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2011 (5) TMI 1076
Issues Involved:1. Whether the respondent followed the procedure for dispute resolution as prescribed in clauses 24 and 25 of the General Conditions of Contract. 2. Whether the amendment of the amount claimed under Claim No. 4 before the arbitral tribunal was permissible without resorting to the procedure prescribed in clauses 24 and 25. Summary:Issue 1: Procedure for Dispute ResolutionThis petition u/s 34 of the Arbitration and Conciliation Act challenges the arbitral award dated 14.07.2009. The Court limited its notice to whether the respondent followed the dispute resolution procedure in clauses 24 and 25 of the General Conditions of Contract. The petitioner argued that the respondent failed to refer the Engineer's decision to the Dispute Review Expert (DRE) within 14 days as required by clause 24.1. The respondent contended that the 14-day period is not mandatory and that they sought reference to the DRE within 14 days of the Engineer's second rejection. The Court held that clause 24.1 does not prescribe a strict limitation period and does not bar the contractor from seeking reference to the DRE after 14 days. The purpose of the 14-day period is to ensure contemporaneous reference, not to shut out the contractor's rights. The Court found no merit in the petitioner's objection based on clauses 24 and 25, noting that the arbitration agreement could be invoked without strictly following these clauses. Issue 2: Amendment of Claim No. 4The petitioner argued that the respondent should have followed the procedure in clauses 24 and 25 before amending the amount claimed under Claim No. 4. The respondent had reduced the claim amount twice before the arbitral tribunal awarded approximately Rs. 0.39 crores. The Court held that once a dispute is referred to arbitration, a change in the claimed amount does not constitute a new claim and does not require re-invocation of the procedure in clauses 24 and 25. The jurisdiction to deal with the claim rests with the Arbitral Tribunal, and neither the Engineer nor the DRE has authority over it once referred. The Court rejected the petitioner's submission, affirming the Arbitral Tribunal's power to allow amendments under the Act. Conclusion:The Court found no merit in the petition and dismissed it, upholding the arbitral award and the respondent's adherence to the dispute resolution procedure.
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2011 (5) TMI 1075
Issues Involved: 1. Maintainability of applications seeking leave to file appeals u/s 378(4) of the Code of Criminal Procedure, 1973. 2. Applicability of the amended proviso to Section 372 of the Code of Criminal Procedure, 1973.
Summary:
Issue 1: Maintainability of Applications Seeking Leave to File Appeals u/s 378(4) of the Code of Criminal Procedure, 1973
The applicants, original complainants, filed complaints against the respondents (original accused) u/s 138 of the Negotiable Instruments Act (NI Act). The complaints were dismissed by the respective Judicial Magistrates, leading to the acquittal of the accused. Aggrieved by these judgments, the complainants sought leave to file appeals u/s 378(4) of the Code of Criminal Procedure, 1973 (the Code).
Issue 2: Applicability of the Amended Proviso to Section 372 of the Code of Criminal Procedure, 1973
The respondents' counsel objected to the maintainability of the applications, arguing that the amended proviso to Section 372 of the Code, introduced by the Code of Criminal Procedure (Amendment) Act 2008 (5 of 2009), provides the applicants, as "victims," the right to appeal against acquittals directly to the Court of Sessions. They contended that the appeals should lie before the Court of Sessions, not the High Court.
The applicants' counsel countered that Section 378(4) of the Code is an exclusive provision for appeals in cases of acquittal in complaints, requiring special leave from the High Court. They argued that the amended proviso to Section 372 of the Code does not apply to private complaints u/s 138 of the NI Act.
Judgment:
The Court examined the relevant provisions of the Code, including Section 372 and Section 378, and the definition of "victim" u/s 2(wa) of the Code. The Court noted that the amended proviso to Section 372 was introduced to provide victims the right to appeal in cases where the State does not file an appeal against acquittal. However, this proviso does not apply to cases instituted upon complaints, as covered by Section 378(4) of the Code.
The Court concluded that the amended proviso to Section 372 of the Code does not apply to applications seeking leave to file appeals against acquittals for offences u/s 138 of the NI Act. Therefore, the applications u/s 378(4) of the Code are maintainable before the High Court.
The applications were deemed maintainable and were set to be decided on their merits. The matter was adjourned to 20.6.2011.
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2011 (5) TMI 1074
... ... ... ... ..... tant Registrar/Administrative Officer (Judicial). The calculation made by the office is accepted and cost of the suit is taxed at ₹ 28,607.65 (rupees twenty eight thousand six hundred and seven and sixty five paisa only).
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2011 (5) TMI 1073
Penalty u/s 271D - Loans in excess of Prescibed limit - Reasonable Cause u/s 273B - Assessee received loans in cash in excess of Rs 20000 from relatives - HELD THAT:- We find that the assessee has received this loan in cash from relatives and transaction between relatives is not in the character of loans or deposit attracting the provisions of section 269SS. We are of the view that the loans from relatives are in the nature of financial support within the family and this is a reasonable cause falling u/s. 273B.
Accordingly, we delete the penalty levied by JCIT - Decision in favour of Assessee
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2011 (5) TMI 1072
Issues involved: Appeal against order u/s 263 of the Income Tax Act for assessment year 2006-07.
Grounds of appeal: 1. Commissioner setting aside assessment order u/s 143(3) for reframe. 2. Alleged error in assessment order prejudicial to revenue. 3. Alleged ownership rights on 50% built-up area. 4. Sale proceeds claimed as long-term capital gain. 5. Assessee's role as confirming party in sale agreements. 6. Alleged lack of transaction verification. 7. Alleged failure to verify capital gains claim. 8. Alleged lack of support for submissions in assessment computation.
The Assessing Officer completed the assessment under section 143(3) accepting the declared total income, including long-term capital gain on sale of flats. The Commissioner u/s 263 found underassessment of income due to unverified details, setting aside the order for reassessment. The Commissioner noted the discrepancy in total sale proceeds not disclosed by the assessee and directed reevaluation of profit from business. The assessee admitted inability to provide all documents during initial assessment, agreeing to reassessment without influence from the Commissioner's observations.
The Tribunal held the initial assessment order as non-speaking, lacking consideration of key facts regarding capital gain classification and expense verification. Acknowledging the order as erroneous and prejudicial to revenue, the Tribunal upheld the Commissioner's decision to set it aside for reassessment. The Tribunal directed the Assessing Officer to conduct a fresh assessment, considering all relevant documents and providing a fair hearing to the assessee, independent of the Commissioner's observations.
The appeal was dismissed with the above observations, affirming the Commissioner's order.
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2011 (5) TMI 1071
Issues Involved: 1. Quashing of summoning order and consequent criminal proceedings. 2. Liability under Section 138 read with Sections 141/142 of the NI Act. 3. Role and responsibility of directors and officers in the issuance and dishonor of cheques. 4. Legal principles regarding vicarious liability and specific averments in complaints. 5. Compounding of offences under Section 138 of the NI Act.
Issue-wise Detailed Analysis:
1. Quashing of Summoning Order and Consequent Criminal Proceedings: The petition was filed to quash the summoning order dated 31.10.2009 and the consequent criminal proceedings initiated under Section 200 Cr. P.C. 1973 read with Section 138 and Sections 141/142 of the NI Act. The petitioner argued that the complaint did not make specific allegations regarding his involvement or responsibility in the issuance and dishonor of the cheques.
2. Liability Under Section 138 Read with Sections 141/142 of the NI Act: The cheques in question, issued by M/s. Nitishree Infrastructure Limited, were dishonored with the remarks "Exceeds arrangement." The complainant filed a legal notice demanding payment, and upon non-payment, initiated criminal proceedings. The court emphasized that for vicarious liability under Section 141 of the NI Act, it is necessary to make specific allegations indicating how and in what manner the directors or officers were responsible for the conduct of the company's business.
3. Role and Responsibility of Directors and Officers in the Issuance and Dishonor of Cheques: The court referred to the judgments in K.K. Ahuja vs. V.K. Vora and Anr. and Satyapal Talwar vs. State, emphasizing that mere reproduction of the wording of Section 141(1) in the complaint is insufficient to make a person liable. Specific allegations must be made regarding the role and responsibilities of the directors or officers in the issuance and dishonor of the cheques. The court noted that the petitioner was not a signatory of the cheque and no specific averments were made regarding his role.
4. Legal Principles Regarding Vicarious Liability and Specific Averments in Complaints: The court reiterated that for vicarious liability under Section 141 of the NI Act, clear allegations must be made indicating the involvement of the directors or officers in the conduct of the company's business. The court cited the case of N. Rangachari vs. Bharat Sanchar Nigam Ltd., stating that a person dealing with a company is entitled to presume that the directors are in charge of the company's affairs. However, specific allegations are necessary to establish their liability.
5. Compounding of Offences Under Section 138 of the NI Act: The court discussed the application moved by the accused for disposal of the complaint on account of tendering the payment of the bounced cheque by DD. The complainant refused to accept the payment, demanding interest and other expenses. The court referred to the judgment in Rajesh Aggarwal vs. State, stating that the consent of the complainant is required for compounding the offence. The court cannot force the complainant to compromise on the deposit of the cheque amount or penalty by the accused.
Conclusion: The court dismissed the petition, finding no merit in the arguments presented by the petitioner. It emphasized the necessity of specific allegations to establish vicarious liability under Section 141 of the NI Act and upheld the legal principles regarding the role and responsibility of directors and officers in the conduct of the company's business. The court also reiterated that compounding of offences under Section 138 of the NI Act requires the complainant's consent.
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2011 (5) TMI 1070
Issues involved: Cross-appeals against the order of the Commissioner of Income-tax (Appeals) for A.Y.2006-07, challenging treatment of long term capital gain, taxation of transaction in shares/securities/mutual funds, disallowance of legal and professional charges, disallowance of repairs and maintenance expenditure, and reducing income on account of export incentive and interest income for deduction under Section 80IB.
Long term capital gain treatment: - The Revenue challenged the order of the CIT(A) in treating long term capital gain as business profit. - The Tribunal found the issue covered in favor of the assessee based on previous orders and dismissed the Revenue's appeal.
Taxation of transaction in shares/securities/mutual funds: - The assessee challenged the taxation of transactions under "Income from business or profession" instead of "Income from Capital Gains." - The Tribunal held that the issue was decided against the assessee in a previous year and confirmed the order treating the transactions as income from business.
Disallowance of legal and professional charges: - Disallowance of charges paid to the assessee's son was upheld by the Tribunal based on lack of services rendered for the business. - The issue was considered in a previous year, and no change in circumstances was noted, leading to the dismissal of the assessee's challenge.
Disallowance of repairs and maintenance expenditure: - The CIT(A) disallowed part of the expenditure as capital in nature without providing a reasoned order. - The Tribunal remanded the issue back to the CIT(A) for reconsideration with proper explanation and opportunity for the assessee.
Reducing income on account of export incentive and interest income: - The CIT(A) confirmed the reduction of income based on previous orders and legal precedents. - The Tribunal upheld the CIT(A)'s decision, finding the issue covered against the assessee.
Conclusion: The department's appeals were dismissed, while the CO in the case of Smt. Seema Ajay Ranka was partly allowed for statistical purposes. The CO in the case of Dr. Ajay Ranka was dismissed.
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2011 (5) TMI 1069
Issues Involved: 1. Maintainability of the winding-up petition. 2. Jurisdictional competence of the North Carolina Court. 3. Conclusiveness of the foreign judgment under Section 13 of the Code of Civil Procedure. 4. Alleged fraud and suppression of material facts by the Petitioner. 5. Specification of contracted goods and damage quantification. 6. Applicability of the Indian Limitation Act.
Issue-wise Detailed Analysis:
1. Maintainability of the Winding-Up Petition: The Court examined whether the Respondent company raised a genuine dispute to the claimed debt. It was noted that if a creditor's debt is bona fide disputed on substantial grounds, the Court has the discretion to dismiss the petition. The Court concluded that the objections raised by the Respondent were substantial and genuine, thus the winding-up petition was not maintainable. This conclusion was supported by the precedent set in IBA Health (India) Private Limited v. Info-Drive Systems SDN. BHD.
2. Jurisdictional Competence of the North Carolina Court: The Court scrutinized whether the North Carolina Court had the jurisdiction to try a claim for damages against an Indian company. It was found that the Respondent company, with its principal place of business in Calcutta, did not fall under the territorial jurisdiction of the North Carolina Court. The Court cited A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem and V. Sreedharan v. T.T. Nanu to support its conclusion that the situs of the contract and the cause of action did not confer jurisdiction to the North Carolina Court. Additionally, the Court held that the Respondent's pro-se response did not amount to acquiescence to the jurisdiction of the U.S. Court.
3. Conclusiveness of the Foreign Judgment under Section 13 of the Code of Civil Procedure: The Court examined whether the foreign judgment was conclusive under Section 13 of the Code of Civil Procedure. It was held that the North Carolina Court's judgment was not conclusive as it was not given on the merits of the case and was obtained by fraud. The Court cited R. Viswanathan v. Rukn Ul Mulk Syed Abdul Wajid and Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi to support its findings.
4. Alleged Fraud and Suppression of Material Facts by the Petitioner: The Court found that the Petitioner had obtained the decree by suppressing relevant materials, such as the Certificates of Inspection, which indicated that the goods were of contracted standards and dispatch-worthy. This suppression amounted to fraud under Section 17 of the Indian Contract Act. The Court cited Sankaran Govindan v. Lakshmi Bharathi and Satya v. Teja Singh to support its conclusion that the foreign judgment was obtained by fraud and thus could not be enforced in India.
5. Specification of Contracted Goods and Damage Quantification: The Court observed that there was a lack of certainty regarding the specification of the contracted goods. The Plaintiff had approved the shipment of goods conforming to "Carolina Pacific Trading Standards," but later claimed damages for goods not meeting the "IHPA Standards." The Court found that the damage quantification by the North Carolina Court was not based on any evidence and was thus perverse. The Court cited Karsandas H. Thacker v. Saran Engineering Company Limited and National Diary Development Board, Bhavanagar v. M/s Gograj Agarwalla and Company to support its findings.
6. Applicability of the Indian Limitation Act: The Court held that the suit for damages filed in the North Carolina Court was beyond the prescribed period of limitation under Indian law, specifically Article 55 of the Schedule to the Indian Limitation Act, 1963. The Court cited Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. to support its conclusion that the foreign judgment was opposed to the fundamental policy of Indian law and thus could not be enforced in India.
Conclusion: The Court concluded that the North Carolina Court's decree was not conclusive and enforceable in India as it was hit by multiple exceptions under Section 13 of the Code of Civil Procedure. The objections raised by the Respondent were substantive and not merely procedural. The winding-up petition was dismissed without any order of cost, and the Court declared that the proceeding was not maintainable.
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2011 (5) TMI 1068
Issues Involved: 1. Whether a Public Sector Enterprise/Undertaking (PSU) with outstanding dues from a sick company under SICA falls within the definition of "other authority" u/s 19(1) of SICA and is entitled to the benefits of Sub-section (2) of Section 19 of SICA. 2. Whether the unpaid balance price for goods supplied falls within the definition of "Financial Assistance" by way of loans, advances, or guarantees or reliefs or concessions or sacrifices.
Summary:
Issue 1: Definition of "Other Authority" u/s 19(1) of SICA - The court examined whether a PSU with outstanding dues from a sick company qualifies as "other authority" u/s 19(1) of SICA, thereby entitling it to prior notice u/s 19(2) of SICA. - Respondent No. 1, a PSU, argued it should be treated as "State" under Article 12 of the Constitution of India and thus covered under "other authority" in Section 19(1) of SICA. - The AAIFR had accepted this argument, stating that the term "other authority" in Section 19(1) of SICA takes its color from Article 12 of the Constitution. - The court, however, clarified that the expression "other authority" in Section 19(1) of SICA should be read ejusdem generis with "a public financial institution or State level institution," and not extended to include all entities covered under Article 12. - The court concluded that Respondent No. 1 does not fall within the definition of "other authority" u/s 19(1) of SICA.
Issue 2: Definition of "Financial Assistance" - The court examined whether the unpaid balance price for goods supplied falls within the definition of "Financial Assistance" by way of loans, advances, or guarantees or reliefs or concessions or sacrifices. - It was argued that the unpaid price for goods supplied does not constitute a loan, advance, or guarantee. - The court held that "financial assistance" u/s 19(1) of SICA refers to loans, advances, guarantees, or reliefs, concessions, or sacrifices related to such financial transactions. - The unpaid price for goods supplied does not fall within this definition, and thus Respondent No. 1 is not entitled to the benefits of Section 19(2) of SICA.
Conclusion: - The court ruled that Respondent No. 1 is not covered within the definition of "other authority" u/s 19(1) of SICA and the unpaid price does not qualify as financial assistance. - Consequently, Respondent No. 1 is to be treated as an "unsecured creditor" and entitled to only 10% of the principal amount as per the sanctioned scheme. - The writ petition was allowed, and the impugned order of the AAIFR dated 12.10.2010 was set aside.
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2011 (5) TMI 1067
Issues Involved: 1. Jurisdiction of the Competition Commission of India (CCI). 2. Alleged anti-competitive agreements under Section 3 of the Competition Act. 3. Definition of the relevant market. 4. Dominance of the Distribution Companies (DISCOMs) in the relevant market. 5. Alleged abuse of dominance under Section 4 of the Competition Act.
Detailed Analysis:
Issue 1: Jurisdiction of the CCI The CCI sought the views of the Delhi Electricity Regulatory Commission (DERC), which stated that while matters relating to electricity tariffs fall under the DERC, issues of abuse of dominance by DISCOMs could be examined by the CCI. The Commission clarified that its mandate is to eliminate practices having adverse effects on competition, promote competition, protect consumer interests, and ensure freedom of trade. The CCI and sectoral regulators have complementary roles. Therefore, the CCI has jurisdiction to examine the issues of abuse of dominance by DISCOMs.
Issue 2: Alleged Anti-Competitive Agreements The informant alleged that DISCOMs had entered into anti-competitive agreements causing an appreciable adverse effect on competition. However, the DG found no evidence to support these allegations. The informant did not provide any material to substantiate the claims, and no evidence was found during the investigation to establish contravention of Section 3 of the Act. Therefore, the CCI concluded that there was no violation of Section 3.
Issue 3: Definition of the Relevant Market The DG defined the relevant market as the distribution and supply of electricity and allied facilities like metering and billing in the respective areas of the three DISCOMs. The DISCOMs contended that the relevant market should be the supply of electricity to consumers in the licensed area of supply in Delhi. The CCI agreed with the DG's definition, noting that electricity is a specialized product with no substitutes, and the conditions for supply are distinctly homogeneous within the licensed areas. Therefore, the relevant market was defined as the distribution and supply of electricity in the licensed areas of the respective DISCOMs.
Issue 4: Dominance of the DISCOMs in the Relevant Market The CCI found that each of the three DISCOMs had a dominant position in their respective areas of operation. The DISCOMs had the ability to operate independently of competitive forces due to their exclusive areas for distribution and supply of electricity. The CCI determined that the DISCOMs enjoyed a monopoly in their respective areas, and thus, held a dominant position in the relevant market.
Issue 5: Alleged Abuse of Dominance The informant alleged that DISCOMs were abusing their dominant position by imposing unfair and discriminatory conditions in the purchase of goods (electricity meters) and services. The DG's investigation revealed that the DISCOMs restricted the supply of meters to those provided by them or their approved vendors, limiting consumer choice and creating entry barriers for other meter manufacturers. The DG also found that a significant percentage of meters tested showed positive errors, leading to inflated bills for consumers. However, the CCI noted that the sample size of meters tested was too small to be representative of all consumers. Despite this, the CCI concluded that the DISCOMs had imposed unfair conditions on consumers by restricting their choice of meters, which amounted to an abuse of dominance under Section 4(2)(a)(i) of the Act.
Supplementary Order: A supplementary order by a member of the CCI highlighted the issue of consumer choice in the meter market, noting that the DISCOMs had restricted the market to their approved vendors, thereby denying market access to other manufacturers. The supplementary order found that the DISCOMs' practices amounted to an abuse of dominance by creating entry barriers and foreclosing competition in the meter market.
Final Decision: The CCI concluded that the DISCOMs had abused their dominant position in the relevant markets of distribution and supply of electricity and meters by imposing unfair conditions on consumers and denying market access to other meter manufacturers. The CCI directed the DISCOMs to cease and desist from such practices, publish accurate information on their websites, and take steps to make consumers aware of their right to procure meters of their choice. The CCI also suggested that the sectoral regulator take necessary actions to address the issue.
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2011 (5) TMI 1066
Issues Involved: 1. Whether the changes made in the Mutual Fund scheme altered its fundamental attributes or modified the same affecting the interest of unitholders, attracting the provisions of Regulation 18(15A) of the SEBI (Mutual Funds) Regulations, 1996. 2. Whether the Board of Trustees and the Fund contravened Regulations 18(9) & 18(22) and Clauses 2, 6, and 9 of the Code of Conduct prescribed under the Fifth Schedule of the Mutual Funds Regulations. 3. Whether the Asset Management Company (AMC) contravened Regulations 18(9), 18(22), 25(1) & 25(16) and Clauses 2, 6, and 9 of the Code of Conduct prescribed under the Fifth Schedule of the Mutual Funds Regulations. 4. Whether the Chief Executive Officer of the AMC failed to ensure compliance with all provisions of the Regulations, Guidelines, and Circulars, violating Regulation 25(6A) of the Mutual Funds Regulations.
Detailed Analysis:
Issue 1: Changes in Fundamental Attributes The core question was whether the changes made by Respondents 2 to 5 in the Mutual Fund scheme altered its fundamental attributes or modified the scheme affecting the interest of unitholders, thus attracting Regulation 18(15A) of the SEBI (Mutual Funds) Regulations, 1996. The appellants argued that the changes, including extending the investment duration from 5-7 years to a period not exceeding 15 years, changing the scheme's name by dropping "SHORT TERM," and altering the benchmark index, significantly affected the scheme's fundamental attributes. The Tribunal concurred, noting that the duration of investment is a fundamental attribute, and altering it without informing unitholders or providing an exit option violated Regulation 18(15A).
Issue 2: Contravention by Board of Trustees and the Fund The Board of Trustees and the Fund were found to have contravened Regulations 18(9) & 18(22) and Clauses 2, 6, and 9 of the Code of Conduct prescribed under the Fifth Schedule of the Mutual Funds Regulations. These provisions mandate that trustees must ensure compliance with all regulations and act in the best interest of unitholders. The Tribunal upheld the findings that the Board of Trustees and the Fund failed to adhere to these obligations.
Issue 3: Contravention by the AMC The AMC was found to have violated Regulations 18(9), 18(22), 25(1) & 25(16) and Clauses 2, 6, and 9 of the Code of Conduct prescribed under the Fifth Schedule of the Mutual Funds Regulations. The Tribunal agreed with the findings that the AMC did not ensure compliance with the regulations and failed to act in the best interest of the unitholders, thereby breaching the code of conduct.
Issue 4: CEO's Failure to Ensure Compliance The Chief Executive Officer of the AMC was found to have failed in ensuring that the Fund/AMC complied with all provisions of the Regulations, Guidelines, and Circulars issued from time to time, violating Regulation 25(6A) of the Mutual Funds Regulations. The Tribunal upheld the findings that the CEO did not fulfill his duty to ensure regulatory compliance.
Conclusion: The Tribunal allowed the appeal, setting aside the findings of the whole time member on the first issue and holding that the changes in the scheme altered its fundamental attributes and modified the same affecting the interest of the unitholders. The Tribunal directed Respondents 2 to 5 to comply with Regulation 18(15A) of the Regulations concerning the appellants and provide them with an exit route. The appellants were also directed to furnish adequate proof of the price at which they exited the scheme. The Tribunal exercised its powers under Rule 21 of the Securities Appellate Tribunal (Procedure) Rules, 2000 to secure the ends of justice. Each party was left to bear its own costs.
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2011 (5) TMI 1065
Challenging the order of H.C for cancelling bail order passes by Session Court - Fake Police Encounter or not - HELD THAT:- this is a very serious case and cannot be treated like an ordinary case. The accused who are policemen are supposed to uphold the law, but the allegation against them is that they functioned as contract killers. Their version that deceased Ramnarayan Gupta was shot in a police encounter has been found to be false during the investigation. It is true that we are not deciding the case finally as that will be done by the trial court where the case is pending, but we can certainly examine the material on record in deciding whether there is a prima facie case against the accused which disentitles them to bail.
The appeals are dismissed, but it is made clear that the trial court will decide the criminal case against the appellants uninfluenced by any observations made in this judgment, or in the impugned judgment of the High Court.
We are of the view that in cases where a fake encounter is proved against policemen in a trial, they must be given death sentence, treating it as the rarest of rare cases. Fake ‘encounters’ are nothing but cold blooded, brutal murder by persons who are supposed to uphold the law. In our opinion if crimes are committed by ordinary people, ordinary punishment should be given, but if the offence is committed by policemen much harsher punishment should be given to them because they do an act totally contrary to their duties.
The ‘encounter’ philosophy is a criminal philosophy, and all policemen must know this. Trigger happy policemen who think they can kill people in the name of ‘encounter’ and get away with it should know that the gallows await them.
In the Shanti Parva of Mahabharat Vol. 1 it is stated:- “Raja chen-na bhavellokey prithivyaam dandadharakah Shuley matsyanivapakshyan durbalaan balvattaraah” - This shloka means that when the King carrying the rod of punishment does not protect the earth then the strong persons destroy the weaker ones, just like in water the big fish eat the small fish. In the Shantiparva of Mahabharata Bheesma Pitamah tells Yudhishthir that there is nothing worse in the world than lawlessness, for in a state of Matsyayaya, nobody, not even the evil doers are safe, because even the evil doers will sooner or later be swallowed up by other evil doers.
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2011 (5) TMI 1064
Issues Involved: 1. Whether the application submitted by the appellant No. 3 on 30th May, 2001, for repurchase of US64 units was incomplete and liable to be rejected. 2. Interpretation of the terms of the brochure and statutory requirements under the Companies Act, 1956. 3. Whether the respondent could reject the application based on the absence of a Board resolution for disinvestment. 4. Applicability of Section 292 of the Companies Act, 1956, to the repurchase application. 5. Whether a writ petition is maintainable in this context.
Issue-Wise Detailed Analysis:
1. Incompleteness of the Application: The core issue was whether the application submitted by appellant No. 3 on 30th May, 2001, was incomplete and thus liable to be rejected. The learned Single Judge had dismissed the writ petition, holding that the application was incomplete due to the absence of a Board resolution for disinvestment. However, the appellants argued that the application was complete as per the terms of the brochure and statutory requirements.
2. Interpretation of Brochure Terms and Statutory Requirements: The brochure provided detailed instructions for the repurchase of US64 units, requiring units to be duly discharged and submitted except during book closure. The appellant No. 3 complied with these requirements, including providing bank account details as per clause 10 of the brochure. The respondent's rejection was based on the absence of a Board resolution for disinvestment, which was not explicitly required by the brochure.
3. Requirement of Board Resolution: Clause 20(6) of the brochure required certain documents at the time of purchase but did not stipulate the need for a Board resolution for repurchase. The person who submitted the repurchase application and discharged the certificates was the same individual authorized by the resolution for purchase. The respondent's argument that 'investment' includes 'disinvestment' was found to be self-contradictory. If 'investment' includes 'disinvestment,' the same resolution authorizing the Managing Director to invest would also cover disinvestment.
4. Applicability of Section 292 of the Companies Act, 1956: Section 292(1)(d) of the Act deals with the power to invest funds, which requires a Board resolution. However, the court found that submission of a Board resolution to a third party is not a statutory requirement under Section 292. The doctrine of indoor management applies unless there are grounds for suspicion, which were not present in this case. The respondent could not assume non-compliance with Section 292 without evidence.
5. Maintainability of Writ Petition: The court held that a writ petition is maintainable against a state instrumentality acting arbitrarily, even in contractual matters. The appellants had approached the court under Article 226, and the court found that the respondent's actions were arbitrary and not in accordance with the agreed terms.
Conclusion: The appeal was allowed, and the letter of rejection dated 16th June, 2001, was quashed. The respondent was directed to pay Rs. 19,60,728/- with simple interest @ 8% per annum from 1st August, 2001, until payment is made. The court emphasized that the respondent could not unilaterally impose fresh conditions not mentioned in the brochure and that the decision-making process was flawed.
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2011 (5) TMI 1063
Issues Involved: 1. Quashing of criminal proceedings by the High Court. 2. Exercise of power u/s 482 Cr.P.C. by the High Court. 3. Role of Magistrate in taking cognizance of police reports u/s 173 and 190 Cr.P.C.
Summary:
Issue 1: Quashing of criminal proceedings by the High Court The High Court of Punjab and Haryana quashed the criminal proceedings against respondents Nos. 1 and 2 based on a report from the Superintendent of Police, City-II, Ludhiana, which recommended dropping the case against them. The High Court's order dated 25.03.2008 quashed the proceedings initiated pursuant to DDR No.15 dated 13.12.2004 and directed that the criminal proceedings against the appellant initiated pursuant to F.I.R. No. 276 dated 12.12.2004 shall not be affected.
Issue 2: Exercise of power u/s 482 Cr.P.C. by the High Court The Supreme Court held that the power u/s 482 Cr.P.C. is to be exercised only in exceptional circumstances. The High Court should not have exercised this power to quash the criminal proceedings when the Magistrate had not yet applied his judicial mind u/s 190 Cr.P.C. to the police reports filed u/s 173 Cr.P.C. The inherent power of the High Court cannot be exercised in matters specifically covered by other provisions of the Code, as established in R. P. Kapur v. State of Punjab [AIR 1960 SC 866].
Issue 3: Role of Magistrate in taking cognizance of police reports u/s 173 and 190 Cr.P.C. The Supreme Court emphasized that it is the Magistrate's role to apply judicial mind to the police reports submitted u/s 173(2) and 173(8) Cr.P.C. and decide whether to take cognizance of the offence. The Magistrate must consider the facts and evidence presented in both the initial and further investigation reports. This interpretation aligns with the precedent set in Abhinandan Jha & Ors. v. Dinesh Mishra [AIR 1968 SC 117] and Mrs. Rupan Deol Bajaj & Anr. v. Kanwar Pal Singh Gill & Anr. [AIR 1996 SC 309].
Conclusion: The appeal is allowed, and the impugned order dated 25.03.2008 is set aside. The police are directed to forward the further report of the Superintendent of Police, City-II, Ludhiana, to the Magistrate concerned. The Magistrate will then apply his mind to the police report and the further investigation report and take a final decision in accordance with the law after considering any objections from the appellant.
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2011 (5) TMI 1062
Issues Involved: 1. Restoration of Petitioner's Land 2. Validity of Orders Dated 6.4.2011 and 8.4.2011 3. Legality of the 1987 Allotment 4. Relevance of Iqbal Ahmad Case 5. Adequacy of Alternative Land Offer 6. Status of Land as Public Utility 7. Review of 1987 Order 8. Conduct of Sub-Divisional Officer 9. Power of Review by Settlement Officer Consolidation 10. Final Judgment and Costs
Summary:
1. Restoration of Petitioner's Land: The matter was adjourned to allow the learned Standing Counsel to file affidavits on how the petitioner's land could be restored. The petitioner was dislodged from land validly allotted to him in exchange for his original holding u/s 19-A(2) read with Section 44-A of the U.P.C.H. Act, 1953. The land was originally taken for constructing a public road. The petitioner continued in possession until the respondents interfered, citing the land as pasture land. The petitioner sought relief through a writ petition, which led to orders dated 6.4.2011 and 8.4.2011 being passed without notice, recalling the 1987 order.
2. Validity of Orders Dated 6.4.2011 and 8.4.2011: The respondents admitted that the orders were passed without giving notice or opportunity to the petitioner, violating principles of natural justice. The court quashed these orders, noting they were issued after 23 years without proper justification.
3. Legality of the 1987 Allotment: The court upheld the 1987 allotment, stating it was done in public interest and not for the petitioner's individual benefit. The exchange was made under the provisions of Section 19-A(2) and Section 44-A of the U.P.C.H. Act, 1953, and was legally sustainable.
4. Relevance of Iqbal Ahmad Case: The court found that the Iqbal Ahmad case did not consider Section 19-A(2) and was not relevant to the present case. The decision in Ram Kumar was more applicable, supporting the legality of the 1987 allotment.
5. Adequacy of Alternative Land Offer: The alternative land offered (Plot No. 293 M) was deemed inappropriate and not equivalent, as it was located half a kilometer away from the original land. The court found the offer insufficient to compensate the petitioner.
6. Status of Land as Public Utility: The land allotted to the petitioner ceased to be public utility land once he surrendered his original holding for constructing a public road. The transaction was transparent and not collusive or fraudulent.
7. Review of 1987 Order: The court noted that the Settlement Officer Consolidation reviewed the 1987 order without any allegations of fraud, misrepresentation, or mistake. The review was deemed unjustified after 23 years.
8. Conduct of Sub-Divisional Officer: The Sub-Divisional Officer's request to expunge the petitioner's name was found to be baseless and mischievous. The delay in addressing the issue was not justified, and the authorities' sudden action was seen as malicious.
9. Power of Review by Settlement Officer Consolidation: The Settlement Officer Consolidation had no power to review the 1987 order after 23 years without notice to the petitioner. The review was based on half-baked legal advice and amounted to malice in law.
10. Final Judgment and Costs: The writ petition was allowed, and the orders dated 6.4.2011 and 8.4.2011 were quashed. The petitioner was entitled to retain his land under the 1987 order. The respondents were restrained from interfering with the petitioner's possession. Costs were imposed on the Sub-Divisional Magistrate, Tehsildar, and Settlement Officer Consolidation, to be deducted from their salaries, with entries made in their service records.
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2011 (5) TMI 1061
Issues involved: Appeals against orders u/s 263 of the Income-tax Act, 1961 for Assessment Years 2002-03 to 2008-09.
Summary: 1. The appeals were filed by the assessee challenging the jurisdiction of the Commissioner of Income-tax u/s 263 of the Act, which set aside the assessment orders and directed the Assessing Officer to reframe the orders de novo due to withdrawal of registration granted u/s 12AA. 2. The Tribunal considered the arguments of the assessee and the Department. The registration granted to the assessee trust u/s 12AA was withdrawn by the CIT, leading to the assessment orders being deemed erroneous and prejudicial to the Revenue's interest. The CIT set aside the original assessment orders based on this withdrawal. 3. The Tribunal reviewed a previous order where the registration u/s 12AA was restored to the assessee trust, rendering the basis for considering the assessment orders as erroneous and prejudicial to the Revenue's interest by the CIT as non-existent. As the Tribunal had already restored the registration, the assessment orders could not be deemed erroneous or prejudicial, leading to the appeals of the assessee being allowed.
Separate Judgement by Tribunal: - The Tribunal, in a separate judgment, held that the withdrawal of registration granted to the assessee under sec.12AA was not sustainable in law. The Tribunal found that the reasons cited by the CIT for canceling the registration were not valid, especially regarding the acceptance of capitation fees and diversion of funds. The Tribunal directed the CIT to vacate the order canceling the registration and restore the registration granted under sec.12AA.
Conclusion: The Tribunal's decision to restore the registration u/s 12AA to the assessee trust invalidated the grounds on which the assessment orders were considered erroneous and prejudicial by the CIT. As a result, the orders of the CIT were set aside, and the appeals of the assessee were allowed.
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2011 (5) TMI 1059
Issues involved: Adjudication on the disallowance of bad debts u/s 143(3) of the I.T. Act, 1961 for the assessment year 2006-2007.
Adjudication on Disallowance of Bad Debts: The Appellate Tribunal was tasked with determining whether the CIT(A) was justified in upholding the disallowance of Rs. 33,60,396 on account of bad debts. The assessee, a 100% exporter of pharmaceutical, leather, and engineering products, had claimed deduction for bad debts during assessment proceedings. The Assessing Officer disallowed the amount, citing that exports are typically done against letters of credit and to known parties, and that the assessee had already claimed a deduction u/s 80 HHC for the same exports. The CIT(A) upheld the disallowance as the assessee failed to produce RBI permission for the write-off of debts. However, the Tribunal found that the grant of deduction for bad debts, even for exporters, does not constitute double benefit as unrealizable amounts excluded from export turnover for section 80 HHC deduction. Citing precedent and legal principles, the Tribunal held that the assessee was entitled to the deduction for bad debts, directing the Assessing Officer to delete the disallowance.
Conclusion: The Tribunal allowed the appeal, ruling in favor of the assessee and ordering the deletion of the disallowance of bad debts. The decision was pronounced on 31st May 2011.
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2011 (5) TMI 1058
Issues Involved: 1. Deletion of disallowance of unexplained purchases/subcontract expenses. 2. Deletion of addition on account of undervaluation of work-in-progress. 3. Deletion of addition on account of undervaluation of closing stock. 4. Confirmation of addition of unexplained purchase/subcontract expenses.
Summary:
Issue 1: Deletion of Disallowance of Unexplained Purchases/Subcontract Expenses The A.O. made an addition of Rs. 79,93,638/- on account of unexplained purchases and subcontract expenses, citing that the assessee failed to produce the parties and the suppliers were mere book entries without physical delivery of goods. The C.I.T.(A) deleted Rs. 75,53,591/- of this addition, noting that the assessee provided sufficient material to prove the genuineness of the expenses, including names, addresses, confirmation letters, copies of accounts, and invoices. The C.I.T.(A) applied a net profit rate of 4% on contract receipts, resulting in an addition of Rs. 4,40,047/-.
Issue 2: Deletion of Addition on Account of Undervaluation of Work-in-Progress The A.O. added Rs. 25,86,256/- for undervaluation of work-in-progress, estimating 15% of the billed amount as work-in-progress. The C.I.T.(A) deleted this addition, observing that the assessee justified the closing work-in-progress with cogent evidence and valid reasons. The C.I.T.(A) noted that the A.O.'s estimation lacked basis and supporting evidence and that the net profit rate estimation covered any lapses in the maintenance of books of account.
Issue 3: Deletion of Addition on Account of Undervaluation of Closing Stock The A.O. added Rs. 12,95,251/- for undervaluation of closing stock, noting discrepancies in the physical stock of goods. The C.I.T.(A) deleted this addition, accepting the assessee's contention that the materials were accounted for in the month of March and that the transportation charges were incurred regularly. The C.I.T.(A) noted that the net profit rate estimation covered the lapses in stock valuation.
Issue 4: Confirmation of Addition of Unexplained Purchase/Subcontract Expenses The revenue challenged the deletion of Rs. 75,53,591/- while the assessee contested the sustained addition of Rs. 4,40,047/-. The Tribunal upheld the C.I.T.(A)'s order, confirming the application of the net profit rate for estimating income and rejecting the books of account indirectly. The Tribunal found the net profit rate estimation to be a fair and reasonable method under the circumstances.
Conclusion: The Tribunal confirmed the C.I.T.(A)'s order, dismissing both the revenue's appeal and the assessee's cross-objection. The net profit rate estimation was upheld as a reasonable basis for determining the assessee's income, and no separate additions for work-in-progress or closing stock were warranted. The order was pronounced in the open court on 13-05-2011.
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2011 (5) TMI 1057
Issues Involved: 1. Validity of ex parte assessment u/s 144 without show cause notice. 2. Justification of invoking provisions of section 145(3) and rejecting books of accounts. 3. Estimation of net profit by the CIT(A). 4. Limitation of assessment. 5. Levy of interest u/s 234B and 234C.
Summary:
1. Validity of ex parte assessment u/s 144 without show cause notice: The assessee contended that the ex parte assessment finalized u/s 144 was invalid as no show cause notice was issued and served as required by the 2nd proviso to section 144(1). The Commissioner of Income-tax (Appeals) held that the assessment u/s 144 was justified as the assessee failed to comply fully with the terms of notices issued u/s 142(1) or 143(2). However, the Tribunal found that the assessee had provided information, albeit not satisfactorily to all queries, and thus, invoking section 144 was unjustified. The Tribunal concluded that non-satisfaction with the responses does not constitute failure to comply with notices, thereby partly succeeding the assessee on this ground.
2. Justification of invoking provisions of section 145(3) and rejecting books of accounts: The Assessing Officer invoked section 145(3) and rejected the books of accounts due to discrepancies and lack of verification of purchases, closing stock, and labour payments. The Commissioner of Income-tax (Appeals) upheld this action, noting that the accounts were unreliable. The Tribunal agreed with the lower authorities, finding no credible material to interfere with the rejection of the trading results declared by the assessee.
3. Estimation of net profit by the CIT(A): The CIT(A) estimated the net profit at Rs. 61.41 lakhs, while the Assessing Officer had estimated it at Rs. 91,46,674/-. The Tribunal found the estimation at 8% of contract receipts to be on the higher side and reduced it to 6%, considering the facts and circumstances. The Tribunal upheld the estimation for sub-contract and road roller hiring as adopted by the CIT(A).
4. Limitation of assessment: Ground No. 4 regarding the assessment being barred by limitation was not pressed by the assessee's counsel during the hearing and was dismissed as not pressed.
5. Levy of interest u/s 234B and 234C: Ground No. 5 relating to the levy of interest u/s 234B and 234C was deemed consequential and required no adjudication.
Conclusion: The appeal of the assessee was partly allowed, with the Tribunal reducing the estimated net profit rate and finding the invocation of section 144 unjustified. The decision was pronounced on May 13, 2011.
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2011 (5) TMI 1056
Issues involved: Appeal against order of CIT (A) for assessment year 2005-06 on grounds of arbitrariness, exceeding jurisdiction, violation of instructions, disallowance u/s 14A, understatement of income, dismissal of appeal, and additional grounds.
Grounds 1-3: Dismissed as not pressed during hearing.
Grounds 4 & 5 (Disallowance u/s 14A): Assessee pointed out arithmetical mistake by Assessing Officer in treating long term capital gain, issue restored for recomputation following Godrej Boycee Manufacturing Co. Ltd. vs. DCIT [2010] 328 ITR 81 (Bombay).
Ground 6 (Understatement of income): Assessee argued conversion of stock-in-trade to investment not prohibited by Income Tax Act, CIT (A) upheld addition based on CBDT instructions and Supreme Court principles, but error in calculation acknowledged, issue restored for recomputation.
Grounds 7 & 8: General in nature, no adjudication required.
Conclusion: Appeal partly allowed for statistical purposes, issue of understatement of income restored for recomputation by Assessing Officer based on correct calculation.
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