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Showing 61 to 80 of 333 Records
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1999 (1) TMI 479
The appeal involved the import of an "Ultra Sound Scanner." The appellant ordered the machine for professional use, but an old machine was given temporarily. The Customs Department wrongly invoked provisions of the Customs Act. The appeal was allowed, setting aside the penalty.
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1999 (1) TMI 461
Does the doctrine of promissory estoppel apply in the facts and circumstances of this case, so as to prevent the amendments from even having prospective effect in the case of the present applicant?
Held that:- Appeal allowed. As before applying the doctrine of promissory estoppel, as it did, the Tribunal should have reached a finding as to whether or not the respondent's plant qualified as a small-scale industry or as a mini cement plant within the meaning of the amended scheme. This was the respondent's only case before it. If the particulars in this behalf were not, as it stated, before the Tribunal, the Tribunal should have called for the same or sought a finding on this aspect from the tax authorities.
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1999 (1) TMI 456
The High Court of Bombay directed the Official Liquidator to invite quotations from 20 more Chartered Accountants. Secured creditors must provide claim details within two weeks. Expenses for appointing accountants and auditors will be shared by secured creditors based on their debts. Valuation and other expenses to be borne by secured creditors in proportion to their dues.
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1999 (1) TMI 455
Issues Involved:
1. Deficiency in service by the insurance company.
2. Validity and genuineness of the insurance claims.
3. Jurisdiction and appropriateness of the Consumer Forum vs. Civil Court.
Issue-wise Detailed Analysis:
1. Deficiency in Service by the Insurance Company:
The primary issue was whether the New India Assurance Co. Ltd. was deficient in its service by not settling the insurance claims made by the complainant. The complainant argued that the insurance company failed to settle claims for losses due to a fire accident caused by an electrical short-circuit. The District Forum initially held that there was a deficiency in service on the part of the insurance company for not settling the claims despite being liable to pay compensation. However, the insurance company contended that their investigation indicated the claims were not genuine and the cause of the fire was suspicious.
2. Validity and Genuineness of the Insurance Claims:
The insurance company appointed a surveyor who reported inconsistencies in the complainant's statements regarding his presence at the time of the accident. The surveyor's report suggested that the fire's rapid spread was unusual for an electrical short-circuit, and the shop's door number did not match the policy's specified location. Additionally, the complainant's failure to submit necessary claim forms and lease documents further cast doubt on the claim's authenticity. The insurance company argued that these factors justified their suspicion and subsequent repudiation of the claim.
3. Jurisdiction and Appropriateness of the Consumer Forum vs. Civil Court:
The insurance company argued that the District Forum should have referred the matter to a Civil Court, citing precedent cases where thorough investigations by surveyors led to the conclusion that claims were not tenable. The National Commission's decisions in similar cases emphasized that disputes involving detailed factual investigations and substantial evidence should be adjudicated in Civil Courts, where both parties could fully present their cases.
Conclusion:
The appellate authority concluded that the insurance company had justifiably repudiated the claims based on thorough investigations and relevant findings. The inconsistencies in the complainant's statements, the mismatch of the shop's door number, and the complainant's premature filing of complaints without submitting necessary documents supported the insurance company's decision. The judgment emphasized that the complainant should pursue remedies through a civil suit rather than the Consumer Forum. Consequently, the appeals were allowed, the District Forum's order was set aside, and the complaints were dismissed without prejudice to the complainant's right to approach a civil court for appropriate reliefs. Appeals allowed.
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1999 (1) TMI 444
Issues:
1. Appeal against order disallowing modvat credit and imposing penalty.
2. Delay in filing the appeal and condonation of the same.
Analysis:
1. The appellant, engaged in manufacturing Medicaments, availed modvat credit on imported goods not in the name of the consignee. The Assistant Commissioner disallowed the credit, imposed a penalty, and the appeal was rejected by the Commissioner (Appeals) Ahmedabad. The appellant appealed against this order, seeking remand for deciding the appeal on merits. The issue revolved around the wrongful availing of modvat credit and the subsequent penalty imposed.
2. The appellant argued that the delay in filing the appeal was due to awaiting clarification and amendment of the original order, which was not received despite assurances from the department. The Commissioner (Appeals) did not provide an opportunity to explain the delay. The appellant's claim of waiting for the order's rectification was supported by a letter to the Superintendent, which went unanswered. The delay of 76 days was condoned, emphasizing the need for a fair hearing and rectification of the original order before deciding on the appeal's merits.
Judgment:
The Tribunal admitted the appeal, condoned the delay of 76 days in filing the appeal before the Commissioner, and remanded the case back to the Commissioner (Appeals) for a fair hearing and disposal according to the law. The decision emphasized the importance of providing an opportunity for parties to present their case and rectify any discrepancies in the original order before proceeding with the appeal on its merits.
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1999 (1) TMI 436
Demand of differential tax - Held that:- Appeal dismissed. That the State Legislature had the power to amend the Andhra Pradesh General Sales Tax Act is not in dispute. It also is not disputed that the amendment made by the 1996 Act was in exercise of its legislative powers by the State Legislature. The validity of the amendment had not been questioned either in the writ petition or even before us. That being the fact situation, the grievance made by learned counsel for the petitioner to the effect that the demand of differential tax based on the amendment of entry 37 could not have been made, is wholly mis-conceived. It is settled-position that an assessee is liable to pay sales tax and the question whether he has collected it from consumer or not is of no consequence. His liability is by virtue of being an assessee under the Act.
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1999 (1) TMI 429
Issues Involved:
The judgment addresses the inclusion of service charges in the assessable value for customs duty calculation and the applicability of Rule 9(1)(d) of GATT Valuation Rules.
Issue 1: Inclusion of Service Charges in Assessable Value
The Appellants filed refund claims due to the inclusion of service charges in the assessable value for customs duty calculation. The Asstt. Collector and the Collector (Appeals) held that the service charges form part of the assessable value under the Customs Valuation Rules, 1988. The Appellants contended that the service charges should not be included in the assessable value under Section 14 of the Customs Act, 1962. They argued that the service charges were in the nature of buying commission and should be excluded from the assessable value as per Rule 9(1)(a)(i) of the Customs Valuation Rules, 1988. The Tribunal examined the case law cited by the Appellants, including the decision of the Apex Court in Apollo Tyres v. CC [1997 (89) E.L.T. 7 (S.C.)], and concluded that the service charges collected by the canalising agency were buying commission and should not be included in the invoice value of the imported goods.
Issue 2: Applicability of Rule 9(1)(d) of GATT Valuation Rules
The impugned order relied on Rule 9(1)(d) of GATT Valuation Rules to justify the inclusion of service charges in the assessable value. However, the Tribunal determined that in this case, the service charges collected by the canalising agency were not commission or brokerage paid by the foreign supplier to the Indian importer. Since the service charges were collected by the canalising agency and were akin to buying commission, they were exempted from inclusion in the assessable value as per Rule 9(1)(a)(i) of the Customs Valuation Rules, 1988.
In conclusion, the Tribunal set aside the impugned order and allowed the appeals, stating that the service charges collected by the canalising agency should not be included in the assessable value for customs duty calculation. Any consequential relief was deemed admissible to the Appellants in accordance with the law.
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1999 (1) TMI 422
Issues:
- Maintainability of the appeal under section 111(2) of the Companies Act, 1956
- Interpretation of the term 'aggrieved person' in the context of filing an appeal
- Applicability of section 10F for filing an appeal before the High Court
- Time limitation for filing an appeal
Analysis:
Issue 1: Maintainability of the appeal under section 111(2) of the Companies Act, 1956
The appellant challenged the Company Law Board's order on the grounds of maintainability, arguing that despite not being the transferor or transferee, he was aggrieved by the respondent company's actions and thus eligible to file an appeal under section 111(2) of the Act. The appellant contended that his financial loss due to the respondent's refusal to transfer shares justified his appeal. However, the Board found that the appellant did not fall within the scope of section 111(2) as he was neither the transferor nor the transferee, nor the person giving intimation of transmission by operation of law. The Board's decision was based on the specific provisions of the Act, which limited the right to appeal to the transferor or transferee.
Issue 2: Interpretation of the term 'aggrieved person' in the context of filing an appeal
The appellant argued that as the seller of the shares on behalf of the transferor, he qualified as an 'aggrieved person' under section 111(2). However, the court disagreed, emphasizing that the term 'aggrieved person' encompassed the transferor who initiated the transfer and the transferee who lodged the share certificate. The appellant's intermediary role did not confer upon him the right to appeal, especially since he did not request the company for share registration. The court clarified that a substantial grievance related to personal or property rights was necessary to qualify as an aggrieved person, which the appellant did not meet in this case.
Issue 3: Applicability of section 10F for filing an appeal before the High Court
The appellant's attempt to rely on section 10F for filing an appeal before the High Court was dismissed as he failed to raise any question of law requiring consideration. The court highlighted that only those directly involved in the transfer process, such as the transferor or transferee, could file an appeal before the Board. The appellant, being a stranger to section 111(2), did not meet the criteria of an 'aggrieved person' and thus could not claim the right to appeal under section 10F.
Issue 4: Time limitation for filing an appeal
Furthermore, the court noted that the appeal was time-barred, as it was filed beyond the sixty-day limit from the date of the Board's decision. The appellant did not provide any justification for the delay or seek condonation for the same. Consequently, the court found the appeal both legally unsustainable and procedurally time-barred, leading to its dismissal.
In conclusion, the High Court upheld the Company Law Board's decision, ruling that the appellant's appeal was not maintainable under section 111(2) of the Companies Act, 1956, and was also barred by time. The court emphasized the importance of meeting the legal requirements for filing appeals and clarified the scope of 'aggrieved person' in the context of company law proceedings.
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1999 (1) TMI 421
Issues Involved:
1. Permission for the Samiti to run the Chanpatia factory for the 1998-99 crushing season.
2. Allegations of misappropriation and defalcation of funds by the Samiti.
3. Inspection and report by the official liquidator.
4. Objections by the Sangharsh Samiti and other parties.
5. Conditions imposed on the Samiti for running the factory.
Detailed Analysis:
1. Permission for the Samiti to run the Chanpatia factory for the 1998-99 crushing season:
The Champaran Sugar Co. Ltd., in liquidation, had its Chanpatia factory run by the workers' cooperative society (Samiti) during the 1997-98 crushing season as an interim measure. The Samiti submitted an application (A-163) seeking permission to run the factory for the 1998-99 season. Despite not generating profits and incurring a loss of about Rs. 3 lakhs, the factory produced sugar worth about Rs. 3 crores and paid the workers and cane-growers substantially. The Court considered the interest of the workmen and cane-growers, whose livelihood depended on the factory, and decided to grant permission for one more season under specific conditions.
2. Allegations of misappropriation and defalcation of funds by the Samiti:
The objections raised by the Sangharsh Samiti and other parties alleged that the Samiti misutilized the opportunity by misappropriating and defalcating funds, selling scrap, ungraded sugar, molasses, and other items illegally. The official liquidator's report, however, did not substantiate these allegations. The Court noted that the security of the factories was not under the control of the official liquidator, making it difficult to pinpoint any theft or pilferage.
3. Inspection and report by the official liquidator:
The Court directed the official liquidator to inspect the two factories and submit a report to verify the allegations. The official liquidator's report, based on records and inspections, indicated that the factory ran for 65 days, purchasing 3,13,728.47 quintals of sugarcane and producing 25,249 quintals of sugar. The report showed substantial payments to cane-growers and workers, with a balance of Rs. 15 lakhs remaining unpaid to the staff. The Court accepted the report, finding no substantial proof of misappropriation or defalcation.
4. Objections by the Sangharsh Samiti and other parties:
The objections (A-166, A-170, A-171) primarily came from the Barachakia factory workers, who were not receiving payments as their factory required conversion to a sulphitation plant. The Court noted the potential internal disputes and politics among the workers as a factor in the objections. The objections did not dispute the running of the Chanpatia factory or the payments made to workers and cane-growers but focused on alleged malpractices by the Samiti.
5. Conditions imposed on the Samiti for running the factory:
The Court imposed several conditions on the Samiti for running the Chanpatia factory for the 1998-99 season:
1. An undertaking not to remove, sell, or transfer any machinery or assets without the official liquidator's permission.
2. Deposit proceeds from sales in a bank and use them for factory expenses.
3. Inform the official liquidator and obtain permission for hypothecating stocks.
4. Comply with free sale and levy requirements.
5. Appoint an internal auditor approved by the official liquidator.
6. Bear all payments and liabilities without imposing them on the company or official liquidator.
7. Obtain permission for selling scrap or ungraded items.
8. Not cut any trees without Court permission.
9. Maintain overall control of the factory with the Court and official liquidator.
10. Obtain a resolution from Samiti members agreeing to the conditions.
11. Report on steps taken for converting the Barachakia factory and generating funds.
The Court concluded that the Samiti should be given another opportunity to run the Chanpatia factory under these conditions, ensuring transparency and accountability while protecting the interests of the workmen and cane-growers.
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1999 (1) TMI 420
Issues involved:
1. Interpretation of a decree against multiple defendants.
2. Determination of personal liability of managing director and director in a decree.
3. Consideration of whether defendants are necessary parties.
4. Correction of judgment and decree to remove personal liability.
5. Application of legal principles regarding nullity of a decree.
Interpretation of Decree Against Multiple Defendants:
The Indian Overseas Bank obtained a decree against multiple defendants, including a private limited company and its managing director and director. The executing court was approached by the bank to proceed against the properties of the defendants. However, the defendants contended that they were not personally liable for the decree amount. The court analyzed the decree and found that it clearly included all three defendants, making them jointly liable. The court emphasized that unless the decree is a nullity, the executing court must enforce it as per its plain language, rejecting the defendants' argument against personal liability.
Personal Liability of Managing Director and Director:
The court referred to a previous decision by the Orissa High Court, which highlighted that directors are generally immune from liability to creditors of their company unless fraudulent misrepresentations were involved in obtaining the loan. In this case, the trial court found that the managing director and director were personally liable based on their specific undertaking to repay the loan. The court distinguished this case from the Orissa High Court decision, emphasizing that here, the trial court correctly held the defendants personally liable based on the evidence presented.
Determination of Necessary Parties and Amount Due:
The trial court established that the managing director and director were necessary parties in the suit and personally liable for the amount due to the plaintiff. The court found that the defendants' contentions lacked evidence, while the plaintiff's documents supported the claim. Consequently, the trial court decreed in favor of the plaintiff, reinforcing the personal liability of the defendants.
Correction of Judgment and Decree:
The defendants attempted to correct the judgment and decree to remove their personal liability, but the court rejected this request. The court reasoned that the liability was not a mistake but a result of judicial reasoning, estopping the defendants from raising the same contentions again. The court emphasized that the correction sought did not fall within the purview of the Civil Procedure Code.
Application of Legal Principles Regarding Nullity of Decree:
The court discussed the concept of a decree being a nullity and highlighted that executing courts can ignore decrees that are nullities, such as those passed without jurisdiction. Referring to Supreme Court decisions, the court emphasized that a decree's validity should be challenged in appellate proceedings if deemed incorrect, rather than in execution proceedings. The court concluded that the decree in this case was not a nullity, as it was clear and based on judicial reasoning, affirming the personal liability of the defendants.
In conclusion, the High Court set aside the lower court's order and held that the managing director and director were personally liable for the decree, allowing the bank to proceed against their properties. The Civil Revision Petition was allowed, affirming the personal liability of the defendants as per the decree.
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1999 (1) TMI 419
Issues:
1. Petition filed under section 433(c) of the Companies Act, 1956 for winding up.
2. Allegations of mismanagement leading to financial crisis and opposition by financial institutions.
3. Examination of objections raised against winding up application.
4. Appointment of official liquidator and specific directions for securing financial institutions' interests.
5. Investigation into asset valuation, sale, and conduct of directors.
6. Directions for engaging a chartered accountant to investigate financial mismanagement.
7. Emphasis on accountability of company officials and need for stringent action in cases of financial misconduct.
Analysis:
1. The petition filed under section 433(c) of the Companies Act, 1956 seeks an order of winding up due to the company's inability to conduct business satisfactorily or repay debts owed to financial institutions. The company faced difficulties leading to a standstill in operations, prompting the petition for winding up.
2. Financial institutions, particularly Canara Bank, oppose the winding up, alleging gross mismanagement by company officials. The bank contends that the financial crisis was a result of deliberate actions post-borrowing, and the winding up petition is an attempt to evade liabilities. Negotiations for reviving the company were made, but the bank claims further assistance was misused.
3. Various objections against the winding up application were examined, with none found to impede the court from granting the petition. Despite acknowledging the financial institutions' concerns, the court emphasizes the legal grounds for winding up if a company's operations cease for over a year.
4. The court orders the winding up of the company under section 433(c) and appoints an official liquidator. Specific directions are issued to the official liquidator to secure the interests of financial institutions, investigate asset valuation discrepancies, and take necessary steps for the liquidation proceedings.
5. An investigation into the asset valuation, sale, and conduct of directors is mandated. The official liquidator is directed to engage a chartered accountant to probe potential financial mismanagement, misuse of funds, and misfeasance by company officials, ensuring accountability and thorough scrutiny.
6. Emphasizing the need for accountability, the court directs stringent action against those involved in financial misconduct, highlighting the trusteeship responsibilities of company officials over corporate assets and public funds. The court aims to set an example by holding guilty parties accountable in the public interest, signaling a commitment to transparency and integrity in corporate affairs.
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1999 (1) TMI 417
Issues Involved:
1. Whether on appointment of a Provisional Liquidator, the board of directors can move BIFR under the provisions of the Act, 1985.
2. Whether on account of suppression of facts, the Order of BIFR can be considered non est and of no effect and can be ignored by this Court.
3. Whether the act of the Official Liquidator taking possession of the assets is merely an administrative act and consequently does not stand suspended despite the registration of the case on 1-12-1998.
Detailed Analysis:
Issue 1: Whether on appointment of a Provisional Liquidator, the board of directors can move BIFR under the provisions of the Act, 1985.
The court examined Section 450(3) of the Companies Act, 1956, which indicates that a provisional liquidator has the same powers as a liquidator unless limited by the court. The court referred to the case of *Union Accident Insurance Co. Ltd., In re* [1972] 1 ALL ER 1105, where it was established that the board retains some residuary powers even after the appointment of a provisional liquidator. The court noted that the Sick Industrial Companies (Special Provisions) Act, 1985 aims to rehabilitate sick companies, a function not within the powers of a liquidator. Therefore, the board retains the power to refer the company to BIFR for rehabilitation purposes. The court also cited judgments from the Delhi High Court and Kerala High Court supporting the view that the board retains certain powers despite the appointment of a provisional liquidator.
Issue 2: Whether on account of suppression of facts, the Order of BIFR can be considered non est and of no effect and can be ignored by this Court.
The court referred to the Supreme Court judgment in *Real Value Appliances Ltd. v. Canara Bank* AIR 1998 SC 2064, which clarified that any misconduct before the High Court does not invalidate the registration of the reference before the BIFR. The Supreme Court held that if orders were obtained by fraud, the aggrieved party could request the High Court to recall such orders. Therefore, the court concluded that the order of BIFR could not be considered non est due to suppression of facts.
Issue 3: Whether the act of the Official Liquidator taking possession of the assets is merely an administrative act and consequently does not stand suspended despite the registration of the case on 1-12-1998.
The court examined Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, which mandates that all proceedings, including winding up, must be suspended once a case is registered with BIFR. The court cited the Supreme Court's interpretation in *Maharashtra Tubes Ltd. v. State Industrial & Investment Corpn. of Maharashtra Ltd.* [1993] 78 Comp. Cas. 803, which emphasized that the purpose of the Act is to freeze all actions against the sick company until its revival is determined. The court rejected the argument that taking possession is merely an administrative act, noting that all proceedings, including those by the Official Liquidator, must be suspended once the case is registered with BIFR.
Conclusion:
The court concluded that all further proceedings against the company are stayed under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985. The petitioners can move the court if the BIFR order is set aside or if BIFR passes any order allowing the court to assume jurisdiction in the matter of appointing a provisional liquidator.
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1999 (1) TMI 416
Issues:
1. Jurisdiction of Special Court for Economic Offences under the Companies Act, 1956.
2. Interpretation of the term 'Economic Offence' in the context of legal proceedings.
3. Obligations of a former officer of a company regarding production of official records post-termination.
Analysis:
Issue 1: Jurisdiction of Special Court for Economic Offences under the Companies Act, 1956:
The judgment dealt with two cases raising a common question of law regarding the jurisdiction of the Special Court for Economic Offences under the Companies Act, 1956. The contention was whether certain offences under the Act fell within the purview of the Special Court or could be tried by regular Magistrates. The court considered the provisions of the Act, previous judgments, and the scope of the Special Court's jurisdiction. It was held that all offences under the Companies Act, whether 'economic' or 'non-economic' in nature, are triable by the Special Court for Economic Offences. The court disagreed with the view that only specific economic offences should be tried by the Special Court, emphasizing the inclusive nature of the Act under the Special Court's jurisdiction.
Issue 2: Interpretation of the term 'Economic Offence' in the context of legal proceedings:
The court delved into the interpretation of what constitutes an 'Economic Offence' in the context of legal proceedings. It noted that while the term was not specifically defined, it generally pertains to offences related to money, property, goods, or services with exchange value. The judgment emphasized that the lack of a clear distinction between 'economic' and 'non-economic' offences under the Companies Act led to the conclusion that all offences under the Act are triable by the Special Court for Economic Offences. The court highlighted the redundancy of making such a division when the Act was explicitly included in the list of Acts falling under the Special Court's jurisdiction.
Issue 3: Obligations of a former officer of a company regarding production of official records post-termination:
The judgment also addressed the obligations of a former officer of a company concerning the production of official records after termination. It examined a case where a former Managing Director was accused of withholding records after ceasing to hold office. The court rejected the argument that such actions did not constitute an offence under the Act, emphasizing that even retired officers could be prosecuted for omissions or commissions during their tenure. The court upheld that the Special Court had jurisdiction to try such offences, disagreeing with the view that the Special Court lacked jurisdiction in cases involving former officers.
In conclusion, the judgment clarified the jurisdiction of the Special Court for Economic Offences under the Companies Act, 1956, emphasizing the inclusive nature of the Act under the Special Court's purview. It also highlighted the broad interpretation of 'Economic Offence' and the obligations of former company officers regarding the production of official records, ensuring a comprehensive legal analysis of the issues involved in the cases before the court.
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1999 (1) TMI 415
Issues Involved:
(a) Whether on appointment of a provisional liquidator, the board of directors can move the BIFR under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985?
(b) Whether on account of suppression of facts the order of the BIFR can be considered to be non est and of no effect and can be ignored by this court?
(c) Whether the act of the official liquidator taking possession of the assets is merely an administrative act and consequently does not stand suspended in spite of registration of the case on December 1, 1998?
Issue-wise Detailed Analysis:
(a) Whether on appointment of a provisional liquidator, the board of directors can move the BIFR under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985?
The court analyzed Section 450(3) of the Companies Act, which states that a provisional liquidator has the same powers as a liquidator unless restricted by the court. It was argued that the board becomes defunct upon the appointment of a provisional liquidator, rendering any subsequent resolutions or actions, such as moving the BIFR, invalid. However, the court referred to the judgment in Union Accident Insurance Co. Ltd., In re [1972] 1 All ER 1105 (Ch. D.), which established that the board retains some residuary powers even after the appointment of a provisional liquidator, such as defending proceedings or appealing orders. The court concluded that the board retains the power to move the BIFR for the purpose of rehabilitating the company, as these are not powers assumed by the liquidator.
(b) Whether on account of suppression of facts the order of the BIFR can be considered to be non est and of no effect and can be ignored by this court?
The court referred to the apex court's judgment in Real Value Appliances Ltd. v. Canara Bank [1998] 93 Comp. Cas. 26 (SC), which clarified that any conduct of the appellant-company before the High Court does not invalidate the registration of the reference before the BIFR. If orders were obtained by fraud, the respondent could ask the High Court to recall such orders. Therefore, the suppression of facts does not render the BIFR order non est, and the proper recourse is to move the Board for recalling the order.
(c) Whether the act of the official liquidator taking possession of the assets is merely an administrative act and consequently does not stand suspended in spite of registration of the case on December 1, 1998?
The court examined Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, which mandates that no proceedings for winding up, execution, distress, or appointment of a receiver can proceed without the consent of the BIFR once a case is registered. The court cited Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. [1993] 78 Comp. Cas. 803 (SC) and Real Value Appliances Ltd. v. Canara Bank [1998] 93 Comp. Cas. 26 (SC), which held that the provisions of Section 22 come into effect immediately upon registration of the case, staying all proceedings. The court rejected the argument that the act of taking possession by the official liquidator is merely administrative, concluding that all proceedings, including the liquidator's actions, are suspended upon registration with the BIFR.
Conclusion:
All further proceedings against the company are stayed in terms of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985. The petitioners can move the court if the BIFR's order is set aside or if the BIFR passes any order affecting the court's jurisdiction in the matter of appointing a provisional liquidator.
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1999 (1) TMI 414
The High Court of Kerala ruled that a succession certificate is required to disburse a debt due to a deceased person. A certificate from the Tahsildar is not sufficient. The court cannot bypass procedural safeguards under the Indian Succession Act. The Official Liquidator must pay out the amount upon the production of a succession certificate or a certificate from the Administrator General.
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1999 (1) TMI 413
Whether under section 9 of The Arbitration and Conciliation Act, 1996 the Court has jurisdiction to pass interim orders even before arbitral proceedings commence and before an arbitrator is appointed?
Held that:- Appeal allowed. The High Court erred in coming to the conclusion that the Trial Court had no jurisdiction in entertaining the application under section 9 because arbitration proceed- ings had not been initiated by the appellant.
Accordingly set aside the judgment of the High Court but as the High Court has not considered the merits of the case, it is directed that the petition filed by the respondent, challenging the order of the Trial Court, be decided on merits
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1999 (1) TMI 412
The High Court of Bombay rejected the Petitioner's application for readmission as a member of the Stock Exchange. The Petitioner had assigned membership rights to another entity, leading to breaches of rules and regulations. The Committee found the Petitioner lacked control over his business, resulting in significant liabilities. The Petitioner's non-compliance with rules led to the rejection of the readmission request. The Court dismissed the petition, citing differences with a similar case. (Case Citation: 1999 (1) TMI 412 - HIGH COURT OF BOMBAY)
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1999 (1) TMI 411
The High Court of Bombay allowed the petition under section 633(2) of the Companies Act, 1956, granting relief to the petitioners from criminal liability for non-compliance with section 113. The court found that the petitioners had acted honestly and reasonably, following a similar judgment in a previous case. The petition was allowed, and there was no order as to costs.
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1999 (1) TMI 409
The petitioners, a financial company and its shareholder, filed an application for registration under section 45(IA) of the Reserve Bank of India Act. The application was initially rejected, citing a missed deadline, but the court ruled in favor of the petitioners based on the interpretation of Section 9 of the General Clauses Act. The court allowed the writ petition, quashed the rejection letter, and directed the authorities to process the application as per the Act.
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1999 (1) TMI 408
Issues Involved:
1. Substitution of a creditor for the original petitioner under Rule 101 of the Companies (Court) Rules, 1959.
2. Determination of the Coffee Board's status as a creditor.
3. Applicability of Sections 433, 434, and 439 of the Companies Act, 1956.
4. Discretionary power of the court to allow substitution.
5. Procedural aspects following substitution under Rules 102 to 104.
Detailed Analysis:
Issue 1: Substitution of a Creditor for the Original Petitioner
The appeal was directed against the order allowing substitution of the Coffee Board as a petitioner in the winding-up petition under Rule 101 of the Companies (Court) Rules, 1959. The original petition was filed by two creditors, and the Coffee Board sought to substitute itself as the petitioner after the original creditors abandoned the petition.
Issue 2: Determination of the Coffee Board's Status as a Creditor
The court examined whether the Coffee Board qualifies as a "creditor" under Section 434 of the Companies Act, 1956. The company had accepted certain claims of the Coffee Board while making counterclaims against it. The court found that the Coffee Board is a "creditor" within the meaning of Section 434, thus satisfying the requirements for substitution under Rule 101.
Issue 3: Applicability of Sections 433, 434, and 439 of the Companies Act, 1956
Sections 433 and 434 outline the circumstances under which a company can be wound up, including its inability to pay its debts. Section 439 specifies that a winding-up petition can be presented by any creditor. The court analyzed these provisions to determine the legitimacy of the Coffee Board's claim and its right to be substituted as a petitioner.
Issue 4: Discretionary Power of the Court to Allow Substitution
Rule 101 provides the court with discretionary power to substitute any creditor or contributory who has the right to present a petition. The court emphasized that this power is broad and can be exercised upon terms deemed just. The court found that the Coffee Board made a prima facie case for substitution, satisfying the conditions of Rule 101.
Issue 5: Procedural Aspects Following Substitution under Rules 102 to 104
Following the substitution, Rule 102 mandates the amendment of the petition, and Rules 103 and 104 outline the procedures for filing affidavits in opposition and reply. The court noted that the appellant company had not filed an affidavit in opposition as required under Rule 103, which further supported the decision to allow substitution.
Conclusion:
The court upheld the order allowing the substitution of the Coffee Board as the petitioner, finding that the Coffee Board met the criteria of a "creditor" and that the substitution was justified under Rule 101. The appellant company was given the opportunity to file an affidavit in opposition under Rule 103. The appeal was dismissed, and no order as to costs was made.
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9911796707
