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• 2007 (10) TMI 726
  
  1. ISSUES PRESENTED and CONSIDERED

  The core legal questions considered by the Court in this Contempt Petition are:

  • Whether the Respondents violated the ad-interim order dated 30th June, 2006, which directed the parties to maintain the status quo as on that date.
  • Whether the first Respondent was in possession of the suit property on or before 30th June, 2006, as tentatively found by the Court in the ad-interim order.
  • Whether the alleged attempt by the first Respondent or its representatives to forcibly enter the suit premises and fix an electricity meter constitutes a breach of the status quo order, thereby amounting to contempt of court under the Contempt of Courts Act, 1971 or under Article 215 of the Constitution of India.
  • Whether the show-cause notice issued to the Respondents on 5th February, 2007 for alleged violation of the interim order should be sustained or discharged.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Existence and scope of the ad-interim order dated 30th June, 2006

  The legal framework involves the Court's power to grant interim reliefs and to maintain status quo pending final adjudication in a suit. The Court passed an ad-interim order directing the parties to maintain the status quo as it existed on 30th June, 2006. This order was based on a tentative finding that the first Respondent was in possession of the suit property at least as of 19th December, 2005.

  The Court's reasoning clearly indicates that the observation regarding possession was tentative and made only for the purpose of granting interim relief. The order was not a final adjudication on possession but a procedural step to preserve the existing state of affairs pending final hearing.

  Issue 2: Whether the first Respondent was in possession of the suit property on or before 30th June, 2006

  The Court relied on the material on record and the tentative finding recorded in the interim order. The possession was not conclusively determined but was assumed for the purpose of maintaining status quo. The Petitioner challenged this assumption, alleging that the first Respondent was never in possession on the date of the order.

  The Court noted that the tentative observation was not a conclusive finding and that the question of possession was still subject to adjudication in the Notice of Motion and the suit itself.

  Issue 3: Whether the attempt to fix an electricity meter by the first Respondent or its representatives is a breach of the status quo order and contempt of court

  The Petitioner alleged that representatives of the first Respondent forcibly entered the premises and attempted to install an electricity meter, supported by complaints filed with the police and letters from security agencies. The Petitioner contended this amounted to deliberate violation of the Court's order.

  The Court analyzed the nature of the alleged breach and the context of the interim order. It held that the status quo order was to preserve the existing possession and condition of the property as on 30th June, 2006. However, even assuming the attempt to fix the electricity meter occurred, the Court found that this act did not constitute a contempt of court under the relevant statutory provisions or constitutional authority.

  The Court's interpretation emphasized the need for a clear and deliberate breach of the order that would warrant contempt proceedings. Mere attempts or acts that do not materially alter possession or the status quo may not suffice.

  Issue 4: Whether the show-cause notice issued on 5th February, 2007 should be sustained or discharged

  Based on the above reasoning, the Court discharged the show-cause notice issued to the Respondents. The Court concluded that the allegations did not establish a prima facie case of contempt or breach of the interim order warranting further proceedings.

  3. SIGNIFICANT HOLDINGS

  The Court held:

  "It must be noted here that in order dated 30th June, 2006 there is a prima facie observation made by this Court that atleast on 19th December, 2005 the first Respondent was in possession of the suit property. After recording the said tentative finding this Court proceeded to pass ad-interim order directing the Respondents to maintain status-quo. It is obvious that the observation made in the said order regarding possession was only a tentative observation at the stage of consideration of ad-interim relief."

  "In my view, even assuming that an attempt was made by the first Respondent to fix an electricity meter, this is not a fit case for taking action against the concerned Respondents either under the Contempt of Courts Act, 1971 or under Article 215 of the Constitution of India."

  Core principles established include:

  • Tentative findings made in interim orders for the purpose of granting status quo are not conclusive determinations of rights such as possession.
  • The maintenance of status quo requires preservation of the existing state of affairs but does not necessarily prohibit all acts such as attempts to fix an electricity meter, unless such acts clearly alter possession or violate the order.
  • Contempt of court requires a clear, deliberate, and material breach of court orders; mere attempts or disputed acts may not suffice to invoke contempt jurisdiction.
  • Show-cause notices for contempt must be based on prima facie evidence of breach; absent such evidence, the Court may discharge such notices.

  Final determinations:

  • The Court discharged the show-cause notice issued against the Respondents for alleged breach of the ad-interim order dated 30th June, 2006.
  • The alleged attempt to fix an electricity meter by the first Respondent or its representatives did not constitute contempt of court or breach of the status quo order.
  • The tentative finding of possession in the interim order remains subject to final adjudication in the suit and related proceedings.

  ---

• 2007 (10) TMI 725
  
  Issues Presented and Considered

  The core legal questions considered by the Court include:

  1. Whether the order of compulsory purchase dated 12th September 2002 under section 269UD of the Income Tax Act, 1961 (the Act) stands abrogated due to the failure of the Central Government (Defendants) to tender the amount of apparent consideration within the prescribed time under section 269UG(1) of the Act.

  2. Whether the immovable property in question revested in the original owners (Mulanis and Om Prakash Navani) by operation of law under section 269UH of the Act due to non-compliance with the mandatory tendering requirement.

  3. Whether the Plaintiff, having purchased the property by registered conveyance in 2006, has acquired absolute ownership and possession of the suit property.

  4. Whether the Defendants are in possession of the property and entitled to maintain security personnel and boards on the property.

  5. Whether the suit filed by the Plaintiff is maintainable in view of the bar under section 269UN of the Act, which declares certain orders final and conclusive.

  6. Whether the Plaintiff is entitled to interim reliefs, including injunctions restraining the Defendants from interfering with possession and development of the property pending final disposal of the suit.

  Issue-wise Detailed Analysis

  1. Abrogation of the Order of Compulsory Purchase Due to Non-Tender of Consideration

  The relevant legal framework is Chapter XX-C of the Income Tax Act, 1961, specifically sections 269UD, 269UE, 269UF, 269UG, and 269UH. Section 269UD(1) empowers the Appropriate Authority to compulsorily purchase immovable property if the consideration is understated. Section 269UE(1) provides that the property vests in the Central Government on the date of such order. Section 269UF(1) mandates payment of consideration equal to the apparent consideration. Section 269UG(1) requires tendering the amount within one month from the end of the month in which the property vests. Section 269UH(1) stipulates that failure to tender or deposit the amount within this period results in abrogation of the compulsory purchase order and revesting of the property in the transferor.

  The Court noted that the order dated 12th September 2002 vested the property in the Central Government on that date. The tendering period expired on 31st October 2002. The Plaintiff contended that the Defendants failed to tender the amount within this mandatory period and that the only deposit made was in 1993 based on an earlier order which was set aside. The Defendants argued that the deposit in the P.D. Account in 1993 constituted valid tender, and subsequent offers to pay were conditional upon the vendors handing over possession and documents.

  The Court examined authoritative precedents including the Supreme Court decisions in Union of India v. Dr. A.K. Garg and Prima Realty v. Union of India, which held that tendering must be made within the stipulated time and that failure results in abrogation. The Court also relied on the Division Bench decision in Parasram Uria Estate Developers Pvt. Ltd. v. Appropriate Authority, which affirmed the mandatory nature of tendering under section 269UG and the consequence of revesting under section 269UH.

  Applying these principles, the Court found that the deposit in 1993 could not be treated as valid tender for the 2002 order since the earlier order was set aside. The conditional offers to pay after 2002 did not amount to unconditional tender within the prescribed time. Hence, prima facie, the order of compulsory purchase dated 12th September 2002 stood abrogated and the property revested in the original owners by operation of law.

  2. Ownership and Possession of the Property

  The Plaintiff claimed to have purchased the property by registered conveyance dated 16th May 2006 and to be in absolute possession. The Defendants contended that forcible possession was taken over by them on 22nd July 1993 and that the Plaintiff's predecessors-in-title were not in possession at the time of sale.

  The Court scrutinized the correspondence and pleadings. Letters from the vendors (Mulanis and Om Prakash Navani) to the Appropriate Authority admitted that the Defendants were in possession at least until October 2002. The Defendants had posted security personnel and displayed notice boards on the property since the early 1990s. The Plaintiff's claim of possession was based on entry after the 2006 conveyance without any evidence of prior possession by the vendors or delivery of possession to the Plaintiff.

  Prima facie, the Court found it difficult to accept the Plaintiff's claim of possession, given the continuous presence of Defendants' security and the vendors' own admissions. The Court concluded that the Defendants appeared to be in possession of the suit property.

  3. Maintainability of the Suit and Plaintiff's Locus

  Section 269UN of the Act declares that orders under section 269UD(1) or 269UF(2) shall be final and conclusive and not subject to challenge in any proceeding. The Defendants argued that the Plaintiff's predecessors-in-title did not challenge the 2002 order and that the Plaintiff lacked locus to file the suit.

  The Court observed that the issue of maintainability and locus raised serious questions, especially since the Plaintiff entered the picture post-2006 and the original vendors had not challenged the compulsory purchase order or raised the issue of revesting. The Court held that these issues involved triable questions to be decided at the final hearing.

  4. Entitlement to Interim Reliefs

  The Plaintiff sought declarations of revesting, injunctions restraining Defendants from interfering with possession or development, and removal of security personnel and boards.

  The Court held that the declaration sought was substantive relief not appropriate for interim orders. Regarding injunctions, given the prima facie finding that the Defendants were in possession and the Plaintiff was not, the Court declined to grant injunctions that would alter possession or allow development of the property pending trial. The Court emphasized that allowing development could prejudice the Defendants' rights given the ongoing dispute.

  The Court granted limited interim relief directing the parties to maintain status quo as of the date of the order, allowing the Defendants to continue guarding the property and retaining notice boards. The Defendants were restrained from dispossessing any person in possession or taking steps to sell or auction the property during the pendency of the suit.

  Significant Holdings

  "Section 269UG contemplates the contingencies when the amount of consideration could be deposited by the Central Government with the appropriate authority: (a) In case of any dispute as to the apportionment of the amount of consideration amongst persons claiming to be entitled thereto. (b) In case the persons entitled to the amount of consideration do not consent to receive it or if there is any dispute as to the title to receive the amount of consideration. Only in cases of the aforesaid two situations, the Central Government is entitled to deposit the amount of apparent consideration with the appropriate authority. When there was no such contingencies existing, the Central Government could not have deposited the amount with the appropriate authority and any deposit in the absence of such contingencies is invalid and the subject property automatically stood revested in the original owners."

  The Court established the core principle that the tender of the amount of apparent consideration under section 269UG(1) is a mandatory requirement and failure to comply within the stipulated period results in automatic abrogation of the compulsory purchase order and revesting of the property in the transferor under section 269UH(1).

  It was held that a deposit of the amount made pursuant to an earlier order, which was set aside, cannot be treated as valid tender for a subsequent order.

  The Court further held that possession is a factual matter and prima facie the Defendants were in possession, supported by documentary evidence and admissions by the vendors.

  On the issue of maintainability, the Court held that the bar under section 269UN raises triable issues regarding the Plaintiff's locus and the suit's maintainability, which require adjudication at final hearing.

  Regarding interim reliefs, the Court concluded that substantive declarations could not be granted at interlocutory stage, and injunctions affecting possession or development were inappropriate given the prima facie possession by Defendants and the nature of the dispute. The Court granted only status quo relief to prevent prejudice pending final adjudication.

  ---

• 2007 (10) TMI 724
  
  The Delhi High Court, through Judges Madan B. Lokur and Dr. S. Muralidhar, dismissed the appeal against the Income Tax Appellate Tribunal's order for assessment year 1997-98. The key issue was whether the assessee had commenced business in the relevant year. The Tribunal had earlier determined the commencement of business occurred in the last quarter of the financial year, disallowing pre-commencement expenditure deductions-a conclusion which became final. Subsequently, the assessing officer, Commissioner (Appeals), and Tribunal concurred that business commenced on 8-1-1997 upon acceptance of an import offer. The High Court found no perversity or substantial question of law in this factual finding and upheld the concurrent decisions, stating: "no substantial question of law arises for our consideration." The appeal was dismissed accordingly.

  ---

• 2007 (10) TMI 723
  
  Issues Involved:
  
  1. Whether the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (1983 Adhiniyam) is repugnant to the Arbitration and Conciliation Act, 1996 (1996 Act) under Article 254 of the Constitution.
  2. Whether the 1983 Adhiniyam is impliedly repealed by the 1996 Act.
  3. Applicability of Section 11(6) of the 1996 Act in the context of disputes arising from works contracts governed by the 1983 Adhiniyam.
  4. Whether the arbitration under the 1983 Adhiniyam is statutory or pursuant to an arbitration agreement.
  
  Detailed Analysis:
  
  1. Repugnancy under Article 254 of the Constitution:
  
  The petitioner contended that the 1983 Adhiniyam is void due to repugnancy with the 1996 Act under Article 254 of the Constitution. Article 254(1) states that if a State law is repugnant to a Union law on a Concurrent List matter, the Union law prevails. However, Article 254(2) allows a State law to prevail if it has received the President's assent, unless Parliament enacts a subsequent law on the same matter. The court noted that the 1983 Adhiniyam received the President's assent and thus was not automatically void under Article 254(1). The court further found no express repeal by the 1996 Act, indicating that the 1983 Adhiniyam was not impliedly repealed.
  
  2. Implied Repeal by the 1996 Act:
  
  The petitioner argued that the 1996 Act, being a later law, impliedly repealed the 1983 Adhiniyam. The court examined the provisions of both Acts and concluded that the 1996 Act did not manifest an intention to repeal the 1983 Adhiniyam. Sub-sections (4) and (5) of Section 2 of the 1996 Act explicitly save other enactments providing for statutory arbitration, indicating Parliament's intention to preserve such laws. The court held that the 1983 Adhiniyam was not impliedly repealed by the 1996 Act.
  
  3. Applicability of Section 11(6) of the 1996 Act:
  
  The petitioner sought the appointment of an arbitral tribunal under Section 11(6) of the 1996 Act, asserting that the 1996 Act should govern the arbitration. The court found that the 1983 Adhiniyam provides for statutory arbitration, which is distinct from arbitration pursuant to an agreement. The 1983 Adhiniyam mandates referral to an Arbitration Tribunal for disputes arising out of works contracts, irrespective of an arbitration clause. Consequently, the application under Section 11(6) was deemed not maintainable as the 1983 Adhiniyam governs the arbitration process for works contracts with the State.
  
  4. Nature of Arbitration under the 1983 Adhiniyam:
  
  The court analyzed whether the arbitration under the 1983 Adhiniyam is statutory or pursuant to an arbitration agreement. It concluded that the 1983 Adhiniyam provides for statutory arbitration, as it allows disputes to be referred to a tribunal even without an arbitration agreement. This statutory nature was affirmed by the court's reliance on previous judgments, which established that the 1983 Adhiniyam governs arbitration for works contracts with the State, irrespective of any arbitration agreement.
  
  Conclusion:
  
  The court dismissed the petitioner's application under Section 11(6) of the 1996 Act and the writ petition, holding that the 1983 Adhiniyam is not repugnant to the 1996 Act and is not impliedly repealed. The 1983 Adhiniyam provides for statutory arbitration, which prevails over the provisions of the 1996 Act due to the express saving clauses in Section 2(4) and (5) of the 1996 Act. The application for arbitration under the 1996 Act was therefore not maintainable.

  ---

• 2007 (10) TMI 722
  
  Issues involved:
  The writ petition challenges decisions in Exts.P2, P4, and P8 regarding punishment imposed on the petitioner after trial by Court Martial, with jurisdiction being a key issue.
  
  Jurisdiction Issue:
  The petitioner, governed by the Navy Act, was posted in Andaman and Nicobar Islands, where the alleged actions occurred, outside the territorial jurisdiction of the Court. Previous judgments establish that the cause of action must at least partly arise within the Court's territory for it to have jurisdiction. The Court held that the acts attributed to the petitioner and the subsequent proceedings all took place outside its jurisdiction, including the Court Martial proceedings at Port Blair and decisions by competent authorities located elsewhere.
  
  The petitioner's attachment to INS Jarawa in Port Blair during the proceedings does not alter the jurisdictional analysis, as the alleged omissions occurred in Andaman and Nicobar Islands. The Court rejected the argument that previous entertainment of a writ petition precludes raising jurisdictional issues, emphasizing that lack of jurisdiction cannot be overcome by consent or prior proceedings. Ultimately, based on established principles under Article 226, the Court found it lacked territorial jurisdiction to hear the writ petition challenging the disciplinary decisions.
  
  Conclusion:
  The Court dismissed the writ petition on jurisdictional grounds, without prejudice to any arguments on the merits of the case.

  ---

• 2007 (10) TMI 721
  
  Issues involved:
  The issues involved in this judgment are the application for stay/suspension of operation of conviction order, initiation of departmental proceedings against the appellant, and the question of whether the appellant can be punished twice for the same charges.
  
  Summary:
  
  Issue 1: Application for Stay/Suspension of Conviction Order
  The appellant filed an Interlocutory Application seeking a stay of the conviction order passed against him by the Special Judge. The appellant was convicted under Sections 409/477A IPC and Section 5(2) r/w 5(1)(c) of the Prevention of Corruption Act. The appellant's provisional bail was confirmed during the pendency of the appeal.
  
  Issue 2: Initiation of Departmental Proceedings
  The employer issued a suspension order cum charge-sheet against the appellant after the conviction order, calling for an explanation regarding disciplinary action. An Enquiry Officer and a presenting officer were appointed to conduct the enquiry into the charges framed against the appellant.
  
  Issue 3: Double Punishment
  The appellant had previously faced a departmental enquiry, resulting in dismissal, which was later overturned, and he was reinstated unconditionally. The appellant argued that it was improper for the management to initiate a fresh departmental enquiry for the same charges for which he was already punished and reinstated.
  
  Court's Decision:
  The Court examined the distinct charges in the different charge-sheets and found that they were not related. The Court held that the appellant should be treated as corrupt until exonerated by a superior court, as per legal precedents. The Court dismissed the Interlocutory Application, stating that the appellant's case did not warrant a stay of the conviction order during the appeal.
  
  This judgment highlights the legal principles surrounding the application for stay of a conviction order, the initiation of departmental proceedings post-conviction, and the prohibition against double punishment for the same charges.

  ---

• 2007 (10) TMI 720
  
  The Appellate Tribunal CESTAT New Delhi heard stay petitions regarding service tax on manpower recruitment agency services. The appellants supplied manpower to clients and argued that the levy was limited before 16-6-2005. The Tribunal granted unconditional stay and waived pre-deposit of dues until the appeals are disposed of. The decision was pronounced on 31-10-2007.

  ---

• 2007 (10) TMI 719
  
  Issues involved:
  The issues involved in the judgment are the legality of issuing summons to the petitioner without impleading her in the proceedings, the authority of a Judicial Magistrate to summon a person not named in the charge sheet, and the liability of a person in an official capacity for the conduct of a company's business.
  
  Issue 1: Legality of Issuing Summons to the Petitioner
  
  The petitioner filed a petition to quash the proceedings against her in C.C.No. 381 of 2006, arguing that summons were issued to her without legal basis. The petitioner, as the General Manager of the company, was not impleaded in the proceedings nor was any notice served before issuing summons. The petitioner's counsel contended that the service of summons to her was an abuse of process and alien to criminal law. The respondent's counsel argued that the Judicial Magistrate had the authority to issue process to a person not named in the charge sheet, citing legal precedents to support this contention.
  
  Issue 2: Authority of Judicial Magistrate to Summon a Person Not Named in the Charge Sheet
  
  The respondent's counsel relied on legal precedents, including a decision of the Hon'ble Supreme Court and a judgment of the Karnataka High Court, to argue that a Judicial Magistrate is empowered to summon a person, such as the petitioner in her capacity as General Manager, even if not specifically named in the charge sheet. The legal basis for issuing summons to individuals responsible for the conduct of a company's business was emphasized, highlighting the importance of holding such persons accountable for offenses committed by the company.
  
  Issue 3: Liability of a Person in an Official Capacity for the Conduct of a Company's Business
  
  The judgment referred to legal principles established by the Hon'ble Supreme Court regarding the liability of individuals in official positions within a company. It was emphasized that for a person to be held liable under relevant sections of the law, specific averments in the complaint regarding their role and responsibility in the company's affairs are essential. The judgment underscored the importance of accurately detailing the involvement of accused persons in the complaint to satisfy the requirements for taking cognizance. In this case, it was concluded that the complaint against the petitioner lacked necessary allegations to establish her liability, leading to the quashing of the proceedings against her.
  
  In conclusion, the judgment delves into the legality of issuing summons to the petitioner, the authority of a Judicial Magistrate to summon individuals not named in the charge sheet, and the liability of persons in official capacities for the conduct of a company's business. Legal precedents and principles were cited to support the arguments presented by both parties, ultimately leading to the quashing of the proceedings against the petitioner due to the absence of allegations establishing her liability in the complaint.

  ---

• 2007 (10) TMI 718
  
  Issues involved: Interpretation of Section 154 of the Income Tax Act regarding disallowance of selling expenses claimed by the Assessee.
  
  The judgment pertains to an appeal filed by the Revenue against an order passed by the Income Tax Appellate Tribunal (the Tribunal) in relation to the Assessment Year 1996-1997. The Assessee had declared income, including a capital gain, and claimed deduction for selling expenses based on an agreement with M/s Fortune International Ltd. The Assessing Officer disallowed the claim of selling expenses under Section 154 of the Act, stating that the entire expenditure was to be borne by the company. The Assessee's reply to the notice was rejected, and the Assessing Officer passed an order disallowing the deduction. The Assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who allowed the appeal on the grounds that the disallowance exceeded the scope of rectification under Section 154 of the Act.
  
  The Tribunal, in considering the appeal, analyzed the scope of Section 154 of the Act and concluded that the issue raised was debatable, rendering Section 154 inapplicable. It was observed that the Assessing Officer's action amounted to a review of the order rather than rectification, which is not permissible under Section 154. The High Court upheld the Tribunal's decision, stating that the interpretation of the relevant Section was correct, and no substantial question of law arose. Consequently, the appeal was dismissed.

  ---

• 2007 (10) TMI 717
  
  Issues involved: Application u/s 482 seeking to quash order confirming Magistrate's order in a case u/s 138 of Negotiable Instruments Act based on limitation of debt recovery.
  
  Summary:
  The applicant, an accused in a case u/s 138 of Negotiable Instruments Act, sought discharge on the ground of limitation for debt recovery. The loan was advanced in 1995, and the cheque issued in 1999 was dishonored, leading to the complaint in 1999. The applicant argued that the debt was time-barred, but the court disagreed. The court noted that acknowledgments made by the accused, including renewals and endorsements on documents, extended the debt repayment period. The court cited legal provisions stating that a signed acknowledgment before the limitation period expiry starts a fresh limitation period. The court also highlighted that a cheque itself can be an acknowledgment under the Limitation Act. The court referenced a case to support the view that revalidation of a cheque by the drawer constitutes a fresh promise, reviving the debt. Ultimately, the court dismissed the application, finding no merit in the limitation argument.
  
  In conclusion, the court held that the acknowledgments made by the accused, including renewals and endorsements, extended the debt repayment period, making the debt legally recoverable even under civil law. The court emphasized that a cheque can serve as an acknowledgment under the Limitation Act and that revalidating a cheque constitutes a fresh promise, reviving the debt. Therefore, the court dismissed the application, finding that the debt was not time-barred and could be legally enforced.

  ---

• 2007 (10) TMI 716
  
  Issues involved: Application for special leave to appeal against the order of acquittal passed by the learned Judicial Magistrate, First Class, Court No. 3 at Nashik u/s 138 of the Negotiable Instruments Act, 1881.
  
  Summary:
  
  Issue 1: Presentation of Cheque within Validity Period
  The complaint was filed due to the dishonour of a cheque dated 25.4.2005, drawn over the Punjab National Bank. The Trial Court noted that the cheque should have been presented within six months from the date it was drawn, i.e., by 25.10.2005. As the cheque was presented after this period, the complaint was dismissed mainly on this ground.
  
  Issue 2: Interpretation of Validity Period
  The applicant contended that the validity period of six months for a cheque should be counted from the next day after the date of the cheque. Citing legal provisions and decisions, the applicant argued that the day of the cause of action should be excluded for counting the period. However, the respondent supported the Trial Court's view and relied on other legal precedents to affirm that the validity period must be counted from the date the cheque bears.
  
  Conclusion:
  The Court refused leave to appeal, upholding the Trial Court's decision that the cheque was presented beyond its validity period, leading to the dismissal of the complaint. The legal interpretations provided by both parties were considered, and it was concluded that the Trial Court's decision did not require reconsideration.

  ---

• 2007 (10) TMI 715
  
  Issues Involved:
  1. Whether the suit is barred by limitation.
  2. Whether the plaintiff is entitled to a decree of declaration as the absolute and exclusive owner of the suit property.
  3. Whether the plaintiff is entitled to a decree declaring the decree dated 5.2.1976 in Suit No. 183/74 as null and void.
  4. Whether the plaintiff is entitled to a decree of possession as prayed for.
  
  Summary:
  
  Issue 1: Whether the suit is barred by limitation
  The trial court dismissed the suit of the appellant on the ground of limitation, holding that since partial rejection of the plaint is not permitted in law, the entire plaint has to be rejected. The High Court affirmed this decision, stating that the entire suit must be dismissed if partial rejection is not possible. The Supreme Court, however, noted that the point of limitation being a mixed question of law and fact should have been decided after appreciation of evidence already on record and not summarily under Order VII Rule 11 CPC. The Court emphasized that the entire plaint should be read as a whole to ascertain its true import and not just isolated paragraphs.
  
  Issue 2: Whether the plaintiff is entitled to a decree of declaration as the absolute and exclusive owner of the suit property
  The appellant claimed that the property was purchased by his father in his name for his benefit and that he constructed a house on the plot with his funds. The respondents, sons of the appellant's elder brother, claimed possession of the first floor based on a decree obtained by their father. The Supreme Court noted that the trial court should have decided the suit on merits rather than rejecting the plaint on the ground of limitation.
  
  Issue 3: Whether the plaintiff is entitled to a decree declaring the decree dated 5.2.1976 in Suit No. 183/74 as null and void
  The appellant contended that the decree obtained by the respondents' father was fraudulent and that he came to know about it only in 1986. The Supreme Court observed that the trial court and the High Court failed to consider the relevant averments in the plaint, which indicated that the appellant had taken steps at the earliest after gaining knowledge of the decree. The Court held that the knowledge mentioned in the plaint cannot be termed as inadequate and incomplete.
  
  Issue 4: Whether the plaintiff is entitled to a decree of possession as prayed for
  The appellant sought possession of the second floor of the house. The Supreme Court directed the trial court to restore the suit to its original file and dispose of the same on merits, emphasizing that the trial court should have considered all the materials available in the plaint before rejecting it.
  
  Conclusion:
  The Supreme Court set aside the orders of the trial court and the High Court, directing the trial court to restore the suit and dispose of it on merits within six months. The Court clarified that it had not gone into the merits of the claims made by both parties, except on the question of limitation.

  ---

• 2007 (10) TMI 714
  
  Issues involved:
  The issues involved in this case are the return of complaint by the Judicial Magistrate for rectification of defects, the sufficiency of court fee paid, and the impact of returning and re-presenting the complaint on the legal rights of the accused.
  
  Return of Complaint and Defects:
  The petitioners, who are accused in a calendar case u/s 138 of The Negotiable Instruments Act, challenged the repeated returns of the complaint by the Judicial Magistrate. The main contention was that the return of a complaint by a criminal court is not in line with criminal law and should lead to dismissal of the complaint. The petitioners argued that the return of the complaint affected the limitation for lodging the complaint. However, the respondent contended that the return of a complaint for rectification of defects is recognized by law and does not extend the statutory period of limitation. The respondent relied on Section 207 Cr.P.C. to justify the return of the complaint by the Magistrate.
  
  Sufficiency of Court Fee:
  Another point raised by the petitioners was the insufficiency of court fee paid at the time of presenting the complaint. They argued that there is no provision for returning a complaint for affixing proper court fee after it was presented with a deficit. On the other hand, the respondent argued that the Presiding Officer of a Court has the power to extend the time for affixing proper court fee as per the Tamil Nadu Court Fee and Suit Valuation Act, 1955. The respondent also cited Order 7, Rule 11 C.P.C. to support the requirement of supplying additional stamp paper to rectify such defects.
  
  Impact on Legal Rights of Accused:
  The Court examined whether the returning and re-presenting of the complaint would prejudice the legal rights of the accused. It was emphasized that an irregularity can be rectified, but not an illegality. Referring to previous judgments, the Court held that the return of the complaint for rectification of defects and re-presentation by the party are administrative procedures that do not prejudice the accused's rights. The Court highlighted that the accused cannot challenge administrative acts of the Court if the complaint was presented within the statutory period.
  
  Conclusion:
  The Court dismissed the petition, stating that after the trial has commenced, there can be no quashing of proceedings. Citing a previous decision, the Court emphasized that allowing the trial to proceed to its logical conclusion is essential. Quashing the proceedings at a part-heard stage would be improper. Therefore, the petition was deemed devoid of merits, and the proceedings in C.C.No.104 of 2004 were to continue until their logical conclusion.

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• 2007 (10) TMI 713
  
  Issues Involved:
  1. Acquittal under Section 138 of the Negotiable Instruments Act, 1881.
  2. Service of notice.
  3. Issuance of cheque in personal capacity.
  4. Compounding of the offence.
  
  Summary:
  
  1. Acquittal under Section 138 of the Negotiable Instruments Act, 1881:
  The Complainant appealed against the acquittal of the accused by the JMFC, Vasco-da-Gama. The accused, as Managing Director of accused no. 2 and partner of accused no. 3, issued a cheque for Rs. 30,000/- which was dishonoured due to insufficient funds. Despite receiving notice, the accused failed to make the payment within 15 days. The trial court acquitted the accused, concluding that the Complainant had received the due amount post-filing the complaint and had an intention of grabbing extra money. The High Court found this conclusion unreasonable, stating that the offence under Section 138 is completed upon failure to comply with the notice of demand, and subsequent payments do not absolve the accused of criminal liability.
  
  2. Service of Notice:
  The statutory notice was addressed to three different entities in one envelope, which was returned as "refused." The High Court held that the notice was deemed to have been refused by the accused and was thus considered good service. The presumption of service under Section 27 of the General Clauses Act was not rebutted by the accused's mere denial.
  
  3. Issuance of Cheque in Personal Capacity:
  The cheque was issued from the accused's personal account. The Complainant admitted receiving the cheque in the accused's personal capacity but claimed it was for the liabilities of accused nos. 2 and 3. The High Court referred to Section 138 and Section 139 of the Act, stating that the cheque could be for the liability of another person, and the presumption of liability applies. The accused, as the alter ego of the company and firm, could not claim the cheque was without consideration.
  
  4. Compounding of the Offence:
  The accused filed for compounding the offence, which the Complainant opposed. The High Court rejected the application, stating that compounding requires mutual agreement and cannot be imposed unilaterally. The Court emphasized that the Complainant cannot be forced into a compromise.
  
  Conclusion:
  The High Court reversed the acquittal, convicting the accused under Section 138 of the Negotiable Instruments Act, 1881. The accused was directed to pay compensation of Rs. 20,000/- to the Complainant, with a default sentence of three months' simple imprisonment. The compensation was to be deposited within three weeks, failing which the trial court would execute the sentence.

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• 2007 (10) TMI 712
  
  Issues Involved:
  1. Whether the sentences awarded in two different FIRs should run concurrently or consecutively.
  2. Interpretation and application of Section 427 of the Code of Criminal Procedure (CrPC).
  3. Judicial discretion in converting consecutive sentences into concurrent sentences.
  4. The role of the High Court's inherent powers under Section 482 CrPC in directing sentences to run concurrently.
  
  Detailed Analysis:
  
  Issue 1: Whether the sentences awarded in two different FIRs should run concurrently or consecutively.
  The applicant-Appellant was convicted under two different FIRs and sentenced to suffer rigorous imprisonment (RI) for various terms. He filed a petition to direct that the sentences awarded in these two different FIRs run concurrently. The Full Bench was constituted to address this issue due to the lack of clear principles governing the exercise of judicial discretion in such cases.
  
  Issue 2: Interpretation and application of Section 427 of the Code of Criminal Procedure (CrPC).
  Section 427 CrPC regulates the mode of execution of sentences when an offender is already undergoing imprisonment for another offense. Sub-section (1) provides that subsequent imprisonment shall commence after the expiration of the previous sentence unless the court directs otherwise. Sub-section (2) mandates that if a person already undergoing life imprisonment is sentenced to another term or life imprisonment, the subsequent sentence shall run concurrently with the previous one. The general principle is that sentences should take effect immediately upon conviction unless directed otherwise by the court.
  
  Issue 3: Judicial discretion in converting consecutive sentences into concurrent sentences.
  The Full Bench noted that while the court has discretion to convert consecutive sentences into concurrent ones, the principles, method, and manner of exercising such discretion were not clearly laid out. The court referred to various judgments, including the Supreme Court's observations in State of Maharashtra v. Najakat Alia Mubarak Ali, which highlighted that Section 427 aims to provide amelioration to prisoners. The discretion should be exercised based on the facts and circumstances of each case, considering factors such as the nature and character of the offenses, the offender's criminal history, age, and sex.
  
  Issue 4: The role of the High Court's inherent powers under Section 482 CrPC in directing sentences to run concurrently.
  The Full Bench discussed whether the High Court could invoke its inherent powers under Section 482 CrPC to direct sentences to run concurrently if the trial or appellate court did not provide such a direction. It was noted that the consensus of judicial opinion suggests that inherent powers can be invoked even if the sentencing court did not exercise its discretion under Section 427(1) CrPC. However, the Supreme Court's decision in M.R. Kudva v. State of Andhra Pradesh clarified that such an application under Section 482 CrPC is not maintainable if the provisions of Section 427 CrPC were not invoked during the original trial or appeal.
  
  Conclusion:
  The Full Bench concluded that the discretion to make sentences run consecutively or concurrently should be governed by the facts and circumstances of each case, including the nature of the offenses, the offender's criminal history, and other relevant factors. The normal rule under Section 427 CrPC is consecutive sentences unless the court directs otherwise. The High Court's inherent powers under Section 482 CrPC cannot be invoked in isolation to direct sentences to run concurrently if the trial or appellate court did not exercise such discretion. The case was remitted back to the Division Bench to pass appropriate directions on the application filed by the applicant-Appellant.

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• 2007 (10) TMI 711
  
  Issues involved:
  The appeal challenges the order of acquittal u/s 138 of the NI Act by the Trial Court.
  
  Issue (a):
  Whether a complaint for an offence u/s 138 of the NI Act can be presented by a person other than payee or holder in due course and their authorised agents, power of attorney holder?
  Answer:
  In the negative in view of Section 142 of the NI Act.
  
  Issue (b):
  Whether a complaint for an offence u/s 138 of the NI Act filed by a Firm, Society, Company by President, Secretary, Director, Employee without authorisation or power of attorney is maintainable?
  Answer:
  Specific authorisation authorising the complainant or a power of attorney authorising to file complaint required.
  
  Issue (c):
  Can a complaint be presented and prosecuted by a person other than the payee or holder in due course?
  Answer:
  Yes, only in specific circumstances as outlined.
  
  Issue (d):
  Whether the Trial Court is justified in acquitting the respondent - accused for the offence u/s 138 of the NI Act.?
  Answer:
  In the affirmative for the reasons stated.
  
  Upon re-evaluation of the evidence, it was established that the respondent had issued a cheque which was returned due to insufficient funds. A statutory notice was sent to the respondent, and the Trial Court took cognizance based on the material presented. However, the complaint was found to lack proper authorization or power of attorney, leading to the acquittal of the accused. The appellant's reliance on previous judgments was deemed inapplicable due to the specific provisions of the NI Act. The Court held that without proper authorization, the complaint was not maintainable, upholding the Trial Court's decision to acquit the accused.

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• 2007 (10) TMI 710
  
  Issues Involved:
  1. Territorial jurisdiction of the court.
  2. Presentation of the cheque and its implications.
  3. Cause of action in the context of dishonoured cheques.
  
  Issue-wise Detailed Analysis:
  
  1. Territorial Jurisdiction of the Court:
  The primary issue raised by the defendant was whether the Delhi High Court had the territorial jurisdiction to entertain the suit. The plaintiffs argued that since the cheque was presented for clearance in New Delhi and dishonoured there, part of the cause of action arose in New Delhi, giving the Delhi High Court jurisdiction. The defendant contended that all relevant actions occurred in Ootacamund, where both parties resided, the contract was signed, and the cheque was drawn and handed over.
  
  2. Presentation of the Cheque and Its Implications:
  The plaintiffs presented the cheque at ICICI Bank in New Delhi, which then routed it through Indian Bank, Chennai, to the Oriental Bank of Commerce, Ootacamund, where it was dishonoured. The plaintiffs argued that this sequence of events meant that part of the cause of action arose in New Delhi. The court examined the concept of "presentation of the cheque" and its role in determining jurisdiction.
  
  3. Cause of Action in the Context of Dishonoured Cheques:
  The court analyzed whether the presentation of a cheque for collection at a bank in a different location from the drawee bank could confer jurisdiction. The plaintiffs relied on several precedents, including the Supreme Court's decision in *K. Bhaskaran v. Sankaran Vaidhyan Balan* and others, which dealt with the offence under Section 138 of the Negotiable Instruments Act, 1881. The court noted that the principles applicable to criminal cases under Section 138 were not directly applicable to civil suits for cheque dishonour.
  
  Detailed Analysis:
  
  1. Territorial Jurisdiction of the Court:
  The court examined the facts and found that the cheque was handed over and accepted in Ootacamund, drawn on a bank in Ootacamund, and dishonoured by that bank. The plaintiffs' administrative office and the bank where the cheque was presented for collection being in New Delhi were deemed irrelevant for determining jurisdiction. The court concluded that the cause of action arose entirely in Ootacamund.
  
  2. Presentation of the Cheque and Its Implications:
  The court referred to the Supreme Court's decision in *Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd.*, which clarified that "the bank" referred to in Section 138 of the Negotiable Instruments Act meant the drawee bank. Applying this reasoning, the court held that the presentation of the cheque for collection at the plaintiffs' bank in New Delhi did not confer jurisdiction on the Delhi High Court. The relevant presentation was to the drawee bank in Ootacamund.
  
  3. Cause of Action in the Context of Dishonoured Cheques:
  The court reviewed various precedents cited by both parties. It distinguished the facts of the present case from those in *Ogale Glass Works Ltd.*, *Gouri Shankar v. Ram Banka*, and *A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies Salem*. The court reiterated that the cause of action in a civil suit for cheque dishonour is the refusal by the drawee bank to honour the cheque, which in this case occurred in Ootacamund.
  
  The court also referred to Section 64(1) of the Negotiable Instruments Act, which stipulates that a cheque must be presented for payment to the drawee bank. The court concluded that the essential fact to be proved by the plaintiffs was the dishonour of the cheque by the drawee bank in Ootacamund, and thus, no part of the cause of action arose in Delhi.
  
  Conclusion:
  The court upheld the defendant's objection regarding territorial jurisdiction and dismissed the suit for want of jurisdiction. The court made it clear that it had not expressed any opinion on the merits of the matter.

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• 2007 (10) TMI 709
  
  The Bombay High Court admitted an appeal on a question of law from Appeal No. E/2184/06 and expedited the hearing. (2007 (10) TMI 709)

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• 2007 (10) TMI 708
  
  Issues Involved:
  1. Recovery of Rs. 12 lacs based on partnership agreement and subsequent default.
  2. Settlement agreement and default in payment of installments.
  3. Court's power to extend time for payment of installments without respondent's consent.
  4. Nature of the decree: whether it was a decree on admission or a consent decree.
  
  Summary:
  
  Issue 1: Recovery of Rs. 12 lacs based on partnership agreement and subsequent default

  The plaintiff filed a suit for recovery of Rs. 12 lacs from the defendant, based on an agreement where the defendant was to induct the plaintiff as a partner upon contributing Rs. 13.50 lacs. The defendant failed to contribute his share, leading the plaintiff to request a refund. Despite confirming the debt and agreeing to repay, the defendant only paid Rs. 1.50 lacs, leaving a balance of Rs. 12 lacs unpaid. The plaintiff filed the suit u/s Order 37 of the Code of Civil Procedure, seeking a decree for Rs. 12 lacs with 18% interest p.a.

  Issue 2: Settlement agreement and default in payment of installments

  During the suit's pendency, the parties settled, with the defendant agreeing to pay the decretal amount in installments of Rs. 1 lac. The settlement included a clause that any default would make the entire amount recoverable. The defendant defaulted twice, leading the plaintiff to oppose the defendant's notice of motion for condonation of default. The Court held it had no power to extend the time without the plaintiff's consent and rejected the notice of motion.

  Issue 3: Court's power to extend time for payment of installments without respondent's consent

  The primary question was whether the Court could extend the time for payment of installments without the respondent's consent. The Court held that it could not, relying on the Supreme Court's judgment in Hukumchand v. Bansilal, which stated that the Court cannot rewrite a contract between parties but can relieve against a forfeiture clause. The Court found that the decree was a consent decree, and the time schedule was binding, not extendable without the respondent's consent.

  Issue 4: Nature of the decree: whether it was a decree on admission or a consent decree

  The Court examined whether the decree was on admission u/s Order 12, Rule 6 of the CPC or a consent decree u/s Order 23. It concluded that the decree was a consent decree, as it was based on an agreement between the parties without the Court's intervention. The Court distinguished between a decree on admission, which does not require party consent, and a consent decree, which is based on a lawful agreement between parties.

  Conclusion:

  The Court dismissed the appeal, holding that the appellant must face the consequences of default as per the agreed terms. The Court could not alter the terms without the respondent's consent, and the appellant's request for extension was rightly rejected. The appeal was dismissed, with parties bearing their own costs.

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• 2007 (10) TMI 707
  
  Issues Involved:
  1. Deletion of addition of Rs. 6,42,000 on account of unexplained cash credits.
  2. Deletion of addition of Rs. 1,08,88,400 and confirmation of addition of Rs. 10,03,500 on account of payment of hire charges.
  3. Deletion of addition of Rs. 3,26,000 on account of interest on bonds.
  4. Deletion of addition of Rs. 40,000 on account of unexplained money given for purchase of shares.
  5. Confirmation of addition of Rs. 61,513 on account of maturity of US-64 Bonds.
  
  Summary:
  
  1. Deletion of Addition of Rs. 6,42,000 on Account of Unexplained Cash Credits:
  The department appealed against the deletion of Rs. 6,42,000 made by the assessing officer due to unexplained cash credits. The Commissioner (Appeals) deleted the addition, citing that confirmation letters, income-tax assessment orders, and bank certificates were provided, proving the genuineness, capacity, and creditworthiness of the creditors. The Tribunal upheld the Commissioner (Appeals)'s decision, referencing the jurisdictional High Court's rulings in CIT v. Metachem Industries and Sumerchand Jain v. CIT, which support the acceptance of loans confirmed by creditors and assessed to tax.
  
  2. Deletion of Addition of Rs. 1,08,88,400 and Confirmation of Addition of Rs. 10,03,500 on Account of Payment of Hire Charges:
  The department contested the deletion of Rs. 1,08,88,400, arguing that the assessee paid hire charges to relatives to reduce taxable income. The assessee countered that the payments were made to non-relatives, thus not falling u/s 40A(2)(b), and provided substantial evidence of the business necessity and genuineness of the transactions. The Tribunal found the payments justified, citing the Supreme Court's judgment in S.A. Builders Ltd. v. CIT, which emphasizes commercial expediency. Consequently, the Tribunal dismissed the department's appeal and allowed the assessee's appeal, deleting the addition of Rs. 10,03,500.
  
  3. Deletion of Addition of Rs. 3,26,000 on Account of Interest on Bonds:
  The department appealed against the deletion of Rs. 3,26,000, arguing that the interest on REC Bonds was not included in the assessee's total income. The assessee maintained that the interest was accounted for on a receipt basis and taxed in the subsequent assessment year. The Tribunal agreed with the Commissioner (Appeals)'s finding that the assessee could follow different accounting methods for different income heads, thus dismissing the department's appeal.
  
  4. Deletion of Addition of Rs. 40,000 on Account of Unexplained Money Given for Purchase of Shares:
  The department contested the deletion of Rs. 40,000, claiming an excess payment for shares. The assessee explained that the shares were paid for with two withdrawals totaling Rs. 3,00,000, with a refund of Rs. 60,000 received later. The Tribunal upheld the Commissioner (Appeals)'s acceptance of the assessee's explanation, dismissing the department's appeal.
  
  5. Confirmation of Addition of Rs. 61,513 on Account of Maturity of US-64 Bonds:
  The assessee appealed against the confirmation of Rs. 61,513, arguing it was from the maturity of US-64 Bonds. The Tribunal found it appropriate to set aside the addition for further inquiry, allowing the assessee to substantiate the receipt with proper evidence, thus allowing the appeal for statistical purposes.
  
  Conclusion:
  The department's appeal was dismissed, and the assessee's appeal was allowed.

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