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Showing 21 to 40 of 743 Records
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2020 (5) TMI 723
Validity of Rule 3(b) of the Kerala Hindu Places of Public Worship (Authorisation of Entry) Rules, 1965 - seeking permission to female devotees between the ages of 10 to 50 years to enter the Sabarimala temple without any restrictions - violative of Article 25 of the Constitution of India or not - interplay between the freedom of religion under Articles 25 and 26 of the Constitution and other provisions in Part III, particularly Article 14 - HELD THAT:- Though the preliminary point for adjudication is the reference of questions of law to a larger bench in a review petition, submissions were made by both sides regarding the maintainability of the review petitions. Presumably, this was done because no reference can be made in review petitions which were not maintainable. Admittedly, the review petitions are kept pending awaiting the pronouncement on the questions of law which were referred to this Bench. Therefore, we refrain from expressing any view on the merits of the review petitions. However, it is necessary to decide the maintainability of the review petitions in view of the submissions made by the parties.
Article 137 of the Constitution of India empowers the Supreme Court to review any judgment pronounced or order made by it subject to the provisions of any law made by the Parliament or any rules made under Article 145. No law has been made by the Parliament as contemplated in Article 137. Article 145 of the Constitution of India gives power to the Supreme Court to make rules for regulating the practice and procedures in the Court. Article 145 (1) (e) pertains to the rules relating to the conditions subject to which any judgment or order pronounced by the Court may be reviewed and the procedure for such review including the time within which applications to the Court for such review are to be entertained - It is clear from a plain reading of Order XLVII, Rule 1 that there are no restrictions on the power of this Court to review its judgment or order. The exceptions to the general power of review relate to review of civil proceedings which can be entertained only on grounds mentioned in Order XLVII, Rule 1 of the Code of Civil Procedure, 1908 and to review of criminal proceedings which can be entertained only on the ground of an error apparent on the face of record.
Undoubtedly there is no bar on the exercise of jurisdiction for referring questions of law in a pending review petition. Therefore, the reference cannot be said to be vitiated for lack of jurisdiction. This Court has acted well within its power in making the reference.
Proviso to Article 145 (3) - HELD THAT:- Article 145 of the Constitution of India empowers this Court to make Rules for regulating the practice and procedure of the Court. Article 145 (3) provides that the minimum number of Judges to decide any case involving substantial questions of law as to the interpretation of the Constitution or for the purpose of hearing a reference under Article 143 shall be five - the contention is that reference to a larger bench in accordance with the proviso to Article 145(3) can be made only in Appeals and not in any other proceedings. However, the proviso deals with a situation when reference has to be made by a bench of less than five Judges. The present reference is made by a bench of five Judges and, therefore, the proviso to Article 145 (3) is not applicable.
The instant review petitions and the reference arising from the review petitions are maintainable.
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2020 (5) TMI 722
Seeking permission to submit Expression of Interest (EoI) and Resolution Plan for the Corporate Debtor - HELD THAT:- By virtue of mandatory contents of resolution plan, the same is in accordance with Section 30 and 31 of the Code, and also complies with the requirement of the Regulations 38 and 39 of CIRP Regulations - The resolution applicant has sought certain reliefs and concessions in the resolution plan. The said relief and concessions are mentioned in Para No. 27 (a) to (r) of the Resolution Plan annexed to the application. This bench is not inclined to allow any of the said reliefs and concessions prayed by the Resolution Applicant.
The resolution plan is approved with modifications, which shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors, Resolution Applicant and other stakeholders involved in the resolution plan - application allowed.
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2020 (5) TMI 721
Seeking a writ of mandamus to appoint an SIT, or any other investigating agency, to inquire into the matter regarding mis-utilization and misappropriation of public money, and to take action against the culprits - Seeking declaration directing the State authorities to take appropriate action against the private respondent, to seize his financial powers thereby preventing him from misappropriating public money, and to declare his continuance in office as illegal - petitioners were not given an opportunity of being heard before placing them under suspension.
Whether the first proviso to Section 138(4) of the Act, whereby an opportunity of hearing is required to be given, would apply even in the case of suspension, or whether it would apply only where the services of the Village Pradhan are sought to be terminated?
Whether the power, to place a Village Pradhan under suspension, is a quasi-judicial power?
Whether such a power, conferred on the State Government under Section 138(4) of the Act, can be delegated by them to the District Magistrate under Section 146 of the Act?
Whether the provisions of the Panchayati Raj Act can be applied for taking action against a Village Pradhan for alleged irregularities on his part in the execution of MGNREGA works?
HELD THAT:- The validity of the notification dated 09.06.2017, delegating powers under Section 138 of the Act to the District Magistrate, is upheld. Since the requirement of the first proviso to Section 138(4) would apply in the case of suspension also, the Village Pradhans, whom the District Magistrates seek to place under suspension, must be given a show cause notice furnishing details as to why such action is proposed to be taken. The Village Pradhan should also be given a reasonable opportunity of submitting a representation thereto, a reasoned order should be passed by the District Magistrate thereafter, and only then may action, if need be, be taken by the District Magistrate to place the concerned Gram Pradhan under suspension.
Petition disposed off.
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2020 (5) TMI 720
Changing the method of accounting of the company from Project Completion Method to Percentage Completion Method Project - Scope of Accounting Standard - Whether the method of accounting followed consistently and regularly and accepted by the Revenue in earlier year can be disturbed by the A.O? - HELD THAT:- No infirmity in these findings of the ld. CIT(A) - Completion Method is a well recognised and accepted method of accounting. This method is consistently and regularly followed by the assessee since this project was undertaken and the method has been accepted by the department for the Assessment Year 2014-15 in an assessment order passed u/s 143 of the Act. The principle of consistency has to be applied. Nothing needs to be added to the detailed finding of the ld. CIT(A). The case law discussed is appropriate. Thus, we uphold the finding of the ld. CIT(A) and dismiss this appeal of the revenue.
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2020 (5) TMI 719
Seeking to stay all further proceedings pursuant to ex-parte order - territorial Jurisdiction - HELD THAT:- The fact of change in the Registered Office of the Corporate Debtor from the State of Telangana to the State of Andhra Pradesh was not brought to the notice of this Adjudicating Authority at any point of time during the proceedings. If any information regarding change of address was submitted by way of counter affidavit, this Adjudicating Authority would have definitely considered the same before passing any orders.
The real question to be answered here is that once the order of admission of the CP(IB) No. 374/7/HDB/2019 was passed by this Adjudicating Authority, which is an appealable order under the provisions of the Code, whether this Adjudicating Authority has powers to recall and set aside the same? - It is opined that this Adjudicating Authority has no such powers under the provisions of the Code. Since the Order of Admission of the CP is an appealable order, the powers of Appellate Authority cannot be circumvented by recalling our own order.
Application disposed off as not maintainable.
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2020 (5) TMI 718
Deduction claimed u/s 80IB(10) - return of income has not been filed within the due date u/s 139(1) as required by section 80AC - sufficient and reasonable cause occurred in filing the return late - HELD THAT:- It is sufficiently clear from the assessee’s averments that the learned lower authorities have declined to entertain its Section 80IB(10) deduction claim for the reason that the same had not been raised in its return filed within the “due date” prescribed under Section 139(1) of the Act. And that the learned lower authorities quote Sections 80A(5) r.w.s. 80AC of the Act. Case law in EBR Enterprises vs. Union of India [2019 (6) TMI 484 - BOMBAY HIGH COURT].holds that filing of such return under Section 139(1) for claiming Chapter VIA deduction is very much a mandatory condition. We thus adopt stricter direction in light of Commissioner of Customs vs. Dilip Kumar [2018 (7) TMI 1826 - SUPREME COURT] and affirm learned lower authorities action rejecting the impugned deduction claimed.
Our attention to the assessee’s petition dated 23.04.2022 that it had filed an application before the CBDT under Section 119(2)(b) seeking condonation of delay in filing the above statutory return. He clarified that the Board had rejected the same on 11.10.2019. And that the assessee’s Writ Petition challenging the same is pending for final adjudication before the hon'ble jurisdictional high court. He therefore sought adjournment to await its final outcome. We find no merit in assessee’s instant adjournment request as its return is found to have been filed well beyond the “due date” prescribed in Section 139(1) of the Act. The assessee’s foregoing pleas fail accordingly. Assessee appeal dismissed.
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2020 (5) TMI 717
Dishonor of Cheque - insufficiency of funds - discharge of legally enforceable debt or not - rebuttal of presumption - whether the accused-respondent No.1 could rebut the fact in respect of a legally enforceable debt, by deterring presumption under Section 139 of the NI Act? - HELD THAT:- From the evidence it appears that after receipt of the demand notice which was delivered on 02.07.2013, the accused-respondent No.1 did not make payment to the complainant. The trial court has clearly observed that the court has condoned the delay that occurred in filing the complaint within one month from the day of expiry of 15 days from the day of receipt of the demand notice. Hence, the trial court has observed that the requirement of Section 138 of the NI Act for convicting any person has been complied but the complainant according to the trial court has failed to prove the existence of legally enforceable debt or liability and no presumption under Section 139 of the NI Act can be drawn.
This court finds that sufficient justification has been given by the trial court while drawing inference in respect of financial capacity of the complainant. Even if, the other inference is capable of being drawn, this court, in view of the settled position of law as enunciated by the apex court in CHANDRAPPA AND ORS. VERSUS STATE OF KARNATAKA [2007 (2) TMI 704 - SUPREME COURT] should not embark upon to disturb the finding of acquittal recorded by the trial court.
In RANGAPPA VERSUS SRI MOHAN [2010 (5) TMI 391 - SUPREME COURT] the apex court has clearly held that it is the settled position of law for that rebutting the fact that might lead to the presumption under Section 139 of the NI Act, the standard of proof is of preponderance of probabilities. From the evidence of the complainant it has been shown that the debt, for discharge of which the cheques were issued may not be real, if seen in the light of the financial capacity of the complainant. Thus, in the considered view of this court, the accused-respondent No.1 has discharged his onus by creating a serious doubt in respect of financial capacity of the complainant.
This court is not inclined to disturb the finding of the trial court by acquitting the respondent No.1 - Appeal dismissed.
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2020 (5) TMI 716
TDS u/s 194A - Motor Accident Claims - Insurance claim award with interest @ 9% per annum from date of claim - whether interest liability would be subject to Tax Deducted at Source (TDS) under Sec. 194 A? - HELD THAT:- Where the Claimants produce the proof of PAN Card, TDS is applied at 10%. In the absence of such PAN Card, it shall be 20%. Not so, insignificant amounts and when refunds are not made to the poor victims, the issue is exacerbated. Following these difficulties for the innocent motor accident victims, a few High Courts have ruled that Sec 194 A was not applicable in these claims. They appear to have done so after due notice and hearing the Income Tax Department.
As Transport Corporations are facing Execution Petitions before Claims Tribunals, where TDS was applied and apparent conflict between the decisions and as insurance companies and TDS issue flagged requires to be elevated to a Division Bench or a larger Bench as may be deemed fit by the Hon’ble Chief Justice for a clear cut verdict on the applicability of TDS on interest in Motor Accident Claims atleast in sofar as Tamil Nadu is concerned.
Going by the above discussion and the obvious and apparent disagreement between two learned single judges on the issue and unnecessary pendency of EPs and CRPs and difficulties faced by all the stakeholders, I am more than satisfied that it is a fit case to order a blanket stay of all Execution Petitions pending before all Motor Accident Claims Tribunals in Tamil Nadu in relation to and confined to the issue of Tax Deduction at Source vide 194 A of the Income Tax Act, 1961. In respect of EPs which may include the TDS issue and not solely confined to it, only the dispute relating to TDS issue will stand suspended, awaiting a verdict from the larger bench.
TDS is in application in millions of motor accident cases since 01.06.2003. Huge sums may have accumulated in the coffers of Income Tax Department. Not all victims may have sought and/ or obtained refunds. Many victims may belong to such strata of society that they may not be in a position to pursue the refund. I deem it fit to leave it to the larger bench to allude to this issue also, and examine the possibility of proper utilization of the unrefunded amounts for the benefit of motor accident victims. The Income Tax Department could be asked to provide statistics relating to the TDS amounts, refunds sought and pending, refunds ordered and no refunds sought for at all, and the period for the same, for this purpose.
This is a fit and proper case to direct the Registry to place this matter before the Hon’ble Chief Justice for considering the issues for resolution by a larger bench, as found fit and proper by the Hon’ble Chief Justice.
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2020 (5) TMI 715
Addition on account of surrender made at the time of search u/s 132 - AR submitted that the surrender was made at the pressure of the search party and it does not have any evidence. The statement was retracted and therefore, could not have been relied upon by the ld AO to make the addition - HELD THAT:- Apparently, in assessment order as well as in the appellate order no evidence was disclosed based on which the father of the assessee disclosed the sum - in the statement u/s 132(4) of the Act of the assessee in reply to question No. 35, where assessee has disclosed ₹ 20 lacks on his own, also does not have any discussion about the material based on which the disclosure is made.
No doubt the disclosure made for the firm of Golden Manor may have other evidence, however in the case of the impugned addition of ₹ 20 lakhs; we do not find any mention about evidence of unaccounted income - also admitted by revenue that the assessee has retracted the statement immediately after the search that is almost within 10 days of the search - circular of CBDT dated 10.03.2003 also discourage revenue from making an addition merely on the basis of statement or confession without any evidence. Further had there been any evidence ld AO should have made addition of that amount and not ₹ 20 Lakhs. In view of this, we do not find any reason to sustain the order of the lower authorities. Accordingly, the ld AO is directed to delete the addition - Appeal of the assessee is allowed.
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2020 (5) TMI 714
Extension of hearing period on account of lockdown (third phase) in the whole country - outbreak of novel Corona Virus for the third consecutive year - HELD THAT:- For the consequential lockdown due to COVID-19 in three phases including the present one, working of this Court, other subordinate courts as well as judicial and quasi-judicial authorities working under the superintendence of this Court, has been affected to a great extent. The situation has resulted in hardship for the litigants and ordinary citizens to approach the court of law to take recourse to legal remedies. With a view to ensure that the litigants and citizens do not suffer on account of their inability to approach the court of law, we propose to invoke our plenary power under Article 226 and power of superintendence under Article 227 of the Constitution of India, our inherent power over the criminal matters under Section 482, Cr.P.C., our power of superintendence over criminal courts under Section 483, Cr.P.C. and our inherent power over the civil matters under Section 151 of the C.P.C.
All interim orders / directions issued or protection granted including any order requiring any compliance by the parties to such proceedings, passed by this Court or any court subordinate to it or any Family Court or Labour Court or any Tribunal or any other Judicial or Quasi Judicial forum in the State of Odisha, over which this Court has power of superintendence, which were subsisting as on the date of commencement of national lockdown, shall stand extended till 18th June 2020 - it is further directed that the interim orders or directions of any court in the State, which are not of a limited duration and were meant to operate till further orders, shall continue to remain in force until modified / altered / vacated by specific order of the court concerned in a particular case.
List this matter before the appropriate Bench on 18th of June, 2020.
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2020 (5) TMI 713
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- As to the facts of the present case, it may be seen that the Operational Creditor has raised various Invoices after supplying the materials to the Corporate Debtor and the Operational Creditor has also filed the Ledger Statement, which is maintained in the books of the Operational Creditor and a perusal of the same shows that a sum of ₹ 53,52,607.73/- is due and payable by the Corporate Debtor. However, on the contrary, the Corporate Debtor has also filed the Statement of Accounts in relation to the Operational Creditor maintained in their books of account, which goes to on show that only a sum of ₹ 60,169/- is pending to be paid by the Corporate Debtor to the Operational Creditor.
As to the facts of the case, from the records it is evident that a series of notices and reminders have been exchanged between the parties from the year 2012 and even the Corporate Debtor by their letter dated 09.03.2017 has disputed the claim of the Operational Creditor. Further, it may be seen that the Corporate Debtor at no point of time has admitted the liability of the Operational Creditor. In so far as the e-mail dated 29.10.2015 which is referred by the Operational Creditor as an admission of liability by the Corporate Debtor, a perusal of the same shows that no where the Corporate Debtor has stated that the sum is due and payable by them to the Operational Creditor - Further upon perusal of the documents filed by the Operational Creditor, the 'debt' and 'default' on the part of the Corporate Debtor cannot be ascertained.
Only upon when the accounts are reconciled, the exact amount, which has become due and payable by the Corporate Debtor can be ascertained. We are well aware of the fact that this Authority cannot reject the claim of the Operational Creditor on the ground of amount not having become crystallized. However, as to the facts of the present case, in order to ascertain the 'debt' and 'due' the accounts needs to be reconciled and only upon reconciliation, as also if any cost reduction is ascertained, it may pass on to the Corporate Debtor and in the said circumstances, we cannot beforehand presume that the debt as claimed by the Operational Creditor will cross the threshold limit as prescribed under Section 4 of the IBC, 2016.
Application dismissed.
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2020 (5) TMI 712
Seeking permanent injunction, to restrain the defendant from attempting to procure and/or attempting to induce a breach/termination of any agreement/arrangement between the third parties and the plaintiff in respect of non-functional properties of the plaintiff across India - restraint on defendant from entering into any agreement or arrangement with any third party in relation to any right/interest of the defendant with respect to non-functional properties across India, where agreement/arrangement for grant of property rights to the plaintiff has been executed but multiplex operations have not commenced - recovery of nominal damages - HELD THAT:- No merit is found in the contention of the senior counsel for the plaintiff, of the defendant being bound by any admission contained in the order dated 1st February, 2018 and admission of law does not bind any party to a lis less a counsel. Rather it appears that the suit as framed, is directed not only against the defendant but also against others who have not been impleaded. During the hearing it emerged that besides the plaintiff and the defendant there are only one or two others carrying on same business but on a much smaller scale than the plaintiff and the defendant. The effect of granting injunction as sought against the defendant, would be that the defendant even if has entered into agreements with the developer/owner of the Amritsar and Juhu, Mumbai properties, would be unable to proceed under the said agreements, leaving the developer/owner aforesaid in a lurch with respect to their properties meant for running and operating multiplex cinemas and who will have no option but to accept whatever commercial terms the plaintiff offers.
The claim of the plaintiff herein also is, to monopolize land and buildings thereon, across India, and just like agricultural produce was held to be natural resource, so is land a natural resource. Moreover yet another directive principle is, that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment and the monopoly sought to be created by the plaintiff by seeking the injunction in this suit, to exclude the defendant from its forays to procure real estate for its business across India, would be against the said directive principle of State Policy - I reiterate that the grant of injunction claimed by the plaintiff on the premise of the actions of the defendant comprising a tortious act of interference with contractual relations of the plaintiff, would be in violation of the fundamental right of the defendant, its promoters and directors to carry on trade and business, without any law having been enacted by the State in this respect in the interest of general public, within the meaning of Article 19(5) of the Constitution of India.
The plaintiff, on the averments contained in the plaint, had no cause of action for the relief claimed against the defendant and the relief claimed by the plaintiff against the defendant is barred by law - the suit is dismissed.
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2020 (5) TMI 711
Maintainability of petition - Seeking interim reliefs on account of indirect/direct alleged breach of certain clauses of the Joint Venture Agreement and Licence and Technical Assistance Agreement - petition is barred by principles of Section 9(3) of Arbitration and Conciliation Act, 1996 or not - HELD THAT:- Perusal of the arbitration clause shows that the parties were ad idem that in' case respondent no. 1 initiated the arbitration, then the arbitration would be held in India and under the Commercial Rules of India Commercial Arbitration Association. However, arbitration would be held in Japan and under the Rules of Japan Commercial Arbitration Association (JCAA), in case it was initiated by M/s. Jay Industries. In the present case, it is undisputed that it is an international commercial arbitration and that the emergency arbitration and regular arbitration were invoked by the Indian entity. Hence, the seat of arbitration is Japan and the rules applicable are those of the JCAA.
The Constitution Bench of Supreme Court in the case of BHARAT ALUMINIUM CO VERSUS KAISER ALUMINIUM TECHNICAL SERVICE, INC AND OTHERS [2012 (9) TMI 912 - SUPREME COURT] prospectively overruled the decision in Bhatia International and held that Parti of the Act would not apply in cases of international arbitration where the seat of arbitration is outside India.
Pursuant to the 246th Report of the Law Commission, the Arbitration and Conciliation (Amendment) Ordinance, 2015 was promulgated, which was published in the Gazette of India on 23rd October, 2015 and came into effect immediately. The Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter referred to as 'the Amendment Act') brought about various amendments in the Act, one of them being enactment of Section 2(ii) whereby Section 2(2) was amended by inserting a proviso. Provisions of Sections 9, 27 and 37(1)(a) and 37(3) of the Act were made applicable to international commercial arbitration where the place of arbitration is outside India and the arbitral award is enforceable under the provisions of Part II of the Act, subject, however, to an agreement to the contrary. Thus, in effect, the position in law went back to the stage prior to the decision in the case of BALCO - In view of the amendment to Section 2(2), it is clear that Section 9 of the Act, with which the present petition is concerned, is applicable even to international commercial arbitration held outside India, provided its applicability has not been excluded by-the parties by an agreement to the contrary.
Even on the anvil of doctrine of election, applicants have to fail. Applicants had consciously chosen to tread on a path and cannot turn around only because they were unsuccessful. It also needs a mention that the pleadings in the petition are really in the nature of an appeal pointing out flaws and infirmities in the order of the emergency arbitrator. Respondents are right that this court in a petition under Section 9 of the Act cannot sit as a court of appeal to examine the order of the emergency arbitrator.
Petition is not maintainable in this court and is accordingly dismissed.
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2020 (5) TMI 710
Denial of Issuance of statutory Form ‘C’ - inter-state purchases of goods - transit purchases under Section 3(b) of the Central Sales Tax Act, 1956 - second sale - Section 6(2) of the Central Sales Tax Act, 1956 to be read with Central Sales Tax (Registration and Turnover) Rules 1957 - it was held by High Court that In the facts of the present case, the transaction is covered by Section 3(b) and this petitioner is entitled to avail the benefit of concessional rate of tax provided under Section 6(2) of the Central Sales Tax Act, 1956.
HELD THAT:- There are no requirement to interfere in this Special Leave Petition. The Special Leave Petition is dismissed accordingly.
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2020 (5) TMI 709
Approval of closure of liquidation process of K.T.C. Foods Pvt. Ltd. - Regulation 45 (3)(a) read with Regulation 32A and 33(1) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Liquidation Process Regulations 2016) - HELD THAT:- In the present case, the application is filed under Regulation 45(3)(a) read with Regulation 32A and 33(1) of the Liquidation Process Regulations 2016. Regulation 32A relating to selling as a going concern was inserted by the Liquidation Process Amendment Regulations 2019 and inter alia requires the Liquidator to identify and group the assets and liabilities to be sold as a going concern, in consultation with the Consultation Committee. Therefore, the response given in Column 2 Sr. No. 16 does not appear to be correct. In view of the reliance in the application on the Regulations of the Liquidation Process Regulations 2016 as amended by the Liquidation Process Amendment Regulations 2019, Regulation 31A of the Liquidation Process Regulations 2016 as inserted by the Liquidation Process Amendment Regulations 2019 was required to be complied with and stakeholders' Consultation Committee constituted. It is noted that as per Regulation 31A(9), the advice of the Consultation Committee is not binding on the Liquidator and there is a proviso that where the Liquidator takes a decision different from the advice given by the Consultation Committee he shall record the reasons for the same in writing.
The sole financial creditor is Oriental Bank of Commerce which has relinquished its security interest all the assets by e-mail dated 05.10.2019. However, there is no representation before us by Oriental Bank of Commerce that the stakeholders' Consultation Committee was not constituted and that this is prejudicial to the interest of Oriental Bank of Commerce. Similar representation has also not been made by any of the operational creditors. Therefore, no adverse inference is being drawn regarding non-constitution of the stakeholders' Consultation Committee.
Regulation 44(1) of the Liquidation Process Regulations 2016 is as substituted by the Liquidation Process Amendment Regulations 2019 dated 25.07.2019. It would not be in the interest of justice to keep the liquidation process of the corporate debtor ongoing, till the time the application for avoidance of transactions is finally decided, especially since KTC Foods is not being directed to be dissolved. Thus, even though the amendment of Regulation 44(1) is through the Liquidation Process Amendment Regulations 2019, the same be applied in the present case and notwithstanding the pendency of the Application No. 510/2019, the closure of liquidation process of the corporate debtor be directed.
In the application, the Liquidator has prayed for approval of the sale of the corporate debtor as a going concern to Shiv Shakti the highest bidder without any liabilities including contingent liabilities and with immunity from existing litigation if any against the corporate debtor. Reference has been made to Regulation 45 (3)(a) of the Liquidation Process Regulations 2016. Reference is also made to Regulation 32A and 33(1) of the Liquidation Process Regulations 2016. However, none of these provisions provides for any approval by the Tribunal of the sale as a going concern to the highest bidder. Therefore, the directions sought for cannot be granted.
In view of the provisions of Section 54 of the Code and Regulations 44 and 45 of the Liquidation Process Regulations 2016, it is directed that since the corporate debtor K.T.C. foods is sold as a going concern, the liquidation process of the corporate debtor K.T.C. Foods Private Limited be closed without dissolution of K.T.C Foods Private Limited and that Application 510/2019 for avoidance of transactions under Chapter III/ VI of Part II of the Code shall continue to be adjudicated upon by the Adjudicating Authority.
Application disposed off.
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2020 (5) TMI 708
Seeking release of gold ornaments and money in interim custody under Section 451 of the Code of Criminal Procedure, 1973 (Cr.P.C.) - custody to a person claiming to be the owner of jewellery/money without incorporating a condition that the said articles should be produced before the court, as and when directed, exactly in the same condition as they were at the time of entrustment - HELD THAT:- On a plain reading of Section 451 Cr.P.C., it can be seen that the power to order for custody and disposal of property pending trial has to be exercised by the court by applying judicial discretion and the arrangement once made thereunder is not even final till the conclusion of inquiry or trial. The court is having a right to terminate the entrustment, get back the property from the person to whom it was given and entrust it to somebody else whom the court deems fit. In cases of rival claims for interim custody, preference of one person over the other does not settle any right to ownership or possession.
The challenge is against conditions 2 and 4 imposed by the trial Judge. Condition 2 is relating to furnishing security in the form of bank guarantee for the value assessed by the court below. We find no reason to interfere with that condition as the jewellery items involved are of a considerable worth. Insofar as condition 4 is concerned, the court below shall allow the claimant to adduce evidence to establish a strong prima facie entitlement to the property. It may also ascertain whether there is any rival claimant for the gold ornaments involved in the case.
After considering the entire evidence on record, the trial court shall take a decision as to whether the petitioner should be directed to produce the articles before the court in the same condition as and when required by the court - matter shall be disposed by the court below as expeditiously as possible, at any rate within a period of one month from the date of receipt of a copy of this order.
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2020 (5) TMI 707
Seeking approval of Resolution Plan - Approval of the Carval Resolution Plan by CoC is in breach of proviso to Section 31(4) of the Code or not - Discrimination against Operational Creditor - Deliberate suppression of vital facts - Violation of IBC as amended, Corporate Insolvency Resolution Process or not - HELD THAT:- When any condition is mentioned in the plan and that condition is required to be fulfilled by the stakeholders after approval of the plan by the CoC, and accomplishment of the provisions of the plan is contingent upon some future actions after approval, then there could be a situation of uncertainty in future in fulfilling of the provisions of the plans, but here in this situation, since interlinking already been approved the Carval Plans alone being approved, nothing has remained contingent, the Resolution Applicant is under unconditional obligation to fulfil the provisions of the Plans, therefore there are no merit in the objection raised by Jatia Group.
Approval of the Carval Resolution Plan by CoC is in breach of proviso to Section 31(4) of the Code or not - HELD THAT:- In the cases of combination, the Adjudicating Authority is mandated to examine as to whether approval is obtained from CCI or not, if not approved, it will not be approved by the Adjudicating Authority. Moreover, in the proviso, it is not said that if approval of CCI is not obtained before CoC approved the plans; the plan approved by the CoC would amount to nullity. Above all, it is not that plans are without approval of CCI, the difference is -approvals are ex-post facto approvals, not ex-ante approvals. If this difference makes any difference to the rights of anybody, then these approvals shall be put to test as to whether post facto approval caused any grievance to any of the stakeholders. It is not the case that by virtue of this post facto approval, Jatia group rights are affected - CCI approval is in no way connected to the commercials CoC examines, since CCI is the Regulatory authority to avoid unhealthy competition in the market, CCI approval is mandatory to the approval of the plan, so that this infraction would not become hindrance if the plan is approved by CCI after CoC has approved. Here plans were approved by CCI.
Discrimination against Operational Creditor - HELD THAT:- If at all equitable treatment is set as a test to approve the Resolution Plan ignoring the provisions of the Code, it always differs from case to case and from person to person. It is only a perception. Perception is always dependent upon the mindset of the person dealing with it, which ultimately will become a threat to predictability and certainty. When the Code is clear as to how to go about, with all humility I hold that this test is beyond the scope of Sec. 53 r/w Section 30(2) of the Code, for this reason only the Honourable Supreme Court time and again reiterated that the Adjudicating Authority shall not enter into the aspects left to be decided by the CoC - As to maximisation of the assets of the Corporate Debtor and keeping the company as a going concern, it is the point to be decided by the CoC. Unless it is pointed out that the CoC examination is vitiated by fraud, the Adjudicating Authority is not expected to interfere with the decision of the CoC.
Deliberate suppression of vital facts - HELD THAT:- It appears the Resolution Application filed revised PBG so as to meet the requirements as mentioned in the format. It is not the case of the Noble counsel that PBG given by the Resolution Applicant is not proportionate to the value of the plan. At the end of the day, one has to see as to whether PBG equivalent to the requirement has been given or not, while approving plans, it is quite common, the Resolution Applicant offers something, when something offered is not in compliance of the requirement, CoC would ask for compliance, if the applicant fulfills the compliance, CoC would further proceed with the plan. In this case also, same thing happened. PBG is normally taken to bind the Resolution Applicant to fulfill the plan; it will not make any difference to quantum of payment and timings mentioned in the plans - there are no merit in the objections raised by Nobel. When the Operational Creditor they will only get their share as set out in the Code. It cannot be seen whether Operational Creditors are receiving money equivalent to the money Financial Creditors getting, because operational creditors as a class cannot equate themselves with the financial creditors and ask for more than what they are entitled u/s 53 r/w section 30(2) of the Code.
With regard to other objections, such as some financial creditors arising discussions in the CoC meeting with regard to the approval of the resolution plans, it is to be seen as to whether the Financial Creditors who raised queries in the meetings have voted in favor of the plan or against the plan and whether the approval is with requisite majority or not. If the approval is given with requisite majority, the discussions taken place in the meeting cannot invalidate the plans duly approved by the CoC.
There are no merit in the objections raised by Noble - the Resolution Plan approved by the CoC of Metallics and the Resolution Plan approved by the CoC of Value Steels are hereby approved.
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2020 (5) TMI 706
Seeking grant of regular bail - case of applicant is that he has neither been named in the FIR nor is there any allegation in the FIR nor any other material collected during investigation, that would identify the applicant as one of the perpetrators of the offences alleged - HELD THAT:- Prison is primarily for punishing convicts; not for detaining undertrials in order to send any 'message' to society. The remit of the court is to dispense justice in accordance with law, not to send messages to society. It is this sentiment, whereby the State demands that undertrials be kept in prison inordinately without any purpose, that leads to overcrowding of jails; and leaves undertrials with the inevitable impression that they are being punished even before trial and therefore being treated unfairly by the system. If at the end of a protracted trial, the prosecution is unable to bring home guilt, the State cannot give back to the accused the years of valuable life lost in prison. On the other hand, an accused would of course be made to undergo his sentence after it has been awarded, after trial.
This court also cannot but notice that the offences under section 147/148/149 IPC arise in the context of an 'unlawful assembly', which section 141 IPC defines as an assembly of 5 or more persons acting with unlawful purposes as defined in that provision; while in the present case only 2 persons appear to have been charged. Also, the offences under sections 147/148/149/427 IPC are in any case bailable offences; and only the offence under section 436 IPC is non-bailable; and there is no material to support that offence that can be said to be clinching or unquestionable, to say the least.
While ordinarily this court would not have entered upon any discussion on the evidence at the stage of considering bail, however here is a case where a purported unlawful assembly of some 250-300 persons is alleged to have committed offences; of which the police have picked-up only two, one of them being the applicant. In this peculiar circumstance, this court was compelled to sift the evidence only prima-facie and limited to cursorily assessing how the police have identified the applicant from that large assembly of persons. This court is conscious that 'judicial custody' is the custody of the court; and the court will be loathe to depriving a person of his liberty, in the court's name, on the mere ipse-dixit of the State, when it finds no substantial basis or reason for doing so.
Application disposed off.
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2020 (5) TMI 705
Maintainability of appeal on low tax effect - Assessee contended that the appeal filed by the Department is not maintainable in view of the Circular No. 17/2019 dt. 08/08/2019 issued by CBDT wherein the monetary limit for filing the appeals by the Department before the ITAT has been increased to ₹ 50,00,000/- from ₹ 20,00,000/-. - HELD THAT:- In the present case it is an admitted fact that the CBDT vide Circular No. 17/2019 enhanced the monetary limit to ₹ 50,00,000/- for not filing the appeal by the department before the ITAT, earlier this limit was specified at ₹ 20,00,000/- in the original Circular no. 03/2018 dt. 11/07/2018.
As earlier Circular no. 3 of 2018 dt. 11/07/2018 at page 5 has been removed and the limit specified in para 3 of the earlier Circular has been enhanced. It is also not in dispute that the earlier Circular was applicable retrospectively to the pending appeals / cross objections and para nos. 12 & 13 of the original Circular no. 03/2018 dt. 11/07/2018 - the amended Circular No. 17/2019 now issued by the CBDT is also applicable to the pending appeals as has been specified in para 13 of the original Circular no. 3/2018 dt. 11/07/2018 and that the Department ought not have filed the appeals before the ITAT where the tax effect is ₹ 50 Lacs or less - we hereby hold that the relaxation in monetary limits for departmental appeals, vide CBDT circular dated 8th August 2019 (supra) shall be applicable to the pending appeals in addition to the appeals to be filed henceforth. Revenue appeal dismissed.
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2020 (5) TMI 704
TP Adjustment to the transaction of software development services - exclusion of comparable namely M/s Infosys Ltd. - HELD THAT:- Respectfully, following the view taken by the Coordinate bench in assessment year 2008-09, we direct the Ld AO/TPO to exclude M/s Infosys Technologies Ltd. from the final set of the comparables. The ground No. 1 to 10 of the appeal of the assessee are accordingly allowed.
TDS u/s 195 - Disallowance of the export commission on account of non-deduction of the tax at source - disallowance u/s 40(a)(i) - AO concluded that there existed a business connection between G&D Egypt and G & D India - HELD THAT:-
We find that for having business connection in India the business operations carried out side India and inside India must have relationship as to contribute the business operations as a whole.
In the instant case, M/s GD Egypt is responsible for marketing and sales for assessee in the region of middle east and north Africa and has procured sales for the assessee. The business operation of the M/s GD Egypt of procuring sales order for the assessee and its entire activity has been carried out from outside India and no part of the business activity has been carried out in the India by M/s GD Egypt. The business connection has to be looked into the business operations of M/s GD Egypt in India and not business connection between the operation of the GD Egpyt and business of the assessee in India, because any workfor which the assessee is making payment will always be associated and part of the business of the assessee. Obviously, in the instant case no business connection exist and thus the finding of the learned DRP on the issue is set aside.
DRP has held that the services rendered by M/s GD Egypt require expertise and knowledge in the specific area of work and such expertise cannot be developed overnight, but it is the result of long period of the work in this line of activities coupled with accumulated experience of operations and therefore the payment made by the assessee to GD Egypt partakes the character of the FTS under domestic law.
In the instant case, the assessee has not invoked any Double Taxation Avoidance Agreement (DTAA) and therefore we are examining only the FTS under domestic law - As decided in M/S. EVERGREEN INTERNATIONAL LTD. [2018 (4) TMI 81 - ITAT DELHI] payment made for procuring of export sale order for Indian taxpayer by any foreign entities from outside India cannot be held as Fee for Technical Services.
In view of holding that payment for services of GD Egypt are not in the nature of Fee for Technical Services (FTS) , the other finding of the learned DRP of the applicability of explanation below section 9(2) i.e. there is no requirement of rendering services in India for income deemed to accrue or arise in India as per section 9(1)(vii) of the act, are rendered merely academic, and we are not required to examine applicability of the same in the year under consideration.
The payment made by the assessee is not chargeable under the provisions of the Act in the hands of GD Egypt, no tax is required to be deducted in terms of section 195 of the Act and consequently no disallowance could be made under section 40(a)(i) of the Act for non-deduction of the tax at source.- Decided in favour of assessee.
Disallowance of bad debt written off - HELD THAT:- No documentary evidence in support of the claim that income pertaining to such write off had been offered to tax as required under the provisions of the Act. In view of the above circumstances, we feel it appropriate to restore this issue back to the file of the learned Assessing Officer with the direction to the assessee to produce all necessary documents in support of its claim before the Assessing Officer, who then will decide the issue in accordance with law. It is needless to mention that the assessee shall be afforded adequate opportunity of being heard.
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