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2007 (8) TMI 792
Issues involved:
The issues involved in the judgment are the applicability of Section 138 read with Section 141 of the Negotiable Instruments Act, 1938, regarding the liability of the first and second petitioners in a case of dishonored cheque.
Summary:
Issue 1: Limitation of Complaint
The respondent's complaint under Section 138 read with Section 141 of the NI Act was found to be barred by limitation in relation to the first petitioner, who was a company registered under the Companies Act. However, it was argued that the complaint was within limitation and maintainable against the second petitioner.
Issue 2: Vicarious Liability
The petitioners contended that since the cheque was issued by the first petitioner, the primary responsibility and liability rested with them, making the second petitioner's liability vicarious. It was argued that in the absence of the main accused, a co-accused with vicarious liability could not be prosecuted.
Judgment Details:
In the case law of Anil Handi Vs. Indian Acrylic Ltd., it was established that a complaint under Section 138 read with Section 141 of the NI Act was maintainable if only the Director of the Company was impleaded as an accused, without the necessity of the company being a co-accused.
Regarding the first petitioner, it was noted that no complaint was filed within the prescribed period of limitation after the notice of dishonour of the cheque. The complaint against the company was conceded to be barred by limitation. However, in the case of the second petitioner, the complaint was found to be within limitation as only one notice was served after the cheque bounced on the second presentation.
The complaint described the second petitioner as the Managing Director of the first petitioner company, with specific allegations of being in charge and responsible for the business conduct. The judgment disposed of the petition by quashing the summoning order concerning the first petitioner but affirmed it for the second petitioner.
In conclusion, the judgment highlighted the importance of researching and citing relevant case laws by members of the bar to ensure a fair and just legal process.
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2007 (8) TMI 791
The Appellate Tribunal CESTAT NEW DELHI ruled in favor of the applicant for waiver of pre-deposit of Service Tax as there was no contract or agreement for maintenance or repair services, allowing the appeals and granting stay petitions.
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2007 (8) TMI 790
Issues involved:
The issues involved in this case include the correctness of the order passed by the Income Tax Appellate Tribunal regarding the levy of gift tax on shares and bonus shares for the assessment year 1987-88.
Issue 1: Levy of gift tax on shares
The Revenue challenged the order passed by the Income Tax Appellate Tribunal, contending that the bonus shares issued by the assessee company amounted to a gift and should be subject to tax. The Revenue argued that the Tribunal misinterpreted the provisions of the Companies Act and Gift Tax Act, leading to an erroneous finding that the bonus shares did not constitute a gift. The Revenue relied on Supreme Court decisions to support their argument that bonus shares held as stock in trade are subject to tax. The assessing authority found that the value of the gift in respect of the bonus shares amounted to a significant sum, which should be subject to gift tax. The Court agreed with the Revenue's arguments and held that the bonus shares issued by the assessee company to investment companies constituted a gift, affirming the assessing authority's order.
Issue 2: Interpretation of gift tax provisions
The respondent contended that the bonus shares issued did not amount to a gift as there was no transfer of shares by the assessee company to the investment companies. They argued that the provisions of the Gift Tax Act were not applicable in this case. The respondent relied on legal provisions and previous court decisions to support their stance that the bonus shares did not constitute a gift. The Court examined the provisions of the Gift Tax Act, Transfer of Property Act, and Companies Act, and concluded that the bonus shares issued and transferred to the investment companies did indeed amount to a gift. The Court rejected the respondent's arguments and upheld the assessing authority's order, stating that the bonus shares were subject to gift tax.
Conclusion:
The High Court of Karnataka ruled in favor of the Revenue, upholding the assessing authority's decision to levy gift tax on the bonus shares issued by the assessee company. The Court set aside the order of the Income Tax Appellate Tribunal and affirmed the assessing authority's order.
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2007 (8) TMI 789
Appointment of Accountant Members in ITAT - Selection List as approved by the Selection Board - Held that:- We find no reason to interfere with the impugned judgment/order. Accordingly, the specialleave petition is dismissed. By the impugned judgment/order, a direction has been given to the respondents before it to give effect to the selection list as approved by the Selection Board.
The Union of India is given eight weeks’ time from today to complete the formalities.
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2007 (8) TMI 788
The High Court of Delhi, in a case related to the Income-tax Act, 1961 for the assessment year 1975-76, ruled that a revised return filed by the assessee was not valid as the original return was not filed under section 139(1) of the Act. The Court cited a Supreme Court decision in support of its ruling. The question of law was answered in favor of the revenue and against the assessee.
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2007 (8) TMI 787
The Supreme Court in the case of 2007 (8) TMI 787 - SC, with judges Mr. A.K. Mathur and Mr. Dalveer Bhandari, condoned delay, admitted appeal, and allowed the interim stay order dated 24-11-2006 to continue.
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2007 (8) TMI 786
... ...
... ... ..... ORDER Delay condoned. The Appeal is dismissed.
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2007 (8) TMI 785
Issues involved: Appeal against ex-parte adinterim order by Company Law Board regarding alleged share dilution and relief sought.
Issue 1: Ex-parte adinterim order challenge
The appeal was directed against the ex-parte adinterim order dated 02.08.2007 passed by the Company Law Board, Principal Bench, New Delhi in Company Petition No.111 of 2007. The Company Petition was filed by respondent No.1 alleging that their 50% shareholding had been diluted by the illegal acts of another group. The Company Law Board had directed that the respondent Company shall not deal with 25% of the built-up area until further order, maintaining the status quo regarding the composition of the Board. The appellant, AnandRao Gaekwar, raised contentions that he was not a necessary party and that the Company Law Board could not have granted any relief adversely affecting him. However, the Court did not permit these contentions as the Company Law Board had already provided an opportunity for the appellant to file a reply, which had not been done by the specified date. The Court disposed of the appeal in similar terms as another appeal, with a minor modification regarding the deadline for filing the reply by the appellant.
Issue 2: Disposal of the appeal
The appeal was disposed of with the appellant being permitted to file a reply by 03.09.2007, the rejoinder by 10.09.2007, and the interlocutory application to be heard by the Company Law Board expeditiously, preferably by 30.09.2007. The Court expected the Company Law Board to decide the interlocutory application within the specified time limit. The present appellant was allowed to raise any preliminary issue regarding their necessity as a party, which would be decided along with the interlocutory application filed by the original petitioner. The appeal was accordingly disposed of, leading to the disposal of the Civil Application for stay as well.
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2007 (8) TMI 784
Issues Involved:
1. Whether the ex parte decree passed in favor of Saroja and her minor children operates as res judicata in the subsequent suit filed by the appellant.
2. Whether the conditions for res judicata u/s 11 of the CPC are satisfied.
3. Whether the ex parte decree can be considered as a final decision.
4. Whether the parties in both suits were litigating under the same title.
Summary:
Issue 1: Ex parte Decree as Res Judicata
The core question was whether the ex parte decree in favor of Saroja and her minor children would operate as res judicata in the subsequent suit filed by the appellant. The Supreme Court held that the ex parte decree passed in the former suit during the pendency of the subsequent suit operates as res judicata. The appellant's title acquired from Kuppusamy was invalidated by the ex parte decree.
Issue 2: Conditions for Res Judicata u/s 11 of CPC
The Court examined the conditions for res judicata u/s 11 of the CPC:
(i) Two suits - one former and one subsequent.
(ii) Competent Court - the former suit was decided by a competent court.
(iii) Same matter in issue - the matter in both suits was directly and substantially the same.
(iv) Heard and finally decided - the ex parte decree was considered a final decision.
(v) Same parties or parties under whom they claim - the appellant claimed through Kuppusamy, satisfying this condition.
(vi) Same title - both parties litigated under the same title.
Issue 3: Ex parte Decree as Final Decision
The appellant argued that an ex parte decree could not be considered as "heard and finally decided." The Court disagreed, stating that an ex parte decree is binding and effective as a decree passed after contest unless obtained by fraud. The appellant did not allege fraud or collusion in her plaint, thus the ex parte decree was valid and satisfied Condition (iv).
Issue 4: Same Title in Both Suits
The Court held that the appellant, although not a party to the former suit, claimed through Kuppusamy, satisfying Condition (v). The parties in both suits litigated under the same title, fulfilling Condition (vi). The Court cited previous judgments to support this view, including Ishwardas Vs. The State of Madhya Pradesh and Aanaimuthu Thevar (Dead) by Lrs Vs. Alagammal & Ors.
Conclusion:
The Supreme Court concluded that all conditions for res judicata were satisfied. The ex parte decree in the former suit operated as res judicata, barring the subsequent suit filed by the appellant. The appeal was dismissed with no order as to costs.
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2007 (8) TMI 783
Issues involved: The deduction claimed by the appellants from the price on account of 'interest receivables'.
Summary:
The issue revolved around the deduction claimed by the appellants for 'interest receivables' from the price list, which was denied by the lower authorities citing lack of evidence and passing on the deduction to all buyers. The appellant argued that the interest on receivables was initially charged but subsequently claimed as deductions based on a CA certificate. The Tribunal found that the appellants had produced the CA certificate for the earlier financial year while claiming the deduction for the subsequent year, which supported their claim. The Tribunal referred to previous judgments, including the case of Novapan Industries Ltd., where it was held that interest on receivables is an allowable deduction from the price list. The Tribunal noted that the issue was settled in favor of the appellants based on the Supreme Court's dismissal of the revenue's appeal in a similar case.
Regarding a point raised by the Jt. CDR about the appellant not appealing against a previous judgment, the Tribunal clarified that the earlier decision was based on a Circular not applicable to the relevant period and a Larger Bench decision that had been overruled by the Supreme Court in a different case. The Tribunal emphasized that the law prevailing at the time of the current appeal, as established by the Supreme Court in relevant cases, should be applied. Consequently, the Tribunal ruled in favor of the appellants, allowing the appeals and providing consequential relief, if any, based on the judgments of the Supreme Court in A. Infrastructure Ltd. and Novapan Industries Ltd.
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2007 (8) TMI 782
Constitutional validity of SARFAESI Act - Sale of the secured asset in public auction - Section 13(4) of SARFAESI Act - Rule 9(7) of the Security Interest (Enforcement) Rules, 2002 - issuance of sale certificate - HELD THAT:- The Constitutional validity of SARFAESI Act has been upheld in the case of Mardia Chemicals Limited v. Union of India [2004 (4) TMI 294 - SUPREME COURT]. In the said judgment, the Supreme Court has held that in cases where the Secured Creditor has taken action u/s 13(4), it would be open to any person, including the borrower to file an appeal u/s 17 of the Act.
Point (i) - Whether the sale of the secured asset in public auction as per Section 13(4) of SARFAESI Act, which ended in issuance of a sale certificate as per Rule 9(7) of the Security Interest (Enforcement) Rules, 2002 ("the Rules") is a complete and absolute sale for the purpose of SARFAESI Act or whether the sale would become final only on the registration of the sale certificate? - The crux of the contention of the learned senior counsel for the appellant is that after issuance of sale certificate, the borrowers, who allowed their property being sold in public auction, cannot claim the right of redemption placing reliance u/s 60 of the Transfer of Property Act, which right they should have exercised before the initiation of proceedings or before the date fixed for sale.
The learned single Judge, agreeing with the argument advanced by the learned Counsel for the borrowers that the right of redemption which is embodied in Section 60 of the Transfer of Property Act is available to the mortgagor, unless it has been extinguished by the act of parties and until the sale is complete by registration, and that the mortgagor does not lose their right of redemption, came to the conclusion that the sale takes complete shape only after it gets registered and it does not come to end by issuance of a sale certificate. But, after considering the relevant provisions in the Registration Act, 1908, we are not in agreement with the conclusion arrived by the learned single Judge in allowing the writ petitions.
In this case, the authorised officer of the secured creditor, exercising the power conferred on him by SARFAESI Act, pursuant to the proceedings initiated by him brought the secured assets of the borrowers for sale in public auction, and, in view of the default in repayment of the loan, confirmed the sale in favour of the highest bidder, the appellant herein and issued the sale certificate on 6-1-2006.
The finding of the learned single Judge that the sale is not complete without registration of sale certificate, therefore, is not sustainable in law and the same is liable to be set aside.
If the argument of the borrowers that even after the issuance of the sale certificate, prior to registration, they are entitled to redeem the property is accepted, it would make the provisions of the SARFAESI Act redundant and the very object of the SARFAESI Act enabling the Banks and Financial Institutions to realise long term assets, manage problems of liquidity, asset liability mismatch and to improve recovery of debts by exercising powers to take possession of securities, sell them and thereby reduce non-performing assets by adopting measures for recovery and reconstruction would fail and would open a pandora's box for the litigations upsetting the sale confirmed in favour of the bona fide auction purchasers, who invested huge money.
In view of our finding on this point, we hold that the sale of the secured asset in public auction as per Section 13(4) of SARFAESI Act, which ended in issuance of a sale certificate as per Rule 9(7) of the Rules is a complete and absolute sale for the purpose of SARFAESI Act and same need not be registered under the provisions of the Registration Act.
Point (ii): Whether the action of the second respondent in not accepting the amounts paid by the borrowers and not cancelling the sale certificate before the registration of the sale is in derogation of Section 60 of the Transfer of Property Act, in view of the Section 37 of SARFAESI Act? - HELD THATL:- With great respect, we are of the view that the decision of the Supreme Court in Narandas Karsondas v. S.A. Kamtam [1976 (12) TMI 186 - SUPREME COURT], is not applicable to the facts of this case. Even as held by the Supreme Court in Narandas Karsondas v. S.A. Kamtam, the right of the mortgagor to redemption continues only till such time the sale of the property was complete by registration.
In this case, our finding, following the decision of the Division Bench of this Court in Arumugham, S. v. C.K. Venugopal Chetty [1986 (8) TMI 450 - MADRAS HIGH COURT] and the Supreme Court in B. Arvind Kumar v. Government of India, is that the sale in this case has become absolute and complete by the issuance of sale certificate on 6-1-2006. Further, Section 17(2)(xii) of the Registration Act, 1908 does not require registration of a sale certificate granted to any purchaser of any property sold in public auction by a civil or revenue officer and it is the finding of the Supreme Court in B. Arvind Kumar v. Government of India, referred supra, that the sale certificate issued by a civil or revenue officer in respect of a property sold in public auction does not fall under the category of non-testamentary documents which require registration under Sub-sections (b) and (c) of Section 17(1) of the Registration Act, 1908.
The right to redeem the mortgage, as provided in Section 60 of the Transfer of Property Act, is, of course, a very valuable right possessed by the mortgagor. At the same time, such a right to redeem the mortgage can be exercised before it is foreclosed, or the estate is sold. It has been held that the mortgagor can adopt the course provided u/s 60 of the Transfer of Property Act only before the mortgagee has filed a suit for enforcement of the mortgage and not thereafter. In this case, as discussed, the borrowers approached the second respondent/ Bank only after initiation of the proceedings u/s 13(4) of the SARFAESI Act, and that too after the property was sold in public auction and the sale was confirmed in favour of the appellant.
We, accordingly, find no irregularity or illegality in the procedure followed by respondents 2 and 3.
Point (iii): Whether Section 35 of the SARFAESI Act has the effect of overriding Section 37 of the SARFAESI Act? - HELD THAT:- Assuming, the right of redemption conferred under the Transfer of Property Act is protected u/s 37 of the SARFAESI Act, and independently available without reference to the registration of the sale certificate u/s 17(2)(xii) of the Registration Act, the sale already effected satisfying the conditions contemplated u/s 13(8) of the SARFAESI Act, shall, by virtue of Section 35 of the SARFAESI Act. prevail over such other rights, much less the right of redemption conferred under Transfer of Property Act, which is protected u/s 37 of the SARFAESI Act, in view of the non-obstante clause provided u/s 35 of the SARFAESI Act, because a non-obstante clause provided u/s 35 of the SARFAESI Act makes it clear that even though there are inconsistencies to such other rights conferred under any other law for the time being in force that are protected u/s 37 of the SARFAESI Act, the action initiated under the provisions of the SARFAESI Act shall have the overriding effect as per Section 35 of the SARFAESI Act, because SARFAESI Act is a Special Act which aims to accelerate the growth of economy of our country empowering the lenders, namely Nationalised Banks, Private Sector Banks and other Financial Institutions to realise their dues from the defaulted borrowers who are very lethargic in repayment of the loans borrowed by them, by exercising their right of expeditious attachment and foreclosure for the enforcement of security and therefore, Sections 35 and 37 of the SARFAESI Act have to be read conjointly to achieve the object of the SARFAESI Act, but not to defeat the same and therefore, we do not see any conflict between them.
That apart, a non-obstante clause is a legislative device which is usually implied to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other enactment, that is to say, to avoid the operation of all contrary provisions, Union of India v. G.M. Kokil [2006 (11) TMI 349 - SUPREME COURT].
For the reasons point (iii) is answered in affirmative.
Resultantly, these appeals are allowed and the order of the learned single Judge made in W.P. is set aside and the writ petitions are dismissed.
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2007 (8) TMI 781
Jurisdiction by the High Court u/s 482 CrPC - Dishonor of Cheque - issued the fabricated cheques to deceive and grab the money - Commission of an Offence of Cheating Or Criminal breach of trust - HELD THAT:- The dispute between the parties herein is essentially a civil dispute. Non-payment or under-payment of the price of the goods by itself does not amount to commission of an offence of cheating or criminal breach of trust. No offence, having regard to the definition of criminal breach of trust contained in Section 405 of the Indian Penal Code can be said to have been made out in the instant case.
Neither any allegation has been made to show existence of the ingredients of the aforementioned provision nor any statement in that behalf has been made. Ordinarily, bouncing of a cheque constitutes an offence u/s 138 of the Negotiable Instruments Act. No complaint thereunder had been taken.
No act of inducement on the part of the appellant has been alleged by the respondent. No allegation has been made that he had an intention to cheat the respondent from the very inception.
In law, only because he had issued cheques which were dishonoured, the same by itself would not mean that he had cheated the complainant. Assuming that such a statement had been made, the same, in our opinion, does not exhibit that there had been any intention on the part of the appellant herein to commit an offence u/s 417 of the Indian Penal Code.
Furthermore, admittedly, their residences are in different districts. Whereas the appellant is a resident of the district of Ajamgarh, the respondent is a resident of the district of Rampur. Cheques were admittedly issued by the appellant at his place. There is nothing on record to show that any part of the cause of action arose within the jurisdiction of the court concerned. Even if such statements merits had been made, the same admittedly have been made only at the place where the appellant resides. The learned Magistrate, therefore had no jurisdiction to issue the summons. Musaraf Hossain Khan v. Bhagheeratha Engg. Ltd. and Ors.[2006 (2) TMI 610 - SUPREME COURT].
Thus, the impugned judgment is set aside. The order taking cognizance is quashed. The appeal is allowed. No offence is made out.
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2007 (8) TMI 780
Issues Involved:
1. Rejection of plaint under Order 7 Rule 11 CPC.
2. Territorial jurisdiction of the court.
3. Authorization of the person filing the suit.
4. Deletion of a defendant from the array of parties.
Issue-wise Detailed Analysis:
1. Rejection of plaint under Order 7 Rule 11 CPC:
The defendants contended that the plaint should be rejected as it does not disclose a cause of action, was not filed by a duly authorized person, and that the court lacks territorial jurisdiction. The court examined the allegations in the plaint and the documents filed, and found that the plaint prima facie disclosed a cause of action. The court emphasized that the power to reject a plaint should be used only when it is absolutely clear that the plaintiff does not have an arguable case. The plaintiff's assertion of patent infringement by the defendant requires examination, and for the purpose of the application, the averments in the plaint must be assumed to be true. The court rejected the argument that no action for infringement can lie against another patentee, stating that Section 48 of the Patents Act grants a patentee the exclusive right to prevent third parties from infringing the patent, and this right is an "exclusionary right." The court also noted that Section 107 of the Act allows every ground for revocation of a patent under Section 64 to be used as a defense in an infringement suit. The court concluded that the defendant's argument that no suit for infringement can be brought against another patentee is without merit and rejected the application under Order 7 Rule 11 CPC.
2. Territorial jurisdiction of the court:
The defendants argued that the court lacked territorial jurisdiction as the defendant No. 3, who is the manufacturer and patent holder, is based in Bangalore, and the patent was granted by the Patent Office in Chennai. They also claimed that defendant No. 2, who is not based in Delhi, was falsely implicated to create jurisdiction. The court held that under Section 20(c) of the CPC, a suit can be instituted where the cause of action arises, wholly or in part. Since the defendants were selling the impugned products in Delhi, this constituted a part of the cause of action, giving the court jurisdiction. The court noted that under Section 48 of the Patents Act, the patentee has the right to prevent infringement throughout India, and the sale of infringing products in Delhi constituted an infringement of the plaintiff's rights, thus giving the court territorial jurisdiction.
3. Authorization of the person filing the suit:
The defendants contended that the suit was not filed by a duly authorized person, as no power of attorney or Board Resolution authorizing the signatory was filed. The court found this submission without merit, noting that the plaint contained a categorical statement that Mrs. Madalsa Srivastava, who signed the plaint, was duly authorized and competent to do so on behalf of the plaintiff. The court stated that this assertion must be accepted as correct for the present and that the issue of authorization can only be decided after a trial. Therefore, the court dismissed this argument.
4. Deletion of a defendant from the array of parties:
The defendants sought the deletion of Shri Lalit Wadhwa from the array of defendants, arguing that he was neither the manufacturer nor the patent holder and was impleaded only to create jurisdiction and obtain an ex-parte interim order. The plaintiff argued that under Section 124 of the Patents Act, the person in charge of the company at the time of the alleged infringement is liable. The court found this reliance on Section 124, which deals with penal liability, to be fallacious in a civil action. The court noted that the plaint did not contain any clear or specific averment against Shri Lalit Wadhwa regarding his role in the alleged infringement. Consequently, the court concluded that Shri Lalit Wadhwa was neither a necessary nor a proper party to the suit and allowed the application for his deletion from the array of defendants.
Conclusion:
The court dismissed I.A. No. 9649/2006, rejecting the defendants' application under Order 7 Rule 11 CPC, and allowed I.A. No. 9648/2006, ordering the deletion of Shri Lalit Wadhwa from the array of defendants. The court also imposed costs of Rs. 20,000 on the defendants for the rejected application.
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2007 (8) TMI 779
Issues involved:
1. Exclusion of Excise Duty on unsold items while determining closing stock value.
2. Allowability of specific expenses under section 30 to 36 of Income-tax Act.
3. Allowance of expenses on rent/repairs and depreciation of Guest House under sections 30 to 46 of Income-tax Act.
4. Relief of custom duty paid included in closing stock as allowable under sec. 43-B.
Issue 1:
The Tribunal was correct in law in holding that the Excise Duty on unsold items is to be excluded while determining the value of the closing stock as adopted by the assessee. The decision in Berger Paints India Ltd. vs. Commissioner of Income Tax [2004] 266 ITR 99 (S.C.) supports this position, leading to an affirmative answer in favor of the Assessee and against Revenue.
Issue 2:
The Tribunal was correct in law in holding that the expenditure on account of repairs, taxes which are specifically allowable under section 30 to 36 are not covered under sec. 37 (2A) of the Income-tax Act. The decision in Britannia Industries Ltd. vs. Commissioner of Income Tax and Another [2005] 278 ITR 546 (SC) necessitates an answer in the negative, in favor of the Revenue and against the Assessee.
Issue 3:
The Tribunal was correct in law in directing to allow expenses amounting to Rs. 58,341/- on rent/repairs and depreciation of Guest House under sections 30 to 46 of the Income-tax Act. The reference is disposed of accordingly, indicating a decision in favor of the Assessee.
Issue 4:
The Tribunal was correct in law in allowing relief of custom duty paid included in closing stock as allowable under sec. 43-B following the order of the Tribunal (Special Bench). This issue aligns with the decision in Berger Paints India Ltd. vs. Commissioner of Income Tax [2004] 266 ITR 99 (S.C.), resulting in an affirmative outcome for the Assessee against Revenue.
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2007 (8) TMI 778
Issues Involved:
The judgment involves overlapping reliefs sought in a writ petition and a petition filed u/s 397-398 of the Companies Act regarding an increase in the authorized share capital, allegations of money laundering, and violation of RBI Regulations.
Increase in Authorized Share Capital:
The appellant challenged the increase in the authorized share capital of the company as null and void. The main thrust of both petitions was the increase in share capital. The court noted that the reliefs sought in both petitions were overlapping. The appellant was advised to bring the matter to the notice of the Director, Prevention of Money Laundering Act, as a remedy was available. The court declined to interfere with the order passed by the Single Judge due to the availability of alternative remedies.
Allegations of Money Laundering and RBI Regulations Violation:
Allegations of money laundering and violation of RBI Regulations were leveled against the private respondents. The reliefs sought in the company petition also included these allegations. The court allowed the appellant to file representations before the RBI and the Central Government regarding the allegations within two weeks. The court clarified that the order should not be construed as expressing any opinion on the merits of the allegations made by the appellant.
Disposition of the Appeal:
In accordance with the order, the appeal was disposed of. The court directed that a copy of the order be given to the counsel representing the Union of India.
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2007 (8) TMI 777
Issues Involved:
1. Validity of the High Court's order directing arbitration.
2. Payment of arrears of rent, water & sewerage tax, and interest.
3. Jurisdiction of the Supreme Court u/s Article 142 of the Constitution of India.
Summary:
1. Validity of the High Court's Order Directing Arbitration:
The appellant-Sansthan challenged the High Court's order which set aside the Additional District Judge's decision and directed the matter to arbitration as per the arbitration clause in the lease agreement. The Supreme Court upheld the High Court's decision, stating that the photocopies of the lease agreements could be taken on record u/s 8 of the Arbitration and Conciliation Act, 1996, to ascertain the existence of an arbitration clause. The dispute was deemed arbitral.
2. Payment of Arrears of Rent, Water & Sewerage Tax, and Interest:
The appellant-Sansthan claimed arrears of rent, water & sewerage tax, and interest. The respondent-Corporation disputed these claims, stating that payments had been made as per interim orders of the Supreme Court. The Supreme Court noted discrepancies in the calculation statements submitted by both parties. The Court held that these disputed claims should be adjudicated by an Arbitrator as per the arbitration clause in the lease agreement.
3. Jurisdiction of the Supreme Court u/s Article 142 of the Constitution of India:
The appellant-Sansthan sought relief u/s Article 142 of the Constitution of India for payment of arrears and interest. The Supreme Court emphasized that its power u/s Article 142 should be exercised to do complete justice but should not bypass existing legal provisions unless there is manifest illegality or palpable injustice. The Court found no such circumstances in this case and declined to grant the relief sought by the appellant-Sansthan.
Conclusion:
The Supreme Court dismissed the appeal, affirming the High Court's order directing arbitration. The Court clarified that the observations made in the judgment should not be construed as an expression of opinion on the merits of the case, which should be adjudicated by the Arbitrator(s) in accordance with law. The parties were directed to bear their own costs.
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2007 (8) TMI 776
Issues Involved:
1. Rectification of the register of members of TWEL, TPPL, and TRTCL.
2. Payment of dividends and other accretions.
3. Interpretation of the Will of (late) S. Sivaramakrishna Aiyer.
4. Jurisdiction and applicability of Sections 111 and 111A of the Companies Act, 1956.
5. Limitation period and applicability of the Limitation Act, 1963.
Detailed Analysis:
1. Rectification of the Register of Members of TWEL, TPPL, and TRTCL:
The petitioners sought rectification of the register of members for the shares held by (late) S. Sivaramakrishna Aiyer in TWEL, TPPL, and TRTCL. The Company Law Board (CLB) concluded that the boards of TPPL and TRTCL had not properly interpreted the Will of (late) S. Sivaramakrishna Aiyer before approving the transmission of shares. The CLB found that the boards had not deliberated on the number of shares held at the time of the Will's execution, shares acquired thereafter, and shares held at the time of death. Consequently, the CLB ordered TPPL and TRTCL to rectify their registers by restoring the name of (late) S. Sivaramakrishna Aiyer.
2. Payment of Dividends and Other Accretions:
The CLB directed the second respondent to restore dividends received in respect of 39,388 equity shares of TPPL and respondents 3 to 6 to restore dividends received in respect of 70,902 equity shares of TRTCL. The dividends were to be restored to TPPL and TRTCL, respectively.
3. Interpretation of the Will of (late) S. Sivaramakrishna Aiyer:
The CLB noted that the disputes among the legal heirs regarding the interpretation of the Will, particularly Clauses 10 and 26, were significant. The CLB highlighted that the terms "my shares" and "acquire" were contentious. However, the CLB concluded that it did not have the jurisdiction to interpret the Will, citing Section 75 of the Indian Succession Act, 1925, which states that such matters should be determined by a competent civil court. The CLB emphasized that the interpretation of the Will involved complicated questions of law and fact that were beyond its summary jurisdiction.
4. Jurisdiction and Applicability of Sections 111 and 111A of the Companies Act, 1956:
The CLB addressed the argument that Sections 111 and 111A should be read in conjunction. The CLB referred to the judgment in Finolex Industries Limited v. Anil Ramchand Chhabria, which held that the remedies of appeal and rectification are available to all kinds of shares held in a public company under the proviso to Section 111A(2) and 111A(3) read with Sub-section (7) of Section 111A. The CLB concluded that it had the jurisdiction to entertain the petitions under Section 111A for rectification of the register of members.
5. Limitation Period and Applicability of the Limitation Act, 1963:
The CLB considered whether the petitions were barred by limitation. The CLB referred to the judgment of the Kerala High Court in Duroflex Ltd. v. Johnny Mathew, which upheld the CLB's power to condone delays under Section 5 of the Limitation Act. The CLB found that the petitioners had shown sufficient cause for the delay, as they were engaged in resolving the disputes before approaching the CLB. Consequently, the CLB condoned the delay and held that the petitions were not barred by limitation.
Conclusion:
The CLB ordered TPPL and TRTCL to rectify their registers by restoring the name of (late) S. Sivaramakrishna Aiyer and directed the respondents to restore dividends received. The CLB dismissed the petition regarding TWEL as there was no cause of action. The CLB emphasized that the legal heirs should seek the intervention of a competent civil court to adjudicate their rights over the shares in question. All interim orders were vacated, and no costs were awarded.
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2007 (8) TMI 775
Issues involved: Interpretation of the West Bengal Thika Tenancy (Acquisition and Regulation) Act, 1981 in relation to a specific performance agreement for sale u/s Indian Contract Act, 1872.
Summary:
The appeal was filed against the High Court's decision to dismiss a suit for specific performance of an agreement for sale, which was initially decreed by the Trial Court. The agreement was made in 1973 under the Calcutta Thika Tenancy Act, 1949, but during the suit, the 1981 Act was enacted, which vested lands in the State and prohibited certain transfers.
The key provisions of the 1981 Act include Section 5, which vests lands in the State, and Section 6(3), which prohibits certain transfers of thika tenancy interests. Section 7(2) declares any transfer in contravention of these provisions as void, with Section 4 having an overriding effect on all laws.
The Court had to determine whether the specific performance of the agreement became impossible due to the 1981 Act. The Act significantly changed the concept of Thika tenancy, with the landlord's interest vesting in the State. The Indian Contract Act, 1872, Section 56 states that an agreement becomes void if the act becomes impossible, as in this case where the land vested in the State.
The appellant argued that the rights under the 1949 Act were not affected by the 1981 Act, but the Court disagreed, stating that the agreement became void under the new law. The High Court ruled that the contract had become void, entitling the plaintiff to a refund of consideration, interest, and costs.
Ultimately, the Supreme Court upheld the High Court's decision, dismissing the appeal for lack of merit.
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2007 (8) TMI 774
Issues: Penalty proceedings u/s 260A of the Income-tax Act, 1961 for assessment year 2001-02.
The judgment pertains to an appeal against an order passed by the Income-tax Appellate Tribunal in penalty proceedings. Initially, the Assessing Officer accepted the return but later, the Commissioner of Income-tax directed to tax the sale of shares as short-term capital gain instead of long-term capital gain claimed by the assessee. The Assessing Officer not only taxed the assessee on short-term capital gains but also imposed a penalty for furnishing inaccurate particulars of income leading to an inaccurate computation of tax.
The assessee acquired shares from Microsoft Corporation through a stock option scheme and claimed the differential amount as long-term capital gains due to the time gap between vesting and selling of shares. The Commissioner of Income-tax (Appeals) and the Tribunal held that the assessee had furnished all necessary particulars accurately, and there was no inaccurate information provided for tax computation.
The High Court, after reviewing the case records, found that the assessee had made a full disclosure of all facts required by the revenue, and no inaccurate particulars were furnished to gain an advantage. The Court concluded that no substantial question of law arose, especially considering the concurrent findings of the lower authorities.
The revenue contended that the date of acquisition of shares was incorrectly mentioned by the assessee. However, the Court upheld the lower authorities' findings, noting that even the Assessing Officer initially accepted the assessee's stand. Consequently, the appeal was dismissed.
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2007 (8) TMI 773
Issues involved:
The judgment involves the interpretation of Section 13-A(6) of the U.P. Trade Tax Act, specifically regarding the seizure of goods due to non-compliance with Circular No. 5482 dated 31-3-2007. The key issues include the justification of the seizure of goods, the requirement of information through E-Mail before dispatching goods, and the maintenance of proper books of account by the applicant.
Summary:
Seizure of Goods Justification:
The Tribunal justified the seizure of goods based on the applicant's failure to provide information as required by Circular No. 5482 dated 31-3-2007 before dispatching the goods. Additionally, it was noted that the applicant did not maintain manufacturing accounts and stock registers adequately, despite being a significant manufacturer of Iron Steel. The Tribunal's decision to allow the release of goods upon furnishing a bank guarantee of Rs. 1 Lac was based on these grounds.
Interpretation of Section 13-A(1-A):
Section 13-A(1-A) empowers officers to seize goods if there is reason to believe that the goods are not traceable to a bona fide dealer or are not properly accounted for in the dealer's records. In this case, it was argued that there was no evidence to suggest that the goods were not entered in the books of account. The Circular dated 31-3-2007, requiring information before dispatching goods, was deemed regulatory but not sufficient to override the Act's provisions. The seizure of goods should be based on concrete evidence rather than presumption.
Compliance with Circulars:
The applicant contended that their manufacturing unit lacked E-Mail facilities and that the Circular dated 31-3-2007 initially applied only to sales, not stock transfers. They had sought extensions for compliance with the Circular, highlighting the regulatory nature of such directives. The subsequent extension of the Circular to cover stock transfers was noted, emphasizing the need for clear guidelines in regulatory matters.
Conclusion:
After considering the arguments and examining the legal provisions, the Court found that the seizure of goods was not justified in this case. The lack of concrete evidence to support the belief that the goods were not properly recorded in the books of account led to the decision to set aside the Tribunal's order. The authority was directed to release the goods without further delay.
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