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Showing 81 to 100 of 1396 Records
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2021 (4) TMI 1317
Validity of notice issued - seeking restraint on Respondent from taking any steps in further of the said notice - seeking restraint from terminating the lease agreement till the completion of the corporate insolvency resolution process or to take any further step in this respect - seeking extension of co-operation in concluding the corporate insolvency resolution process in terms of the Insolvency and Bankruptcy Code, 2016 - seeking injunction on Respondent from taking possession of the said leasehold land till such time this MA is disposed of.
HELD THAT:- The CIRP was initiated on 11.03.2019 and the impugned notice is dated 08.11.2019. The CIRP on the extension being granted came to an end on 06.12.2019. The R1's Show Cause Notice terminating the lease agreement dated 22.01.2015 was issued on 08.11.2019 and the same was signed by Regional Officer, MIDC, Nashik - it is clear that R1's action in seeking possession of the leased land, during the currency of CIRP, is hit by Section 14(1)(d) of the Code.
As far as other prayers, R1 shall not take any coercive steps till the Application for approval of the Resolution Plan (MA No. 3960 of 2019) is heard by this Bench - application allowed.
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2021 (4) TMI 1316
Appeal decided against dead person - As submitted that because of Covid-19 pandemic, the applicant could not receive any information about the case and that was the reason for non-appearance and not making an appropriate application for bringing on record the authorised representative at the time when appeal was pending - HELD THAT:- It is an admitted fact that the main appeal was filed by the assessee Dinesh Ojha and the said Dinesh Ojha had died during the pendency of the appeal. In this respect, copy of death certificate of Dinesh Ojha has also been placed on record by the applicant and the applicant has also placed on record the copy of her Aadhar Card wherein also it is clearly depicted that the applicant is the wife of assessee Dinesh Ojha. It is also an admitted fact that the appeal was decided by the Tribunal on 12/10/2020 and the order was passed against the deceased assessee Dinesh Ojha.
Considering the interest of justice that the appeal was decided against a dead assessee as in the present case, the assessee had already died on 12/2/2019 and the appeal was subsequently decided against the assessee on 12/10/2020 and because of Covid-19 Pandemic, the applicant could not move application in time before the Tribunal, therefore, considering the principles of natural justice, equity and fair play, we allow the present application and recall the order of the Tribunal dated 12/10/2020 and directed the Registry to fix the appeal accordingly with a condition that the applicant would comply with all the mandatory requirements contained in Rule 26 of the Appellate Tribunal Rules, 1963 by filing revised Form-36 containing the details of legal/authorized representative of the deceased within 30 days from the date of receipt of this order. Misc. application allowed.
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2021 (4) TMI 1314
Maintainability of petition - time limitation - appeal was dismissed while observing that the same has not been filed within stipulated period as prescribed under Section 107 (1) of Central Goods and Services Tax Act, 2017 - opportunity of hearing to the present petitioner not provided - HELD THAT:- From perusal of impugned order dated 20.03.2020 (Annexure P/1) shows that the appeal was preferred by the petitioner on 16.03.2020 and the same has been dismissed on 20.03.2020. The order does not reflect that any opportunity of hearing was afforded to the present petitioner to produce material to explain delay and, therefore, apparently the appeal has been dismissed within a short period of 4 days.
Thus, since prima-facie the order impugned appears to have been passed in violation of principle of natural justice, without commenting on merits of the case, it is deemed proper to quash the order impugned dated 20.03.2020 and remit the matter to the Appellate Authority to consider and decide the petitioner’s explanation pertaining to condonation of delay - petition allowed by way of remand.
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2021 (4) TMI 1313
Approval of Resolution Plan - Section 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is found that the CoC has approved the plan with 100% voting share in favour of the approval of the plan filed by Bharat Forge Limited. Moreso, the Resolution Applicant fulfills the mandatory contents of the Resolution Plan as provided under Regulation 38 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016.
Keeping in view such object behind the enactment of the Code, intention of the Legislature, that the priority is to be given to the resolution than liquidation in the larger interests of the public, workmen, stakeholders and the other employees of the corporate debtors in the interest of justice and in order to achieve the object of the Code and liquidation of a company can be only as a last resort, wherein, all efforts for bringing Resolution Plan were failed or it cannot be found workable in the larger public interest. Hence, now the approval of Resolution Plan by this Adjudicating Authority is rule as per the apex court's decision in the matter of K. Sashidhar Vs. Indian Overseas Bank & Ors. [2019 (2) TMI 1043 - SUPREME COURT] - The Court referred to its judgment in K Sashidhar's matter wherein it was provided that there is no provision under the Code which empowers the Adjudicating Authority to oversee the justness of the reason or the commercial decision taken by the financial creditors in approving or rejecting the proposed resolution plan. The apex court upheld the autonomy of the COC regarding the commercial matters and decisions that cannot be questioned by the AA.
Extinguishment of claim, Concession and Relief in Resolution Plan - HELD THAT:- It is to be mention herein that since all the Financial Creditors, Operational Creditors and other Stakeholders have already lodged their claims during the CIRP and the same has been already considered by CoC and accordingly, Resolution Plan has been approved by CoC with majority. The claims of any Stakeholder and others, if remained unaddressed or not considered by CoC, shall not claim upon Corporate Debtor after the approval of Resolution Plan. Furthermore, if there is any proceeding pending before any competent authority(s), Resolution Applicant may approach the said authority for appropriate order.
The Resolution Plan is approved - application allowed.
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2021 (4) TMI 1312
Seeking release of cash seized in search u/s 132 - Interest towards compensation/damages for the delayed period - petitioners seek an order and direction against respondents to pay interest at the rate of 12% p.a. from 01.11.2017 to 01.12.2020 on cash amount of ₹ 9,35,000/- and interest at the rate of 12% p.a. from 01.11.2017 till its final realization of the amount - whether this Court can award interest or compensation having found delay on the part of the revenue in releasing the cash amount seized by the revenue from the petitioners while carrying out the assessment, though delay was attributed on the part of the respondents and not on the petitioners from the date of assessment order till payment or not? - HELD THAT:- There is no doubt that the said Section 132-B (4) (b) provides that, interest shall run from the date immediately following the expiry of the period of one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or requisition under section 132A was executed to the date of completion of the assessment under Section 153A or under Chapter XIV-B. In our view the said provision does not indicate any bar from awarding payment of interest or compensation in a situation where Court finds any delay on the part of the revenue in releasing the amount within time specifically prescribed under the provisions of law for no fault of the assessee.
The Hon’ble Supreme Court in a case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax-1, Pune [2006 (1) TMI 55 - SUPREME COURT] while dealing with the claim for payment of interest under Section 214 of the Act, 1961 made by the petitioner whether there was gross delay on the part of the revenue ranging from 12 to 17 years held that, there is no question of the delay being 'justifiable' as is argued and in any event if the revenue takes an erroneous view of the law, that cannot mean that the withholding of monies is 'justifiable' or 'not wrongful'.
In our view the principles laid down by the Hon’ble Supreme Court of India in a case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax-1, Pune (supra) would apply to the facts of this case. The respondents were solely responsible for the gross delay in not releasing the cash amount of the petitioners under Section 132-B (4) (b) of the Act, 1961 and thus cannot refuse the payment of compensation to the petitioners for wrongfully withholding the said amount from the date of assessment order till payment.
In this case, it is not the case of interpretation of Section 132-B(4)(b) of the Act, 1961 or under the said provision, the Courts would restrict obligation and liability of the revenue to pay interest or compensation upto the date of payment. The question for consideration of this Court raised by the petitioners is whether the respondents can refuse to compensate the petitioners for wrongfully withholding the cash amount of the petitioners though by the assessment order the liabilities of the petitioners were declared as nil beyond the date of assessment order.
Though in this case the petitioners have prayed for interest at the rate of 12% p.a. from 01.11.2017 to 01.12.2020 on cash amount of ₹ 9,35,000/- and compensatory interest at the same rate from 24.12.2019 till 01.12.2020 on the amount of cash released of ₹ 14,36,000/-, the petitioners have restricted their prayer for compensatory interest at the rate of 6% p.a. on these two amounts and also on ₹ 24,29,000/-. In our view, though Delhi High court had awarded interest at the rate of 9% p.a. towards compensation/damages for the delayed period, since the petitioners in this case have restricted their claim for compensation/damages at the rate of 6% p.a. for the delayed period, we are inclined to allow the claim for the interest by way of compensation/damages at the rate of 6% p.a. for delayed period already quantified in the chart submitted by the petitioners.
ORDER - The respondents are directed to pay interest by way of compensation/damages for the period from 03.03.2018 to 23.12.2019 as prayed under Section 132-B(4) of the Act, 1961 at the rate of 6% p.a. totaling to ₹ 5,99,780/- after giving credit of the interest already paid by the revenue for the period from 01.03.2018 to 13.12.2019 in the sum of ₹ 2,06,360/- within a period of four weeks from the date of this order.
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2021 (4) TMI 1311
Validity of faceless assessment u/s 144B - Denial of natural justice - as argued the date for making the assessment is already extended up to 30.04.2021. But despite the aforesaid request, AO proceeded to pass the final assessment order dated 23.03.2021 (Annxeure-A) without even taking notice of the request for adjournment made by the petitioner - HELD THAT:- Prima facie case for consideration is made out. Admit. Issue notice.
Till further orders of this Court, the effect and operation of the impugned assessment order dated 23.03.2021 (Annexure-A to the petition) shall remain stayed.
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2021 (4) TMI 1310
Validity of faceless assessment u/s 144B - Denial of natural justice - As argued in the draft assessment order, the petitioner was given time up to 23:59 hours of 26.03.2021 whereby the petitioner was required to either accept the proposed modification or file his written reply objecting to the proposed modification or if required he could request for personal hearing but despite the said time having been allowed till the mid night of 26.03.2021, the reply having been tendered by the petitioner on 26.03.2021 i.e. within the time, the Assessing Officer proceeded to pass the assessment order on 25.03.2021- HELD THAT:- Prima facie case for consideration is made out.
Admit. Issue notice - Till further orders of this Court, the effect and operation of the impugned assessment order dated 25.03.2021 (Annexure-A to the petition) shall remain stayed.
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2021 (4) TMI 1309
Unexplained investment in land - AO made addition as deemed income being unexplained investment in land shown less in the balance sheet of the appellant - Substantial question of law or fact - CIT-A also after considering the oral and documentary evidence, recorded the findings that there was unexplained investment in land shown less in the balance sheet of the appellant and dismissed the appeal filed by the appellant - Tribunal has also recorded various findings of fact while dismissing the appeal preferred by the appellant - HELD THAT:- As the appellant vehemently urged that on the basis of photocopy of the agreement for sale between Shri Ayub Haji Abdul Rashid Qureshi and Shri Rajansingh Kuvarsingh Baisthkur, the assessing officer could not have made an addition in the income of the appellant. Learned counsel for the appellant could not dispute that the appellant had cross-examined Shri Rajansingh Kuvarsingh Baisthkur. Even in the cross-examination of the said seller Shri Rajansingh Kuvarsingh Baisthkur, he admitted that he had received the sum of ₹ 30.55 lakhs out of which ₹ 2 lakhs was received by cheque and balance amount of ₹ 23.50 lakhs was received in cash.
The entire order passed by the Income Tax Appellate Tribunal is based on pure findings of fact. No substantial question of law arises in this appeal filed under Section 260A of the Income Tax Act, 1961. The appeal being devoid of merit is accordingly dismissed.
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2021 (4) TMI 1308
Interest disallowance u/s 36(1)(iii) - assessee had borrowed funds from bank and group entities and paid aggregate interest - Assessee claimed deduction of net interest from business income in statement of computation of income on the reasoning that interest expenditure was periodic cost and hence, an allowable deduction u/s 36(1)(iii) - going by Accounting Standard 7 issued by Institute of Chartered Accountants of India (ICAI), AO opined that expenses directly related to the project were to be debited to cost of project and could be claimed as deduction only in the year in which corresponding income of the project was credited in Books of Accounts and offered to tax - HELD THAT:- It is quite evident that the assessee was following percentage of completion method of accounting to recognize revenue from operations as against the case law of Tribunal Special Bench in M/s Wall Street Construction Limited. [2005 (9) TMI 228 - ITAT BOMBAY-F] which deal with a case wherein the assessee was following completed contract method and therefore, the said decision was not applicable to the facts of the case, as rightly held by learned first appellate authority.
As undisputed fact that the assessee was engaged in real estate construction and had borrowed capital for business purposes. No other diversion of income has been alleged by Ld. AO. As noted by Ld. CIT(A), the interest was paid to debenture holders, financial institutions as well as unsecured loan creditors and the loan was utilized for business purposes. The funds were borrowed for the purpose of construction and have gone into the projects of the assessee which constitute assessee’s stock-in-trade and not capital asset. In view of these clear cut findings, the adjudication of Ld. CIT(A) could not be faulted with. Another important fact is that the assessee has followed consistent accounting treatment to charge interest expenditure in the accounts. Therefore, the ground thus raised by the revenue stand dismissed.
Set-off of brought forward losses - HELD THAT:- This ground would also not survive in view of the fact that the provisions of Sec.79 were not applicable to the assessee since assessee is a company in which public is substantially interested. This fact could not be controverted by revenue before us. Therefore, this ground also stands dismissed.
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2021 (4) TMI 1307
Suit for recovery of money - jurisdiction to set aside the exparte decree or not - HELD THAT:- The petitioners are the defendants in the suit filed by the respondent for recovery of money. The first petitioner is a private limited company and the second and third defendants are its Directors. They availed term loan to the tune of ₹ 10 lakhs from the respondent on 25.10.1995 to purchase machineries. Accordingly, the deed of hypothecation in respect of machineries and vehicles were executed on 25.10.1995. They also executed letter of undertaking on the same day and thereafter they defaulted payment of loan. Therefore, the respondent filed suit for recovery of money to the tune of ₹ 9,93,812/- - the respondent filed suit and suit summons were sent to the address given by the petitioners. Those summons were returned unclaimed and as such substituted service was ordered. Accordingly, the respondent effected paper publication and the petitioners were set exparte and exparte decree was passed on 12.02.2004.
Now it cannot be said that the fixed deposit made by the petitioners not returned to the petitioners by the respondent. That apart, the petitioners filed petition to set aside the exparte order without any condone delay petition. Though it was numbered and ordered on merits, the petitioners failed to mention sufficient cause for the delay in petition to set aside the exparte decree. Exparte decree was passed on 12.02.2004 - It is unbelievable statement and as rightly pointed by the learned counsel for the respondent, it is nothing but cock and bull story and only to maintain the petition to set aside the exparte decree without condone delay of petition. Therefore, the petitioners failed to state any sufficient cause to consider the petition to set aside the exparte decree.
Admittedly, the machineries are also sold out and no amount was paid towards loan in favour of the respondent herein. While admitting the present civil revision petition, this Court imposed condition and the said condition was only complied with by the petitioners by depositing 50% of the decree amount. Though the learned counsel for the petitioners submitted in respect of jurisdiction of the Debts Recovery Tribunal, on perusal of the order passed by the court below, it does not refer any jurisdiction point. The petition to set aside the exparte decree was dismissed only on merits. Therefore, there is nothing to go into the ground of jurisdiction of Debts Recovery Tribunal. Hence, this Court finds no irregularity of infirmity in the order passed by the court below.
This civil revision petition is dismissed.
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2021 (4) TMI 1306
Assessment u/s 153A - Period of limitation - HELD THAT:- Revenue on instructions, says that the limitation, for passing the assessment order will expire on 30.09.2021.
The record shows that the matter is coming up for hearing, in the ordinary course, on 23.04.2021. In view of these circumstances, it is directed that the assessment proceedings be carried on and, in the event, an order is passed, the same shall not be given, effect to, during the pendency of the writ petition.
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2021 (4) TMI 1305
Seeking vacation of leased premise owned by the Applicants and hand over vacant possession of the same - whether the Owner/ Lessor of land in actual physical possession of Corporate Debtor can recover the same while moratorium is in effect? - HELD THAT:- In the matter of M/s Navbharat Castings LLP vs. M/s Moserbear India Ltd. & Anr [2018 (7) TMI 2184 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], the Hon’ble NCLAT was dealing with the issue as to whether the order of moratorium will be applicable to the leasehold property of a Landlord in respect of which the Corporate Debtor is a tenant, particularly after decree of eviction passed in favour of the land lord against the Corporate Debtor, which is similar to the facts of the present case and the finding recorded by the Hon’ble NCLAT in the said matter is on clear terms that the recovery of property by the Owner/ Landlord occupied by the Corporate Debtor during the period of moratorium is not permissible.
The order of moratorium takes effect immediately from the insolvency commencement date which is defined under Section 5(12), and the same lasts till the completion of the Corporate Insolvency Resolution Process (CIRP). Under Section 12 of IBC, 2016 the time limit for completion of CIRP is provided as 180 days from the date of admission of application to initiate such process which can be extended for a further period not exceeding 90 days but has to be mandatorily completed within a period of 330 days from the insolvency commencement date including the period of judicial intervention. As to the facts of the present case, it is seen that this Tribunal vide order dated 06.08.2020 has extended the CIRP period of the Corporate Debtor by 150 days including the exclusion of the periods lost due to the lockdowns imposed by the Central / State Governments.
Seeking direction to Respondent to pay the Applicants a sum of ₹ 99,12,000/- plus GST for 12 months, plus future rent at ₹ 7,00,000/- plus GST until handing over of the possession of the leased property - HELD THAT:- Eventhough the amount as claimed by the Applicants, for the period of moratorium, has not been paid in full, the Respondent has paid certain sum to the Applicants. In any case, it was submitted by the Learned Counsel for the Respondent that the negotiation talks are going on with the landlords for reduction of rent and also they have planned to downsize the hospitals from 96 centers to 44 centers and as such the cost if any which is due and payable to the Applicants, on account of rent, during the period of moratorium, would fall within the domain of ‘CIRP Costs’. Further taking into consideration the facts of the present case, this Tribunal cannot direct the Respondent to pay the rental arrears due to the Applicants incurred during the period of moratorium - the sum which is due and payable to the Applicants would form part of the CIRP costs. The CIRP costs would be paid in priority even if a Resolution Plan in relation to the Corporate Debtor is approved by this Tribunal or if the Corporate Debtor is ordered for Liquidation.
The Corporate Debtor cannot be directed to evict the premises during the period when the moratorium is in force and the rental arrears which is due and payable to the Applicants would form part of the CIRP costs, to be paid in priority be it resolution or liquidation as the case may be - application disposed off.
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2021 (4) TMI 1304
Grant of bail - bail sought on medical grounds specifically u/s 45 of PMLA Act - HELD THAT:- On perusal of the application for bail preferred by respondent no.1 it is apparent that the application is primarily on merits with averments relating to his health condition as reflected in paragraph 13 of the application. It is also apparent that on account of the grievance of respondent no.1 with regards to his health condition, report was called for by the Special Court. The report was received. Pursuant to that permanent bail was granted to respondent no.1 pending trial. The order granting bail refers to compliance report submitted by Jail authority about the health condition of respondent no.1 - On perusal of the compliance report with regards to the health of applicant, it can be seen that after making observations about his ailment, it was stated that the accused had an appointment for CT Scan on 7th April 2021. He is taking medicine for asthama, anxiety, APD and Hematuria and once CT scan is done, the Court will be informed about its outcome. However, the Court proceeded to grant permanent bail pending trial to respondent no.1.
The respondent no.1 can be examined by Medical Board consisting of Neurologist, Endocrinologist and General Physician and report thereof be submitted to this Court on 19th April 2021 - Application disposed off.
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2021 (4) TMI 1303
Seeking grant of bail - bail sought on medical grounds under Section 45 of PMLA - diversion of proceeds of crime - HELD THAT:- The applicant is currently taking medicines for Asthama, anxiety, APD and Hematuria. It is also taken into consideration that, again cases of COVID-19 is surge and situation is looking grim. In such situation, even if the applicant/accused No.5 would send to the any hospital for tests or otherwise, it would be harm to his life due to contagious disease like COVID-19. Therefore, special care and medication to the applicant/accused No.5 is need of an hour, else it will came serious prejudice to the life and limb of the applicant/accsued No.5 - On this count itself, the provisions of Section 45 sub-section (ii) of PML Act is invoked, which provides that, “where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person who is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the special court so direct”.
Furthermore, fleeing away from justice and/or fleeing away out of country, can be taken care by directing the applicant/accused No.5 to surrender his passport before ED immediately and not to leave India without prior permission of the Court. The question of tampering and hampering of prosecution evidence does not arise, as respondent/ED has tendered private complaint before this Court and accordingly, this Court has taken cognizance of it - applicant/accused No.5 can be released on bail only on medical grounds, without going into merits of the matter, by imposing following conditions as to avoid further unwarranted results for proper medical care and treatment of the applicant/accused No.5.
The application is allowed subject to conditions imposed.
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2021 (4) TMI 1302
Seeking withdrawal of Bail application - also seeking liberty for redressal before the learned Trial Court submitting to the effect that the supplementary chargesheet in the matter has been filed - HELD THAT:- The bail application is dismissed as withdrawn.
The date 24.05.2021 is cancelled.
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2021 (4) TMI 1301
Penalty u/s 271(1)(c) - HELD THAT:- In the present case, the basis for levying the penalty U/s 271(1)(c) is not in existence, as the assessment itself is set aside [2021 (5) TMI 22 - ITAT CHANDIGARH], we, therefore, by following the ratio laid down by KC BUILDERS AND ANOTHER VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX [2004 (1) TMI 7 - SUPREME COURT] delete the impugned penalty u/s 271(1)(c) of the Act levied by the A.O. and sustained by the ld. CIT(A). - Decided in favour of assessee.
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2021 (4) TMI 1300
Approval of Resolution Plan - Whether spectrum is a natural resource and Government is holding the same as cestui que trust? - HELD THAT:- The question whether spectrum is a natural resource is no more res integra. In the CENTRE FOR PUBLIC INTEREST LITIGATION & ORS. VERSUS UOI. & ORS. [2012 (2) TMI 568 - SUPREME COURT] where it was held that The licences granted to the private respondents on or after 10.1.2008 pursuant to two press releases issued on 10.1.2008 and subsequent allocation of spectrum to the licensees are declared illegal and are quashed.
Section 18 of I&B Code enjoins upon the Interim Resolution Professional (IRP) to collect all information, inter-alia, related to the assets of the Corporate Debtor for determining the financial position of the Corporate Debtor. Section 18(1)(f) mandates that the IRP shall take control and custody of any asset over which the Corporate Debtor has ownership rights as recorded in balance sheet of the Corporate Debtor or with information utility etc. that records the ownership of assets including intangible assets which include intellectual property - Assets owned by a third party in possession of the Corporate Debtor held under trust or under contractual arrangements including bailment have been excluded from the purview of assets which the Interim Resolution Professional is required to take in his control and custody.
Whether limited right to use of spectrum vested with the Licensee for the licence period would constitute assets of Licensee? - HELD THAT:- The trading of access spectrum by Access Service Providers being based on recommendations of TRAI on spectrum trading and in pursuance of National Telecom Policy providing the status of Seller to the Access Service Provider transferring the right to use spectrum with corresponding status of Buyer to the Access Service Provider acquiring the right to use spectrum is only compatible with the hypothesis that the Access Service Provider/Licensee has the capacity and is possessed of right to transfer the right to use the spectrum that had been acquired by it under the Licence. So long as the licence is not suspended, revoked or terminated or until the expiration of period of licence, the Access Service Provider/Licensee continues to have right to trade subject to observance of the Spectrum Trading Guidelines and terms and conditions of the regulatory framework. The trading activity envisaged under the Guidelines is subject to approval of DOT which has the right to recover the dues for the period prior to the effective date of trade. It is a trading of limited nature with the trading being permitted only between companies eligible to trade and the Buyer satisfying the eligibility criteria.
Sale of assets of a Corporate Debtor as a part of the Resolution Plan within the ambit of I&B Code and regulated under Regulation 37 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- It is flabbergasting to hear DOT advancing the proposition that use of spectrum in terms of the licence does not constitute the assets of the Licensee and that the licence granted to Licensee and use of spectrum thereunder is not a tradable asset. In the face of provisions of Tripartite Agreement read in juxtaposition with the Guidelines for Trading of Access Spectrum, it is inconceivable that DOT as Licensor is not aware of the import of the provisions and the effect of the stipulations in the Tripartite Agreement and the Guidelines for Trading of Access Spectrum based on National Telecom Policy and formulated by Central Government on the recommendations of TRAI. Presence of DOT in the Tripartite Agreement is neither cosmetic nor an idol formality. The combined effect of all this is that the DOT has taken a stand which is in direct conflict with the factual proposition emanating from record and the role it has played all along - the argument raised on the score that the use of spectrum under the licence granted to it is not an intangible asset in the hands of Licensee being devoid of merit has to be repelled.
Whether spectrum can be subjected to proceedings under the I&B Code? - HELD THAT:- The statutory protection against suspension or termination of licence would extend to the Corporate Debtor as the Central Government through DOT is the Licensor. Of course it is a contractual relationship but that does not depart from the fact that the Central Government is the Licensor and in that capacity it is covered under the explanation. In conclusion, it can be said without any fear of contradiction that in the event of spectrum being subjected to proceedings under I&B Code, protection would be available to Telecom Licences and spectrum under Section 14(1) of the I&B Code.
Whether spectrum being under contract can be subjected to proceedings under Section 18 of the I&B Code? - HELD THAT:- Finding in respect of spectrum as a natural resource being property of the public vested in the State as a Trustee and the right to use of spectrum being granted by DOT to Telecom Service Providers through licence in lieu of consideration which partakes of the character of a contract governing relations between the Licensor and Licensee with terms and conditions of licence regulating the right to use spectrum by the Licensee for the period of licence has already been returned. It has also been found that in terms of the Licence Agreement and Guidelines for Access Trading of Spectrum for Access Service Providers, the right to use of spectrum vests in the TSPs/Licensees. Possession is co-related to ownership and entitlement to possession cannot be divorced from the title to property. Spectrum being the property of Nation is in possession of the State as a Trustee, however, right to use spectrum under the Licence Agreement vests in the Licensees/TSPs, who are in occupation of the same being its actual users irrespective of whether they have a right to hold the same in their possession or not. Bulk of case law cited at the Bar in regard to concept of possession and occupation is of little relevance in this case as the spectrum being a natural resource belonging to the Nation with State holding it in trust for the benefit of the Nation is not in controversy.
It being the duty of the IRP to collect all information relating, inter alia, to the assets of the Corporate Debtor for determining its financial position, monitor its assets and manage its operations until Resolution Professional is appointed by Committee of Creditors (CoC) and take control and custody of assets over which the Corporate Debtor has ownership rights as recorded in the balance sheet of Corporate Debtor with such assets including intangible assets falling within the purview of Section 18 of I&B Code, there should be no hesitation in holding that the right to use of spectrum under the Licence Agreement or falling within the ambit of Tripartite Agreement can be subjected to proceedings under Section 18 of I&B Code. Therefore, we are of the considered opinion that we need not go into the question of distinction between possession and occupation.
Whether a licence can be transferred under the insolvency proceedings particularly when the trading is subjected to clearance of dues by Seller or Buyer as provided in Guidelines No. 10 and 11, whereas in insolvency dues are wiped off and what is the Significance of Guideline 12 of the Guidelines for Access Spectrum Trading for Access Service Providers in case spectrum is an issue in any adjudication pending before a court of law? - HELD THAT:- The broad features of the Guidelines for Trading of Access spectrum by Access Service Providers elsewhere in this judgment. It has been taken note of that based on National Telecom Policy and upon consideration of recommendations of TRAI on spectrum trading the Government decided to allow trading of access spectrum only between two Access Service Providers holding inter alia UASL with authorization of Access Service in the licensed service area with the earmarked spectrum bands treated as tradable spectrum bands - if the Seller, Buyer or both, while giving prior intimation for trading have either provided false information, suppressed a material fact or provided incorrect information in regard to the proposed trading being in conformity with the conditions of licence and the Spectrum Trading Guidelines, the Government would be within its rights to take appropriate action including annulment of trading arrangement.
Admittedly, Central Government objected to grant permission for trading of licence to the TelCos before initiation of insolvency proceedings. It appears that inter alia Central Government declined permission for trading of licence as in its opinion spectrum cannot be subject matter of I&B Code proceedings. It is not disputed that the TelCos were faced with huge arrears concerning the spectrum licence which were required to be cleared before granting of such permission by Central Government. Since the DOT was of the view the spectrum could not be the subject matter of insolvency proceedings and the dues under the licence towards the spectrum use could not be put in the category of operational dues, it did not accept the sharing arrangements made inter se Telecom Service Providers with respect to spectrum. The issue for consideration would be whether spectrum can be treated as security interest and what was the mode of its enforcement. Admittedly, NOC for trading has been declined by the Government for non-compliance of the terms and conditions stipulated in the Licence Agreement - This is not a case where a Financial Creditor or an Operational Creditor is seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor but the Corporate Debtor itself is seeking such initiation. This would therefore, require to be examined alongwith the question whether such dues as are payable to Government can be wiped off by resorting to the proceedings under the I&B Code and whether insolvency proceedings are bonafide.
Spectrum being treated as security interest and mode of enforcement - HELD THAT:- Having regard to Clause 3.4 and 3.5 of the Tripartite Agreement according priority/first charge to DOT, the spectrum cannot be treated as a security interest by the Lenders. That apart, it being within the domain of Licensor to suspend, revoke or terminate the Licence Agreement besides being empowered under Section 20A of the Indian Telegraph Act, 1885 to levy fine for contravention of any condition contained in its licence, the security interest, if any, in the hands of Lenders would be so fragile and vulnerable that would seriously jeopardize its enforcement - we need not consider the mode of enforcement of security interest.
Application disposed off.
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2021 (4) TMI 1299
Quashing of Signature Not Verified Digitally signed by Sanjay Kumar - framing of charge against the respondent-accused for the offence under Section 7 of the Prevention of Corruption Act - revisional jurisdiction of High Court - HELD THAT:- In the case of P. VIJAYAN VERSUS STATE OF KERALA & ANR. [2010 (1) TMI 1097 - SUPREME COURT], this Court had an occasion to consider Section 227 of the Cr.P.C. What is required to be considered at the time of framing of the charge and/or considering the discharge application has been considered elaborately in the said decision. It is observed and held that at the stage of Section 227, the Judge has merely to sift the evidence in order to find out whether or not there is sufficient ground for proceeding against the accused. It is observed that in other words, the sufficiency of grounds would take within its fold the nature of the evidence recorded by the police or the documents produced before the Court which ex facie disclose that there are suspicious circumstances against the accused so as to frame a charge against him. It is further observed that if the Judge comes to a conclusion that there is sufficient ground to proceed, he will frame a charge under Section 228 Cr.P.C., if not, he will discharge the accused.
The High Court has exceeded in its jurisdiction in exercise of the revisional jurisdiction and has acted beyond the scope of Section 227/239 Cr.P.C. While discharging the accused, the High Court has gone into the merits of the case and has considered whether on the basis of the material on record, the accused is likely to be convicted or not. For the aforesaid, the High Court has considered in detail the transcript of the conversation between the complainant and the accused which exercise at this stage to consider the discharge application and/or framing of the charge is not permissible at all. As rightly observed and held by the learned Special Judge at the stage of framing of the charge, it has to be seen whether or not a prima facie case is made out and the defence of the accused is not to be considered.
After considering the material on record including the transcript of the conversation between the complainant and the accused, the learned Special Judge having found that there is a prima facie case of the alleged offence under Section 7 of the PC Act, framed the charge against the accused for the said offence. The High Court materially erred in negating the exercise of considering the transcript in detail and in considering whether on the basis of the material on record the accused is likely to be convicted for the offence under Section 7 of the PC Act or not - the High Court was required to consider whether a prima facie case has been made out or not and whether the accused is required to be further tried or not. At the stage of framing of the charge and/or considering the discharge application, the mini trial is not permissible. At this stage, it is to be noted that even as per Section 7 of the PC Act, even an attempt constitutes an offence. Therefore, the High Court has erred and/or exceeded in virtually holding a mini trial at the stage of discharge application.
The impugned judgment and order passed by the High Court discharging the accused under Section 7 of the PC Act is unsustainable in law - Appeal allowed.
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2021 (4) TMI 1298
Ex parte order Passed by Tribunal due to non-appearance on behalf of the assessee - HELD THAT:- AR being a senior citizen was not well in December, 2017 and January 2018 with high blood sugar and high blood pressure - due to that medical emergency the AR failed to appear before the Tribunal on the hearing dates.Since there was nobody appeared before the Tribunal at the time of hearing, the Tribunal dismissed the assessee's appeal ex parte.
We note that there is a reasonable cause which prevented the assessee to appear Tribunal on the dates fixed for hearing. So, we are inclined to recall the impugned order dated 31-01-2018 and direct the registry to fix the case afresh in due course. Appeal of assessee allowed.
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2021 (4) TMI 1297
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational creditors - existence of debt and dispute or not - whether the MOU is null and void? - HELD THAT:- This forum is not for carrying out detailed investigation into the correctness of otherwise of any agreement. IBC envisages summary proceedings as are apparent o\n the face of it. In the instant case and on a perusal of the Agreement dated 08.06.2015 it appears that the same is genuine and valid. The Respondent's plea that this Agreement is not genuine appears to be clearly untenable.
Where there is a bonafide pre-existing dispute? - HELD THAT:- The Petitioner issued Legal Notices dated 03.03.2017 under section 138 of NI Act against the 5 dishonoured cheques and calling up the Respondent to make payment of ₹ 6 Cr as per the MOA. To this, the Respondent has denied having entering into MOA and states that the cheques were given prior to the Sale Deed dated 08.06.2015, and were to be returned after receiving entire sale consideration, except 5 cheques. This stand of the Respondent also appears to be unacceptable - As per the MOU which is signed and agreed to by both sides, there is a clear liability to pay ₹ 6 crore, including the mode of payment, as referred to supra. There was, therefore, no pre-existing dispute, as has been made out by the Respondent, and a clear debt existed.
From the examination of its accounts, it is quite visible that the Respondent has lost its ability to generate revenues, continue its business and pay its debts. It is only harping on its contention that it has not entered into Memorandum of Agreement dated 08.06.2015 and is in denial of the liability. However, as mentioned above, this claim does not appear to be correct and there does not appear to be any bonafide dispute. The dispute stated to be pre-existing is unrelated to the debt in question, and is subsequent to the MOA as per which the debt arose.
Petition admitted - moratorium declared.
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