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Showing 41 to 60 of 1569 Records
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2023 (7) TMI 1532
Direction to respondents 1 to 5 to disburse the service tax, interest and penalty waiver - HELD THAT:- This Court is of the considered opinion that appropriate authority ought to consider and pass orders.
Hence, the 1st respondent are directed to consider the case of the petitioners therein and pass orders within a period of twelve weeks from the date of receipt of a copy of this order.
Petition allowed.
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2023 (7) TMI 1531
In the case before the Rajasthan High Court, presided over by Hon'ble Mr. Justice Inderjeet Singh, the petitioner, represented by Mr. R.D. Rastogi, ASG, argued against the jurisdiction of the National Company Law Tribunal (NCLT) Mumbai Bench regarding a matter under the Prevention of Money Laundering Act (PMLA). The petitioner cited precedents from the Delhi High Court (Rajiv Chakraberty Resolution Professional of EEIL Vs. Directorate of Enforcement, 2022 SCC Online DEL 3703) and the Madras High Court (Deputy Director, ED Vs. Asset Reconstruction Company, 2020 SCC Online MAD 28090) to support their position. The petitioner contended that the proceedings under the PMLA are pending before the PMLA Appellate Tribunal, which has already issued a status quo order concerning the disputed property. The petitioner also noted that a previous writ petition (D.B. Civil Writ Petition No. 18091/2019) was dismissed as withdrawn, and the respondents approached the NCLT Mumbai Bench without including the petitioner, despite the proceedings being registered in Jaipur. Consequently, the court issued a notice to the respondents, returnable in six weeks, and stayed the operation of the NCLT Mumbai order dated 24.02.2022 and any further proceedings related to it.
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2023 (7) TMI 1530
Money Laundering - provisional attachment order - invocation of Section 8(4) of PMLA 2002, not as a rule but as an exception - validity of notice - notice for possession has been issued without giving any exceptional reasons (for eviction) rather caused as a rule - violation of principles of natural justice - reliance placed in the of OPTO CIRCUIT INDIA LTD. VERSUS AXIS BANK & OTHERS [2021 (2) TMI 117 - SUPREME COURT] to emphasize that reasons needs to be given in the notice and cannot be supplemented.
Challenge to notice - HELD THAT:- The notice for possession has been questioned by the appellant even on the ground that no reason has been given therein, whereas administrative order should disclose the reason. The reference of the judgement of Apex Court in the case of OPTO Circuits (India) Ltd. v. Axis Bank has been given where it was held that the reasons for passing of an order shall be given therein and cannot be substituted - It is found that the order impugned therein was containing reasons but additional reasons were given before the court for the first time. Such a practice was not accepted. The case in hand is not of similar nature. In this case, there is no order under challenge but a notice under Section 8 (4) of the Act of 2002 which does not direct for giving reasons in the notice for possession. In fact, the provision aforesaid allow possession of the property forthwith on passing order of confirmation of provisional attachment order.
The stage for taking possession comes forthwith on the confirmation of order of provisional attachment and it does not mandate assignment of reasons therein for causing possession. The notice otherwise does not require a reply from the effected person so as to assign the reasons for its reply. The appellants have failed to make a differentiation between the administrative order and the notice under the statute not requiring assessment of reasons for taking possession - In fact, it is in view of the judgement of Apex Court in the case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)] that provision of Section 8 (4) cannot be invoked as a course but as an exception. The said judgment does not mandate assignment of the reason in the notice itself. What has been ruled is that the possession should not be sought as a course but as an exception. In such circumstance notice was not required to contain the reason for taking possession of the attached property. The reasons can be supplied by the respondents as and when the notice is questioned by the aggrieved party.
Confirmation of provisional attachment order - HELD THAT:- The possession of the property may be taken at the stage of confiscation but in the case of exceptional nature, it can be after confirmation of provisional attachment order. On strictly going by the Section 8 (4), the right of the respondents to invoke aforesaid provision comes in existence forthwith upon confirmation of the provisional attachment order. The statutory provision cannot be ignored, even by the court. In fact, possession at the stage of confiscation of the property remains automatic because on confiscation of the property, it vests in the government and would be along with the possession and therefore, Section 8 (4) was brought on the statute to allow possession of the property even prior to confiscation and the said provision has been upheld by Apex Court where its constitutional validity was challenged. Once the provision is held to be constitutionally valid, a view contrary or offending the statutory provision cannot be taken. Thus, the appellant cannot be agreed that possession of the property can be taken only on confiscation. It would be rewriting Section 8 (4) of the Act though possession after confirmation of the provisional attachment order would not be as a rule but an exception.
What would be an exception? - HELD THAT:- The principle established is that possession post-confirmation of provisional attachment is permissible as an exception, provided exceptional reasons are demonstrated - The present case being a case of organised crime, the exception exist to invoke Section 8 (4) to take possession of the property.
Conduct of the appellant - HELD THAT:- As per the statement made by them, the purchase of the property is shown to be out the funds earned in cash and not out of the proceeds of crime. It is stated that whatever fund was taken from ABG International Pvt. Ltd., was not out of the bank loan taken by ABG Shipyard Ltd., but out of their own earnings in cash. The fact could not be substantiated and, further with regard to the loan amount said to have been re-paid to the company through a notarized assignment deed, it is stated by the Notary that there is no entry of the said document in the register and that it bears an odd no. 12-A which can happen only in a case of interpolation. The respondents have successfully shown that even the alleged re-payment through the assignment deed is out of the funds of associated companies of ABG Shipyard by routing the proceeds of crime and not after taking loan from the bank or earning for its re-payment.
Conclusion - The money trail is enough to show that the proceeds of crime was diverted for purchase of property in question and thereby the flat no. 4-C was purchased out of the proceeds of crime. The possession of the attached property should not be taken by invoking Section 8(4) of the Act of 2002 as a rule but can be as an exception. The appellant's application for an interim order dismissed - The notice for possession upheld.
Application dismissed.
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2023 (7) TMI 1529
Contravention of the provisions of Section 10 (6) r/w 10 (5) of FEMA - charges for 10 remittances made abroad - HELD THAT:- Contravention of the provisions of Section 10 (6) r/w 10 (5) of FEMA further r/w Regulation 6(1) of Foreign Exchange Management (Realization, Repatriation and Surrender of Foreign Exchange) Regulations 2000 by M/s. Akzo Nobel India Ltd. earlier known as M/s. ICI India Ltd. are established. In so far as the three Directors viz Sarv/Shri Nihal Kaviratne, Amit Jain & Sanjiv Mishra are concerned the Learned Counsel for the Appellants has submitted Form 32 under the Companies Act which clearly show their appointments have been made in 2009 & 2010 that is much after the impugned transactions had occurred. Form 32 in the case of Shri R. Gopalakrishnan shows that he vacated office as an Additional Director and reappointed as a Director w.e.f. 22.07.1999.
In the appeal, pleading has been made that Shri R. Gopalakrishnan was nonexecutive and independent Director who was not involved in the day to day affairs of the Company. Adjudicating Authority has acknowledged that the Show Cause Notice has failed to spell out clearly the role of the Directors. Therefore, the aforementioned charges established for the Company fail to hold good under Section 42 of FEMA 1999 against the aforementioned four Directors of the Company.
While the charges against the Appellant Company stand established, in view of the fact that the Company has been making regular imports of substantial amounts and it is only in miniscule percentage of cases that the Company failed to submit proof of imports against 10 remittances, in the interest of justice the penalty under Section 13(1) of FEMA 1999 is reduced to Rs. 5,00,000/- (Rupees Five Lakhs Only). The amount already paid by the Appellant Company as pre-deposit of penalty vide demand draft dated 27.02.2018 is to be fully adjusted against the reduced penalty. Since, the charges under Section 42 of FEMA 1999 do not hold good against the four aforementioned Directors of the Appellant Company, the penalty of Rs. 1,00,000/- imposed on each of them under the impugned Adjudication Order dated 30.01.2015 is quashed.
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2023 (7) TMI 1528
Claim for credit in respect of advance tax paid by a declarant under the Scheme, 2016 - character of the advance tax - Income Declaration Scheme, 2016 - Is advance tax entitled to the same dispensation as is given to the TDS? - Can a legally sustainable distinction be made between ‘TDS’ and ‘Advance Tax’ in the matter of credit to be given against the liability under the Scheme, 2016?
As decided by HC [2022 (2) TMI 344 - BOMBAY HIGH COURT] in the case at hand, it is not the case of respondent No.1 that the advance tax paid by the petitioner was not relatable to the income for the relevant assessment years, which petitioner disclosed. If the said payment is not apportionable towards any other liability, there is no justifiable reason to deprive the declarant from getting the credit for the same against the liability under the Scheme, 2016
Petition stands allowed - Respondent No.1 shall issue certificate in Form 4 as required by Rule 4(5) of Income Declaration Scheme Rules, 2016, upon the petitioner complying with all the requirements under the said Scheme, 2016. However, the petitioner shall be entitled to and given credit for the advance tax already paid by the petitioner and the respondent No.1 shall not refuse to issue Form No.4 on the said count.
HELD THAT:- Issue notice to the respondent as well as on the application seeking condonation of delay.
Tag along with connected matter.
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2023 (7) TMI 1527
Bogus purchases - bogus accommodation bills - hawala transactions from certain parties who were only providing accommodation sale bills - All decided by HC [2022 (2) TMI 1482 - BOMBAY HIGH COURT] purchases cannot be rejected without disturbing the sales in case of a trader and additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases
HELD THAT:- In terms of Circular No. 17/2019 dated 08.08.2019 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board Direct Taxes, Judicial Section, since the amount of tax involved is low, we are not inclined to interfere with the impugned order.
The special leave petitions are, accordingly, dismissed.
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2023 (7) TMI 1526
Maintainability of appeal before the Tribunal - HELD THAT:- Considering the fact that proceedings has been initiated against the appellant under Insolvency and Bankruptcy Code 2016 (IBC) and resolution plan has already been approved, in that circumstances it is held that the appeals are not maintainable before the Tribunal.
Accordingly, the same are dismissed.
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2023 (7) TMI 1525
Addition on account of unearned revenue - HELD THAT:- Tribunal has returned a finding of fact that these very amounts were offered to tax in the subsequent year, as and when services were offered.
Two findings of fact emerge that the money received by the respondent/assessee was offered for imposition of tax only when services were rendered.
Second, this was an accounting practice followed consistently for several years.
Lastly, since the tax rate remained the same, no loss was caused to the revenue by the respondent/assessee offering the aforementioned amount for the tax in the subsequent period.
This position of law appears to have been, in a sense, recognized by the coordinate bench of this court in a judgment rendered in Commissioner of Income Tax-III vs Shyam Telelink Ltd. [2018 (12) TMI 585 - DELHI HIGH COURT]. Thus the proposed question no. (i) in our opinion does not require consideration.
Addition on account of provision for liquidated damages - We have in another appeal of the revenue [2023 (8) TMI 591 - DELHI HIGH COURT], remanded the matter to the Tribunal for reconsideration.
Tribunal, in the instant case, has followed decision rendered by it in AY 2004-05, which is the AY that is involved in the matter we have remanded for reconsideration.
Therefore, the impugned order is set aside on the issue concerning liquidated damages.
Directions contained in our order passed today [supra] will apply mutatis mutandis in this matter as well, as regards the issue concerning liquidated damages. Counsel for the parties will appear before the Tribunal on 28.08.2023.
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2023 (7) TMI 1524
Revision u/s 263 - exercise of jurisdiction under the said provision was done for the second time - period of limitation - HELD THAT:- Tribunal accepted the plea raised by the assessee as regards the aspect relating to the limitation, it examined the merits of the matter and has recorded a factual finding that the issue on which the PCIT proposed the revision of the order framed u/s 143(3) read with Section 263 dated 23.12.2019, issue which was directed by the PCIT in order u/s 263 dated 23.03.2022 was not the subject matter of revisionary proceedings in the first round.
Tribunal came to the conclusion that the period of limitation has to run from the date of assessment as framed under Section 143(3) dated 26.12.2016, that is at the end of the financial year, 31.03.2017. Therefore, it held that the exercise of jurisdiction u/s 263 of the Act is hopelessly barred by limitation.
Tribunal also took note of the decision of ARBUDA MILLS [1996 (1) TMI 11 - SUPREME COURT] wherein it was held that jurisdiction under Section 263(1) of the Act is sought to be exercised with reference to an issue which is covered by the original order of assessment under Section 143(3) of the Act, which does not form the subject matter of the reassessment. The limitation was necessarily begun to run from the date of order passed under Section 143(3) of the Act. Reference was also made to the decision of ALAGENDRAN FINANCE LIMITED [2007 (7) TMI 304 - SUPREME COURT]
Thus, we find that the order passed by the learned Tribunal had been passed taking note of the correct legal position and referring to the relevant decision and the said order does not call for any interference. Decided against revenue.
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2023 (7) TMI 1523
Validity of order passed u/s 148A(d) passed without approval from the “Specified Authority” as described u/s 151(ii) - as contented that the approval has been taken from the Principal Commissioner of Income Tax when admittedly the specified authority for approval in this case is Principal Chief CIT since three years has not been passed from the end of the relevant assessment year on the date when the aforesaid impugned order was passed as alleged by the petitioner.
HELD THAT:- As order u/s 148A(d) of the Act by excluding the time granted to the petitioner to file response to the notice under Section 148A(b) of the Act and a further period of seven days are excluded from the date of expiry of normal period of three years for the purpose of assessment, the impugned order passed under Section 148A(d) of the Act is very much within three years in this case and as such for passing the aforesaid impugned order Principal CIT and not the Principal Chief CIT is “Specified Authority” for approval of the same. In view of the aforesaid factual and legal position “Specified Authority” for the purpose of approval in this case is Principal CIT and the assessing officer has rightly taken approval from the Principal CIT concerned and such approval for passing the impugned order under Section 148A(d) is perfectly legal and valid and the aforesaid impugned order does not call for any interference by this Writ Court. WP dismissed.
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2023 (7) TMI 1522
Interest credited to “Interest Suspense Account” taxed in earlier years now written off during the year - whether the interest is taxable in the year of credit of the suspense account or in the year of recovery? - disallowance of contribution to SBI retired employees medical fund u/s 40(9) - ITAT directing AO to delete addition - As decided by HC [2019 (6) TMI 1714 - BOMBAY HIGH COURT] both these questions form part of the revenue’s grounds of appeal in Income Tax Appeal [2019 (6) TMI 1183 - BOMBAY HIGH COURT] which by an order passed today we have dismissed.
HELD THAT:- This Court is of the opinion that the impugned order does not call for interference. The special leave petition is accordingly dismissed.
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2023 (7) TMI 1521
Validity of assessment order - Shorter period given to file response - violation of principles of natural justice as the show cause notice was issued on 10.05.2023 seeking for reply before 15.05.2023, which time for response is contrary to the SOP applicable for faceless assessment - HELD THAT:- It is clear that the notice has been issued on 10.05.2023 by 18.14 hours. The response was directed to be made by 15.05.2023. The time that is stipulated for response is in clear violation of the applicable SOP at Clause N.1.3 which requires that at least 7 days time to be given for the purpose of making out a response.
It is clear that the plea of prejudice caused to the petitioner and violation of principles of natural justice is a contention that requires acceptance. Accordingly, on the sole ground, the matter is remanded to the stage post show cause notice at Annexure-J dated 10.05.2023. The petitioner is at liberty to make out his reply to the show cause notice at Annexure-J and the Authority to afford all opportunities as is permissible under the law to complete the proceedings. All contention of the petitioner are kept open.
Petitioner submits that the aspect of limitation is also to be kept open. Said submission of the petitioner is taken note of. Accordingly, Annexures-A1 to A4 are set aside.
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2023 (7) TMI 1520
The Appellate Tribunal allowed the Appellant's claim as not time-barred based on a Supreme Court ruling. Notice issued to Respondents for filing replies. The Appeal C.A. (AT) Ins. No. 913 of 2023 was dismissed as withdrawn to focus on another related case.
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2023 (7) TMI 1519
Reopening of assessment - validity of order passed u/s 148A(d) - Petitioner failed to submit any documentary evidence for double reporting of sale of property and details of cost of acquisition and the entire sale consideration will be treated as capital gain and this will be the escaped income in the year under consideration - HELD THAT:- We fail to understand how a person can prove the negative. The onus was on the AO to prove that what the Petitioner has stated in the Reply was incorrect and in fact there were two transactions linked to Petitioner as against Petitioner’s stand that there was only one transaction during the relevant Assessment Year.
Moreover, how can the entire sale consideration be treated as capital gain. There must have been some cost price which after applying the required formula has to be reduced from the sale consideration to determine capital gain. In the circumstances, though Mr. Shirsat had requested for some time to take instructions and file reply, we see no reason to grant any time.
In the circumstances, we quash and set aside the order u/s 148A(d) of the said Act. Consequently subsequent notice issued u/s 148 is also quashed and set aside.
Matter is remanded to the concerned officer to pass a correct order.
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2023 (7) TMI 1518
TDS u/s 195 - payment made by assessee to various bank as Nostro account maintenance charges - Addition u/s 40(a)(i) on non deduction of TDS - Nostro Accounts Maintenance Charges were levied by overseas banks/branches on the Assessee were with respect to the Nostro Accounts maintained outside India.
HELD THAT:- Tribunal in the case of Oman International Bank SAOG [2014 (1) TMI 191 - ITAT MUMBAI] held that the provisions of Section 40(a)(i) of the Act cannot be attracted in case of the deemed remittance of Nostro Account Maintenance Charges without deduction of tax at source. In the case before us also the CIT(A) has concluded that the Assessee was not under obligation to withhold tax from Nostro Account Maintenance Charges in terms of Section 195 of the Act and therefore, could not be treated as an ‘assessee in default’. Accordingly, demand raised by the Assessing Officer on the Assessee under Section 201(1) and 201(1A) of the Act was deleted by the CIT(A). In our view, the order passed by the CIT(A) does not suffer from any infirmity to this extent.
We do not find merit in the contention advanced by Ld. Departmental Representative that Nostro Account Maintenance Charges are in the nature of ‘interest’ as defined under Section 2(28A) of the Act.
The service fee and other charges included in the above definition of ‘interest’ are those charged in respect of (i) moneys borrowed, or (ii) debt incurred or (iii) in respect of any credit facility (which has not been utilized). In the case before us, the Assessing Officer has not brought on record any material to establish that the Assessee has borrowed money or incurred debt or availed any credit facility, and the Nostro Account Maintenance Charges have been charged in respect of the same. - Decided in favour of assessee.
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2023 (7) TMI 1517
Validity of Prohibition of Behami Property Transaction Act - Challenge to show-cause-notice on the ground of jurisdiction of the respondent authority concerned - petitioners submits that the alleged transaction against which the impugned show-cause-notice has been issued relates back to the financial year 2014-15 - HELD THAT:- We are not inclined to interfere with the impugned show-cause-notice at this stage and extending the time to file objection/response to the aforesaid impugned show-cause-notice by a period of two weeks from date and the respondents authority concerned shall consider the same in accordance with law and pass a reasoned and speaking order after giving an opportunity of hearing to the petitioners of its authorised representative and shall also consider the applicability of the aforesaid judgment of Ganpati Dealcom (P.) Ltd. [2022 (8) TMI 1047 - SUPREME COURT] and such final order on the impugned show-cause-notice will be passed by the respondents authority concerned within a period of four weeks form the date of receipt of such objection/response.
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2023 (7) TMI 1516
Legality of imposing monetary conditions for granting anticipatory bail - Discretion of the courts in imposing conditions under Section 438 of the Code of Criminal Procedure - HELD THAT:- There seems to be little doubt that the Appellant had volunteered to deposit Rs. 22,00,000/- (Rupees twenty-two lakh) without prejudice to his rights and contentions and that he had also applied for extension of time to make such deposit which was also granted; but having failed to arrange for sufficient funds, he is questioning the condition imposed by the High Court for grant of pre-arrest bail.
Law regarding exercise of discretion while granting a prayer for bail Under Section 438 of the Code of Criminal Procedure having been authoritatively laid down by this Court, we cannot but disapprove the imposition of a condition of the nature under challenge. Assuming that there is substance in the allegation of the complainants that the Appellant (either in connivance with the builder or even in the absence of any such connivance) has cheated the complainants, the investigation is yet to result in a charge-sheet being filed Under Section 173(2) of the Code of Criminal Procedure, not to speak of the alleged offence being proved before the competent trial court in accordance with the settled procedures and the applicable laws. Sub-section (2) of Section 438 of the Code of Criminal Procedure does empower the high court or the court of sessions to impose such conditions while making a direction Under Sub-section (1) as it may think fit in the light of the facts of the particular case and such direction may include the conditions as in Clauses (i) to (iv) thereof.
The version in the FIR, even if taken on face value, discloses payment through cheques of Rs. 17,00,000/- (Rupees seventeen lakh) in the name of the Appellant and not Rs. 22,00,000/- - the High Court ought to have realized that having regard to the nature of dispute between the parties, which is predominantly civil in nature, the process of criminal law cannot be pressed into service for settling a civil dispute. Even if the Appellant had undertaken to make payment, which we are inclined to believe was a last ditch effort to avert losing his liberty, such undertaking could not have weighed in the mind of the High Court to decide the question of grant of anticipatory bail. The tests for grant of anticipatory bail are well delineated and stand recognized by passage of time. The High Court would have been well-advised to examine whether the Appellant was to be denied anticipatory bail on his failure to satisfy any of such tests. It does seem that the submission made by counsel on behalf of the Appellant before the High Court had its own effect, although it was far from being a relevant consideration for the purpose of grant of bail.
It also does not appear from the materials on record that the complainants have instituted any civil suit for recovery of money allegedly paid by them to the Appellant. If at all the offence alleged against the Appellant is proved resulting in his conviction, he would be bound to suffer penal consequence(s) but despite such conviction he may not be under any obligation to repay the amount allegedly received from the complainants. This too is an aspect which the High Court exercising jurisdiction Under Section 438 of the Code of Criminal Procedure did not bear in mind - the High Court fell in grave error in proceeding on the basis of the undertaking of the Appellant and imposing payment of Rs. 22,00,000/- as a condition precedent for grant of bail.
Appeal disposed off.
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2023 (7) TMI 1515
Validity of assessment u/s 147 or 153C - incriminating material was found and seized during the search carried out of ‘some other person’ - HELD THAT:- As the incriminating material was found and seized during the search carried out of ‘some other person’ that a sum had been paid by the assessee during the Financial Year 2011-12 to Santosh Medical College, Ghaziabad, and since the assessee was not assessed u/s 153C of the Act, which provision specifically exclude the operation u/s 147 of the Act, in our considered opinion, the A.O erred in invoking provision to Section 147 of the Act instead of those of Section 153C of the Act.
The reasons recorded u/s 147 of the Act and all proceedings pursuant to thereto, cumulative the order under Appeal are quashed.
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2023 (7) TMI 1514
Revision u/s 263 - bogus purchases - HELD THAT:- Apart from purchase vouchers, the assessee also furnished transport built is in respect of these purchases to show that these were genuinely purchased and received at its business premises.
AO, on the basis of such evidences, got satisfied and also discussed the issue in the assessment order.
AO recorded that the assessee was called upon to produce books of accounts, bills/vouchers of purchases and sales. The same were produced by the assessee and duly verified on test check basis.
AO, further recorded that the assessee “furnished purchase register along with purchase bills and transportation details”, which were verified by him and found to be correct. As against this, the ld. CIT revised the order on the ground that: `The order was passed without due verification of the above information’, namely, accommodation entries were obtained from the five parties. It is, therefore, evident that the initiation of revision proceedings on this score is not valid.
Not only, no such transactions were entered into with the first 4 parties, the genuineness of the 5th party, whose purchases were recorded, was also substantiated with relevant purchase bills and transportation details. Such details were produced before the AO, who recorded this fact in the assessment order and also the correctness of the assessee’s claim. As manifest that the assessment order cannot be construed as erroneous much less prejudicial to the interest of the Revenue. We, therefore, overturn the impugned order.
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2023 (7) TMI 1513
Withdrawal of the earlier complaint - Breach of insurance policy condition regarding delay in intimation of theft - breach of condition concerning safeguarding the vehicle - Settlement of insurance claims on a non-standard basis.
Whether the delay of 6 days in intimating the Insurance Company about the theft comes within the purview of breach of Condition No. 1 and also whether on facts there was breach of condition No. 5 of the insurance policy to justify the rejection of the claim in toto?
HELD THAT:- A careful perusal of Condition No.1 shows that notice is to be given in writing to the Insurance Company immediately upon occurrence of any accidental loss or damage. The later part of the clause says that in case of theft or criminal act, which may be subject of a claim under the policy, the insured shall give immediate notice to the police and cooperate with the Insurance Company in securing the conviction of the offender - In the present case, after the incident of theft on 26.06.2008, FIR was registered on 27.06.2008. The intimation was also given to the Insurance Company admittedly on 02.07.2008. The Police have also reported the vehicle as untraced as the records indicate.
Insofar as the alleged breach of Condition No.5 is concerned, it is seen from the record that the driver of the claimant left the key in the keyhole of the vehicle when he got down to search the location of “Mittal Farm”, where he had to unload the stone dust. The investigator recommended the repudiation of claim because, according to him, steps to safeguard the vehicle insured were not taken by the driver. It is contended by the appellant that breach of condition No.5, if any, cannot result in total repudiation of the claim - It is noticed in the repudiation letter that the driver Mam Chand had, after alighting from the vehicle, gone to enquire about the location of Mittal’s Farm and that after he went some distance, he heard the sound of the starting of the vehicle and it being stolen away. The time gap between the driver alighting from the vehicle and noticing the theft, is very short as is clear from the facts of the case. It cannot be said, in such circumstances, that leaving the key of the vehicle in the ignition was an open invitation to steal the vehicle.
Nitin Khandelwal [2008 (5) TMI 763 - SUPREME COURT] and Amalendu Sahoo [2010 (3) TMI 1290 - SUPREME COURT] lay down the correct formula that where there is some contributory factor, a proportionate deduction from the assured amount would be all that the Insurance Company can aspire to deduct.
The judgment of the National Commission set aside - Appeal allowed.
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