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1980 (7) TMI 277
Issues Involved:
1. Jurisdiction to take action under the Contempt of Courts Act, 1971.
2. Applicability of Section 20 of the Contempt of Courts Act, 1971.
3. Condonation of delay in contempt proceedings.
4. Nature and scope of contempt proceedings.
5. Application of the Limitation Act, 1963 to contempt proceedings.
Detailed Analysis:
1. Jurisdiction to take action under the Contempt of Courts Act, 1971:
The court examined whether it had jurisdiction to take action under the Contempt of Courts Act, 1971, considering the provisions of Section 20 of the Act. The ad-interim injunction issued by the Board of Nominees was in force from 26-5-1978 to 5-5-1979, and the present petition was filed on 20-11-1979. The court noted that unless the respondents committed a willful breach of the injunction between 20-11-1978 and 5-5-1979, Section 20 would bar its jurisdiction. The petitioner failed to specify when the breach occurred, which was necessary to establish the court's jurisdiction.
2. Applicability of Section 20 of the Contempt of Courts Act, 1971:
Section 20 of the Contempt of Courts Act, 1971, places an absolute fetter on the power of the court to initiate proceedings for contempt after one year from the date on which the contempt is alleged to have been committed. The court emphasized that this provision is a condition precedent to the exercise of its jurisdiction. The court cannot initiate proceedings if the alleged contempt occurred more than one year before the initiation of the proceedings.
3. Condonation of delay in contempt proceedings:
The petitioner filed a civil application for condonation of delay. The court discussed whether it had jurisdiction to condone delay in contempt proceedings. Section 29(2) of the Limitation Act, 1963, was examined, which allows for the application of Sections 4 to 24 of the Limitation Act unless expressly excluded by a special or local law. The court concluded that the Contempt of Courts Act, 1971, is a complete code and excludes the application of the Limitation Act. Therefore, Section 5 of the Limitation Act, which allows for the condonation of delay, is not applicable to contempt proceedings.
4. Nature and scope of contempt proceedings:
The court highlighted that contempt proceedings are between the contemner and the court. A person bringing contempt to the court's notice is merely an informant and does not have the status of a petitioner or applicant. Section 20 of the Contempt of Courts Act, 1971, does not contemplate the institution of a petition or application by a private individual but rather the initiation of proceedings by the court on its own motion or otherwise.
5. Application of the Limitation Act, 1963 to contempt proceedings:
The court concluded that the provisions of the Limitation Act, 1963, are not applicable to contempt proceedings under the Contempt of Courts Act, 1971. The Act is a complete code, and Section 20 prescribes a condition precedent to the exercise of the court's jurisdiction, not a period of limitation in the traditional sense. Therefore, the court cannot condone delay in initiating contempt proceedings.
Conclusion:
The court dismissed the petition, finding that the petitioner failed to show that the contempt was committed within one year of the court issuing the notice (23-11-1979). Since the condition precedent to the exercise of the court's jurisdiction was not satisfied, the court's jurisdiction to take action under the Contempt of Courts Act, 1971, was barred under Section 20. The petition was dismissed, and the rule was discharged.
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1980 (7) TMI 276
Issues Involved:
1. Validity of authority for publishing.
2. Right to sue.
3. Infringement of copyright.
4. Ownership of copyright.
5. Maintainability of the suit.
6. Non-joinder of necessary parties.
Detailed Analysis:
1. Validity of Authority for Publishing:
The trial court found that Basant Kumar, defendant No. 3, permitted the printing, publishing, and sale of 3,000 copies of the book SAPNA. However, defendants 1 and 2 exceeded their rights and committed infringement of the plaintiffs' copyright. The court decreed an injunction restraining Basant Kumar from using and licensing the right of printing and publishing the books SAPNA and others.
2. Right to Sue:
The trial court held that the plaintiffs had the right to restrain the defendants from printing, publishing, and selling the books. The plea that the suit was not maintainable due to non-registration of copyright under Section 44 of the Indian Copyright Act was repelled. The court emphasized that non-registration of copyright by the plaintiffs or the original author, R. N. Tripathi, could not bar the filing of the present suit. It was also held that one co-owner or co-sharer could bring a suit against another co-sharer for the infringement of copyright.
3. Infringement of Copyright:
The trial court found that defendants 1 and 2 had infringed the copyright of the plaintiffs by printing and publishing the book SAPNA without proper authorization. The court decreed the suit and issued an injunction restraining the defendants from further infringement. The defendants were also directed to render accounts of the books.
4. Ownership of Copyright:
The plaintiffs claimed exclusive copyright in the books SAPNA and PATHIK, among others, written by their father, Ram Naresh Tripathi. The court held that the plaintiffs and defendant No. 1 were indeed owners of the copyright, and Basant Kumar had no right to give the license to print the same to defendants 1 and 2.
5. Maintainability of the Suit:
The appellants argued that the suit was not maintainable due to the non-registration of copyright. However, the court held that registration under Section 44 of the Indian Copyright Act was not mandatory for the enforcement of copyright. The court referred to several judgments, including those from the Madras and Calcutta High Courts, which supported the view that an author acquires a copyright in his work regardless of registration, and non-registration does not disable the owner from bringing an infringement action.
6. Non-joinder of Necessary Parties:
The appellants argued that the suit was liable to be dismissed due to the non-joinder of the minor son of Basant Kumar as a party. The court found that since the will dated 19-4-56 executed by Pt. Ram Naresh Tripathi had not been proved, the question of non-joinder did not arise. The court held that non-joinder of Vijai Kumar did not affect the merits of the case and was inconsequential.
Conclusion:
The appeals were dismissed, and the trial court's judgment and decree were upheld. The court directed the parties to bear their own costs.
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1980 (7) TMI 275
Issues Involved:
1. Powers of the Court to cancel bail under Section 439(2) of the Cr.P.C., 1973.
2. Grounds for cancellation of bail.
3. Application of legal principles and precedents in canceling bail.
Issue-wise Detailed Analysis:
1. Powers of the Court to Cancel Bail under Section 439(2) of the Cr.P.C., 1973:
The Revision Application raises an important question regarding the powers of the Court to cancel bail under Section 439(2) of the Cr.P.C., 1973. The prosecution's case involved the interception of a truck containing contraband snake skins and fruits, leading to the arrest of certain individuals and the implication of the petitioner in a widespread conspiracy to smuggle snake skins. The petitioner was initially granted bail by the learned Additional Chief Metropolitan Magistrate. However, the D.R.I. sought cancellation of this bail, leading to the Sessions Court's order for the petitioner's arrest and judicial custody. The Sessions Judge's order was criticized for its lack of clarity and for being prone to create confusion and complications.
2. Grounds for Cancellation of Bail:
The grounds for cancellation of bail were debated extensively. The prosecution argued that the petitioner was a previous convict involved in smuggling activities and that his release on bail could hamper the investigation, particularly in tracing an accomplice, Mangal Chand Bhandari. The learned Sessions Judge supported the cancellation of bail, citing the petitioner's alleged role as the "master-mind" behind a serious conspiracy. However, the High Court noted that the learned Sessions Judge's observation regarding the national economy was unsupported and unwarranted. The High Court emphasized that the cancellation of bail requires careful consideration and should not be based on mere allegations or unsupported observations.
3. Application of Legal Principles and Precedents in Canceling Bail:
Shri Jethmalani, representing the petitioner, argued that the offence, though non-bailable, was not punishable with death or life imprisonment, and thus bail should be the rule. He cited the Supreme Court's decision in Gurcharan Singh v. State (Delhi Administration), 1978 CriLJ 129, which emphasized that bail should not be denied unless exceptional circumstances are present. He also distinguished between rejection of bail and cancellation of bail, arguing that the latter requires supervening circumstances that make it no longer conducive to a fair trial. The High Court referred to the Supreme Court's decision in Sanjay Gandhi's case, which stated that the power to cancel bail should be exercised with care and circumspection and only if there is a preponderance of probabilities that the accused is interfering with the course of justice.
The High Court also considered the guidelines provided by the Madras High Court in Public Prosecutor v. George Williams, AIR 1951 Mad 1042, which listed five grounds for cancellation of bail, including committing the same offence while on bail, hampering the investigation, tampering with evidence, absconding, and committing acts of violence. In the present case, the prosecution's grounds for cancellation were the petitioner's past conduct and the need to trace an accomplice. The High Court found these grounds insufficient to justify the cancellation of bail, noting that the petitioner had complied with all bail conditions and that there was no evidence of tampering or interference with the investigation.
Conclusion:
The High Court concluded that the learned Sessions Judge erred in canceling the bail. The order of the learned Sessions Judge was set aside, and the petitioner was directed to be released on bail with specific conditions, including attending the D.R.I. office daily and not leaving Greater Bombay without the Court's permission. The High Court emphasized the need for careful consideration and circumspection in exercising the power to cancel bail, aligning with the principles laid down by the Supreme Court and other precedents.
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1980 (7) TMI 274
Issues Involved:
1. Value of compensation for vacant lands.
2. Value of compensation for buildings on acquired lands.
3. Jurisdiction of the Special Land Acquisition Judge to enhance compensation.
4. Cross-objections filed by claimants regarding compensation.
Detailed Analysis:
1. Value of Compensation for Vacant Lands:
In F.A. Nos. 437 and 440, the primary issue was the compensation for vacant lands. The Collector initially awarded compensation at Rs. 53,525 per acre, which was enhanced by the Civil Court to Rs. 3,000 per decimal (.01 acres). The Civil Court based its decision on Ext. 9, a sale deed from 1957, which indicated a value of Rs. 4,000 per katha (.015 acres). The Court reasoned that land values had likely increased by June 1962 due to inflation. The Government Pleader argued that transactions from 1961 should have been considered instead, but the Court found these transactions unreliable due to lack of evidence and potential familial bias. Consequently, the Court upheld the enhanced compensation, deeming it reasonable given the continuous rise in land values.
2. Value of Compensation for Buildings on Acquired Lands:
In F.A. Nos. 438 and 441, the issue was the compensation for buildings. The Civil Court awarded compensation based on the capital value of the buildings, calculated as twenty times the annual income. The Government Pleader contested the evidence of income, but the Court found sufficient corroboration from tenant testimonies and counter-foil rent receipts. The Court maintained the compensation awarded by the Civil Court, finding no merit in the State's appeal.
In F.A. Nos. 439 and 442, the issue also pertained to building compensation, specifically for buildings owned by Jyoti Finance Company. The Civil Court found the monthly income from the shops to be Rs. 925, based on tenant testimonies and counter-foil rent receipts. The Government Pleader's objections were dismissed, and the Court upheld the Civil Court's findings, affirming the compensation awarded.
3. Jurisdiction of the Special Land Acquisition Judge to Enhance Compensation:
The Government Pleader argued that the Special Land Acquisition Judge lacked jurisdiction to enhance compensation beyond what was claimed under Section 9 of the Act, citing Section 25(2). However, the Court noted that Section 9(3) requires notice to be served on all interested parties, and there was no evidence that such notice was served. The Court referenced a precedent (Sushila Devi v. State of Bihar) to support its stance that the absence of evidence of notice precluded the application of Section 25(1). The rate report indicated that objections under Section 9 had been filed, further undermining the Government Pleader's argument. Consequently, the Court rejected the jurisdictional objection, affirming the enhanced compensation.
4. Cross-Objections Filed by Claimants Regarding Compensation:
The claimants filed cross-objections in F.A. Nos. 438, 439, 441, and 442, contesting the Civil Court's assessment of their rental income. The Court found the Civil Court's findings on rental income to be well-supported by evidence, including tenant testimonies and counter-foil rent receipts. The Court dismissed the cross-objections, finding no merit in the claimants' arguments.
In F.A. No. 437, the claimant S.K. Thacker argued that the entire land constituted part of a petrol pump, and he was receiving Rs. 225 per month as rent from Burmah Shell. The Court found this claim untenable, as only the land was acquired, and other properties remained with the claimants.
Conclusion:
The appeals by the State were dismissed, and the cross-objections were partially allowed in F.A. Nos. 437 and 440, with statutory compensation and interest to be paid proportionately from the date of dispossession. The cross-objections in other appeals were dismissed. The parties were ordered to bear their own costs.
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1980 (7) TMI 273
Issues Involved:
1. Validity of reopening assessments under section 147(b) of the Income-tax Act, 1961.
2. Whether the decision of the Income-tax Appellate Tribunal, Bombay Bench, constituted "information" under section 147(b).
Issue-wise Detailed Analysis:
1. Validity of Reopening Assessments under Section 147(b):
The assessee, a registered partnership firm, had its assessments for the years 1966-67, 1968-69, and 1969-70 reopened by the Income Tax Officer (ITO) under section 147(b) of the Income-tax Act, 1961. The original assessments allowed deductions under section 40(b) for interest paid to individual accounts of partners, who were representatives of their respective Hindu Undivided Families (HUFs). Later, the ITO discovered a decision by the Income-tax Appellate Tribunal, Bombay Bench, which held that interest paid to a partner, irrespective of the capacity in which it was received, was inadmissible as a deduction under section 40(b). Based on this, the ITO issued notices under section 148 and reassessed the income by disallowing the interest deductions previously allowed.
The assessee appealed, arguing that the ITO had no jurisdiction to reopen the assessments as no new "information" had come into his possession. The Appellate Assistant Commissioner (AAC) rejected this contention, and the Income-tax Appellate Tribunal upheld the reassessments, stating that the Tribunal's decision constituted "information" under section 147(b).
At the High Court, the primary question was whether the ITO's reopening of assessments based on the Tribunal's decision constituted acting on "information" within the meaning of section 147(b). The court referred to several precedents, including CIT v. A. Raman & Co., Kasturbhai Lalbhai v. R. K. Malhotra, and Indian and Eastern Newspaper Society v. CIT, to determine the scope of "information". It was established that "information" could include knowledge of law derived from judicial decisions by competent authorities.
In this case, the Tribunal's decision was considered a competent source of law, and the ITO's subsequent action based on this decision was deemed valid. The court concluded that the ITO had validly initiated proceedings under section 147(b) as the Tribunal's decision provided new information regarding the interpretation of section 40(b).
2. Whether the Decision of the Income-tax Appellate Tribunal Constituted "Information":
The assessee did not press for an answer to the second question during the hearing. However, the court's analysis indicated that the Tribunal's decision did constitute "information" under section 147(b). The court reiterated that "information" must be derived from an external source and must be capable of influencing the assessment. The Tribunal's decision, being a pronouncement by a competent quasi-judicial authority, met these criteria.
The court referred to the Supreme Court's decision in Indian and Eastern Newspaper Society v. CIT, which clarified that "information" as to law must come from a formal source competent to declare the law. The Tribunal's decision on the interpretation of section 40(b) was a valid source of such information.
Conclusion:
The court concluded that the proceedings under section 147(b) were validly initiated. The ITO had acted on new information derived from a competent judicial authority, which justified the reassessment. The first question was answered in the affirmative, and the second question was not pressed by the assessee and thus was not required to be answered. The assessee was ordered to pay the costs of the reference to the Commissioner.
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1980 (7) TMI 272
Issues Involved:
1. Eligibility for deduction of remuneration paid to directors.
2. Applicability of section 40(c) versus section 40A(2) of the Income-tax Act.
3. Nature of services rendered by the director and their classification.
4. Judicial precedents and their binding nature on the Tribunal.
Detailed Analysis:
1. Eligibility for deduction of remuneration paid to directors:
The primary issue in these appeals concerns the eligibility for deduction of remuneration paid to directors. The department contends that the deduction cannot exceed Rs. 72,000 under section 40(c)/40A(5), while the assessee argues that under certain circumstances, this limit is not applicable. The assessee, a private limited company engaged in film production, had agreements with one of its directors, who was also a film artiste, for acting, directing, and writing stories for its films. The Commissioner held that the assessment orders were erroneous for allowing the full director's remuneration without considering section 40(c) and directed the ITO to disallow the excess over Rs. 72,000 for each year.
2. Applicability of section 40(c) versus section 40A(2) of the Income-tax Act:
The assessee argued that section 40(c) should not apply as the remuneration was part of the cost of production of the film, which is the stock-in-trade of the assessee. It was further contended that section 40(c) applies only to remuneration for services as a director and not to professional services. The department, however, maintained that section 40(c) applies to any remuneration payable to a director, irrespective of the capacity in which services are rendered. The Tribunal noted that previous decisions had favored the department's view but recognized a divergence in a recent Karnataka High Court ruling, which distinguished between sections 40(c) and 40A(2).
3. Nature of services rendered by the director and their classification:
The Tribunal examined whether the director's services as an actor, director, and story writer were commercial in nature and had a market value, distinguishing between a contract of service and a contract for service. It was found that the agreements did not create the office of the director but were professional contracts with a film artiste. The director's services under these agreements were not the usual services performed by a company director and were commercial in character, thus falling under section 40A(2) rather than section 40(c).
4. Judicial precedents and their binding nature on the Tribunal:
The Tribunal acknowledged that although previous decisions supported the department's view, the Karnataka High Court's ruling provided a different interpretation. The High Court had clarified that section 40(c) refers to personal services, while section 40A(2) pertains to commercial services with market value. The Tribunal decided to follow the Karnataka High Court's decision, emphasizing judicial propriety and the absence of contrary High Court decisions. Consequently, the appeals were allowed, and the additions suggested by the Commissioner's order were not upheld.
Conclusion:
The Tribunal concluded that the remuneration paid to the director for acting, directing, and writing stories for films was commercial in nature and fell under section 40A(2), not section 40(c). The appeals were allowed, and the additions made by the Commissioner were dismissed. The Tribunal followed the Karnataka High Court's decision, which provided a clear distinction between the two sections, ensuring judicial consistency.
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1980 (7) TMI 271
Issues Involved
1. Whether an officer of the Railway Protection Force (RPF) making an inquiry under the Railway Property (Unlawful Possession) Act, 1966, is considered a police officer for the purposes of Section 25 of the Evidence Act and Section 162 of the Code of Criminal Procedure, 1898.
2. Whether a person arrested by an RPF officer under Section 6 of the Act for an alleged offence under Section 3 of the Act is a "person accused of an offence" within the meaning of Article 20(3) of the Constitution.
3. Whether Section 9 of the Act is violative of Article 14 of the Constitution.
Detailed Analysis
Issue 1: Status of RPF Officer as Police Officer
The primary question was whether an RPF officer conducting an inquiry under the 1966 Act is a "police officer" for the purposes of Section 25 of the Evidence Act, which states, "No confession made to a police officer shall be proved as against a person accused of any offence." The Court discussed the policy behind Sections 25 and 26 of the Evidence Act, which is to ensure that confessions made to police officers are presumed to be obtained under duress and are therefore inadmissible.
The appellant's counsel argued that the term "police officer" should be construed broadly to include RPF officers, as they possess similar powers to those of police officers during investigations. However, the Court noted that the RPF officer does not have the power to submit a report or chargesheet under Section 173 of the Code, which is a significant distinction from police officers.
The Court examined various precedents, including State of Punjab v. Barkat Ram, Badku Joti Savant v. State of Mysore, and State of U.P. v. Durga Prasad, which held that officers of other departments like Customs or Excise, who possess some powers of police officers, are not considered police officers under Section 25 of the Evidence Act. The Court concluded that an RPF officer does not possess all the attributes of a police officer, particularly the power to initiate prosecution by submitting a chargesheet under Section 173 of the Code. Therefore, an RPF officer is not a "police officer" within the meaning of Section 25 of the Evidence Act.
Issue 2: Status of Arrested Person as "Person Accused of an Offence"
The second issue was whether a person arrested by an RPF officer is a "person accused of an offence" under Article 20(3) of the Constitution, which protects against self-incrimination. The appellant argued that once a person is arrested under suspicion of an offence, they should be considered an accused person, and any statement made should be inadmissible.
The Court referred to the interpretation of "person accused of any offence" in M.P. Sharma v. Satish Chandra, which requires a formal accusation through an FIR or a formal complaint. The Court noted that at the time the incriminating statements were made, no formal complaint or FIR had been lodged against the appellant. Therefore, the appellant was not a "person accused of an offence" within the meaning of Article 20(3) at that time.
Issue 3: Constitutionality of Section 9 of the Act
The third issue, regarding the constitutionality of Section 9 of the Act under Article 14 of the Constitution, was not raised or pressed during the arguments in the lower courts. Therefore, the Supreme Court refused to address this issue.
Conclusion
The Supreme Court dismissed the appeals, holding that:
1. An RPF officer is not a "police officer" within the meaning of Section 25 of the Evidence Act.
2. The appellant was not a "person accused of an offence" under Article 20(3) at the time the statements were made.
3. The issue of the constitutionality of Section 9 of the Act was not addressed as it was not raised in the lower courts.
The Court also noted the State's undertaking to provide the accused with copies of all relevant documents and statements on which the prosecution intends to rely and permitted the accused to inspect other relevant materials collected by the inquiry officer. The case was sent back to the trial court for further proceedings with a directive to expedite the trial.
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1980 (7) TMI 270
Issues:
Interpretation of Section 10(2A) of the Indian Income-tax Act, 1922 in relation to remission of interest and capital amount in a settlement agreement.
Analysis:
The case involved an application under s. 66(2) of the Indian I. T. Act, 1922, where the Income-tax Appellate Tribunal was directed to draw up a statement of the case regarding the justification of holding no addition under section 10(2A) of the Act. The assessee, who owned a rice mill, had mortgaged his property to a bank, which was later closed, leading to a settlement agreement with the official liquidator. The settlement involved a payment of a reduced amount in full satisfaction of the claim, including interest and costs. The Income Tax Officer (ITO) added back the interest amount under s. 10(2A) during assessment proceedings for the year 1961-62, leading to an appeal by the assessee before the Appellate Assistant Commissioner (AAC).
The AAC agreed with the ITO that the assessee benefitted from the settlement by remission of interest and capital, but upon scrutiny, found that the assessee had paid a portion of the interest previously allowed. The AAC reduced the addition by that amount and sustained the addition of the balance. The assessee further appealed to the Income-tax Appellate Tribunal, which concluded that the addition of the balance amount to the profit was not tenable in law.
The Tribunal's decision was based on the interpretation of s. 10(2A), which deems any amount received or benefit accrued due to remission of a deduction made in a previous year as profits or gains. However, in this case, it was unclear whether the entire interest was remitted in the settlement, making it difficult to identify conclusively the particular item for which remission was granted. Referring to the Supreme Court's decision in Tirunelveli Motor Bus Service Co. P. Ltd. v. CIT [1970] 78 ITR 55, the court emphasized the need for clear identification of the remitted amount for application of s. 10(2A).
The court noted that the settlement agreement did not clearly indicate a complete rebate of the interest, as the order mentioned settlement in full satisfaction of the claim, including interest. As a result, it was deemed speculative to determine the exact remission granted on the interest amount. Consequently, the court held that s. 10(2A) was not applicable in this case due to the lack of clarity on the remitted amount, aligning with the principles established in the Tirunelveli Motor Bus Service case. Thus, the court answered the question referred in the affirmative and against the department, ruling in favor of the assessee.
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1980 (7) TMI 269
Issues Involved:
1. Review of earlier judgment.
2. Validity and application of the 1964 policy.
3. Selection and promotion criteria for the post of Brigadier.
4. Procedural fairness and hearing of parties.
Summary:
1. Review of Earlier Judgment:
The petitioner sought a review of an earlier judgment due to perceived procedural unfairness and lack of adequate hearing. The Supreme Court emphasized that a review is not a routine procedure and should be granted only if there is a material error or miscarriage of justice. The Court found no such error in the earlier judgment and thus refused the review.
2. Validity and Application of the 1964 Policy:
The petitioner argued that the 1964 policy should govern the selection process. However, the Court had previously ruled that the Central Government was free to revise or reverse the 1964 policy, provided it acted justly and fairly. The Court reiterated that no finality or infallibility attached to the 1964 policy and upheld the Government's plenary power to formulate or modify military policy.
3. Selection and Promotion Criteria for the Post of Brigadier:
The case involved two colonels vying for one post of Brigadier. The High Court had directed the Defence Department to select the best colonel, resulting in both being adjudged equal in merit, but the respondent being chosen due to seniority. The Supreme Court upheld this selection, noting that the respondent was recommended by the Selection Panel in 1979 and that seniority is a valid criterion when merit is equal. The Court found no injustice in the order promoting the respondent.
4. Procedural Fairness and Hearing of Parties:
The petitioner contended that he was not adequately heard in the proceedings leading to the earlier judgment. The Supreme Court acknowledged this grievance but found that the petitioner had been given a fair opportunity to present his case during the review. The Court emphasized that the implementation of its final order should not be delayed further and directed the Central Government to appoint the respondent as Brigadier immediately.
In conclusion, the Supreme Court refused the review petition, upheld the Central Government's freedom to revise the 1964 policy, validated the selection process based on seniority and merit, and ensured procedural fairness by hearing the petitioner comprehensively. The Court directed the immediate implementation of its final order to avoid further delay.
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1980 (7) TMI 268
Issues:
Assessment based on entries in third-party account books without opportunity for cross-examination.
Detailed Analysis:
Issue 1: Assessment based on entries in third-party account books without opportunity for cross-examination
- The revision was filed by the Commissioner of Sales Tax, U.P., challenging the enhancement in disclosed turnover for the assessment year 1973-74.
- The Sales Tax Officer rejected the accounts of the assessee, a partnership firm dealing in imported Vanaspati Ghee, based on discrepancies found in the account books of a third party, the Lucknow party.
- The Sales Tax Officer enhanced the disclosed turnover by Rs. 1,75,000 due to a payment of Rs. 27,600 made by the Lucknow party to the assessee, which was not recorded in the assessee's books.
- The assessee contended that without the opportunity to cross-examine the Lucknow party, no liability could be imposed based on entries in their account books.
- Citing previous court decisions, the Additional Judge (Revisions) accepted the assessee's contention, emphasizing the importance of affording the assessee a fair opportunity to rebut materials used against them.
- The Commissioner challenged this decision, arguing that the case should have been remanded to allow the assessee to cross-examine the Lucknow party, as it was an irregularity in the assessment proceedings.
- The court held that the irregularity warranted remanding the case to give the assessee the opportunity to cross-examine the Lucknow party, rather than annulling the assessment order.
- The revision was allowed, setting aside the order of the Revising Authority, and the case was referred back to the Assessing Officer for reassessment after affording the assessee the chance to cross-examine the Lucknow party.
This detailed analysis highlights the key issue of assessment based on entries in third-party account books without providing the assessee with the opportunity for cross-examination, leading to the decision to remand the case for a fair assessment process.
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1980 (7) TMI 267
The Supreme Court held that Section 4(c) of the Consolidation of Holdings & Prevention of Fragmentation Act 1956 is not violative of Articles 14 and 19 of the Constitution of India. The Court dismissed the Writ Petitions as the issues raised had already been covered by previous decisions. No costs were awarded in this case.
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1980 (7) TMI 266
Issues Involved:
1. Public Nuisance and Sanitation
2. Judicial Power and Duty under Section 133 Cr.P.C.
3. Financial Constraints of Municipal Bodies
4. Enforcement of Public Health Obligations
5. Role of State Government
6. Judicial Oversight and Enforcement
Issue-wise Detailed Analysis:
1. Public Nuisance and Sanitation:
The case revolves around the Ratlam Municipality's failure to provide adequate sanitation facilities, resulting in public nuisance. The residents of Ward No. 12, New Road, Ratlam, faced severe health hazards due to the municipality's neglect. The court found that the area was plagued with filth, cesspools, and malodorous fluids from an Alcohol Plant, leading to mosquito breeding and other health issues. The municipality was held responsible for not fulfilling its statutory duties under Section 123 of the M.P. Municipalities Act, 1961, which mandates the cleansing of public streets, places, and sewers, and the disposal of night-soil and rubbish.
2. Judicial Power and Duty under Section 133 Cr.P.C.:
The court emphasized the importance of Section 133 Cr.P.C., which empowers a Magistrate to remove any unlawful obstruction or nuisance from a public place. The Magistrate's order directing the municipality to construct drainage facilities was upheld. The court stated, "The public power of the Magistrate under the Code is a public duty to the members of the public who are victims of the nuisance, and so he shall exercise it when the jurisdictional facts are present as here." The court also highlighted that failure to comply with the order would attract penal provisions under Section 188 I.P.C.
3. Financial Constraints of Municipal Bodies:
The municipality argued that financial constraints prevented it from fulfilling its statutory duties. However, the court rejected this plea, stating, "The plea of the municipality that notwithstanding the public nuisance financial inability validly exonerates it from statutory liability has no juridical basis." The court asserted that statutory bodies must comply with their obligations regardless of financial difficulties, and the State Government should provide necessary financial aid.
4. Enforcement of Public Health Obligations:
The court underscored the importance of providing basic sanitation facilities as a fundamental human right. It stated, "Decency and dignity are non-negotiable facets of human rights and are a first charge on local self-governing bodies." The court directed the municipality to construct public latrines, manage drains, and fill cesspools to ensure sanitation. The court also emphasized the role of the Malaria Department in eradicating mosquitoes.
5. Role of State Government:
The court highlighted the State Government's responsibility under Article 47 of the Constitution, which mandates the improvement of public health. The court directed the State Government to provide financial assistance to the municipality and take action against the Alcohol Plant for discharging pollutants. The court stated, "The State will realize that Art. 47 makes it a paramount principle of governance that steps are taken 'for the improvement of public health as amongst its primary duties'."
6. Judicial Oversight and Enforcement:
The court stressed the need for judicial oversight to ensure compliance with its orders. It directed the Magistrate to monitor the progress of the municipality's work every three months and take action under Section 188 I.P.C. for any breaches. The court also warned of possible contempt proceedings for willful non-compliance. It stated, "We have no hesitation in holding that if these directions are not complied with the Sub Divisional Magistrate will prosecute the officers responsible."
Conclusion:
The court dismissed the municipality's petition, upholding the Magistrate's order with modifications to make it workable. The court emphasized the importance of public health and sanitation, the duty of statutory bodies to fulfill their obligations regardless of financial constraints, and the role of judicial oversight in ensuring compliance. The judgment serves as a precedent for enforcing public health obligations and addressing public nuisances through judicial intervention.
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1980 (7) TMI 265
Issues Involved:
1. Whether the amounts received from the supply of water to the Defence department constituted agricultural income and were exempt from taxation.
2. Whether the losses claimed from forward contracts in groundnut oil and cotton seed oil were speculative losses and should be treated as such under section 73 of the Income-tax Act, 1961.
Summary:
Issue 1: Agricultural Income
The assessee, a firm engaged in ginning cotton and manufacturing groundnut oil, entered into a contract with the Ministry of Defence to supply water from its open tank. The assessee claimed that the receipts from this contract constituted agricultural income and were exempt from taxation. The ITO rejected this claim, considering the income as fees for services rendered. The AAC disagreed, treating the receipts as revenue derived from land used for agricultural purposes. However, the Tribunal held that the income arose from a commercial contract and had no direct nexus with the agricultural land. The High Court agreed with the Tribunal, stating that the receipts from the Defence department were non-agricultural income as they resulted from a commercial contract to supply water, not directly from agricultural activities.
Issue 2: Speculative Losses
The assessee also engaged in forward contracts for groundnut oil, settling some by price differences rather than actual delivery, resulting in losses. The ITO classified these as speculative losses under section 43(5) and treated them as a separate business, not allowing set-off against regular business income. The AAC, while agreeing that the transactions were speculative, allowed the set-off, considering them part of the regular business. The Tribunal reversed this, holding that the speculative transactions constituted a separate business under Explanation 2 to section 28. The High Court upheld the Tribunal's decision, affirming that the speculative transactions must be treated as a distinct business, and the losses should be carried forward and set off separately under section 73.
Conclusion:
Both questions were answered in the affirmative and against the assessee, confirming that the water supply receipts were non-agricultural income and the speculative losses should be treated as a separate business for tax purposes. The department was awarded costs of the references.
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1980 (7) TMI 264
Issues Involved:
1. Whether an officer of the Railway Protection Force (RPF) making an inquiry under the Railway Property (Unlawful Possession) Act, 1966, is a Police officer for the purposes of Section 25, Evidence Act and Section 162 of the Code of Criminal Procedure, 1898.
2. Whether a person arrested by an RPF officer under Section 6 of the Act is a "person accused of an offence" within the meaning of Article 20(3) of the Constitution.
3. Whether Section 9 of the Act is violative of Article 14 of the Constitution.
Detailed Analysis:
Issue 1: Whether an RPF Officer is a Police Officer for the Purposes of Section 25, Evidence Act and Section 162, CrPC
The primary question was whether an RPF officer making an inquiry under the Railway Property (Unlawful Possession) Act, 1966, can be considered a "police officer" for the purposes of Section 25 of the Evidence Act, which states that "No confession made to a police officer shall be proved as against a person accused of any offence." The court examined the duties and powers of RPF officers under the 1966 Act and the Railway Protection Force Act, 1957, comparing them with those of police officers under the Code of Criminal Procedure (CrPC).
The court noted that although RPF officers have some powers similar to those of police officers, such as arrest and inquiry, they do not have the power to submit a charge-sheet under Section 173 of the CrPC. This distinction is crucial as it limits their role to inquiry rather than full-fledged investigation. The court relied on previous judgments, including State of U.P. v. Durga Prasad, which held that RPF officers are not police officers for the purposes of Section 25 of the Evidence Act. Therefore, any confessional statement made to an RPF officer is not inadmissible under Section 25 of the Evidence Act.
Issue 2: Whether a Person Arrested by an RPF Officer is a "Person Accused of an Offence" under Article 20(3) of the Constitution
The second issue was whether a person arrested by an RPF officer is a "person accused of an offence" within the meaning of Article 20(3) of the Constitution, which protects against self-incrimination. The court examined whether the protection under Article 20(3) applies at the stage of inquiry conducted by an RPF officer.
The court referred to the interpretation of "person accused of an offence" in previous judgments, such as M.P. Sharma v. Satish Chandra, which held that a person becomes an accused only when a formal accusation is made, such as the lodging of an FIR or a formal complaint. In the present case, since no formal complaint or FIR had been lodged at the time of the inquiry, the appellant did not qualify as a "person accused of an offence" under Article 20(3). Therefore, the protection against self-incrimination did not apply to the statements made during the RPF inquiry.
Issue 3: Whether Section 9 of the Act is Violative of Article 14 of the Constitution
The third issue, concerning the constitutional validity of Section 9 of the Act under Article 14, was not raised or pressed during the arguments in the lower courts. Consequently, the Supreme Court refused to address this issue and did not pronounce any judgment on it.
Conclusion:
The Supreme Court dismissed the appeals, holding that:
1. An RPF officer making an inquiry under the 1966 Act is not a police officer for the purposes of Section 25 of the Evidence Act and Section 162 of the CrPC.
2. A person arrested by an RPF officer under Section 6 of the Act is not a "person accused of an offence" within the meaning of Article 20(3) of the Constitution at the stage of inquiry.
3. The court did not address the constitutional validity of Section 9 of the Act under Article 14 as it was not raised in the lower courts.
The court also noted the State's undertaking to provide the accused with copies of all relevant documents and statements, allowing the accused to inspect other material collected by the inquiry officer. The case was sent back to the trial court for further proceedings, with a directive to conduct the trial on a day-to-day basis and dispose of it within three months.
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1980 (7) TMI 263
Issues Involved:
1. Competency of the appellant to maintain the appeal.
2. Interpretation of "person aggrieved" in the context of election petitions.
3. Applicability of Sections 109 and 110 of the Representation of the People Act to appeals.
Summary:
Issue 1: Competency of the appellant to maintain the appeal
A preliminary objection was raised questioning the competency of Shri Thammanna to maintain the appeal, arguing he does not fulfill the character of a "person aggrieved" by the High Court's judgment. The appellant did not file any written statement, lead evidence, or participate in the arguments before the High Court. The court emphasized that the appellant was not a necessary party and did not join the contest at any stage, thus lacking locus standi to prefer the appeal.
Issue 2: Interpretation of "person aggrieved"
The court examined the term "person aggrieved" and concluded that it must be a person who has suffered a legal grievance or has been adversely affected by the decision. In this case, the appellant did not participate in the proceedings and was not prejudicially affected by the High Court's decision. Therefore, he could not be considered a "person aggrieved."
Issue 3: Applicability of Sections 109 and 110 of the Representation of the People Act to appeals
The court discussed whether the provisions of Sections 109 and 110, which restrict the withdrawal of election petitions, apply to appeals. It was concluded that these sections do not apply to appeals under Section 116C, which governs the procedure for appeals in the Supreme Court. The court held that an appellant has the right to withdraw an appeal unconditionally, and this right is not restricted by Sections 109 and 110. The principle that an election petition is a representative action has limited application and does not extend to appeals.
Conclusion:
The court dismissed the appeal, agreeing with the preliminary objection that the appellant did not have the necessary locus standi to maintain the appeal. The appellant was not a "person aggrieved" by the High Court's decision, and the provisions restricting withdrawal of election petitions do not apply to appeals. The appeal was dismissed with costs.
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1980 (7) TMI 262
Issues Involved:
1. Validity of Sections 4 and 5 of the Constitution (42nd Amendment) Act, 1976.
2. Validity of the Sick Textile Undertakings (Nationalisation) Act, 1974.
3. Validity of the Constitution (39th Amendment) Act.
4. Validity of Article 31B of the Constitution.
5. Validity of Article 31C of the Constitution.
6. Validity of the Constitution (40th Amendment) Act, 1976.
7. Validity of the Constitution (42nd Amendment) Act, 1976.
Detailed Analysis:
1. Validity of Sections 4 and 5 of the Constitution (42nd Amendment) Act, 1976:
The primary issue was whether Sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976 transgress the limitations on the amending power of Parliament as held in Keshavananda Bharati. The court held that the amendments introduced by Sections 4 and 55 damage the basic structure of the Constitution by destroying its essential elements. Section 4 amended Article 31C to provide that no law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV shall be deemed void on the ground of inconsistency with Articles 14, 19, or 31. Section 55 inserted sub-sections (4) and (5) in Article 368, which declared that no amendment of the Constitution shall be called in question in any court on any ground and that there shall be no limitation on the constituent power of Parliament to amend the Constitution. The court found these provisions unconstitutional as they transgress the limitations on the amending power and damage the basic structure by removing judicial review and allowing Parliament to amend the Constitution without any limitations.
2. Validity of the Sick Textile Undertakings (Nationalisation) Act, 1974:
The petitioners challenged the constitutional validity of the Sick Textile Undertakings (Nationalisation) Act, 1974, and the order dated October 19, 1971, under which the management of Minerva Mills Ltd. was taken over. The court did not delve into the merits of this challenge at this stage but focused on the broader constitutional issues.
3. Validity of the Constitution (39th Amendment) Act:
The petitioners challenged the constitutionality of the Constitution (39th Amendment) Act, which inserted the impugned Nationalisation Act as Entry 105 in the 9th Schedule to the Constitution. This raised questions regarding the validity of Article 31B, which the court proposed to deal with in another batch of petitions.
4. Validity of Article 31B of the Constitution:
The court held that Article 31B, which provides that none of the Acts and Regulations specified in the 9th Schedule shall be deemed to be void on the ground of inconsistency with any of the fundamental rights, was valid. However, it was clarified that amendments to the 9th Schedule made after April 24, 1973, would be open to challenge on the ground that they damage the basic or essential features of the Constitution.
5. Validity of Article 31C of the Constitution:
The court examined whether the amendment to Article 31C by the 42nd Amendment, which extended the protection to laws giving effect to any of the Directive Principles, was valid. It was held that the amendment damaged the basic structure of the Constitution by making fundamental rights subordinate to the Directive Principles. The court emphasized that the harmony and balance between fundamental rights and Directive Principles were essential features of the Constitution.
6. Validity of the Constitution (40th Amendment) Act, 1976:
The petitioners argued that the Constitution (40th Amendment) Act, 1976, which included certain laws in the 9th Schedule, was invalid as the Lok Sabha was not in existence at the time of its enactment. The court found that the Lok Sabha was validly extended by the House of People (Extension of Duration) Act, 1976, which was enacted during the operation of a Proclamation of Emergency.
7. Validity of the Constitution (42nd Amendment) Act, 1976:
The court held that clauses (4) and (5) of Article 368, inserted by the 42nd Amendment, were unconstitutional as they removed all limitations on the power of Parliament to amend the Constitution and deprived the courts of their power to review constitutional amendments. The court emphasized that the power of judicial review is an integral part of the basic structure of the Constitution and cannot be abrogated.
Conclusion:
The court declared Sections 4 and 55 of the Constitution (42nd Amendment) Act, 1976, to be beyond the amending power of Parliament and void. It upheld the validity of Article 31B and the unamended Article 31C but struck down the amendment to Article 31C by the 42nd Amendment. The court also upheld the validity of the Constitution (40th Amendment) Act, 1976, and emphasized the importance of maintaining the balance between fundamental rights and Directive Principles as part of the basic structure of the Constitution.
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1980 (7) TMI 261
Issues:
1. Confiscation of gold by authorities based on non-declaration.
2. Validity of appellant's explanation for possession of gold.
3. Authority's power to seize gold before the last date for purchasing gold bonds.
4. Exercise of discretion by authorities for fine in lieu of confiscation.
5. Proportionality of confiscation to violation of rules.
6. Misconception in the Government of India's order regarding appellant's case.
Analysis:
1. The judgment involves an appeal against the confiscation of gold by authorities due to the appellant's failure to declare it. The appellant claimed the gold was given by his father-in-law for investment in gold bonds, but the authorities found his explanation unconvincing and confiscated the gold, imposing a penalty under Rule 126-L (16). The appeal to the Gold Control Administrator and further revision to the Government of India were dismissed, leading to the filing of a writ petition challenging the orders.
2. The appellant argued that he had obtained the necessary forms for gold bonds, indicating no intention to evade declaration. However, the court noted discrepancies in the appellant's behavior, such as denying possession of gold initially and the form not being from the proper authority. The court upheld the lower authorities' findings, emphasizing that unless the findings are perverse or baseless, they must be respected.
3. The appellant contended that authorities had no power to seize gold before the last date for purchasing gold bonds. The court rejected this argument, citing that notifications did not restrict authorities from inspecting or confiscating gold if found in violation of rules.
4. Regarding the exercise of discretion for a fine in lieu of confiscation, the court clarified that while the option exists under Rule 126-FM sub-rule 8(a), authorities are not obligated to offer it. As the authorities did not provide this option, their actions were deemed legal.
5. The appellant argued that the confiscation of gold was disproportionate to the violation. However, the court differentiated this case from a previous decision, stating that under the rules, confiscation is mandatory unless the option for a fine is given.
6. Lastly, the appellant raised a point of misconception in the Government of India's order regarding his case. The court noted that while there might have been a misunderstanding on a minor aspect, the main contention was adequately addressed in the order. Therefore, the court upheld the Government of India's decision, finding no reason to interfere with the lower court's judgment.
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1980 (7) TMI 260
The appeal from Metha Gems, Bombay against the Order of confiscation of Rough diamonds valued at &8377; 81,169 was remanded back to the authority due to lack of adherence to principles of natural justice. Reports of valuation and market enquiry were not provided to the appellants, denying them the opportunity to cross-examine the experts. The Board emphasized the need for due observance of natural justice in such cases.
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1980 (7) TMI 259
The appeals were allowed, and the orders imposing personal penalties on M/s. Hind Hosiery Mills were set aside due to lack of evidence showing their personal involvement in the impugned act. The penalties were not imposed as "persons concerned" but because the goods were not available for confiscation at the time.
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1980 (7) TMI 258
Issues Involved:
1. Entitlement to duty on specified yardage.
2. Payability of excise duty to the State of Rajasthan.
3. Entitlement to recover excise duty.
4. Jurisdiction of civil court.
5. Bar of limitation.
6. Authorization of person signing and verifying the plaint.
7. Constitutionality of the Rajasthan Excise Duties Ordinance, 1949.
8. Validity of the presentation of the suit.
9. Estoppel from making the claim.
10. Maintainability of the suit.
11. Assessment of excise duty and its recoverability.
12. Relief entitled to the plaintiff.
Detailed Analysis:
1. Entitlement to Duty on Specified Yardage:
The court found that the total yardage for the purpose of excise duty was 13,455,678 yards, calculated at 3 yards per pound. The defendant's claim that the yardage should be calculated at 2.5 yards per pound was not substantiated.
2. Payability of Excise Duty to the State of Rajasthan:
The court held that the defendant was liable to pay excise duty under the Rajasthan Excise Duties Ordinance, 1949. This duty was applicable to the stock of manufactured cloth lying in the mills on April 1, 1949, and to the cloth manufactured during the period from April 1, 1949, to March 31, 1950.
3. Entitlement to Recover Excise Duty:
The court found that by virtue of the agreement dated February 25, 1950, between the President of India and the Rajpramukh of Rajasthan, the Union of India became entitled to recover the excise duty payable by the defendant to the State of Rajasthan. The Ordinance and the Rules framed thereunder were properly promulgated in the Official Gazette.
4. Jurisdiction of Civil Court:
The court held that the suit was maintainable in a civil court. The arrears of excise duty became a debt due to the Union of India, which was entitled to recover the same by a civil suit. The court distinguished this case from others where the jurisdiction of civil courts was barred due to the existence of special tribunals for tax disputes.
5. Bar of Limitation:
The court found that the suit was within limitation under Article 112 of the Limitation Act, which prescribes a period of 30 years for suits by the government. The suit was filed within this period.
6. Authorization of Person Signing and Verifying the Plaint:
The court held that the plaint was signed and verified by a duly authorized person, and the presentation of the plaint was in accordance with the law.
7. Constitutionality of the Rajasthan Excise Duties Ordinance, 1949:
The court found that the excise duty could be levied retrospectively and that such retrospective imposition did not violate the Constitution. The legislative competence of the Union or State to impose excise duty retrospectively was upheld.
8. Validity of the Presentation of the Suit:
The court held that the presentation of the suit was valid. Any defects in the presentation were rectified, and the suit was maintainable.
9. Estoppel from Making the Claim:
The court did not find any grounds for estoppel that would prevent the plaintiff from making the claim for excise duty.
10. Maintainability of the Suit:
The court held that the suit was maintainable. The plaintiff's right to recover the arrears of excise duty as a debt was affirmed.
11. Assessment of Excise Duty and Its Recoverability:
The court found that the assessment of excise duty was duly made, and the duty was demanded according to law by the Central Excise Officer through a notice of demand. This was sufficient compliance with the provisions of law.
12. Relief Entitled to the Plaintiff:
The court decreed the plaintiff's suit for Rs. 2,14,520/- on account of excise duty and directed that the plaintiff shall get interest at 6% on the decretal amount from the date of the suit till realization.
Conclusion:
The appeal was dismissed, and the judgment and decree of the District Judge were upheld. The plaintiff was entitled to recover the specified amount of excise duty along with interest.
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