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2007 (5) TMI 658
Issues Involved:
1. Maintainability of the application u/s 11 of the Arbitration and Conciliation Act, 1996.
2. Territorial jurisdiction of the City Civil Court, Hyderabad.
Summary:
1. Maintainability of the application u/s 11 of the Arbitration and Conciliation Act, 1996:
The appellant, The Indian Iron and Steel Co. Ltd., contested the application filed by the respondent, M/s. Tiwari Road Lines, under Section 11 of the Arbitration and Conciliation Act, 1996, on the grounds that the agreement between the parties mandated arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration. The Supreme Court noted that Clause 13.1 of the agreement explicitly required disputes to be settled by arbitration as per these rules. The respondent did not attempt to resolve the dispute through the agreed procedure and directly approached the City Civil Court, Hyderabad. The Court held that under Sub-section (2) of Section 11, parties are free to agree on a procedure for appointing arbitrators, and recourse to the Chief Justice or his designate can only be taken if the agreed procedure fails. Since the parties had an agreed procedure, the application under Section 11 was not maintainable, and the City Civil Court had no jurisdiction to appoint an arbitrator. Consequently, the orders dated 31.03.2004 and 27.12.2004 appointing a retired judicial officer as arbitrator were set aside.
2. Territorial jurisdiction of the City Civil Court, Hyderabad:
The appellant also argued that the City Civil Court, Hyderabad, lacked territorial jurisdiction as no part of the cause of action arose there. The tenders were floated, and the agreement was executed in Kolkata. The High Court had erroneously concluded that the court at Hyderabad had jurisdiction because the bank guarantee was furnished and encashed there. The Supreme Court found merit in the appellant's contention but did not express a final opinion on this issue, given the decision on the main point regarding the maintainability of the application under Section 11.
Conclusion:
The appeal was allowed with costs, and the judgments and orders of the High Court of Andhra Pradesh and the City Civil Court, Hyderabad, were set aside. The parties were directed to resolve their disputes through arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration.
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2007 (5) TMI 657
Challenged the judgment and decree of the High Court - resumption of the leased land for contravention of the terms of lease - Claim for possession - issued notice u/s 80 of the Code of Civil Procedure - illegal and unauthorized dispossession - suit for a declaration - mesne profits, costs and other appropriate reliefs -
(i) Whether the lease under deed - Ex.P1 dated 30.9.1921, is a perpetual lease - HELD THAT:- Essential ingredients of a lease are : (a) There should be a transfer of a right to enjoy an immovable property; (b) Such transfer may be for a certain term or in perpetuity; (c) The transfer should be in consideration of a premium or rent; (d) The transfer should be a bilateral transaction, the transferee accepting the terms of transfer.
The deed dated 30.9.1921 does not specify any duration, but permits the lessee to hold the land forever subject to the right of the lessor to resume the land by giving one month's notice. There is no grant in perpetuity. The right of the lessor to resume the land by giving a month's notice, is unconditional at the absolute will and discretion of the lessor, whenever he desires.
The learned Counsel for appellant submitted that courts have taken the view that existence of a mere provision for forfeiture for non-payment of rent or other specified breach, in a deed granting permanent lease, will not make the lease non- permanent. Such line of decisions, may not assist the appellant as a provision for determination of the lease for a specified breach, is in no way comparable to reservation of an absolute right to resume at will without assigning any reason, in a lease without consideration. We, therefore, affirm the finding that Ex.P1 is not a lease in perpetuity. We, however, desist from examining the further question whether the lease itself was invalid for want of consideration, as such a contention was not raised in the written statement nor urged before the trial court or High Court.
(ii) Whether the plaintiff's father did not secure any manner of right, title or interest in the suit property, as the sale certificate in his favour was not followed by a registered deed of transfer - It is well settled that when an auction purchaser derives title on confirmation of sale in his favour, and a sale certificate is issued evidencing such sale and title, no further deed of transfer from the court is contemplated or required. In this case, the sale certificate itself was registered, though such a sale certificate issued by a court or an officer authorized by the court, does not require registration. Section 17(2)(xii) of the Registration Act, 1908 specifically provides that a certificate of sale granted to any purchaser of any property sold by a public auction by a civil or revenue officer does not fall under the category of non testamentary documents which require registration under Sub-section (b) and (c) of Section 17(1) of the said Act. We therefore hold that the High Court committed a serious error in holding that the sale certificate did not convey any right, title or interest to plaintiff's father for want of a registered deed of transfer.
(iii) Whether the transfer of leasehold interest in favour of plaintiff's father was void, for want of notice to lessor and consent of the lessor - Only transfers in violation of Condition IV are void. No penal consequence is specified for failure to comply with Condition V. Therefore, it is not possible to hold that the auction sale of the leasehold right in favour of Bhowrilal was void for want of notice to the lessor.
(iv) Whether the plaintiff was forcibly dispossessed in September 1975 and entitled to a decree for possession and (v) Whether the suit was barred by limitation - It is clear that the case of plaintiff that he was forcibly dispossessed from the suit land in September, 1975 is an afterthought to grab defence land. As plaintiff has failed to prove forcible dispossession and the documents disclose that the land was resumed in terms of the lease dated 30.9.1921 without any protest from the plaintiff, he is not entitled to the relief of possession, even if such dispossession was within twelve years before the date of suit. Apart from merits, the claim for possession is also clearly barred by limitation as the suit was filed on 21.8.1987 and plaintiff was lawfully dispossessed several years prior to 1975.
If at all there is any dispute or issue was pending, that was relating to the claim for compensation and plaintiff had to seek arbitration in that behalf by establishing that structures were lawfully put up with the permission of the lessor and the nature and extent of such structures. But no such request was made for arbitration. No such relief is claimed in the plaint. At all events by 1987, there was no surviving claim for compensation and no request could even be made for reference to arbitration. The plaintiff - appellant is not therefore entitled to any relief.
Conclusion - Though the judgment of the High Court may be erroneous in regard to certain issues of fact, we find that the final decision of the High Court to dismiss the suit was correct and just and does not call for interference. We, therefore, affirm the decision of the High Court dismissing the suit.
The appeal is, accordingly, dismissed. Parties to bear their respective costs.
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2007 (5) TMI 656
Issues involved:
The issues involved in the judgment are the jurisdiction of recovery proceedings u/s Uttar Pradesh Public Money's Recovery of Dues Act, 1972, the applicability of previous court decisions, the legality of recovery citation, the status of the principal debtor company being wound up, the role of the official liquidator, the right of State Financial Corporation (SFC) u/s SFC Act, 1951, and the actions permissible in case of a company under liquidation.
Jurisdiction of Recovery Proceedings:
The appellant challenged the recovery proceedings initiated against him u/s Uttar Pradesh Public Money's Recovery of Dues Act, 1972, on the ground that the respondent cannot proceed against him as a guarantor unless the property of the principal debtor is sold. The High Court dismissed the writ petition, upholding the proceedings against the guarantor since the company had been wound up, and the official liquidator was appointed. The Court found the recovery proceedings to be in order due to the company's winding up status.
Applicability of Previous Court Decisions:
The appellant relied on a previous court decision in Pawan Kumar Jain v. Pradeshiya Industrial and Investment Corporation of U.P. to support his claim that the recovery proceedings were illegal. However, the High Court distinguished this case as the principal debtor company in the present case had already been wound up, leading to a different legal scenario. The Court also referred to the decision in Kailash Nath Agrawal v. Pradeshiya Industrial and Investment Corporation of U.P. to support the action taken by the respondents.
Role of Official Liquidator:
The Court highlighted the role of the official liquidator in cases where the principal debtor company has been wound up. It emphasized that the official liquidator's consent is essential for actions related to realizing mortgaged properties. State Financial Corporations (SFCs) are required to seek appropriate directions from the Company Court if the official liquidator does not consent, and all actions must be taken under the supervision of the Company Court.
Right of State Financial Corporation (SFC) u/s SFC Act, 1951:
The judgment reiterated that the right of State Financial Corporation (SFC) to act unilaterally under Section 29 of the State Financial Corporation Act, 1951, is applicable only until there is no order of winding up against the debtor company. SFCs cannot realize mortgaged properties without the consent of the official liquidator and must seek directions from the Company Court for any actions in such cases.
Conclusion:
The Court found that the recovery efforts had been hindered, and the appellant had not taken concrete steps towards a settlement. Citing previous cases, the judgment emphasized the need to address defaulters sternly. Ultimately, the appeal was deemed without merit and dismissed, with costs imposed on the appellant.
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2007 (5) TMI 655
Issues Involved:
1. Right of respondents 2 & 3 to continue as directors.
2. Rendering of accounts by respondents 2 & 3.
3. Restraint on respondents 2 & 3 from interfering in the affairs of the Company.
Issue-Wise Detailed Analysis:
1. Right of Respondents 2 & 3 to Continue as Directors:
The petitioners sought a declaration that respondents 2 & 3 have no right to continue as directors of the Company. The petitioners argued that the respondents took control of the Company through misrepresentation and manipulation, and failed to determine and pay fair consideration for the shares as per the Share Purchase Agreement (SPA). The respondents countered that the petitioners' grievances arose from the SPA and thus cannot form the basis of a petition under sections 397/398 of the Companies Act. The court noted that the respondents were appointed as directors pursuant to the SPA, and the petitioners' plea that the respondents cannot be in management was not valid for relief against oppression or mismanagement. The court held that the petitioners cannot seek intervention to declare that respondents 2 & 3 have no right to continue as directors since these prayers arise directly from the alleged breach of the SPA.
2. Rendering of Accounts by Respondents 2 & 3:
The petitioners requested the court to direct respondents 2 & 3 to render accounts of the Company. The court observed that the grievances and reliefs claimed by the petitioners flowed from the SPA. The court emphasized that the SPA contained specific terms and conditions, including the role of respondents in the management of the Company. The court noted that the petitioners' grievances stemmed from the alleged non-fulfillment of SPA terms by the respondents, and such issues should be resolved through arbitration as stipulated in the SPA. Therefore, the court did not grant the relief of directing respondents 2 & 3 to render accounts.
3. Restraint on Respondents 2 & 3 from Interfering in the Affairs of the Company:
The petitioners sought to restrain respondents 2 & 3 from interfering in the Company's affairs. The court found that the petitioners' grievances were interwoven with the SPA, which included provisions for management control and share transfer. The court noted that the petitioners had handed over management to the respondents as per the SPA and agreed not to interfere in day-to-day management. The court highlighted that any grievance related to convening an extraordinary general meeting or amending the articles of association arose from the SPA and should be addressed through arbitration. Consequently, the court did not restrain respondents 2 & 3 from interfering in the Company's affairs.
Conclusion:
The court concluded that the alleged acts of oppression and mismanagement were closely tied to the SPA. The court emphasized that issues arising from the SPA should be resolved through arbitration as per the agreement. The court disposed of the company petition, allowing the petitioners to pursue their grievances through arbitration. All interim orders were vacated.
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2007 (5) TMI 654
Petition filed u/s 34 of the Arbitration and Conciliation Act 1996 (The Act) - Validity of award made by sole arbitrator - no arbitration agreement between the parties - Violates provisions of The Limitation Act, 1963 and Sick Industrial Companies (Special Provisions) Act, 1985 and The Arbitration and Conciliation Act, 1996 -
Issue Regarding Existence of an Arbitration Agreement - HELD THAT:- In the present case, the Petitioner herein made his offer when it placed the purchase order dated 13.2.1997 upon the Respondent which, inter-alia, contained Clauses 10 and 11 as aforesaid. Clause 10, specifically made any other terms or conditions, contained in any document of the respondents that were in addition to, or in contradiction to those contained therein, inapplicable to the contract unless they were specifically agreed to by the petitioner in writing. Clause 11 subjected all disputes to jurisdiction of Delhi Courts. The respondent acted on this offer by effecting supplies of the goods, and at the same time raised an invoice dated 6.3.1997 for ₹ 1,49,866.17 which contained condition No. 4.
The inclusion of terms and conditions at the back of the invoice, unilaterally issued by the Respondent while effecting delivery of the goods in terms of the Petitioner's purchase order, would not bind the Petitioner. The purchase order itself made it clear that the Petitioner did not intend to refer its disputes to arbitration in respect of the resulting transaction arising out of the said purchase order. Arbitration was clearly contra indicated when the Petitioner's purchase order itself stated that "Any dispute arising out of this contract shall be subject to the jurisdiction of Courts in Delhi" The Respondent was well aware that the Petitioner had shunned arbitration, yet the Respondent acted in furtherance of the said purchase order by effecting supplies.
The signature by the petitioners agent on the respondents copy of the invoice cannot tantamount to acceptance of the respondents so called offer for arbitration. The signatures in such a situation were evidently an acknowledgment of receipt of the goods and nothing more. There is another aspect of the so- called Arbitration Agreement contained in condition No. 4 of the Respondents invoice.
Thus, I find that there was in fact no arbitration agreement between the parties and that the arbitrator appointed by the Paper Merchants Association (Regd.), Delhi had no jurisdiction to adjudicate the disputes between the parties in relation to the contract in question. The arbitrator has completely misdirected himself in dealing with the aforesaid specific objection as to his jurisdiction.
Issue of Limitation: - The Purchase Order dated 13.2.1997 clearly stipulates that the payment was to be made in 90 days of the date of dispatch of goods. There is no averment in the claim petition that any goods were supplied beyond 31.7.1997 (the principal amount claimed before the Arbitrator was the total claimed to be outstanding as on the said date).
Thus, time began to run in this case not later than 31-7-97 (or 90 days thereafter at the latest) which date was not denied by the Respondent No. 1 in his rejoinder filed before the Arbitrator. Proceedings, if any, ought to have been initiated before the expiry of three years from that date. However, the Arbitration commenced in January, 2001. The giving of `C' Form by the petitioner on 16-1-2000 does not have the effect of postponing the due date of payment under the contract. Therefore, unless the Respondent makes out a case of extension of limitation under the provisions of the Limitation Act, the proceedings were clearly barred by time.
Form 'C' given by the Petitioner to the Respondent on 16.1.2000 be considered to be an acknowledgment? - Firstly, there is no acknowledgement of a present and subsisting liability. The said form can at the most be treated as an acknowledgement of the goods received under the contract of supply of goods and the price fixed to be paid for them. Whether or not payments were effected thereafter, or any amount remains due or outstanding cannot be inferred from the said 'C' form in the facts and circumstances of this case. Secondly, no intention to acknowledge a liability can be inferred from the contents of the said 'C' form. Thirdly, one cannot establish a jural relation of debtor and creditor from the contents of the said 'C' form. Thus, the essential requirements for a writing to constitute acknowledgment are missing from this document. (see Hansa Industries (P) Limited v. MMTC Ltd [2004 (7) TMI 379 - HIGH COURT OF DELHI].
Thus, the Arbitrator clearly erred in treating 16.1.2000 as the date of commencement of limitation. In view of the provisions contained in The Limitation Act, and the authorities cited, I find no force in the contention of the Respondent that the claim before the Arbitrator was within the period of Limitation. The said 'C' Form does not constitute an acknowledgment within the meaning of Section 18 of the Limitation Act and the Arbitrator misapplied the law on this aspect as well.
I, Therefore, set aside the impugned award as being contrary to Public Policy of India.
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2007 (5) TMI 653
Issues involved:
The judgment deals with the rejection of an application for ad-interim injunction by the trial court and the Punjab and Haryana High Court, concerning the alleged infringement of a registered trademark "Glucon-D" by the defendant's product "Glucose-D" and deceptive packaging.
Trademark Infringement Issue:
The plaintiffs, owners of the trademark "Glucon-D," filed a suit for permanent injunction and accounts of profits for trademark infringement and copyright infringement. The trial court rejected the application for ad-interim injunction, stating that the word "Glucose" was generic and the packaging was dissimilar. The High Court upheld this decision. However, the Supreme Court found that the prior user of "Glucon-D" and its packaging by the plaintiffs was established, predating the defendant's use of "Glucose-D." The Court noted the phonetic similarity between the two marks and the deceptive packaging, leading to confusion among buyers. The Court set aside the lower court's orders and granted the ad-interim injunction.
Legal Arguments:
The appellants argued for the injunction based on prior user of "Glucon-D" and its packaging, citing relevant case law. The respondent contended that the delay in filing the suit and lack of evidence on deceptive similarity were grounds for denying the injunction. The Court emphasized the importance of prior user in passing off actions and the need to establish reputation in the market to prevent infringement. It highlighted the phonetic similarity between the marks and the deceptive packaging as key factors in granting the injunction.
Decision and Conclusion:
The Supreme Court allowed the application for ad-interim injunction, overturning the decisions of the lower courts. The Court clarified that its ruling was limited to the injunction and would not bind the trial court in the ongoing suit. The judgment focused on the established prior user of "Glucon-D" and the deceptive similarity with the defendant's product, warranting the grant of the injunction to protect the plaintiff's trademark rights.
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2007 (5) TMI 652
Petition filled u/s 397 and 398 - Oppression and Mismanagement - manipulation of accounts - matrimonial discord between the two directors - Seeking winding up of the company and appointment of the liquidation office - R-1 company was incorporated by husband and wife as the only two directors - stocks and cash of the company always remained under exclusive control of the respondent No. 2 - R-2 namely Shri Sandeep Dutt (petitioner's husband against whom divorce proceedings are pending) - HELD THAT:- Considering the pleadings and the documents filed therewith as well as the arguments of the counsels of the parties, it cannot be denied that the matrimonial discord is the root cause of this petition. But at the same time it is a composite petition having allegations of oppression, mismanagement including siphoning off of funds and breach of fiduciary relationship prejudicial to the interest and health of the R-1 as well. It is true that it is not possible to separate the human aspect of disharmony in the personal relationship between the directors which has led to the deadlock and the ill health of an earlier profit making company. It is a fact that there is a deadlock. Cause is known - matrimonial discord. And may be even spite and negligence which cannot be ruled out. But the preliminary objections raised in the case cannot be sustained.
The case of oppression and mismanagement u/s 397 and 398 of the Act has been made out. Personal cruelty in the relationship has lead to compelling circumstances of the wife director to withdraw from her successfully established business to look for another job to fed for herself and her two children. It is not an easy and painless decision. Driving an almost indispensable director out of the company resulting in the deadlock is itself an act of oppression. For the purposes of Sections 397 and 398 of the Act, oppression may be an act of cruelty, severity, defaulting of will or excessive use of authority. It is unfortunate, but it is true that the personal relationship of the directors has affected the functioning of the R-1 company. It is humanly impossible to exclude and detach the personal relationship when personal life and business are mixed up and intricably linked.
The respondents preliminary objections as regards the misjoinder of the parties cannot be accepted in view of the fact that the appointment of R-2's mother as additional director/director is in violation of Section 252 of the Act and is illegal and in contravention of the provisions of the Act. An illegal act cannot generate legal rights.
However, during the arguments the counsel for the petitioner did not insist on relief qua R-2's mother, her main allegations being against R-1 and R-2. As regards the petitioner joining hand with another person in the competing business alleged to be an unethical business practice affecting the clients and the goodwill of the R-1, the allegation is merely a bald allegation, no case is made out, what else can a professional interior designer do other than that to earn a livelihood for herself and her two children is also not understood. The R-2 has failed to appreciate the constraints of her choice.
Thus, I find that the respondents have failed to meet the allegations on merits of the case under Sections 397 and 398 of the Act. The manipulation of accounts of the R-1, siphoning off of discount sale consideration and non-furnishing of the statements and annual returns to the ROC for several years are all acts of oppression and mismanagement in the conduct of the affairs of the company. Since there is a deadlock in the company, the petitioner has expressed her inability to be in the R-1's business in the circumstances of this case, parting ways may be good for the general health of the R-1.
It is also a settled proposition of law that the fiduciary capacity within which Directors have to act enjoins upon them a duty to act on behalf of the company with utmost care and skill and due diligence and in the interests of the company. They have a duty to make full and honest disclosure to shareholders regarding all important matters relating to the company. In the present case the fiduciary duties have been breached by both the parties - by the petitioner as well as by the respondents. Both the parties have indulged in acts in the conduct of the affairs of the company which have been prejudicial to the interests of the R-1.
To do substantial justice between the parties, I hereby direct the R-2 to restore the sale consideration received in respect of the discounted sales and other amounts siphoned off from the R-1 company's accounts forthwith. Since there is a deadlock in the R-1, and since both the parties know the worth of the company, I hereby direct the parties to arrive at an amount to be paid to the petitioner for her going out of the company which would be acceptable to the petitioner. In case no such acceptable consideration is arrived and paid to the petitioner within a month of receipt of this order, I consider it appropriate to direct that both the parties to be present in the CLB Court Room along with their counsels on 23.8.2007 at 11.30 a.m. to bid for the shares and the party which bids the higher price for the shares, should purchase the shares of the other party at that price.
Hence, I dispose of the petition, keeping seisin over the matter till the finalization of the bidding, if required. All CA s stand disposed off. All interim orders stand vacated.
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2007 (5) TMI 651
Issues:
The judgment involves quashing of complaints u/s 211 and Section 293(1)(a) r/w. Section 629-A of the Companies Act, 1956 against the applicant.
Issue 1: Allegations against the Applicant
The applicant challenged the complaints on the grounds that his name was not specifically connected to the alleged offences and no specific allegations were made linking him to the day-to-day administration of the Company. The applicant argued that without such averments, he could not be held liable for the offences.
Issue 2: Legal Precedents
The applicant relied on legal precedents, including the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, which emphasized the necessity of averring that the accused was in charge of and responsible for the conduct of the business of the Company at the time of the offence. The court highlighted the importance of such averments for establishing liability under Section 141 of the Negotiable Instruments Act, 1881.
Issue 3: Director's Liability
The respondents contended that as the applicant was the Director of the Company, he was automatically responsible for the conduct of the business, thus making him liable for the offences. However, the court noted that mere directorship does not automatically establish liability under Section 141, emphasizing the need for specific averments regarding the accused's role in the Company's business.
Judgment
After examining the complaints and legal arguments, the court found that there were no averments indicating that the applicant was in charge of or responsible for the Company's business. As per Section 141 of the Negotiable Instruments Act, criminal liability arises only if the accused was in charge of and responsible for the business at the time of the offence. Since such allegations were lacking, the court quashed the complaints against the applicant u/s 482 of the Code of Criminal Procedure, while allowing proceedings against other accused persons to continue.
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2007 (5) TMI 650
Issues involved: Refund of unutilized Cenvat credit due to goods being exempted from payment of additional duty of Excise.
The appeal was filed against Order-in-Appeal No. ER(2982)364/MI/2005, where the Commissioner (Appeals) set aside the Order-in-Original and allowed the respondent's appeal.
The main issue in this case pertains to the refund of unutilized Cenvat credit due to goods being exempted from payment of additional duty of Excise. The Tribunal referred to previous decisions, including the case of Shree Prakash Textiles (Guj.) Ltd. v. CCE, Ahmedabad, which held that cash refund is permissible when credit on inputs cannot be utilized, as per the proviso to Section 11B(2) of the Central Excise Act, 1944. The Tribunal also cited the decision of the Hon'ble Karnataka High Court in the case of UOI v. Slovak India Trading Co. Pvt. Ltd., supporting the same view.
In line with the above decisions, the Tribunal upheld the Order-in-Appeal passed by the Commissioner (Appeals) and rejected the appeal, stating that there is no need for interference as the decision is correct and legal.
Ultimately, the Tribunal rejected the appeal filed by the Revenue, affirming the correctness of the Order-in-Appeal.
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2007 (5) TMI 649
Issues Involved:
1. Alleged fraudulent removal of a director.
2. Unauthorized increase in share capital and dilution of petitioners' shareholding.
3. Non-provision of company documents and alleged siphoning of funds.
4. Allegations of false claims and concealment of material facts by the petitioners.
5. Maintainability of the petition under Sections 397 and 398 of the Companies Act, 1956.
Detailed Analysis:
1. Alleged fraudulent removal of a director:
The petitioners contended that Petitioner No. 1 was fraudulently removed from the directorship of the respondent company. They argued that her resignation was forged, as evidenced by her continued participation in company activities post the alleged resignation date. They presented bank statements and cheques signed by her after the purported resignation date as proof. The respondents countered this by submitting both typed and handwritten resignation letters and argued that Petitioner No. 1 resigned due to the bank's threats related to another company, Productive Diagnostics Pvt. Ltd., in which she was involved.
2. Unauthorized increase in share capital and dilution of petitioners' shareholding:
The petitioners alleged that the respondents increased the paid-up share capital without notifying them, reducing their shareholding from 12.94% to 9.1%. They claimed that this was done fraudulently to suppress Petitioner No. 1's influence. The respondents argued that the share allotment was made against share application money received during Petitioner No. 1's tenure and offered to restore the petitioners' original shareholding level.
3. Non-provision of company documents and alleged siphoning of funds:
The petitioners claimed they were not provided with minutes of board meetings or audit reports, which they argued constituted oppression and mismanagement. They also alleged that funds were siphoned off, citing a specific instance where Rs. 10,000 was debited from Petitioner No. 1's account. The respondents countered these claims by pointing out that the petitioners had access to company documents and that the Rs. 10,000 advance was a legitimate transaction.
4. Allegations of false claims and concealment of material facts by the petitioners:
The respondents highlighted several instances where the petitioners made false claims, such as the ownership of properties and the number of cars owned by the company. They also pointed out the petitioners' concealment of the handwritten resignation letter and other material facts. The Board found these objections tenable, noting that the petitioners had not come with clean hands and had concealed crucial information.
5. Maintainability of the petition under Sections 397 and 398 of the Companies Act, 1956:
The respondents argued that the petitioners failed to prove any acts of oppression or mismanagement. They contended that the Company Law Board (CLB) was not the appropriate forum to adjudicate criminal matters like forgery. The Board agreed, stating that the petitioners did not establish a clear case of oppression or mismanagement and had made false statements under oath.
Conclusion:
The Board found that the petitioners did not come with clean hands and had concealed material facts. The petitioners' claims of oppression and mismanagement were unsubstantiated. The petition was dismissed, with the petitioners given the liberty to accept the respondents' offer of settlement or to buy/sell their stake in the company. No order as to costs was made, and all interim orders were vacated.
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2007 (5) TMI 648
Smuggling - psychotropic substance - non-compliance with the mandatory provisions of Section 42(2) of the Act - Held that: - the High Court was right in coming to the conclusion that Section 42 of the Act was not attracted to the facts of this case. In the instant case on information received by PW-2 who communicated the same to PW-1, the witnesses went to the bus stand where the person carrying the drug was expected to arrive - The appellant was, therefore, not searched and arrested in exercise of power of arrest, search, and seizure under Section 42 of the Act.
Section 42 applies to a case where the officers concerned on information received, or having reason to believe from personal knowledge that any offence has been committed in relation to any drug or psychotropic substance etc. and which is kept or concealed in any building, conveyance or enclosed place may, between sunrise and sunset, enter into and search any building, conveyance or place.
The High Court has not accepted the involvement in the conspiracy of Hiralal who in his confessional statement claimed to have handed over the contraband to appellant Peter John. If the confessional statement of Hiralal is discarded, there remains no evidence except his own confession to implicate the appellant Peter John - appellant Peter John is also entitled to the benefit of doubt.
Appeal allowed - decided in favor of appellant.
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2007 (5) TMI 647
Issues involved: Appeal by Revenue u/s 260 A of Income Tax Act against Tribunal's order allowing deduction under Section 36(1)(vii) for export incentives and liability to M/s. Old Village Industries Ltd.
Deduction of &8377; 3,58,563/- under Section 36(1)(vii): Tribunal allowed deduction for export incentives irrecoverable during the year. Assessee credited sum in Profit and Loss A/c based on mercantile system but received only part. Balance considered irrecoverable and written off. Assessing Officer disallowed claim due to lack of supporting documents. Commissioner of Income Tax (Appeal) allowed the claim. Tribunal upheld decision, stating essentials of Section 36(1)(vii) satisfied. No substantial question of law identified, appeal dismissed.
Addition of &8377; 14,35,072/- liability to M/s. Old Village Industries Ltd.: Assessee had to recover sum from associate concern M/s. Ovil for export orders. Requested payment, which was remitted by M/s. Apollo International Enterprises Pvt. Ltd. Assessing Officer doubted genuineness of transaction and added amount as unproved liability. Commissioner of Income Tax (Appeal) deleted the addition. High Court to consider if Tribunal was justified in deleting the addition under Section 68 of the Act for unexplained liability. Paper books to be filed as per High Court Rules.
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2007 (5) TMI 646
Issues Involved:
1. Whether the suit is within the limitation period.
2. Whether the plaintiff is in possession of the suit property.
3. Ownership and title of the suit property.
4. Whether the suit property belongs to the State.
5. Relief, costs, and compensatory costs.
Summary:
Issue 1: Limitation Period
The court addressed whether the suit was within the limitation period. It was concluded that the suit was not barred by limitation.
Issue 2: Possession of the Suit Property
The court found that the plaintiff and defendant No. 2 had been in possession of the suit land. The State did not produce evidence to counter the plaintiff's claim of possession.
Issue 3: Ownership and Title of the Suit Property
The court examined the historical ownership of the property, noting that it was purchased in 1859 by the ancestors of the plaintiff and defendant No. 2. The property was inherited by Smt. Putari Sethani and subsequently by the plaintiff and defendant No. 2. The court found that the plaintiff and defendant No. 2 had proved their title and possession.
Issue 4: Whether the Suit Property Belongs to the State
The court scrutinized the State's claim that the land was Nazul land and thus belonged to the State. The court noted that the Settlement Commissioner had previously determined that no lease deed was executed, and the property should be deemed to be held by the plaintiff's predecessor as a perpetual lessee. The court found the State's reliance on revenue records insufficient to establish ownership, as these records could not override the lawful title acquired by the auction purchaser.
Issue 5: Relief, Costs, and Compensatory Costs
The court set aside the judgments of the High Court and the Trial Judge, decreeing the suit in favor of the plaintiff. The appeal was allowed with costs, and counsel's fee was assessed at Rs. 25,000.
Conclusion:
The Supreme Court found that the plaintiff and defendant No. 2 had established their title and possession of the suit property. The State failed to prove its ownership or the character of the land as Nazul land. The court decreed the suit in favor of the plaintiff, allowing the appeal with costs.
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2007 (5) TMI 645
Issues Involved:
1. Legality of starting distance education programs without the first ordinance.
2. Territorial jurisdiction of the University for operating study centers.
3. Compliance with University Grants Commission (UGC) regulations.
Summary:
1. Legality of starting distance education programs without the first ordinance:
The University initiated distance education programs without the first ordinance being notified by the State Government, as required u/s 52(2) of the Uttar Pradesh State Universities Act, 1973. The Chancellor disapproved the proposal for starting new courses in distance education, citing the irregularity and irresponsibility of the University's actions. The High Court upheld this decision, noting that the initiation of the distance education program was illegal in the absence of the first ordinance.
2. Territorial jurisdiction of the University for operating study centers:
The Supreme Court emphasized that the University must operate within its territorial jurisdiction as defined u/s 5 of the Act. The University's jurisdiction is limited to seven districts in Uttar Pradesh, and Nainital is not one of them. The Court held that study centers cannot be legally permitted to operate beyond the territorial jurisdiction of the University, as it would require close supervision and the provision of amenities akin to a full-fledged institution.
3. Compliance with University Grants Commission (UGC) regulations:
The appellants argued that the UGC Regulations 1985 allowed for the establishment of study centers. However, the Court clarified that the UGC Regulations, being subordinate legislation, must be read with the principal Act. The Court stated that a statutory authority must act within the four-corners of the statute, and the territorial jurisdiction of the University must be maintained to avoid chaos. The Court dismissed the appeal, concluding that the study centers in Nainital were beyond the University's territorial jurisdiction and no writ of mandamus could be issued.
Conclusion:
The appeal was dismissed, and the Court held that the University's actions in starting distance education programs without the first ordinance and operating study centers beyond its territorial jurisdiction were illegal. The Court emphasized the need for compliance with statutory provisions and territorial limits.
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2007 (5) TMI 644
Issues Involved:
1. Jurisdiction of the Tribunal to pass the impugned order.
2. Availability of alternative remedy.
3. Compliance with statutory provisions and procedural requirements.
Summary:
1. Jurisdiction of the Tribunal to pass the impugned order:
The petitioner, a nationalized bank, challenged the order of the Debt Recovery Tribunal (DRT), Bangalore, dated 22.12.2006, which directed redelivery of possession of the property in question. The bank argued that the order was without jurisdiction since the respondent did not comply with the notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('the Act'). The bank had taken possession of the secured assets on 30.11.2004 and issued a sale notice on 14.3.2005. The Tribunal's order to redeliver possession was contested on the grounds that u/s 17(3) of the Act, possession can only be restored if the Tribunal concludes that the measures taken were not in accordance with the Act. The Tribunal's order was passed without considering the bank's objections and was not a speaking order, thus rendering it unsustainable.
2. Availability of alternative remedy:
The respondent argued that the impugned order was appealable u/s 18 of the Act, and hence, the writ petition should be dismissed on the grounds of alternative remedy. However, the court held that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not compulsion. The Tribunal's failure to pass a speaking order and consider the bank's objections justified the High Court's intervention despite the availability of an alternative remedy.
3. Compliance with statutory provisions and procedural requirements:
The court examined whether the Tribunal had jurisdiction to direct redelivery of possession during the pendency of the appeal. U/s 13(4) of the Act, if the borrower fails to discharge his liability, the secured creditor may take measures to recover the debt. U/s 17(3), the Tribunal can restore possession only if it finds the measures taken were not in accordance with the Act. The Tribunal's order was found to be without jurisdiction as it did not follow the statutory provisions. The bank's action of engaging a security personnel to guard the property was in accordance with Rule 8(4) of the Security Interest (Enforcement) Rules, 2002, and Section 13(7) of the Act, which allows recovery of such expenses from the borrower.
Conclusion:
The writ petition was allowed, and the Tribunal's order dated 22.12.2006 was quashed. The Tribunal was directed to dispose of the main matter on its merits within two months. No costs were awarded.
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2007 (5) TMI 643
Challenged the Judgment and Order passed by the High Court - Oral Gift of the Property - acquired title by adverse possession - burden of proof - suit for recovery of possession and arrears of rents and also for damages for wrongful use and occupation of the property filed - jurisdiction of the Civil Court - HELD THAT:- Respondent No. 3 was admittedly the owner of the property. As his ownership had not been disputed, the burden was on Respondent No. 1 to prove his title. It has, as noticed hereinbefore, claimed title : (i) by reason of an oral gift; and (ii) by adverse possession.
The High Court although noticed the lease came to an end in the year 1975 and if from the said date or at least from the date of purported oral gift allegedly made in its favour by Respondent No.1. Any change in the nature of its position occurred, it was expected of it to accept the same by its conduct. Why it would pay rent to Respondent No. 3 till October 1976 has not been explained.
It is now well-settled that time creates title. Acquisition of a title is an inference of law arising out of certain set of facts. If in law, a person does not acquire title, the same cannot be vested only by reason of acquiescence or estoppel on the part of other.
It may be true that Respondent No. 1 had constructed some buildings; but it did so at its own risk. If it though that despite its status of a tenant, it would raise certain constructions, it must have taken a grave risk. There is nothing on record to show that such permission was granted. Although Respondent No. 1 claimed its right, it did not produce any document in that behalf. No application for seeking such permission having been filed, an adverse inference in that behalf must be drawn.
It may be true that Respondent No. 3 herein should have examined himself and the learned Trial Judge committed a serious error in drawing an adverse inference in that behalf as against Respondent No. 1. It was, however, so done keeping in view the fact that Respondent No. 3 was evidently not interested in the property in view of the fact that it had suffered a decree. For all intent and purport, even if the submission of Mr. Parasaran is accepted that the appellant is claiming is claiming only by reason of an award, he has transferred the property in his favour. He received a valuable consideration in terms of the award. We are not concerned with the validity thereof.
Non-examination of Respondent No. 3 indisputably would give rise to a presumption, as has been held by this Court in Sardar Gurbaksh Singh v. Gurdial Singh [1927 (7) TMI 8 - PRIVY COUNCIL], Martand Pandharinath Chaudhari v. Radhabai Krishnarao Deshmukh[1930 (3) TMI 18 - BOMBAY HIGH COURT], and The Ramanathapuram Market Committee, Virudhunagar v. East India Corpn. Ltd., Madurai[1975 (1) TMI 96 - MADRAS HIGH COURT] and Vidhyadhar v. Manikrao and Anr. [1999 (3) TMI 655 - SUPREME COURT], but by reason of presumption alone, the burden is not discharged. A title is not created.
A claim of title by prescription by Respondent No. 1 again is not tenable. It based its claim on a title. It had, therefore, prima facie, no animus possidendi.
In this case, the respondents have raised a plea of title in itself, the question in regard to the jurisdiction of the Civil Court has not been raised, presumably in view of the fact, that ultimately the civil court was bound to determine the question whether the defendant/respondent No. 3 made an oral gift or not being a complicated question, could not have gone into in a suit under the Rent Control Act. In any event, such a question having not been raised, we are of the opinion that the same should not be permitted to be raised before us for the first time.
Thus, the impugned judgment cannot be sustained, which is set aside accordingly. The appeal is allowed.
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2007 (5) TMI 642
Mining leases from the State Government - arbitration agreement between the parties - Application u/s 9 of the Arbitration and Conciliation Act, 1996 ("the Act") - agreement specifically enforced in the light of Sections 10 and 42 of the Specific Relief Act - Powers u/s 9 of the Act independent of any restrictions placed by the Specific Relief Act ? - HELD THAT:- It is seen that the mining lessee had entered into an agreement with the appellant-company for the purpose of raising the iron ore from the area covered by the mining lease. The term of the original agreement expired and this was followed by two extensions for three years each. Thereafter, the respondent firm had refused to extend the agreement and claims that it wants to do the mining itself.
Prima facie, it is not possible to say that the High Court was wrong in thinking that it may be a case where an injunction could not be granted in view of the provisions of the Specific Relief Act. Here again, we do not think that we should pronounce on that question since that again will be a question for the arbitrator to pronounce upon.
Suffice it to say that the position is not clear enough for us to assume for the purpose of this interlocutory proceeding that the appellant is entitled to specifically enforce the agreement dated 14.3.1991 read in the light of the Power of Attorney dated 25.3.1991. Of course, this aspect will be again subject to the contention raised by the appellant-company that the agreement created in his favour was co-terminus with the mining lease itself. But, as we have stated, these are the aspects to be considered by the Arbitral Tribunal. We refrain from pronouncing on them at this stage.
Prima facie, it appears that the general rules that governed the court while considering the grant of an interim injunction at the threshold are attracted even while dealing with an application u/s 9 of the Act. There is also the principle that when a power is conferred under a special statute and it is conferred on an ordinary court of the land, without laying down any special condition for exercise of that power, the general rules of procedure of that court would apply. The Act does not prima facie purport to keep out the provisions of the Specific Relief Act from consideration.
No doubt, a view that exercise of power u/s 9 of the Act is not controlled by the Specific Relief Act has been taken by the Madhya Pradesh High Court. The power u/s 9 of the Act is not controlled by Order XVIII Rule 5 of the Code of Civil Procedure is a view taken by the High Court of Bombay. But, how far these decisions are correct, requires to be considered in an appropriate case.
Suffice it to say that on the basis of the submissions made in this case, we are not inclined to answer that question finally. But, we may indicate that we are prima facie inclined to the view that exercise of power under Section 9 of the Act must be based on well recognized principles governing the grant of interim injunctions and other orders of interim protection or the appointment of a receiver.
In the result, we decline to interfere with the order of the High Court and dismiss this appeal. While doing so, we revoke the nomination made by the parties of two arbitrators. We appoint Mr. Justice Y.K. Sabharwal, former Chief Justice of India as the sole arbitrator to decide the dispute between the parties. The parties are directed to suffer their respective costs.
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2007 (5) TMI 641
Issues Involved:
The issues involved in this case are:
1. Whether profit can be worked on an estimate basis for contractors when proper books of account are not produced for verification before the Assessing Officer (AO)?
2. Whether the deeming provisions of section 44AD can be applied to contractors with a turnover exceeding Rs. 40 Lakhs, as specifically provided in the Income Tax Act?
Issue 1 - Profit Estimation for Contractors:
The High Court considered the appeal filed by the revenue against the common order of the Income Tax Appellate Tribunal (ITAT) regarding assessment years 1999-2000 and 2000-2001. The main question was whether the ITAT was justified in allowing profit estimation at 10% of gross receipts for contractors who claim to maintain proper books of account but fail to produce complete books for verification before the AO. The Court referred to a previous case involving the same assessee for the assessment year 2001-2002, where similar issues were considered and the appeal was dismissed. The Court applied the same reasoning as in the earlier case and dismissed the current appeals based on the precedent set in the previous judgment.
Issue 2 - Applicability of Section 44AD:
The second issue raised by the revenue was whether the ITAT can extend the deeming provisions of section 44AD to contractors with a turnover exceeding Rs. 40 Lakhs, contrary to the statutory limit set by the Income Tax Act. The Court noted that the Act clearly specifies the applicability of section 44AD to contractors with a turnover not exceeding Rs. 40 Lakhs. The Court emphasized that the ITAT cannot go beyond the provisions of the Act and apply section 44AD to cases exceeding the prescribed limit. The Court upheld the statutory limit and ruled against the extension of the deeming provisions to cases not covered by the specified turnover limit.
Separate Judgment:
The judgment was delivered by Mr. Justice M.M. Kumar and Mr. Justice Rajesh Bindal of the Punjab & Haryana High Court. The Court addressed the issues raised by the revenue regarding profit estimation for contractors and the applicability of section 44AD to cases exceeding the turnover limit specified in the Income Tax Act. The Court relied on previous decisions and statutory provisions to make its determinations, ultimately dismissing the appeals based on established legal principles and precedents.
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2007 (5) TMI 640
Issues Involved:
The judgment deals with the issue of whether the amount received by way of interest from banks on temporary deposit of funds is exempt from tax under the principle of mutuality.
Summary:
Issue 1: Application of Doctrine of Mutuality
The Assessee, a club, earns income from its members and their guests. The surplus funds are deposited in banks, which are attributable to amounts received from members towards their dues and expenses incurred by members and their guests for various club facilities. The Income Tax Appellate Tribunal held that income received for the use of facilities by guests of the members is exempt from taxation under the doctrine of mutuality. The Tribunal concluded that deposits made and interest received from banks are not outside the scope of mutuality.
Issue 2: Legal Precedents
The Assessee's counsel cited the case of Director of Income Tax v. All India Oriental Bank of Commerce Welfare Society, where the court applied the doctrine of mutuality to a similar scenario. The court held that when a group contributes to a common fund without dealings with external bodies, any surplus generated is not taxable. The court found no distinction between this case and the present one, thus supporting the application of the doctrine of mutuality.
Decision:
The High Court answered the substantial question of law in the affirmative, favoring the Assessee and ruling against the Revenue. The appeal was disposed of in favor of the Assessee based on the application of the doctrine of mutuality and relevant legal precedents.
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2007 (5) TMI 639
Judicial review - Validity of Pre-emptive purchase passed by the appropriate authority - challenged by the prospective buyers - determination of fair market value of the Property - applicability of section 269UD(1) where the market value is more than purchase value of the property - scope of interference under Art. 226 - HELD THAT:- We must at the outset begin with noticing the scope of interference under Art. 226 of the Constitution of India which by now stand well defined following catena of judgments by Hon'ble Supreme Court. While examining the validity of pre-emptive purchase order of the property under Chapter XX-C of the Act, this Court in exercise of its powers of judicial review can interfere only if it finds that (i) relevant material has been ignored or (ii) irrelevant or erroneous material has been considered or (iii) it has been passed in utter violation of principles of natural justice or (iv) there has been infraction of any statutory provision in the process of decision making or (v) decision is such which no reasonable person could on available material arrive at.
Functions of the Appropriate Authority being akin to that of a quasi judicial body, therefore, its order are subject to judicial review within the scope available for writ of certiorari. At the same time, however, this power of judicial review would not extend to the status of the appellate powers and for that matter, revisional powers where the scope of interference is much wider. It is within this available scope of interference that the learned single Judge examined the validity of the impugned pre-emptive purchase order and upheld the same and we have to now in this appeal examine the correctness of the judgment passed by learned single Judge which exercise in effect would also extend to examining validity of the impugned pre-emptive purchase order on the grounds that have been raised before us.
Market rates of totally different type of land - On examination of the impugned order of pre-emptive purchase, we find that the Appropriate Authority in its order has categorically noted this argument with reference to r. 11 of the Rajasthan Urban Areas (Sub-Division, Reconstruction and Improvement of Plots) Rules, 1975 and noted that the said Rule provides that the saleable area would be about 66 per cent and this may be more if the plot size is smaller but assuming that only 66 per cent would have available area for sale, yet out of 7,943 sq. mtrs. an area equal to 5,242.38 sq. mtrs. would have been available for sale. Appropriate Authority therefore by this alternative mode worked out the rate of the land on the basis of comparable sale instance i.e. 5,242.38 sq. mtrs. by adjustment of time gap of +12 per cent which then would come to ₹ 1,994.72 per sq. mtr. It was noted that this was so because the deduction of 34 per cent land contemplates absence of larger size as well as less development. On this basis the land value will be ₹ 1,995 x 5,242.38 = 1,04,58,548. Value of the constructed godowns of ₹ 42 lacs being added thereto, total value of the said property would come to ₹ 1,46,58,548 as against declared apparent consideration of ₹ 99,84,500.
We do not find any error in the approach taken by the Appropriate Authority because deduction of 34 per cent of the land for making the provision of civic amenities like roads, parks, open spaces, electricity, water, sewerage, drainage, would essentially exclude the element of the land area being a large size agricultural chunk of land, which is the alternative argument made by the respondents and this would then also exclude the element of the land being less developed/underdeveloped. In other words, making use of 1/3rd land would in fact make the remaining 2/3rd land developed and with the sub-division of lands into plots of smaller sizes, it would no longer remain a large size undeveloped agricultural land. In fact, making provision of all these civic amenities and facilities by using 1/3rd of the land would considerably enhance its saleability and appreciate the value of the remaining 2/3rd of the land.
On this count, we do not find that the impugned order passed by the learned Appropriate Authority suffers from any legality so as to warrant interference by this Court in exercise of its power of judicial review.
Various encumbrances that were attached to the property - The Valuation Officer in an application submitted to the Appropriate Authority on 18th May, 1994 has categorically stated that in spite of the fact that he invited attention of the transferor to para 4 of the agreement whereby the transferor had to get the open land partitioned by metes and bounds with a specific demarcation, she failed to get the demarcation done till date and thereafter when he went to the site on 22nd June, 1994 the transferee produced copy of the status quo order passed by this Court. In fact, the vendor in her appeal before us is claiming mesne profit from the prospective buyers asserting that they have been during all these years earning huge profits by renting out offices as also open land area for social functions like marriage and party etc. Apart from the fact that the argument about the encumbrances being attached to the property was not raised before the Appropriate Authority, facts narrated above clearly show that despite possession of the godowns and office premises etc. having been handed over to the transferee, both the transferee and the transferor adopted a non-co-operative attitude in getting the common land partitioned by metes and bounds, notwithstanding the specific stipulation to that effect in the agreement to sale that though symbolic possession of the 1/4th share has been handed over by the vendor to the prospective buyer on the date of agreement and the vendor shall get the open land partitioned by metes and bounds by specific demarcation within the period of two months from the date of agreement. The vendor thus deliberately avoided to perform her part of the obligation in the agreement. Neither of the parties can therefore be allowed to take advantage of such a situation. We therefore do not find any merit in this argument either.
Principles of natural justice failed to furnish the material documents - Both the factors of encumbrances and built up structures having thus been noticed and deliberated upon coupled with the fact that the material relating to comparable sale instance having been supplied to the prospective buyer and also in view of the fact the appellants did not take any such plea in replies to the show cause notices, mere non-supply of the report of the Valuation Officer did not in any way violate the provisions of s. 269UD (1A) and for that matter the principles of natural justice. It is well settled that principles of natural justice cannot be put in a straitjacket formula and whether or not the requirements of such principles have been satisfied, would have to be decided on the facts of a given case. And in this case, in our opinion, facts show that they were complied with.
In the present case however the fact situation is entirely different. When the prospective buyers filed the writ petition, this Court vide order dt. 19th April, 1994 while directing the parties to maintain status quo further directed that "the period during which the stay order remains in operation shall be excluded for making the payment by the respondent to the seller". This order was later modified on 27th May, 1994 upon the counsel or the vendor making an argument that if the period of interim stay order is extended, she is likely to suffer loss in terms of interest on the amount which was payable to her and she should not be made to suffer because of this interim order. The learned single Judge therefore while extending the stay order clarified that in case action of the Appropriate Authority is found untenable in law, the vendor shall be entitled to reimbursement of the loss occasioned to her.
In order to meet this contingency, the official respondents immediately invested the amount of apparent sale consideration in the sum of ₹ 99,88,500 in the fixed deposit which we are informed was extended from time to time and is valid till date and the maturity value of such FDR as on 16th May, 2006 was stated to be of ₹ 2,67,81,932. We are however not inclined to entertain the other prayers of appellant Mithilesh Kumari because she having not challenged the pre-emptive purchase order and twice submitted no objection to the IT Department for the compulsory acquisition of the said property acquiesced in those proceedings and is now estopped from challenging the said order.
Thus, in our view the present matter does not fall in any of those five categories which we had set out at the beginning of our discussion, and therefore, in our considered opinion, the learned single Judge did not commit any error of law in not interfering with the pre-emptive purchase order passed by the Appropriate Authority.
We therefore do not find any merit in the appeal filed by the prospective buyers and the same is therefore dismissed but the appeal filed by the vendor is partly allowed with the direction that upon Department taking over possession of the subject property, prospective buyers would be entitled to refund of the amount paid to the vendor together with interest @ 6 per cent per annum, out of the maturity amount of the aforementioned FDR and remaining amount shall be paid to the vendor. In the facts of the case, however, we leave the parties to bear their own costs.
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