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Showing 61 to 80 of 391 Records

• 2000 (4) TMI 796
  

  Supreme Court held that the requirements of the principles of natural justice which are required to be observed are - Workman should know the nature of the complaint or accusation. The management should act in good faith which means that the action of the management should be fair, reasonable and just

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• 2000 (4) TMI 795
  
  Issues:
  1. Condonation of delay in filing an appeal before the Tribunal.
  2. Appealability of the communication dated 5-1-1999.
  3. Jurisdiction of the Tribunal to dispose of the matter.
  4. Excusing the delay in filing the appeal.
  5. Dismissal of the appeal due to delay.
  
  Issue 1 - Condonation of Delay:
  The case involved an application for condonation of delay in filing an appeal before the Tribunal. The appellant, a leading exporter of various items, including maida, sought to convert free shipping bills to duty drawback shipping bills. The Commissionerate rejected the request, leading the appellant to file a revision application before the Joint Secretary. The Tribunal considered the delay in filing the appeal, amounting to approximately Rs. 12 lakhs, and emphasized the need for a valid reason for the delay. The Tribunal found that the application did not provide a sufficient explanation for the delay and dismissed the appeal.
  
  Issue 2 - Appealability of Communication:
  The debate centered on whether the communication dated 5-1-1999 was an appealable order. The departmental representative argued that this communication was the appealable order, while the Tribunal analyzed relevant case laws to determine the appealable nature of the communication. The Tribunal concluded that the communication dated 5-1-1999 was indeed an appealable order, contrary to the department's argument regarding the earlier communication dated 29-9-1998.
  
  Issue 3 - Tribunal's Jurisdiction:
  Regarding the Tribunal's jurisdiction, it was established that any person aggrieved by an order passed by the Commissioner of Customs as an Adjudicating Authority could file an appeal to the Tribunal. The Tribunal clarified the distinction between decisions made by the Commissioner of Customs and the Commissioner (Appeals) concerning the appeal process to the Tribunal.
  
  Issue 4 - Excusing the Delay:
  The Tribunal examined the reasons for the delay in filing the appeal and highlighted the lack of a valid explanation in the application for condonation of delay. Despite the strong case presented by the appellant, the Tribunal emphasized the importance of promptly seeking redressal after a decision is made against a party. The failure to provide a satisfactory reason for the delay led to the dismissal of the appeal.
  
  Issue 5 - Dismissal of the Appeal:
  Ultimately, due to the dismissal of the condonation of delay application, the appeal was also dismissed. The Tribunal referenced relevant legal precedents and emphasized the necessity of providing valid reasons for delays in filing appeals. The judgment highlighted the importance of timely action and vigilance in pursuing legal remedies to avoid dismissal based on procedural delays.

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• 2000 (4) TMI 794
  
  Issues Involved:
  1. Whether proceedings under Section 138 of the Negotiable Instruments Act, 1881 can be quashed due to the pendency of proceedings under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.
  2. Whether the allegations in the complaint satisfy the requirement of Section 141 of the Negotiable Instruments Act, 1881 concerning the liability of directors and other officers of the company.
  
  Detailed Analysis:
  
  Issue 1: Proceedings under Section 138 of the Negotiable Instruments Act, 1881 and Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985
  
  The petitioners sought to quash the proceedings under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) on the grounds that their companies had been referred to the Board for Industrial and Financial Reconstruction (BIFR) under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), and an enquiry under Section 16 was pending. They argued that Section 22 of SICA barred such prosecutions.
  
  The court noted that it was undisputed that references had been made to BIFR and enquiries under Section 16 were pending. Section 22(1) of SICA suspends legal proceedings, contracts, etc., against a sick industrial company during the pendency of an enquiry or scheme under SICA.
  
  The court referred to authoritative pronouncements, including the Supreme Court's judgment in BSI Ltd. v. Gift Holdings (P.) Ltd., which clarified that the term "proceedings" in Section 22(1) does not encompass criminal prosecutions. The Supreme Court categorically held that the word "suit" in Section 22(1) does not include criminal prosecution, and is restricted to proceedings for the recovery of money or enforcement of security against the industrial company.
  
  Further, the Supreme Court in Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd. unequivocally held that Section 22(1) of SICA does not bar the filing or continuation of prosecution for offences under Section 138 of the NI Act. The court observed that Section 22 only creates an embargo against the disposal of assets of the company for recovery of its debts, not against criminal prosecutions.
  
  Therefore, the court concluded that there is no scope for contending that the provisions under Section 22(1) of SICA operate as a bar to the prosecution for the offence under Section 138 of the NI Act. Consequently, the petitions to quash the proceedings on this ground were dismissed.
  
  Issue 2: Compliance with Section 141 of the Negotiable Instruments Act, 1881
  
  The petitioners contended that the complaints did not satisfy the requirement of Section 141 of the NI Act concerning the liability of directors and other officers of the company. Section 141 stipulates that every person who was in charge of and responsible for the conduct of the business of the company at the time the offence was committed shall be deemed guilty of the offence.
  
  The court examined the complaints and noted that they contained assertions that the accused directors were responsible for the conduct of the business of the company. For instance, in one of the complaints, it was asserted that the directors were responsible for the conduct of the business of the firm, and hence, they were liable to be prosecuted.
  
  The petitioners argued that the complaints did not specifically allege that the directors were in charge of and responsible for the conduct of the business at the time the offence was committed. However, the court held that the sum and substance of the allegations indicated that the directors were responsible for the conduct of the business. It was a question of fact to be determined during the trial whether the directors were indeed in charge of and responsible for the affairs of the company.
  
  Considering the nature of the averments in the complaints, the court found that these were not cases where the proceedings could be quashed at this stage. Therefore, the petitions on this ground were also dismissed.
  
  Conclusion:
  The court dismissed the petitions, holding that there were no grounds for quashing the proceedings under Section 138 of the NI Act on the basis of the pendency of proceedings under Section 22 of SICA or on the basis of the allegations in the complaints concerning the liability of directors and other officers of the company.

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• 2000 (4) TMI 793
  
  Issues:
  1. Quashing of proceedings under section 482 of the Code of Criminal Procedure, 1973.
  2. Application of mind by the magistrate before taking cognizance of the offences under section 58B of the Reserve Bank of India Act, 1934.
  3. Interpretation of section 58C regarding liability of directors in a company for contraventions or defaults.
  
  Analysis:
  
  Issue 1: Quashing of proceedings under section 482 of the Code of Criminal Procedure, 1973
  The petition sought the quashing of proceedings in C.C. No. 1832 of 1998 under section 482 of the Code of Criminal Procedure. The petitioners were accused of committing various offences under section 58B of the Reserve Bank of India Act, 1934. The contention was that the magistrate did not apply his mind before taking cognizance of the case, citing a Supreme Court judgment emphasizing the importance of considering all relevant facts and circumstances before issuing process. The order passed by the magistrate was criticized as cryptic, merely stating "Taken on file under section 58B of the RBI Act." However, despite the lack of a detailed order, the court held that the material provided justified taking cognizance of the offences, and the mere absence of an explicit reference to the material did not warrant quashing the cognizance.
  
  Issue 2: Application of mind by the magistrate before taking cognizance of the offences under section 58B
  The argument centered on whether the magistrate had applied his mind before taking cognizance of the offences under section 58B. While the order was deemed unsatisfactory for lacking a detailed explanation, the court noted that the complaint extensively described the acts constituting the offences. The court emphasized that the magistrate is not required to pass a detailed order under section 204 of the CPC Act but should give some indication that he has considered the material. In this case, the court found that the material presented justified taking cognizance, even though the order was brief, and the magistrate's decision was upheld.
  
  Issue 3: Interpretation of section 58C regarding liability of directors in a company
  The petitioners argued that besides the managing director and chairman, it was improbable for the other directors to be held liable under section 58C. Section 58C holds individuals in a company responsible for contraventions or defaults, and the court acknowledged that determining liability is a factual question. The court highlighted that while it might seem unlikely for all directors to be responsible, it is for the trial court to assess their liability based on evidence presented during trial. The court emphasized that assertions in the complaint regarding the directors' roles in the company should not be a sole reason to quash proceedings under section 482 of the Act. As the complaint asserted the directors' responsibility for the company's conduct, the court dismissed the petition.
  
  This detailed analysis of the judgment from the Andhra Pradesh High Court provides insights into the issues of quashing proceedings, application of mind by the magistrate, and the interpretation of liability under section 58C of the RBI Act, offering a comprehensive understanding of the legal reasoning and decision-making process involved.

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• 2000 (4) TMI 792
  

  Cognizance taken by the criminal court under sections 420, 120B of the Indian Penal Code, 1860, as well as section 138 of the Negotiable Instruments Act, 1881 - Held that:- No idea under what circumstances, the High Courts have stayed the criminal proceedings, nor any provision has been shown to us. Be that as it may, we are not inclined to interfere with the impugned order. The special leave petition stands, accordingly, dismissed.

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• 2000 (4) TMI 777
  

  FIR registered in a police station quashed by HC mainly on the ground that the person who forwarded the complaint to the police had no authority to do so.

  Held that:- Appeal allowed. How could the FIR be quashed if the investigating agency should have been different? By lodging FIR alone no investigation is conducted by the police. It is the first step towards starting investigation by the police. If High Court was of the opinion that investigation has to be conducted by the Bureau then also there was no need to quash the FIR.

  So from any angle, the High Court has committed serious error in quashing the FIR

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• 2000 (4) TMI 771
  

  Whether the products which are ready to serve beverages under the brand name “Frooti” and “Appy” fall under the description of mango and apple, specified in the Schedule?

  Held that:- Appeal allowed. The products “Frooti” and “Appy” not being specified in the Schedule, the respondent had no authority to demand any fee from the appellant on marketing the said products.

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• 2000 (4) TMI 766
  
  Issues Involved:
  1. Whether the dispute relating to the membership card can be a subject matter of reference under bye-law 248(a) of the Stock Exchange Bye-laws, Rules, and Regulations, 1957.
  2. Whether the petitioners are entitled to interim measures as prayed for.
  3. Appropriate final order.
  
  Issue-Wise Detailed Analysis:
  
  Issue 1: Whether the dispute relating to the membership card can be a subject matter of reference under bye-law 248(a) of the Stock Exchange Bye-laws, Rules, and Regulations, 1957.
  
  The court examined the provisions of the Securities Contracts (Regulation) Act, 1956 (SCR Act) and the relevant bye-laws and rules of the Stock Exchange, Mumbai. The SCR Act defines "contract" as one relating to the purchase or sale of securities and "securities" include shares, stocks, bonds, etc. The Act mandates that recognized stock exchanges create bye-laws for the regulation and control of contracts and the settlement of disputes, including arbitration.
  
  Bye-law 248(a) specifically provides for arbitration of disputes arising out of or in relation to dealings, transactions, and contracts made subject to the rules, bye-laws, and regulations of the exchange. The court noted that the rules and bye-laws operate in different fields; rules govern membership while bye-laws regulate securities transactions. However, the court concluded that since the MOU and its terms must comply with the Stock Exchange rules, the dispute over the membership card falls within the scope of bye-law 248(a). The court held that there is an arbitration agreement between the parties, making the dispute arbitrable under the bye-laws.
  
  Issue 2: Whether the petitioners are entitled to interim measures as prayed for.
  
  The court considered the criteria for granting interim measures: prima facie case, balance of convenience, and potential for irreparable loss. The petitioners argued that they had paid Rs. 43 lakh towards the MOU and alleged breaches by the respondents, including failure to obtain necessary approvals and clear liabilities. The court found that the petitioners had established a prima facie case, as the respondents did not specifically deny the petitioners' allegations regarding unpaid liabilities and breaches of the MOU.
  
  The court noted that the membership card, while not property, is a commercial privilege that cannot be adequately compensated with money. The balance of convenience favored the petitioners, as allowing the transfer of membership to a third party would complicate the arbitration process and potentially create third-party rights outside the scope of the dispute.
  
  Issue 3: Appropriate final order.
  
  Given the findings on the first two issues, the court granted the petitioners' request for interim measures. The court issued an injunction restraining the respondents from alienating, encumbering, parting with possession of, or creating any third-party rights in respect of the membership card. The court emphasized that these observations were tentative and would not influence the arbitration proceedings.
  
  Final Order:
  The court granted the interim measures in favor of the petitioners, restraining the respondents from transferring or encumbering the membership card, thereby preserving the subject matter of the arbitration dispute. No order as to costs was made.

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• 2000 (4) TMI 765
  

  Auction sale of the property of Company under liquidation - Held that:- As from the facts narrated it is apparent that the attention of learned Company Judge was not focussed to the fact that since 1980 company was closed and that there was no question of selling the company’s assets as a going concern. Thus in the present case, there is total non-application of mind to the material which is required to be considered for auction sale of the assets of the company. Also if the sale is set aside in appeal, it cannot be stated that purchaser is entitled to have refund of the amount with interest.

  Official Liquidator is directed to recover the possession of the property sold as per the inventory and thereafter to refund the amount deposited by the respondent No. 2 - auction purchaser. It would be open to respondent No. 2 to file proper application for recovering any other expenditure incurred by it after purchase of the said property if it is entitled to recover the same.The Official Liquidator is directed to resell the property after obtaining fresh valuation report from other reliable expert and after giving a copy of the said valuation report to secured creditors

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• 2000 (4) TMI 764
  
  Issues Involved:
  1. Legality of the BIFR's winding-up order.
  2. Compliance with the Sick Industrial Companies (Special Provisions) Act, 1985.
  3. Locus standi of the State Bank of India in the proceedings.
  4. Requirement for consent from financial institutions for rehabilitation schemes.
  
  Detailed Analysis:
  
  1. Legality of the BIFR's Winding-Up Order:
  The petitioner, a limited company registered under the Companies Act, 1956, with two manufacturing units, became a sick industrial company as defined under section 3(o) of the Sick Industrial Companies (Special Provisions) Act, 1985, due to accumulated losses. The BIFR, by its order dated 29-4-1994, decided that it was just, equitable, and in the public interest to wind up the petitioner-company. This decision was upheld by the appellate authority on 31-1-1996. However, a learned Single Judge of the High Court set aside the appellate authority's order, remanding the matter to the BIFR to request the operating agency to first frame a scheme and then ask the petitioner-company to bring up a proposal. Despite this, the BIFR again decided on 30-6-1999 that the company should be wound up, a decision upheld by the appellate authority on 10-1-2000.
  
  2. Compliance with the Sick Industrial Companies (Special Provisions) Act, 1985:
  The Act mandates timely detection of sick companies and the determination of necessary measures. Under section 17, the BIFR must decide if it is practicable for the company to make its net worth exceed accumulated losses within a reasonable time. If not, the BIFR must consider public interest measures under section 18 before resorting to winding up under section 20. The BIFR initially decided that public interest necessitated measures for the petitioner-company but failed to properly frame and publish a rehabilitation scheme as required under section 18. The operating agency's draft scheme requiring promoters to bring fresh funds was not finalized due to lack of consent from the secured creditor, State Bank of India.
  
  3. Locus Standi of the State Bank of India:
  The State Bank of India, as a secured creditor, filed WPMP No. 7869 of 2000 to be impleaded as a party-respondent, claiming interest in the proceedings. The petitioner objected to the bank's locus standi. However, the court held that under section 15(2), the bank had a statutory right to bring the matter to the BIFR's notice and participate in the proceedings. The outcome of the writ petition would directly affect the bank's right to recover dues, thus justifying its locus standi.
  
  4. Requirement for Consent from Financial Institutions for Rehabilitation Schemes:
  Section 19 and Regulation 34 of the BIFR Regulations, 1987, stipulate that any scheme providing financial assistance or concessions requires consent from the concerned financial institutions. The operating agency's draft scheme was not finalized due to the lack of consent from the State Bank of India. The court agreed with the bank's position, noting that as a nationalized bank dealing with public funds, it must assess the necessity of such consent in the larger public interest. The BIFR's refusal to frame a scheme without the bank's consent was deemed appropriate.
  
  Conclusion:
  The court dismissed the writ petition, upholding the BIFR's decision to wind up the petitioner-company due to the lack of a feasible rehabilitation scheme and the secured creditor's refusal to consent to financial concessions. The State Bank of India's locus standi was affirmed, and the necessity for consent from financial institutions for rehabilitation schemes was emphasized.

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• 2000 (4) TMI 763
  
  Issues:
  1. Revision petitions filed against the order declining to issue process against the respondent.
  
  Analysis:
  The petitioner filed two revision petitions challenging the order of the Metropolitan Magistrate declining to issue process against the respondent in complaints alleging an offence under section 58B of the Reserve Bank of India Act, 1934. The Magistrate took cognizance of the offence but excluded the respondent from the process, citing lack of documentary evidence showing the respondent's role as Executive Director of the company. The petitioner contended that the order was illegal and unjust, emphasizing that the complaint's averments implicated the respondent under section 58C of the Act. The legal issue revolved around whether the Magistrate erred in not considering the complaint's contentions and supporting documents. The court highlighted section 58C, which deems individuals in charge of a company's business, including directors, liable for contraventions or defaults committed by the company.
  
  The court analyzed the provisions of section 58C, emphasizing that three categories of persons could be held liable: the company itself, individuals in charge of the company's business, and other officers whose neglect or connivance led to the company's offence. The legal fiction created by the section made these individuals offenders alongside the company. The court stressed that during the process of issuing summonses, the focus should be on whether the complaint's allegations implicate the respondent, an executive director, when the company is accused of an offence under section 58B. The complaint explicitly named the respondent as the Executive Director responsible for the company's affairs, supported by an audit report detailing the respondent's significant role in financial matters.
  
  The court referred to a recent Supreme Court decision to establish that directors of an offending company can be prosecuted for the company's offences. The court concluded that the complaint, along with supporting documents, established a prima facie case for summoning the respondent. The Magistrate's decision to dismiss the complaints against the respondent was overturned, ordering the respondent to be summoned and tried according to the law. The judgment clarified that evidence against the respondent would be determined during the trial, emphasizing that the complaint's contentions were sufficient to implicate the respondent at the summoning stage.

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• 2000 (4) TMI 761
  
  Issues:
  1. Appeal under section 483 of the Indian Companies Act, 1956 by the Bhavnagar Municipal Corporation against the rejection of objection to the sale of land by Public Auction.
  2. Interpretation of leasehold rights and transferability without consent.
  3. Validity of auction proceedings without proper notice and opportunity to the Corporation.
  4. Jurisdiction of the Company Court in winding up proceedings.
  5. Corporation's objection to the proposed sale by auction.
  6. Necessity of original or copy of lease deed for substantiating objections.
  7. Determination of lease period and transferability of rights.
  8. Alleged title in the land vested in the Corporation.
  9. Adjudication of claim by the Company Court under section 446(2)(b).
  10. Permissibility of auction proceedings on 'as is where is and whatever basis'.
  
  Analysis:
  
  1. The appeal was filed by the Bhavnagar Municipal Corporation under section 483 of the Indian Companies Act, 1956 against the rejection of its objection to the sale of land by Public Auction. The objection was related to the sale of New Jehangir Vakil Mills land by the Official Liquidator in the course of winding up proceedings of the company.
  
  2. The Corporation contended that the leasehold rights obtained by the company were not transferable without consent and raised objections to the sale based on statutory covenants and the Bombay Provincial Municipal Corporation Act, 1949. The Corporation argued that the Company Judge should have determined the company's rights as a lessee before allowing the sale, citing relevant legal precedents.
  
  3. The Corporation raised concerns about the auction proceedings, claiming lack of notice and opportunity for hearing. They argued that the Company Judge erred in permitting the auction without establishing the transferability of the company's rights. The Corporation emphasized the necessity of notice to the lessor before proceeding with the sale.
  
  4. The respondents, including the successful auction purchaser and the Official Liquidator, highlighted the Corporation's failure to substantiate objections with necessary documents. They argued that the Company Court had exclusive jurisdiction to decide such matters during winding up proceedings and that the Corporation's objections lacked proper documentation.
  
  5. The main issue was whether the Official Liquidator should proceed with the auction of the land 'as is where is and whatever basis,' as ordered by the Company Judge. The jurisdiction of the Company Court under section 446(2)(b) to adjudicate claims against the company during winding up was a key consideration.
  
  6. The Corporation's objection to the proposed sale was not supported by the necessary documents, such as the lease deed. The Company Judge asked the Corporation to specify its objections, but the lack of essential documentation led to the rejection of the objection and approval of the auction proceedings.
  
  7. The Court emphasized the importance of having the original or a copy of the lease deed and other title documents to substantiate objections. Without proper documentation, the Company Judge had no choice but to allow the sale by auction 'as is where is and whatever basis.'
  
  8. The Court refrained from making a definitive conclusion regarding the lease period and the transferability of rights, citing the need for a proper claim supported by relevant documentary evidence. Legal precedents were referenced to highlight the Corporation's obligation to lodge a formal claim for adjudication.
  
  9. Considering the nature of the Corporation's objection and the lack of supporting documents, the Court found no error in permitting the auction proceedings. It was noted that the successful purchaser would not obtain a title better than what existed at the time of transfer with the company.
  
  10. The Court dismissed the appeals and the Special Civil Application, emphasizing the importance of proper documentation and refraining from prejudicing any future claim adjudication. The request for an appeal to the Supreme Court and a stay of the order were rejected.
  
  This detailed analysis of the judgment provides a comprehensive overview of the legal issues involved and the Court's reasoning in addressing each concern raised by the parties.

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• 2000 (4) TMI 759
  

  Whether the appellants herein had suffered a loss as claimed or at all?

  Whether respondent No. 2 had given the said shares as securities and/or the same were taken from him forcibly.

  If the said shares were given as securities then the question would also be as to whether it was by way of pledge or mortgage?

  Whether rights and bonus shares, dividend and interest on the said shares formed part of secured assets?

  Held that:- The decision of the Special Court holding that the appellants had been able to prove loss to the extent of ₹ 280.80 crores is affirmed.

  Bonus shares, dividend and interest were accretions to the pledged stock and have to be regarded as forming part of the pledged property which could not be ordered to be handed over unless redemption takes place.

  The letter dated 11-5-1992, addressed by Hiten P. Dalal to the appellants created a pledge in their favour not only of the shares and debentures worth ₹ 105 crores, particulars of which were given in the said letter, but also on the bonus shares, dividend and interest accrued on the said pledged shares and debentures. In reduction of Dalal’s liability to the appellants, they are entitled to sell the original shares, rights shares and the bonus shares and also to retain the dividend and interest accrued on the original shares.

  Cantriple Units referred to in the letter dated 11-5-1992 representing transaction value of ₹ 205 crores shall be returned to the custodian and his retention would be subject to the outcome of the other proceedings including Miscellaneous Application No. 36 of 1993 and the appellants and other parties would be entitled to try and establish their rival claims to the said units.

  The observations made by the Special Court with regard to the conduct of the appellants and their employees do not call for any interference.The award of costs by the Special Court for ₹ 30 lakhs against Hiten P. Dalal is affirmed.

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• 2000 (4) TMI 758
  

  Whether the arbitrator was competent to entertain the counter-claim filed by the respondent No. 1 for dissolution of the firm V.H. Patel & Company?

  Held that:- Appeal dismissed. So far as the power of the arbitrator to dissolve the partnership is concerned, the law is clear that where there is a clause in the articles of partnership or agreement or order referring all the matters in difference between the partners to arbitration, arbitrator has power to decide whether or not the partnership shall be dissolved and to award its dissolution. Power of the arbitrator will primarily depend upon the arbitration clause and the reference made by the court to it. If under the terms of the reference all disputes and different arising between the parties have been referred to arbitration, the arbitrator will, in general, be able to deal with all matters, including dissolution. There is no principle of law or any provision which bars an arbitrator to examine such a question. Although the learned counsel for the petitioner relied upon a passage of Pollock & Mulla quoted earlier, that passage is only confined to the inherent powers of the court as to whether dissolution of partnership is just and equitable, but we have demonstrated in the course of our order that it is permissible for the court to refer to arbitration a dispute in relation to dissolution as well on grounds such as destruction of mutual trust and confidence between the partners which is the foundation therefor.

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• 2000 (4) TMI 757
  

  Impact of the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 n the provisions of the Companies Act, 1956 - Held that:- Appeal allowed. Direct the Registry of the Supreme Court to make over the monies deposited in this court pursuant to sale of shed No. 15, to the Debt Recovery Tribunal, Delhi, and it will be for the said Tribunal to find out if there are any workmen's dues by issuing notice to the workmen or other persons/bodies which can furnish information in this behalf. The above monies to be sent from this court as well as the monies realised by earlier sales, —in case they are not subject to any pending litigation—have to be first released towards the workmen's dues. The balance remaining will then be released in favour of the appellant-bank in accordance with law and subject to the various principles stated in this judgment. In case any machinery or goods pledged to the Canara Bank are lying in the two other sheds already sold, it will be open to the Canara Bank to move the Tribunal/Recovery Officer for their removal and for an inventory.

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• 2000 (4) TMI 756
  
  Issues:
  Quashing of proceedings under section 138 of the Negotiable Instruments Act, 1881 based on the cheques issued, liability of managing director, and jurisdiction of the complainant to file the complaint.
  
  Detailed Analysis:
  
  Issue 1: Liability of Managing Director
  The petitioner sought quashing of proceedings under section 138 of the Negotiable Instruments Act, arguing that the cheques in question were issued by the company, not by him personally. While the petitioner is the managing director of the company that issued the cheques, the complaint was filed against him individually. The court noted that the cheques were drawn on the company's account and signed by the managing director on behalf of the company. It was emphasized that for an offence under section 138, the cheque must be drawn by the accused on an account maintained by him personally. As the complaint did not establish that the accused issued the cheques on his personal account, the court held that the requirement of section 138 was not satisfied.
  
  Issue 2: Jurisdiction of Complainant
  Another contention raised was that the complainant, Om Sai Securities and Investments Private Limited, should have been the one to file the complaint, not the individual complainant who did so. The court clarified that the company was mentioned in the agreement only to indicate the address of the complainant, who had advanced the loans to the accused. Therefore, the court found no substance in the argument that only the company could have prosecuted the petitioners.
  
  Conclusion
  The court allowed the petitions seeking quashing of the criminal proceedings in C.C. Nos. 6 and 210 of 1999, as it was determined that the cheques were issued by the company, not the individual accused, and the complainant had the jurisdiction to file the complaint as the lender. The court emphasized the necessity for the cheque to be drawn on the personal account of the accused for liability under section 138 to be established.

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• 2000 (4) TMI 755
  

  Whether clause 5 amounted to an arbitration clause at all and whether such a question amounted to a dispute relating to the ‘existence’ of the arbitration clause ?

  Whether such a question should be decided only by the arbitral Tribunal under section 16 and could not be decided by the Chief Justice of India or his designate while dealing with an application under section 11 ?

  If the Chief Justice or his designate could decide the said question, then whether clause 5 of the agreements dated 15-8-1995 which used the words "may be referred" required fresh ‘consent’ of the parties before areferences was made for arbitration ?

  Held that:- Appeal dismissed. Even if the Chief Justice of India or his designate under section 11(12) is to be treated as an administrative authority, the position is that when the said authority is approached seeking appointment of an arbitrator/arbitrators Tribunal under section 11 and a question is raised that there is, to start with, no arbitration clause at all between the parties, the Chief Justice of India or his designate has to decide the said question.

  The words ‘may be referred’ used in clause 5, read with clause 4, lead me to the conclusion that clause 5 is not a firm or mandatory arbitration clause and in my view, it postulates a fresh agreement between the parties that they will go to arbitration. Point 2 is decided accordingly against the petitioner

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• 2000 (4) TMI 730
  
  The Appellate Tribunal CEGAT, Chennai allowed the appeals by remanding the matter for de novo consideration by the Commissioner, following precedent law that statutory benefit under Section 3A(4) cannot be denied based on Rule 96ZO(3) barring the benefit. The Division Bench held that statutory provisions should prevail over rules in case of conflict.

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• 2000 (4) TMI 723
  
  The Appellate Tribunal CEGAT, Chennai ordered the appellants to pre-deposit a penalty of Rs. 2,00,000 for undervaluing imported goods. The Commissioner granted an option to re-export the goods on payment of a fine of Rs. 7,00,000. The Tribunal set aside the order and remanded the matter to the Commissioner to re-consider in light of relevant judgments, waiving the pre-deposit. The Commissioner was directed to re-adjudicate the matter promptly.

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• 2000 (4) TMI 722
  
  Issues:
  1. Whether the lignite handling system erected by the appellants is excisable or not?
  
  Analysis:
  The only point of dispute in this appeal is whether the lignite handling system erected by the appellants is excisable. The impugned order confirmed duty and penalty, stating that the system is excisable under the Central Excise Tariff because it is not immovable property embedded in the earth. The appellants argued that the entire system is immovable property due to its nature and mode of erection, emphasizing that it cannot be dismantled effectively and moved elsewhere. They also claimed the demand is time-barred, citing early submissions to the department. The appellants contended that the demand should be reduced based on the correct effective rate of duty under law.
  
  The appellants further argued that they had provided detailed information to the department in 1991, demonstrating their belief that the goods were non-excisable. They claimed Modvat credit on components, asserting that if correctly considered, the demand would be revenue-neutral. The appellants highlighted the lack of discussion in the impugned order regarding the time-bar issue and the reduction of Modvat credit. They referenced relevant case law and circulars to support their arguments.
  
  The Department reiterated its stance that the system is not immovable property based on the statement of the Senior Manager and classification under Chapter 84.28 of the HSN. The Department referred to a specific case to support its position.
  
  Upon review, the Tribunal found deficiencies in the impugned order. It noted a lack of detailed discussion on the nature of the foundation and the effective rate of duty. The Tribunal observed that the order did not address the submissions made by the appellants regarding limitation and Modvat credit adequately. The Tribunal agreed with the appellants that applying the correct rate of duty and allowing proper Modvat credit would make the demand revenue-neutral. Consequently, the Tribunal set aside the order and remanded the matter for a fresh consideration, instructing the Commissioner to provide the appellants with an opportunity to present technical evidence before issuing a detailed order.
  
  In conclusion, the Tribunal allowed the appeal by way of remand, emphasizing the need for a comprehensive review of the technical aspects and a detailed order covering all aspects of the dispute.

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