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Showing 41 to 60 of 1415 Records
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2023 (4) TMI 1376
Duty Free Import Authorisation Scheme (DFIA) - Petitioner, a transferee of DFIA, purchased the scrips and utilised the same for discharging duty liability against various Bills of Entry under N/N. 40 of 2006 and 17 of 2009 dated 19.2.2009 - demand of additional duty along with interest from the date of clearance not be recovered from it on the materials imported under various bills of entry as per N/N. 40 of 2006 as amended by condition (iiia) of N/N. 17 of 2009 Customs along with penalty u/s 114-A of the CA 1962 - demand on the ground that the petitioner had not declared at the time of clearance of the goods.
As decided by HC [2017 (11) TMI 494 - MADRAS HIGH COURT] condition imposed vide the amending Notification is incapable of satisfaction retrospectively. The petitioner, by virtue of the burden imposed under the amendment is required to have furnished the details relating to availment of duty by the transferor of the scrip at the original instance. Apart from being practically unworkable, the amendment imposes a condition that nullifies a right that vested in the petitioner and creates a burden that the petitioner would be incapable of discharging. While the satisfaction of the condition post date of Notification is mandatory and, accepted to be so by the petitioner we agree that the retrospective application of the same is liable to be interfered with. Condition (iii)(a) imposed in Notification 17 of 2009 must be read to have been enacted from and with effect from 19.2.2009 only.
HELD THAT:- This Court is of the opinion that having regard to the peculiar circumstances no cause for interference with the impugned judgment is made. The civil appeals are, accordingly, dismissed leaving the question of law open.
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2023 (4) TMI 1375
Reduction of compensation amount from Rs.4,61,250 to Rs.4,15,000 per acre - Affirmation of High Court's judgment by the Supreme Court - State's withdrawal of appeals and discrimination in compensation - HELD THAT:- By now, it is a settled principle of law that the dismissal of the special leave petition in limine does not amount to affirmation of the view taken by the High Court. Unless the judgment of the High Court is affirmed, at least, with short reasoning, the same would not amount to binding precedent - It would be seen that learned Reference Court by discussing the entire evidence, has granted compensation at the rate of Rs.4,61,250/ per acre.
The Reference court had granted compensation at the rate of Rs. 4,61,250/ per acre. The High Court, vide order dated 08.03.2016 has allowed the said appeal(s) to be withdrawn and the same had been placed on record before this Court in I.A. No. 59170 of 2016. Though a period of more than six years had lapsed, the said position is not contested by the respondents - The State or its instrumentalities cannot be permitted to adopt an attitude of pick and choose.
The impugned judgment and order dated 20th January 2015 passed by the High Court is set aside and the order of the Reference Court dated 14th March 2012 is restored - Appeal allowed.
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2023 (4) TMI 1374
Maintainability of petition - Seeking quashing of an arbitration case registered by the respondent no. 1, West Bengal Micro Small Enterprise Facilitation Council (Council) against the petitioners - setting aside of all proceedings initiated or being conducted by the Facilitation Council - HELD THAT:- The alternative statutory remedy in the present case is not only sufficient and effective but also multi-layered. The petitioners can seek recourse through any of the remedies available under the 1996 Act; the petitioners have instead chosen to approach the Writ Court and invoke its extraordinary powers under Article 226 of the Constitution.
The petitioner’s contention with regard to the Facilitation Council not having jurisdiction for lack of registration of the respondent no. 2 as an MSME Unit should next be dealt with.
Section 2(n) of the MSMED Act defines a “supplier” as a micro or small enterprise which has filed a memorandum with the authority referred to in section 8(1) of the Act. The petitioners’ objection to the respondent no. 2 being a supplier would appear from an affidavit filed by the petitioners where it has been stated that the respondent no. 2 applied for Udyog Aadhar registration on 22.11.2017 which is 4 years after the transaction - The District Industries Center, Directorate of Cottage and Small Scale Industries was the notified authority in the State at the relevant point of time. Even otherwise, according to learned counsel for the parties, the admitted fact is that the petitioners have already made part payment to the respondent no. 2 of about Rs. 36 lakhs and approximately Rs. 50 lakhs stands outstanding as on date – as submitted by counsel.
In MARINE CRAFT ENGINEERS PRIVATE LIMITED VERSUS GARDEN REACH SHIPBUILDERS AND ENGINEERS LIMITED [2023 (4) TMI 1372 - CALCUTTA HIGH COURT] it was held that the date of execution of a contract between a buyer and a supplier under the MSMED Act loses relevance for the application of the said Act provided the supplier claims recovery of the amount due under section 17 for goods supplied after the date of registration. The Court also held that the supplier would not be disqualified from making a reference to the Facilitation Council only on the basis of whether the supplier was registered as an MSME Unit on the date of the contract.
The above facts persuade the Court to hold that the respondent no. 2 was statutorily-entitled to make a reference to the Council for adjudication of the disputes.
The point of maintainability is accordingly answered in favour of the respondent no. 2 and against the petitioners - The Court is not willing to set aside or interfere with the ongoing arbitration proceedings before the Facilitation Council - Petition dismissed.
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2023 (4) TMI 1373
Quashing of private complaint for the offence under Sections 92(5) and 137(3) of the Companies Act, 2013 - non- compliance of Sections 92(4) and 137(1) & (2) of the Act - petitioners had not filed the annual return and balance sheet till date - continuing offences - HELD THAT:- It is to be noted here that subsequent to modifying the sentence from fine to penalty in the year 2019, the Companies Amendment Act 2020 also brought about change in the quantum of penalty that can be levied. Therefore, the petitioners are entitled to the benefit of the Companies Amendment Act, 2019 and the Companies Amendment Act, 2020 which further changes or mollifies the rigour of punishment for the lapses. Since the petitioner's case is similar to the case that is extracted above, the prosecution against the petitioners is transferred to the adjudicating authority appointed under the Act to adjudicate the contravention committed by the petitioners in terms of Section 454 read with 92(5) and 137(3) of the Act.
This Criminal Original Petition stands disposed of.
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2023 (4) TMI 1372
Prayer for setting aside of an award made - jurisdiction of Arbitrator to pass the impugned Award - petitioner questions the jurisdiction of the Arbitrator on the ground that the Facilitation Council had the exclusive jurisdiction to decide on the reference made by the petitioner in terms of the provisions of the MSMED Act, 2006 - whether the Facilitation Council under the provisions of The Micro, Small and Medium Enterprises Development Act, 2006 would have exclusive jurisdiction to entertain and decide disputes brought before it by the petitioner? - HELD THAT:- The date of execution of a contract between a buyer and a supplier under the MSMED Act is irrelevant for the application of the provisions of the MSMED Act provided the supplier claims recovery of the amount due under section 17 for goods supplied or services rendered after the date of registration. In other words, whether the supplier was registered as an MSME on the date of the contract would not disqualify the supplier from making reference to the Micro and Small Enterprises Facilitation Council under section 18 for recovery of outstanding amounts as long as the amounts claimed are relatable to goods supplied or services rendered after the date of registration of the supplier as a micro, small or medium enterprise under section 8(1) of the Act. If the supplier fulfils the aforesaid condition and makes a reference to the Facilitation Council under section 18, the Council steps in as the only – and exclusive forum - to decide the reference under the provisions of the MSMED Act, 2006.
The unilateral act of the respondent in invoking the contractual arbitration clause and appointing the learned Sole Arbitrator on 23.9.2016 after the petitioner made a reference to the Facilitation Council is thus patently contrary to the provisions of the MSMED Act. Moreover, the respondent invoked the arbitration clause and proceeded with the arbitration and made a reference before the Arbitrator appointed by it being fully aware that the reference before the Facilitation Council under the MSME Act was pending as on the date of the appointment of the Arbitrator. The impugned Award dated 23.9.2018 by which the claim of the respondent (which was the claimant in the arbitration proceedings) of Rs. 30,24,849/- was allowed in full is hence in the form of a face-off with the provisions of the MSMED Act so to speak.
The impugned Award dated 23.9.2018 is hence liable to be set aside under section 34 of The Arbitration and Conciliation Act, 1996 as being in contravention with the fundamental policy of Indian law and being vitiated by patent illegality appearing on the face of the award.
Application allowed.
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2023 (4) TMI 1371
Jurisdiction of State Commission to decide the tariff contrary to the agreement - altering Power Purchase Agreements (PPAs) - coercion to enter into PPA - HELD THAT:- There was never any provision, which mandated prior approval by the state commission, of PPAs entered into, by parties, in exercise of their free choice, in relation to renewable energy sources. As a matter of fact, in the case of renewable power, the state commission had approved a model PPA. Further, the tariff terms and conditions to the extent decided are by the Central Commission and not by the State Commission. These are incorporated in the model PPA. Neither the commission, nor the contesting respondents, during the hearings in the present appeals, were able to point out any provision in the PPA in the present case, which conflicted with any provision of the model PPA, or any express regulation. Furthermore, it was not established how in the absence of any reference to the Multi Year Tariff Regulations, they were applicable to PPAs relating to renewable energy sources.
Whether change in the REC Regulations obliged revision of the PPA in this case? - HELD THAT:- An important factor which cannot be lost sight of is that all the respondent’s WPDs were registered, under the REC Regulations, based on the state commission’s tariff order, of 2010. It is undisputed, that to register under the REC Regulations 2010, an entity (such as WPDs) had to be (a) accredited, with a State Agency [(defined by Regulation 2 (n) of the REC Regulations as an agency “designated by the State Commission to act as the agency for accreditation and recommending the renewable energy projects for registration”) and an entity “not having any power purchase agreement for the capacity related to such generation to sell electricity at a preferential tariff determined by the Appropriate Commission].
In the present case, the PPA was entered into by the parties on 29.03.2102, within the control period stipulated in the tariff order of 2010. The change in the REC Regulations 2010, whereby the Explanation to Regulation 5 was amended resulted in a change. The pre-existing clause that the power would be "at a price not exceeding pooled cost of the power purchase" was altered to "at the pooled cost of power purchase". This change, was through the Second Amendment (to the REC Regulations), carried out on 10.07.2013. It is a matter of record, that for the period between 29.03.2102 and 10.07.2013 - and indeed, after the Second Amendment, no difficulty was experienced in the pricing mechanism agreed by the parties, under the PPA. It was on 10.12.2013 that the respondent WPD approached the state commission for re-determination of tariff. Clearly, this was an opportunistic attempt to derive advantage from the change, brought about by the Second Amendment, and seek to have it applied to an existing contract, which cannot be countenanced. In view of these reasons, it is held that the reasoning of APTEL, and the State Commission cannot be upheld.
Applicability of the Second Amendment to pre-existing contracts- the general law - HELD THAT:- It is held that agreements, such as the PPAs in the present case, entered into, voluntarily by the parties, before the Second Amendment, were not affected, by its terms. The findings to the contrary in the impugned order, are set aside.
Were the respondents coerced into entering into PPAs - HELD THAT:- It is incomprehensible how such an allegation could have been entertained and incorporated as a finding, given that the respondents are established companies, who enter into negotiations and have the support of experts, including legal advisers, when contracts are finalized. The findings regarding coercion are, therefore, wholly untenable. This court is also of the opinion that the casual approach of APTEL, in not reasoning how such findings could be rendered, cannot be countenanced. As a judicial tribunal, dealing with contracts and bargains, which are entered into by parties with equal bargaining power, APTEL is not expected to casually render findings of coercion, or fraud, without proper pleadings or proof, or without probing into evidence. The findings of coercion are therefore, set aside.
Thus, it is held that the concurrent findings and orders of the State Commission and APTEL cannot be sustained. They are accordingly set aside - appeal allowed.
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2023 (4) TMI 1370
Complaint u/s 200 of Cr.P.C. r/w Sections 24(1), 27 of SEBI against the petitioners -Respondent notified regulations for regulating the activities of Collective Investment Scheme Companies titles as Securities and Exchange Board of India (Collective Investment Scheme) Regulations Act,1999 but petitioners have not complied with the respondent directives meant to protect the interests of the investors
HELD THAT:- No investor or customer has lodged any complaint with the respondent that the petitioners have cheated them and apart from the above said reason, the respondent has not levelled any specific allegation in that regard in the complaint. In the absence of any complaint, there was no cause of action to lodge the complaint. These are all the grounds have to be given into the fulfledged complaint and the complaint was lodged by the respondent, after recording the evidence. The Trial Court found prima-facie made out and had taken cognizance. Therefore, the complaint cannot be thrown out.
As relying on M. Jayanthi [2019 (12) TMI 1319 - SUPREME COURT] and Arvind Khanna [2019 (10) TMI 672 - SUPREME COURT] the points raised by the petitioner cannot be considered by this Court under Section 482 Cr.P.C.
In view of the above discussion, this Court is not inclined to quash the proceedings in C.C.No.6435 of 2004 on the file of the XXIII Metropolitan Magistrate, Saidapet, Chennai. While pending this matter, this Court, by an order dated 25.01.2016, appointed an Auditor of one M/s. Brahmayya & Co., in order to settle the issue. However, the petitioners did not settle the same and nothing proceeded further. Therefore, the appointment of Auditor also now stand cancelled.
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2023 (4) TMI 1369
Levy of service tax - incentives for achieving the sales target - Whether can be considered as commission for providing "business auxiliary service" - HELD THAT:- This issue has been decided in M/s DD Motors [2018 (11) TMI 1763 - CESTAT NEW DELHI] hold on the question of whether the service tax is leviable on the amount of the incentive received by the appellant from M/s Maruti Udyog Ltd. for achieving certain sales targets, we hold that same is not taxable under the category of the business auxiliary service as same being in the form of a trade discount received by the appellant from the supplier of vehicles.”
This decision has been followed by the Tribunal in Rohan Motors Ltd. [2020 (12) TMI 1014 - CESTAT NEW DELHI] Assessee appeal allowed.
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2023 (4) TMI 1368
Disallowance in respect of future expenses claimed as deduction - HELD THAT:- Issue involved in this appeal is covered by the decision of this Court in M/s. Quest Global Engineering Services Pvt. Ltd [2021 (3) TMI 434 - KARNATAKA HIGH COURT] holding the questions of law in Assessee’s favour.
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2023 (4) TMI 1367
Grant of bail - recovery of narcotic substance i.e. 99 bottles of phensedyl syrup containing codeine phosphate of commercial quantity - HELD THAT:- Chemical examiner’s report is placed on record. Report shows presence of codeine phosphate in the sample.
In view of the aforesaid report and other materials on record showing recovery of narcotic substance i.e. 99 bottles of phensedyl syrup containing codeine phosphate, which is above commercial quantity from the petitioners and the statutory restrictions under Section 37 of the NDPS Act, it is not inclined to grant bail to the petitioners.
The application for bail is thus rejected.
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2023 (4) TMI 1366
Reopening of assessment u/s 147 - reasons to believe - non supplying of reasons to believe along with the notice u/s 148 - HELD THAT:- We note that in the case of GKN Drive Shaft India Ltd. [2002 (11) TMI 7 - SUPREME COURT] mandated the AO to furnish reasons within a requisite time. On receipt of reasons, the assessee is entitled to file objection to issuance of notice and the AO is bound to dispose of the same by passing a speaking order. In the present case before us, ld. counsel is contesting that this mandate given by the Hon’ble Supreme Court has not been complied with by the ld. AO and, therefore, the assessment completed and demand so raised is liable to be quashed, as bad in law.
We do find force in the submissions made by the ld. counsel based on facts available on record and the mandate given by the Hon’ble Supreme Court in the case of GKN Drive Shaft India Ltd. (supra). We also gainfully draw support from the decision of co-ordinate bench of ITAT, Delhi in the case of Balwant Rai Wadhwa [2011 (1) TMI 348 - ITAT NEW DELHI] which has also dealt with the issue of non supplying of reasons to believe along with the notice u/s 148 of the Act to the assessee. Appeal of the assessee is allowed.
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2023 (4) TMI 1365
Grant of bail - recovery of 100 bottles of Phensedyl Syrup containing Codeine Phosphate above commercial quantity - HELD THAT:- Materials on record prima facie establish recovery of 100 bottles of Phensedyl Syrup containing Codeine Phosphate above commercial quantity from the possession of the petitioners.
In view of the circumstances and statutory restrictions under Section 37 of the NDPS Act, it is not inclined to grant bail to the petitioners - The application for bail is, thus, rejected.
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2023 (4) TMI 1364
Delay in disposal of applications under Section 14 of the SARFAESI Act - principal grievance of the Petitioners is that, despite the power under section 14 of the SARFAESI Act of 2002 being ministerial and to be used to aid the secured creditors in taking steps to realize their dues expeditiously, the applications are kept pending for an unduly long period - HELD THAT:- Section 14 of the SARFAESI Act, thus, places an obligation upon the Chief Metropolitan Magistrate or District Magistrate to assist secured creditors in taking possession of the secured asset. Section 14 of the SARFAESI Act enables the secured creditor to approach the District Magistrate/Chief Metropolitan Magistrate with a written application requesting for taking possession of the secured assets and forwarding it to the secured creditor for further action.
The powers of the Chief Judicial Magistrate and the District Magistrate under Section 14 of the SARFESI Act are merely administrative and do not involve pronouncing any judgment on the borrower's objections to the secured creditor taking possession of the secured assets. Once the secured creditor has met all the requirements under Section 14 of the SARFESI Act, it is the duty of the CMM/DM to assist the secured creditor in obtaining possession of the assets and related documents, with the help of any subordinate officer or appointed advocate commissioner.
The learned counsel for the High Court Administration stated that currently there is no separate category assigned for applications under Section 14 of the SARFAESI Act in the Case Information System (CIS) software. Steps can be taken to create a separate category for these cases so they can be identified for the special drive. The learned counsel also mentioned exploring options to issue necessary instructions to facilitate e-filing and the creation of a portal within the existing CIS. It was also submitted that a special day can be assigned by the CMM for taking up the pending applications. Initiatives be taken pursuant to this position.
The Application filed by a Secured creditor under section 14 of the SARFAESI Act with due compliance (the Application) should be disposed of by the District Magistrate/ Collector in the State of Maharashtra not later than 30 days of the Application is filed - Petition disposed off.
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2023 (4) TMI 1363
Disallowance of ESOP expenditure u/s 37 - HELD THAT:- We find that identical issue came up for consideration before in the case of Novo Nordisk India (P) Ltd. [2013 (11) TMI 218 - ITAT BANGALORE] as held expenditure in question was wholly and exclusively for the purpose of the business of the assessee and had to be allowed as deduction as a revenue expenditure - Decided in favour of assessee.
Claim of refund of excess tax paid on distribution of dividend by the assessee to its non-resident shareholders - according to the assessee, ought to have been restricted to the rate prescribed under the Indo-German Double Taxation Avoidance Agreement (DTAA). Assessee has claimed that it is eligible for refund of the excess Dividend Distribution Tax (DDT) paid by it - HELD THAT:- Assessee placed reliance on the decision of Coordinate Bench, Delhi in the case of Giesecke & Devrient India Pvt Ltd. [2020 (10) TMI 750 - ITAT DELHI] The correctness of the aforesaid decision has however been doubted in some other cases.
We find that on this issue, there has been conflicting view, we find it proper and just to remit the matter back to the file of ld. AO for consideration of the issue afresh - Accordingly, ground no. 2 is allowed for statistical purpose.
Disallowance towards delay in deposit of employees’ contribution to Provident Fund before the due date - HELD THAT:- This issue is covered against the assessee by the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. [2022 (10) TMI 617 - SUPREME COURT] wherein it has been held that “deduction u/s 36(1)(va) in respect of delayed deposit of amount collected towards employees’ contribution to PF cannot be claimed when deposited within the due date of filing of return even when read with Section 43B.
Disallowance of notional IND-AS (Accounting Standards issued by Institute of Chartered Accountants of India) adjustment - HELD THAT:- Lease deposit is required to be measured at fair value on initial recognition. The difference between the amount of deposit and its fair value is treated as prepaid lease expenses and amortized over the term of the lease. These amortized prepaid rents being notional expenses charged to the statement of Profit and Loss is disallowed in the tax computation.
Interest income on lease deposit would accrue over the period of lease. It represents notional income arising on fair valuation of rental deposits recognised as per requirement of IND-AS and credited to the statement of Profit and Loss. No interest has actually accrued or arisen on this deposit and income is recognised on notional basis. Accordingly, since income is to be recognised on the principle of real income, the amount was reduced from income from other sources to arrive at the total income under the provisions of the Act.
As we do not find any reason to interfere with the direction given by the Ld. DRP to the AO to reconcile the difference and accordingly, this ground of appeal is allowed for statistical purposes.
Short credit for TDS and TCS given to the assessee as against claimed by it in the return of income - In this respect, we direct the ld. AO to provide the credit towards TDS and TCS claimed by the assessee after due verification of the documents and records and in accordance with the provisions of law. We also direct the assessee to furnish all the relevant documents and records to substantiate its claim in this respect. Accordingly, this ground of appeal is allowed for statistical purposes.
TP adjustment - notional interest on delayed receivables from Associated Enterprise (AEs) - assessee submitted that these receivables are closely linked to the primary transactions and should not be tested separately, nor these can be re-characterised as loan transactions - whether or not the interest on receivables is a separate international transaction and the rate of interest? - HELD THAT:- Outstanding receivables of the assessee from its AEs constitute international transactions liable to be benchmarked independently. However, in the present case, while arriving at the quantum of the said receivables, we do accept the contention of assessee for netting off the outstanding payables by the assessee to the AEs so that interest is computed on the net outstanding receivables for the year under consideration.
Ld. Counsel has stated that the weighted average realisation of receivables for the relevant year is 47 days for the software distribution segment against which ld. TPO levied interest on outstanding receivables for more than 30 days by treating it as a separate international transaction. We are in concurrence with the ld. TPO taking 30 days as normal credit period for computing the interest on outstanding receivables which are to be netted off with the payables with the AEs.
Rate of interest - As we find that adjustment is to be computed considering the interest rate applicable to transactions denominated in the currency in which the invoices are raised, in accordance with the view in the judgment of Cotton Naturals (I) (P.) Ltd. [2015 (3) TMI 1031 - DELHI HIGH COURT] in which it is held that it is the currency in which the loan is to be repaid which determines the rate of interest and hence the prime lending rate should not be considered for determining the interest rate. In the present case, assessee has raised invoices on its AEs in EURO and hence, the EUR LIBOR prevalent during the financial year 2017-18 relevant to AY 2018-19 is to be considered for determining the arm’s length rate of interest to be charged on the net outstanding receivables.
Accordingly, ld. AO / TPO is directed to give effect to the above findings and directions and re-compute the amount of interest on the net outstanding receivables and determine the upward adjustment in this respect. Ground no. 2 is partly allowed.
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2023 (4) TMI 1362
Belated payment of employees contribution of PF and ESI - disallowance made under the intimation u/s 143(1) - HELD THAT:- If the assessee is aggrieved by the disallowance made under the intimation u/s 143(1), the assessee should have agitated the addition by availing the remedy available against the intimation u/s 143(1) of the Act. Therefore, this issue cannot be agitated in the appeal filed against the order u/s 143(3) r.w.s. 144C(13) of the Act. Thus, this ground of appeal no. 2 stands dismissed.
Deduction u/s 10AA in respect of disallowance made u/s 36(1)(va) - HELD THAT:- It is settled position of law that the inflated business profits on account of any disallowances also qualifies for deduction u/s 10AA in view of the decision of Gem Plus Jewellery India Ltd [2010 (6) TMI 65 - BOMBAY HIGH COURT] and subsequently followed in the case of PCIT vs. Lionbridge Technologies (P.) Ltd [2017 (9) TMI 1410 - BOMBAY HIGH COURT] affirmed by the Hon’ble Supreme Court in the case of PCIT vs. Lionbridge Technologies (P.) Ltd [2018 (8) TMI 151 - SC ORDER] However, the material on record does not indicate that the disallowance of PF and ESI was made in relation to business profits of unit, whose profits are eligible for deduction u/s 10AA of the Act.
Therefore, this matter is remitted to the file of the AO to examine whether or not PF and ESI disallowance was made in respect of unit, whose profits are eligible for deduction u/s 10AA and if so found, such disallowance may be treated as eligible profit for the purpose of deduction of income u/s 10AA of the Act. Thus, this ground of appeal no. 3 stands partly allowed.
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2023 (4) TMI 1361
Seeking grant of regular bail - Seizure of contraband - Ganja - discrepancies in the weight of seized contraband and samples drawn for analysis - Sections 20/29 NDPS Act - HELD THAT:- The discrepancy in the weight of the sample goes to the root of the matter and questions the actual seizure itself. The prosecution has not been able to explain this discrepancy at this stage. It erodes the credibility of the recovery proceedings.
Since the recovery of the quantity of the contraband itself has become doubtful, the applicability of Section 37 of the NDPS Act at this stage cannot be insisted upon. The applicant has no other criminal antecedents. However, the applicant needs to satisfy the triple test viz. flight risk; influencing any witness and tampering with evidence. In my view, the same can be taken care of by imposing stringent bail conditions upon the applicant.
The applicant has been in custody since 07.06.2021 which is about 1 year and 10 months. Charge-sheet has been filed in the present case and charges have also been framed and the custodial interrogation of the applicant is not required. The trial is also not likely to conclude in near future and the continued incarceration of the applicant will not serve any purpose. Since the applicant is an under trial prisoner and has already undergone about more than 1 year and 10 months of incarceration and since the applicant has no other previous criminal antecedents, the application is allowed.
The applicant is directed to be released on bail subject to fulfilment of conditions imposed - bail application allowed.
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2023 (4) TMI 1360
Offence u/s 9(1)(c) of FERA - amount received from the NRIs by the Noticees (the Appellants here-in), as share application money, no share was allotted to them and the said amount continued under the head Share Application Money in the records of the Noticee Company - as pleaded that shares were issued to the NRIs who were family friends of the promotee. He could not produce the documents with regard to allotment of shares to the NRIs because of fire in his office and lock-out of his factory.
HELD THAT:- As there is nothing to show that the Appellant made an admission either during the investigation or subsequently of existence of a debt and of a jural relationship of creditor and debtor between the Company and the NRIs. To acknowledge a debt, the Company/ Promoter should have issued an acknowledgement admitting in writing that there is a debt owed by the Appellant. It is important to note that section 9(1)(c) FERA requires draw, issue or negotiate any bill of exchange or promissory note or acknowledge of debt. Reading of the Judgment Supra and these wordings of the section it is inescapable not to infer that even acknowledge of debt requires an instrument.
Even if for argument sake if it is taken that no "instrument" is required for acknowledging a debt the position is clarified by the Judgment which cites Swaminathan Odayar v. Subbarama Aiyar [1926 (9) TMI 2 - MADRAS HIGH COURT] in which as held that an acknowledgment need not be express but may be implied from facts and circumstances under which a statement in a deposition was made but it cannot be implied as a matter of law.
In the present case there is no mention of a deposition by the Appellants of acknowledging a debt. In fact right from the beginning they have denied owing a debt to the NRIs from where there was in-flow of share capital money. They have all through maintained the inflow of funds was for share capital. It also does not imply that since the Appellants could not produce documents for issuance of shares the money received by them becomes debt either as a matter of implication or that of Law. The Respondents have also failed to produce any evidence documentary or otherwise to show how "acknowledge of debt" got created.
The appeals are allowed and the impugned Adjudication Order is set aside. The pre-deposit of penalty amount made by the two Appellants are to be refunded to them by the Respondent on expiry of the period of appeal against this Order
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2023 (4) TMI 1359
Money laundering - proceeds of crime - scheduled offences - reasons to believe - provisional attachment of the appellant company's assets - amassing assets in excess of income from legitimate sources - HELD THAT:- There are no merit in the contention of the appellants that since the payments in respect of the share transactions were made through banking channels and Creative Fiscal received the entire consideration in its bank account, therefore, the transactions were genuine and above board. It is well known that one of the fundamental features of the companies involved in the entry-providing business is that on paper, they adhere meticulously to all legal procedural requirements under various laws, including the Companies Act, the I-T Act etc. Further, entry-providing operations are always carried out through banking channels.
The appellant company, while claiming that it did not benefit in any way from the transaction between Creative Fiscal and the four companies, seeks to gloss over this important fact. It is important to bear in mind that the definition of "proceeds of crime" under section 2(u) of the Act takes within its ambit not only property derived or obtained directly as a result of criminal activity relating to a scheduled offence but also the property derived or obtained indirectly as a result of criminal activity relating to a scheduled offence, and also the value of such property.
In the present case, a mere perusal of the impugned order reveals that though the initial trigger or the starting point of the PMLA investigation may have been the FIR filed by the State Vigilance Department of Jharkhand under the Indian Penal Code, 1860 and Prevention of Corruption Act, 1988 wherein the proceeds of crime were quantified at Rs. 1,40,10,333/-, the investigation carried out by the respondent Directorate revealed the actual quantum of proceeds of crime generated by the individuals and entities belonging to the group was exponentially higher than that amount.
It is not out of place to mention that provisional attachment based on reason to believe that any person is in possession of proceeds of crime and such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to the confiscation of such proceeds of crime is an interim measure to prevent the person from alienating or encumbering the property in any manner until his culpability under the Act is finally established by a court of competent jurisdiction. It does not prevent the person interested in the enjoyment of the property from enjoying it. Such provisional attachment of property can be done by the director or other officer specified under section 5 on the basis of "reason to believe" on the basis of "material in his possession".
The impugned order constituted sufficient material for the director or other competent officer to have the requisite reason to believe - there are no merit in the impugned order - appeal dismissed.
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2023 (4) TMI 1358
Maintainability of writ application - High Court dismissed the petition stating that 'writ petition is accordingly dismissed on the ground of laches' - HELD THAT:- Having regard to the basis on which the High Court dismissed the State’s writ petition, there are no reason to interfere with impugned judgment.
The Special Leave Petition is accordingly dismissed.
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2023 (4) TMI 1357
Seeking appointment of a Sole Arbitrator to adjudicate the disputes between the parties - Section 11 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- In the present case, the impleadment of the respondent no.3 in the arbitration proceedings is mandated not on account of "group of companies doctrine" but on account of the fact that the authority of respondent no.1 to act as maintenance agency is directly derived from the respondent no.3 (developer) in terms of their inter se agreement dated 30.06.2008; and the said agreement is inextricably linked to the maintenance agreements to which the petitioner no.1 is the party. The agreements in question have to be read with each other to derive the respective rights and obligations of the parties.
In ONGC v. Discovery Enterprises [2022 (4) TMI 1350 - SUPREME COURT] the Supreme Court has taken note of the principle that a non-signatory party can be bound by the principle of estoppel to prohibit such a party from deriving the benefits of a contract while disavowing the obligations to arbitrate under the same.
In the present case, (i) the respondent no.3 (developer) is deriving direct benefit (as noticed aforesaid) from the contract with the maintenance agency (respondent no.1); (ii) the maintenance agreements dated 01.11.2015 and 03.12.2010 between the maintenance agency and the owners of the built up unit/flats are inextricably connected with agreement for services dated 30.6.2008 between the maintenance agency and the developer. As such, both the 'direct benefits' estoppel theory and the 'intertwined estoppel theory' are applicable in the present case.
The petitioners have made out a prima facie case for referring the parties to arbitration and for appointment of a Sole Arbitrator to adjudicate the disputes between the parties - Petition disposed off.
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