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Case Laws
Showing 341 to 360 of 699 Records
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2008 (5) TMI 415
Fee continuity benefit - whether under the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 a fee is required to be paid by the stock brokers?
Held that:- Appeal dismissed. By clear interpretation of the Regulations, it is abundantly clear that no provision of succession to registration is permissible. Nikhil K. Vakharia son of Late Shri Kanchanlal K. Vakharia in order to operate in the stock exchange has to obtain a fresh registration from the SEBI and for the first five years, he would be required to pay the quantum of fee linked to the turnover and thereafter at the flat rate of Rs. 5,000 in order to keep the registration in force.
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2008 (5) TMI 414
Whether the alleged "restrictive trade practice" is "prejudicial to public interest" within the meaning of section 38 of the MRTP Act?
Held that:- Appeal allowed. In the instant case, the complainant/informant had requested for refund of the security amount and, therefore, it was refunded. It was really not a case of "termination of dealership". There was no charge or allegation of termination of dealership in the notice of enquiry, therefore, the Commission was not justified in passing the order based on "termination of dealership". Even otherwise also, the termination of single dealership cannot affect competition to any "material degree" in the relevant trade or industry within the meaning of clause (h) of section 38(1) of the MRTP Act.
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2008 (5) TMI 413
Winding up - Circumstances in which a company may be wound up - Held that:- As it appears from the facts and circumstances in the present case that the Company is unable to pay its dues and the debt has already been determined and the amount is also payable. Hence, it is well-settled law that a winding up petition is a perfect remedy for enforcing payment of a just debt.
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2008 (5) TMI 412
Nomination of arbitrator
Held that:- As it is noticed that the nationality of a company is determined by the law of the country in which it is incorporated and from which it derives its personality. However, for the purpose of taxation, test of residence may not be registration but where the company does its real business and where the central management and control exists. A distinction, thus, exists in law between a nationality and the residence. Furthermore, there exists a dispute that all the Board meetings take place only in Malaysia. In a matter involving determination of jurisdiction of a court, certainty must prevail which cannot be determined by entering into a dispute question of fact.
Thus this Court has no jurisdiction to nominate an arbitrator
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2008 (5) TMI 411
Whether any unfair trade practice was resorted to by the GDA?
Whether the MRTP Commission had the jurisdiction to direct the GDA to allot an alternative plot of land to the respondent at the previously fixed price under the MRTP Act?
Held that:- Appeal allowed by way of remand of this appeal to the MRTP Commission for decision afresh on the compensation, which may be given to the respondent in accordance with law along with refund of the amount deposited by the respondent with the GDA with simple interest. It is difficult to conceive that the respondent was unsuccessful in the draw of lots as alleged by the GDA, which is the excuse given by them for not giving the possession of the plot to the respondent. It is an admitted fact that the GDA had already issued a reservation/allocation letter to the respondent and it is also a finding of the MRTP Commission that the respondent had paid the full amount of ₹ 58,000. This shows that the respondent was successful in the draw of lots because otherwise, where was the need for the GDA to issue the reservation/allocation letter to the respondent which also required him to make the necessary payments. In this view of the matter, we affirm the finding of the MRTP Commission that the act of the GDA amounted to an unfair trade practice.
The MRTP Commission has the power to impose damages or give compensation to the respondent as a mode of redressal for harm caused by the unfair trade practices, but it certainly cannot assume the powers of the civil Court because the action of the MRTP Commission in this case virtually amounts to grant of specific performance.
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2008 (5) TMI 410
Whether the provisions of the FUTP Regulations are attracted in this case?
Held that:- Appeal dismissed. Accept the contention of Mr. Sundaram that Ritesh Agarwal and Deepak Agarwal could not have proceeded against for violation of the FUTP Regulations.
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2008 (5) TMI 409
Whether the Notice of Enquiry (NOE) is not maintainable for the preliminary objection taken by the appellant in its reply to the NOE?
Whether the appellant has indulged in or is indulging in the alleged restrictive trade practices?
Whether the alleged restrictive trade practices are not prejudicial to public interest?
Held that:- Appeal filed by the appellant is allowed with costs and the impugned judgment passed by the Monopolies and Restrictive Trade Practices Commission is set aside.
In the instant case, neither the notice nor the application even allege that the appellant has ever indulged in or that the alleged trade practice has or may have the effect of preventing, distorting or restricting competition in any manner and in particular it, inter alia, tends to obstruct the flow of capital or resource into the stream of production or tends to bring about manipulation of prices or conditions of delivery or to affect flow of supplies into the market in such a manner so as to impose unjustified costs and/or restrictions on the consumers of goods in question and therefore ex facie neither notice nor the application are maintainable. Thus the Commission must be extremely careful before issuing notices to the parties because it has serious consequences on the reputation and credibility to the activities of those parties. Frivolous notices breed long-drawn avoidable litigation before various forums.
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2008 (5) TMI 408
Confirmation of the sale by a Court at grossly inadequate price, whether or not it is a consequence of any irregularity or fraud in the conduct of sale, could be set aside on the ground that it was not just and proper exercise of judicial discretion. In such cases, a meaningful intervention by the Court may prevent, to some extent, underbidding at the time of auction through Court?
Held that:- Appeal allowed in part. As from the facts it is clear that the appellant’s bid was accepted in November, 2004. Immediately, it had deposited 25 per cent amount. The appellant also deposited remaining amount of 75 per cent on 12/13-4-2005. It would, therefore, be appropriate if we direct respondent No. 3 to pay an amount of Rs. 30 lakhs to the appellant which in our opinion would serve the ends of justice. Payment of Rs. 30 lakhs will serve as a "solatium to the purchaser for his trouble and disappointment for the loss of that which is perhaps a good bargain - the order passed by the Company Judge and confirmed by the Division Bench of the High Court are in consonance with law. But we may not be understood to have expressed any opinion on the allegations levelled by the appellant against the Official Liquidator. As and when the matter comes up for consideration before an appropriate Court/Authority, it will be decided on its own merits irrespective of the disposal of this appeal by us.
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2008 (5) TMI 407
Dishonor of cheques - Held that:- According to the High Court, admittedly the purchase orders in question were entered into and the purchases were made by the appellants with full knowledge of the proceedings that the company was declared sick under the SICA, the appellants clearly all through gave the impression to the respondent company that the outstanding amount towards the purchase of the goods would be shortly cleared. The fact that the purchases were made with the clear promise to repay could not be disputed by the appellants. The Directors had in fact issued the cheques for discharging their liability with the full knowledge, would not only clearly show that there was an undisputed debt, but would also show that, right from the inception, the appellants in fact had no intention of paying the amount for the purchases made by them. The intention of the appellants can be gathered by their subsequent acts, conduct and behaviour of taking a shelter under the provisions of SICA. Hence, the appellants are not entitled to any indulgence of this court under its extraordinary jurisdiction under Article 136 of the Constitution. The appellants had lost their total credibility because of their conduct. When the appellant company was declared sick, then without disclosing this fact the appellants ought not to have made huge purchases from the respondent company. Ultimately, the appellant company did not pay for the purchases. This clearly indicates that the appellants had no intention of making payment of the purchases made by it.
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2008 (5) TMI 406
Whether the respondent-company was liable to be prosecuted under section 138 of the Negotiable Instruments Act by virtue of section 141 of the Act in the absence of prosecution of the person incharge of the affairs or other Directors of the company?
Whether the liability was that of the company or the appellant herself?
Held that:- Appeal dismissed. Let the matters be placed before three-Judge Bench. The Registry is directed to place the records before the Hon’ble the Chief Justice of India for appropriate orders.
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2008 (5) TMI 405
Winding up - Fees to be credited to Central Government - seeking permission of this Court to deduct an amount of ₹ 3,54,90,803 from the liquidated assets of the 103 Companies (In Liquidation) as per Annexure A to this report, in terms of rule 291 of the Companies (Court) Rules, 1959 and to pay the said amount to the public account of India
Held that:- A close reading of rule 291 reveals that Central Government fees are to be charged by the Official Liquidator at the stage of collection or realization. Fees charged at the stage of disbursement under the provisions of sub-rules (3) and (4) of rule 291, are required to be deducted from the amount collected or realized. After effecting such deduction of the amount so disbursed and the deduction of expenses incurred by the Official Liquidator, fees can be charged on such balance amount.
In the above view of the matter, the Official Liquidator is hereby directed to recalculate the amount of fees to be collected under the respective heads and only on those items which are covered under rule 291(2)(i) or 291(2)( ii) or 291(4) are to be considered. Subject to the aforesaid directions and observations, this report is accordingly, disposed of in the above terms.
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2008 (5) TMI 404
Amalgamation - Held that:- There does not appear to be any legal impediment in sanctioning the proposed scheme of amalgamation. Consequently, sanction is hereby granted to the proposed scheme of amalgamation under sections 391 and 394 of the Companies Act, 1956 for amalgamation of the transferor-company with the transferee-company. The certified copy of this order shall be filed with the Registrar of Companies within five weeks. It is clarified that this order should not be construed as an order granting exemption from payment of stamp duty if payable in accordance with law in regard to increase in the share capital of the transferee-company. Upon sanction becoming effective and from the appointed date, the transferor-company shall stand dissolved without its formal winding up.
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2008 (5) TMI 403
Issues:
- Restoration of company's name in the register of companies under section 560(6) of the Companies Act, 1956.
Analysis:
The petitioners, a company incorporated under the Companies Act, 1956, sought directions under section 560(6) to restore their name in the register of companies. The company, incorporated in 1992, faced financial difficulties due to market recession and significant losses from 2000 to 2003. Consequently, the previous management applied to strike off the company's name from the register. However, before the Registrar of Companies made a decision on the application, a change in management occurred. The new management, considering improved business prospects, decided to revive the company and communicated this decision to the Registrar of Companies. Despite this, the company's name was struck off from the register on 28-10-2006.
The company, represented by Petitioner No. 1, now sought restoration of its name in the register. The Registrar of Companies, through Mr. Baldev Malik, Advocate, expressed no objection to the restoration, subject to the payment of additional fees for filing statutory returns for the default period. The court directed the Registrar of Companies to restore the company's name in the register upon payment of the additional fee as determined by the Registrar in accordance with the rules.
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2008 (5) TMI 402
Issues Involved:
1. Maintainability of the writ petition under Articles 226 and 227 of the Constitution of India.
2. Nature of the order passed by the Special Court (interlocutory or final).
3. Conformity of the Special Court's order with Section 319 of the Criminal Procedure Code.
Detailed Analysis:
1. Maintainability of the Writ Petition:
The primary issue was whether the High Court could entertain a writ petition against an order passed by the Special Court under Articles 226 and 227 of the Constitution of India. The petitioner argued that the Special Court, despite being presided over by a High Court Judge, does not equate to a High Court. The petitioner's counsel cited the Supreme Court's judgment in the Special Courts Bill, 1978, In re AIR 1979 SC 478, emphasizing the benign presence of Article 226, which ensures judicial scrutiny by the High Court. The petitioner also referenced L. Chandra Kumar v. Union of India [1997] 3 SCC 261, which upheld the High Court's power of judicial review under Article 226/227 over decisions of Tribunals. The Advocate General contended that the Special Court was not a Tribunal and thus not subordinate to the High Court. However, the court concluded that the orders of the Special Court, being interlocutory, could be subjected to judicial review under Articles 226 and 227.
2. Nature of the Order Passed by the Special Court:
The next issue was whether the impugned order was interlocutory or final. The petitioner argued that the order was interlocutory and thus not appealable to the Supreme Court under Section 10 of the Special Court Act. The court referred to V.C. Shukla v. State 1980 Supp. SCC 92, which defined an interlocutory order as one that does not determine the final rights of the parties. The court applied this principle, noting that if the application under Section 319 Cr.P.C. had been rejected, the matter would have ended for the petitioner. However, since the application was allowed, the petitioner had to face trial, making the order interlocutory in nature.
3. Conformity with Section 319 of the Criminal Procedure Code:
The petitioner challenged the Special Court's order under Section 319 Cr.P.C., arguing that the court did not discuss any evidence warranting the petitioner's arraignment as an accused. The court examined precedents, including Michael Machado v. Central Bureau of Investigation [2000] 3 SCC 262, which emphasized that the court must have reasonable satisfaction from the evidence collected regarding the involvement of another person in the offence. The court also referenced Municipal Corporation of Delhi v. Ram Kisan Rohtagi [1983] 1 SCC 1, which stated that the power under Section 319 should be used sparingly and only for compelling reasons. The court found that the Special Court had not adhered to these principles and thus remanded the matter back for reconsideration by the Special Judge.
Conclusion:
The High Court ruled that the writ petition was maintainable under Articles 226 and 227 of the Constitution. It determined that the impugned order was interlocutory and not appealable to the Supreme Court. The court found that the Special Court's order did not conform to the requirements of Section 319 Cr.P.C. and remanded the matter for a fresh decision by the Special Judge, in accordance with the law laid down by the Supreme Court. The writ petition was disposed of with no order as to costs.
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2008 (5) TMI 401
Auction sale set aside - Held that:- Appeal partly allwed. Ends of justice would be met if respondent No. 3 M/s. MSN Organics (P.) Ltd., who has purchased the property for ₹ 1.80 crores is directed to pay an amount of ₹ 20,00,000 (rupees twenty lakhs only) to the appellant herein.
It is true that when the Company Judge set aside the sale on 17-3-2006, the order was reversed by the Division Bench of the High Court since it was in breach of natural justice. That does not, however, mean that the Company Court could not pass fresh order after affording opportunity of hearing to the parties. The Company Court was right in passing fresh order after hearing the parties. If the Recovery Officer could not have confirmed the sale, obviously all actions taken in pursuance of confirmation of sale, such as, issuance of sale certificate, registration of documents, etc., would be of no consequence. Since the Company was in liquidation and Official Liquidator was in charge of the assets of the Company, he ought to have been associated with the auction proceedings, which was not done. This is also clear from the report submitted by the Official Liquidator and on that ground also, the auction sale was liable to be set aside.
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2008 (5) TMI 400
Winding up - Circumstances in which a company may be wound up - Held that:- This Court expresses no opinion on whether the documents submitted to the income-tax authorities were genuine or not. The issue of whether the documents were, in fact, genuine and whether Mr. Kumar had authority to sign the documents are issues which can only be tried in regular trial.
The receipt of the bills have not been acknowledged. The question of whether any bills, as alleged, were actually raised and served on the company requires adjudication upon evidence. It cannot be held that the company has no defence at all to the claim of the petitioning creditor. The company has an arguable case. The Company Court is not a debt collecting court. In view of the defence raised by the company, the claim of the petitioning creditor is relegated to a suit. The winding up application is dismissed.
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2008 (5) TMI 399
Whether the sum available, from the sale proceeds of the security of a secured creditor, after meeting the principal dues of the secured creditor with interest at the contracted rate till the date of winding up, and the dues of the workmen, can be utilised to pay the secured creditor interest at the contracted rate from the date of winding up till the date of sale of the secured assets or should it be applied for repayment of the principal dues of the unsecured creditors and, only thereafter, for payment of interest at 4 per cent, per annum to all creditors, both secured and unsecured ?
Whether the rate of interest payable to the workmen, along with their principal dues, in the absence of an agreement for payment of interest ?
Held that:- The plant and machinery of the company under liquidation was hypothecated in favour of the Industrial Development Bank of India. They assigned their debt later to Stressed Assets Stabilization Fund. ₹ 83.35 lakhs, realised from the sale of plant and machinery, has been paid to them in its entirety. The balance due to them, which is in excess of ₹ 350 lakhs, has necessarily to be treated as unsecured debt and, in accordance with sections 47(3), 48 and 61(6) of the Provincial Insolvency Act, 1920, read with rule 179 of the Companies (Court) Rules, 1959, the Industrial Development Bank of India would be entitled for payment of interest at 6 per cent, per annum, or 4 per cent, per annum, as the case may be, from the date of winding up, in case any surplus is available after payment in full of the principal due to both the secured and the unsecured creditors. The official liquidator's request that he be permitted to pay 86.56 per cent, to the unsecured creditors, without paying interest at the contracted rate of 15 per cent, per annum to the State Bank of India (the sole charge holder of the fixed assets of the company under liquidation and buildings), from the date of winding up till the date of sale of assets must, therefore, be rejected.
In view of the proviso to section 529(1), the security of the secured creditor is deemed to be subject to a pari passu charge in favour of the workmen also. For all practical purposes, a workman is treated as a co-chargeholder along with the secured creditor and would, therefore, be entitled to claim same rate of interest from the assets of the company under liquidation as has been contracted to by the secured creditor which, in the present case, is 15 per cent, per annum.
The amount liable to be paid as interest to the State Bank of India is required to be computed by the official liquidator. It is only thereafter, and after the amount required to be set apart to the State Bank of India, the workmen and other dues as detailed hereinabove, are determined, would the official liquidator be in a position to arrive at the sum still available with him which can, in turn, be utilised for payment of other dues.
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2008 (5) TMI 398
Whether Zafrani zarda is a processed form or manufactured form prepared from the raw material tobacco?
Held that:- Appeal allowed. Zafrani zarda being a "manufactured tobacco" would not answer the description of processed tobacco. It is used by a class of consumers. It is used for a specific purpose. Tobacco as a processed form is used for many purposes, by many persons and in many ways. Tobacco in raw form or in any other processed form is not commercially known as zarda. The common parlance test may have to be applied for the purpose of finding out as to whether the product in question is manufactured goods or not.
The High Court, unfortunately, had not considered this aspect of the matter. The impugned judgment cannot, thus, be sustained & is set aside accordingly.
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2008 (5) TMI 394
Whether toffee is 'sweetmeat' as contemplated by the exemption notification?
Whether "chewing gum" be treated as confectionery ?
Held that:- The High Court, therefore, should have applied the test of popular parlance by finding out how toffee is understood in the country and more particularly in the State of U.P. No evidence was led by the State to substantiate its case that 'toffee' is considered as sweetmeat either by the dealers in toffees or by the consumers.
In order to give meaning to the notification issued by the State of Uttar Pradesh this court has laid great emphasis on the common parlance test. The court gave an apt illustration of a toffee. Toffee in the country of origin may be considered as sweetmeat but it cannot be considered as mithai in this part of the country (Uttar Pradesh). Similarly, by no stretch of imagination, can bubble gum be considered as mithai in the State of Uttar Pradesh. Consequently, "bubble gum" is taxable as an unclassified goods.
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2008 (5) TMI 390
Confiscation, redemption fine and penalty - valuation - Held that: - we find that no incriminating evidence have been found nor any duplicate invoices or suppression of invoices etc. are involved in this case. Therefore, while confirming the differential duty demand which has been made on the basis of comparable prices, we waive confiscation of the imported goods, imposition of redemption fine and penalty in this case - the Adjudicating Commissioner is not justified in ordering demand of interest on the differential duty payable - appeal allowed - decided partly in favor of appellant.
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9911796707
