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1999 (2) TMI 677
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... ... ..... JJ. ORDER The Civil Appeals as well as the I.As. are dismissed.
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1999 (2) TMI 676
Issues involved: Appeal against interference with conviction and sentence u/s 408, 468, and 477A of the Indian Penal Code by the High Court in Criminal Revision Petition.
Details of the Judgment:
Issue 1: Conviction and Sentence
The accused, an employee of a company, was convicted of offenses u/s 408, 468, and 477A of the Indian Penal Code for misappropriating empty barrels and selling them for personal gain. The Magistrate found the accused guilty based on evidence of falsified documents and diversion of company property. The Additional Sessions Judge upheld the conviction on re-appraisal of evidence. However, the High Court interfered with the conviction, stating that the prosecution failed to establish the case beyond reasonable doubt.
Issue 2: Revisional Jurisdiction
The State contended that the High Court exceeded its revisional jurisdiction by re-appreciating the evidence and not considering all evidence presented. On the other hand, the defense argued that the High Court was justified in interfering due to lack of evidence and failure to establish entrustment for the offense u/s 408. The Supreme Court held that revisional power is for correcting miscarriage of justice and not for re-appreciating evidence unless a glaring feature indicates a gross miscarriage of justice. The High Court's interference was deemed unsustainable, and the conviction and sentence passed by the Magistrate and affirmed by the Additional Sessions Judge were confirmed.
Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's judgment and confirming the conviction and sentence of the accused. The accused was directed to surrender to serve the sentence, and bail bonds were canceled. No further order was deemed necessary in the case.
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1999 (2) TMI 675
Issues Involved:
1. Entitlement of 'Bawas' from Sindh to claim benefits under the Nomadic Tribe category.
2. Legality of the Government Resolution dated 1.4.1987.
3. Nature of evidence required for establishing belonging to a Nomadic Tribe.
4. Necessity of establishing mutual affinity among tribal communities specified in the Schedule.
Issue-wise Detailed Analysis:
1. Entitlement of 'Bawas' from Sindh to Claim Benefits Under the Nomadic Tribe Category:
The respondent challenged the Caste Scrutiny Committee and the Additional Commissioner's orders, which denied her the benefit of reservation for the Nomadic tribe in Maharashtra. The Full Bench of the Bombay High Court considered historical contexts, including the inclusion of the 'Bawa' community in various Government Resolutions of the Bombay Presidency, even after Sindh's separation. The High Court concluded that the Bawa community from Sindh, which migrated to India, continued to be recognized as part of the Nomadic tribe. This conclusion was based on historical records and government resolutions that consistently included 'Bawa' as a synonym of 'Gosavi' or 'Bairagi,' recognized as Nomadic tribes.
2. Legality of the Government Resolution dated 1.4.1987:
The Government Resolution dated 1.4.1987, which excluded the Sindhi community from the Nomadic Tribe list, was challenged. The High Court found that this resolution aimed to overturn the court's decision in Vijay Daulatani's case, which recognized the Bawa community from Sindh as part of the Nomadic tribe. The court held that neither the Executive nor the Legislature could invalidate a judicial decision by issuing an executive order. The Supreme Court upheld this view, stating that the resolution did not present new material or a fresh basis to alter the legal standing established by the earlier judgment.
3. Nature of Evidence Required for Establishing Belonging to a Nomadic Tribe:
The High Court emphasized that individuals must establish mutual affinity among the tribal communities specified in the Schedule before the appropriate authorities. This requirement was remanded to the Scrutiny Committee for reconsideration based on merits, highlighting the need for a thorough examination of social and ethnical backgrounds.
4. Necessity of Establishing Mutual Affinity Among Tribal Communities Specified in the Schedule:
The High Court noted that establishing mutual affinity among tribal communities is crucial for validating claims of belonging to a Nomadic Tribe. This involves demonstrating social and ethnical connections with the recognized communities in the Schedule, which was a factual determination to be made by the Scrutiny Committee.
Conclusion:
The Supreme Court affirmed the Bombay High Court's judgment, recognizing the Bawa community from Sindh as entitled to the benefits reserved for Nomadic tribes. The Government Resolution dated 1.4.1987 was deemed beyond the executive power of the State and an invalid attempt to overturn judicial decisions. The necessity for adequate evidence and mutual affinity among tribal communities was reiterated, ensuring that claims are substantiated based on historical and social contexts. The appeal by the State of Maharashtra was dismissed, upholding the High Court's comprehensive analysis and conclusions.
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1999 (2) TMI 674
The Supreme Court dismissed the Civil Appeals after considering the judgment in Union of India & Ors. v. J.G. Glass Industries Ltd. & Ors. reported in 1998 (97) E.L.T. 5 (S.C.) = (1998) 2 SCC 32.
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1999 (2) TMI 673
Issues Involved:
1. Inclusion of premium received on sale/surrender of import licenses in total turnover u/s 80HHC.
2. Reduction of profits by 90% of gross or net labor charges u/s 80HHC.
3. Reduction of profits by 90% of gross or net interest received u/s 80HHC.
4. Deduction of Rs. 84,428 u/s 80-I.
Summary:
Issue 1: Inclusion of Premium on Import Licenses in Total Turnover u/s 80HHC
The assessee received a total premium of Rs. 51,93,829 from the sale/surrender of import licenses. The Assessing Officer (AO) included this amount in the total turnover, but the CIT(A) directed verification of whether the profits were from licenses received under the Imports (Control) Order, 1955. The Tribunal held that the premium received on own licenses (Rs. 15,47,005) falls under clause (iiib) of section 28 as "cash assistance" and should not be included in total turnover. The premium from licenses purchased in the open market (Rs. 36,46,824) also should not be included in total turnover as it is not directly linked to export performance. Hence, the amount of Rs. 51,93,829 shall not form part of the total turnover.
Issue 2: Reduction of Profits by 90% of Labor Charges u/s 80HHC
The AO reduced the profits by 90% of gross labor charges (Rs. 23,31,585), while the assessee argued for net labor charges. The Tribunal agreed with the assessee, stating that net receipts should be considered to avoid distortion in profits. Since the net receipt of labor charges was nil, no reduction was warranted.
Issue 3: Reduction of Profits by 90% of Interest Received u/s 80HHC
The AO reduced the profits by 90% of gross interest received (Rs. 1,97,500). The Tribunal held that net interest should be considered, and since the net interest was negative (Rs. 34,24,095), no reduction was required.
Issue 4: Deduction u/s 80-I
The AO denied the deduction of Rs. 84,428 u/s 80-I, stating that the assessee was engaged in processing, not manufacturing. The Tribunal upheld this view, referencing the Bombay High Court decisions in London Star Diamond Co. (I) Ltd. and Sterling Foods (Goa), which held that processing does not constitute manufacturing. Therefore, the assessee is not entitled to the deduction u/s 80-I.
Conclusion:
The appeal was partly allowed with the following determinations:
(a) Rs. 51,93,829 shall not form part of the total turnover.
(b) Profits are reduced by 90% of net labor charges, resulting in no reduction.
(c) Profits are reduced by 90% of net interest, resulting in no reduction.
(d) Profits are reduced by 90% of net premium of Rs. 21,34,030.
(e) Profits are increased by 90% of Rs. 15,47,005.
(f) Profits are not increased by any profit on licenses acquired from other parties.
(g) Deduction u/s 80-I is disallowed.
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1999 (2) TMI 672
Issues Involved:
1. Addition of unexplained cash u/s 69.
2. Addition on account of NRI gifts.
3. Addition of domestic gifts.
4. Addition of unexplained cash credits.
5. Addition of undisclosed investment in properties u/s 69B.
6. Addition of undisclosed sale consideration.
7. Addition of alleged bogus expenses.
8. Addition of unexplained investment in the clinic.
9. Addition of alleged commission receipts.
10. Addition of alleged cash payment.
11. Addition towards alleged undisclosed professional receipts.
12. Addition of capital gains.
Summary:
1. Addition of unexplained cash u/s 69:
The AO made an addition of Rs. 1,24,360 u/s 69 as unexplained cash. The appellant argued that the cash books were updated based on the seized patients' registers. The Tribunal deleted the addition, agreeing with the appellant's explanation and noting the absence of evidence requiring the appellant to prove the entries.
2. Addition on account of NRI gifts:
The AO added Rs. 4,06,080 for NRI gifts, suspecting them as a mode of converting black money into white. The Tribunal sustained the addition, noting the similarities in the donors' letters and the lack of credible evidence supporting the gifts' genuineness.
3. Addition of domestic gifts:
The AO added Rs. 1,57,456 for domestic gifts. The Tribunal sustained Rs. 37,500 related to NRI gifts erroneously included as domestic gifts and deleted the remaining Rs. 1,19,956, citing the lack of new material seized during the search and the small amounts involved.
4. Addition of unexplained cash credits:
The AO added Rs. 82,876 for unexplained cash credits. The Tribunal deleted the addition, finding no suspicious features and applying the ratio of the decision in Sunder Agencies.
5. Addition of undisclosed investment in properties u/s 69B:
The AO added Rs. 16,09,166 for undisclosed investment in properties. The Tribunal deleted the addition, noting the lack of comparable sale instances and accepting the appellant's explanation for the low cost of acquisition.
6. Addition of undisclosed sale consideration:
The AO added Rs. 3,72,520 as undisclosed sale consideration. The Tribunal deleted the addition, finding no evidence of receipt of additional sale consideration and noting the transaction was with the appellant's own HUF.
7. Addition of alleged bogus expenses:
The AO made ad hoc additions of Rs. 50,000 each for three years for alleged bogus expenses. The Tribunal deleted the additions, noting the lack of specific evidence linking the blank vouchers to inflated expenses.
8. Addition of unexplained investment in the clinic:
The AO added Rs. 15,300 for unexplained investment in the clinic. The Tribunal deleted the addition, considering the small amount involved and the corresponding deduction for the expenditure incurred.
9. Addition of alleged commission receipts:
The AO added Rs. 2,42,870 for alleged commission receipts. The Tribunal sustained the addition, finding no convincing explanation from the appellant and noting the entries related to the appellant.
10. Addition of alleged cash payment:
The AO added Rs. 63,591 for alleged cash payments. The Tribunal deleted the addition, inferring the expenditure was incurred from unrecorded commission receipts.
11. Addition towards alleged undisclosed professional receipts:
The AO added Rs. 1,24,00,866 for undisclosed professional receipts. The Tribunal deleted the addition, finding no basis for the estimation and noting the excess cash declared by the appellant covered any omissions.
12. Addition of capital gains:
The AO added Rs. 11,59,250 for capital gains, claiming the property belonged to the appellant. The Tribunal deleted the addition, accepting the explanation that the property belonged to the HUF and noting the funds for acquisition flowed from the HUF.
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1999 (2) TMI 671
Issues Involved:1. Unexplained Jewellery 2. NRE Gifts 3. Non-NRI Gifts 4. Unexplained Property Investment Issue-wise Detailed Analysis:1. Unexplained Jewellery:On 26-3-1996, a search of the residential premises revealed jewellery weighing 802.90 gms. valued at Rs. 3,44,534. The Assessing Officer (AO) considered 402.90 gms. out of this as unexplained and added it to Dr. Arunkumar Gupta's income. Additionally, 998.40 gms. of jewellery sold to M/s. Vipul Jewellers was found, with the AO conceding 250 gms. as explained and considering the remaining 748.40 gms. valued at Rs. 3,25,570 as unexplained in the hands of Dr. (Mrs.) Renu Gupta. The Tribunal found that the assessee had disclosed 1000 gms. of gold jewellery in her wealth-tax returns for 1991-92 and 1992-93, which were accepted by the Wealth Tax Officer. Therefore, the addition of Rs. 3,25,570 under section 68 of the Income-tax Act for the assessment year 1995-96 was deemed unjustified and was deleted. 2. NRE Gifts:The AO added Rs. 2,11,000 towards unproved NRE gifts and Rs. 16,880 towards the alleged premium for the assessment year 1994-95. The Tribunal noted that the assessee failed to produce the donor for examination and confirmation of the gifts. The donor's intimate relationship with the assessee was also found to be unsubstantiated. Following the reasoning in the case of Smt. Raj Rani Gupta, where similar NRI gifts were considered benami, the Tribunal confirmed the additions of Rs. 2,11,000 and Rs. 16,880 towards NRE gifts and the alleged premium. 3. Non-NRI Gifts:The AO added Rs. 1,46,112 towards non-NRI gifts for the assessment year 1995-96. The Tribunal, following its reasoning in the case of Smt. Raj Rani Gupta, found no justification to sustain this addition and cancelled it. 4. Unexplained Property Investment:The AO added Rs. 4,06,666 as unexplained investment in property for the assessment year 1992-93. The property in question was purchased under an agreement dated 30-12-1991 for Rs. 6,10,000, but the books of the assessee showed an investment of Rs. 10,16,666. The Tribunal noted that the assessee was not an income-tax assessee in 1992-93 and had no source of income to explain the purchase. The discrepancy between the agreement value and the book value was also unexplained. The Tribunal sustained the addition on the ground that the nature and source of the purchase money were not explained. Conclusion:The appeal was partly allowed. The addition of Rs. 3,25,570 towards unexplained jewellery was deleted, while the additions of Rs. 2,11,000 and Rs. 16,880 towards NRE gifts and the premium were confirmed. The addition of Rs. 1,46,112 towards non-NRI gifts was cancelled, and the addition of Rs. 4,06,666 towards unexplained property investment was sustained.
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1999 (2) TMI 670
Issues Involved:
1. Alleged manufacture and clearances of aerated water without payment of duty.
2. Alleged clandestine manufacture of 30,000 cases of Soda.
3. Validity of the show-cause notice based on alleged receipt of concentrates.
4. Evidentiary value of the unsigned, unauthenticated statement and typed information.
Summary:
1. Alleged manufacture and clearances of aerated water without payment of duty:
The case arose from an Order-in-Original dated 24.12.1997, confirming a duty demand of Rs. 33,85,416/- for the alleged manufacture and clearances of aerated water (Pepsi and 7-Up) under heading No. 2201.12 of the Central Excise Tariff Act, 1985. The demand also included the alleged manufacture of 30,000 cases of Soda for the period from May 1991 to the issuance of the show cause notice on 28.5.96, invoking the proviso to Section 11A(1) of the Central Excise Act read with Rule 9(2) of Central Excise Rules, 1944. The case was based on intelligence gathered by the Directorate General of Anti Evasion, which led to searches and recovery of certain records from the factory-cum-registered office on 31.8.94.
2. Alleged clandestine manufacture of 30,000 cases of Soda:
The show-cause notice also alleged the clandestine manufacture and removal of 30,000 cases of Soda, without providing any specific details about the materials and methods used for such manufacture.
3. Validity of the show-cause notice based on alleged receipt of concentrates:
The appellants contended that the factory was under lock-out due to labor problems from May 1991, supported by evidence from the Labour Department. They also provided evidence showing that the concentrates were diverted to M/s. Universal Drinks Pvt. Ltd., Nagpur, including letters, consignment notes, invoices, and journal vouchers. The Commissioner rejected these evidences as an after-thought without substantial reasoning. The Tribunal found that the show-cause notice lacked a prima facie basis and was built on assumptions and conjectures without sufficient evidence.
4. Evidentiary value of the unsigned, unauthenticated statement and typed information:
The department's case heavily relied on an unsigned and unauthenticated typed statement found during the search, which allegedly detailed a scheme for clandestine manufacture and removal. The Tribunal held that such a document could not have any evidentiary value and could not be the basis for establishing clandestine manufacture and removal. The Tribunal also noted the lack of evidence regarding the procurement of other necessary raw materials, electricity consumption, and financial transactions to support the allegations.
Conclusion:
The Tribunal concluded that the show-cause notice and the subsequent order lacked a proper foundation and were based on insufficient evidence. The appeal was allowed, and the impugned order was set aside with consequential relief as per law.
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1999 (2) TMI 669
Issues:
Appeal against quashing of detention order based on violation of natural justice principles.
Analysis:
The case involves an appeal by the State of Tamil Nadu against the quashing of a detention order under the COFEPOSA Act. The detenu was found with a large sum of foreign currency at the airport, leading to his detention to prevent future smuggling activities. The High Court quashed the detention order solely on the grounds of violation of natural justice principles. The State contended that the documents in question were not placed before the Advisory Board, but the High Court found that vital documents were not properly communicated to the detenu, leading to a violation of his rights. The detaining authority failed to provide the detenu with the necessary information regarding the purpose of the documents, depriving him of the opportunity to make an effective representation. The detenu's wife filing a representation did not mitigate this violation of rights.
The detenu's rights under Article 22(5) of the Constitution were found to be infringed due to the lack of proper communication regarding the documents provided to him. The detaining authority's failure to inform the detenu about the purpose of the documents and their intended use before the Advisory Board led to confusion and prevented him from making an effective representation. The Court emphasized the importance of strict compliance with procedural safeguards in cases of preventive detention, highlighting the need for clear communication and proper opportunity for representation. The detenu's right to make a representation against the detention order was deemed to have been violated, justifying the High Court's decision to quash the detention order. The appeal was dismissed, upholding the High Court's decision based on the violation of natural justice principles and the detenu's rights under Article 22(5) of the Constitution.
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1999 (2) TMI 668
Issues:
Interpretation of Explanation I to Section 87 in relation to cessation of exemption under Section 81(l)(k) of the Kerala Land Reforms Act.
Analysis:
The case involved a dispute regarding the applicability of Explanation I to Section 87 of the Kerala Land Reforms Act in the context of the cessation of exemption under Section 81(l)(k). The respondent, a partner in an industrial firm, had claimed exemption for land under Section 81(l)(k) of the Act. The High Court initially allowed the exemption, but later, after the exemption ceased to apply, invoked Section 87 of the Act, leading to the current appeal.
The key contention put forth by the appellant was that the cessation of exemption under Section 81(l)(k) should be considered as of the notified date, 1.1.1970, due to non-use of the land for industrial purposes. On the other hand, the respondent argued that the cessation of exemption triggers the application of Explanation I to Section 87, which deems the land acquired after the notified date.
The Court examined the provisions of Section 81(l)(k) and emphasized that the exemption applies if the land is held by an industrial undertaking and set apart for industrial use, subject to the Collector's specified time frame for actual use. The Court noted that the intention behind the exemption was to promote future industrial development without misuse. The Collector's notice specified a deadline for using the land, which the respondent failed to meet, leading to the cessation of exemption.
The Court then delved into Explanation I to Section 87, which deals with surrendering excess land acquired after the notified date. The Explanation states that land exempted under Section 81 and ceasing to be exempted is deemed acquired after the notified date. The Court highlighted the clarity of the provision and its application to cases falling under Section 87, emphasizing the legislative intent to prevent misuse of exemptions.
In conclusion, the Court upheld the High Court's decision, stating that the cessation of exemption under Section 81(l)(k) led to the deemed acquisition of the land after the notified date. Therefore, the Taluk Land Board could not initiate proceedings under Section 85 to determine the ceiling area as of 1.1.1970. The appeal was dismissed, with no order as to costs, based on the facts and legal analysis presented in the case.
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1999 (2) TMI 667
Issues Involved:
1. Whether factory-made 'Catechu' or 'Kattha' is considered a 'Forest Produce' under Section 2(4) of the Indian Forest Act.
2. The applicability of the U.P. Transit of Timber and other Forest Produce Rules, 1978 to factory-made Kattha.
3. The constitutionality of Rule 3 of the U.P. Transit of Timber and other Forest Produce Rules, 1978 under Articles 19(1)(g), 301, and 304 of the Constitution.
4. Whether the seizure of Kattha and the vehicle by the Forest Range Officer was lawful.
Detailed Analysis:
1. Whether factory-made 'Catechu' or 'Kattha' is considered a 'Forest Produce':
The primary issue in this case was whether factory-made 'Catechu' or 'Kattha' falls under the definition of 'Forest Produce' as per Section 2(4) of the Indian Forest Act, 1927. The petitioner argued that the Kattha produced in their factory through a complex mechanical process should not be considered 'forest produce' as it is distinct from the traditional cottage industry Kattha. However, the court referred to the inclusive definition of 'forest produce' in Section 2(4), which explicitly includes 'Catechu', irrespective of whether it is found in or brought from a forest. The court also considered previous judgments, such as Karnataka Forest Development Corporation v. Contreads Private Limited and Forest Range Officer V.P. Mohammad Ali, which emphasized that processed products like rubber sheets and sandalwood oil remain forest produce. The court concluded that even factory-made Kattha is a forest produce within the meaning of the Act.
2. Applicability of the U.P. Transit of Timber and other Forest Produce Rules, 1978:
The petitioner challenged the applicability of the U.P. Transit of Timber and other Forest Produce Rules, 1978, arguing that a transit pass should not be required for factory-made Kattha. The court analyzed Rule 3 of the said Rules, which mandates a transit pass for the movement of any forest produce within the state. The court held that since factory-made Kattha is classified as a forest produce, it falls under the purview of these rules, requiring a transit pass for its movement.
3. Constitutionality of Rule 3 under Articles 19(1)(g), 301, and 304:
The petitioner contended that Rule 3 of the U.P. Transit of Timber and other Forest Produce Rules, 1978, violated Articles 19(1)(g) and 301 of the Constitution by imposing unreasonable restrictions on the movement of forest produce. The court did not find any merit in this challenge, noting that the rules were enacted to prevent illegal exploitation of forest resources and maintain ecological balance. The court emphasized that the rules were validly enacted under the powers conferred by the Indian Forest Act and did not contravene constitutional provisions.
4. Legality of the Seizure by the Forest Range Officer:
The petitioner argued that the seizure of Kattha and the vehicle by the Forest Range Officer was unlawful, as the manufactured Kattha was not a forest produce. However, the court found that since factory-made Kattha is indeed a forest produce, the seizure was justified under Section 52 of the Indian Forest Act for violating Rule 3 of the U.P. Transit of Timber and other Forest Produce Rules, 1978.
Conclusion:
The writ petition was dismissed, affirming that factory-made 'Kattha' is a forest produce under the Indian Forest Act. The court upheld the applicability of the U.P. Transit of Timber and other Forest Produce Rules, 1978, and found no constitutional violation in Rule 3. The seizure of Kattha and the vehicle was deemed lawful, and the court directed the authorities to proceed further in accordance with the law.
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1999 (2) TMI 666
The Supreme Court dismissed Civil Appeals due to a delay of 288 days with no satisfactory explanation provided. (Case citation: 1999 (2) TMI 666 - SC)
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1999 (2) TMI 665
Supreme Court dismissed the appeal in the case with citation 1999 (2) TMI 665 - SC. Justices Sujata V. Manohar and R.C. Lahoti delivered the order.
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1999 (2) TMI 664
Issues Involved:
1. Whether a judgment debtor has any option or right to make the payment of the decretal amount in the manner he likes unilaterally?
2. Whether the mere acceptance of such amount by the creditor can be held to be agreeing to the condition put by the judgment debtor while satisfying the decree?
3. Whether a debtor can unilaterally insist upon the payment of the decretal amount in liquidation of the principal amount in the first instance notwithstanding his liability to pay the interest and costs?
Summary:
Issue 1: Judgment Debtor's Right to Unilateral Payment Manner
The Supreme Court examined whether a judgment debtor has the right to unilaterally decide the manner of payment of the decretal amount. The Court held that the general rule of appropriation of payments towards a debt is that, in the absence of a specific condition or agreement to the contrary, the money paid by the judgment debtor is first applied in the payment of interest and costs, and then towards the principal amount. This principle is supported by precedents such as *Venkatadri Appa Row v. Parthasarathi Appa Row* and *Meghraj v. Mst. Bayabai*.
Issue 2: Creditor's Acceptance of Payment Conditions
The Court addressed whether the creditor's mere acceptance of the payment implies agreement to the conditions set by the judgment debtor. It was found that the decree holder had intimated the judgment debtor that the amount paid had not been appropriated towards the principal amount. The Court emphasized that there is no obligation on the decree holder to intimate the judgment debtor that the amount paid to him had not been accepted in the manner specified by him. The judgment debtors' plea that the payments made were in liquidation of the principal amount was negatived.
Issue 3: Unilateral Insistence on Payment Towards Principal
The Court considered whether a debtor can unilaterally insist on the payment of the decretal amount towards the principal first. The Court held that Sections 59 and 60 of the Indian Contract Act, 1872, which deal with the application of payments where the debt to be discharged is indicated or not indicated, are applicable only in the pre-decretal stage and not thereafter. Post-decretal payments have to be made either in terms of the decree or in accordance with an agreement between the parties. The Court reiterated that the general rule is that payments are first applied to interest and costs, and then to the principal amount, unless there is an agreement to the contrary.
Conclusion:
The appeal was allowed, setting aside the impugned order of the High Court and upholding the order of the executing court. The appellant was entitled to costs throughout. The judgment clarified that the general rule of appropriation of payments towards a decretal amount is to first adjust towards interest and costs, and then towards the principal amount, unless there is an agreement to the contrary.
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1999 (2) TMI 663
Issues involved: Breach of contract leading to termination, claim for damages, correction of judgment for interest pendent lite.
Breach of Contract and Claim for Damages: The appellant was allotted construction work for a hostel by the respondent-State, with specific completion milestones. Due to alleged obstruction by the Superintending Engineer, the work was not completed within the stipulated time, leading to the contract being rescinded by the respondent-State. The appellant claimed damages of Rs. 20,000 for breach of contract, contending that the termination was in breach thereof. The trial court decreed the suit for recovery of Rs. 32,000, including future interest at 6% per annum. The High Court partly allowed the appeal, holding the respondent liable to pay only Rs. 4,783.33 to the appellant with interest at 6% per annum.
Correction of Judgment for Interest Pendent Lite: The appellant filed an application under Section 152 of the CPC seeking interest pendent lite from the date of the suit till the date of the decree, which the trial court allowed. However, the High Court set aside this order, stating that the omission in not granting pendent lite interest was not accidental but intentional, as the trial court had already rejected the claim for such interest. The High Court held that Section 152 CPC allows correction of only accidental omissions and not intentional ones, emphasizing that the court cannot modify its original judgment after passing it.
Claim for Damages and Appellate Court's Decision: The High Court disallowed the appellant's claim for Rs. 20,000 as damages for breach of contract, stating that the appellant failed to prove actual loss suffered due to the breach. However, the Supreme Court held that damages can be claimed for loss of expected profit in case of breach of contract, citing precedents where damages were awarded based on a broad evaluation. The Supreme Court found the trial court's grant of 10% of the contract price as damages reasonable, disagreeing with the appellate court's reduction of the amount to Rs. 4,783.33. The Supreme Court allowed the appeal partly, modifying the judgment to award the appellant Rs. 24,783.33 with future interest at 6% per annum.
In conclusion, the Supreme Court upheld the appellant's claim for damages based on loss of expected profit due to the breach of contract, emphasizing the legal entitlement to compensation in such cases.
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1999 (2) TMI 662
Issues:
1. Incorrect exemption granted based on Form 3 - A.
2. Discrepancies in Form 3 - A issued by different firms.
3. Appeal against the Tribunal's decision.
4. Revision filed under Section 11 of the Trade Tax Act.
Analysis:
1. The dealer of Iron and Steels was granted tax exemption based on Form 3 - A in the Assessment Year 1980 - 81. However, upon verification, it was discovered that the exemption was wrongly granted as the forms were not issued by the relevant departments. The assessing authority reopened the assessment, determined an escaped turnover, and imposed tax liability.
2. The dealer appealed, and the Deputy Commissioner of Sales Tax allowed the appeal for various reasons. The Tribunal affirmed these findings, stating that if forms were wrongly issued by firms, action could be taken against those firms. The Tribunal upheld the decision regarding discrepancies in Form 3 - A issued by different firms.
3. The department filed a revision under Section 11 of the Trade Tax Act against the Tribunal's decision. The arguments presented by both parties focused on the validity of the forms issued by different firms and the liability for tax payment.
4. The court analyzed the arguments and previous judgments, emphasizing that the selling dealer cannot be held liable if they accepted forms in good faith, even if the purchasing dealers misused them. The court also highlighted that the burden of verifying the authenticity of forms does not lie solely with the selling dealer. The court dismissed the revision, stating that there was no error in the findings of the lower appellate authorities.
This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the court's reasoning leading to the dismissal of the revision.
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1999 (2) TMI 661
... ...
... ... ..... Appeals are dismissed on the ground of delay as well as on merit.
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1999 (2) TMI 660
Issues Involved:
1. Locus Standi of the Appellants
2. Questions of Law Arising Out of the Company Law Board's Order
3. Validity of the 1949 Share Allotment
4. Application of the Limitation Act
5. Delay and Laches in Filing the Application
6. Concurrent Jurisdiction of Civil Courts and Company Law Board
Summary:
1. Locus Standi of the Appellants:
The appellants' locus standi to file the application u/s 111 of the Act was challenged. The court held that the appellants, as shareholders holding 25 shares each, had the locus standi to apply for rectification of the share register. The objection on the basis of locus standi was rejected.
2. Questions of Law Arising Out of the Company Law Board's Order:
The court identified several questions of law arising from the Company Law Board's order, including:
- Whether the issue of shares in violation of section 105C of the Companies Act, 1913 is illegal, null, and void.
- Whether issuance of shares beyond the authorized share capital without amending the Memorandum or Articles of Association is illegal, null, and void.
- Whether the jurisdiction of the civil court is co-extensive with that of the Company Law Board u/s 111 of the Companies Act, 1956.
- Whether filing a prior civil suit without a prayer for rectification bars an application u/s 111.
- Whether delay and laches can be grounds for rejecting an application challenging an illegal issuance of shares.
- Whether an application u/s 111 can be dismissed on the ground of delay without examining the merits.
3. Validity of the 1949 Share Allotment:
The court examined whether the 1949 share allotment was valid, considering the authorized share capital and compliance with section 105C of the 1913 Act. It was held that if the shares were issued beyond the authorized capital or without offering them to existing shareholders, the allotment would be invalid. The Company Law Board was directed to determine whether the shares were properly allotted and issued in compliance with the law.
4. Application of the Limitation Act:
The respondents argued that the Limitation Act applied to proceedings before the Company Law Board. The court held that while the Company Law Board might be considered a court in a restricted sense, the Limitation Act did not apply to applications u/s 111. Even if it did, the appellants' application, filed within three years of discovering their right to sue, would be within time.
5. Delay and Laches in Filing the Application:
The Company Law Board dismissed the application on grounds of delay and laches. The court found that the Company Law Board erred in holding that the cause of action arose in 1949 and that the appellants knew of their right to challenge the allotment all along. The court emphasized that mere delay could not defeat the right to rectification if the allotment was invalid.
6. Concurrent Jurisdiction of Civil Courts and Company Law Board:
The court held that filing a civil suit did not bar an application u/s 111. The Company Law Board should not have refused to exercise its jurisdiction merely because a civil suit was pending. The court noted that the Company Law Board had exclusive jurisdiction in certain matters and should have decided the application on its merits.
Conclusion:
The appeal was allowed, the order of the Company Law Board was set aside, and the matter was remitted back to the Company Law Board for re-deciding the application in light of the court's observations. There was no order as to costs.
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1999 (2) TMI 659
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... ... ..... s are dismissed on the ground of delay as well as on merit.
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1999 (2) TMI 658
The Supreme Court dismissed the appeal due to an inordinate delay of 347 days in filing and found no reason to interfere on merits.
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