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Showing 21 to 40 of 672 Records
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2005 (8) TMI 735
The Supreme Court of India allowed exemption, issued notice, tagged petitions with S.L.P. (C) Nos.15872-15873 of 2005, and granted the petitioner liberty to file additional documents within two weeks.
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2005 (8) TMI 734
Issues involved:
- Validity of reassessment proceedings under section 147/148
Analysis:
The judgment pertains to two separate appeals filed by the assessee against orders of the CIT(A) for the assessment years 1994-95 and 1995-96. The primary issue raised in both appeals was the validity of the reassessment proceedings initiated under section 147/148 of the Income Tax Act, 1961. The assessee contended that the Assessing Officer (AO) failed to provide the reasons for reassessment before issuing the notice under section 148, depriving the assessee of the opportunity to object to the proceedings. The counsel for the assessee highlighted that even the CIT(A) did not furnish a copy of the reasons recorded for initiating the reassessment proceedings. On the other hand, the Departmental Representative supported the orders of the Departmental authorities.
Upon considering the submissions, the Tribunal emphasized that it is well-established that the reasons recorded by the AO under section 147/148 must be communicated to the assessee, allowing them to raise objections to the initiation of proceedings. The Tribunal observed that neither the CIT(A) nor the Departmental authorities provided the reasons to the assessee as required by law. Consequently, the Tribunal set aside the CIT(A)'s order and directed the CIT(A) to supply a copy of the reasons recorded by the AO for initiating the proceedings under section 147/148. Additionally, the assessee was to be granted a hearing to present their objections. The Tribunal instructed the CIT(A) to pass a fresh order in compliance with the law, ensuring a reasonable opportunity of hearing for the assessee.
As a result of the above findings, both appeals filed by the assessee were treated as allowed for statistical purposes, indicating a favorable outcome for the assessee in challenging the validity of the reassessment proceedings under section 147/148.
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2005 (8) TMI 733
Issues Involved:
1. Taxability of a club registered under the Karnataka Societies Registration Act, 1960, under the Wealth Tax Act, 1957.
2. Applicability of Section 21AA of the Wealth Tax Act, 1957.
3. Levy of penalty for belated filing of wealth-tax returns under Section 18(1)(a) of the Wealth Tax Act, 1957.
Detailed Analysis:
1. Taxability of a Club Registered under the Karnataka Societies Registration Act, 1960, under the Wealth Tax Act, 1957:
The core issue was whether the assessee-club, registered under the Karnataka Societies Registration Act, 1960, is liable to wealth tax. The assessee-club had initially filed returns declaring net wealth as 'nil' and claimed it was not liable for wealth tax as an AOP. The Wealth Tax Officer assessed the wealth of the club in the status of an individual and charged wealth tax. The first appellate authority allowed the assessee's appeal for the assessment year 1980-81 but upheld the assessment for 1981-82 to 1983-84, citing Section 21AA of the Wealth Tax Act, effective from 1-4-1981. The Tribunal, however, allowed the assessee's appeal, relying on the Karnataka High Court's decision in CWT v. Bowring Institute, which held that the assessee was not an entity assessable to wealth tax. The High Court ultimately referred to the Supreme Court's decision in CWT v. Ellis Bridge Gymkhana, which clarified that clubs were not assessable to wealth tax for assessment years prior to the insertion of Section 21AA.
2. Applicability of Section 21AA of the Wealth Tax Act, 1957:
Section 21AA, introduced by the Finance Act, 1981, effective from 1-4-1981, provides that where assets chargeable to wealth tax are held by an AOP and the individual shares of the members are indeterminate or unknown, wealth tax shall be levied on the AOP as an individual. The first appellate authority applied this provision for assessment years 1981-82 to 1983-84, concluding that the assessee-club was liable for wealth tax as the members' shares were indeterminate. The Tribunal's decision was overturned by the High Court, which upheld the application of Section 21AA, confirming that the assessee was exigible to wealth tax for assessment years 1981-82 to 1983-84.
3. Levy of Penalty for Belated Filing of Wealth-Tax Returns under Section 18(1)(a) of the Wealth Tax Act, 1957:
The assessee-club filed its wealth tax returns belatedly, claiming a bona fide belief that it was not liable for wealth tax based on previous judicial decisions and Tribunal orders. The Wealth Tax Officer imposed penalties for the delayed filing, which were challenged by the assessee. The first appellate authority and the Tribunal accepted the assessee's explanation, finding the delay justified under the bona fide belief. The High Court upheld this view, noting that the explanation provided by the assessee was reasonable and satisfactory. The High Court emphasized that penalty proceedings could only follow the completion of assessment proceedings, and since the assessee was not considered an entity for assessment, it could not be penalized for delayed filing.
Conclusion:
The High Court ruled that the assessee-club was not liable to wealth tax for the assessment year 1980-81 but was liable for the assessment years 1981-82 to 1983-84 under Section 21AA. The penalties imposed for delayed filing of returns for the years 1981-82 and 1982-83 were cancelled, as the assessee's belief that it was not liable for wealth tax was found to be bona fide and reasonable. The reference proceedings were disposed of accordingly.
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2005 (8) TMI 732
The High Court of Gujarat disposed of O.J. Appeal No.69 of 2004 along with O.J. Appeal No.70 of 2004. O.J. Civil Application No.132 of 2004 was also disposed of, and the rule was discharged.
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2005 (8) TMI 731
Issues Involved:
1. Maintainability of applications under Section 34 of the Arbitration and Conciliation Act, 1996 (Indian Act) for setting aside foreign awards.
2. Applicability of Indian law versus English law in arbitration agreements.
3. Jurisdiction of Indian courts to set aside foreign awards.
Detailed Analysis:
1. Maintainability of Applications under Section 34 of the Indian Act for Setting Aside Foreign Awards:
The appeals were filed under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996, challenging the District Judge's decision that applications under Section 34 to set aside foreign awards were not maintainable. The High Court noted that the District Judge dismissed the applications without providing reasons. The appellants argued that the District Judge should have addressed the issues of fact and law raised by the parties. They contended that, according to the Supreme Court's decision in Bhatia International v. Bulk Trading S.A., the Indian Act applies to international commercial arbitrations held outside India unless expressly excluded by the parties. The High Court agreed that the District Judge failed to give reasons and thus undertook to consider the maintainability of the applications itself.
2. Applicability of Indian Law Versus English Law in Arbitration Agreements:
The agreement between the parties stated that disputes would be settled by arbitration under English Arbitration Law, and the arbitration would be held in London. The appellants argued that since the substantive rights under the agreement were governed by Indian law, the awards could be challenged in India. They cited the Supreme Court's decision in Bhatia International, which held that Indian law applies to international commercial arbitrations unless excluded. The respondents countered that the arbitration was conducted under English law, as specified in the agreement, and thus could only be set aside by a competent authority in England. The High Court found that the arbitration was indeed conducted under English law, as evidenced by various procedural aspects of the arbitration and the award itself.
3. Jurisdiction of Indian Courts to Set Aside Foreign Awards:
The High Court examined Section 48(1)(e) of the Indian Act, which allows refusal of enforcement of a foreign award if it has been set aside by a competent authority of the country in which, or under the law of which, the award was made. The High Court concluded that the awards were made under English law, and thus only a competent authority in England could set them aside. The Court distinguished this case from others cited by the appellants, where the agreements did not specify that English law would apply to the arbitration.
Conclusion:
The High Court held that the applications under Section 34 of the Indian Act were not maintainable for setting aside the foreign awards made under English law. The appeals were dismissed, and each party was ordered to bear its own costs. The judgment emphasized the importance of the specific arbitration agreement terms, which in this case, clearly indicated that English law governed the arbitration process.
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2005 (8) TMI 730
Jurisdiction to entertain and try the suit - Challenged the Validity Of order of termination - Entitlement to continue in service without any break - Appointment as conductor on daily wages with the Rajasthan State Road Transport Corporation - Suit for declaration - Termination on the basis of the remarks made by the checking staff on 01.05.1984 when the respondent was on duty - Violation of principles of natural justice - HELD THAT:- The services of the respondent were terminated simpliciter and does not contain any stigma and, therefore, there was no requirement under the law to hold any enquiry before terminating the services. The Courts below have also committed serious error in granting back wages along with reinstatement. Even otherwise, the respondent has not led any evidence before the trial Court except his own ipsi dixit to show that his services were terminated on the ground of any alleged misconduct. Therefore, it was not obligatory on the part of the Corporation to hold an enquiry before terminating the services. It is also settled that the employees of the Corporation are not civil servants and, therefore, they are not entitled to protection under Article 311 of the Constitution of India. Their terms of appointment is governed by the letter of appointment and, therefore, the management was well within its right to terminate the services of the respondent-probationer during the period of probation if his services were not found to be satisfactory during the said period. The Courts below and the High Court have committed serious error in decreeing the suit as prayed for and for directing reinstatement with full back wages.
The respondent is a temporary employee of the Corporation and a probationer and not a Government servant and, therefore, is not entitled for any protection under Article 311 of the Constitution. He was a party to the contract. In view of the fact that the respondent was appointed on probation and the services were terminated during the period of probation simpliciter as the same were not found to be satisfactory, the appellant-Corporation is not obliged to hold an enquiry before terminating the services. The respondent being a probationer has got no substantive right to hold the post and was not entitled to a decree of declaration as erroneously granted by the lower Courts and also of the High Court.
Thus, we hold that the respondent ought to have approached the remedies provided under the Industrial Disputes Act. He has miserably failed to do so but approached the Civil Court, which on the facts and circumstances of the case has no jurisdiction to entertain and try the suit. The respondent has not acted bona fide in instituting the suit. It is seen from the order of the High Court that the respondent had been reinstated in service in the year 1990 and the back wages had also been paid to him. Though in law, the respondent is not entitled to any back wages, thus, we are not inclined to order refund of the back wages already paid to the respondent. But we make it very clear that the respondent shall not be allowed to continue in service any further. He shall not be entitled to any further emoluments or service benefits except the amount, which has already been paid to him. The respondent shall be discharged forthwith. No costs. The appeal stands allowed.
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2005 (8) TMI 729
Issues:
1. Interpretation of section 43B of the Income-tax Act regarding SEBI turnover charges.
Analysis:
The appeal before the Appellate Tribunal ITAT Mumbai involved the interpretation of section 43B of the Income-tax Act concerning SEBI turnover charges. The dispute arose when the CIT(A) held that the turnover charges payable to SEBI were not covered under the provisions of section 43B of the Income-tax Act. The Assessing Officer disagreed, stating that any sum payable by the assessee by way of tax, duty, cess, or fees under any law should be allowed as a deduction only when actually paid. The Assessing Officer argued that SEBI turnover charges fell under this category and disallowed the deduction claimed by the assessee. The CIT(A), however, relying on a judgment of the Calcutta High Court, allowed the claim of the assessee. The revenue then appealed to the Tribunal, contesting the decision of the CIT(A) and supporting the Assessing Officer's stance.
The Tribunal examined the contentions of both parties and analyzed the nature of SEBI turnover charges. It noted that SEBI, as a regulatory body created under the Securities and Exchange Board of India Act, 1992, had the authority to levy fees or charges for carrying out its functions. The Tribunal observed that the turnover charges paid to SEBI could be considered as cess, duty, or tax payable by the assessee under section 43B of the Income-tax Act. The Tribunal highlighted that SEBI's powers, functions, and regulatory role established it as an authority empowered by law to collect such charges. In contrast, the assessee argued that turnover charges did not fall under the category of tax, duty, cess, or fees as per the provisions of section 43B(a) of the Income-tax Act.
After a thorough examination, the Tribunal concluded that SEBI turnover charges were akin to tax, duty, cess, or fees payable under a law, specifically the Securities and Exchange Board of India Act, 1992. It emphasized that the charges were not a one-time payment but were based on a percentage of turnover, making them recurrent in nature. The Tribunal disagreed with the CIT(A)'s decision, ruling in favor of the revenue and setting aside the CIT(A)'s order. Consequently, the Tribunal allowed the appeals of the revenue, upholding the Assessing Officer's disallowance of the deduction claimed by the assessee for SEBI turnover charges.
In summary, the Tribunal's judgment clarified that SEBI turnover charges were considered as dues payable under the law, falling within the ambit of section 43B of the Income-tax Act. The decision underscored the regulatory authority of SEBI and the recurrent nature of the charges based on turnover, distinguishing them from one-time fees.
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2005 (8) TMI 727
Issues Involved:
1. Whether a registered sale deed is a public document.
2. Whether a certified copy of a registered sale deed issued by the Registering Officer is a public document.
3. Whether a certified copy of a public document can be received in evidence without any further proof.
4. What is the effect and efficacy of producing and marking a certified copy of the sale deed.
5. Whether the order of the trial Court requires interference.
Detailed Analysis:
Issue 1: Whether a registered sale deed is a public document.
- The court clarified that a registered sale deed is not a public document but a private document. According to Section 74 of the Evidence Act, public documents are those forming the acts or records of acts of sovereign authorities, official bodies, tribunals, or public officers. A sale deed executed by a private individual does not fall into this category. The court cited the Privy Council case Gopal Das v. Shri Thakurji and Ratanlal's Law of Evidence to support this position, emphasizing that an original registered document is returned to the person who presented it for registration and is not kept as a public record.
Issue 2: Whether a certified copy of a registered sale deed issued by the Registering Officer is a public document.
- The court held that Book 1 kept in Registration Offices, where registered documents are copied, entered, or filed, is a public document. However, a certified copy of a registered document extracted from Book 1 is not a public document but a certified copy of a public document. The court explained that while the entries in Book 1 are public records, the certified copy of the sale deed is essentially a true copy of a copy.
Issue 3: Whether a certified copy of a public document can be received in evidence without any further proof.
- The court referred to Sections 76, 77, and 79 of the Evidence Act, which allow certified copies of public documents to be produced in proof of the contents of the public documents. The court stated that a certified copy of a registered instrument issued by the Registering Officer can be produced as secondary evidence of the public document (entries in Book 1) without laying any foundation for acceptance of secondary evidence. However, this does not prove the execution of the original document, only its contents.
Issue 4: What is the effect and efficacy of producing and marking a certified copy of the sale deed.
- The court noted that producing and marking a certified copy of a sale deed does not prove the execution of the original document. The execution must be proved by examining the executant or other witnesses, or by other means of proof as outlined in Section 67 of the Evidence Act. The court cited several cases, including Karuppanna Gounder v. Kolandaswami Gounder and Subudhi Padhan v. Raghu Bhuvan, to illustrate that the marking of a certified copy does not dispense with the need for proof of execution.
Issue 5: Whether the order of the trial Court requires interference.
- The court found that the trial court's order allowing the respondent to produce a certified copy of the sale deed as secondary evidence was unsustainable. The trial court had incorrectly assumed that the original sale deed was a public document and that the certified copy could be admitted under Section 65(e) of the Evidence Act. Additionally, the trial court's reasoning that obtaining the original from the record of F.A. No. 337/2003 would be time-consuming was not a valid ground for accepting the document as secondary evidence. The court emphasized that steps should have been taken to secure the production of the original document.
Conclusion:
- The court set aside the trial court's order and remitted the matter for fresh consideration. It noted that the respondent could still place material to show that the case would fall under Clause (b) of Section 65, enabling her to give secondary evidence, or take steps to secure the original document.
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2005 (8) TMI 726
Issues:
1. Continuance of anti-dumping duties
2. Gazetted Notification by the Ministry of Finance
3. Appeal process before Customs Excise and Service Tax Appellate Tribunal (CESTAT)
4. Stay of Notification pending appeal
Analysis:
1. The judgment addresses the issue of the continuance of anti-dumping duties. The court noted that a prima facie case had been made out for the continuance of these duties. The proceedings were spread over multiple dates for detailed hearings, during which it was observed that the Ministry of Finance, though not a party to the proceedings, had gazetted a Notification. The court emphasized the principle that a person is entitled to protection from the moment they enter the court's portals. Conditional on the petitioner filing an appeal before CESTAT within fifteen days, the Notification dated 19.7.2005 would remain stayed until the Tribunal schedules a public hearing.
2. The judgment delves into the aspect of the Gazetted Notification by the Ministry of Finance. It was highlighted that the Ministry's actions were not under the Union of India, which was duly represented in the proceedings. The court directed that the Notification be held in abeyance for a short period to maintain status quo until the matter is taken up before CESTAT. The court emphasized the need for protection for the petitioner from the moment they entered the court.
3. The judgment discusses the appeal process before CESTAT. It was mandated that the petitioner file its appeal within fifteen days from the date of the judgment. The court directed that the appeal be listed before the Tribunal in the month of August to prevent delays that could potentially occur in the CESTAT office. The judgment ensured that the rights of the parties to challenge the order were preserved.
4. Lastly, the judgment addresses the stay of the Notification pending appeal. It was ruled that the Notification dated 19.7.2005 would remain stayed until the Tribunal fixed the matter for public hearing. The court disposed of the writ petition in these terms, ensuring that the petitioner's rights were protected throughout the process.
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2005 (8) TMI 725
Issues Involved:
1. Execution of a decree against a partner when the decree was against the partnership firm.
2. Execution of a decree in violation of Order 21 Rules 49 and 50 C.P.C.
3. Validity of the Will executed by Smt. Dhanwanti Devi.
4. Liability of partners under the Partnership Act.
5. Calculation and payment of interest on the principal amount of the decree.
Issue-Wise Detailed Analysis:
1. Execution of a Decree Against a Partner When the Decree Was Against the Partnership Firm:
The appellant contended that a decree cannot be executed against a partner when the decree was against the partnership firm. The court held that under the provisions of the Partnership Act, one partner is the agent of the other, and therefore, the partner is always liable for partnership debt unless there is an implied or express restriction. The court referred to Sections 24 and 25 of the Indian Partnership Act, 1932, which state that notice to a partner is binding on the firm and that every partner is liable jointly and severally for all acts of the firm done while he is a partner.
2. Execution of a Decree in Violation of Order 21 Rules 49 and 50 C.P.C.:
The appellant argued that the proceedings were initiated in violation of Order 21 Rules 49 and 50 C.P.C. The court noted that Order 21 Rule 49 provides that no execution can issue against any partnership property except on a decree passed against the firm or against the partners in the firm as such. In this case, the State had obtained a decree against the partnership firm. Order 21 Rule 50 allows execution against the property of the partnership and the separate property of the partners. The court concluded that the High Court correctly held that the Will was executed by Smt. Dhanwanti Devi to defeat the execution of a decree obtained by the State.
3. Validity of the Will Executed by Smt. Dhanwanti Devi:
The appellant claimed that Smt. Dhanwanti Devi had executed a Will bequeathing the house to him, and therefore, the property should not be attached in execution. The court found that the High Court had correctly held that the Will was prepared to defraud the creditor and not with an intention to bona fide bequeath the property to the appellant. The court upheld the High Court's finding that the Will was a created document to delay the recovery proceedings.
4. Liability of Partners Under the Partnership Act:
The court reiterated that under Section 25 of the Partnership Act, the liability of the partners is joint and several. It is open to a creditor of the firm to recover the debt from any one or more of the partners. The court referred to previous judgments, including Dena Bank vs. Bhikhabhai Prabhudas Parekh & Co. & Ors. and Income Tax Officer (III), Circle-I, Salem vs. Arunagiri Chettiar, which established that partners are liable for the debts of the firm incurred while they were partners.
5. Calculation and Payment of Interest on the Principal Amount of the Decree:
The dispute between the parties was regarding the interest on the principal amount of Rs. 37,593 as on 17.10.1992. The State claimed that a sum of Rs. 61,890 was due as interest on the principal amount, and the appellant was also liable to pay subsequent interest. The court calculated the interest payable on Rs. 37,593 from 17.10.1992 at 18% per annum, which amounted to Rs. 1,49,848. However, the court directed the appellant to pay a sum of Rs. 1,00,000 in full satisfaction of the claim made by the State of Rajasthan. The court noted that justice should be tempered with mercy and that asking a party to pay interest at 18% per annum from 17.10.1992 was excessive. The appellant was given two months to pay the amount, failing which he would be liable to pay interest at 18% per annum on Rs. 37,593 from 17.10.1992 till the date of payment. The court also imposed a charge over the property until the payment was made.
Conclusion:
The appeal was disposed of with the direction that the appellant pay Rs. 1,00,000 to the State of Rajasthan within two months. The court emphasized that the liability of partners is joint and several, and the Will executed by Smt. Dhanwanti Devi was intended to defraud the creditor. The court balanced the need for justice with mercy by reducing the interest payable and avoiding prolonged execution proceedings.
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2005 (8) TMI 724
Issues Involved:
1. Repayment of the loan amount by the Company.
2. Lodgment of the pledged share certificates for transfer.
3. Title transfer of the impugned shares to the petitioner.
4. Authenticity of transfer entries and rubber stamp impressions on share certificates.
5. Return of original share certificates to the petitioner.
6. Genuineness of the correspondence among the petitioner, Company, and VINMAR.
Detailed Analysis:
Repayment of the Loan Amount:
The petitioner extended a loan of Rs. 10 lakhs to the Company against a pledge of 1,04,200 equity shares. The petitioner claims the Company failed to repay the loan in full, leaving a balance of Rs. 6 lakhs plus interest. The Company contends it repaid the entire loan in installments, including payments made through third parties and cash, which the petitioner denies. The Company did not provide specific dates or witnesses for these payments. The lack of detailed evidence and the subsequent actions of the second respondent, including sending a demand draft of Rs. 17.96 lakhs to the petitioner, suggest the loan was not fully repaid.
Lodgment of the Pledged Share Certificates for Transfer:
The petitioner lodged the share certificates and transfer deeds with the Company through VINMAR, as evidenced by various communications. However, discrepancies exist regarding the number of shares and transfer deeds lodged. The petitioner claims 1,05,200 shares were lodged, while VINMAR initially forwarded 86,400 shares. The communication from the Transfer Agents and subsequent actions by the petitioner raise doubts about the lodgment process. The Company's acknowledgment of receipt of the share certificates from VINMAR further complicates the matter.
Title Transfer of the Impugned Shares:
The petitioner asserts that the shares were transferred to his name and returned by the Company. However, the Company disputes this, alleging the transfer entries and rubber stamp impressions on the share certificates are fabricated. The petitioner's actions, including selling 1,000 shares and attempting to dematerialize others, indicate he believed the shares were transferred. Yet, the Company's consistent denial and the lack of clear evidence supporting the petitioner's claim create substantial doubt.
Authenticity of Transfer Entries and Rubber Stamp Impressions:
The Company alleges the transfer entries and rubber stamp impressions on the share certificates are forged. The petitioner provided the original share certificates during the hearing, but discrepancies in the size and appearance of the rubber stamp impressions raise questions about their authenticity. The communication from the Company in June 1999, stating the transfer entries are not genuine, supports the Company's claim. The ongoing criminal case for forgery and cheating further complicates this issue.
Return of Original Share Certificates:
The petitioner claims the Company returned the original share certificates after transferring them to his name. However, the Company denies this, and the inconsistencies in the petitioner's evidence, including the lack of forwarding letters and the use of plain paper for critical communications, cast doubt on this claim. The petitioner's inability to produce original documents requested by the second respondent further weakens his position.
Genuineness of the Correspondence:
The petitioner provided various communications to support his claims, but the Company alleges these are fabricated. The discrepancies in the content, format, and signatures of these communications, along with the lack of postal acknowledgments, suggest they may not be genuine. The petitioner's reliance on these disputed documents and the Company's consistent denial highlight the need for a thorough investigation.
Conclusion:
Given the complexity of the disputes, including allegations of forgery and fabrication, the Company Law Board (CLB) decided that these issues cannot be resolved through summary proceedings under Section 111A of the Companies Act, 1956. The proper course of action is to relegate the parties to a civil suit where a detailed investigation and trial by evidence can occur. The CLB's decision aligns with judicial precedents emphasizing the need for civil suits in cases involving serious disputes and allegations of fraud. The company petition and related application are disposed of, with no order as to costs.
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2005 (8) TMI 723
Issues Involved:
1. Validity of the recruitment rules for the promotion to the post of 'Assistant Architect' in relation to the Architects Act, 1972.
2. Legality of the promotion of non-registered architects to the post of 'Assistant Architect Class-II'.
Issue-wise Detailed Analysis:
1. Validity of the Recruitment Rules:
The petitioners, registered architects with degrees in architecture, challenged the amendments to the recruitment rules that allowed non-registered architects to be promoted to the post of 'Assistant Architect'. They argued that this was repugnant to the Architects Act, 1972, which mandates that only registered architects can use the title 'Architect'. The court examined the grounds on which subordinate legislation can be challenged, particularly focusing on whether the rule was repugnant to any statute. The court noted that while the Architects Act prohibits non-registered individuals from using the title 'Architect', it does not bar them from performing architectural functions. The court highlighted that unlike the Medical and Legal professions, the Architects Act does not exclusively reserve architectural functions for registered architects. Therefore, the court concluded that the state government can prescribe qualifications for various posts, including those involving architectural functions, without necessarily requiring registration under the Architects Act. However, the court emphasized that such individuals cannot be designated as 'Architects' or 'Assistant Architects' unless they are registered under the Architects Act.
2. Legality of the Promotion of Non-Registered Architects:
The petitioners contended that the promotion of non-registered architects to the post of 'Assistant Architect' was invalid and sought to quash the promotions of respondents who were not registered architects. The court reiterated that while non-registered individuals can perform architectural functions, they cannot be titled 'Architects' or 'Assistant Architects'. The court upheld the validity of the recruitment rules but directed that the state government must cease using the titles 'Architects' or 'Assistant Architects' for individuals who are not registered under the Architects Act. The court also directed the state to give preference to registered architects for posts involving architectural functions, as mandated by Section 35(2) of the Architects Act.
Conclusion:
The petition was allowed in part with the following directions:
1. The state government must cease using the titles 'Architects' or 'Assistant Architects' for posts not requiring registration under the Architects Act.
2. If the state wishes to continue using these titles, it must prescribe that appointees or promotees be registered architects.
3. The state must give preference to registered architects for posts involving architectural functions.
4. The state must comply with these directions within four months from the receipt of the order.
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2005 (8) TMI 722
Issues Involved:
1. Whether a secured creditor can proceed under the Securitisation Act without withdrawing proceedings under the R.D.B. Act.
2. Validity of the guarantee deed and liability of the guarantor.
3. Limitation period for initiating action under the Securitisation Act.
Issue-wise Detailed Analysis:
1. Whether a secured creditor can proceed under the Securitisation Act without withdrawing proceedings under the R.D.B. Act:
The petitioners argued that the respondent bank must elect one remedy, either under the R.D.B. Act or the Securitisation Act, and cannot pursue both simultaneously. The court examined the provisions of both acts, noting that Section 13(10) of the Securitisation Act allows a secured creditor to file an application to the D.R.T. if dues are not fully satisfied with the sale proceeds of the secured assets. The court emphasized that the Securitisation Act is intended to be in addition to, and not in derogation of, the R.D.B. Act, as per Section 37 of the Securitisation Act. The court rejected the petitioners' contention that pursuing remedies under both acts would result in conflicting orders, stating that the doctrine of estoppel or res judicata would apply to prevent such conflicts. The court concluded that a secured creditor is not required to elect between the two acts and can proceed under both.
2. Validity of the guarantee deed and liability of the guarantor:
The petitioners contended that the guarantee deed was invalid as it was not signed by the bank officials, thereby absolving petitioner No. 1 from any liability. The court rejected this argument, stating that the petitioners had signed the guarantee deed, and the bank had acted upon it by releasing funds. The court held that the absence of the bank's signature did not negate the existence of a concluded contract. Furthermore, the court noted that under Section 13(ii) of the Securitisation Act, a secured creditor can proceed against the security without taking other measures specified in the act. Thus, the court found that the proceedings against petitioner No. 1 were valid.
3. Limitation period for initiating action under the Securitisation Act:
The petitioners argued that the claim under the Securitisation Act was barred by the limitation period prescribed under the Limitation Act. The court examined the timeline of events: the loan was sanctioned in 1994, the suit was filed in 1997, and the notice under Section 13 was issued in 2004. The court referred to the limitation period for the sale of mortgaged property, which is 12 years, and concluded that the action taken under the Securitisation Act was within the limitation period.
Conclusion:
The court found no merit in the petitioners' arguments and upheld the respondent bank's right to proceed under both the R.D.B. Act and the Securitisation Act. The court emphasized that the Securitisation Act aims to provide a speedy recovery mechanism for financial institutions and should not be frustrated by procedural limitations. The court discharged the rule and rejected the petitioners' request for the continuation of interim relief, stating that it would be contrary to the objectives of the Securitisation Act. No order as to costs was made.
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2005 (8) TMI 721
Jurisdiction Of High Court to extend the time for depositing the money, awarded from Lok Adalat - Validity of order of Lok Adalat based on mutual compromise - High court set aside the order of Lok Adalat - Suit for partition and separate possession of property - Compromise entered into between parties - HELD THAT:- It is seen from the records that the Appellant was compelled to file the suit for recovery of possession of Plot No. 2 since the Respondent herein refused to comply with the terms of the compromise arrived at between the parties. The suit was decreed on 26.7.1990 and appeal was filed by the Judgment Debtor Respondent before the District Court and during the pendency of the appeal the matter was compromised between parties on 5.10.1999.
We have already extracted the terms of compromise in paragraph supra. It is thus clear that the decree holder Appellant has approached the executing court on the ground that the Judgment debtor/ Respondent failed to execute the sale deed after receiving ₹ 9.5 lakhs from the decree holder. Therefore the Appellant prayed before the Executing Court that he should be permitted to deposit ₹ 9.5 lakhs in that court and get the documents executed through court if the Judgment debtor failed to do so on issuance of notice for the purpose by the executing court. The respondent submitted that the compromise arrived at is a conditional one and Judgment debtor is liable to execute the sale deed in favour of the decree holder only if he remits the amount as agreed, and since decree holder has failed to comply with the conditions the Judgment debtor is not bound by the terms of the compromise. On the other hand the respondent/J.D. was ready and willing to deposit ₹ 3.5 lakhs before the executing court as per the terms of the compromise.
The High Court, in our view, has also misinterpreted Section 27 of the Post Office Act. The requirement of Section has been complied with in this case. The reasoning of the High Court on this issue is not correct and not in accordance with factual position. In the notice issued, the Postman has made the endorsement. This presumption is correct in law. He had given notice and intimation. Nevertheless, the respondent did not receive the notice and it was returned unserved. Therefore, in our view, there is no obligation cast on the appellant to examine the Postman as assumed by the High Court. The presumption under Section 114 of the Evidence Act operates apart from that under the Post Office Act.
In our opinion, the award of the Lok Adalat is fictionally deemed to be decrees of Court and therefore the courts have all the powers in relation thereto as it has in relation to a decree passed by itself. This, in our opinion, includes the powers to extend time in appropriate cases. In our opinion, the award passed by the Lok Adalat is the decision of the court itself though arrived at by the simpler method of conciliation instead of the process of arguments in court. The effect is the same. In this connection, the High Court has failed to note that by the award what is put an end to is the appeal in the District Court and thereby the litigations between brothers forever. The view taken by the High Court, in our view, will totally defeat the object and purposes of the Legal Services Authorities Act and render the decision of the Lok Adalat meaningless.
The High Court, in our view, has failed to note that the courts attempt should be to give life and enforceability to the compromise award and not to defeat it on technical grounds. This is a fit case, in our view, where the Respondent ought to have been directed to execute the sale deed by the extended time, if necessary. The High Court is also not correct in holding that the Court has no jurisdiction to extend the time. In our view, the learned Subordinate Judge has rightly extended the time for depositing the money which the High Court has wrongly interfered with.
We, therefore, hold that the order passed by the High Court in C.R.P. 1136/2003 is liable to be set aside. We do so accordingly. We direct the Respondent herein to execute the sale deed within two weeks from today failing which the Appellant could get the sale deed executed though court as stipulated in the award. The respondent is now entitled to withdraw ₹ 9.5 lakhs from the Sub-Court Alapuzha. Though this is a fit case for awarding cost, we refrain from doing so in view of the relationship between the parties.
The appeal is allowed.
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2005 (8) TMI 720
Issues Involved:
1. Recall of the order dated 17.10.2003 permitting secured creditors to proceed under the Securitisation Act.
2. Quashing the order passed in Review Application No. 55/2005.
3. Validity of the mortgage and registration of charge under the Companies Act.
4. Jurisdiction and applicability of the Securitisation Act versus the Companies Act.
Issue-wise Detailed Analysis:
1. Recall of the Order Dated 17.10.2003 Permitting Secured Creditors to Proceed Under the Securitisation Act:
The Company in Liquidation, through the Official Liquidator, challenged the order dated 4.5.2005, which refused to recall the order dated 17.10.2003. The original order allowed secured creditors to proceed under the Securitisation Act. The Company Judge also allowed the State Bank to sell the secured asset of 18 acres and 20 gunthas of land, while restricting the sale of movables in the custody of the Official Liquidator. The appeal contended that the property put up for sale had not been entirely mortgaged in favor of the respondent, and thus could not be sold under the Securitisation Act.
2. Quashing the Order Passed in Review Application No. 55/2005:
The appellant sought to quash and set aside the order passed in Review Application No. 55/2005 on 13.6.2005, which had rejected the review of the order dated 4.5.2005. The appellant argued that the properties could not be sold under the Securitisation Act after the winding-up order was passed and that the second mortgage was not registered as required by law, making it void against the liquidator.
3. Validity of the Mortgage and Registration of Charge Under the Companies Act:
The appellant contended that the second mortgage for 7 acres and 9 gunthas was not registered with the Registrar of Companies, thus not constituting a secured asset. The respondent-Bank argued that equitable mortgages were created by deposit of title deeds on 4.5.1990 and 21.8.1991. The Tribunal had accepted these mortgages, but the Official Liquidator was not a party to those proceedings. The Court noted that despite awareness of the proceedings, the Official Liquidator had not moved the Debts Recovery Tribunal to recall its order dated 4.10.2004.
4. Jurisdiction and Applicability of the Securitisation Act Versus the Companies Act:
The Court referred to the Supreme Court's judgment in Allahabad Bank v. Canara Bank, which held that the Tribunal under the RDB Act has exclusive jurisdiction even after a winding-up order is passed. The Court analyzed the provisions of the Securitisation Act, noting that it prevails over the Companies Act. The Securitisation Act allows secured creditors to proceed without the leave of the Company Court, both before and after winding-up. The Court concluded that the respondent could sell the secured assets under the Securitisation Act, and the appellant could seek remedies under the Debts Recovery Act or the Securitisation Act if they contested the validity of the charge.
Conclusion:
The appeal was disposed of with the direction that the appellant could move under the Debts Recovery Act or the Securitisation Act to challenge the validity of the charge. The Court upheld the applicability of the Securitisation Act over the Companies Act, allowing the respondent to sell the secured assets without the Company Court's leave.
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2005 (8) TMI 719
Seeking waiver of claim of interest over the arrears which remain unpaid - stay granted by the Court - Application for temporary injunction u/s 12-A - HELD THAT:- In view of the judgments in Style (Dress Land) vs. Union Territory [1999 (8) TMI 969 - SUPREME COURT], Kanoria Chemicals & Industries Ltd. vs. U.P. State Electricity Board [1997 (3) TMI 600 - SUPREME COURT], we need not dilate on the subject any more and respectfully following the dictum in these judgments, set aside the part of the order reproduced in the earlier part of this order and the appellants shall be entitled to charge interest for the period during which stay granted by the Commission was in operation. Although the amount of interest in brochure is stated to be 20% which is unconscionable in the facts and circumstances of the case, we reduce the same to15% per annum. The appellants shall be entitled to charge interest on the amount due for the period during which stay remained in operation at the rate of 15% per annum.
In case the possession of the house has not been handed over to the respondent, then the appellants shall handover the possession of the house on payment of the principal amount, if any, not already paid along with interest for the period during which the stay granted by the Commission was in operation.
Appeals are partly allowed with no order as to costs.
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2005 (8) TMI 718
Issues Involved:
1. Recovery of dues under Order 37 of the Code of Civil Procedure (CPC).
2. Applications for leave to defend the suit.
3. Application for condonation of delay in filing leave to defend.
4. Application for injunction against the defendants.
5. Claim for interest on the principal amount.
Issue-wise Detailed Analysis:
1. Recovery of dues under Order 37 of the Code of Civil Procedure (CPC):
The plaintiff, a company engaged in the manufacture, marketing, and sale of flavors and fragrances, filed a suit for recovery of Rs. 27,70,832/- under Order 37 of the CPC. The defendants, a partnership firm, had approached the plaintiff for supply, which was made, and cheques were issued by the defendants. These cheques were dishonored due to insufficient funds. Despite assurances and issuance of fresh cheques, the dues remained unpaid. The plaintiff claimed the amount based on a written contract and dishonored cheques, asserting that the claim was within the purview of Order 37.
2. Applications for leave to defend the suit:
Defendant No. 2 filed an application under Order 37 Rule 3(5) read with Section 151 CPC seeking unconditional leave to defend the suit. Defendant No. 3 also filed a similar application along with an application for condonation of delay. The court examined whether the defendants were entitled to unconditional leave to defend or if an injunction against their property was warranted. The court noted that the defendants made vague denials and failed to provide substantial evidence or correspondence to support their claims of defective goods or non-receipt of goods. The court found the defense to be frivolous and vexatious, thus denying the leave to defend.
3. Application for condonation of delay in filing leave to defend:
Defendant No. 3, a widow of the erstwhile partner, sought condonation of a seven-day delay in filing the application for leave to defend, citing personal reasons and illness of her daughter. The court, considering the peculiar facts and circumstances, condoned the delay, allowing the application for leave to defend to be decided along with that of Defendant No. 2.
4. Application for injunction against the defendants:
The plaintiff filed an application under Order 39 Rules 1 & 2 CPC to restrain the defendants from selling or transferring certain property. Defendant No. 2 made a statement in court that they would not transfer or create third-party interest in the property. Based on this statement, the court found no further orders necessary and disposed of the application.
5. Claim for interest on the principal amount:
The plaintiff claimed interest at 24% per annum, but the court found no written contract or document supporting this claim. The court emphasized that claims under Order 37 must be based on written contracts, and in the absence of such a contract for interest, the claim was declined. However, the court awarded interest at 6% per annum from the date of institution of the suit till realization of the principal amount of Rs. 19.5 lacs, along with the costs of the suit.
Conclusion:
The court dismissed the applications for leave to defend filed by Defendants 2 and 3, finding no substantial defense. The plaintiff was entitled to a decree for Rs. 19.5 lacs with 6% interest per annum from the date of the suit till realization, and the costs of the suit. The applications related to condonation of delay and injunction were disposed of accordingly.
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2005 (8) TMI 717
State Government's employees - Seeking higher quantum of death-cum-retirement gratuity - Whether the decision of the Central and State Governments to restrict the revision of the quantum of gratuity as well as the increased ceiling of gratuity consequent upon merger of a portion of dearness allowance into dearness pay reckonable for the purpose of calculating gratuity, was irrational or arbitrary - HELD THAT:- It is difficult to accede to the argument on behalf of the employees that a decision of the Central Government/ State Governments to limit the benefits only to employees, who retire or die on or after 1.4.1995, after calculating the financial implications thereon, was either irrational or arbitrary. Financial and economic implications are very relevant and germane for any policy decision touching the administration of the Government, at the Centre or at the State level.
Even at that time, interestingly, the benefits were not made admissible from 1.3.1988, i.e. the date of the Average Consumer Price Index of 729.91, but from a much further date i.e. 16.9.1993. The Central Government adopted the same policy while issuing the O.M. dated 14.7.1995. Although, dearness allowance linked to the All India Average Consumer Price Index 1201.66 (as on 1.7.1993), was treated as reckonable part of dearness allowance for the purpose of calculating the death-cum-retirement gratuity, the benefit was actually made available to the employees who retired or died on or after 1.4.1995. Similarly, the increase in the ceiling of gratuity was a mere consequential step, which was also made applicable from 1.4.1995. As we have already noticed, 1.4.1995 was the date suggested by the Fifth Central Pay Commission ("Pay Commission") in its Interim Report. The Central Government took a conscious stand that the consequential financial burden would be unbearable.
It, therefore, chose to taper down the financial burden by making the benefits available only from 1.4.1995. It is trite that, the final recommendations of the Pay Commission were not ipso facto binding on the Government, as the Government had to accept and implement the recommendations of the Pay Commission consistent with its financial position. This is precisely what the Government did. Such an action on the part of the Government can neither be characterized as irrational, nor as arbitrary so as to infringe Article 14 of the Constitution.
More recently, in Veerasamy [1999 (3) TMI 677 - SUPREME COURT], this Court observed that, financial constraints could be a valid ground for introducing a cut-off date while implementing a pension scheme on a revised basis. In that case, the pension scheme applied differently to persons who had retired from service before 1.7.1986, and those who were in employment on the said date. It was held that they could not be treated alike as they did not belong to one class and they formed separate classes.
In the result, we set aside the common judgment and order of the High Court of Punjab & Haryana in CWP and in connected matters decided thereby, in so far as they purport to grant the revised death-cum- retirement gratuity to government employees who died or retired before the prescribed cut-off date of 1.4.1995. We also set aside judgment and orders of the High Court of Himachal Pradesh in CWP.
We further allow Civil Appeal, Civil Appeal @ SLP (C) and T.C. (and set aside the order dated 21.9.2001 of the CAT (Mumbai Bench) in O.A. and dismiss Civil Appeal.
In the circumstances of the case, there shall be no order as to costs.
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2005 (8) TMI 716
Issues:
1. Interpretation of Section 50 of the NDPS Act regarding personal search.
2. Compliance with the mandatory provisions of Section 50 of the NDPS Act.
3. Admissibility of evidence obtained during a search.
4. Validity of the judgment and order of the High Court.
Interpretation of Section 50 of the NDPS Act regarding personal search:
The case involved an appeal by the State of Rajasthan against a judgment acquitting the respondent of carrying contraband opium. The High Court held that a search of a bag carried on the head of a person amounts to a personal search under Section 50 of the NDPS Act. However, the Supreme Court referred to a previous judgment to define "person" as a human being with appropriate coverings and clothing, excluding articles like bags or containers. Therefore, the Court concluded that the provisions of Section 50 were not applicable in this case, overturning the High Court's decision.
Compliance with the mandatory provisions of Section 50 of the NDPS Act:
The High Court found that there was no proper compliance with the mandatory provisions of Section 50 of the NDPS Act in the search conducted in this case. It held that the respondent was entitled to an acquittal due to the partial option given to him during the search. However, the Supreme Court disagreed, stating that the search did not fall under the definition of a personal search as per the Act, and hence, there was no requirement for strict compliance with Section 50. The Court set aside the High Court's decision and upheld the trial court's judgment.
Admissibility of evidence obtained during a search:
The appellant argued that the respondent should be deemed under arrest when questioned by the police and that any confession made should not be used against him. The Court rejected this argument, stating that there was no evidence of the respondent being compelled to confess. The Court emphasized that compelling a person to be searched does not amount to a confession. Therefore, the evidence obtained during the search was admissible, and there was no valid reason to support the High Court's judgment of acquittal.
Validity of the judgment and order of the High Court:
The Supreme Court concluded by setting aside the High Court's judgment and restoring the judgment of the Special Judge, NDPS Cases, Chittorgarh, dated May 5, 2000. The respondent was ordered to be taken into custody to serve the remainder of the sentence. The appeal by the State of Rajasthan was allowed, overturning the High Court's decision and upholding the conviction of the respondent for carrying contraband opium.
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2005 (8) TMI 715
Issues Involved:
1. Whether the Court should decline to enter upon the controversy of whether an implementable arbitration agreement exists between the parties.
2. Applicability of Part I and Part II of the Arbitration & Conciliation Act, 1996.
3. Jurisdiction of Civil Courts in arbitration matters.
4. Waiver of arbitration clause.
5. Relevant facts and circumstances of the case.
Issue-Wise Detailed Analysis:
1. Whether the Court should decline to enter upon the controversy of whether an implementable arbitration agreement exists between the parties:
The Court analyzed whether it should refer the parties to arbitration, leaving the Arbitral Tribunal to decide its jurisdiction. It was noted that if there is a strong likelihood that one party would be needlessly subjected to arbitration, the Court should intervene to prevent a futile reference. The Court was guided by previous legal submissions and the Arbitration & Conciliation Act, 1996, which expects the Court to obviate unnecessary arbitration references.
2. Applicability of Part I and Part II of the Arbitration & Conciliation Act, 1996:
The Court examined the decision in Bhatia International v. Bulk Trading S.A. and Anr., which held that Part I of the Act applies to all arbitrations with statutory connectivity to India unless explicitly excluded. The Court noted that the ratio of Bhatia International does not foreclose further discussion on the interplay between Sections 8 and 45 or Part I and Part II. The Court concluded that Part I applies to all arbitrations unless excluded by agreement, while Part II applies specifically to New York Convention arbitrations.
3. Jurisdiction of Civil Courts in arbitration matters:
The Court emphasized that Section 5 of the Arbitration & Conciliation Act does not explicitly oust the jurisdiction of Civil Courts. It referred to several Supreme Court judgments, including Dhulabhai v. State of Madhya Pradesh, which held that Civil Courts' jurisdiction is all-encompassing unless expressly excluded by statute. The Court also highlighted that Section 8 of the Act preserves Civil Courts' jurisdiction unless an application for arbitration is filed.
4. Waiver of arbitration clause:
The Court discussed the doctrine of election of remedies, noting that a party may waive its right to arbitration by choosing to litigate in Civil Courts. The Court referred to previous judgments, including Food Corporation of India v. Sreekanath Transport, where the Supreme Court held that filing a civil suit despite an arbitration clause constitutes a waiver of the arbitration clause. The Court found that the defendants had waived their right to arbitration by actively participating in civil litigation.
5. Relevant facts and circumstances of the case:
The Court detailed the factual background, noting the incorporation of SKYCELL Communication Pvt. Limited and the subsequent disputes among its shareholders. The Court highlighted various legal actions taken by the parties, including suits and applications under Section 45 of the Arbitration & Conciliation Act. The Court observed that the defendants had previously argued that there was no arbitration agreement with the plaintiff and had engaged in extensive litigation, thereby waiving the arbitration clause. The Court concluded that the arbitration clause had become inoperative and declined to refer the parties to arbitration.
Conclusion:
The Court confirmed the interim order staying the arbitration proceedings requested by Defendant No. 1 and extended the stay to other defendants. The applications were disposed of accordingly, and the Court emphasized that the defendants must pursue their claims in Civil Courts rather than through arbitration.
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