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2006 (6) TMI 519 - COMPANY LAW BOARD, NEW DELHI
Oppression Or Mismanagement - Increasing of authorized share capital and allotment of additional shares - manipulating the allotment of shares - removal of Petitioner from the Directorship - violation of the proper and legal procedure prescribed - barred by limitation - HELD THAT:- It is a well settled proposition that the provision of Sections 397 and 398 are to be invoked to get the grievances of oppression and mismanagement redressed. The petitioner has rightly invoked the provisions of these sections. If a member who holds 50% of the shares in a company is reduced to the position of minority shareholder in the company by an act of the company or by its Board of Directors malafide, the said act must ordinarily be considered to be an act of oppression to the said member.
I am, therefore, of the view that the allotment of shares impugned in the company petition made for personal gains and with a view to gain advantage against the other shareholders of a closely held company was neither in compliance with the legal requirements (except the allotment on 11.12.2002 though it suffered from on illegality and no proper procedure was followed)nor ensured the fair play and probity in corporate management, resulting in the enhancement of the shareholding of the second respondent, which would constitute an act of oppression, as held in Praful M Patel v. Wonderweld Electrodes P. Ltd [2001 (9) TMI 1154 - COMPANY LAW BOARD, NEW DELHI], Akbarali A Kalvert v. Konkan Chemicals P. Ltd. [1994 (5) TMI 270 - COMPANY LAW BOARD] and M.K. Haridas v. Asal Malabar Beedi Depot P. Ltd. [2002 (2) TMI 1345 - COMPANY LAW BOARD, CHENNAI].The member who holds 50% hares in the company is entitled by virtue of his position control, manage and run the affairs of the company. This is a benefit or advantage which the member enjoys and is entitled to enjoy in accordance with the provisions of company and in the matter of administration of the affairs of the company by electing his own members to the Board of Directors of the company.
The facts on record show that holding of meetings, increasing share capital, allotting additional shares and removing the petitioner as directors without following proper procedure were wholly unauthorized and invalid and hence have to be set aside.
The facts of the present case are so manifestly against respondents that two opinions are not possible on the aspect of relief. Relief has to be granted in the present case to undo the advantage gained by the respondents through their manipulations and fraud. To do substantial justice between the parties, I order as follows vacating the interim order dated 17.10.2005:
I. The issue of 8800 shares on 11.12.2002 is hereby sustained with the directions that 4400 shares out of the total 8800 shares issued on 11.12.2002 be transferred by Respondent No. 2 to the petitioner names -Sh. Rajesh Patil by conversion of his unsecured loans.
II. The issue of 2,90,000 shares on 8.1.2003 being totally malfide, only motive being to gain control of company is hereby declared null and void and all allotment are set aside with the directions that the name of 48 persons be struck off from the register of members.
III. Since I have held that the stand of the company that the petitioner and his nominees had vacated office of the director u/s 283(1)(g) cannot be sustained for the reasons given above, I declared that the petitioner and his nominees shall continue of directors of the company.
Thus, I dispose of this petition. No order as to cost.
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2006 (6) TMI 518 - COMPANY LAW BOARD, MUMBAI
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... ... ..... consideration since the rejoinder was not affirmed before the Notary/Oath Commissioner as provided under Regulation 23 of the CLB Regulations, 1991. The advocate for the petitioner submitted that the rejoinder was signed at Sharjah (U.A.E.) by the petitioner and her signature was attested by the Indian High Commission at Sharjah and it should be treated as proper affirmation. The petition filed by the petitioner has been affirmed before Notary in India but the rejoinder was signed at Sharjah but not affirmed by affidavit at Sharjah though the signature is attested by the Indian High Commission. Since the rejoinder was not affirmed by affidavit either at Sharjah or in India, the same cannot be accepted and relied upon as proper rejoinder in view of the specific provision under Regulation 23 of the CLB Regulations. In view of the facts and legal position discussed above, I am of the view that there is no merit in the petition and the petition is dismissed and no order to cost.
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2006 (6) TMI 517 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
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... ... ..... pellant was dated November 1999 whereas the client started trading with it in June 1999. The allegation is that the appellant traded on behalf of the client without an agreement. This allegation formed part of the show cause notice. The reply of the appellant is that through inadvertence the date had been wrongly entered at the time of filing the registration form and that when the mistake was noticed the same has since been rectified. It is not in dispute that the mistake has been rectified. The Board did not accept the explanation. If it had given some reasons for not accepting the explanation we could have considered that aspect. The Board in the impugned order has simply rejected the contention without giving any reason. The possibility of advertence cannot be ruled out and therefore, we would like to give the appellant a benefit of doubt in this regard. 11. In the result of appeals are allowed and the impugned orders dated 25/01/2006 set aside with no order as to costs.
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2006 (6) TMI 516 - SUPREME COURT
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... ... ..... We find that the contentions of the learned counsel for the appellant to be correct. The case of the appellants was not independently examined. Merely because the Revision Petition filed by the informant was dismissed that could not have been a ground for not discussing the merits of the appeal filed by the appellants. A Criminal Revision Petition may have been without merit; but that did not make the appeal filed by the appellants meritless. On the above grounds alone we set aside the order of the High Court and sent it to the High Court for a fresh consideration on merits. It is submitted by learned counsel for the appellants that they were on bail during the pendency of the appeal before the High Court. It is open to them to bring this fact to the notice of the High Court and seek such interim order as is available in law. Since the appeal is of the year 2000 the High Court is requested to dispose of the same expeditiously. The appeals are allowed to the aforesaid extent.
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2006 (6) TMI 515 - MADRAS HIGH COURT
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... ... ..... publish the reason for reduction, in the aforesaid newspapers. The copy of this order including the resolution passed shall be delivered to the Registrar of Companies within 21 days from today and the same shall be caused publication in the Gazette by the publication (sic). Apart from this, the company shall produce before this Court any scheme formulated on the understanding entered into with the foreign investors and serve copies of the same to all the secured creditors. The company shall file a report as regards the progress of its negotiation before this Court so that the future course of action consequent on the reduction which was necessitated by its anxiety to have an investment from the foreign investor is placed for scrutiny of this Court. 57. In the light of the prima facie view that I have taken, the prayer sought for in the Company Petition needs to be put on notice as ordered above. The petition shall be posted for hearing objections, if any, on 26th July 2006.
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2006 (6) TMI 514 - SUPREME COURT
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... ... ..... marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it." As noted above, the High Court has not even discussed as to how the decision in Ramesh Chand's case (supra) had any similarity to the facts of the present case. In the aforesaid background we set aside the order of the High Court and remit the matter for a fresh hearing in accordance with law. We make it clear we have not expressed any opinion on the merits of the case. Learned counsel for the respondent submitted that similar cases are pending in the High Court awaiting decision in this case. Therefore, it would be proper that the writ petition is disposed of finally. Keeping in view the aforesaid submission, we request the High Court to dispose of the writ petition as early as possible. The appeal is accordingly disposed of. No costs.
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2006 (6) TMI 513 - ITAT JAIPUR
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... ... ..... /R has not brought any agreement or any other material on record in support of his argument and also we find nothing in the agreement which the Assessing Officer has referred with regard to rent at the rate of ₹ 21,000 per month. In the absence of any material on record, the argument of ld. D/R cannot be accepted and we have no other alternative but to treat the entire recovery of expenditure as recovery of expenditure only and not the income from other sources. Hence the decision of ld. CIT (A) in treating ₹ 21,000 per month as rent is reversed. Thus ground no. 5 of assessee’s appeal in I.T.A. No. 363/JP/03 of the assessee is allowed and solitary ground of the revenue in I.T.A. No. 388/JP/03 is dismissed. 86. The Ground No. 6 of the assessee is general in nature which needs no adjudication. 87. In the result, I.T.A No. (1) 273/JP/03 of the assessee is partly allowed; (2) 363/JP/03 of the assessee is partly allowed (3) 388/JP/03 of the revenue is dismissed.
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2006 (6) TMI 512 - CESTAT BANGALORE
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... ... ..... ul consideration, we find that the assessee has taken very sustainable and legal grounds. The order is not sustainable in law. The matter had been adjudicated by the AC on this very issue and demands had been dropped. The Commissioner ought to have reviewed the matter and should have passed an order in terms of Section 84 of the Finance Act. He has failed to do so. Therefore, the proceedings invoking larger period is not sustainable. The demands are barred by time. The Apex Court in the case of Nizam Sugar Factory v. CCE as reported in 2006 (197) ETL 465 (SC) have clearly held that where they are earlier show cause notices and proceedings initiated against the assessee, then in such a situation demands cannot be confirmed for larger period. This judgment clearly applies to the facts of the present case. The impugned order is not sustainable and the same is set aside by allowing the appeal. Operative portion of this order was pronounced in open court on conclusion of hearing.
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2006 (6) TMI 511 - KARNATAKA HIGH COURT
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... ... ..... d his decision regarding the concealment of income, the penalty proceedings cannot be initiated. As aforesaid, in all these matters, the assessment orders passed od not in anyway disclose that the petitioners have suppressed or concealed the material facts intentionally. In view of the same, the impugned order levying penalty cannot be sustained. Hence, the following order is passed. Order in W.P. Nos 12337/2004, 12669/2004, 15305/2004 & 15399/2005 The impugned orders passed by the respective Assistant Commissioners of Commercial Taxes, Bangalore, levying penalty on the petitioners are guashed. However, it is open for the respondent-authorities to re-open the assessment, if need be, in accordance with law. Order in W.P. Nos 13803/2005 & 14321/2005 The impugned orders passed by the Assistant Commissioner of Commercial Taxes, II Circle, Bagalkot, vide Annexures-F1, F2 and E dated 27-1-205 and 31-1-2005 respectively quashed. These Writ petitions are allowed accordingly.
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2006 (6) TMI 510 - DELHI HIGH COURT
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... ... ..... atisfaction is discernible from the findings recorded by the authority initiating the proceedings, the same should suffice. In the light of the above, we admit these appeals for determination of the following substantial question of law "Whether satisfaction of the officer initiating the proceedings under section 271 of the Income Tax Act can be said to have been recorded even in cases where satisfaction is not recorded in specific terms but is otherwise discernible from the order passed by the authority ?" 5. Keeping in view the pronouncements of this court in Ram Commercial (supra) and other cases on the subject, we are of the view that it would be more appropriate if the question is authoritatively determined by a Full Bench of this Court. 6. We accordingly refer these appeals to a Full Bench for determination of the above question and for final disposal of the appeals as nothing would survive for consideration once the question is answered one way or the other.
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2006 (6) TMI 509 - KERALA HIGH COURT
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... ... ..... issue, if necessary, appropriate directions to the authority against whose decision, the appeal is preferred, to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute. (See Kapurchand Shrimal v. CIT 1981 131 ITR 451 ) (SC). 10. Since we are of the considered view that the revenue should be given an opportunity to find out whether ₹ 10 lakhs or any amount by way of pakidi was received by the assessees from their tenant Sundaresa Pai while letting out their commercial building as per the lease deed dated 10-2-1989, the orders of the Tribunal, Appellate Authority and the original Assessing Authority are set aside and the matter is remitted to the original Assessing Authority for a revised assessment after giving the revenue as well as the assessees an opportunity to substantiate their respective contentions. The question of law raised in the I.T.A. is answered in favour of the revenue. The ITR and ITA are disposed of accordingly.
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2006 (6) TMI 508 - CESTAT BANGALORE
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... ... ..... s that they rightly come in the category in which the department has confirmed the service tax. 3. On a careful consideration, we notice that the issue pertaining to the matter has to be gone into in great detail in the light of the literature and other material produced by the appellants. At this stage, it cannot be said prima facie that the training imparted by them would be for Computer Training alone, as even in terms of their own admission, they are carrying out specialized courses meant for graduates and post-graduates in the fields of biotechnology, pharmacy and other related inter-disciplinary fields. However, to enable the appellants to contest the matter, they are directed to pre-deposit a sum of ₹ 1,00,000/-(Rupees One lakh only) within a period of two months from today. On such deposit, the balance of the service tax and penalty stands waived and recovery stayed. Call on to report compliance on 31st August, 2006. (Pronounced and dictated in open Court)
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2006 (6) TMI 507 - SUPREME COURT
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... ... ..... aint upon him would be held by the court to be reasonable, while it may give the covenantee the full benefit of unreasonable provisions if the covenanter is unable to face litigation." o p /o p It is significant that in the event the amount of gratuity is calculated at the rate of 26 days’ salary for every completed year of service, vis-a-vis, 15 days5 salary therefor, the tenure of an employee similarly situate will vary. Whereas in the former case an employee may receive the entire amount of gratuity while working for a lesser period, in the latter case an employee drawing the same salary will have to work for a longer period. o p /o p We are, therefore, of the opinion that the workman cannot opt for both the terms. Such a construction would defeat the purpose for which Sub-Section (5) of Section 4 has been enacted. For the reasons aforementioned, the impugned judgment cannot be sustained, which is set aside accordingly. The appeal is allowed. No costs. o p /o p
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2006 (6) TMI 506 - BOMBAY HIGH COURT
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... ... ..... of facts and intention to evade Central Excise Duty which has been discussed in the findings of the Adjudicating Authority in Order in Original dated 26.9.2000 ? 2. Can the CESTAT ignore the pieces of evidence collected and recorded under Panchanama before the independent witnesses as well as statements of the Assessee and supplier of the Stenter Machine, recorded under section 14 of the Central Excise Act, 1944 ? 3. Mr.M.H. Patil, learned counsel waives service on behalf of the respondents.
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2006 (6) TMI 505 - CESTAT, BANGALORE
CENVAT Credit - goods are received back in the factory within one hundred and eighty days of their being sent to a job worker or not - Rule 4(5)(a) of CCR - SSI Exemption - use of brand name of others - procedure under Notification No. 214/86 dated 25-3-1986 not followed - inclusion of value of the clearance of M/s. Rayalaseema Hi-Strength Hypo Ltd. in the aggregate value of the clearance of the appellants for the purpose of computing SSI limits of ₹ 3 crores.
CENVAT Credit - goods are received back in the factory within one hundred and eighty days of their being sent to a job worker or not - Rule 4(5)(a) of CCR - HELD THAT:- A close reading of Rule 4(5)(a) of CCR makes it clear that a manufacturer can avail CENVAT credit on inputs or capital goods as such or after being partially processed are sent to the job worker for further processing, test, repair, reconditioning or any other purpose; and the goods are received back in the factory within 180 days from the job worker. It is very clear that the above rule does not contemplate payment of duty by the job worker. The duty liability is squarely on the shoulders of the raw material supplier. Therefore, the demand of duty for the reason that raw material supplier has not followed the provision of Notification No. 214/86 is not correct. Therefore we set aside the demand of ₹ 16,02,337/-.
Inclusion of value of the clearances of branded goods for SSI exemption - HELD THAT:- It has been clearly stated in the relevant Notification at Para 3A(b) that the value of clearance bearing brand name or trade name of another person who is eligible for the benefit of exemption in terms of Para 4 of the Notification, is not to be included in the aggregate value of clearances of excisable goods for home consumption in respect of the manufacturer who avails the benefit of notification. In the present case, as the raw material supplier has his own brand name, he is not entitled for SSI benefit. The goods received from the appellants bearing brand name ‘Anisha’ were cleared on payment of duty. It is very clear from the above provision that the value of the said clearance is not to be included in the aggregate value of the clearance of the appellants - the demand on this count is also not sustainable. In the result, the entire demand of duty is set aside. Hence no penalty and interest are leviable.
The impugned order set aside - appeal allowed.
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2006 (6) TMI 504 - SUPREME COURT
Habeas Corpus Petition - delay in disposal of the representation - detenu not filed any application for bail - HELD THAT:- It may be noted that the writ petition was filed on 22.12.2005, even before the order of rejection was served. That being so the detenu cannot make grievance that the State had not explained the position as to how his representation was dealt with.
The only requirement is that the detaining authority should be aware that the detenu is already in custody and is likely to be released on bail. The conclusion that the detenu may be released on bail cannot be ipsi-dixit of the detaining authority. On the basis of materials before him, the detaining authority came to the conclusion that there is likelihood of detenu being released on bail. That is his subjective satisfaction based on materials. Normally, such satisfaction is not to be interfered with.
On the facts of the case, the detaining authority has indicated as to why he was of the opinion that there is likelihood of detenu being released on bail. It has been clearly stated that in similar cases orders granting bail are passed by various courts. Appellant has not disputed correctness of this statement. In that background this Court observed that it was not "normal" case. The High Court was justified in rejecting the stand of the appellant.
Looked from any angle the Judgment of the High Court does not warrant interference. The appeal is dismissed.
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2006 (6) TMI 503 - GAUHATI HIGH COURT
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... ... ..... me and at every stage. This aspect remains unanswered in the counter by the appellants. 60. The writ petitioner, in our considered opinion, has made out a clear case requiring the interference of this Court. We accordingly hold that the writ petitioner is entitled to grant of exemption with effect from the date of production and manufacturing of MS Ingots, i.e., from 14.7.1999 onwards for a period of 10 years in terms of office memorandum issued vide notification No. EA/1/2/96-IPS dated 24.12.1997 by the Government of India, Ministry of Industry, Department of Industrial Policy and Promotion. The respondents are accordingly directed to take appropriate steps in terms of the law declared and observations made in this order. 61. The. Writ Appeal Nos. 208, 216, 223, 224, 226 of 2003 preferred by the Union of India are accordingly allowed and Writ Appeal No. 227 of 2003 is dismissed with the observation and direction as above. 62. The parties are directed to bear their own costs
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2006 (6) TMI 502 - BOMBAY HIGH COURT
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... ... ..... April, 1990; wherein the Assistant Director, DRI of Revenue Intelligence is notified to be the Proper Officer for the whole of India as well as for the States of Maharashtra, Madhya Pradesh and Goa in relation to the matters where Customs Officers are required to be notified as ‘Proper Officer’. 4. Having examined the legal submission advanced and the view taken by the Larger Bench of the Tribunal; which finds our approval, we answer the above question in favour of the revenue and against the assessee holding that the Assistant Commissioner, Director of Revenue Intelligence (DRI) was competent to issue show cause notice dated 29th March, 1993 under Sections 28 and 124 of the Customs Act, 1962. 5. Having answered the above question, other two questions framed while admitting the appeal need no specific answer being consequential in nature. 6. In the above view of the matter, appeal is allowed. The impugned order is quashed and set aside with no order as to costs.
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2006 (6) TMI 501 - BOMBAY HIGH COURT
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... ... ..... ve, of Mr.Jahagirdar and Mr.Jamdar, JJ. is also under the COFEPOSA Act. When the division bench judgment has clearly laid down the law in para -19, sub-para (6), as stated above, then the Advisory Board was not permitted to raise the contention in their affidavit that detenu has no legal right to be represented in the cases of detention under the COFEPOSA Act. Secondly, the affidavit is in contravention of the record and proceedings of the Advisory Board, as pointed out above. What is meant by "obvious reasons" is not clear and consequently, it has to be held that the prayer of the detenu for permission to be represented by the legal practitioner was not rejected after proper consideration. It was rejected on erroneous grounds and therefore, the order of detention is required to be set aside and quashed. 5. The petition is allowed and continuous detention of the detenu is rendered illegal after 27.10.2005. He should be set free, if not required in any other matter.
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2006 (6) TMI 500 - SUPREME COURT
Whether there is no substance in the accused-appellant's plea relating to grant of benefit under the Probation Act?
Whether Section 9(4) of Trial of Offences Relating to Transaction in Securities Act, 1992 only permits the Special Court to regulate the procedure before it. That in no way authorizes the Special Court to regulate the proceedings before this Court?
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