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2009 (4) TMI 1048
Issues involved: Acquittal under Section 138 of the Negotiable Instruments Act, 1881 challenged on grounds of lack of proper notice before filing complaint.
The Supreme Court heard the appeal where the Trial Court had acquitted the appellant of the charge under Section 138 of the Negotiable Instruments Act, but the High Court set aside the acquittal and convicted the appellant. The High Court directed the appellant to pay a sum of rupees one lakh twenty thousand to the complainant and face imprisonment if the amount was not paid. The appellant challenged this decision on the grounds that proper notice as required by Clause (b) of the proviso to Section 138 of the Act was not served before filing the complaint. The notice was served on the appellant's wife, which the appellant argued did not fulfill the legal requirement. The respondent, however, argued that serving the notice on the appellant's wife was sufficient compliance.
The key legal provision in question was Section 138 of the Negotiable Instruments Act, which deals with the dishonour of cheques due to insufficient funds. The section specifies that the drawer of a dishonored cheque can be punished with imprisonment or fine. The proviso to Section 138 outlines conditions that must be met before a person can be convicted under this section. Clause (b) of the proviso mandates that the payee or holder must make a demand for payment by giving written notice to the drawer of the cheque within thirty days of being informed of the dishonour. In this case, the notice was served on the appellant's wife instead of the appellant himself. The Court concluded that this did not fulfill the legal requirement, and the complainant had not complied with the notice provision of Clause (b) of the proviso to Section 138. The Court noted that the High Court had overlooked this crucial aspect, leading to the appellant's conviction being unsustainable.
In the final decision, the Supreme Court allowed the appeal, setting aside the High Court's order and restoring the Trial Court's acquittal of the appellant.
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2009 (4) TMI 1047
Issues involved: Loan agreement, mortgage deed, winding up process, validation of property disposition, interests of creditors, application for validation, possession of property, rights of secured creditors, commencement of winding up proceedings.
In the present case, the Company in liquidation sought a loan from M/s V.G.P. Finance Ltd. and executed a loan agreement. Subsequently, the Company failed to repay the amounts leading to the mortgage of the property in question. Following the winding up order of the Company, the Official Liquidator issued a notice for handing over the assets. Respondent No. 1 moved the Company Court for validation of the property disposition, which was earlier granted possession by the Single Judge and confirmed by the Division Bench. The Indian Bank, a secured creditor, approached the Supreme Court challenging the validation without considering the interests of other creditors and the timing of the transactions in relation to the winding up process.
The Supreme Court observed that the Company Court and the Division Bench did not adequately consider the interests of all creditors, both secured and unsecured, as required by law. The Court highlighted the importance of assessing the list of assets held by the Company in liquidation, especially when no other assets besides the subject lands were identified. The Court noted the absence of a validation prayer in the initial application and the lack of consideration for the commencement of winding up proceedings. Consequently, the Court directed the Company Judge to reexamine the application for validation, ensuring proper registration, consideration of all creditors' claims, and the assets held by the Company in liquidation.
The Indian Bank contended that the validation of the sale deeds should not have been granted without accounting for creditors' interests, asset lists, and the timing of transactions vis-à-vis the winding up process. The Supreme Court instructed the High Court to reconsider the matter without being influenced by previous observations and allowed both parties to present their arguments.
In conclusion, the Supreme Court ordered the maintenance of status quo regarding possession of the lands with respondent No. 1, prohibiting any encumbrance, alienation, or creation of third-party rights. The appeal was disposed of with no costs imposed, granting liberty for further submissions by both parties.
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2009 (4) TMI 1046
The Supreme Court of India in 2009 (4) TMI 1046 - SC Order, with Justices H. Kapadia and Aftab Alam, dismissed the civil appeal while condoning the delay.
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2009 (4) TMI 1045
The Gujarat High Court admitted the case and issued notice to the respondent on substantial questions of law regarding ownership of excess stock and reversal of CIT(A) order by ITAT without cogent reasons. The appellant argued that ITAT decision was perverse as all details were submitted, but not considered, and relevant documents were not reviewed.
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2009 (4) TMI 1044
Issues involved: Bail application under Section 135 Customs Act, 1962 for alleged involvement in large-scale fabrication of documents to facilitate illegal imports.
Details of the judgment:
1. The petition sought regular bail for the Petitioners who had been in custody since February 2009. The case involved misdeclaration of goods imported as restricted items, which were actually cleared as freely importable items. The accused were involved in a systematic activity of preparing forged documents to facilitate illegal imports over an extended period of time.
2. Investigations revealed that the accused facilitated clearance of consignments by declaring them as assorted printed books when they were actually worn out clothes and other restricted items. The accused admitted to facilitating clearance by misdeclaring the goods, resulting in substantial evasion of customs duty.
3. The accused were found to have prepared false invoices and Bills of Lading for multiple companies, leading to a significant loss of revenue through duty evasion. The accused charged hefty amounts per container for facilitating clearance of consignments through fraudulent means.
4. The elder brother of one of the accused was stated to have abetted in smuggling goods by arranging imports in the name of fictitious firms based on forged documents. The accused charged commissions and forged signatures to facilitate duty-free clearance of consignments.
5. The bail application of the Petitioners was rejected by the Additional Sessions Judge, and the High Court upheld the decision based on the evidence implicating the Petitioners in the large-scale fabrication of documents for illegal imports. The Court emphasized the seriousness of the offense and the extent of the scam unearthed.
6. The Court declined the plea for bail, stating that the offense under Section 135 of the Customs Act, 1962, resulting in a significant loss of revenue, was grave enough to warrant denial of bail at that stage. The Court made it clear that the decision did not comment on the bail granted to other co-accused and that any challenge to such orders would be considered on its merits.
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2009 (4) TMI 1043
Issues Involved:
1. Application under Order 12 Rule 6 read with Order 20 Rule 18 and Section 151 CPC filed by the plaintiff.
2. Application under Order 7 Rule 11 CPC filed by the defendant.
Issue-wise Detailed Analysis:
1. Application under Order 12 Rule 6 read with Order 20 Rule 18 and Section 151 CPC filed by the plaintiff:
The plaintiff and the defendant are real brothers and co-owners of the suit property, each owning a 50% share. The property, a plot with a residential house, was jointly sub-leased to them. The plaintiff contended that their late mother supervised the construction and that he, along with their mother, funded the construction, while the defendant, serving in the Army, did not contribute financially. Post-construction, the property was rented out, and the rent was shared equally between them.
The plaintiff claimed that after their mother's death, the defendant managed the property in a fiduciary capacity but later began residing in the suit premises. The plaintiff, residing in the USA, visited India occasionally and used the premises during these visits. Despite multiple requests for partition by metes and bounds, the defendant evaded the issue, leading the plaintiff to send a legal notice and eventually file the current suit for partition.
The defendant admitted co-ownership in a previous suit (CS[OS] No. 402/2006) and in various pleadings, which the plaintiff used to support his application for a decree of partition based on these admissions. The court noted these admissions and found them clear and unequivocal, justifying a decree under Order 12 Rule 6 CPC.
The court emphasized that the purpose of Rule 6 of Order 12 CPC is to enable speedy justice based on admissions, whether in pleadings or otherwise. The admissions need not be explicit; constructive admissions are sufficient. The court granted the plaintiff's application, passing a preliminary decree for partition, confirming that both parties are co-owners with equal shares, and appointed a local commissioner to suggest the mode of partition by metes and bounds.
2. Application under Order 7 Rule 11 CPC filed by the defendant:
The defendant argued that the plaintiff, being out of possession for over 40 years, should correct the valuation for the relief of partition and supply the requisite court fee stamp papers. The defendant claimed that the plaintiff had not been in actual possession or control of the suit property, indicating a complete ouster.
The plaintiff countered by providing instances of constructive possession, such as opening a joint bank account, giving power of attorney to the defendant, and contributing to legal fees and property maintenance. The plaintiff also referenced a memorandum of understanding confirming joint ownership.
The court referred to the principle that in the case of co-owners, the possession of one is legally the possession of all unless ouster or exclusion is proven. The court found no clear evidence of the plaintiff's exclusion or ouster from the property. Consequently, the court dismissed the defendant's application under Order 7 Rule 11 CPC, holding that the plaintiff's joint possession was legally presumed.
Conclusion:
The court allowed the plaintiff's application under Order 12 Rule 6 CPC, passing a preliminary decree for partition and appointing a local commissioner to suggest the mode of partition. The defendant's application under Order 7 Rule 11 CPC was dismissed, as the court found no merit in the claim of the plaintiff's exclusion from possession. The case was listed for further proceedings to await the local commissioner's report.
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2009 (4) TMI 1042
Issues Involved:
1. Maintainability of the appeals.
2. Decision on merits regarding the contravention of Sections 8(1) and 8(2) of FERA.
Summary:
Objection as to Maintainability:
The first issue addressed was the maintainability of the appeals. The respondents' counsel raised a preliminary objection, citing the Supreme Court's decision in *Mohtesham Mohd. Ismail v. Special Director, Enforcement Directorate*, which held that only the Central Government, not the Enforcement Directorate, could file an appeal before the High Court u/s 54 FERA. The appellant's counsel sought adjournments to make submissions, and eventually, a written note of submissions was filed. The court noted the distinction between Section 54 FERA and Section 35 FEMA, concluding that the present appeal, filed by the Central Government represented by the Directorate of Enforcement, was maintainable. The preliminary objection was overruled.
Decision on Merits:
The Enforcement Directorate alleged that the respondents were engaged in unauthorized foreign exchange transactions and seized foreign and Indian currencies from them. The respondents denied the allegations, claiming the seized foreign currency was from legitimate export transactions. The Adjudicating Authority found the respondents guilty of contravening Sections 8(1) and 8(2) FERA and imposed penalties. The respondents appealed to the Appellate Tribunal, which set aside the Adjudicating Authority's order, finding the respondents' explanation sufficient and trustworthy.
The Tribunal noted that the respondents provided evidence of lawful acquisition of foreign exchange through valid export deals, including contracts, receipts, affidavits from buyers, and bank statements. The Tribunal found no merit in the appellant's contention that the respondents had to "prove" lawful acquisition beyond the evidence provided. The Tribunal also found that the initial burden of proving illegal possession of foreign exchange was on the appellant, which was not sufficiently discharged.
The High Court agreed with the Tribunal's findings, stating that the respondents offered a satisfactory explanation for possessing the foreign exchange. The court emphasized that the presumption of culpable mental state and the genuineness of documents under Sections 59 and 72 FERA were rebuttable, and the respondents successfully rebutted these presumptions. The court found no error in the Tribunal's conclusion that the respondents' statements, retracted and alleged to be involuntary, could not solely sustain a finding of contravention.
The court concluded that the appellant failed to raise any question of law, as required for an appeal u/s 54 FERA and Section 35 FEMA, and dismissed the appeals as without merit.
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2009 (4) TMI 1041
Issues involved: Dismissal of complaint in default under Section 138 of the Negotiable Instruments Act, appeal against the dismissal, application for condonation of delay, interpretation of Section 256 of the Code of Criminal Procedure.
Dismissal of complaint in default under Section 138 of the Negotiable Instruments Act:
The appellant filed a complaint under Section 138 of the Negotiable Instruments Act, which was dismissed in default by the Judicial Magistrate, resulting in acquittal. The appellant then filed an appeal against this dismissal, challenging the order on grounds of limitation. The delay in filing the appeal was later condoned. The trial court found reasonable grounds to summon the respondent as an accused under Section 138, and the accused was ordered to be summoned. However, on the day of the hearing, neither the complainant nor her counsel was present, leading to the dismissal of the complaint for non-prosecution. The appellant attempted to explain her absence, but the order of dismissal was deemed indefensible.
Interpretation of Section 256 of the Code of Criminal Procedure:
The court examined Section 256 of the Code, which deals with non-appearance or death of the complainant. The section provides for the acquittal of the accused if the complainant does not appear, unless the court decides to adjourn the hearing or dispense with the complainant's attendance. The court referenced a previous judgment to emphasize that the court must consider the necessity of the complainant's presence for the progress of the case before dismissing the complaint. In this case, the trial court failed to consider whether the complainant's presence was essential, leading to the order being set aside and the complaint remanded back for proper disposal.
Conclusion:
The High Court set aside the order of dismissal in default and remanded the complaint back to the trial court for proper disposal in accordance with the law. The court directed the parties to be present for further proceedings and instructed the Registrar General to circulate the judgment to subordinate courts for adherence to Section 256 of the Code. The records of the lower courts were to be returned, and the matter was disposed of accordingly.
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2009 (4) TMI 1040
Issues Involved: Appeal against the order quashing FIR u/s 482 CrPC.
Issue 1: Quashing of FIR under Section 482 CrPC
The appeal challenged the order quashing the FIR in Crime No. 433/2002-2003 of Prohibition and Excise Station, Mahabubabad, Warangal District registered under Section 7 (A) read with Section 8(e) of A.P. Prohibition Act, 1995 read with Section 109 of the Indian Penal Code, 1860. The High Court allowed the prayer to quash the FIR under Section 482 of the Code of Criminal Procedure, 1973.
The State of Andhra Pradesh contended that the High Court's decision to quash the FIR was erroneous as there was material to show the commission of a crime. The power under Section 482 of the Code should be sparingly used and not to stifle legitimate prosecutions. The Supreme Court emphasized that the power under Section 482 is an exception and not the rule, and the High Court should not quash proceedings unless it is a clear case of abuse of process of court or to secure the ends of justice.
Issue 2: Exercise of Power under Section 482 of the Code
The Supreme Court highlighted that the power under Section 482 of the Code is inherent and should be exercised judiciously. The Court clarified that the High Court should not analyze the case in detail to determine conviction at the quashing stage. The Court must ensure that the complaint discloses an offence and is not frivolous, vexatious, or oppressive. The material collected during investigation and evidence led in Court decides the fate of the accused, and mala fides of the informant are of secondary importance.
The Court referred to previous judgments to outline categories where the inherent power can be exercised to quash proceedings, emphasizing that the power should be used sparingly and only in rare cases. The Court reiterated that the acceptability of materials to establish culpability is a matter for trial, and interference with the FIR at the threshold should be in exceptional circumstances.
Conclusion:
The Supreme Court allowed the appeal, stating that the High Court was not justified in quashing the FIR as the materials to establish guilt would be determined during trial. The Court emphasized that the power under Section 482 should be exercised cautiously and only in exceptional circumstances, not to stifle legitimate prosecutions.
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2009 (4) TMI 1039
Issues involved:
The issues involved in the judgment are:
1. Taxation of dividend income on a net basis
2. Deletion of additions related to telephone expenses and conveyance disallowed under rule 6D
3. Treatment of amount received on termination of re-insurance division as a capital receipt
Taxation of Dividend Income:
The appellant, Revenue, raised the issue of whether the Income Tax Appellate Tribunal (ITAT) was correct in directing the Assessing Officer (A.O.) to tax the dividend income on a net basis. The court noted that this question had already been addressed in a previous case, C.I.T. v. Ambalal Kilachand, and therefore, it was not considered a substantial question of law. As a result, the court dismissed this issue.
Deletion of Expenses:
The appellant also questioned the deletion of additions related to telephone expenses and conveyance disallowed under rule 6D. The court was informed by the counsel for the assessee that this issue had been settled in previous judgments of the court, namely C.I.T. v. Acme Manufacturing Co., C.I.T. v. Chemet, and C.I.T. v. Gannon Dunkerly & Co. Therefore, the court found no substantial question of law in this regard and dismissed the appeal.
Treatment of Amount Received:
Regarding the treatment of the amount received on the termination of the re-insurance division as a capital receipt, the court referred to the judgment in the case of C.I.T. v. Narendra D. Desai. Since this issue was already covered by a previous judgment, the court concluded that no substantial question of law was involved in this appeal. Consequently, the appeal was dismissed with no order as to costs.
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2009 (4) TMI 1038
The Bombay High Court dismissed the appeal by the Revenue regarding the taxation of dividend income on a net basis, citing a previous judgment in C.I.T. v. Ambalal Kilachand, (1995) 81 Taxman 435 (Bom). No substantial question of law was found.
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2009 (4) TMI 1037
Issues Involved:
1. Infringement of copyright by renting copies authorized for sale or rental outside India.
2. Importation of infringing copies into India.
3. Usage of home-viewing-only copies for rental purposes.
4. Infringement of fundamental rights under Article 19(1) of the Constitution.
5. Entitlement to an injunction.
6. Relief.
Issue-wise Detailed Analysis:
Issue 1 & 3: Infringement by Renting Copies Authorized Outside India and Usage of Home-Viewing-Only Copies
The court analyzed Sections 13, 14, 40, and 51 of the Copyright Act, 1957. It was noted that copyright in cinematographic films includes the exclusive right to sell, give on hire, or offer for sale or hire any copy of the film, regardless of previous sales or hires. The court rejected the defendant's argument of "exhaustion of rights," stating that the copyright owner retains control over the commercial use of copies, even if they have been sold previously. The court emphasized that the statute does not support the principle of international exhaustion. The defendant's importation and rental of DVDs without the plaintiffs' authorization constituted infringement under Sections 51(a)(i) and 51(b)(iv).
Issue 2: Importation of Infringing Copies
The court explained that "parallel importation" refers to legally produced goods sold in one country and imported into another through unauthorized channels. The court cited Section 11(2) of the Customs Act and the International Copyright Order, 1999, which extend copyright protection to works first published abroad. The court held that the importation of DVDs without the plaintiffs' authorization constituted infringement under Section 51(b)(iv). The court noted that the proviso to Section 51(b)(iv) permits the importation of one copy for private and domestic use, not for commercial purposes.
Issue 4: Infringement of Fundamental Rights
The defendant argued that restricting its rental business infringed its fundamental right to carry on business under Article 19(1)(g) of the Constitution. The court rejected this argument, stating that the enforcement of intellectual property rights does not infringe on fundamental rights. The court emphasized that copyright law balances the protection of creative expression and the promotion of creativity. The court held that the defendant's argument had no merit and answered the issue against the defendant.
Issue 5 & 6: Entitlement to Injunction and Relief
The court noted that while the plaintiffs would normally be entitled to relief, the defendant contested the plaintiffs' ownership of all the works claimed. Therefore, the matter required recording of evidence. The court confirmed the ad-interim injunction granted earlier, which would bind the defendant until the disposal of the suit. The court directed the Registry to list the suit for further proceedings.
Conclusion:
The court held that the defendant's importation and rental of DVDs without the plaintiffs' authorization constituted infringement of copyright. The court rejected the defendant's arguments based on the principle of exhaustion of rights and fundamental rights. The ad-interim injunction was confirmed, and the matter was directed for further proceedings to determine the plaintiffs' ownership of the works claimed.
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2009 (4) TMI 1036
Issues Involved:
1. Willful disobedience of the Supreme Court's order dated 30.9.2007 by respondents 1 to 5.
2. Criminal contempt by respondent No. 6 under Section 2(c) of the Contempt of Courts Act, 1971.
Issue-Wise Detailed Analysis:
1. Willful Disobedience of the Supreme Court's Order Dated 30.9.2007 by Respondents 1 to 5:
- Background Facts: The Democratic Progressive Alliance (DPA) passed a resolution on 24.9.2007 for a bandh on 1.10.2007 to pressurize the Central Government regarding the Sethu Samudram Project. The petitioner challenged this resolution in the Madras High Court, which issued directions to ensure no disruption of public life and services. The petitioner then approached the Supreme Court, which restrained the political parties from proceeding with the bandh.
- High Court and Supreme Court Orders: The High Court directed the state machinery to ensure no disruption of public life on 1.10.2007. The Supreme Court, on 30.9.2007, restrained the political parties from proceeding with the bandh.
- Compliance by Respondents 1 to 3: Respondent No. 1 issued instructions to maintain law and order and essential services. Respondent No. 2 conveyed these instructions to police officers. Respondent No. 3 ensured that transport services were operational to the extent possible. Despite these efforts, the petitioner alleged that the bandh was enforced, causing disruption.
- Affidavits and Evidence: Respondents 1 to 3 detailed the steps taken to comply with the court's orders. They claimed that the disruption was due to the support of trade unions and the public's fear of violence, not due to any willful disobedience on their part. The court found no evidence of willful disobedience or that respondents 1 to 3 failed to take necessary steps.
- Conclusion: The court concluded that respondents 1 to 3 took all necessary steps to comply with the court's order. The evidence presented did not establish willful disobedience. Therefore, respondents 1 to 3 were not held guilty of contempt.
2. Criminal Contempt by Respondent No. 6 under Section 2(c) of the Contempt of Courts Act, 1971:
- Allegations: The petitioner alleged that respondent No. 6 made a speech on 1.10.2007 that scandalized the judiciary and the Supreme Court's order, constituting criminal contempt.
- Evidence Presented: The petitioner relied on newspaper reports and an edited tape of the speech telecasted on Jaya T.V. Respondent No. 6 denied the allegations, claiming the reports were inaccurate and the tape was doctored.
- Legal Standards for Admissibility: The court noted the standards for admitting tape-recorded evidence, including identification of the speaker, accuracy of the recording, and exclusion of tampering. The petitioner failed to produce primary evidence, such as affidavits from reporters or an unedited tape.
- Conclusion: The court found that the evidence presented did not meet the required standards for proving criminal contempt beyond a reasonable doubt. Therefore, respondent No. 6 was not held guilty of criminal contempt.
Final Judgment:
- The contempt petitions were dismissed as the court found no willful disobedience by respondents 1 to 5 and no sufficient evidence to hold respondent No. 6 guilty of criminal contempt. The parties were left to bear their own costs.
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2009 (4) TMI 1035
Dishonor of Cheque - discharge of legally enforceable debt or not - acknowledgment of debt in terms of Section 18 of Limitation Act 1963 or not - time limitation - HELD THAT:- One thing which is important and can be taken note of is that neither in the complaint nor in the notice nor in the affidavit it has been stated that the debt which became time barred i.e. the amount which was paid by the complainant to petitioner No. 1 at the asking of petitioner No. 2 on 1.2.2002 was ever acknowledged within the period of limitation so as to keep the liability alive.
On perusal of the complaint and other documents show that the complainant had paid a sum by way of cheque to petitioner No. 1 at the asking of petitioner No. 2 somewhere in January, 2002 and the said cheque was credited in the account of petitioner No. 1 on 1.2.2002 and was payable after six months and was not paid within three years from 31.8.2002 that is the period within which it was under limitation and as such the loan became time barred as on 31.8.2002.
It is also clarified that first two cheques which stated to have been paid to the complainant by the petitioners were paid on 27.4.2006 and 31.5.2006. Thus those cheques were paid after three years of the friendly loan having became time barred. Similarly, the cheques issued in lieu of the original cheque i.e. a cheque bearing No. 817773 dated 30-08-2006 and another cheque bearing No. 350562 dated 05-05-2007.
Section 18 of the Limitation Act clearly goes to show that for analyzing the limitation of a civil liability beyond a period of three years, the acknowledgement, if any, must be there before period of limitation is over, which is not the case.
It may also be relevant to take note of the judgment delivered by the Bombay High Court in Smt. Ashwini Satish Bhat v. Shri Jeevan Divakar Lolienkar and Anr.[1999 (2) TMI 699 - BOMBAY HIGH COURT], wherein also in a similar case when a cheque was dishonoured which issued beyond the period of limitation the appeal filed by the complainant was dismissed.
No contrary judgment has been cited on behalf of the complainant/respondent. Accordingly the petition is allowed. The complaint dated 13.12.2007 and all the proceedings emanating therefrom are hereby quashed.
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2009 (4) TMI 1034
Issues involved: Challenge to order under Section 173 of the Motor Vehicle Act, 1988 regarding the date of commencement of the insurance policy.
Summary:
The Supreme Court addressed the challenge to an order passed by a learned single Judge of the Allahabad High Court dismissing an appeal under Section 173 of the Motor Vehicle Act, 1988. The dispute centered around the date of commencement of the insurance policy in relation to an accident on 28/5/1996 and a policy covering the period from 29/5/1996 to 28/5/1997. The High Court upheld the liability on the appellant based on the cover note issued on 28/5/1996. However, the appellant argued that the policy was valid from 29/5/1996 to 28/5/1997 as per the cover note. Citing precedents, the Supreme Court emphasized that if a specific time for the purchase of the policy is mentioned, the policy becomes effective from that time. As the High Court did not consider this aspect, the Supreme Court set aside the judgment and remitted the matter for fresh consideration. Ultimately, the appeal was disposed of.
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2009 (4) TMI 1033
Issues involved: Interpretation of the expression "date fixed" in Article 54 of the Schedule to Limitation Act, 1963.
Summary:
The Supreme Court addressed a reference regarding the interpretation of the term "date" in Article 54 of the Limitation Act, 1963. The Court noted that various High Courts had differing views on whether the date should be definitively fixed or inferred from surrounding circumstances. The Court referred to previous cases such as Ramzan v. Hussaini and Tarlok Singh v. Vijay Kumar Sabharwal for guidance. The Court emphasized the importance of a fixed and definite date for performance, stating that the expression "date fixed for performance" implies a specific date in the calendar. The Court concluded that the term "date" in Article 54 signifies a specified date and not one to be inferred from other circumstances. The matter was referred back to the Division Bench for further consideration.
In conclusion, the Supreme Court clarified the interpretation of the term "date fixed" in Article 54 of the Limitation Act, 1963, emphasizing the need for a specific and definite date for performance. The Court's decision provides guidance on establishing the date of performance and the plaintiff's notice of refusal, highlighting the importance of a clear and fixed timeline in legal matters.
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2009 (4) TMI 1032
Issues involved: Appeal against CIT order u/s 263 for advertisement and publicity expenses, appeal against disallowance of foreign travel expenses, revenue's appeal against deletion of prior period expenses.
Issue 1: Advertisement and Publicity Expenses
The appeal was against the CIT's order u/s 263 regarding the deduction claimed for advertisement and publicity expenses. The original assessment allowed the claim without discussion. The CIT contended that the provision for advertisement and publicity expenses was for unascertained liability and not deductible. The assessee argued that the provision was based on purchases made by distributors under a scheme, making it an allowable expenditure. The ITAT set aside the CIT's order, restoring that of the Assessing Officer.
Issue 2: Disallowance of Foreign Travel Expenses
The appeal challenged the disallowance of a portion of foreign travel expenses. The Assessing Officer disallowed a balance of expenses after allowing a portion based on proof of business purpose. The CIT (Appeals) upheld the disallowance. The ITAT found that the Assessing Officer's disallowance of a lesser amount was justified due to lack of full details, reversing the CIT (Appeals) order.
Issue 3: Deletion of Prior Period Expenses
The revenue's appeal concerned the deletion of addition on account of prior period expenses. The assessee argued that the expenses accrued in the relevant previous year, justifying their deduction in the assessment year under consideration. Citing relevant case law, the ITAT upheld the CIT (Appeals) decision to allow the claim, dismissing the revenue's appeal.
In summary, the ITAT allowed the assessee's appeal in ITA No.2403/Del/2008, partly allowed the assessee's appeal in ITA No.1561/Del/2008, and dismissed the revenue's appeal in ITA No.1216/Del/2008.
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2009 (4) TMI 1031
Bail Application - FIR was initially registered for offences u/s's 147, 148, 149 and 307 of the IPC - subsequently, on death of two injured persons, Section 302, IPC was also added - Whether having regard to the nature of the offences the second respondent has been charged with the background in which these were committed and the stage of the trial, the High Court was justified in granting bail to the said respondent and set him free? - appellant had gone to the shop where one Basiruddin also came - Anzar’s (shopkeeper) refusal to sell goods to him on credit, Basiruddin started beating him, on which the appellant intervened - Being annoyed Basiruddin accompanied by 21 other persons, including the second respondent armed with guns and country made firearms - seeing this, appellant rushed to the house of his brother Qayyum - All the said 22 persons attacked the house of Qayyum - As per the medical reports, the injured persons sustained gunshot injuries which were grievous in nature - later on, Rizwan and Anzar Hussain died.
HELD THAT:- Normally this Court does not interfere with the order of the High Court relating to grant or rejection of bail but in the instant case, having carefully gone through the impugned order, we are constrained to observe that the High Court has completely ignored the basic principles which are to be kept in view while dealing with an application filed u/s 439 of the Code for grant of bail and has thus, committed a manifest error in the matter of grant of bail to the second respondent, warranting interference by this Court.
The background of the incident, the nature of the assembly, the nature of the arms carried by the accused and the manner in which the offences were committed, prima facie, reflect the character and the conduct of the accused for whom perhaps refusal by the shopkeeper to sell goods on credit was a challenge to their authority and the power they wielded in the area. Be that as it may, the significant feature of the case is that the learned Judge, except for recording the submissions of counsel for both the parties, has not indicated any reason whatsoever for grant of bail.
This is manifest from the afore extracted order that there is no consideration of any of the factors, like nature of the offence; the evidence collected by the prosecution and forming part of the chargesheet and the circumstances under which the offences were committed, all relevant for deciding the question whether the bail should be granted or not.
In our opinion, failure on the part of the learned judge in not indicating any reason for grant of bail particularly when charges against the second respondent are serious, makes his order indefensible. As observed by this Court in Puran’s case [2001 (5) TMI 971 - SUPREME COURT OF INDIA], giving reasons is different from discussing merits or demerits. At the stage of granting bail, a detailed examination of evidence and elaborate documentation of the merits of the case is not to be undertaken but that does not mean that while granting bail some reasons for prima facie concluding why bail was granted are not to be indicated, which is the case here.
For the foregoing reasons, the appeal is allowed and the impugned order granting bail to the second respondent is set aside. The bail bond and surety furnished by the said respondent in terms of the High Court’s order stand cancelled and it is directed that he shall be taken into custody forthwith.
We may also clarify that if in future any application for grant of bail is filed by the second respondent, it shall be considered on its own merits, uninfluenced by this order.
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2009 (4) TMI 1030
Motor accident claim - Claim for compensation on death of dependency - quantum of compensation so awarded - Application seeking increase in compensation - Principles relating to assessment of compensation in cases of death - HELD THAT:- The issues to be determined by the Tribunal to arrive at the loss of dependency are (i) additions/deductions to be made for arriving at the income; (ii) the deduction to be made towards the personal living expenses of the deceased; and (iii) the multiplier to be applied with reference of the age of the deceased. If these determinants are standardized, there will be uniformity and consistency in the decisions. There will lesser need for detailed evidence. It will also be easier for the insurance companies to settle accident claims without delay.
Addition to income for future prospects - In view of imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of deceased is more than 50 years.
Though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid different yardsticks being applied or different methods of calculations being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances.
Deduction for personal and living expenses - We are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependant family members is 4 to 6, and one-fifth (1/5th) where the number of dependant family members exceed six.
Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself.
However, where family of the bachelor is large and dependant on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third.
Selection of Multiplier - The principles relating to determination of liability and quantum of compensation are different for claims made u/s 163A of MV Act and claims u/s 166 of MV Act. Section 163A and Second Schedule in terms do not apply to determination of compensation in applications u/s 166.
Computation of compensation - In this case as noticed, the salary of the deceased at the time of death was ₹ 4,004. By applying the principles enunciated by this Court to the evidence, the High Court concluded that the salary would have at least doubled (₹ 8008/-) by the time of his retirement and consequently, determined the monthly income as an average of ₹ 4004/- and ₹ 8008/- that is ₹ 6006/- per month or ₹ 72072/- per annum. We find that the said conclusion is in conformity with the legal principle that about 50% can be added to the actual salary, by taking note of future prospects.
In this case, the accident and death occurred in the year 1988. The award was made by the Tribunal in the year 1993. The High Court decided the appeal in 2007. The pendency of the claim proceedings and appeal for nearly two decades is a fortuitous circumstance and that will not entitle the appellants to rely upon the two pay revisions which took place in the course of the said two decades. If the claim petition filed in 1988 had been disposed of in the year 1988-89 itself and if the appeal had been decided by the High Court in the year 1989-90, then obviously the compensation would have been decided only with reference to the scale of pay applicable at the time of death and not with reference to any future revision in pay scales.
If the contention urged by the claimants is accepted, it would lead to the following situation: The claimants only could rely upon the pay scales in force at the time of the accident, if they are prompt in conducting the case. But if they delay the proceedings, they can rely upon the revised higher pay scales that may come into effect during such pendency. Surely, promptness cannot be punished in this manner. We therefore reject the contention that the revisions in pay scale subsequent to the death and before the final hearing should be taken note of for the purpose of determining the income for calculating the compensation.
As contended that having regard to the fact that the family of deceased consisted of 8 members including himself and as the entire family was dependent on him, the deduction on account of personal and living expenses of the deceased should be neither the standard one- third, nor one-fourth as assessed by the High Court, but one-eighth. We agree with the contention that the deduction on account of personal living expenses cannot be at a fixed one-third in all cases (unless the calculation is under section 163A read with Second Schedule to the MV Act). The percentage of deduction on account personal and living expenses can certainly vary with reference to the number of dependant members in the family. But as noticed earlier, the personal living expenses of the deceased need not exactly correspond to the number of dependants.
As an earning member, the deceased would have spent more on himself than the other members of the family apart from the fact that he would have incurred expenditure on travelling/transportation and other needs. Therefore we are of the view that interest of justice would be met if one-fifth is deducted as the personal and living expenses of the deceased. After such deduction, the contribution to the family (dependants) is determined as ₹ 57,658/- per annum. The multiplier will be 15 having regard to the age of the deceased at the time of death (38 years). Therefore the total loss of dependency would be ₹ 57,658 x 15 = ₹ 8,64,870/-.
In addition, the claimants will be entitled to a sum of ₹ 5,000/- under the head of `loss of estate' and ₹ 5000/- towards funeral expenses. The widow will be entitled to ₹ 10,000/- as loss of consortium. Thus, the total compensation will be ₹ 8,84,870/-. After deducting ₹ 7,19,624/- awarded by the High Court, the enhancement would be ₹ 1,65,246/-.
We allow the appeal in part accordingly. The appellants will be entitled to the said sum of ₹ 165,246/- in addition to what is already awarded, with interest at the rate of 6% per annum from the date of petition till the date of realization. The increase in compensation awarded by us shall be taken by the widow exclusively.
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2009 (4) TMI 1029
Issues Involved:1. Application u/s Order 22 Rules 4 and 9 CPC for substitution of legal heirs. 2. Application u/s Section 5 of the Limitation Act for condonation of delay. Summary:1. Application u/s Order 22 Rules 4 and 9 CPC for substitution of legal heirs:The plaintiff filed a suit for specific performance and sought to substitute the legal heirs of deceased defendant No. 1, Smt. Bimla Devi, who passed away on 06.10.2003. The plaintiff claimed ignorance of her death until 13.11.2003. Despite the stipulated 90-day period for filing the application expiring, the plaintiff sought to implead the legal heirs, including Shri Rakesh Aggarwal, Ms. Preeti, and Ms. Anju, as defendants No. 1[a] to 1[c]. The plaintiff argued that the right to sue survives against these legal heirs as successors to the suit premises. 2. Application u/s Section 5 of the Limitation Act for condonation of delay:The plaintiff attributed the delay in filing the application to the fault of the previous advocate, who neither informed about the death of defendant No. 1 nor pursued the matter diligently. The plaintiff contended that the delay was not deliberate and that sufficient cause existed due to the complex and peculiar facts of the case. The plaintiff emphasized that not setting aside the abatement would cause irreparable loss and harm, while allowing the applications would not prejudice the defendants. Defendants' Opposition:The defendants opposed both applications, arguing that they were filed beyond the prescribed limitation period and lacked sufficient explanation for the delay. They contended that the suit had already abated against defendant No. 1 and should be dismissed, which would also affect the suit against other defendants. Court's Analysis and Judgment:The court reviewed the applications, replies, and relevant judgments. It noted that in a similar case (C.S. [OS] No. 2243/1993), the delay in filing the application for substitution of legal heirs was condoned. The court cited the Supreme Court's liberal approach in condoning delays to advance substantial justice, as seen in cases like Ram Nath Sao v. Gobardhan Sao and Nagina Singh v. Naga Singh. The court emphasized that rules of limitation are not meant to destroy rights but to ensure timely remedies. The court acknowledged that the plaintiff had made a specific prayer for setting aside the abatement in the main application and that an oral prayer for condonation under Section 5 of the Limitation Act is sufficient. The court held that the power to condone delay is not necessarily dependent on a formal application and can be exercised if sufficient cause is shown. Given the settled law and the fact that one of the legal heirs (defendant No. 8) was already a party to the proceedings, the court allowed the application for condonation of delay. The plaintiff was directed to pay costs of Rs. 10,000 to the Delhi High Court Legal Services Committee within four weeks, and the legal representatives of deceased defendant No. 1 were brought on record. The amended memo of parties was taken on record, and the matter was listed before the Joint Registrar for further proceedings.
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