. The court found no substance in the petitioners' arguments challenging the legality and constitutionality of the Ordinance, the authority of the Governor, the financial management by the Caretaker Government, and the invocation of Articles 355, 356, and 360 of the Constitution.
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2004 (4) TMI 637
Issues Involved:
1. Whether Cash Compensatory Support (CCS) received by the assessee constitutes income derived from an industrial undertaking and is eligible for relief under section 80J of the Income-tax Act, 1961.
2. Whether duty drawback received by the assessee constitutes income derived from an industrial undertaking and is eligible for relief under section 80J of the Income-tax Act, 1961.
Issue-wise Detailed Analysis:
1. Cash Compensatory Support (CCS):
The core question was whether CCS received by the assessee could be considered income derived from an industrial undertaking and thus eligible for relief under section 80J of the Income-tax Act, 1961. The Commissioner of Income-tax (CIT) argued that CCS receipts could not be termed as profits derived from the industrial undertaking and proposed to withdraw the relief under section 80J. The Tribunal, however, had held that CCS constituted income derived from an industrial undertaking and was eligible for relief under section 80J.
The High Court referenced several decisions, including the Supreme Court ruling in *CIT v. Sterling Foods* and the Madras High Court's ruling in *CIT v. Jameel Leathers & Uppers*, which interpreted the expression "derived from" as requiring a direct nexus between the profits and the industrial undertaking. The Court concluded that CCS is attributable to, but not derived from, the industrial undertaking. The direct source of CCS was the Government scheme for incentives, not the industrial undertaking itself. Thus, the High Court held that CCS could not be included in the profits and gains of the business for the purposes of deduction under section 80J.
2. Duty Drawback:
The question of whether duty drawback could be considered as income derived from an industrial undertaking was also examined. The assessee argued that duty drawback is a reimbursement of customs and excise duties paid on raw materials and is directly linked to the manufacturing activity. The High Court distinguished duty drawback from other incentives like CCS. It noted that duty drawback is intended to reduce the cost of production by reimbursing the customs and excise duties, which are integral parts of the cost of production.
The Court referenced section 75(1) of the Customs Act and section 36 of the Central Excise Act, which provide for duty drawback to relieve exporters from the burden of duties. The Court held that duty drawback is inextricably linked with the cost of production of the industrial undertaking and thus constitutes income derived from the industrial undertaking. Therefore, duty drawback is eligible for relief under section 80J of the Income-tax Act, 1961.
Conclusion:
The High Court concluded that while CCS does not constitute income derived from an industrial undertaking and is not eligible for relief under section 80J, duty drawback does constitute such income and is eligible for the relief.
Judgment:
- For Cash Compensatory Support (CCS): The answer is in the negative, in favor of the revenue, and against the assessee.
- For Duty Drawback: The answer is in the affirmative, in favor of the assessee, and against the revenue.
Both references were disposed of accordingly.
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2004 (4) TMI 636
Issues Involved:
1. Whether the Karnataka Electricity Regulatory Commission (KERC) can be added as a party respondent to the appeal and whether it is entitled to defend the impugned order on merits.
2. Whether there existed a binding contract between the appellant and the KPTCL on the tariff prior to the commencement of the Karnataka Electricity Reform Act, 1999.
3. Whether the status of the appellant is that of an Independent Power Producer (IPP) or Captive Power Plant (CPP).
4. Whether the impugned orders are perverse, arbitrary, and passed without application of mind.
5. Whether the Commission has failed to appreciate the appellant's rights grounded on the principles of promissory estoppel and legitimate expectation.
Detailed Analysis:
Point No. 1:
The appellant did not initially implead the KERC as a party respondent. The Court directed the appellant to serve notice to the KERC for the interim application for stay. The Court later considered whether the KERC is a necessary or proper party to the appeal. The appellant argued that the KERC, being a quasi-judicial authority, should not contest its own orders. The Court agreed, stating that the KERC should not take sides and should leave the validity of its order to be determined by the Court. The KERC was struck out as a party respondent, as it was not necessary for the appeal.
Point No. 2:
A "concluded contract" in terms of Explanation to Section 19 and proviso to Section 27(2) of the Act need not be in writing or in any particular form. The Court concluded that there existed a "concluded contract" between the appellant, KPTCL, and GoK before the Act commenced on 01.06.1999. This conclusion was based on several documents and circumstances, including government orders, letters, and negotiations that took place before the Act came into force. The Court held that all essential terms and conditions were agreed upon before 01.06.1999, making the contract binding and deemed to have been approved by the Commission under the Act.
Point No. 3:
The appellant complied with the requirements of the Supply Act for establishing a generating company, setting up a scheme, and selling electricity, making it an IPP, not a CPP. The Court noted that the appellant's plant was designed to supply power to the grid and guaranteed continuous supply, which is characteristic of an IPP. The Court rejected the respondents' contention that the plant was a CPP, stating that the plant's design and approvals indicated it was an IPP.
Point No. 4:
The Court found that the impugned orders suffered from errors apparent on their face. The Commission wrongly calculated fixed charges and incentive payment charges, which, if corrected, would increase the tariff. The Commission also unilaterally applied two-part tariff elements to a single-part tariff, which was arbitrary. The Court noted that the Commission took into account irrelevant considerations and left out relevant ones, making the orders perverse and arbitrary.
Point No. 5:
The Court held that the doctrines of promissory estoppel and legitimate expectation were applicable. The appellant performed its part of the contract based on promises made by KPTCL and GoK. The Commission failed to appreciate the appellant's rights under these doctrines. The Court emphasized that the Government and public authorities must honor their statements and treat citizens fairly, which was not done in this case.
Conclusion:
The appeal was allowed, and the impugned orders were set aside. The KPTCL was directed to comply with the tariff rate specified in the GoK order dated 12th May 1999 and repay the amounts recovered from the appellant as per the interim order dated 19th November 2002. The parties were directed to bear their respective costs.
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2004 (4) TMI 635
Issues Involved:
1. Classification of distilleries into captive and non-captive units.
2. Whether distilleries can question the price of rectified spirit post-supply without prior protest.
3. State's power to fix prices of rectified spirit produced by petitioner-distilleries.
Issue-wise Detailed Analysis:
Re: Classification of Distilleries into Captive and Non-Captive Units
The classification of distilleries into captive and non-captive units is based on an intelligible differentia. The cost of production of rectified spirit varies depending on whether a distillery has raw material (molasses) available on-site or has to purchase and transport it from other sugar mills. The Chartered Accountant's report indicated that captive units, which do not incur transportation and tax costs on molasses, have a lower production cost compared to non-captive units. This classification ensures that the cost of rectified spirit supplied to arrack contractors is uniform, regardless of the distillery's status. The classification was deemed rational and legally sound.
Re: Distilleries Questioning Price Post-Supply Without Prior Protest
The distilleries supplied rectified spirit without demur or protest, and only later sought to challenge the price fixed by the government. The contracts of sale were conditioned by the government order fixing the price. The distilleries were aware of the price at all relevant times and did not raise any objections before making the supplies. The Sale of Goods Act, 1930, stipulates that the price in a contract of sale can be fixed by the contract or determined by the course of dealings between the parties. In this case, the price was fixed by the government order, and the distilleries accepted it by their conduct. The principle of estoppel by conduct applies, preventing the distilleries from later demanding a higher price. The court held that the distilleries are not entitled to a higher price than what was stipulated in the government order.
Re: State's Power to Fix Prices of Rectified Spirit
The Supreme Court in Deccan Sugar and Abkari Company Limited v. Commissioner of Excise, Andhra Pradesh, held that the state can levy excise duty only on potable liquor fit for human consumption, and rectified spirit does not fall under this category. Consequently, the state cannot impose excise duty on rectified spirit. Although the state has the authority to regulate the manufacture, transportation, and use of rectified spirit to prevent its misuse, the court did not find it necessary to delve into these arguments in detail for this case. The appeals were determined based on the answers to the first two questions.
Additional Grievance of Appellant in W.A. No. 7354 of 1999
The appellant in W.A. No. 7354 of 1999 claimed to be wrongly classified as a captive unit and sought reclassification as a non-captive unit. The respondents acknowledged the representation and assured it would be examined. The court directed the competent authority to examine the appellant's claim for reclassification within three months from the date of serving a copy of the order.
Conclusion
Writ Appeal Nos. 8220 and 7352 of 1999 were dismissed. W.A. No. 7354 of 1999 was allowed to the extent that the competent authority must examine the appellant's claim for reclassification within three months. Each party was directed to bear its own costs.
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2004 (4) TMI 634
The Supreme Court dismissed the appeal due to a delay of 191 days with no satisfactory explanation, and also found that the appeal did not deserve to be admitted.
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2004 (4) TMI 633
Issues Involved:
1. Legally enforceable debt.
2. Joint business liability.
3. Presumption under Section 138 of N.I. Act.
4. Constructive notice.
Issue-wise Detailed Analysis:
1. Legally Enforceable Debt:
The complainant alleged that the accused issued a cheque for Rs. 24,400 towards the discharge of a debt from a joint business. The trial court found no evidence proving the cheque was issued for a legally enforceable debt. Under Section 138 of the N.I. Act, a cheque must be issued for the discharge of a legally enforceable debt or liability. The presumption under Section 139 of the N.I. Act that the cheque was issued for such a purpose is rebuttable. The accused successfully rebutted this presumption by presenting evidence that the cheque was issued as security and not for a debt.
2. Joint Business Liability:
The complainant claimed that the accused and his brother ran a joint lorry business, and the debt was from this joint business. The accused denied this, stating he and his brother operated separate businesses. The trial court found no evidence of a joint business. The complainant failed to produce any documents supporting the existence of a joint business. The accused provided receipts and statements showing separate transactions for his lorry. The trial court concluded that the complainant could not claim the amount due from the accused based on an alleged joint business.
3. Presumption under Section 138 of N.I. Act:
The trial court found that the presumption under Section 139 of the N.I. Act was rebutted. The accused provided evidence showing separate business transactions and payments made for his lorry, Angala Easwari. The complainant's claim that the cheque was issued for a joint business debt was not supported by evidence. The trial court's finding that there was no legally enforceable debt was based on the evidence presented.
4. Constructive Notice:
The complainant sent a statutory notice to the accused, which was returned with the endorsement "intimation given; not claimed." The trial court found that this did not constitute constructive notice. The court noted that for constructive notice to be presumed, there must be clear evidence that the accused intentionally evaded service. The complainant did not provide such evidence. The court held that mere issuance of notice is not sufficient; there must be proof of deliberate evasion by the accused.
Conclusion:
The trial court's findings were based on a thorough assessment of the evidence. The complainant failed to prove the existence of a legally enforceable debt and a joint business. The presumption under Section 139 of the N.I. Act was successfully rebutted by the accused. The court also found no sufficient service of notice on the accused. The High Court upheld the trial court's judgment, finding no serious or substantial error warranting interference. The appeal was dismissed.
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2004 (4) TMI 632
Interpretation of the term "agriculture" in the context of the Act and the notification - Whether pisciculture is considered agriculture under the Tamil Nadu Revision of Tariff Rates on Supply of Electrical Energy Act, 1978 - HELD THAT:- It is, therefore, clear from the record that agriculture, for our purpose, need not be kept confined in its meaning to the production of grain and food products for consumption of human beings alone; it can be extended as comprising within its meaning all the products of the land involving human labour but then it is the producing capacity of the land which must necessarily be found as involved in any activity to amount to agriculture.
In our opinion, for the purpose of interpreting the Act and the notification issued thereunder, the term 'agriculture' has to be read in contradistinction with the term 'aquaculture'. Pisciculture is a branch of aquaculture. Pisciculture is not agriculture.
The learned senior counsel for the appellants invited our attention to the definition of term 'agriculture' as given in definition sections or interpretation clauses of several other enactments such as sub-section (2) of Section 2 of Tamil Nadu Agricultural Produce Marketing (Regulation) Act, 1987, clause (b) of Section 2 of Tamil Nadu Agricultural University Act, 1971, clause (a) of Section 2 of Agricultural and Rural Debt Relief Scheme, 1990, so defining the term 'agriculture' as to include therein 'pisciculture'. These definitions were pressed in service by Shri Iyer, the learned senior counsel, to support his submission for a similar meaning being assigned in the present case. Suffice it to observe that the common parlance meaning of the term 'agriculture', in the context in which it has been used and is arising for determination before us, cannot be determined by reference to definition given in other statutes. This we say for more reasons than one. Firstly, none of the statutes reffered to by Shri Iyer, the learned senior counsel, can be called statutes in pari materia. Secondly, it is common knowledge that the definition coined by the Legislature for the purpose of a particular enactment is often an extended or artificial meaning so assigned as to fulfill the object of that enactment. Such definitions given in other enactments cannot be freely used for finding out meaning to be assigned to a term of common parlance used in an altogether different setting.
And lastly, as Justice G.P. Singh points out in "Principles of Statutory Interpretation"......it is hazardous to interpret a statute in accordance with a definition in another statute and more so when such statute is not dealing with any cognate subject or the statutes are not in pari materia." The same view has been taken in the decision of this court in CIT, W.B. v. Benoy Kumar [1957 (5) TMI 6 - SUPREME COURT] which we have extensively referred to earlier in this judgment.
We do not find any fault or flaw in the view of the law taken by the High Court. The impugned judgment of the High Court, which is also reported as (1998) III M.L.J. 680 is affirmed in its entirety. All the appeals are dismissed with costs.
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2004 (4) TMI 631
Act of Oppression and Management - Challenged the allotment of further shares by the company on the ground that by the fresh issue of shares they have been reduced to a minority - HELD THAT:- Since I have a definite opinion by one expert that the signatures on the minutes were forged and by another an indefinite opinion, I have made my own comparison. On a visual comparison of his signatures on the minutes with the signatures in the various documents attached with the application, I find that there is no similarity in any of the words, Vinod, Kumar and Pathak. In other words, no part of his signature on the minutes is similar to the one found on the documents furnished even by the respondents and therefore, I am prima facie satisfied that the signatures of the deceased on the minutes may not be genuine.
Even otherwise, to come to the conclusion that late Vinod Kumar Pathak expressed his unwillingness to infuse funds, there should have been proper material. The minutes dated 16.2.2001, in which the alleged decision to mobilize funds by issue of shares was taken, does not record any details of the financial needs of the company like the quantum of funds required etc for the deceased to express that he was not in a position to infuse any funds. Even the minutes of the next meeting on 15.7.2001 doest not record the quantum of money to be raised. The allotment was purportedly made on 5.11.2001, that is nearly 9 months after the need for funds was felt by the Board as recorded in the minutes of the purported Board meeting on 16.2.2001. There is nothing on the record to show as to how the Board computed the requirement of funds to the extent of ₹ 3.2 lakhs to allot 1600 shares to the wives of the 3rd and 4th respondents. The very fact that the Return of allotment was filed only on 25th January 2002, that is after the demise of Vinod Kumar Pathak, would also raise a doubt as to whether the said allotment was made on 5.11.2001. While it is the prerogative of the Board to allot shares, the power should be exercised in the interest of the company and not for any ulterior purpose. In the present case, by this allotment, the existing majority has been converted into a minority and a new majority has been created in favour of the respondents, which is a grave act of oppression and is an act in breach of the fiduciary duties of the directors.
Thus, I declare by allotting 3200 shares to the respondents group, the Board had acted in a manner oppressive to the majority shareholders and in breach of the fiduciary duties of the Directors. Therefore, I direct that the said allotment shall stand cancelled with immediate effect. The company shall refund the amount paid by these two allottees at the earliest and reduce its paid up capital to that extent. While canceling the allotment, I have noted that the two allottees are not parties to the proceedings. Since they are not third parties but are the wives of the directors who had allotted the shares, their presence is not considered necessary, especially when the allotment is cancelled on the ground that the directors had acted in breach of their fiduciary duties to the company and the members.
The petition is disposed of in terms of paragraph 10 ante with no order as to cost.
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2004 (4) TMI 630
Issues: Application for amalgamation of Transferor Company with Transferee Company; Dispensing with the meeting of Equity Shareholders and Unsecured Creditor for approving the Scheme of Amalgamation.
Analysis:
1. Amalgamation Application: The judgment pertains to an application for the amalgamation of the Transferor Company with the Transferee Company. The Transferor Company has entered into an arrangement in the nature of amalgamation with the Transpek Industry Limited, which is the holding Company of the Transferor Company, holding 100% shares. The applicant sought to rely on various decisions, including a decision of the Court, to support the contention that the Transferee Company did not need to file an independent application for amalgamation. The Court considered the submissions made by the applicant's advocate and the documents provided in support of the application.
2. Consent of Shareholders and Creditors: The advocate for the applicant highlighted that all the Equity Shareholders of the applicant Company had given their consent, as evidenced by the letters placed on record. Additionally, the consent of the Unsecured Creditor was also obtained and documented. It was noted that there were no Secured Creditors based on the applicant Company's balance sheet. Given that all Equity Shareholders and the Unsecured Creditor had approved the proposed Scheme of Amalgamation, the advocate requested the Court to dispense with the meeting of Equity Shareholders and Unsecured Creditor for approving the Scheme.
3. Dispensing with Meeting Requirement: Considering that the applicant Company had secured written approval from all Equity Shareholders and the Unsecured Creditor, and there were no Secured Creditors involved, the Court decided to dispense with the requirement of holding a meeting of the Equity Shareholders and Unsecured Creditor regarding the proposed Scheme of Amalgamation. Consequently, the Court disposed of the application in accordance with the provided approvals and the absence of Secured Creditors, thereby concluding the matter in favor of the applicant - Company seeking amalgamation with Transpek Industry Limited.
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2004 (4) TMI 629
Seeking examination of witnesses u/s 311 - Witness Protection and Credibility of Evidence - Conduct of the Public Prosecutor - Role of the Investigating Agency - Acceptance of Additional Evidence and Re-trial - Transfer of Trial Outside the State - The case, known as the "Best Bakery Case," involved macabre killings due to communal frenzy. Zahira, an eye-witness, alleged that she was forced to depose falsely due to threats and coercion, raising significant issues regarding witness protection and the credibility of evidence before the Court.
HELD THAT:- It is not that the Court has to be satisfied that the additional evidence would be necessary for rendering a verdict different from what was rendered by the trial Court. In a given case even after assessing the additional evidence, the High Court can maintain the verdict of the trial Court and similarly the High Court on consideration of the additional evidence can upset the trial Court's verdict. It all depends upon the relevance and acceptability of the additional evidence and its qualitative worth in deciding the guilt or innocence of the accused.
It is to be noted at this stage that it is not the prosecution which alone can file an application u/s 391 of the Code. It can also be done, in an appropriate case by the accused to prove his innocence. Therefore, any approach without pragmatic consideration defeats the very purpose for which Section 391 of the Code has been enacted. Certain observations of the High Court like, that if the accused persons were really guilty they would not have waited for long to commit offences or that they would have killed the victims in the night taking advantage of the darkness and/or that the accused persons had saved some persons belonging to the other community were not only immaterial for the purpose of adjudication of application for additional evidence but such surmises could have been carefully avoided at least in order to observe and maintain the judicial calm and detachment required of the learned Judges in the High Court. The conclusions of the High Court that 65 to 70 persons belonging to the attacked community were saved by the accused or others appears to be based on the evidence of the relatives of the accused who were surprisingly examined by prosecution. We shall deal with the propriety of examining such persons, infra. These aspects could have been, if at all permissible to be done, considered after accepting the prayer for additional evidence.
It is not known as to what extent these irrelevant materials have influenced the ultimate judgment of the High Court, in coming with such a strong and special plea in favour of a prosecuting agency which has miserably failed to demonstrate any credibility by its course of action. The entire approach of the High Court suffers from serious infirmities, its conclusions lopsided and lacks proper or judicious application of mind. Arbitrariness is found writ large on the approach as well as the conclusions arrived at in the judgment under challenge, in unreasonably keeping out relevant evidence from being brought on record.
Right from the beginning, the stand of the appellant- Zahira was that the investigating agency was trying to help the accused persons and so was the public prosecutor. If the investigation was faulty, it was not the fault of the victims or the witnesses. If the same was done in a manner with the object of helping the accused persons as it appears to be apparent from what has transpired so far, it was an additional ground just and reasonable as well for accepting the additional evidence.
It is no doubt true that the accused persons have been acquitted by the trial Court and the acquittal has been upheld, but if the acquittal is unmerited and based on tainted evidence, tailored investigation, unprincipled prosecutor and perfunctory trial and evidence of threatened/terrorised witnesses, it is no acquittal in the eye of law and no sanctity or credibility can be attached and given to the so-called findings. It seems to be nothing but a travesty of truth, fraud on legal process and the resultant decisions of Courts - coram non judis and non est. There is, therefore, every justification to call for interference in these appeals.
It is true that the prosecution is not bound to examine each and every person who has been named as witness. A person named as a witness may be given up when there is material to show that he has been gained over or that there is no likelihood of the witness speaking the truth in the Court. There was no such material brought to the notice of the Courts below to justify non-examination. The materials on record are totally silent on this aspect. Another aspect which has been lightly brushed aside by the High Court is that one person who was to be examined on a particular date was examined earlier than the date fixed. This unusual conduct by the prosecutor should have been seriously taken note of by the Trial Court and also by the High Court. It is to be noted that the High Court has found fault with DCP Shri Piyush Patel and has gone to the extent of saying that he has miserably failed to discharge his duties; while finding at the same time that police inspector Baria had acted fairly.
The criticism according to us is uncalled for. Role of Public Prosecutor was also not in line with what is expected of him. Though a Public Prosecutor is not supposed to be a persecutor, yet the minimum that was required to be done to fairly present the case of the prosecution was not done. Time and again, this Court stressed upon the need of the investigating officer being present during trial unless compelling reasons exist for a departure. In the instant case, this does not appear to have been done, and there is no explanation whatsoever why it was not done. Even Public Prosecutor does not appear to have taken note of this desirability.
We do not think it necessary to highlight all the infirmities in the judgment of the High Court or the approach of the Trial Court lest nothing credible or worth mentioning would remain in the process. This appears to be a case where the truth has become a casualty in the trial. We are satisfied that it is fit and proper case, in the background of the nature of additional evidence sought to be adduced and the perfunctory manner of trial conducted on the basis of tainted investigation a re-trial is a must and essentially called for in order to save and preserve the justice delivery system unsullied and unscathed by vested interests. We should not be understood to have held that whenever additional evidence is accepted, re-trial is a necessary corollary. The case on hand is without parallel and comparison to any of the cases where even such grievances were sought to be made. It stands on its own as an exemplary one, special of its kind, necessary to prevent its recurrence. It is normally for the Appellate Court to decide whether the adjudication itself by taking into account the additional evidence would be proper or it would be appropriate to direct a fresh trial, though, on the facts of this case, the direction for re-trial becomes inevitable.
Conclusion: The Supreme Court allowed the appeals, directing a re-trial outside the State of Gujarat, acceptance of additional evidence, and ensuring witness protection to uphold the integrity of the justice delivery system.
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