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1997 (5) TMI 455
Issues Involved:
1. Applicability of Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) to the suit filed by the plaintiff.
2. Whether the suit for recovery of arrears of rent and mesne profits falls under the category of proceedings that should be stayed under Section 22(1) of SICA.
3. Interpretation of the term "proceedings" under Section 22(1) of SICA.
4. Impact of the 1993 Amendment to SICA on the applicability of Section 22(1).
5. Relevance of prior judgments and their applicability to the current case.
Issue-wise Detailed Analysis:
1. Applicability of Section 22(1) of SICA to the suit filed by the plaintiff:
The petitioner contested the trial court's order rejecting the application under Section 22(1) of SICA for staying the suit. Section 22(1) of SICA provides for the suspension of legal proceedings against a sick industrial company during the pendency of an inquiry under Section 16 or a scheme under Section 17. The petitioner argued that the suit for recovery of possession and arrears of rent should be stayed under this provision.
2. Whether the suit for recovery of arrears of rent and mesne profits falls under the category of proceedings that should be stayed under Section 22(1) of SICA:
The court referred to the case of M/s Shree Chamundi Mopeds Ltd v. Church of South India Trust Association Madras, where it was held that eviction proceedings initiated by a landlord against a tenant company do not fall under the categories of proceedings automatically suspended under Section 22(1) of SICA. The categories include winding up, execution, distress, or the appointment of a receiver. The court concluded that eviction proceedings do not fall within these categories and thus are not liable to be stayed.
3. Interpretation of the term "proceedings" under Section 22(1) of SICA:
In the case of Maharashtra Tubes Ltd v. State Industrial and Investment Corpn. of Maharashtra Ltd, the Supreme Court held that the term "proceedings" in Section 22(1) should be given a broad interpretation to include coercive actions against the properties of the sick industrial company. However, the court in the current case found that eviction proceedings do not fall under the intended scope of "execution, distress or the like."
4. Impact of the 1993 Amendment to SICA on the applicability of Section 22(1):
The 1993 Amendment to SICA added the words "and no suit for recovery of money" to Section 22(1). The petitioner argued that this amendment clearly covers the suit for recovery of arrears of rent and mesne profits, making it liable to be stayed. The court acknowledged this argument and noted that a suit for recovery of arrears of rent and mesne profits would result in financial liability on the defendant, thus falling under the category of a suit for recovery of money.
5. Relevance of prior judgments and their applicability to the current case:
The court referred to the case of Deputy Commercial Tax Officer Vs. Corromandal Pharmaceuticals, where it was held that Section 22(1) should be read to apply only to dues included in the sanctioned scheme and not to liabilities incurred after the scheme's sanction. Applying this principle, the court concluded that mere pendency of an inquiry under Section 16 of SICA does not suffice for staying the suit; the dues must be included in the sanctioned scheme.
Conclusion:
The court allowed the revision in part. It maintained the trial court's order refusing to stay the suit for eviction but sent back the matter regarding the stay of the suit for recovery of money for fresh consideration. The parties were directed to appear before the trial court on 14th July 1997.
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1997 (5) TMI 454
Issues Involved:
1. Scope of Section 22 of the Income Tax Act, 1961.
2. Assessment of rental income under Section 22 vs. Section 56 of the Act.
3. Determination of 'legal owner' for tax purposes.
4. Applicability of amendments to Section 27 of the Act and their retrospective effect.
Issue-wise Detailed Analysis:
1. Scope of Section 22 of the Income Tax Act, 1961:
The primary issue in all the cases was the interpretation of Section 22 of the Income Tax Act, 1961, which pertains to the taxation of income from house property. The court examined whether the income derived from house property should be taxed under Section 22 or under Section 56 as 'income from other sources'. The respondent-assessees contended that since they were not the 'legal owners' of the properties, the income should be assessed under Section 56. The court had to determine the correct interpretation of the term 'owner' within the context of Section 22.
2. Assessment of Rental Income under Section 22 vs. Section 56 of the Act:
The court analyzed whether the rental income should be calculated based on the bona fide annual value or the actual rent received. The assessees argued that the rental income should be assessed under Section 56 as 'income from other sources' because the title to the property had not been legally transferred to them. The Income Tax Officer, however, assessed the income under Section 22, considering the annual letting value of similar properties. The court had to decide whether the income should be taxed under Section 22 or Section 56.
3. Determination of 'Legal Owner' for Tax Purposes:
The court examined the concept of 'legal ownership' and whether possession and beneficial enjoyment of the property without a registered sale deed could constitute ownership for tax purposes. The court referred to the case of Jodha Mal Kuthiala v. Commissioner of Income Tax, where it was held that the owner for tax purposes is the person who can exercise the rights of the owner in his own right. The court also considered various judgments from different High Courts, which had divergent views on this issue. The court concluded that the person in possession and enjoying the property, even without a registered sale deed, could be considered the owner for the purposes of Section 22.
4. Applicability of Amendments to Section 27 of the Act and Their Retrospective Effect:
The court considered the amendments to Section 27 introduced by the Finance Act, 1987, which expanded the definition of 'owner' to include persons in possession of the property under certain conditions. The court examined whether these amendments were clarificatory and, therefore, retrospective in nature. The court concluded that the amendments were indeed clarificatory and had retrospective effect, thereby supporting the view that possession and beneficial enjoyment could constitute ownership for tax purposes.
Conclusion:
The court held that the views taken by the High Courts of Allahabad, Patna, Rajasthan, Punjab, and Haryana, which considered the person in possession and enjoying the property as the owner for tax purposes, were correct. The contrary views taken by the Delhi, Bombay, and Andhra Pradesh High Courts were not upheld. The court emphasized that the term 'owner' in Section 22 should be interpreted to mean the person entitled to receive income from the property in his own right, aligning with the amendments to Section 27. Consequently, the income from the properties in question should be assessed under Section 22 of the Income Tax Act.
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1997 (5) TMI 453
Issues Involved:
1. Invocation of Section 73 of the CrPC, 1973.
2. Issuance of non-bailable warrants and proclamations.
3. Remand to police custody post-cognizance.
4. Role of Magistrate during investigation.
Issue-wise Summary:
1. Invocation of Section 73 of the CrPC, 1973:
The principal question was when and under what circumstances a Court can invoke the provisions of Section 73 of the CrPC, 1973. The Supreme Court held that Section 73 confers power upon a Magistrate to issue a warrant during investigation for apprehension of a person accused of a non-bailable offence and evading arrest. The Court stated, "Section 73 of the Code is of general application and that in course of the investigation a Court can issue a warrant in exercise of power thereunder to apprehend, inter alia, a person who is accused of a non-bailable offence and is evading arrest."
2. Issuance of Non-bailable Warrants and Proclamations:
The CBI moved applications for issuance of non-bailable warrants and proclamations under Section 8(3)(a) of TADA. The Designated Court rejected these applications, stating that after cognizance was taken, no process could be issued to aid investigation under Section 73 of the Code. The Supreme Court set aside this order, directing that the Designated Court dispose of the applications in accordance with law, emphasizing that "Section 73 coupled with Section 167 of the Code bestowed upon the Court such power."
3. Remand to Police Custody Post-cognizance:
The Court addressed whether a person arrested during further investigation could be remanded to police custody under Section 167 post-cognizance. It held that "the words 'accused if in custody' appearing in Section 309(2) refer and relate to an accused who was before the Court when cognizance was taken... and not to an accused who is subsequently arrested in course of further investigation." Thus, the Court can authorize detention in police custody under Section 167 for further investigation.
4. Role of Magistrate During Investigation:
The Supreme Court clarified that a Magistrate plays a role during investigation, such as holding test identification parades or recording confessions. However, the issuance of a warrant under Section 73 for production before the police must involve judicial discretion. The Court noted, "Whether the Magistrate, on being moved by the Investigating Agency, will entertain its prayer for police custody will be at his sole discretion which has to be judicially exercised."
Conclusion:
The appeals were allowed, and the Designated Court was directed to reconsider the CBI's applications in light of the Supreme Court's observations. The judgment emphasized the Magistrate's role in balancing investigative needs with judicial oversight.
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1997 (5) TMI 452
The Supreme Court dismissed the special leave petition regarding condonation of delay in filing a suit under Section 95(3) of the West Bengal Co-operative Societies Act, 1983. The Court held that the Registrar was correct in refusing to condone the delay as proper explanation for the delay was not provided. The time spent in prosecuting the proceedings was excluded under Section 14 of the Limitation Act, but the delay in filing the suit needed proper explanation.
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1997 (5) TMI 451
Issues:
- Conviction under Sections 449, 394/397, and 302/34, IPC
- Circumstantial evidence and lack of eyewitnesses
- Recovery of incriminating articles
- Commutation of death sentence
Analysis:
The Supreme Court judgment involved the appeal of two appellants who were convicted under Sections 449, 394/397, and 302/34, IPC for trespassing into a residential house, committing murders, and looting valuables. The prosecution's case relied on circumstantial evidence due to the absence of eyewitnesses. The victims, a woman, and her two children were found dead with injuries, which the doctor confirmed as homicidal. The prosecution presented various circumstances against each appellant to establish their involvement in the crimes, including debts, relationships, recovered articles, injuries, and distribution of looted properties.
The trial court and the High Court upheld the convictions based on the proven circumstances and concluded that the appellants were guilty of the offenses. The defense argued that the recovered articles only established an offense under Section 411, IPC, not the offenses they were convicted of. However, the courts found the evidence compelling and drew a presumption that the appellants committed both the robbery and murders. The Supreme Court cited precedents to support this conclusion and upheld the convictions based on the incriminating circumstances presented.
Regarding the sentence, the defense contended that the appellants did not deserve the death penalty. The courts had initially imposed the death sentence due to the heinous nature of the crimes and the victims' vulnerability. However, the Supreme Court decided not to consider this case as one of the "rarest of rare cases" and commuted the death sentence to life imprisonment while maintaining the sentences for the other convictions. The appeals were thus disposed of accordingly.
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1997 (5) TMI 450
Supreme Court of India dismissed the appeals for want of prosecution as the appellant gave no instructions to the advocate on record. No order as to costs. (1997 (5) TMI 450 - SC)
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1997 (5) TMI 449
Issues:
1. Claim for refund of duty under Rule 173L rejected by Assistant Commissioner.
2. Appeal against rejection upheld by first appellate authority.
3. Dispute over non-rendering of accounts to Assistant Commissioner within prescribed time limit.
4. Appellants' submission of maintaining records and fulfilling other conditions of Rule 173L.
5. Argument on the mandatory nature of Rule 173L (3) by the Respondent.
6. Comparison of decisions by both parties regarding the technical violation of Rule 173L.
Analysis:
The appeal before the Appellate Tribunal CEGAT CALCUTTA involved a dispute over the rejection of a refund claim of duty amounting to Rs. 23,433 under Rule 173L by the Assistant Commissioner of Central Excise. The appellants, engaged in the manufacture of Slurry Explosives, had returned a quantity of duty-paid explosives to their factory due to quality defects. The processed explosives were re-cleared after payment of duty, but the claim was denied for not rendering accounts to the Assistant Commissioner within the specified time limit. The first appellate authority upheld the rejection, leading to the appeal before the Tribunal.
The appellants argued that they had maintained records and fulfilled all conditions of Rule 173L except for the timely rendering of accounts. They contended that the denial based solely on this procedural lapse was unjust, citing precedents where refunds were not denied for similar technical reasons. On the other hand, the Respondent emphasized the mandatory nature of Rule 173L (3) and the need for strict adherence without room for relaxation.
After considering both sides' submissions, the Tribunal noted that the return, reprocessing, and re-clearance of goods were undisputed, and records were maintained satisfactorily. The primary issue was the failure to render accounts to the Assistant Commissioner within the stipulated period. The Tribunal highlighted that this procedural requirement aimed to ensure the Officer's subjective satisfaction and prevent misuse of the facility. Since the Department was content with the maintained accounts and the records were eventually submitted upon request, the Tribunal found the appellants' case aligned with previous decisions where strict technical violations did not warrant refund denials.
The Tribunal distinguished the Gujarat High Court decision cited by the Respondent, emphasizing that it did not primarily concern the interpretation of Rules 173L (3) & (4) but provided context-specific observations. Consequently, the Tribunal allowed the appeal, granting consequential reliefs to the appellants based on the applicable precedents and the specific circumstances of the case.
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1997 (5) TMI 448
The Supreme Court dismissed the contempt petitions filed for non-compliance of a previous judgment, stating that the respondents have not willfully disobeyed the court's orders. Three months' time was given to the respondents to implement the judgment in full spirit. The Contempt Petitions were dismissed. (1997 (5) TMI 448 - Supreme Court)
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1997 (5) TMI 447
Issues Involved
1. Jurisdiction of the Company Court under Section 446 of the Companies Act, 1956.
2. Applicability of the Debt Recovery Act, 1993, in the context of company liquidation.
3. Conflict between the Companies Act and the Debt Recovery Act.
4. Legal principles regarding the priority of secured creditors and workmen's dues.
5. Harmonious construction of conflicting statutory provisions.
Detailed Analysis
1. Jurisdiction of the Company Court under Section 446 of the Companies Act, 1956
The core issue is whether the jurisdiction of the company court under Section 446 of the Companies Act, 1956, to grant or refuse leave for any suit or legal proceedings, has been taken away by the Debt Recovery Act, 1993. Section 446(1) states, "When a winding up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceedings shall be commenced, or if pending at the date of winding up order, shall be proceeded with, against the company, except by leave of the court and subject to such terms as the court may impose." The court holds that Section 446(2) confers special jurisdiction on the court winding up the company to entertain or dispose of any suit or proceeding by or against the company, notwithstanding anything contained in any other law for the time being in force.
2. Applicability of the Debt Recovery Act, 1993, in the Context of Company Liquidation
The Debt Recovery Act, 1993, was enacted to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions. Section 17 of the Debt Recovery Act states, "A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions." However, the court finds that the Debt Recovery Act does not lay down procedures for the recovery of amounts due from a company in liquidation or for the distribution of such amounts among various creditors. Therefore, the Debt Recovery Act and the Companies Act do not operate in the same field.
3. Conflict between the Companies Act and the Debt Recovery Act
The court examines whether the provisions of the Debt Recovery Act override the provisions of the Companies Act, particularly Section 446. The Debt Recovery Act contains a non-obstante clause in Section 34, which states that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law. However, the court concludes that the provisions of the Companies Act, particularly Section 446, are special laws dealing specifically with the winding up of companies and the distribution of their assets. Therefore, the provisions of the Companies Act should prevail in the context of company liquidation.
4. Legal Principles Regarding the Priority of Secured Creditors and Workmen's Dues
The court refers to Sections 529 and 529A of the Companies Act, which deal with the application of insolvency rules in the winding up of insolvent companies and overriding preferential payments. The proviso to Section 529(1) creates a pari passu charge in favor of workmen on every security available to secured creditors. The court cites the Supreme Court's decision in UCO Bank v. Official Liquidator High Court, Bombay, which held that the legitimate dues of workmen must rank pari passu with those of secured creditors, even above the dues of the Government.
5. Harmonious Construction of Conflicting Statutory Provisions
The court emphasizes the need for a harmonious construction of the provisions of the Companies Act and the Debt Recovery Act. It cites the Supreme Court's decisions in Sarwan Singh v. Kasturi Lal and Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd., which held that when two laws operate in the same field, efforts should be made to harmoniously construct the provisions to give effect to the objects of both Acts. The court concludes that the provisions of Section 446 of the Companies Act and the Debt Recovery Act can be harmoniously construed to give effect to the purpose, intent, and object of both Acts.
Conclusion
The court holds that there is no conflict between the provisions of the Debt Recovery Act and Section 446 of the Companies Act. Each case should be adjudged on its facts and merits, and the company court has the full power and jurisdiction to consider the best interests of the creditors, both secured and unsecured, as well as the workmen, and then pass necessary orders under Section 446. The matters are listed for further directions on July 26, 1997.
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1997 (5) TMI 446
Issues Involved:
1. Whether the company indulged in unfair trade practices under Section 36A(3)(a) of the Monopolies and Restrictive Trade Practices Act, 1969.
2. Whether the increase in the price of detergent was to cover the prize money under the scheme.
3. Whether the complaint and evidence were sufficient to prove the charges against the company.
Detailed Analysis:
1. Unfair Trade Practices under Section 36A(3)(a):
The primary issue was whether the company's scheme of offering prizes through a lottery constituted an unfair trade practice under Section 36A(3)(a) of the Act. The Commission initially found that while the company did not breach Section 36A(3)(b), it did violate Section 36A(3)(a). The relevant provision states that an unfair trade practice includes "the offering of gifts, prizes or other items with the intention of not providing them as offered or creating the impression that something is being given or offered free of charge when it is fully or partly covered by the amount charged in the transaction as a whole."
The appellant contended that the scheme was an incentive for consumer loyalty and not an unfair trade practice. The Commission, however, inferred that the prize money was covered by the increased price of the detergent, which was seen as creating an impression of a free offer when it was not.
2. Increase in Price to Cover Prize Money:
The company argued that the price increase was due to the rise in raw material costs and not to cover the prize money. The Commission did not seek further evidence to substantiate this claim, relying solely on the complaint by the Director General (D.G.). The appellant claimed that audited balance sheets and other financial documents could prove that the price increase was unrelated to the prize scheme. The court found that the Commission should have given the company an opportunity to present this evidence.
3. Sufficiency of Complaint and Evidence:
The D.G.'s complaint was based on a letter from Azad Singh, which alleged that the company had increased the price of its detergent to cover the prize money. The court noted that there was no other material evidence before the Commission to support the charge of unfair trade practice. The court emphasized that the words "or otherwise" in Section 36A imply that not only actual loss or injury but also the likelihood of such must be proven with cogent material.
The court concluded that the Commission's inference of an unfair trade practice was unsustainable due to the lack of sufficient evidence. The matter was remitted back to the Commission to allow both parties to present further evidence.
Conclusion:
The Supreme Court quashed the Commission's order under Section 36D, which held that the company had committed an unfair trade practice under Section 36A(3)(a). The case was remitted back to the Commission for fresh consideration, allowing the company to present additional evidence to substantiate its claims. Both parties were directed to bear their own costs.
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1997 (5) TMI 445
The High Court of Allahabad quashed an order passed by the Divisional Level Committee regarding the modification of an eligibility certificate under the U.P. Trade Tax Act, 1948. The Court relied on a previous case and disposed of the writ petition accordingly. (1997 (5) TMI 445 - ALLAHABAD HIGH COURT)
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1997 (5) TMI 444
The Appellate Tribunal ITAT Jaipur allowed the appeal of the assessee for the assessment year 1991-92 regarding deduction of expenses and depreciation on a jeep out of the incentive bonus earned. The Tribunal remanded the matter back to the AO to consider the claim in light of a recent communication from the CBDT and a scheme formulated by LIC. The appeal was allowed for statistical purposes.
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1997 (5) TMI 443
Issues Involved:
1. Entertainability of cross-suits, counterclaims, and claims of set-off before the Debt Recovery Tribunal (DRT).
2. Jurisdictional competence of civil courts versus the DRT in cases involving cross-suits, counterclaims, and set-off claims.
3. Transfer of civil suits to the DRT and the impact on associated cross-suits and counterclaims.
4. The right to raise defenses such as payment, adjustment, set-off, and counterclaims in recovery suits.
Detailed Analysis:
1. Entertainability of Cross-Suits, Counterclaims, and Claims of Set-Off Before the DRT:
The court examined whether cross-suits, counterclaims, and claims of set-off can be entertained by the DRT, which is a tribunal with special jurisdiction to try applications by banks or financial institutions for debt recovery. The court concluded that the DRT cannot entertain counterclaims or set-off claims as it is not a civil court and its jurisdiction is limited to applications filed by banks or financial institutions. The DRT's mandate does not extend to adjudicating claims made by other parties, even if they are presented in the form of a counterclaim or set-off in a written statement.
2. Jurisdictional Competence of Civil Courts Versus the DRT:
The court held that the DRT, being a tribunal and not a court, has limited jurisdiction conferred by statute. It can only entertain applications by banks or financial institutions for recovery of debts. The civil courts, on the other hand, have broader jurisdiction, including the authority to entertain counterclaims and set-off claims. The court emphasized that the DRT's jurisdiction is exclusive for matters falling within its purview, and civil courts must transfer such cases to the DRT.
3. Transfer of Civil Suits to the DRT and the Impact on Associated Cross-Suits and Counterclaims:
The court addressed whether civil suits should be transferred to the DRT if they involve cross-suits or counterclaims. It was determined that civil suits within the DRT's jurisdiction must be transferred, but associated cross-suits and counterclaims cannot be transferred to the DRT. The civil court should direct the separation of counterclaims from the written statement and register them as independent suits. Cross-suits will continue to be tried by the civil court.
4. The Right to Raise Defenses Such as Payment, Adjustment, Set-Off, and Counterclaims in Recovery Suits:
The court recognized the defendant's right to raise various defenses, including payment, adjustment, set-off, and counterclaims. However, it clarified the distinctions between these defenses:
- Payment: Satisfaction or extinguishment of a debt before filing the written statement.
- Adjustment: Mutual demands between the same parties, akin to payment but made by the debtor.
- Set-Off: A cross-demand arising from a separate transaction, treated as a cross-action.
- Counterclaim: A separate action against the plaintiff, treated as an independent suit.
The court reiterated that set-off and counterclaims must be within the jurisdictional competence of the court or tribunal where they are raised. Since the DRT lacks jurisdiction to entertain counterclaims or set-off claims, such defenses must be pursued in civil courts.
Conclusion:
The court dismissed the appeals and upheld the transfer of suits filed by banks to the DRT, while associated cross-suits and counterclaims would remain with the civil courts. The court emphasized the need to honor the statutory framework and jurisdictional boundaries established by the DRT Act, ensuring that claims and defenses are adjudicated by the appropriate forum. The parties were directed to appear before the DRT on a specified date for further proceedings.
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1997 (5) TMI 442
Issues Involved:
1. Which rule existed on the date when the petitioner laid down his office?
2. Whether the petitioner is entitled for grant of interest from 13-5-88 or from the date of his retirement, and at what rate?
Issue-Wise Detailed Analysis:
Issue 1: Which rule existed on the date when the petitioner laid down his office?
The petitioner argued that Rule 19(iii)(a)(i) of the All India Services (Death-cum-Retirement Benefits) Rules, 1958 should apply, which provides for a retirement gratuity equal to 1/4th of the emoluments for each completed period of 6 months of service, subject to a maximum of 16 times the emoluments, not exceeding Rs. 1 lakh. The respondents, however, contended that the calculation should be based on the provisions existing at the time of the petitioner's retirement, which allowed for a maximum gratuity of Rs. 24,000.
The court noted that the respondents failed to substantiate their claim with any material evidence. Therefore, the court proceeded on the assumption that Rule 19(3)(a) as printed in Choudhary's compilation was correct. This rule stipulated that the death-cum-retirement gratuity should be paid on the scale prescribed in column 2 of Schedule B, subject to a maximum of 15 times the emoluments, with a maximum amount specified in column 3 of the schedule.
The court concluded that the petitioner had been paid the correct amount of Rs. 15,300 under the head DCRG, and thus, the calculation made by the respondents was not incorrect.
Issue 2: Whether the petitioner is entitled for grant of interest from 13-5-88 or from the date of his retirement, and at what rate?
The petitioner sought interest from the date of his retirement, while the respondents argued that interest should be calculated from 13-5-88, based on a circular issued following the Allahabad High Court's judgment in M.C. Desai v. Union of India AIR 1988 All 283. The Allahabad High Court had awarded interest at the rate of 12% per annum from the date of retirement, a decision affirmed by the Supreme Court in Civil Appeal No. 3715/1990.
The court considered the conflicting judgments of the Supreme Court in M.C. Desai's case and M.L. Abhayankar's case. In M.L. Abhayankar's case, the Supreme Court directed that interest should be payable from the first day of the month in which the writ petition was filed. However, the Government of India, in its circular dated 6-8-96, directed the payment of interest from 13-5-88.
The court observed that when faced with conflicting decisions of co-equal benches of the Supreme Court, it must follow the judgment that appears to state the law more accurately. The court preferred the reasoning in M.C. Desai's case, which awarded interest from the date of retirement due to the illegal withholding of gratuity by the Central Government.
The court also noted the Government of India's delay in issuing the circular even after the Supreme Court's judgment, which indicated a lack of reasonable speed. Given the circumstances, the court held that the petitioner was entitled to interest at the rate of 18% per annum from the date of his retirement.
Conclusion:
The writ petition was partly allowed. The respondents were directed to pay interest at the rate of 18% per annum from the date of the petitioner's retirement until the date of payment. The payment was to be made within six weeks. Additionally, the petitioner was awarded the cost of litigation, assessed at Rs. 2500.
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1997 (5) TMI 441
Issues Involved:
1. Legislative competence of the State legislature to levy cess on the use of flowing water from a river.
2. Validity of the retrospective application of the cess.
3. Natural right to draw water from a flowing river.
4. Guidelines for determining the rates of cess.
Detailed Analysis:
1. Legislative Competence of the State Legislature:
The primary question addressed in the judgment is whether the State legislature has the power to levy rates of cess on the use of flowing water from the river 'Wana'. The appellant contended that the Maharashtra Land Revenue Code, 1966 (the Code) envisages collection of land revenue from agriculturists for the use of water for cultivation purposes and that the use of water for industrial purposes is not covered. The appellant argued that neither Entry 18, Entry 45, nor Entry 49 of List II of the Seventh Schedule to the Constitution could sustain the demand under Section 70 of the Code, rendering the resolution illegal.
The court held that legislative Entries are to be interpreted broadly and widely to give power to the legislature to enact laws with respect to matters enumerated in legislative Entries. Entry 45 of List II includes land revenue, which encompasses the assessment and collection of revenue, including water cess. The court cited precedents such as Navinchandra Mafatlal v. The Commissioner of Income-tax and Kunnathat Thatcunni Moopil Nair v. The State of Kerala to emphasize that legislative Entries should be given their widest amplitude. The court concluded that Section 70 of the Code comes within Entry 45 of List II, thus validating the State's power to levy cess on the use of water.
2. Validity of the Retrospective Application of the Cess:
The appellant challenged the retrospective demand of cess levied by the Tehsildar for the period from 1967-68 to 1973-74. The court observed that while the State Government has the power to levy cess under Section 70 of the Code, the demand must be prospective and not retrospective. The Solicitor General conceded that the executive cannot make any demand retrospectively. Consequently, the court directed that the demand should be construed to operate from the date of the Resolution passed by the Government (June 5, 1972), and the appellant is liable to pay the land cess from that date.
3. Natural Right to Draw Water from a Flowing River:
The appellant argued that he had an easementary right to draw flowing water from the river uninterruptedly and continuously for over 70 years, thereby perfecting his right to draw water. The court, however, found that the appellant's use of water for industrial purposes with the help of artificial contrivances does not constitute a natural right. The court held that the right to use water from a flowing river vests in the State as an integral part of the land, and the State has the authority to regulate and levy cess on such use.
4. Guidelines for Determining the Rates of Cess:
The appellant contended that no guidelines were provided for the demand of cess levied on the use of water from the flowing river. The court found that the manner in which the rates were prescribed in the Resolution provided sufficient guidelines for determining the rates at which the demand could be assessed. The machinery provision under sub-section (2) of Section 20 of the Code was followed, and the principles of natural justice were complied with by the appellate and revisional authorities.
Conclusion:
The court upheld the legislative competence of the State to levy cess on the use of flowing water for industrial purposes under Section 70 of the Maharashtra Land Revenue Code, 1966, as it falls within Entry 45 of List II of the Seventh Schedule to the Constitution. The demand for cess must be prospective from the date of the Resolution passed by the Government, and the appellant is liable to pay the cess at the rates specified therein. The appeal was disposed of with directions to the respondents to compute the rate on a prospective basis and make a fresh demand, which the appellant is required to pay within 30 days from the date of receipt of the demand. No costs were awarded.
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1997 (5) TMI 440
Issues Involved:
1. Infringement of Plaintiff's Copyright
2. Passing Off of Goods
3. Territorial Jurisdiction
4. Balance of Convenience
Detailed Analysis of the Judgment:
1. Infringement of Plaintiff's Copyright:
The plaintiff, M/s. Dodha House, alleged that the defendants were infringing their copyright by using a similar art work, label, and wrapper for their product "Maingi's Todha." The plaintiff's art work and wrapper were registered under the Indian Copyright Act, and they claimed exclusive rights to use these elements. The defendants contended that their trade mark "Maingi's Todha Sweet" was distinct and had been in use for about 20 years. They denied any similarity or imitation that could cause deception or confusion. The court examined the wrappers of both products and concluded that the similarity was not sufficient to cause deception among customers, as there were distinguishable features in both wrappers.
2. Passing Off of Goods:
The plaintiff accused the defendants of passing off their goods as those of the plaintiff by using a similar trade name and packaging. The court noted that while the names "Dodha" and "Todha" might sound phonetically similar, the visual differences in the packaging were significant enough to prevent confusion. The court referenced previous cases to emphasize that both visual and phonetic similarities must be considered, but ultimately found that the differences in the wrappers were sufficient to avoid confusion.
3. Territorial Jurisdiction:
The defendants argued that the court at Ghaziabad had no jurisdiction to try the suit, as their business was conducted in Kot Ka Pura and not in Ghaziabad. The court acknowledged that under Section 105 of the Trade and Merchandise Marks Act, a suit for infringement or passing off must be filed in the district where the defendant resides or carries on business. Since the plaintiff's business was also conducted in Ghaziabad, the court had jurisdiction under the Copyright Act. However, for matters related to the Trade and Merchandise Marks Act, the court at Ghaziabad lacked territorial jurisdiction. The court concluded that the suit could not be entertained in Ghaziabad for issues related to the Trade and Merchandise Marks Act.
4. Balance of Convenience:
The court considered the balance of convenience, noting that the injunction had been in place since 1992, preventing the defendants from conducting their business. The court reasoned that if the suit were ultimately dismissed, the defendants would have suffered irreparable loss, whereas the plaintiff could be compensated for any loss if the suit were decreed in their favor. The court found that the balance of convenience favored the defendants, and the injunction order could not be sustained.
Conclusion:
The appeal was allowed, and the injunction order dated 17-1-1992 passed by the 1st Addl. District Judge, Ghaziabad was set aside. The trial court was directed to decide the suit based on the evidence without being influenced by the observations made in this order.
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1997 (5) TMI 439
Issues:
1. Application for amendment of paragraph 13 of the petition under Order 6, Rule 17 of the Civil Procedure Code.
2. Opposition by respondents to the prayer for amendment.
3. Legal principles governing the withdrawal of admissions in pleadings.
4. Precedents related to the withdrawal of admissions and seeking amendment of pleadings.
5. Consideration of the bona fide nature of the application for amendment.
6. Impact of the proposed amendment on the rights and positions of the parties.
7. Effect of alteration of positions by the parties based on the original statement in the petition.
8. Interpretation of the clauses of the agreements to determine the expiry date.
9. Decision on whether to allow the proposed amendment based on the circumstances and potential prejudice to the respondents.
Analysis:
1. The petitioner sought to amend paragraph 13 of the petition under Order 6, Rule 17 of the Civil Procedure Code, stating that the mention of the expiry date of an agreement in July 1994 was an inadvertent error. The petitioner aimed to delete this part from the statement to accurately reflect the agreements' terms and timelines.
2. Respondents No. 2 to 5 opposed the prayer for amendment, arguing that the admission in paragraph 13 was crucial and its withdrawal would prejudice their defense. They contended that allowing the withdrawal of the admission would alter the nature and scope of the case, impacting their rights.
3. The court considered legal principles on amending pleadings, citing precedents such as Panchdeo Narain Srivastava v. Kum. Jyoti Sahay and Akshaya Restaurant v. P. Anjanappa & Another, emphasizing that even admissions in pleadings can be explained away or withdrawn if necessary for substantive justice.
4. Precedents like Sh. Mahinder Singh v. Smt. Iqbal Kaur & Others and R. Gupta @ Raj Gupta v. Nirmal Nanda & Another were referenced to highlight instances where applications for amendment were rejected due to lack of credibility or bona fide intentions.
5. The court scrutinized the petitioner's motives for seeking the amendment, noting that the petitioner's actions seemed to be an attempt to evade the consequences of the original statement rather than a genuine error correction, raising doubts about the bona fide nature of the application.
6. Considering that both parties had altered their positions based on the original statement in the petition, the court assessed the potential prejudice to the respondents if the proposed amendment was allowed, emphasizing the importance of interpreting the agreements' clauses to determine the expiry date accurately.
7. Ultimately, the court decided not to allow the proposed amendment, noting that the alteration of positions by the parties and the potential prejudice to the respondents weighed against granting the amendment. The court held that the interpretation of the agreements' clauses would determine the expiry date, and the rejection of the amendment would not cause prejudice to the petitioner.
8. In a separate order related to the agreements, the court held that the agreements had expired by efflux of time in May 1995, further supporting the decision to reject the proposed amendment based on the circumstances and interpretations of the agreements.
9. Consequently, the court rejected the application for amendment, concluding that allowing the proposed changes would prejudice the respondents due to the altered positions and the interpretation of the agreements' clauses, leading to the dismissal of the application.
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1997 (5) TMI 438
Issues Involved:
1. Maintainability of writ petition against an unaided private medical college.
2. Petitioner's eligibility for admission to the MBBS course.
3. Respondents' adherence to admission guidelines.
4. Judicial review of private educational institutions performing public duties.
Issue-wise Detailed Analysis:
1. Maintainability of Writ Petition Against an Unaided Private Medical College:
The primary issue was whether a writ petition is maintainable against an unaided private medical college affiliated to a university. The Full Bench of the High Court in Gurpreet Singh v. Panjab University had previously ruled that such a petition is not maintainable. However, this view was doubted, leading to the matter being referred to a larger Bench. The Court reviewed the decisions in Shri Anadi Mukta Sadguru Shree Muktajee Vandasjiswami Suvarna Jayanti Mahotsav Smarak Trust v. V. R. Rudani and Unni Krishnan v. State of Andhra Pradesh, which expanded the scope of writ jurisdiction under Article 226 of the Constitution. It was concluded that the High Courts have the power to issue writs not only to statutory authorities and instrumentalities of the State but also to "any other person or body performing public duty." Thus, the petition against the unaided private medical college was maintainable.
2. Petitioner's Eligibility for Admission to the MBBS Course:
The petitioner claimed to be a convert to Christianity and applied for admission under the reserved category for Christians. She was provisionally selected but was required to produce a "Baptism Certificate" and a valid "sponsorship letter." The petitioner failed to submit the official sponsorship letter by the stipulated deadline and instead provided a "commending letter." The Court found that the petitioner did not meet the necessary eligibility criteria as she failed to produce the required documents, including a valid sponsorship letter from an authorized person of the Diocese of Amritsar.
3. Respondents' Adherence to Admission Guidelines:
The respondents contested the petitioner's claim, asserting that the Christian Medical College is a privately managed, unaided minority institution and questioned the maintainability of the writ petition. They maintained that the petitioner did not submit the official sponsorship letter by the deadline, which was a prerequisite for admission. The College's guidelines required that the sponsorship letter be submitted along with the application form by June 15, 1996. The petitioner failed to comply with this requirement, and her selection was provisional and subject to the production of relevant certificates in original. The Court upheld the respondents' adherence to the admission guidelines and found no fault in their actions.
4. Judicial Review of Private Educational Institutions Performing Public Duties:
The Court emphasized that private educational institutions, especially those providing medical education, perform a public duty and supplement the State's efforts. These institutions are subject to the regulations and rules framed by the affiliating university and the Medical Council of India. The Court noted that such institutions are partners with the State in performing a public duty and are subject to judicial review. The power under Article 226 of the Constitution is not confined to the enforcement of fundamental rights but also extends to any person or authority discharging a public duty. The Court overruled the Full Bench decisions in Pritam Singh v. State of Punjab and Gurpreet Singh Sindhu v. The Punjab University, Chandigarh, which had previously held that writs could not be issued against private educational institutions.
Conclusion:
The Court concluded that the writ petition was maintainable against the unaided private medical college. However, on merits, the petitioner was not entitled to the issue of a mandamus directing the respondents to admit her to the MBBS course as she failed to meet the eligibility criteria and did not produce the required sponsorship letter. The writ petition was dismissed, but there was no order as to costs.
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1997 (5) TMI 437
Issues:
1. Deduction of interest paid on loans from non-residents for Indian shares and debentures.
2. Allowance of deduction for loss due to changes in foreign exchange rate.
3. Entertaining objections by the assessee without being raised in Form No. 6A for assessment under s. 143(1).
Analysis:
Issue 1:
The appeal concerned the deduction of interest paid by the assessee on a loan incurred for Indian shares and debentures without tax deduction. The Revenue argued that tax should have been deducted under s. 195, disallowing the deduction. The CIT(A) allowed the deduction based on an alternate plea by the assessee. The High Court noted that the CIT(A) was correct in holding s. 40A(2) not applicable due to the assessee not being in business. However, the High Court remanded the matter back to the CIT(A) to consider the applicability of s. 195 and s. 58(1)(a)(ii) and to provide the assessee an opportunity to be heard.
Issue 2:
The second ground of appeal related to the deduction of loss due to changes in foreign exchange rate from capital gains. The CIT(A) allowed this deduction, citing the Karnataka High Court's decision that foreign currency fluctuations are part of capital gains or losses. The High Court upheld the CIT(A)'s decision, rejecting the appeal on this ground.
Issue 3:
The final issue involved the objections raised by the assessee without being included in Form No. 6A for assessment under s. 143(1). The Revenue contended that these objections could not be entertained in the appeal under s. 143(3). The High Court clarified that objections raised under s. 143(1) do not hinder the assessee's right to challenge the assessment under s. 143(3) fully or partly. Therefore, the High Court rejected the appeal on this ground, affirming the assessee's right to challenge the assessment under s. 143(3).
In conclusion, the High Court partly allowed the appeal, remanding one issue back to the CIT(A) for further consideration while upholding the decisions on the other issues.
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1997 (5) TMI 436
Issues Involved:
1. Maintainability of the writ petition in the Kerala High Court.
2. Delay in executing the detention order.
Issue-wise Detailed Analysis:
1. Maintainability of the Writ Petition in the Kerala High Court:
The respondents contested the maintainability of the writ petition, arguing that the cause of action arose outside the territorial jurisdiction of the Kerala High Court. The detenu was apprehended at Sahar Airport, Bombay, and the detention order was passed by the Joint Secretary, Government of India, in New Delhi. The respondents contended that the mere fact of the detenu's arrest and detention in Kerala did not confer jurisdiction on the Kerala High Court.
The petitioner argued that the fact of detention is essential in a habeas corpus petition, and since the detention occurred in Kerala, the Kerala High Court had jurisdiction. The court referred to Article 226(2) of the Constitution of India, which allows a High Court to exercise jurisdiction where the cause of action arises wholly or in part within its territory. The court also cited precedents, including the Gujarat High Court's decision in *Manjulaben v. C.T.A. Pillay* and the Madras High Court's decision in *P. Subramani v. State of Karnataka*, which supported the view that the place of detention forms part of the cause of action.
The court concluded that since the detenu was arrested and detained in Kerala, these facts constituted part of the cause of action, thereby conferring jurisdiction on the Kerala High Court. Thus, the original petition was deemed maintainable.
2. Delay in Executing the Detention Order:
The petitioner challenged the detention on the ground of significant delay in executing the detention order. The detention order was passed on 17-5-1993, but the detenu was arrested only on 4-6-1996, after a delay of three years. The petitioner contended that the detenu had not absconded and was available at known locations. The authorities did not take proper steps to execute the detention order, nor did they attempt to cancel the bail granted to the detenu.
The respondents, in their counter-affidavit, claimed that the detenu was absconding, and the Enforcement Directorate made multiple attempts to locate him. However, the court found the explanations unsatisfactory. The authorities failed to provide detailed steps taken to trace the detenu, did not investigate the sureties provided for the bail, and did not attempt to cancel the bail order.
The court referred to the Supreme Court's decision in *T.A. Abdul Rahman v. State of Kerala*, which held that unexplained delays in executing detention orders cast doubt on the genuineness of the detaining authority's satisfaction. The court also cited its own decision in O.P. No. 16273/96, where a delay of 6.5 years in executing a detention order led to its quashing.
Upon reviewing the records and affidavits, the court concluded that the authorities failed to explain the delay adequately. The mere assertion that the detenu was absconding was insufficient. Consequently, the court quashed the detention order and directed the immediate release of the detenu, provided he was not required in any other case.
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