|
Advanced Search Options
Case Laws
Showing 41 to 60 of 730 Records
-
2009 (5) TMI 989
Cenvat/Modvat - Fraudulent availment of credit - penalty imposed - Held that:- Delay condoned - appeal dismissed.
-
2009 (5) TMI 988
Issues Involved:
1. Whether the investigation into the affairs of M/s. Information Technologies (India) Ltd. under Section 237(b) of the Companies Act, 1956, is warranted.
2. Whether the respondent company is a subsidiary of Usha (India) Ltd.
3. The impact of SEBI's prior investigation and findings on the present proceedings.
4. The relevance and implications of the SFIO's interim report.
5. The legal objections raised by the respondents regarding the jurisdiction and maintainability of the petition.
Detailed Analysis:
1. Whether the investigation into the affairs of M/s. Information Technologies (India) Ltd. under Section 237(b) of the Companies Act, 1956, is warranted:
The petitioner, Union of India, sought an investigation under Section 237(b) based on SEBI's findings that indicated manipulation and fraudulent activities by the respondent company. The SEBI's investigation revealed several discrepancies, including the improper preparation of balance sheets, fictitious entries to boost share value, and manipulation in the valuation of assets and shares. The Company Law Board (CLB) concluded that there was sufficient prima facie evidence suggesting that the business of the respondent company was conducted with the intent to defraud its members, creditors, and the general public. The Board emphasized that the formation of an opinion under Section 237(b) must be based on reasonable and justifiable grounds, and in this case, the petitioner had acted bona fide in seeking the investigation.
2. Whether the respondent company is a subsidiary of Usha (India) Ltd.:
The respondents contended that M/s. Information Technologies (India) Ltd. was not a subsidiary of Usha (India) Ltd., arguing that the holding company did not control the composition of the board of directors and did not hold more than half of the nominal value of the equity share capital. However, the petitioner pointed out that the respondents had previously admitted in their replies that the respondent company was a subsidiary of Usha (India) Ltd. The CLB noted that whether the respondent company was a subsidiary or not could only be determined through a thorough investigation, as the status of a subsidiary could change with slight dilution in equity. The Board held that the issue of subsidiary status should be left to the investigation agency to decide.
3. The impact of SEBI's prior investigation and findings on the present proceedings:
The respondents argued that since SEBI had already conducted a detailed investigation and initiated civil and criminal actions, a parallel investigation under the Companies Act was not warranted. They relied on legal provisions and case law to support their claim that the SEBI's findings should suffice. However, the petitioner contended that the scope and powers under the Companies Act were broader than those under the SEBI Act, and the investigation under Section 237(b) was necessary to uncover the full extent of fraudulent activities. The CLB agreed with the petitioner, stating that the SEBI's investigation did not preclude the need for a separate investigation under the Companies Act, as the latter could cover violations of other statutes as well.
4. The relevance and implications of the SFIO's interim report:
The respondents highlighted that the SFIO's interim report did not mention any specific findings against the respondent company, arguing that this indicated no grounds for further investigation. The petitioner countered that the SFIO had only commenced its investigation when the matter was remanded by the High Court and had not completed it. The CLB found that the interim report was irrelevant to the decision on whether to order an investigation under Section 237(b), as the SFIO had not completed its work. The Board emphasized that the power under Section 237(b) should be exercised carefully but found that the prerequisites for such an investigation were met in this case.
5. The legal objections raised by the respondents regarding the jurisdiction and maintainability of the petition:
The respondents argued that the CLB lacked jurisdiction under Sections 15Y and 20Y of the SEBI Act, which they claimed barred parallel investigations. They also contended that the petition was barred by law and should be dismissed under Order VII, Rule 11 of the CPC. The CLB rejected these objections, stating that the Companies Act and the SEBI Act had different scopes and could operate concurrently. The Board held that the jurisdiction of the CLB was not ousted by the SEBI's investigation and that the petition was maintainable. The CLB also dismissed the argument that the investigation would cause undue hardship, noting that the allegations of fraud and misconduct warranted a thorough probe.
Conclusion:
The CLB concluded that there were sufficient grounds to order an investigation under Section 237(b) of the Companies Act, 1956, into the affairs of M/s. Information Technologies (India) Ltd. The Board emphasized that the investigation was necessary to uncover the full extent of fraudulent activities and to protect the interests of stakeholders. The petition was allowed, and the investigation was ordered to be carried out by the Central Government to ensure that the truth about the company's transactions and operations could be revealed.
-
2009 (5) TMI 987
Issues involved: Illegal removal of director u/s 283(1)(g) of the Companies Act, 1956, oppression against the petitioner, application of Section 397/398 in closely held companies, absence of proper notices for board meetings, removal of director in a quasi partnership, restoration of directorship, suggestion for share purchase.
Illegal Removal of Director u/s 283(1)(g): The petitioner, holding one-third of the paid-up capital, was removed as a director under Section 283(1)(g) of the Companies Act, 1956. Allegations were made that the petitioner was excluded from the company's affairs by the second and third respondents. False police complaints were filed against the petitioner, claiming he took confidential files and stock from the company. The petitioner was unaware of alleged board meetings where his removal was decided. The respondents failed to provide evidence of issuing notices for these meetings. The removal of the petitioner as a director was deemed oppressive and not bona fide. The Chairman held that the application of Section 283(1)(g) against the petitioner was unjust, and his directorship deserved to be reinstated.
Oppression Against the Petitioner: The respondents accused the petitioner of spreading rumors about the company's closure, instigating staff, and removing company files and goods. They claimed the petitioner did not attend board meetings, leading to his automatic removal as a director. The respondents filed Form No. 32 with the Registrar of Companies to notify the petitioner's removal. The petitioner denied these allegations and stated there was no concrete evidence of his misconduct. The Chairman noted the loss of trust and confidence among the parties in the quasi partnership, leading to the petitioner's removal. However, he found the application of Section 283(1)(g) against the petitioner to be unjust and oppressive, as there was no conclusive proof of wrongdoing by the petitioner.
Application of Section 397/398 in Closely Held Companies: In closely held companies like the one in question, where all three shareholders were also directors, directorial complaints can be entertained under Section 397/398 of the Act. The company, converted from a partnership, was considered a quasi partnership due to the close relationship among the shareholders. In such cases, complaints regarding directorship can be addressed under Section 397/398, even if they are not typically entertained in other company structures.
Absence of Proper Notices for Board Meetings: The respondents alleged that notices were issued for board meetings which the petitioner failed to attend, resulting in his removal as a director. However, the petitioner claimed he did not receive any notices for these meetings. The respondents did not provide documentary evidence of issuing notices or minutes of the alleged meetings. The Chairman found the lack of proof of notice issuance and meeting minutes, concluding that the application of Section 283(1)(g) and the petitioner's removal were unjustified.
Restoration of Directorship: Despite holding that the petitioner's directorship deserved to be reinstated, the Chairman noted the strained relationship among the parties. To avoid escalating disputes, he suggested that all three shareholders bid for the company, with the successful bidder taking over. The petitioner agreed to this proposal, but the respondents did not. Considering the strained relationship and the petitioner's minority shareholder status, the Chairman directed the respondents to purchase the petitioner's shares at a fair value determined by an independent valuer. The matter was scheduled for further discussion to appoint a chartered accountant for this purpose.
The petition was disposed of with no order as to costs, emphasizing the need for fair resolution in the best interest of the company and shareholders.
-
2009 (5) TMI 986
Issues Involved:
1. Alleged oppression by allotment of additional shares.
2. Appointment of new directors without consent.
3. Removal of petitioner-directors.
4. Appointment of the second respondent as managing director.
Summary:
1. Alleged oppression by allotment of additional shares:
The petitioners alleged that by allotting 1,340 additional shares to his own group, the second respondent converted the petitioners from a majority into a minority. The petitioners sought cancellation of this allotment. The court noted that before the impugned allotments, the petitioners' group held 2,100 shares while the second respondent's group held 1,000 shares. The court found that the allotment of shares worth Rs. 1,34,000 was done to gain a larger shareholding in the company than the petitioners. The court declared the impugned allotment as null and void, restoring the shareholding as it was before March 31, 2007.
2. Appointment of new directors without consent:
The petitioners claimed that the second respondent appointed respondents Nos. 3 and 4 as directors without their knowledge and consent. The court observed that the appointment of the third and fourth respondents as directors was not in compliance with the company's Articles of Association, which required proportional representation and filling of casual vacancies. The court declared the appointment of the third and fourth respondents as directors null and void.
3. Removal of petitioner-directors:
The petitioners sought restoration of their directorship after being removed in an extraordinary general meeting allegedly held on December 18, 2007. The court found that the removal of the first and second petitioners as directors was highly oppressive, especially in a family company where they had been directors for over 25 years. The court declared the removal of the first and second petitioners as directors null and void, restoring the board as it was before March 31, 2007.
4. Appointment of the second respondent as managing director:
The petitioners challenged the appointment of the second respondent as the managing director. The court noted that the company never had a managing director for over 25 years and found the appointment unnecessary and done to concentrate managerial powers. The court ruled that the second respondent shall cease to be the managing director with immediate effect.
Conclusion:
The court declared the impugned allotment of shares and the appointment of the third and fourth respondents as directors null and void. It also restored the first and second petitioners as directors and ordered the refund of the consideration paid for the cancelled shares. The court stipulated that the petitioners should not exclude the second respondent from management and that bank accounts should be operated jointly. The petition was disposed of in these terms.
-
2009 (5) TMI 985
Issues Involved:
1. Transfer of interest and rights over the Machilipatnam Port Project to a third party.
2. Failure and refusal to provide funds for the Subarnarekha Port Project.
3. Illegal closure of the registered office.
4. Refusal to shift the registered office.
5. Freezing of the company's bank accounts.
6. Forcing petitioners to fund the company from personal sources.
7. Preventing the company from pursuing its lawful objectives.
Detailed Analysis:
1. Transfer of Interest and Rights over the Machilipatnam Port Project:
The petitioners alleged that the respondents transferred the interest and rights over the Machilipatnam Port Project to a third party, depriving the company of business opportunities and profits. The respondents contended that the company or the petitioners had no stake in the Machilipatnam Port Project. However, evidence showed that SREI committed to funding its share through the company, and the project was awarded based on the technical competence of the petitioners. The third respondent's withdrawal from the project without the petitioners' knowledge and the subsequent sale of equity to Maytas and NCC for Rs. 50 crores was deemed oppressive.
2. Failure and Refusal to Provide Funds for the Subarnarekha Port Project:
The petitioners argued that the second respondent failed to provide timely funds for the Subarnarekha Port Project, violating the Investment Agreement. Evidence indicated that the second respondent had met some funding requirements but failed to provide crucial financial support, such as a bank guarantee and strategic expenses, forcing the petitioners to mortgage personal assets. This breach of the Investment Agreement was found to be oppressive and prejudicial to the petitioners.
3. Illegal Closure of the Registered Office:
The petitioners claimed that the second respondent unlawfully locked the registered office, preventing access and halting operations. The respondents did not provide a specific denial or justification for this act. The closure of the registered office was found to be prejudicial to the company's operations and constituted an act of oppression.
4. Refusal to Shift the Registered Office:
The petitioners proposed shifting the registered office to ensure smooth functioning, which was opposed by the respondents. The opposition was deemed unjustifiable, given the paramount interest of the company. The refusal to shift the office contributed to the deadlock and was considered an act of oppression.
5. Freezing of the Company's Bank Accounts:
The respondents instructed the company's bankers to freeze the bank accounts, allegedly to safeguard funds. However, the accounts were jointly operated, and there was no evidence of wrongful withdrawal by the petitioners. The freezing of accounts was found to be prejudicial and oppressive.
6. Forcing Petitioners to Fund the Company from Personal Sources:
Due to the second respondent's failure to provide necessary funds, the petitioners were forced to secure an overdraft facility and a bank guarantee against personal assets. This financial burden was deemed oppressive and contrary to the terms of the Investment Agreement.
7. Preventing the Company from Pursuing its Lawful Objectives:
The cumulative effect of the respondents' actions, including the closure of the registered office, freezing of bank accounts, and failure to provide funds, prevented the company from pursuing its lawful objectives and carrying out profitable projects. These actions were found to be burdensome, harsh, and wrongful, constituting oppression.
Conclusion:
The judgment concluded that the respondents' actions were oppressive and prejudicial to the petitioners. The second respondent was directed to transfer its shares and interests in the company to the petitioners at a price of Rs. 52.50 crores or a fair value determined by an independent valuer. The respondents were also required to reimburse 30% of the benefits derived from the Machilipatnam Port Project to the company. The petitioners were allowed to reconstitute the board of directors, excluding the respondents' nominees, and were required to keep the second respondent informed of major developments in the Subarnarekha Port Project until the exit formalities were completed.
-
2009 (5) TMI 984
Issues involved: Transfer of proceedings in CC 1290 of 2008, interpretation of Section 202 of the Code of Criminal Procedure, 1973.
In the judgment, the Supreme Court addressed a small issue concerning the transfer of proceedings in CC 1290 of 2008 from the learned Additional Chief Judicial Magistrate to the Chief Judicial Magistrate, Ernakulam. The learned Single Judge had directed the transfer based on the mandatory requirement for an inquiry under Section 202 of the Code of Criminal Procedure, 1973, as amended by Central Act 25/2005. The Single Judge emphasized the necessity of conducting an inquiry after the amendment, noting that examining the complainant and witnesses under Section 202 amounted to taking cognizance of the offense. The Court found the legal position on this matter to be unexceptionable.
Regarding the transfer directed by the Single Judge, the Supreme Court found no issue with it in the background facts. The Court deemed the observations made against the Judicial Officer as unnecessary and deleted them. The Single Judge had also granted discretion to the Chief Judicial Magistrate to record further sworn statements if needed upon deciding to take cognizance of the offense. The Court considered these observations and directions to be appropriate, leading to the disposal of the appeal.
-
2009 (5) TMI 983
Issues Involved:
1. Infringement of registered trademarks.
2. Phonetic and visual similarity between trademarks.
3. Honest and concurrent use of the trademark.
4. Delay and acquiescence in seeking legal remedy.
5. Prima facie case for grant of injunction.
Detailed Analysis:
1. Infringement of Registered Trademarks:
The plaintiff sought a permanent injunction to restrain the defendants from infringing its registered trademarks, including the device of QILLA, and the words GOLDEN QILLA, LAL QILLA CHAPP, LAL QILLA, and NEEL QILLA, used in relation to rice. The plaintiff claimed that the defendants' use of HARA QILLA and the device of QILLA was intended to infringe its trademarks and cause confusion among consumers.
2. Phonetic and Visual Similarity Between Trademarks:
The learned Single Judge initially rejected the plaintiff's plea for an interim injunction, stating that there was no visual or phonetic similarity between the plaintiff's and defendants' marks. However, upon appeal, it was noted that the essential feature of the plaintiff's mark, the word 'QILLA,' was phonetically similar to the defendants' mark. The court emphasized that an unwary purchaser might not distinguish between the different prefixes (GOLDEN, LAL, NEELA, and HARA) and could be confused by the common word 'QILLA' and the similar device of a fort.
3. Honest and Concurrent Use of the Trademark:
The defendants claimed honest concurrent use of the mark HARA QILLA since 1978. However, the court found that the defendants failed to provide sufficient evidence, such as invoices or bills, to substantiate this claim. The court referenced the House of Lords' decision in Alex Pirie & Sons' Application, highlighting that mere knowledge of the plaintiff's mark and subsequent use does not constitute honest use if it leads to confusion.
4. Delay and Acquiescence in Seeking Legal Remedy:
The defendants argued that the plaintiff had delayed seeking legal remedy, which should defeat their claim for an injunction. The court rejected this argument, noting that the plaintiff had taken timely steps upon discovering the infringement, including sending a legal notice in 1986 and filing an opposition to the defendants' trademark application in 1989. The court referenced Hindustan Pencils Private Limited v. India Stationery Products Co., stating that delay alone does not bar the grant of an injunction if the plaintiff has a prima facie case.
5. Prima Facie Case for Grant of Injunction:
The court concluded that the plaintiff had established a prima facie case for infringement. The plaintiff's consistent use of the QILLA marks since 1962 and the likelihood of consumer confusion due to the defendants' similar mark warranted an interim injunction. The court emphasized that the plaintiff's reputation and goodwill were at risk due to the defendants' continued use of the infringing mark.
Conclusion:
The appeal was allowed, and the impugned order of the learned Single Judge was set aside. The defendants were restrained from using the HARA QILLA mark and device during the pendency of the suit. They were granted three months to dispose of existing stock using the infringing mark, subject to maintaining proper inventories and accounts. The trial court was requested to expedite the trial and dispose of the suit within one year.
-
2009 (5) TMI 982
Human Rights of Witnesses and Victims - Whether a person is qualified for protection from bodily injury and otherwise to assure the health, safety and welfare of that person - Gujarat Government constituted a five members Special Investigation Team ('SIT') - headed by Mr. R.K. Raghavan, former Director of the Central Bureau of Investigation - undertake inquiry/investigation - Petitions sought various reliefs including the transfer of some of the ongoing trials, and a reinvestigation/further investigation into the various incidents on the basis of which charges had been filed in these trials, this Court, in the first instance, granted a stay of these ongoing trials -
HELD THAT:- The reports of the SIT, in respect of each of these cases have now been received. We have considered the submissions made by Mr. Harish N. Salve, learned amicus curiae, Mr. Mukul Rohtagi, learned Counsel for the State, Ms. Indira Jaisingh and other learned Counsel.
It is an established fact that witnesses form the key ingredient in a criminal trial and it is the testimonies of these very witnesses, which establishes the guilt of the accused. It is, therefore, imperative that for justice to be done, the protection of witnesses and victims becomes essential, as it is the reliance on their testimony and complaints that the actual perpetrators of heinous crimes during the communal violence can be brought to book.
Further, in the case of Zahira v. State of Gujarat [2006 (3) TMI 729 - SUPREME COURT], while transferring what is known as the `Best Bakery Case', directed: "The State of Gujarat shall also ensure that the witnesses are produced before the concerned court, whenever they are required to attend them, so that they can depose freely without any apprehension of threat or coercion from any person. In case any witness asks for protection, the State of Maharashtra shall also provide such protection as deemed necessary, in addition to the protection to be provided for by the State of Gujarat.
Since the protection of a witness is a paramount importance it is imperative that if and when any witness seeks protection so that he or she can depose freely in court, the same has to be provided. It is therefore directed that if a person who is examined as a witness needs protection to ensure his or her safety to depose freely in a court he or she shall make an application to the SIT and the SIT shall pass necessary orders in the matter and shall take into account all the relevant aspects and direct such police official/officials as it considers proper to provide the protection to the concerned person.
It shall be the duty of the State to abide by the direction of the SIT in this regard. It is essential that in riot cases and cases involving communal factors the trials should be held expeditiously. Therefore, we request the Hon'ble Chief Justice of Gujarat High Court to designate court(s) in each district where the trial of the concerned cases are to be held. The Designated Courts shall take up the cases in question.
Taking into account the number of witnesses and the accused persons and the volumes of evidence, it is open to the High Court to designate more than one court in a particular district. Needless to say that these cases shall be taken up by the Designated Court on a day-to-day basis and efforts shall be made to complete the trial with utmost expedition. The SIT shall furnish periodic reports if there is any further inquiry/investigation. The State of Gujarat shall also file a status report regarding the constitution of the courts in terms of the directions to be given by the Hon'ble Chief Justice of the High Court within three months. The matter shall be listed further as and when directed by this Court.
The following directions are given presently:
(i) Supplementary charge sheets shall be filed in each of these cases as the SIT has found further material and/or has identified other accused against whom charges are now to be brought.
(ii) The conduct of the trials has to be resumed on a day-to-day basis - keeping in view the fact that the incidents are of January, 2002 and the trials already stand delayed by seven years. The need for early completion of sensitive cases more particularly in cases involving communal disturbances cannot be overstated.
(iii) The SIT has suggested that the six "Fast Track Courts" be designated by the High Court to conduct trial, on day-to-day basis, in the five districts.
(iv) It is imperative, considering the nature and sensitivity of these nominated cases, and the history of the entire litigation, that senior judicial officers be appointed so that these trials can be concluded as soon as possible and in the most satisfactory manner. In order to ensure that all concerned have the highest degree of confidence in the system being put in place, it would be advisable if the Chief Justice of the High, Court of Gujarat selects the judicial officers to be so nominated. The State of Gujarat has, in its suggestions, stated that it has no objection to constitution of such "fast track courts", and has also suggested that this may be left to Hon'ble the Chief Justice of the High Court.
(v) Experienced lawyers familiar with the conduct of criminal trials are to be appointed as Public Prosecutors. In the facts and circumstances of the present case, such public prosecutors shall be appointed in consultation with the Chairman of the SIT. The suggestions of the State Government indicate acceptance of this proposal. It shall be open to the Chairman of SIT to seek change of any Public prosecutor so appointed if any deficiency in performance is noticed.
If it appears that a trial is not proceeding as it should, and the Chairman of the SIT is satisfied that the situation calls for a change of the public prosecutor or the appointment of an additional public prosecutor, to either assist or lead the existing Public Prosecutor, he may make a request to this effect to the Advocate General of the State, who shall take appropriate action in light of the recommendation by the SIT.
(vi) If necessary and so considered appropriate SIT may nominate officers of SIT to assist the public prosecutor in the course of the trial. Such officer shall act as the communication link between the SIT and the Public Prosecutor, to ensure that all the help and necessary assistance is made available to such Public Prosecutor.
(vii) The Chairman of the SIT shall keep track of the progress of the trials in order to ensure that they are proceeding smoothly and shall submit quarterly reports to this Court in regard to the smooth and satisfactory progress of the trials.
(viii) The stay on the conduct of the trials are vacated in order to enable the trials to continue. In a number of cases bail had been granted by the High Court/Sessions Court principally on the ground that the trials had been stayed. Wherever considered necessary, the SIT can request the Public Prosecutor to seek cancellation of the bails already granted.
(ix) For ensuring of a sense of confidence in the mind of the victims and their relatives, and to ensure that witnesses depose freely and fearlessly before the court:
In case of witnesses following steps shall be taken:
(a) Ensuring safe passage for the witnesses to and from the court precincts.
(b) Providing security to the witnesses in their place of residence wherever considered necessary, and (c) Relocation of witnesses to another state wherever such a step is necessary.
(x) As far as the first and the second is concerned, the SIT shall be the nodal agency to decide as to which witnesses require protection and the kind of witness protection that is to be made available to such witness.
(xi) In the case of the first and the second kind of witness protection, the Chairman, SIT could, in appropriate cases, decide which witnesses require security of the paramilitary forces and upon his request same shall be made available by providing necessary security facilities.
(xii) In the third kind of a situation, where the Chairman, SIT is satisfied that the witness requires to be relocated outside the State of Gujarat, it would be for the Union of India to make appropriate arrangements for the relocation of such witness. The Chairman, SIT shall send an appropriate request for this purpose to the Home Secretary, Union of India, who would take such steps as are necessary to relocate the witnesses.
(xiii) All the aforesaid directions are to be considered by SIT by looking into the threat perception if any.
(xiv) The SIT would continue to function and carry out any investigations that are yet to be completed, or any further investigation that may arise in the course of the trials. The SIT would also discharge such functions as have been cast upon them by the present order.
(xv) If there are any matters on which directions are considered necessary (including by way of change of public prosecutors or witness protection), the Chairman of the SIT may (either directly or through the Amicus Curiae) move this Court for appropriate directions.
(xvi) It was apprehension of some learned Counsel that unruly situations may be created in court to terrorise witnesses. It needs no indication that the Court shall have to deal with such situations sternly and pass necessary orders. The SIT shall also look into this area.
(xvii) Periodic three monthly reports shall be submitted by the SIT to this Court in sealed covers.
List after four months.
-
2009 (5) TMI 981
Total stoppage of Mining Activity - Optimization of land and ecological degradation in an area admeasuring approximately 448 sq. kms. in the Aravalli Hill Range - Precautionary Principle - What should be the duration of such ban/stoppage? - HELD THAT:- In this Order what we are emphasising is extensive mining and not individual un-authorised mining because even in the case of former no steps to re-habilitate was ever taken. The result is that mining operations have been carried out on a disproportionate scale in the Aravalli Hill mainly in Gurgaon and Faridabad including Mewat in the State of Haryana. The satellite images indicate the devastation caused to the area by the extensive mining operations. Extraordinary situation demands extraordinary remedies. In the circumstances, we are of the view that mining operations should be immediately suspended in the above Area.
It is true that, complete ban was imposed on mining Aravalli hills vide Order dated 29/30.10.2002, which came to be modified by Order dated 16.12.2002 and it is equally true that, vide judgment in M.C. Mehta case [2004 (3) TMI 817 - SUPREME COURT], this Court observed that it was not suggesting a complete ban on mining operations so long as it is possible to undertake mining operations on the sustainable development principle (see para 57). At the same time, in paras 89 and 96(6) of the judgment dated 18.3.2004 this Court specifically suggested that if degradation of environment continues and reaches the stage of no return, this Court may consider closure of mining activities. In other words, a gateway was provided for this Court to impose the ban in future if degradation of environment becomes irreversible.
We make it clear that by this Order the ban will not be confined only to 5 km. but it would cover the entire Aravalli Hill range within the State of Haryana in which mining operations are being carried out. (i.e. area admeasuring approximately 448 sq. kms. falling in the Districts of Faridabad and Gurgaon including Mewat.)
Environment and ecology are national assets. They are subject to inter-generational equity. Time has now come to suspend all mining in the above Area on Sustainable Development Principle which is part of Articles 21, 48A and 51A(g) of the Constitution of India. In fact, these Articles have been extensively discussed in the judgment in M.C. Mehta's case (supra) which keeps the option of imposing a ban in future open. Mining within the Principle of Sustainable Development comes within the concept of "balancing" whereas mining beyond the Principle of Sustainable Development comes within the concept of "banning". It is a matter of degree. Balancing of the mining activity with environment protection and banning such activity are two sides of the same principle of sustainable development. They are parts of Precautionary Principle.
At this stage, we may also note that under Section 13(2)(qq) of 1957 Act, Rules have been framed for rehabilitation of flora and other vegetation destroyed by reason of any prospecting or mining operations. Under Section 18 of the 1957 Act, Rules have been framed for conservation and systematic development of minerals in India and for the protection of environment by preventing or controlling pollution caused by prospecting or mining operations which also form part of Mineral Concession Rules, 1960 and Mineral Conservation and Development Rules, 1988.
Under Rule 27(1)(s)(i) of Mineral Concession Rules, 1960 every lessee is required to take measures for planting of trees not less than twice the number destroyed by mining operations. Under Mineral Conservation and Development Rules, 1988, vide Rule 34, mandatory provisions for reclamation and rehabilitation of lands are made for every holder of prospecting licence or mining lease to be undertaken and that work has to be completed by the lessee/licensee before abandoning the mine or prospect. Similarly, under Rule 37 of Mineral Conservation and Development Rules, 1988 the lessee/licensee has to calibrate the air pollution within permissible limits specified under EP Act, 1986 as well as Air (Prevention and Control of Pollution) Act, 1981.
We hereby suspend all mining operations in the Aravalli Hill Range falling in the State of Haryana within the area of approximately 448 sq. kms. in the Districts of Faridabad and Gurgaon including Mewat till Reclamation Plan duly certified by State of Haryana, MoEF and CEC is prepared in accordance with the statutory provisions contained in various enactments enumerated as well as in terms of the Rules framed thereunder and the Guidelines. The said Plan shall state what steps are needed to be taken to rehabilitate (including reclamation) followed by Status Reports on steps taken by the Authorities pursuant to the said Plan.
-
2009 (5) TMI 980
Power of a court u/s 319 - application of prosecution u/s 319 of the Code - summon issued for trial of offences u/s 148/302 r/w Section 149 of the Indian Penal Code - HELD THAT:- Indisputably, before an additional accused can be summoned for standing trial, the nature of the evidence should be such which would make out grounds for exercise of extraordinary power. The materials brought before the court must also be such which would satisfy the court that it is one of those cases where its jurisdiction should be exercised sparingly.
The observation of this Court in Municipal Corporation of Delhi v. Ram Kishan Rastogi [1982 (12) TMI 218 - SUPREME COURT] and other decisions following the same is that mere existence of a prima facie case may not serve the purpose. Different standards are required to be applied at different stages. Whereas the test of prima facie case may be sufficient for taking cognizance of an offence at the stage of framing of charge, the court must be satisfied that there exists a strong suspicion. While framing charge in terms of Section 227 of the Code, the court must consider the entire materials on record to form an opinion that the evidence if unrebutted would lead to a judgment of conviction. Whether a higher standard be set up for the purpose of invoking the jurisdiction u/s 319 of the Code is the question. The answer to these questions should be rendered in the affirmative. Unless a higher standard for the purpose of forming an opinion to summon a person as an additional accused is laid down, the ingredients thereof, viz., (i) an extraordinary case and (ii) a case for sparingly exercise of jurisdiction, would not be satisfied.
We, therefore, are of the opinion that the impugned judgment cannot be sustained which is set aside accordingly and the matter is remitted to the learned Sessions Judge for consideration of the matter afresh.
The appeals are allowed with the aforementioned directions.
-
2009 (5) TMI 979
The Delhi High Court passed an interim order on 28.07.2008, which is ongoing. The parties in the suit have made an interim arrangement in an agreement dated 15.05.2009. The interim order from 28.07.2008 is replaced by the terms of the agreement until the decision of the applications related to interim relief. The applications are listed for a hearing on 30.07.2009.
-
2009 (5) TMI 978
Issues Involved:
1. Legality of the deed of assignment executed by the State Bank of India in favor of Kotak Mahindra Bank Ltd.
2. Compliance with the guidelines issued by the Reserve Bank of India.
3. Validity of the assignment under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
4. Adequacy of consideration for the assignment.
5. Fraud and misrepresentation in obtaining the deed of assignment.
6. Maintainability of the writ petition under Article 226 of the Constitution of India.
7. Rights and obligations of the guarantor and principal borrower.
Issue-wise Detailed Analysis:
1. Legality of the Deed of Assignment:
The petitioner challenged the deed of assignment dated 16.1.2006 executed by the State Bank of India (SBI) in favor of Kotak Mahindra Bank Ltd., alleging it was done without proper notice and was less than the amount deposited by the Helios Company. The court found that the assignment was executed in an arbitrary and illegal manner, selling the company's assets for a meager amount of Rs. 39.63 lakhs, even though Rs. 47.50 lakhs was already deposited by Helios Company with SBI.
2. Compliance with RBI Guidelines:
The court noted that the RBI issued guidelines on 13.7.2005 for the purchase/sale of non-performing assets. However, these guidelines are executive instructions and do not have statutory force. The court held that the SBI should have followed the statutory enactments rather than the RBI guidelines, especially when the recovery proceedings were already underway under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
3. Validity under Securitisation Act:
Kotak Mahindra Bank Ltd. was not registered as an Asset Reconstruction Company (ARC) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The court found that the assignment was invalid as Kotak Mahindra Bank Ltd. falsely claimed to be an ARC in the affidavit filed before the Collector of Stamps, Alibaug, Maharashtra.
4. Adequacy of Consideration:
The court observed that the assignment deed was executed for Rs. 39.63 lakhs, which was significantly lower than the Rs. 195 lakhs offered by Helios Company for a one-time settlement. This was considered inadequate and arbitrary, especially since the company's assets were valued at Rs. 141 lakhs by SBI's valuers.
5. Fraud and Misrepresentation:
The court found that Kotak Mahindra Bank Ltd. committed fraud and misrepresentation by claiming to be an ARC and stating that the assignment was executed under the Securitisation Act. This false statement was used to evade stamp duty and mislead the authorities, rendering the deed of assignment void.
6. Maintainability of the Writ Petition:
The court held that the writ petition was maintainable under Article 226 of the Constitution of India. The petitioner, being the Director and Guarantor of Helios Company, had the right to challenge the arbitrary and illegal actions of SBI and Kotak Mahindra Bank Ltd. The court rejected the argument that the matter was purely contractual and should be dealt with by the Debt Recovery Tribunal.
7. Rights and Obligations of the Guarantor and Principal Borrower:
The court emphasized that the position of a guarantor is co-extensive with that of the principal borrower. Since the initial agreement was amended without the guarantor's consent, the petitioner was discharged of his liability. The court directed SBI to accept the Rs. 195 lakhs deposited by Helios Company as a one-time settlement and release the charge on the company's property.
Conclusion:
The court allowed the writ petition, quashed the deed of assignment dated 16.1.2006, and directed SBI to accept the Rs. 195 lakhs deposited by Helios Company towards the one-time settlement. The court also ordered SBI to release the charge on the property of Helios Company, ensuring that the actions of public financial institutions are fair, just, and equitable.
-
2009 (5) TMI 977
Justiciability of the recommendations of the Chief Justice of Madras High Court for appointment of Shri N. Kannadasan (the appellant) as the President of the State Consumer Disputes Redressal Commission (`the Commission') in terms of Section 16 of the Consumers Protection Act, 1986 (`the Act') question involved herein - Interpretation of sec 16 of the Act - appellant was an Advocate practicing in the Madras High Court He was appointed as an Additional Judge of the said Court for a period of two years - During his tenure as an Additional Judge a representation was made from the Members of the Bar alleging lack of probity against him - he was not appointed as a Permanent Judge as a result whereof demitted his office - He resumed practice in Madras High Court - the Government of India by its letter replied that he be treated at par with the retired Judges of the High Court for the purposes of obtaining medical benefits but would not be entitled to any pensionary benefits - In the meantime on or about, he was appointed as an Additional Advocate General of the State of Madras - Appellant name was included in the list of retired Judges -
Before the post of President of the Commission fell vacant, the Government of Tamil Nadu requested the Registrar General of the High Court to forward names of eligible candidates for appointment as President of the Commission - The said post, however, fell vacant only - The Government of Tamil Nadu appointed Shri Kannadasan as the president of the Commission -
HELD THAT:- The words "is or has been" refer to the person holding the office of a Judge or who has held the said office. It may be said to have the same meaning so far as eligibility is concerned.
Suitability of a person to be considered for appointment as a Chairman of a State Commission having regard to the provisions contained in Article 217 of the Constitution of India has been assumed by this Court to be available for the eligible persons who are retired Judges which would mean that those Judges who had retired from service without any blemish whatsoever and not merely a person who "has been a judge".
If the Collegium of the Supreme Court Judges including the Chief Justice of India, which is a constitutional authority in the matter of appointment of Judges and re-appointment of Additional Judges did not find him eligible, it would be beyond anybody's comprehension as to how Chief Justice of a High Court could find him eligible/suitable for holding a statutory post requiring possession of qualification of holder of a constitutional office. If no recommendation by the Chief Justice is constitutionally permissible, the question of the eligibility criteria being not satisfied certainly is relevant.
We have perused the records ourselves. We are satisfied that it was necessary for the Chief Justice of the High Court to apprise himself the reasons with reference to the backdrop of events as to why the collegium of the Supreme Court of India did not find the appellant to be a fit person for re-appointment or made a Permanent Judge. Names of eight persons were recommended together. A large number of vacancies existed. Six of them were recommended to be appointed as Permanent Judges.
We say so for more than one reason. Section 16(1)(b)(iii) in relation to appointment of a Member of the Commission lays down inter alia the qualifications of a person of ability, integrity and standing. If in the case of a Member, ability, integrity and standing are essential qualifications, it is difficult to perceive why the same qualification is not required for appointment as Chairman of the Commission within the meaning of Clause (a) thereof. The said criteria was not necessary to be expressly stated as the same could be presumed as recommendation in that behalf, to be made by the Chief Justice of a High Court.
CONSULTATION - Whether the consultative process required to be gone into for the purpose of appointment of Chairman, State Commission was complied with - Appointment to the post of President of a State Commission must satisfy not only the eligibility criteria of the candidate but also undertaking of the process of consultation.
The consultative process brings within its ambit a heavy duty so as to enable the holder of a high office like Chief Justice to know the same. It must be shown that he had access and in fact was aware of the fact that the appellant had not been made a Permanent Judge. The matter might have been different if such a fact had been taken into consideration.
If a decision for the purpose of making a recommendation in terms of proviso appended to Section 16 necessitates looking into all relevant materials, non- consideration of such a vital fact, in our opinion, cannot be ignored as the opinion is a subjective one and not based on objective criteria. We are more than sure that had the records been brought to his notice, the Chief Justice would not have made the recommendation.
Judicial Review - Judicial review in our constitutional scheme itself is a part of its basic structure. Decisions whether arrived at by the Executive or the Judiciary are subject to judicial review. We have noticed hereinbefore that the Madras High Court maintains a register of retired Judges. Attention of the Chief Justice was drawn only to the said register. Names of five Judges were proposed.
It will also not be correct to contend that as non-appointment of the appellant did not cast a stigma, such a fact was not necessary to be noticed. We have noticed S.P. Gupta [1981 (12) TMI 165 - SUPREME COURT] that where facts are brought to the notice of the court, whether by way of affidavit by the constitutional authorities or by placing before the court the entire material, it is permissible to delve deep into the matter.
Once, thus, decision making process had been undergone in terms of the constitutional scheme in its correct perspective, judicial review may not be maintainable.
QUO WARRANTO - Issuance of a writ of quo warranto is a discretionary remedy. Authority of a person to hold a high public office can be questioned inter alia in the event an appointment is violative of any statutory provisions.
We have found hereinbefore that the appellant was not eligible for appointment of a public office and in any event the Processual machinery relating to consultation was not fully complied.
PANEL - We have noticed hereinbefore that the State of Tamil Nadu in its letter dated 30th May, 2008 addressed to the Registrar of the Madras High Court while intimating that a vacancy had arisen in the post of President, State Commission, made a request to him to send a panel of eligible names of retired High Court Judges after approval by Hon'ble the Chief Justice of the High Court of Madras for its consideration therefore.
Pursuant thereto or in furtherance thereof, the Chief Justice only forwarded a panel of three Judges. The Executive Government of the State made a final choice therefrom.
Having regard to processual mandate required for the purpose of appointment to the post of Chairman, State Commission, the Executive Government of the State cannot have any say whatsoever in the matter. The process for preparation of a panel requested by the Executive Government of the State and accepted by the Chief Justice of the High Court, in our opinion, was impermissible in law. If the State is granted a choice to make an appointment out of a panel, as has been done in the instant case, the primacy of the Chief Justice, as opined by this Court in the aforementioned decisions, would stand eroded.
It will bear repetition to state that even for the said purpose the procedure laid down by this Court in Supreme Court Advocates-on-Record Association (supra) as also the Special Reference, for recommendation of the name of the High Court Judge, as contained in Article 217 of the Constitution of India, should be followed. It is accepted at the Bar that by reason of judicial constitutional interpretation of Articles 217 and 124 of the Constitution of India, the procedures laid down thereunder has undergone a drastic change. A recommendation instead and in place of Chief Justice of India must emanate from the Collegium. However, for the purpose of making recommendation in terms of Section 16(1) the opinion of the Chief Justice alone shall prevail.
It is true that if a panel of names is suggested and the State makes an appointment of one out of the three, the question of meeting of mind between the Chief Justice and the Executive would not arise but there cannot be any doubt whatsoever that by reason thereof the ultimate authority to appoint would be the Executive which in view of the decisions of this Court would be impermissible.
We have, therefore, no hesitation in holding that the process adopted by the High Court and the Chief Justice in asking for a panel of name and sending the same was not legally permissible.
Conclution - The summary of our discussions is as under:
(i) Judicial review although has a limited application but is not beyond the pale of the superior judiciary in a case of this nature.
(ii) The superior courts may not only issue a writ of quo warranto but also a writ in the nature of quo warranto. It is also entitled to issue a writ of declaration which would achieve the same purpose.
(iii) For the purpose of interpretation of Constitution in regard to the status of an Additional Judge, the word "has been" would ordinarily mean a retired Judge and for the purpose of examining the question of eligibility, not only his being an Additional judge but also a qualification as to whether he could continue in the said post or he be appointed as an acting or ad hoc judge, his suitability may also be taken into consideration.
(iv) Section 16 of the Act must also be given a contextual meaning. In a case of this nature, the court having regard to the wider public policy as also the basic feature of the Constitution, viz., independence and impartiality of the judiciary, would adopt a rule of purposive interpretation instead of literal interpretation.
(v) Due consultative process as adumbrated by this Court in various decisions in this case having not been complied with, appointment of Shri Kannadasan was vitiated in law.
(vi) The Government of the State of Tamil Nadu neither could have asked the High Court to send a panel of names of eligible candidates nor the Chief Justice of the High Court could have sent a panel of names of three Judges for appointment to the post of Chairman, State Commission.
Before parting, however, we would place on record that Mr. Ramamurthy, learned Counsel on 5.5.2009 filed a memorandum before us stating that the appellant Shri N. Kannadasan has submitted his resignation. It is, however, not stated that the said offer of resignation has been accepted by the State of Tamil Nadu. Moreover, there is no prayer for withdrawal of the special leave petition.
We, in the aforementioned situation, are proceeding to pronounce our judgment. We must also place on record our deep appreciation for the learned Counsel for the parties and in particular Shri G.E. Vahanvati, the learned Solicitor General of India for rendering valuable assistance to us.
-
2009 (5) TMI 976
Issues involved:
The judgment involves the invocation of Section 9 of the Arbitration and Conciliation Act, 1996 for seeking an interim relief of injunction against the respondents regarding a termination letter.
Details of the judgment:
Issue 1: Invocation of Section 9 of the Arbitration Act
The Petitioner invoked Section 9 of the Arbitration Act seeking an interim relief of injunction against the respondents regarding a termination letter dated 13.04.2009. The contract in question was for the construction of a carriageway on a National Highway project in Tamil Nadu. Disputes arose due to delays in handing over land and other related aspects. Despite attempts to settle disputes through correspondence, no resolution was reached.
Issue 2: Consideration of Termination Notice
The Court considered the termination notice, the clauses of the agreements, and the parties' submissions. It noted the disputes between the parties, including delays and the invocation of force majeure clause. The Court emphasized that the merit of the disputes should be examined in detail by the Arbitral Tribunal, as it involves a commercial contract where parties must decide and take appropriate actions.
Issue 3: Rejection of Interim Relief
The Court rejected the petitioner's plea for an interim injunction, stating that the respondents, as the decision-makers, had the right to terminate the contract based on available material. The Court highlighted the importance of completing the project within stipulated time and the need for detailed inquiry and trial to resolve the disputes. It emphasized that the petitioner could seek compensation or damages through arbitration but was not entitled to the relief of injunction as requested.
In conclusion, the Court rejected the ad-interim relief sought by the petitioner and scheduled the matter for further proceedings on a later date.
-
2009 (5) TMI 975
Issues Involved:
1. Admissibility of oral evidence u/s 32(1) of the Evidence Act.
2. Applicability of Section 6 of the Evidence Act.
3. Conviction under Section 498A, IPC.
Summary:
1. Admissibility of Oral Evidence u/s 32(1) of the Evidence Act:
The primary issue was whether the oral evidence of witnesses about what the deceased had told them against the accused regarding the treatment meted out to her is admissible u/s 32(1) of the Evidence Act to sustain a conviction under Section 498A, IPC. The court referred to the legal position established in Sharad Birdhichand Sarda v. State of Maharashtra, which states that Section 32 is an exception to the rule of hearsay and makes admissible the statement of a person who dies, provided the statement relates to the cause of death or circumstances leading to the death. However, the court concluded that the statements made by the deceased to her brothers (PW-4 and PW-5) did not relate to the cause of her death or any circumstances of the transaction which resulted in her death, as her death was accidental and not homicidal or suicidal. Therefore, such evidence is inadmissible under Section 32(1) of the Evidence Act.
2. Applicability of Section 6 of the Evidence Act:
The court also examined whether Section 6 of the Evidence Act, which deals with the relevancy of facts forming part of the same transaction, could be applied. Section 6 allows hearsay evidence if it is almost contemporaneous with the acts and there is no interval for fabrication. The court referred to the decision in Sukhar v. State of U.P., which states that for hearsay evidence to be admissible under Section 6, it must be substantially contemporaneous with the fact and not merely a narrative of a past event. The court found that the statements made by the deceased to PW-4 and PW-5 did not meet these criteria and thus, Section 6 was not applicable.
3. Conviction under Section 498A, IPC:
The trial court had convicted the accused under Section 498A, IPC, based on the testimonies of PW-4 and PW-5, who stated that the deceased had told them about the torture and harassment she faced. The High Court upheld this conviction. However, the Supreme Court found that the evidence provided by PW-4 and PW-5 was inadmissible under Section 32(1) of the Evidence Act and that there was no other provision under which the statement of a dead person could be looked into in evidence. Consequently, the court held that there was no admissible evidence to sustain the conviction under Section 498A, IPC.
Conclusion:
The Supreme Court allowed the appeal, setting aside the conviction and sentence passed on the appellant under Section 498A, IPC, and ordered the release of the accused if not required in any other case.
-
2009 (5) TMI 974
Issues Involved:
1. Maintainability of the suit.
2. Existence and validity of the arbitration agreement.
3. Jurisdiction of the arbitral tribunal.
4. Reliefs sought by the plaintiff.
Summary:
1. Maintainability of the Suit:
The court expressed doubts about the maintainability of the suit, referencing the case of Roshan Lal Gupta v. Sh. Parasram Holdings Pvt. Ltd., where it was held that a suit for declaration that an agreement containing an arbitration clause was void and for perpetual injunction restraining arbitration proceedings did not lie. The court emphasized that the Arbitration and Conciliation Act, 1996, particularly Sections 5 and 16, confers the power on the arbitral tribunal to rule on its own jurisdiction, including the existence or validity of the arbitration agreement.
2. Existence and Validity of the Arbitration Agreement:
The plaintiff argued that there was no written arbitration agreement and that the brokers involved were agents of the defendant, not the plaintiff. The court noted that whether the brokers were agents of the plaintiff or the defendant and whether there was any written agreement involving an arbitration clause should be determined by the arbitral tribunal, not the court.
3. Jurisdiction of the Arbitral Tribunal:
The plaintiff contended that Sections 5 and 16 of the Arbitration Act apply only to domestic arbitration and not to international commercial arbitration. However, the court referred to Bhatia International v. Bulk Trading S.A., which held that the provisions of Part I of the Arbitration Act apply to all arbitrations, including international commercial arbitrations, unless expressly excluded by the parties. The court also cited Venture Global Engineering v. Satyam Computers Services Ltd., which upheld the non-maintainability of a suit challenging an arbitral award, suggesting that such matters should be addressed within the arbitration framework.
4. Reliefs Sought by the Plaintiff:
The plaintiff sought declarations that the initiation of arbitration proceedings was null and void, that the arbitral tribunal lacked jurisdiction, and that the sales contracts were void. The plaintiff also sought an injunction to restrain the defendants from proceeding with arbitration. The court held that these reliefs fall within the domain of the Specific Relief Act and are discretionary, available only when there is no alternative efficacious remedy. Since the plaintiff could raise these issues before the arbitral tribunal, the court found the suit to be not maintainable.
Conclusion:
The suit was dismissed as not maintainable, with the court emphasizing that the issues raised by the plaintiff should be addressed within the arbitration proceedings, as per the provisions of the Arbitration and Conciliation Act, 1996.
-
2009 (5) TMI 973
Commission of Offence Punishable u/s 409, 420, 461 and 468 IPC - framing of wrong charges - appropriate questions not put while the accused was examined u/s 313 - Question of authority of the person granting sanction - nature of power exercised by the Court u/s 197 - Ld Counsel for the appellant submitted that no part of the alleged offence is protected u/s 197 of the Code, and the effect of Section 464 of the Code has to be seen.
Prior to examining whether the Courts below committed any error of law in discharging the accused it may not be out of place to examine the nature of power exercised by the Court u/s 197 of the Code and the extent of protection it affords to public servant, who apart, from various hazards in discharge of their duties, in absence of a provision like the one may be exposed to vexatious prosecutions.
HELD THAT:- For instance a public servant is not entitled to indulge in criminal activities. To that extent the Section 197 has to be construed narrowly and in a restricted manner. But once it is established that act or omission was done by the public servant while discharging his duty then the scope of its being official should be construed so as to advance the objective of the Section in favour of the public servant. Otherwise the entire purpose of affording protection to a public servant without sanction shall stand frustrated. For instance a police officer in discharge of duty may have to use force which may be an offence for the prosecution of which the sanction may be necessary.
But if the same officer commits an act in course of service but not in discharge of his duty then the bar u/s 197 of the Code is not attracted. To what extent an act or omission performed by a public servant in discharge of his duty can be deemed to be official was explained by this Court in Matajog Dobey v. H.C. Bhari [1955 (10) TMI 3 - SUPREME COURT].
If on facts, it is prima facie found that the act or omission for which the accused was charged had reasonable connection with discharge of his duty then the act must be held as official to which applicability of Section 197 of the Code cannot be disputed.
The contention of the respondent that for offences u/s's 406 and 409 r/w Section 120B of IPC sanction u/s 197 of the Code is a condition precedent for launching the prosecution is equally fallacious. It was held in Harihar Prasad, etc. v. State of Bihar [1971 (9) TMI 186 - SUPREME COURT] as follows:
''As far as the offence of criminal conspiracy punishable u/s 120B, r/w Section 409, IPC is concerned and also Section 5(2) of the Prevention of Corruption Act is concerned, they cannot be said to be of the nature mentioned in Section 197 of the CrPC. To put it shortly, it is no part of the duty of a public servant, while discharging his official duties, to enter into a criminal conspiracy or to indulge in criminal misconduct. Want of sanction u/s197 of the CrPC is, therefore, no bar.''
The error in charge also does not vitiate the order. Finally, it is submitted that the question relating to Section 313 of the Code loses significance when considered in the background as to whether there was any need for sanction.
Apparently the first Appellate Court and the High Court have not kept this aspect in view.
As the provision itself mandates that no finding sanction or order by a court of competent jurisdiction becomes invalid unless it is so that a failure of justice has in fact been occasioned because of any error omission or irregularity in the charge including in misjoinder of charge.
Obviously, the burden is on the accused to show that in fact failure of justice has been occasioned. We set aside the impugned order of the High Court and direct that leave to appeal shall be granted and the appeal shall be heard on merits. We make it clear that we have not expressed any opinion on the merits of the case which shall be decided in the appeal before the High Court.
The appeal is allowed.
-
2009 (5) TMI 972
Issues Involved:
1. Allegations of oppression and mismanagement.
2. Validity of the power of attorney.
3. Legality of the board and general meetings held on May 18, 2006.
4. Legality of the increase in authorized share capital and allotment of shares.
5. Shifting of the registered office.
6. Compliance with statutory notice requirements.
7. Representation on the board of directors.
Detailed Analysis:
1. Allegations of Oppression and Mismanagement:
The petitioner alleged that the respondents engaged in acts of oppression and mismanagement, including amending the registered address of the company without notice, increasing the authorized share capital, and allotting shares to gain majority control. The petitioner contended that these actions were taken without proper notice or intimation, violating the law and Articles of Association (AoA).
2. Validity of the Power of Attorney:
The respondents challenged the validity of the power of attorney held by Mrs. Pushpa Bansal, claiming it was merely attested by a notary public and thus defective. The Board found that the power of attorney was valid, noting certification by the notary public and a register maintained in the jail showing the notary's visit. The Board dismissed the preliminary objections, holding that the power of attorney was sufficient to confer authority to institute the petition.
3. Legality of the Board and General Meetings Held on May 18, 2006:
The petitioner argued that the meetings were held without proper notice and in violation of statutory requirements. The statutory notice for the extraordinary general meeting was given only eight days prior, against the requirement of 21 days' clear notice as per Section 171 of the Companies Act. The Board found that no proper notice was served, and the resolutions passed at these meetings were illegal and invalid.
4. Legality of the Increase in Authorized Share Capital and Allotment of Shares:
The petitioner contended that the increase in authorized share capital and subsequent allotment of shares to respondent No. 4 were done with mala fide intent to usurp control of the company. The Board found that the increase in capital was not for bona fide needs but for extending undue benefit to one individual. The allotment of shares to respondent No. 4 was declared illegal and canceled.
5. Shifting of the Registered Office:
The petitioner argued that the registered office was shifted with mala fide intent. The Board found that the shifting of the registered office was done without proper notice and was illegal. The registered office was ordered to be restored to its original location.
6. Compliance with Statutory Notice Requirements:
The Board noted that the company failed to comply with statutory notice requirements for meetings. The certificate of posting provided by the respondents was found to be unreliable, and no corroborative evidence such as a dispatch register or books of account was produced. The Board held that the meetings held without proper notice were invalid.
7. Representation on the Board of Directors:
The petitioner argued that the respondents appointed their sympathizers to the board and excluded the petitioner's group from management. The Board found that the respondents' actions were burdensome and oppressive, and ordered equal representation for the petitioner's group on the board.
Conclusion:
The Company Law Board found in favor of the petitioner, holding that the actions of the respondents were oppressive and constituted mismanagement. The resolutions passed at the board and general meetings on May 18, 2006, were declared illegal and set aside. The allotment of shares to respondent No. 4 was canceled, and the registered office was ordered to be restored to its original location. The petitioner's group was granted equal representation on the board, and the bank accounts of the company were to be operated with joint signatures from both groups. The petition was disposed of with no order as to costs.
-
2009 (5) TMI 971
The Supreme Court allowed the appeal and set aside the High Court's order that quashed a notice issued by a bank under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The writ petition filed before the High Court was dismissed.
-
2009 (5) TMI 970
The Supreme Court dismissed the Civil Appeal after condoning the delay. (Citation: 2009 (5) TMI 970 - SC)
........
|
9911796707
