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Showing 81 to 100 of 902 Records

• 2009 (8) TMI 1226
  
  Issues Involved:
  1. Proper presentation of the election petition u/s 81(1) of the Representation of the People Act, 1951.
  2. Interpretation of the mandatory requirement for the petitioner's presence during the filing of the election petition.
  
  Summary:
  
  Issue 1: Proper presentation of the election petition u/s 81(1) of the Representation of the People Act, 1951

  1) This appeal, u/s 116A of the Representation of the People Act, 1951, challenges the High Court of Karnataka's order dismissing the election petition for improper presentation u/s 81(1) of the Act.

  2) The appellants contested the election results for Constituency No. 140, Bagepalli, alleging irregularities and illegalities, including an unauthorized recounting after the initial declaration of appellant No.1 as the winner.

  3) The election petition was filed by the appellants' advocate, but the High Court Registry objected, stating the appellants were not present during the filing, leading to the petition's dismissal by the learned Single Judge.

  4) The Supreme Court examined whether the election petition was properly presented u/s 81(1) and whether the High Court's dismissal was justified.

  Issue 2: Interpretation of the mandatory requirement for the petitioner's presence during the filing of the election petition

  5) Section 81(1) mandates that an election petition must be presented by the candidate or elector within 45 days from the date of election of the returned candidate.

  6) The appellants argued that the presence of the petitioner is not mandatory if the petition is presented by an authorized advocate. The respondents contended that personal presentation by the petitioner is mandatory.

  7) The Court emphasized that Section 81(1) has five specific requirements, including that the petition must be presented "by" the petitioner. Section 86(1) mandates dismissal of petitions not complying with Section 81.

  8) Previous judgments, including K. Venkateswara Rao and Hukumdev Narain Yadav, affirmed that the Representation of the People Act is a self-contained code, requiring strict adherence to its provisions.

  9) The Court highlighted that the Act's provisions must be interpreted strictly to ensure the genuineness of election petitions and prevent frivolous litigations.

  10) The Court noted that the petitioner's personal presence ensures preliminary verification by the High Court, preventing vexatious petitions.

  11) The Court distinguished the present case from Sheo Sadan Singh, where the petition was presented in the immediate presence of the petitioner, thus satisfying the requirement in substance.

  12) The Court rejected the Rajasthan High Court's interpretation in Bhanwar Singh, which allowed presentation by an advocate without the petitioner's presence.

  13) The Court concluded that the High Court correctly dismissed the election petition due to improper presentation, as it was filed only by an advocate without the petitioners' presence.

  14) The civil appeal was dismissed, upholding the High Court's decision, with no order as to costs.

  ---

• 2009 (8) TMI 1225
  
  Issues involved: Interpretation of arbitration agreement, maintainability of application u/s 9 of the Arbitration and Conciliation Act, 1996.
  
  In the judgment by the Delhi High Court, the appeal was against the order of the learned Single Judge dated 25th May, 2009, which concluded that there was no arbitration agreement between the parties. The Single Judge held that the application u/s 9 of the Act was not maintainable and that the findings would not prevent the appellant from seeking remedies under appropriate law.
  
  The High Court, comprising of Mukul Mudgal and Neeraj Kishan Kaul, JJ., found no reason to disagree with the Single Judge's conclusion on the maintainability of the application u/s 9 of the Act, based on the interpretation of Section 7 of the Act. Citing the Supreme Court's decision in Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya and Anr. (2003) 5 SCC 531, the High Court affirmed the Single Judge's findings.
  
  The appellant's senior counsel sought to withdraw the appeal and the application u/s 9 of the Act to file a civil suit, emphasizing that the judgment should not hinder the matters to be raised in the suit. The respondent's counsel argued that since the application u/s 9 had been decided on merits, no further clarification was necessary upon withdrawal of the appeal.
  
  The High Court noted that the Single Judge had already permitted the appellant to seek remedies against the respondents under appropriate law, and that the observations were confined to the context of the application u/s 9 of the Act. Consequently, the appeal was dismissed as withdrawn, and the pending application was disposed of accordingly.

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• 2009 (8) TMI 1224
  

  Property pending the winding up proceedings - Company application seeking a direction to execute and register a sale deed - agreement entered into between the parties - Whether Transfer of property effected six months prior to the presentation of the winding up proceedings fraudulent transfer? Whether agreement for sale does not by itself create any interest in or charge on the immovable property covered under the agreement for sale - Sale agreement was entered into on 17.2.2000 itself; that the company petition was filed on 2.7.2001, and thus the agreement was entered into one year and four months before the presentation of the winding up proceedings as contemplated u/s.441 of the Companies Act; that under such circumstances, at no stretch of imagination, it could be called as a fraudulent transfer; that even the ld Single Judge has not determined a question as to whether there was any collusion or not; but has raised the question as to whether the transaction was a fraudulent preference or not; that in the instant case, all would clearly indicate that there was no fraudulent preference at all; and that the ld Single Judge has erred in coming to the conclusion that it was a fraudulent preference.

  Appellant had no knowledge about the financial crisis or crunch of Kothari Orient Finance Limited at the relevant time; that apart from this, so long as it is not a fraudulent preference, it cannot be stated that it was intended to defeat the interest of the depositors; that in the case on hand, it cannot in any way affect the interest of the depositors since the company is having all assets both movable and immovable which were very well available; that under the circumstances, it cannot be termed as fraudulent preference, and hence the order of the ld Single Judge has got to be set aside and a direction be issued for registration of the sale deed.

  HELD THAT:- The entire case of the appellant rests on the agreement dated 17.2.2000, which was executed by the Director of Kothari Orient Finance Limited on the one side and the appellant bank on the other whereby consideration was fixed at ₹ 105 lakhs, and a letter dated 6.11.2000, on which date the possession of the property was handed over along with the documents of title. At this juncture it would be more apt and appropriate to look into the alleged agreement for sale.

  There was no need for making such a clause in the agreement as if the balance of consideration of ₹ 64 lakhs was liable to be paid by the appellant to Kothari Orient Finance Limited, company under winding up, who was actually under financial crisis. The ld Senior Counsel for the appellant brought to the notice of the Court that even this ₹ 41 lakhs of advance had not gone to the company, and out of this amount, ₹ 25 lakhs the major part, had actually gone to the Directors and not to the Company.

  The Director of the company under winding up has agreed to deliver the original title deeds and also the vacant possession of the property only at the time of the registration of the sale deed to the purchaser. In the instant case, it is contended that on 6.11.2000, the possession of the property was handed over with all the documents of title. Thus it would clearly indicate the intention of the management of the company under winding up to make an unjust and preferential treatment in favour of the appellant.

  It is clear that if any transfer of property is effected six months prior to the presentation of the winding up proceedings, it cannot be termed as a fraudulent transfer. In the instant case, what was available in the hands of the appellant was only an agreement for sale dated 17.2.2000. Under Sec.54 of the Transfer of Property Act, it would not clothe him any right or interest over the said property. So long as registration of sale deed is not done, it cannot be said to be a transfer of property in the eye of law.

  Merely because the possession and the documents were handed over, it cannot also clothe him any right to have the benefit under Sec.531 of the Companies Act. Had it been true that the handing over of documents and possession was made on 6.11.2000, and a letter therefor was also made that day itself as contended by the appellant's side, the long and unexplained delay in filing the company petition could not have occasioned. Admittedly, the company petition was filed on 2.7.2001. This would be indicative of the fact that the said letter has been created pending the proceedings and also in order to avoid the transaction being called as a fraudulent preference.

  The conduct of the parties would clearly indicate that in appraisement of the financial crisis, a resolution came to be passed by the board of directors authorising one of the directors who entered into an agreement for sale of the only one immovable property in favour of the appellant bank which, in the considered opinion of the Court, cannot but be termed as a fraudulent preference, and that too when there are number of banks and depositors in thousands to whom the company under winding up owed crores of money. This Court is unable to notice any infirmity either factually or legally, and hence the order of the learned Single Judge has got to be sustained.

  In the result, this original side appeal is dismissed confirming the order of the ld Single Judge. The parties are directed to bear their costs.

  ---

• 2009 (8) TMI 1223
  

  Challenging the order of High Court - the Validity and/ or legality of an order issuing a warrant against the appellant - Interpretation of the roles and responsibilities of the Central Bureau of Investigation (CBI) vis-`-vis the provisions of the Extradition Act, 1962 ("the Act") - Appellant and the respondent No. 6 are citizens of India. Appellant married the respondent No. 6 on 6.04.2002 at Mumbai. They moved to California on 19.04.2002 and stayed there till 2005. Out of the said wedlock, a daughter Eesha was born on 26.04.2003. Marital life of the Appellant and the Respondent No. 6 was however not happy. According to the respondent No. 6, she was continuously being harassed. She applied for grant of permanent asylum on 1.07.2003 allegedly under coercion from the appellant. Later on the respondent No. 6 allegedly moved to her sister's house at Sharon Massachusetts, USA.

  PROCEEDINGS IN USA - She filed a complaint at Police Department on 26.04.2005. On or about 09.05.2005 an application before the Probate and Family Court of Massachusetts for grant of divorce was filed by her. In the said proceeding, she also sought for orders of custody of her daughter. A decree for divorce as also the custody of the child was passed by the Norfolk Country Probate and Family Court, Canton, Massachusetts on 2.5.2006.

  PROCEEDINGS BEFORE THE FAMILY COURT - she filed an application for custody of the child before the Family Court at Mumbai on 11.05.2007. By an order dated 15.05.2007, the Family Court directed the appellant to remain present in the Court with Eesha. Pursuant to the said notice of the Family Court, his father appeared before the court on 15.05.2007 and stated that the appellant had gone out of Mumbai along with Eesha. The Family Court, thus issued a warrant of arrest against the appellant and directed grant of custody of the child to the Respondent No. 6.

  Appellant indisputably preferred an appeal before the High Court which was marked as Family Court Appeal (Stamp) No. 11724 of 2007. An order of stay was granted by the High Court of Bombay in the matter, which is still operative.

  PROCEEDINGS BEFORE THE HIGH COURT - The Atlanta City Police and the American Court in the meanwhile issued a warrant of arrest against the Appellant which was transmitted through INTERPOL to the Government of India. Appellant filed a writ petition questioning the legality and/ or validity of the said warrant, which by reason of the impugned judgment dated 11.08.2008 has been dismissed.

  HELD THAT:- In view of the rival contentions of the parties, the following questions which arise for our consideration are:

  (i) Whether having regard to the concept of sovereignty the Executive Government of India can enforce a warrant passed by the Probate and Family Court, Massachusetts?

  (ii) Having regard to the provisions contained in Sections 44A and 13 of the Code of Civil Procedure, is the foreign judgment enforceable in India?

  (iii) Whether the CBI established under the DPSE Act has the authority to deal with INTERPOL notices?

  MATRIMONIAL DISPUTE AND THE COURT'S POWER OF REVIEW: The dispute between the appellant and the respondent No.6 essentially being a matrimonial dispute, is a private dispute. Criminal offences, if any, are sought to be made out relate to the violation of the Order of the Court which speaks of commission of an offence of forgery as well.

  A `Yellow Corner Notice' is evidently used to trace missing minors. The Interpol issued a yellow or watch notice on 13.6.2007 in respect of Eesha, minor daughter of the respondent No. 6. It, however, issued a red or detain and arrest notice on 21.6.2007 to locate and arrest the Appellant. Pursuant thereto or in furtherance thereof, the Assistant Director, National Crimes Bureau (NCB) forwarded a letter dated 4.1.2008 received from the U.S. Embassy (Department of Justice) to the Mumbai Police to locate the appellant and his daughter on 14.01.2008. Appellant was located by Mumbai Police on 3.5.2008 and the said information was passed on to the U.S. Embassy on 9.5.2008.

  The CBI has also filed its counter affidavit before this Court stating that the Indian Interpol Wing works as an interface between the Interpol Secretariat General, France, Interpol member countries and various law enforcement agencies of India. One of its functions is to circulate the Red Corner Notice as also Yellow Corner Notices issued by the Interpol Secretariat General at the behest of any member country within India.

  Application of the provisions of the Act, thus, in a case of this nature must be held to be imperative in character. We have noticed hereinbefore that for the purpose of applying the provisions of the Act, existence of a treaty between the requesting State and the requested State plays an important role. It makes a distinction between an extraditable offence and other offences including political offences subject of course to the condition that offences relating to illegal tax are not to be treated to be a political offence. Sections 4-18 provides for the mode and manner in which a request for extradition of a person is required to be made by the concerned country. The requirements are specific in nature and are required to be accompanied by a large number of documents.

  Such an arrest can be effected only pursuant to a warrant issued by the Magistrate in view of Sections 6, 16 and 34B of the Act or an arrest warrant issued by a foreign country and endorsed by the Central Government under Section 15 of the Act. It is also not in doubt or dispute that in a case where there is no treaty, it is only the Magistrate who issues the warrant for arrest subject of course to the condition that the Central Government had ordered a Magisterial Inquiry in terms of Section 5 of the Act. Such an order of arrest, emanating from a Treaty -State, is also permissible under a `Provisional Warrant' issued by a Magistrate in exercise of its power under Section 16 of the Act, upon information that the fugitive should be apprehended subject to the condition that the detention thereunder may continue only for the time requisite for obtaining an endorsed warrant from the Central Government.

  However, when a request for provisional arrest in terms of Article 12 is communicated, it must satisfy the requirement of Section 34B of the Act. Such request from a foreign country must be accompanied by the requisite documents and not a communication from INTERPOL alone. It will bear repetition to state that an arrest can be effected at the instance of the Central Government only when such a request is made by the foreign country and not otherwise. Respondent No.6 herself accepts that she had pursued only civil remedies and the order of the custody Court was passed under civil remedies. Section 29 of the Act as indicated hereinbefore provides for power of Central Government to discharge any fugitive criminal. If it has arrived at a conclusion that it is unjust or inexpedient to surrender or return the fugitive criminal.

  India follows the doctrine of dualism and not monoism. We may, however, hasten to add that this Court, however, at times for the purpose of interpretation of statute has taken into consideration not only the treaties in which India is a party but also declarations, covenants and resolutions passed in different International Conferences. {See M/s Entertainment Network (India) Ltd. vs. M/s Super Cassettee Industries Ltd [2008 (5) TMI 671 - SUPREME COURT]. The Act as also the treaties entered into by and between India and foreign countries are admittedly subject to our municipal law. Enforcement of a treaty is in the hands of the Executive. But such enforcement must conform to the domestic law of the country. Whenever, it is well known, a conflict arises between a treaty and the domestic law or a municipal law, the latter shall prevail.

  The power of the Central Government vis-`-vis State is in two categories - Keeping in view the Constitution of INTERPOL vis-`-vis the Resolutions adopted by the C.B.I. from time to time, although a Red Corner Notice per se does not give status of a warrant of arrest by a competent court. It is merely a request of the issuing authority to keep surveillance on him and provisionally or finally arrest the wanted person for extradition. The provisions of the Act and the Treaty are required to be given effect to. Whenever a request is received from INTERPOL the authority must act on behalf of the Central Government. The INTERPOL provides constitution of NCBs by Member States.

  C.B.I. has different roles to play. When it acts as NCB, being a department of CBI, it acts under a Treaty. It acts in terms of the constitution of the INTERPOL. It acts as a authority of the Central Government. By reason of such an act it does not carry out investigation, although it is entitled therefor. It functions as an NCB which is to give effect to the request received from INTERPOL and/or foreign country. When it does so, indisputably it has to apply its mind. It can take any action only because it is lawful to do so. It does not exercise absolute discretion. It has to act if a case therefor has been made out including the question as whether any extraditable offence has been made out. For the aforementioned purpose it does not Act as an agency within the four corners of the DSPE Act. It acts, it will be a repetition to state, has an authority of the Central Government.

  The limitation of its powers having regard to the provisions of Section 5 of DSPE Act as also some of the decisions of this Court, therefore, in our opinion, cannot be said to have any application in the facts and circumstances of this case.

  C.B.I., therefore, is entitled to organize and coordinate in regard to the request made by INTERPOL. It may have to obtain endorsed warrant. It may have to give provisional warrant in terms of Section 34B of the Act.

  CONCLUSION - We have already held above that the Municipal Laws of a country reign supreme in matters of Extradition. It is thus for the State concerned to take a decision in regard to such Notices, keeping in view the Municipal Laws of the country. The High Court was, therefore, in our opinion, clearly wrong in holding that a Red Corner Notice should not be tinkered with. When a person complains of a violation of his Fundamental Right and/or otherwise of his fundamental right he is entitled to the right of judicial review. It ought not to be forgotten here that the dispute between the Appellant and the Respondent No. 6, being essentially a Matrimonial dispute, is a private dispute and no criminal extraditable offence can be made out of the same, in the absence of a specific request for extradition.

  The High Court, thus, in our opinion, committed a serious error insofar as it failed to take into consideration the provisions of the Act, in the absence of any request having being made by the Govt. of USA to the Executive Government of the Union of India or any authourization made by the latter on its behalf.

  Furthermore, if a violation of any order passed by a civil court is made the ground for issuance of a Red Corner Notice, indisputably, the court will enquire as to whether the same has undergone the tests laid down under Sections 13 and 44A of the Code of Civil Procedure.

  As regards the question of custody, we have, however noticed, hereinabove that although the family court at Bombay for all intent and purposes relying on or on the basis of the order passed by the Massachusetts Court directed custody of the girl in favour of her mother, the Bombay High Court has stayed the operation thereof. The Appellant therefore, must be held to be in lawful custody of his daughter unless any other or further order is passed by a court of competent jurisdiction.

  Lastly, it is imperative to note that the State does not seek for enforcement of the custody and/ or restrain order passed by the Probate and Family Court, Massachusetts in view of the rigours contained in Sections 13 and 44A of the Code of Civil Procedure. Even the Family Court does not appear to have dealt with this aspect of the matter. In any event, as the matter is pending before the High Court, it alone will have a final say therein.

  For the aforementioned reasons, the impugned judgment cannot be sustained. It is set aside accordingly. The appeal is allowed. However, in the facts and circumstances of the case, there shall be no order as to costs.

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• 2009 (8) TMI 1222
  
  Issues involved:
  Challenge to communication u/s Regulation 3(2) of the takeover code regarding issuance of Global Depository Receipts by Indian listed companies and applicability of takeover code.
  
  Comprehensive details:
  1. The appeal challenges a communication issued by the general manager of the Corporation Finance Department in response to a request by Bharti Airtel Limited seeking informal guidance on the issuance of Global Depository Receipts (GDRs) by Indian listed companies and the applicability of Regulation 3(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
  2. Bharti proposed a partnership with MTN Group Limited involving the issuance of GDRs by Bharti to MTN and its shareholders. The proposal includes acquiring 49% shares of MTN by Bharti. The communication clarified that MTN and its shareholders would need to comply with the takeover code only upon conversion of GDRs into equity shares with voting rights.
  3. The appellant, holding 100 shares of Bharti, felt aggrieved by the communication, arguing it contradicted the takeover code and could affect shareholders' rights. The respondents contended the appeal was premature as the proposal was not finalized, and the communication was interpretative, not an order.
  4. The Tribunal found the appeal premature as the proposal was pending finalization. The communication was interpretative and not binding on the Board. The Tribunal emphasized that no final decision adversely affecting shareholders had been made.
  5. Regarding the appellant's bonafides, the Tribunal agreed with Respondents 2 and 3 that they were suspect. The appellant's timing of acquiring shares raised doubts about the motive behind the appeal. The Tribunal declined to entertain the appeal based on these grounds.
  6. The appellant's grievance about the Board not considering a representation was dismissed as the Board had not passed any order on it. The Tribunal clarified that appeals could only be made against orders, not inaction. As the appellant did not request a direction for the Board to address the representation, the Tribunal could not entertain this argument.
  
  In conclusion, the appeal was deemed not maintainable, and the parties were left to bear their own costs.

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• 2009 (8) TMI 1221
  
  Issues Involved:
  1. Eligibility for Pension Benefits under United Bank of India (Employees) Pension Regulations, 1995.
  2. Interpretation of "Qualifying Service" under Regulation 29(5).
  3. Applicability of Clause (5) of Regulation 29 to Voluntary Retirement.
  
  Summary:
  
  1. Eligibility for Pension Benefits under United Bank of India (Employees) Pension Regulations, 1995:
  The respondent voluntarily retired from the United Bank of India on 31.5.1989. The United Bank of India (Employees) Pension Regulations, 1995, were introduced later, and the respondent sought to exercise his option for pension. The appellant bank rejected his application, leading the respondent to file a writ petition. The High Court ruled in favor of the respondent, but the appellant bank challenged this decision.
  
  2. Interpretation of "Qualifying Service" under Regulation 29(5):
  The core question was whether the respondent was entitled to pensionary benefits under clause (5) of Regulation 29. Regulation 2(n) defines 'employee' and Regulation 2(w) defines 'qualifying service'. The Regulations applied to employees who retired on or after 1.1.1986 and before 1.11.1993, provided they exercised the option within the prescribed period. The High Court interpreted that the qualifying service could be extended by five years under clause (5) of Regulation 29, considering the service rendered while on duty or otherwise.
  
  3. Applicability of Clause (5) of Regulation 29 to Voluntary Retirement:
  The Supreme Court examined whether clause (5) of Regulation 29, which allows for an increase in qualifying service by up to five years, applied to the respondent. The Court held that the term 'otherwise' should be interpreted ejusdem generis, meaning it should be limited to situations similar to those explicitly mentioned in the Regulations. The Court concluded that the respondent, who was not in service at the relevant time, could not benefit from the extended qualifying service provision.
  
  Conclusion:
  The Supreme Court set aside the High Court's judgment, ruling that clause (5) of Regulation 29 applies only to employees who have completed 20 years of qualifying service. The appeal was allowed, and no order as to costs was made.

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• 2009 (8) TMI 1220
  
  Issues involved:
  The issues involved in this case are the legality of the orders passed by respondent no.2 under section 21(2) of the Act for reassessment for the assessment year 2005-06, the lack of opportunity of being heard before passing the impugned orders, and the violation of principles of natural justice.
  
  Details of the Judgment:
  
  Issue 1: Legality of Orders Passed by Respondent No.2 under Section 21(2) of the Act for Reassessment:
  The petitioner, a private limited company engaged in manufacturing and selling oil and organic manure, challenged the impugned orders dated 25-4-2009 and notices dated 28-4-2009 issued by respondent no.2 and respondent no.3 under section 21(2) of the Act for reassessment of the assessment year 2005-06. The petitioner contended that the orders were passed without affording a reasonable opportunity of being heard.
  
  Issue 2: Lack of Opportunity of Being Heard Before Passing Impugned Orders:
  The petitioner argued that the impugned order granting permission for reassessment was passed without providing an adequate opportunity to present their case. The notice fixing the appearance date on 25-4-2009 was served on the evening of 24-4-2009, leaving insufficient time for the petitioner to respond. The Court criticized the haste with which the orders were passed, emphasizing the importance of fairness and natural justice in administrative proceedings.
  
  Issue 3: Violation of Principles of Natural Justice:
  The Court referred to a previous judgment emphasizing the necessity of affording a hearing to the assessee before granting permission for reassessment. It was held that the failure to provide reasons for granting permission rendered the impugned order unsustainable. The Court quashed the impugned orders dated 25-4-2009 and directed respondent no.2 to pass a fresh order after affording the petitioner an opportunity to be heard.
  
  In conclusion, the writ petition was allowed, and the impugned orders were quashed, with directions for a fresh order to be passed by respondent no.2 within three months after providing proper notice to the petitioner.

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• 2009 (8) TMI 1219
  
  Issues Involved:
  Multiple writ petitions filed for quashing reassessment orders passed by the assessing authority for different assessment years u/s 21 of the Act without affording proper opportunity of hearing to the petitioners.
  
  Judgment Details:
  
  Writ Petition No. 1319(Tax)/07:
  - Petitioner, a commission agent, engaged in purchase and sale of paddy on commission basis for Ex U.P. Principals.
  - Assessment order passed for 2002-03, petitioner filed appeal, which was partially allowed.
  - Notices issued for reassessment, petitioner objected, but reassessment orders passed ex parte without proper opportunity of hearing.
  - Court found the short notice period given to contest the proceeding inadequate and without jurisdiction.
  - Assessing authority's conduct lacked fairness and adherence to principles of natural justice.
  - Reassessment orders quashed, directing fresh orders to be passed within three months after affording proper hearing.
  
  Connected Writ Petitions:
  - Similar facts and issues in connected writ petitions.
  - Assessing authority failed to provide adequate opportunity of hearing before passing reassessment orders.
  - Orders passed under section 21 of the Act found to be procedurally flawed and set aside.
  - Orders granting permission for reassessment sustained, fresh orders to be passed after proper hearing within three months.
  
  Conclusion:
  - Writ petitions allowed in part, quashing reassessment orders due to lack of proper opportunity of hearing.
  - Court refrained from expressing opinion on the merits, leaving it to the concerned authority to pass appropriate orders in accordance with the law.

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• 2009 (8) TMI 1218
  
  Issues Involved:
  1. Entitlement to 0% duty of customs under the EPCG Scheme.
  2. Validity of the notification date for the 0% duty of customs.
  3. Interpretation of "substitution" in legislative context.
  
  Issue-wise Detailed Analysis:
  
  1. Entitlement to 0% duty of customs under the EPCG Scheme:
  The petitioner-company imported textile machinery and sought the benefit of the Export Promotion Capital Goods (EPCG) Scheme, which initially provided a duty of customs at 10% ad valorem. The government later introduced a 0% duty of customs scheme effective from April 1, 1999. The petitioner applied for the 0% duty benefit, but the respondent authorities granted only the 10% EPCG licence. The petitioner cleared the consignments under protest and sought a refund of the 10% duty paid.
  
  2. Validity of the notification date for the 0% duty of customs:
  The central issue was whether the benefit of the 0% duty of customs could be applied retrospectively from April 1, 1999, given that the official notification was published on November 4, 1999. The respondents argued that the exemption could only take effect from the date of publication in the Official Gazette, as per Section 25 of the Customs Act, 1962.
  
  3. Interpretation of "substitution" in legislative context:
  The petitioner relied on the principle that "substitution" of a provision implies the repeal of the earlier provision and its replacement by the new one, effective from the date of the new policy's introduction. This interpretation was supported by the Supreme Court's rulings in *Government of India & Ors. v. Indian Tobacco Association* and *Zile Singh v. State of Haryana & Ors.*.
  
  Judgment Analysis:
  
  Entitlement to 0% Duty:
  The court noted that the petitioner-company imported the textile machinery in August 1999, during the period when the 0% duty of customs scheme was in effect as per the government policy starting April 1, 1999. However, the official notification was published later on November 4, 1999.
  
  Notification Validity:
  The court examined the relevant notifications: Notification No. 29/97-Cus., Notification No. 31/99-Cus., and Notification No. 122/99-Cus. It found that the term "bio-tech and engineering sectors" was introduced in March 1999 and later substituted to include "textile and chemical sectors" in November 1999. The court interpreted that the substitution indicated the government's intent to apply the 0% duty from the policy's introduction date.
  
  Substitution Interpretation:
  The court referred to the established legal principles regarding "substitution" from the *Zile Singh* and *Indian Tobacco Association* cases. It concluded that the substitution of "bio-tech, engineering, textile, and chemical sectors" in the notifications was intended to be effective from April 1, 1999, aligning with the government's policy.
  
  Final Judgment:
  The court quashed the impugned order dated July 30, 2003, rejecting the petitioner's claim for a refund of the 10% duty paid. It directed the respondents to grant the benefit of 0% duty of customs under the EPCG Scheme to the petitioner-company within two months.
  
  Conclusion:
  The writ application was allowed, and the petitioner was entitled to the 0% duty of customs benefit retroactively from April 1, 1999, based on the interpretation of "substitution" in legislative amendments. The court's decision emphasized the intent and policy of the government over the technicality of the notification date.

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• 2009 (8) TMI 1217
  
  The Gujarat High Court admitted the case and issued notice on the substantial question of law regarding the exclusion of excise duty when valuing closing stock at the end of accounting. The matter was posted along with Tax Appeal No.41/2008.

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• 2009 (8) TMI 1216
  
  The Supreme Court dismissed the appeal in the case with citation 2009 (8) TMI 1216. Judges were Mr. S.H. Kapadia and Mr. Aftab Alam.

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• 2009 (8) TMI 1215
  
  Issues involved: Dispute over addition of undisclosed income u/s 68 of the Income Tax Act.
  
  Summary:
  The appeal centered on the addition of Rs. 1,85,55,000 as undisclosed income u/s 68 of the Income Tax Act. The CIT reversed the Assessing Officer's decision and deleted the addition, a ruling upheld by the I.T.A.T. The I.T.A.T emphasized that the company did not purchase the shares in question, and if purchased by an individual, the addition should have been made in that individual's hands, not the company's. Referring to the judgment in CIT v. Lovely Exports (P.) Ltd., the I.T.A.T stated that share application money from alleged bogus shareholders does not constitute undisclosed income for the company. The Tribunal highlighted that proceedings could be initiated against the individual who allegedly purchased the shares, Sh. P.K. Sharma, under section 153(3) of the Act. Consequently, the appeal was dismissed as no legal question arose apart from the aforementioned issue.

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• 2009 (8) TMI 1214
  
  Issues involved:
  The issues involved in this case are:
  1. Interpretation of Modvat credit under Rule 191B/191BB of the Central Excise Rules, 1944.
  2. Differentiation between exemptions under Rule 191B/191BB and other exemptions.
  3. Reliance on a previous decision of CEGAT when the matter is sub judice in Orissa High Court.
  
  Issue 1: Modvat credit under Rule 191B/191BB
  The petitioner sought direction on whether Modvat credit taken on inputs should be expunged for clearances under Rule 191B/191BB, despite Rule 57C placing an embargo on credit if the final product is wholly exempt from duty. The respondent, a manufacturer of Polyester staple fibre, cleared products without duty payment under Rule 191B/191BB, not reversing the Modvat credit as required by Rule 57C.
  
  Issue 2: Differentiation between exemptions
  The Tribunal's differentiation between exemptions under Rule 191B/191BB and other exemptions regarding the applicability of Rule 57C was questioned by the petitioner, arguing that there was no valid ground for such differentiation.
  
  Issue 3: Reliance on previous decision
  The Tribunal's reliance on a previous decision of CEGAT in the case of M/s. Orissa Synthetics Ltd. was challenged by the petitioner, as the decision was being contested in the Orissa High Court and was sub judice.
  
  The Assistant Commissioner decided in favor of the respondent, following the CEGAT judgment in M/s. Orissa Synthetics Ltd., which held that Rule 57C did not apply to clearances under Rule 191B/191BB. The Commissioner (Appeals) upheld this decision, stating that until the CEGAT order was overturned, its ratio had to be followed. The CEGAT also supported this stance, leading the department to seek a reference to the Tribunal.
  
  The department's request for reference was based on the disagreement with the Orissa Tribunal's decision in the Orissa Synthetics Ltd. case, which was under appeal in the Orissa High Court. The Punjab and Haryana High Court's decision in a similar case supported the respondent's position, stating that Modvat credit was admissible. Consequently, the petition was dismissed as no referable question of law arose.
  
  In conclusion, the High Court dismissed the petition, aligning with the Punjab and Haryana High Court's view that no referable question of law existed in this case, thus not warranting a direction to the Tribunal for reference.

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• 2009 (8) TMI 1213
  
  Issues involved: Interpretation of standing orders in customs duty assessment, reliance on foreign journals for valuation of imported goods.
  
  In the judgment, the High Court addressed the issue of standing orders in customs duty assessment in light of the Supreme Court's decision in Varsha Plastics Private Limited v. Union of India. The Supreme Court clarified that standing orders are meant to assist in the exercise of quasi-judicial powers for determining the value for customs duty levy, but they are not binding. The High Court agreed with this view, emphasizing that standing orders are guidelines, not mandates, and are intended to streamline the functioning of customs officers without interfering with their discretion. The Department confirmed that the impugned standing order is non-binding and serves to bring about uniformity in assessment work. Therefore, the standing order should be understood as guidance rather than a directive.
  
  Regarding the use of foreign journals for valuation of imported goods, the Supreme Court highlighted that if the transaction value is rejected, customs authorities must determine the value based on Customs Valuation Rules and contemporaneous imports. However, in the absence of evidence of contemporaneous imports, reference to foreign journals indicating international prices may be relevant. The Assessing Authority must justify any rejection of transaction value and follow Customs Valuation Rules for determining the value of goods. The judgment emphasized that the correct international price for imported goods should be established based on the facts of each case, with the Assessing Authority having the responsibility to determine the value at which the goods are sold in international trade at the time of importation.
  
  In conclusion, the High Court applied the Supreme Court's observations to the present case and disposed of the writ petition accordingly. The petitioner was granted the opportunity to present evidence before the Assessing Authority to support the valuation in the Bill of Entry. If dissatisfied with the Assessing Authority's decision, the petitioner could seek redress in accordance with the law.

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• 2009 (8) TMI 1212
  
  Issues:
  1. Imposition of fine and penalty on the appellant for errors in the Bill of Entry.
  2. Appeal against the orders of the Commissioner of Customs (Appeals) and Customs, Excise and Service Tax Appellate Tribunal.
  3. Consideration of the appellant's reputation and unintentional mistake.
  4. Decision on the penalty and redemption fine imposed on the appellant.
  
  Analysis:
  
  1. The case involves the imposition of a fine and penalty on the appellant due to errors in the Bill of Entry filed by their agent. The authorities acknowledged the unintentional nature of the mistake but still imposed the penalties. The appellant challenged these penalties through a series of appeals.
  
  2. The appellant contested the fines imposed by the Commissioner of Customs (Appeals) and the Customs, Excise and Service Tax Appellate Tribunal. The appellant argued that as a reputable company with a significant foreign exchange earning status, they had no intention to evade duty, especially for a small amount. The authorities recognized the inadvertent error but upheld the penalties.
  
  3. The court considered the appellant's reputation as a reputed company with Five Star Hotels and a significant foreign exchange earner. The court acknowledged that the appellant would not risk their status and benefits for a minor duty evasion amount. The appellant expressed readiness to pay the penalty to avoid hindrances in future proceedings.
  
  4. After evaluating the circumstances, the court found the violation to be trivial, unintentional, and without serious consequences. Considering the appellant's status and public interest, the court directed the appellant to pay the penalty and redemption fine. The court clarified that the payment would not have adverse effects on the appellant's rights, benefits, or reputation as per relevant circulars.
  
  This detailed analysis highlights the issues of penalty imposition, appeal proceedings, reputation considerations, and the final decision on the penalty and redemption fine in the legal judgment.

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• 2009 (8) TMI 1211
  
  Issues involved: Revision under Section 11 of the U.P. Trade Tax Act against the order of the Tribunal for the assessment year 1987-88 under the Central Sales Tax Act.
  
  Summary:
  1. The case involved the initiation of proceedings under Section 21 of the Act based on information received from Mandi Samiti regarding the sale of goods. The assessing authority assessed tax under both the U.P. Trade Tax Act and the Central Sales Tax Act without providing the opportunity of cross-examination or confronting the original documents to the dealer.
  
  2. The applicant filed appeals before the Assistant Commissioner and the Trade Tax Tribunal, which were dismissed. The Tribunal upheld the assessing authority's decision solely based on the information without addressing the dealer's request for cross-examination and confrontation of documents.
  
  3. The applicant, represented by counsel, argued that the burden of proof lies on the revenue to establish the authenticity of information and documents relied upon. The assessing authority failed to summon the original records or allow cross-examination, leading to an unjust assessment upheld by the Tribunal.
  
  4. After hearing both parties, the court found that the assessing authority did not meet the burden of proving the genuineness and authenticity of the information used for assessment. Therefore, the court allowed the revision and set aside the Tribunal's order dated 29.3.2001.

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• 2009 (8) TMI 1210
  

  Interpretation and application of arbitration clause - Commission of offences u/s 13(1)(d)(2)(ii-iii) r/w Section 13(2) of the Prevention of Corruption Act, 1988 ("the Act") and Section 120B of the IPC - controversy regarding the use of those stones as rubble in masonry dam - allocation of the parts of the quarries - contractors invoked the arbitration agreement - ad hoc settlement was proposed - Whether sanction for prosecution in terms of Section 197 of the CrPC was required - HELD THAT:- At the outset, however, we must place on record that construction of the dam over river Hasdeo Bango became necessary for the purpose of supply of water to the National Thermal Power Corporation. It was a World Bank project. The project was required to be completed within a time frame. Stones required to be used for the construction of the dam, as of necessity, were required to be of sufficient strength. The opinion of the Indian Institute of Technology, referred to by Mr. Tulsi, is not on record. Correspondences as also the opinion of the Central Water Commission, Government of India, however, point out that stones of requisite strength were not available at Therma Pahar Quarry. The quantum of stone required was eight lakh cubic meters and only one lakh cubic metres was available thereat. The balance seven lakh cubic meters of stone was, thus, required to be obtained from the quarries situated at villages villages Katghora, Hunkra and Maheshpur.

  Stone is a minor mineral within the meaning of the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 and the Minor Mineral Concession Rules framed by the State. Lease and/ or licence for extraction thereof is to be granted by the Collector. Although the Mines Department of the State intended to grant `Quarry lease' in favour of others having regard to the requirements of the State, the said quarries were reserved, subject to certain conditions.

  The respondent Nos. 8 to 10, in view of the provisions of the Mines and Mineral (Regulation and Development) Act, 1957 and the Madhya Pradesh Minor Mineral Concession Rules could not have on their own undertaken mining operation for the purpose of extracting the said minor mineral. They could have done so only on a licence granted in their favour by the Collector/State. However, as the hillocks of the villages in question were reserved for departmental use, only by reason thereof the contractors could carry on mining operation thereat and not otherwise. It was, therefore, a conscious decision on the part of the competent authorities of the State.

  The intra-departmental and inter-departmental correspondences and notesheets to which we have adverted to heretobefore clearly go to show that the authorities incharge of construction of the dam were aware of the difficulties which were being faced by the contractors. Their apprehension was that in the event the contractors were not permitted to mine stones from Katghora Quarry and other Quarries, they may leave the job as a result whereof the entire project might come to a stand-still.

  We would proceed on the basis that two divergent opinions on the construction of the contract in the light of the stand taken by the World Bank as also the earlier decision taken by the State was possible. That, however, would not mean that a fresh decision could not have been taken keeping in view the exigencies of the situation. A decision to that effect was not taken only by one officer or one authority. Each one of the authorities was ad idem in their view in the decision making process. Even the Financial Adviser who was an independent person and who had nothing to do with the implementation of the project made recommendations in favour of the contractors stating that if not in law but in equity they were entitled to the additional amount.

  From the materials available on record, it is crystal clear that the decision taken was a collective one. The decision was required to be taken in the exigency of the situation. It may be an error of judgment but then no material has been brought on record to show that they did so for causing any wrongful gain to themselves or to a third party or for causing wrongful loss to the State. Ex facie, there is no material to show that a conspiracy had been hatched by the respondents.

  Even under the Act, an offence cannot be said to have been committed only because the public servant has obtained either for himself or for any other person any pecuniary advantage. He must do so by abusing his position as public servant or holding office as a public servant. In the latter category of cases, absence of any public interest is a sine qua non. The materials brought on record do not suggest in any manner whatsoever that the respondent Nos. 1 to 7 either had abused their position or had obtained pecuniary advantage for the respondent Nos. 8, 9 and 10, which was without any public interest.

  It is also interesting to notice that the prosecution had proceeded against the officials in a pick and choose manner. We may notice the following statements made in the counter-affidavit which had not been denied or disputed to show that not only those accused who were in office for a very short time but also those who had retired long back before the file was moved for the purpose of obtaining clearance for payment of additional amount from the government, viz., M.N. Nadkarni who worked as Chief Engineer till 24.03.1987 and S.W. Mohogaonkar, Superintending Engineer who worked till 19.06.1989 have been made accused but, on the other hand, those who were one way or the other connected with the decision, viz., Shri J.R. Malhotra and Mr. R.D. Nanhoria have not been proceeded at all. We fail to understand on what basis such a discrimination was made.

  In this case, the probative value of the materials on record has not been gone into. The materials brought on record have been accepted as true at this stage. It is true that at this stage even a defence of an accused cannot be considered. But, we are unable to persuade ourselves to agree with the submission of Mr. Tulsi that where the entire materials collected during investigation have been placed before the court as part of the chargesheet, the court at the time of framing of the charge could only look to those materials whereupon the prosecution intended to rely upon and ignore the others which are in favour of the accused.

  Indisputably, they were required to do so. Be he an Executive Engineer, Superintending Engineer, Chief Engineer, Engineer-in-Chief, Secretary or Deputy Secretary, matters were placed before them by their subordinate officers. They were required to take action thereupon. They were required to apply their own mind. A decision on their part was required to be taken so as to enable them to oversee supervision and completion of a government project. The Minister having regard to the provisions of the Rules of Executive Business was required to take a decision for and on behalf of the State.

  Some of the respondents, were required to render their individual opinion required by their superiors. They were members of the Committee constituted by the authorities, viz., the Minister or the Secretary. At that stage, it was not possible for them to refuse to be a Member of the Committee and/ or not to render any opinion at all when they were asked to perform their duties. They were required to do the same and, thus, there cannot be any doubt whatsoever that each one of the respondent Nos. 1 to 7 was performing his official duties.

  Whether an order of sanction was required to be obtained - There exists a distinction between a sanction for prosecution u/s 19 of the Act and Section 197 of the Code of Criminal Procedure. Whereas in terms of Section 19, it would not be necessary to obtain sanction in respect of those who had ceased to be a public servant, Section 197 of the CrPC requires sanction both for those who were or are public servants. For the purpose of attracting the provisions of Section 197 of the CrPC, it is not necessary that they must act in their official capacity but even where a public servant purports to act in their official capacity, the same would attract the provisions of Section 197 of the CrPC. It was so held by this Court in Sankaran Moitra v. Sadhna Das and Another [2006 (3) TMI 748 - SUPREME COURT].

  In State of Karantaka v. Ameerjan [2007 (9) TMI 628 - SUPREME COURT], it was held that an order of sanction is required to be passed on due application of mind. Thus, in this case, sanction for prosecution in terms of Section 197 of the CrPC was required to be obtained.

  For the reasons aforementioned, there is no merit in this appeal which is dismissed accordingly.

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• 2009 (8) TMI 1209
  
  Supreme Court dismissed the appeal in the case with citation 2009 (8) TMI 1209 - SC. Judges were Mr. S.H. Kapadia and Mr. Aftab Alam.

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• 2009 (8) TMI 1208
  
  The Supreme Court dismissed the Special Leave Petition as the petitioner was required to make a pre-deposit, but extended the time to make the deposit by ten weeks. Key participants included Mr. Mukul Rohtagi and Mr. Hari Shankar K.

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• 2009 (8) TMI 1207
  
  Issues Involved:
  1. Prior permission of secured creditors for the scheme of arrangement of demerger/amalgamation.
  2. Rights of secured creditors over securities.
  3. Necessity of convening a meeting of secured creditors.
  4. Lack of notice to creditor banks.
  5. Suppression of material facts before the court.
  6. Allocation of liabilities to the textile division.
  7. Bona fides of the demerger and amalgamation scheme.
  
  Detailed Analysis:
  
  1. Prior Permission of Secured Creditors:
  The secured creditors, including Corporation Bank, Dhanalakshmi Bank, State Bank of India, and Lakshmi Vilas Bank, argued that the scheme of arrangement for demerger/amalgamation was made without their prior permission. The court noted that the company had agreed in their loan agreements not to effect any scheme of amalgamation or reconstruction without the written consent of the secured creditors. This was stipulated in clauses such as 42(b) of the agreement. The court found that the company had violated these clauses by proceeding with the scheme without obtaining the necessary permissions.
  
  2. Rights of Secured Creditors Over Securities:
  The secured creditors contended that the arrangement, if approved, would result in them losing their rights to proceed against the securities originally furnished by RSL Industries. The court noted that the company's argument that the securities and charges would remain intact was not tenable. The court found that the demerger scheme transferred all liabilities to the textile division, which would adversely affect the security position of the banks. The court rejected the company's contention that the agreement for prior consent was invalid.
  
  3. Necessity of Convening a Meeting of Secured Creditors:
  The secured creditors argued that a meeting of the secured creditors should have been convened and conducted. The court acknowledged that while Section 391 of the Companies Act does not mandate a meeting of creditors in a scheme between the company and its members, it emphasized that the court has a duty to ascertain whether the scheme would affect the creditors' interests. The court found that the secured creditors were kept in darkness and were not given an opportunity to be heard, which was necessary given the potential adverse effects on their interests.
  
  4. Lack of Notice to Creditor Banks:
  The secured creditors claimed they were kept in darkness from the commencement of the proceedings until the court approved the scheme. The court noted that despite repeated requests from the State Bank of India for a consortium meeting to discuss the developments, the company failed to convene such a meeting or inform the secured creditors about the proceedings. The court found that the company intentionally withheld information and did not place the real situation before the company court.
  
  5. Suppression of Material Facts Before the Court:
  The secured creditors argued that the company suppressed necessary details before the court. The court highlighted the importance of disclosing all material facts, including the latest financial position and existing liabilities, to the court as required under Section 391 of the Companies Act. The court found that the company failed to disclose these facts, which would have influenced the court's decision to grant approval for the scheme.
  
  6. Allocation of Liabilities to the Textile Division:
  The court noted that under the demerger scheme, all liabilities were transferred to the textile division, which was highly advantageous to the consortium banks that financed the leather division. The court found that this allocation of liabilities would adversely affect the interest of the secured creditors, as the security position could not continue as it originally stood.
  
  7. Bona Fides of the Demerger and Amalgamation Scheme:
  The secured creditors contended that the scheme lacked bona fides and was an attempt to defraud the banks. The court found that the company's actions, including not obtaining prior consent, not convening a consortium meeting, and suppressing material facts, indicated a lack of bona fides. The court emphasized the importance of protecting public interest and found that the scheme, as approved, would adversely affect the secured creditors and public interest.
  
  Conclusion:
  The court concluded that the approval of the scheme of arrangement/amalgamation by the single judge was valid and effective subject to the approval by the secured creditors. The court dismissed the appeals, confirming the order of the learned single judge and emphasizing the necessity of protecting the interests of the secured creditors and public interest.

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