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2008 (12) TMI 793
Appointment of a sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 - interpretation of Article VI in the said agreement which according to the applicant contains the Arbitration Clause - existence of valid arbitration agreement between the parties or not - existence of live claim between the parties or not.
Whether there exists a valid arbitration agreement between the parties? - HELD THAT:- In the present case the parties did not agree upon any particular procedure for the appointment of the arbitrator. Clause VI provides that disputes arising out of the agreement which could not be settled amicably shall be finally settled in accordance with the provisions of the Act.
Whether the parties have agreed to resolve their disputes by arbitration or through conciliation? - HELD THAT:- What is required to be gathered is the intention of the parties from the surrounding circumstances including the conduct of the parties and the evidence such as exchange of correspondence between the parties. The respondent in none of its letters addressed to the applicant suggested that the dispute between the parties is required to be settled through conciliation and not by arbitration. In response to the applicant's letter invoking the arbitration clause the respondent merely objected to the names inter-alia contending the suggested arbitration would not be cost effective and the demand for arbitration itself was a premature one.
Is there any material available on record suggesting that the parties intended to resolve their disputes through conciliation on failure to settle the disputes amicably among themselves? - HELD THAT:- The arbitration clause states that the disputes arising out of the agreement which cannot be settled amicably to be finally settled in accordance with the Arbitration and Conciliation Act, 1996. Therefore, the provisions of the said Act will govern the appointment of Arbitrator, the reference of disputes and the entire process and procedure of arbitration from the stage of appointment of arbitration till the award is made and executed/given effect to. The provisions of the said Act would meet the requirement of checklist of the matters enumerated in the treatise. Once the parties agree for resolution of dispute in accordance with the Arbitration and Conciliation Act, 1996 the said Act will take care of the entire processes and procedure. Be that as it may when the specific intention of the parties is clearly evident from the arbitration clause the same cannot be treated as vague on the ground that it does not satisfy the suggested checklist of all matters to be considered while drafting an arbitration agreement.
Whether invocation of Article VI providing for arbitration is premature? - HELD THAT:- The exchange of letters between the parties undoubtedly discloses that attempts were made for an amicable settlement but without any result leaving no option but to invoke arbitration clause.
Whether there is any live issue between the parties? - HELD THAT:- It is amply clear from the facts as pleaded and as well as from the exchange of correspondence between the parties that there has not been any satisfaction recorded by the parties with respect to their claims. There has been no mutual satisfaction arrived at between the parties as regards the dispute in hand. The claims are obviously not barred by any limitation. It is thus clear that there is a live issue subsisting between the parties requiring its resolution.
Thus, a clear case is made out for appointment of an arbitrator to decide the disputes between the parties - application allowed.
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2008 (12) TMI 792
Issues Involved:
1. Validity of ex parte order.
2. Compliance with procedural requirements under Order 5 Rules 19 and 20 CPC.
3. Presumption of service under Section 27 of the Post Office Act and Section 114 of the Evidence Act.
4. Requirement for recording reasons for satisfaction under Rule 20.
Summary:
1. Validity of ex parte order:
The petitioner, the eighth respondent in E.P. No. 153 of 1982 in O.S. No. 379 of 1954, was set ex parte by the executing Court on 05.04.2002. He filed an application to set aside the ex parte order within 30 days from the date of his knowledge on 28.02.2008. The executing Court dismissed the application, stating it could not be believed that the petitioner obtained the information about the ex parte order only on 28.02.2008, as his siblings had already made an appearance through their lawyer.
2. Compliance with procedural requirements under Order 5 Rules 19 and 20 CPC:
The petitioner contended that the executing Court did not follow the procedures contained in Order 5 Rules 19 and 20 CPC, which vitiated the ex parte order. The Court bailiff returned the notice stating "no residence," and the Court ordered for publication in a newspaper. The petitioner argued that the Court must declare that summons was duly served by recording its reasons and, if not, proceed under Rule 20 with substituted service, recording reasons for its satisfaction.
3. Presumption of service under Section 27 of the Post Office Act and Section 114 of the Evidence Act:
The respondents argued that a presumption should be drawn under Section 27 of the Post Office Act and Section 114 of the Evidence Act that the summons was duly served on the petitioner. The Court noted that even though the presumption as to the service is drawn in favor of the respondents, the Court did not presume that summons was served upon the petitioner and did not make its declaration as ordained by Rule 19 but acted under Rule 20.
4. Requirement for recording reasons for satisfaction under Rule 20:
The Court discussed various judicial pronouncements on whether the Court must record its reasons for satisfaction before ordering substituted service under Rule 20. The Supreme Court held that if the satisfaction of the Court is implicit, it is sufficient. The Court concluded that no duty is cast upon the Court under Rule 20 to explicitly express its satisfaction by recording the reasons, and the order of substituted service passed by the executing Court is valid.
Conclusion:
The civil revision petition is dismissed, and the ex parte order is upheld as valid. The Court held that the executing Court followed the procedures laid down in the CPC, and there was no legal infirmity in the proceedings. The requirement for recording reasons for satisfaction under Rule 20 is not mandatory, and the order of substituted service is valid in the eye of law.
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2008 (12) TMI 791
Issues Involved:
1. Legality of the Lok Adalat's Award
2. Dismissal of the Second Appeal for Default
3. Refusal to Restore the Second Appeal
Summary:
1. Legality of the Lok Adalat's Award:
The appellants, defendants in a suit for declaration and mandatory injunction, had their second appeal referred to the Lok Adalat by the Kerala High Court Legal Services Committee. The Lok Adalat, consisting of two retired Judges, purported to pass an 'award' on 25.5.2007, directing the appellants to vacate certain buildings by 31.7.2007. However, the Supreme Court noted that "Lok Adalats have no adjudicatory or judicial functions" and their role is purely conciliatory. The Lok Adalat's 'award' was deemed erroneous and illegal as it was made without a final settlement between the parties, which is a prerequisite for such an award.
2. Dismissal of the Second Appeal for Default:
The second appeal was listed for final hearing on 19.8.2008. The appellants' counsel requested an adjournment due to personal inconvenience, which was rejected by the learned Single Judge, who dismissed the appeal for default. The Supreme Court highlighted that "a court should not permit any prejudice to creep into its judicial mind" and that the dismissal was influenced by the perceived unreasonable conduct of the appellants before the Lok Adalat, which was irrelevant to the merits of the case.
3. Refusal to Restore the Second Appeal:
An application for restoration of the appeal was filed on 20.8.2008, supported by an affidavit from the appellants' counsel citing severe ear pain as the reason for her absence. The learned Single Judge dismissed this application on 29.8.2008, stating that the appellants were "cantankerous litigants" protracting the litigation. The Supreme Court criticized this approach, emphasizing that "no party can be punished for failing to reach the settlement before the Lok Adalat" and that any prejudice against a party due to their conduct before an ADR forum violates the guarantee against bias in the judicial process.
Conclusion:
The Supreme Court allowed the appeals, set aside the impugned orders of the High Court, and restored the second appeal for disposal on merits. The Court requested the Hon. Chief Justice to assign the appeal to another learned Judge, clarifying that this was not a reflection on the judicial integrity of the original Judge.
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2008 (12) TMI 790
Appointment of arbitrator - Services Agreement as well as disputes between the parties, exist - Section 11(6) of the Arbitration and Conciliation Act, 1996.
HELD THAT:- The Services Agreement dated July 15, 2006 has not ceased to exist and the applicant is entitled to invoke the arbitration clause contained in that agreement. The application filed by the applicant is within the time prescribed by law. There is no manner of doubt that disputes are existing between the parties relating to the execution of the Services Agreement dated July 15, 2006, which are arbitrable. Under the circumstances, the instant application will have to be accepted.
Mr. Justice Arvind Sawant (Retd.), former Chief Justice, High Court of Kerala, is appointed as the sole arbitrator - application allowed.
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2008 (12) TMI 789
Issues involved:
The judgment addresses the issue of whether statutory authorities are governed by the principle of comity in the context of a dispute between two parties over the similarity of their product labels.
Consideration of the Principle of Comity:
The judgment recognizes the principle of comity in law, where different statutory authorities and courts are expected to respect each other's opinions unless they are contrary to law, public policy, or morality.
Dispute Over Product Labels:
The appellant claimed that the respondent's detergent wrapper was a slavish copy of their registered trademark "LIFEBUOY." The appellant's wrapper featured a mix of white and red colors, with the red color occupying approximately 1/3rd of the space. In contrast, the respondent used a wrapper with the same size, color, and proportion of red to white, under the name "LUCKYSOAP."
Outcome of Proceedings:
The appellant successfully opposed the respondent's application for trademark registration with the Registrar of Trademarks, citing potential confusion for consumers. However, the Copyright Board ruled against the appellant, stating that the labels were not substantially similar and did not infringe on the appellant's copyright.
Failure to Consider Prior Order:
The Copyright Board's decision did not acknowledge the Registrar of Trademarks' ruling, which the appellant argued was a grave error. The judgment emphasized that the Copyright Board should have given weight to the prior order u/s the principle of comity.
Correction of Factual Error:
The judgment noted a factual error in the Copyright Board's order regarding the appellant's registration under the Copyright Act. The appellant's petition u/s Section 50 of the Copyright Act was allowed, and the Copyright Board's decision was set aside.
Final Decision:
The appeal was allowed, the Copyright Board's order was overturned, and the appellant's petition was granted with a directive to expunge the copyright granted to the respondent. No costs were awarded in this matter.
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2008 (12) TMI 788
Issues involved: Challenge to the order of termination u/s 24 of the Primary Education Act and Gujarat Panchayat Services (Discipline and Appeal) Rules, 1997, reinstatement under section 47(1) of the Act, jurisdiction of the Commissioner of disabled persons.
Challenge to Order of Termination:
The respondent, a primary teacher, was terminated from service due to frequent absences. Despite multiple notices and opportunities to respond, the respondent did not provide any explanation or defense. The termination was carried out in accordance with the proper procedure under section 24 of the Primary Education Act and Gujarat Panchayat Services (Discipline and Appeal) Rules, 1997.
Reinstatement under Section 47(1) of the Act:
The respondent filed a case before the Commissioner of disabled persons, claiming to be suffering from a mental disease and seeking reinstatement under section 47(1) of the Act. The Commissioner allowed the application, directing the petitioner to reinstate the respondent, provide posting within seven days, pay salary, and treat her service as continuous.
Jurisdiction of the Commissioner:
The petitioner challenged the Commissioner's order, arguing that the Commissioner lacked jurisdiction to set aside the termination order. The petitioner contended that there was a significant delay in filing the application after the termination. The respondent's advocate argued that the order was justified under section 47 of the Disability Act, stating that the respondent's dismissal was improper due to her mental condition.
Analysis and Decision:
After reviewing the record, it was found that the respondent had a history of prolonged absences without responding to notices or providing necessary documentation. The respondent's claim of mental illness was not substantiated with a medical certificate. The petitioner had followed due process in terminating the respondent's service, and the Commissioner erred in setting aside the termination order.
Conclusion:
The High Court quashed and set aside the Commissioner's order, ruling in favor of the petitioner. The Court held that the respondent's absenteeism predated the Act, and her challenge to the termination was time-barred. The decision to dismiss the respondent was deemed justified, considering the impact of her prolonged absence on the school and students.
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2008 (12) TMI 787
Issues Involved:
1. Maintainability of Summary Suits under Order 37 of the Code of Civil Procedure for claims involving damages for defamation, declaration, and permanent injunction.
2. Granting of conditional leave to defend the suits on the condition of depositing significant sums of money.
3. Whether applications under Order 7 Rule 11 of the Code of Civil Procedure should be decided before applications for leave to defend.
Detailed Analysis:
1. Maintainability of Summary Suits under Order 37 of the Code of Civil Procedure:
The court examined whether the claims for damages due to defamation, along with requests for declaration and permanent injunction, could be filed as Summary Suits under Order 37 of the Code of Civil Procedure. The relevant provisions of Order 37 Rule 1(2) and Rule 2 were scrutinized, which specify that Summary Suits are applicable to suits upon bills of exchange, hundies, promissory notes, or suits to recover a debt or liquidated demand in money payable by the defendant on a written contract, enactment, or guarantee.
The judgment highlighted that the claims for damages due to defamation do not fall within the classes mentioned in Order 37 Rule 1(2). These suits involve uncertain damages that need to be ascertained through evidence, and therefore, cannot be considered as suits to recover a fixed sum of money. Additionally, the inclusion of reliefs for declaration and permanent injunction further disqualified these suits from being maintainable under Order 37. The court concluded that the issue of whether such Summary Suits are maintainable is a serious triable issue.
2. Granting of Conditional Leave to Defend:
The trial court had granted conditional leave to the defendants to defend the suits on the condition of depositing substantial amounts (Rs. 15 Crores, Rs. 35 Crores, and Rs. 50 Lacs, respectively). The defendants argued that the trial court erred in not granting unconditional leave, especially given the serious triable issue regarding the maintainability of the suits under Order 37.
The judgment noted that the trial court failed to properly consider the defense raised by the defendants regarding the maintainability of the suits. The court observed that when there is a serious triable issue, such as the maintainability of the suit, the defendants should be granted unconditional leave to defend. Consequently, the court found that the trial court had materially erred in imposing the condition to deposit the amounts and decided to quash the impugned orders.
3. Decision on Applications under Order 7 Rule 11:
The defendants had also filed applications under Order 7 Rule 11 of the Code of Civil Procedure for the rejection of the plaints, arguing that the suits were not maintainable. The trial court had deferred the decision on these applications, stating that they need not be decided before the applications for leave to defend.
The judgment emphasized that applications under Order 7 Rule 11 should be considered and decided at the earliest possible stage. If it is determined that the suit is not maintainable, there would be no need to proceed with applications for leave to defend or summons for judgment. The court criticized the trial court's approach and underscored the importance of promptly addressing applications under Order 7 Rule 11.
Conclusion:
The court allowed the Special Civil Applications, quashing the trial court's orders that granted conditional leave to defend and instead granted unconditional leave to the defendants to defend the suits. The Civil Revision Applications filed by the plaintiffs were dismissed. The judgment underscored the necessity of addressing the maintainability of Summary Suits and the proper sequence of deciding applications under Order 7 Rule 11 before considering leave to defend.
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2008 (12) TMI 786
The Bombay High Court allowed the appellant to withdraw the appeal, which was then dismissed. The court fees will be refunded to the appellant according to the rules.
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2008 (12) TMI 785
Issues involved: Allegations of market manipulation, violation of securities regulations, imposition of penalties, appeal against debarment from securities market.
Summary:
1. The case involved allegations of market manipulation by the promoters of Cyberspace, leading to an investigation by the Securities and Exchange Board of India (SEBI) into trading activities. The Board found that circular trades were executed to artificially raise the price and volumes of Cyberspace's shares, involving entities like Amit Interchemicals P. Ltd. The appellant, a director of Amit Interchemicals, was issued a show cause notice u/s 11 and 11B of the SEBI Act for his involvement in these trades.
2. The appellant filed a reply claiming innocence, stating that he was coerced into becoming a director of Amit Interchemicals and was unaware of the trades. However, evidence presented by the Board showed that the appellant had signed delivery instruction slips and was actively involved in the circular trades. The whole-time member passed an order debarring the appellant and Amit Interchemicals P. Ltd. from the securities market for 5 years, which led to the appellant filing an appeal against this decision.
3. During the appeal hearing, it was established that the appellant was indeed a director of Amit Interchemicals and had knowledge of the trades conducted by the company. Despite initial denials, the appellant's active participation in the circular trades was confirmed through documentary evidence. The appellant's argument of being misled by the promoters was rejected, and his lack of cooperation during the investigation was noted. The appeal was dismissed, upholding the penalty imposed on the appellant for his role in the market manipulation scheme.
4. The appellant's counsel argued for a reduction in the penalty, citing other cases with lesser punishments. However, the Tribunal found that each entity involved in the scheme had distinct roles, and the severity of the penalty was justified based on the appellant's direct involvement as a director of Amit Interchemicals. Comparisons to cases of brokers and individual investors were made to emphasize the seriousness of the appellant's actions. Ultimately, the appeal was rejected, and the penalty remained unchanged.
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2008 (12) TMI 784
Issues Involved:
1. Validity of the sale of assets of the liquidated company.
2. Compliance with Rule 273 of Companies (Court) Rules, 1959.
3. Authority of KSFC and Official Liquidator in conducting the sale.
Summary:
1. Validity of the Sale of Assets of the Liquidated Company:
The appellant, a shareholder and Ex-Director of the first respondent-Company, challenged the order dated 29.1.2007 which allowed the sale of the company's assets. The sale was conducted by KSFC in association with the Official Liquidator and KSIIDC. The appellant alleged material irregularities, including the omission of KSIIDC's name in the sale notification and the failure to sell several movable assets. The court found that the sale notification was defective as it did not mention KSIIDC and did not follow the proper procedure for selling leasehold rights.
2. Compliance with Rule 273 of Companies (Court) Rules, 1959:
The appellant contended that the sale did not comply with Rule 273, which requires sales to be conducted by public auction or by inviting sealed tenders under the court's supervision. The court agreed, noting that the sale notification was vague and did not specify the leasehold rights. The sale was conducted by inviting offers rather than a public auction, which violated Rule 273.
3. Authority of KSFC and Official Liquidator in Conducting the Sale:
The court observed that KSFC did not follow the procedure under Sec.32 of the SFC Act, which requires an application to the district judge for the sale of mortgaged property. The leasehold rights of the liquidated company could not be sold as absolute ownership. The court concluded that the sale and confirmation of the property were not legal and valid.
Conclusion:
The appeal was allowed, and the impugned order dated 29.01.2007 was set aside. The court permitted KSFC to sell only the leasehold rights of the liquidated company in association with the Official Liquidator and KSIIDC, in compliance with Rule 273, by inviting tenders followed by a public auction.
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2008 (12) TMI 783
Issues Involved:
1. Applicability of the Bombay Money-Lenders Act, 1946 to the petitioners.
2. Whether the hire-purchase agreement constitutes a loan under the Act.
3. Compliance with procedural requirements u/s 200 of the Cr.P.C.
4. Responsibility of petitioner No. 2 in the alleged offence.
Summary:
1. Applicability of the Bombay Money-Lenders Act, 1946:
The petitioners sought to quash Criminal Case No. 302 of 2008 pending against them for offences u/s 5, 18, 19, 25 read with Section 34 of the Bombay Money-Lenders Act, 1946. The petitioners argued that the loan given for purchasing a rickshaw was to a trader and hence not covered under the Act. The court rejected this argument, stating that a rickshaw driver does not fit the definition of a 'trader' u/s 2(18) of the Act. Consequently, the petitioners were required to obtain a license as per Section 5 of the Act, which they failed to do, thereby contravening the provisions of the Act.
2. Hire-Purchase Agreement as a Loan:
The petitioners contended that a hire-purchase agreement should not be equated with a loan agreement. The court, referencing the Supreme Court decision in Sundaram Finance Ltd. v. State of Kerala, held that a hire-purchase agreement can be considered a loan agreement. The agreement in question involved the recovery of the loan amount with interest in installments, thus attracting the provisions of the Act.
3. Compliance with Procedural Requirements u/s 200 of the Cr.P.C.:
The petitioners argued that the original complainant was not examined on oath, as required u/s 200 of the Cr.P.C. The court dismissed this contention, noting that the complainant was a government public servant. According to Section 200 of the Cr.P.C., when a complaint is made in writing by a public servant acting in the discharge of official duties, the Magistrate need not examine the complainant and witnesses on oath.
4. Responsibility of Petitioner No. 2:
The petitioners claimed that there were no specific allegations against petitioner No. 2 regarding his responsibility for the company's affairs at the time of the alleged offence. The court found this argument baseless, as the complaint contained specific averments that petitioner No. 2 was a responsible Director of the Company.
Conclusion:
The court concluded that the petitioners had advanced loans as defined under the Act without obtaining the necessary license, thereby violating the Act. The application to quash the complaint was dismissed, and the petitioners were to be tried for the alleged offences.
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2008 (12) TMI 782
Issues Involved:
1. Maintainability of a Special Appeal from an interim order passed in contempt jurisdiction.
2. Whether a non-party to the original proceedings can be proceeded against for contempt.
3. Jurisdiction of the appellate court under Section 19 of the Contempt of Courts Act, 1970.
Summary:
1. Maintainability of Special Appeal:
The primary issue was whether a Special Appeal from an interim order passed by the court in exercise of its contempt jurisdiction is maintainable. The appellant contended that the special appeal should have been dismissed in limine as per the decision in Midnapore Peoples' Coop. Bank Ltd. v. Chunilal Nanda, [(2006) 5 SCC 399], which states that an appeal u/s 19 of the Contempt of Courts Act, 1970 is maintainable only when an order of punishment has been made. The Division Bench of the High Court admitted the special appeal and stayed the interim order of the Single Judge, but did not initially provide reasons for its decision.
2. Non-party to Original Proceedings:
The appellant argued that the first respondent, who was not a party to the original writ petition, could be proceeded against for contempt as he was aware of the court's order and benefited from the impugned Government Order. The court noted that ordinarily, a person not a party to the original proceedings cannot be proceeded against in contempt unless exceptional circumstances are established. The court referenced Babulal v. Municipal Corpn., Ratlam, [(2005) 13 SCC 101], and S.N. Banerjee v. Kuchwar Lime and Stone Co. Ltd., [AIR 1938 PC 295], emphasizing that a non-party deriving benefit from a Government Order may not be liable for contempt unless it is proven that they willfully and deliberately defied the court's direction.
3. Jurisdiction under Section 19 of the Contempt of Courts Act:
The court acknowledged the controversy regarding the appellate court's jurisdiction under Section 19 of the Contempt of Courts Act. It noted that while some decisions suggest an appeal is maintainable only when an order of punishment has been made, other decisions, such as R.N. Dey v. Bhagyabati Pramanik, [(2000) 4 SCC 400], suggest that an appeal is maintainable if the jurisdiction is exercised under the Contempt of Courts Act. The court decided not to address the larger question of maintainability under Section 19 vis-à-vis the Letters Patent of the High Court, as the matter was referred to a larger Bench.
Conclusion:
The Supreme Court quashed both the interim order of the Single Judge and the order of the Division Bench, directing the Single Judge to consider the merit of the contempt matter only after the disposal of the related writ petition. The appeal was disposed of with no costs.
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2008 (12) TMI 781
Issues involved:
1. Whether the ITAT was justified in upholding the deletion of disallowance of capital expenditure on initial issue expenditure on mutual funds.
2. Whether the ITAT was justified in upholding the deletion of disallowance of capital expenditure on professional and legal charges.
3. Whether the ITAT was justified in ignoring the decision of the Supreme Court in M/s. Brook Bond India Ltd. Vs. CIT regarding disallowance of expenditure to increase share capital.
Issue 1: Capital Expenditure on Mutual Funds
The Tribunal found that the initial expenses incurred for raising capital were in nature and could not be allowed as revenue expenditure. However, it noted that the capital raised was not for the assessee but for the mutual funds, which are independent entities. As the capital structure of the assessee did not increase by the capital raised for mutual funds, the expenses were considered to be part of the profit-making activity of the assessee's asset management business. The Tribunal concluded that the expenses were not capital in character as they did not result in the creation of any capital asset and did not provide any long-lasting benefit. Therefore, the expenses incurred by the assessee for its own business of asset management could not be disallowed as capital expenses by linking them with the raising of funds for the mutual fund schemes.
Issue 2: Professional and Legal Charges
The Tribunal also upheld the deletion of disallowance of capital expenditure on professional and legal charges. It was argued that this expenditure was incurred towards the issue of capital and should be disallowable in computing the total income of the assessee. However, the Tribunal found that there was no valid basis to treat these expenses as capital in nature. The expenses were considered to have a direct nexus with the assessee's asset management business and were part of its profit-making activity. It was emphasized that no enduring benefit had been derived from incurring these expenses, and they were deemed to be independent activities of the assessee's business, not linked to the mutual fund schemes.
Issue 3: Ignoring Supreme Court Decision
Regarding the decision of the Supreme Court in M/s. Brook Bond India Ltd. Vs. CIT, which held that expenditure incurred to increase share capital is disallowable, the ITAT was found to have ignored this precedent. However, the Tribunal's reasoning in the present case was based on the specific circumstances and nature of the expenses incurred by the assessee for its asset management business, which were deemed to be revenue in nature rather than capital.
In conclusion, the High Court dismissed the appeal as it did not find any substantial question of law involved based on the Tribunal's findings and the specific details of the case.
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2008 (12) TMI 780
Issues involved: Classification of imported goods, direction for issuance of Concession Certificate.
The High Court of Gujarat granted the requested amendment and directed for its immediate implementation. The applicant-industry filed a Special Civil Application regarding the classification of imported goods and sought a Concession Certificate under a specific Notification. The applicant had received a consignment of goods while the petition was pending, leading to the application for a direction to the authority to issue the necessary Concession Certificate. Mr. Nanavati represented the applicant and requested a similar order as a previous consignment, with duty payment of &8377; 1,67,814. Ms. Shah, representing the opponents, had no objection to this request. The Court allowed the application, directing the applicant to deposit the duty amount in the court's registry for the issuance of the Concession Certificate by the Deputy Commissioner of Central Excise Division-III, Silvassa.
This judgment primarily addressed the issue of obtaining a Concession Certificate for imported goods based on the classification dispute. The Court's decision provided a resolution by allowing the applicant to deposit the required duty amount for the issuance of the certificate, ensuring compliance with the relevant regulations and facilitating the clearance of the imported goods.
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2008 (12) TMI 779
The Supreme Court directed the registry to release Rs. 20,16,952/- along with the original title deeds of property to the respondent as the appellant had not withdrawn the amount deposited by the respondent. The interlocutory application was disposed of accordingly.
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2008 (12) TMI 778
Maintainability of suit for enforcement of a contract on the part of the joint promisee - vendees and developers of the neighbouring plot fell apart, disputes and differences having arisen amongst the vendees inter se. - compromise between the vendors and his co-vendee - principle of novation of contract - High Court reversed the judgment and decree of the Additional Subordinate Judge -
HELD THAT:- Admittedly, the agreement was entered into on 23.4.1984. The contract was to be performed within a period of eight months. A joint tentative layout plan for both the lands was granted on 26.4.1984. Nothing has been placed on record to show as to when the disputes and differences between the vendees inter se began or when the disputes and differences between the developers of two plots started. It may be true that in terms of the agreement, draft layout was to be obtained in respect of Plot No. 36 but the very fact that the parties proceeded on the basis that all the lands would be developed together and steps having been taken in this behalf; it was too late for G. Srinivas Reddy to raise a fresh demand.
The ld trial judge applied the principle of novation of contract having regard to the subsequent conduct of the parties. The said principle, in our opinion, is applicable as against the said G. Srinivas Reddy. The agreement in question is not an agreement for sale simplicitor. The parties thereto were aware that only for the purpose of development of the said plot the agreement had been entered into. If that be so, the vendors were right in enforcing the terms of the said agreement/contract keeping in view the aforementioned purpose in mind. The joint promisee might not have rescinded the contract prior to the filing of the suit for damages against the defendants 1 to 3 but then when he filed the suit claiming refund of the amount of advance which he had paid by way of his share as also the damages, the contract stood rescinded so far as he was concerned. His claim might have been based on the purported breach of the terms of the contract on part of defendants No. 1 to 3, but they had arrived at a compromise. True it is that G. Srinivas Reddy filed a written statement in the suit filed by the Mohammed Kasim Ali. He expressed his intention to pay the amount of consideration for the entire land but evidently the suit did not go to trial. He did not insist therefor. When an application for settlement arrived at between Mohammed Kasim Ali and the defendant Nos.1 to 3 was filed, he did not object thereto. As he had appeared even before the High Court through counsel, it was obligatory on his part to oppose the said compromise between the vendors and his co-vendee.
It may, however, immediately be noticed that the court therein proceeded on the basis that the original contract was required to be enforced just as it was made even though one of their co-vendees refused to join them then and only on that basis the said principle was evolved.
Keeping in view the consent decree passed by a competent court of law in terms of consent entered into by and between Mohd. Kasim Ali and defendants 1 and 3, the agreement of sale in the same form could not have been enforced. The matter might have been different had the compromise not been recorded. A part of the contract stood rescinded; it has been worked out. We, however, must place on record that the terms of the compromise are not placed before us.
We are not concerned with the maintainability thereof. We would assume that the said suit was maintainable. But the fact that he did not choose to file a suit for specific performance of contract at the first instance speaks volumes about his conduct. The civil courts, in the matter of enforcement of an agreement to sell, exercise a discretionary jurisdiction. Discretionary jurisdiction albeit must be exercised judiciously and not arbitrarily or capriciously. A plaintiff is expected to approach the court with clean hands. His conduct plays an important role in the matter of exercise of discretionary jurisdiction by a court of law.
In Sanjana M. Wig (Ms.) v. Hindustan Petroleum Corpn. Ltd.[2005 (9) TMI 589 - SUPREME COURT] in regard to exercise of the discretionary jurisdiction, this Court held that the same depends upon the facts and circumstances of each case wherefor no hard and fast rule can be laid down.
We may notice that B.P. Jeevan Reddy, J. in K.S. Vidyanadam & ors. v. Vairavan [1997 (2) TMI 573 - SUPREME COURT] held that a new look is required to be given and the rigour of the rule is required to be relaxed by courts as regards the principle that time is not of the essence of the contract in case of immovable properties as when the said principle was evolved the prices and values were stable and inflation was unknown.
We think, it is not a case where we should exercise our discretionary jurisdiction under Article 136 of the Constitution of India. We refuse to interfere with the discretionary jurisdiction exercised by the High Court particularly when the ld trial court had not adverted to this aspect of the matter at all.
The appeals are dismissed with costs.
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2008 (12) TMI 777
Issues Involved:
1. Eligibility criteria for tender.
2. Misrepresentation by the appellant.
3. Concept of joint venture and its applicability.
4. High Court's dismissal of the writ petition.
Summary:
1. Eligibility Criteria for Tender:
The appellant challenged the Division Bench of the Delhi High Court's judgment dismissing their writ petition, which contested the respondents' decision that the appellant did not meet the eligibility criteria for a tender for thick web switches. The tender required ISO 9001 certification and RDSO approval for 1 in 12 curved switch manufacturers on the date of opening the tender. The appellant argued that their manufacturing facility and prototype samples were approved by RDSO, and they possessed the necessary CNC machine, which was crucial for manufacturing TWS.
2. Misrepresentation by the Appellant:
The respondents contended that the appellant's initial approval was due to misrepresentation, which was later corrected. The appellant countered that the respondents did not specify what was misrepresented and highlighted the respondents' failure to disclose any falsehood in the appellant's representations. The High Court accepted the respondents' stance that the appellant did not meet the eligibility criteria, referencing Clauses 2.8, 4.1.1, 4.1.2, 4.2, and 4.3 of the tender document.
3. Concept of Joint Venture and Its Applicability:
The appellant cited the case of New Horizons Ltd. and Anr. v. Union of India and Ors. to argue that the experience of joint venture partners should be considered. The Supreme Court highlighted the concept of a joint venture, emphasizing that it involves a community of interest and shared risks. The Court noted that the appellant's joint venture partners had the necessary ISO 9001 certification and RDSO approval, which should be considered valid.
4. High Court's Dismissal of the Writ Petition:
The Supreme Court concluded that the High Court erred in dismissing the writ petition, as the appellant did fulfill the eligibility criteria. The Court directed the Evaluation Committee to reconsider the appellant's bid along with the other selected bidders and make a final decision.
Conclusion:
The appeal was allowed to the extent that the Evaluation Committee must reconsider the appellant's bid, acknowledging the validity of the joint venture's credentials and the appellant's compliance with the tender's eligibility criteria.
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2008 (12) TMI 776
The Supreme Court allowed the civil appeal of the appellant-assessee, stating that the proviso in section 36(1)(iii) of the IT Act, inserted from April 1, 2004, operates prospectively. The appellant is entitled to the benefit of interest allowance for the assessment year 1989-90. The matter is remitted to the High Court for a decision in accordance with the law.
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2008 (12) TMI 775
Issues Involved:
The judgment involves the cancellation of penalty u/s 271(1)(c) of the Income Tax Act on two grounds: (1) disallowance of excess depreciation claimed on leased motor cars, and (2) reversal of provisions for non-performing assets (NPAs).
Excess Depreciation Claimed on Leased Motor Cars:
The Appellate Tribunal considered the appeal filed by the revenue against the order of the CIT(A) cancelling the penalty for the assessment year 2001-02. The assessing officer had levied a penalty on the assessee for claiming higher depreciation on leased motor cars and for provision of doubtful debts. The first appellate authority noted that the assessee had claimed higher depreciation at 25% based on established judicial pronouncements. The assessee believed that leasing a motor car equated to hiring, justifying the higher rate of depreciation. The authority found the claim to be made in good faith with full disclosure, leading to the cancellation of the penalty. The authority cited the case of Electrical Agencies Corporation vs CIT to support its decision.
Provision for Doubtful Debts:
Regarding the penalty on the reversal of provisions for NPAs, the first appellate authority observed that the assessee had consistently followed prudential norms issued by the RBI for NPAs. The assessing officer had allowed these claims in previous assessment years. However, due to a retrospective amendment to section 36(1)(vii), the assessee reversed its NPA provisions and offered them for taxation. The authority found that the initial claims were based on judicial pronouncements and the retrospective amendment was unforeseeable. Therefore, the penalty on this issue was also cancelled. The authority referenced the case of New India Industries Ltd vs ACIT to support its decision.
Conclusion:
The Appellate Tribunal, after hearing the departmental representative, upheld the cancellation of the penalty by the first appellate authority. It noted that the issues were debatable, and the assessee had acted in good faith based on legal interpretations. Citing various legal precedents, including CIT vs Suresh Chandra Mittal and T. Ashok Pai vs CIT, the Tribunal dismissed the revenue's appeal, affirming the first appellate authority's decision.
Separate Judgment:
No separate judgment was delivered by the judges in this case.
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2008 (12) TMI 774
Issues Involved:
1. Whether the appellant has been able to establish a debt as recoverable u/s 433(e) of the Companies Act against the 2nd respondent.
2. Whether the said debt is bona fide disputed by the 2nd respondent.
3. Whether the 1st respondent, as a holding company of the 2nd respondent, is liable for the debts of the 2nd respondent and if so, whether the 1st respondent is also liable to be wound-up.
Summary:
Issue 1: Establishing Debt u/s 433(e)
The appellant, a small-scale industry, alleged that the 2nd respondent-company owed them Rs. 3,80,951/- for job work performed. Despite multiple correspondences and legal notices, the 2nd respondent disputed the debt, claiming delays and wastage issues. The appellant's claim was for an unascertained and un-adjudicated amount, not admitted by the 2nd respondent. The court found that the appellant did not establish a clear debt recoverable u/s 433(e) of the Companies Act.
Issue 2: Bona Fide Dispute
The court noted that the 2nd respondent had bona fide disputed the debt, offering Rs. 2.24 lakhs as full and final settlement, which the appellant refused. The appellant's insistence on additional claims and interest indicated that the dispute was genuine. The court emphasized that the process of the company court cannot be used to pressurize a company when there is a bona fide dispute regarding the debt.
Issue 3: Liability of the Holding Company
The appellant argued that the 1st respondent, as the holding company, should be liable for the debts of the 2nd respondent. However, the court found that the 1st respondent had transferred its shares and ceased to be the holding company as of 30-09-2004. The court held that the 1st respondent, as a separate legal entity, could not be held liable for the day-to-day transactions of the 2nd respondent. The court cited the Supreme Court decision in Punjab State Industrial Development Corporation Ltd. v. Pnfc Karamchari Sangh, which established that liabilities of a subsidiary cannot be passed on to the holding company.
Conclusion:
The appeal was dismissed as the appellant failed to establish a recoverable debt u/s 433(e), the debt was bona fide disputed by the 2nd respondent, and the 1st respondent was not liable for the debts of the 2nd respondent.
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