|
Advanced Search Options
Case Laws
Showing 1 to 20 of 1280 Records
-
2014 (9) TMI 1287 - DELHI HIGH COURT
Suit for recovery of money - Bar under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) - HELD THAT:- The issue that a simple suit for recovery of moneys is not barred by Section 22 of SICA is clear from the judgment of the Supreme Court in the case of Raheja Universal Limited Vs. NRC Limited and Ors. [2012 (10) TMI 233 - SUPREME COURT].
The ratio of this judgment of the Supreme Court in the case of Apollo International Ltd. Vs. Supriya Pharmaceuticals Ltd. [2012 (10) TMI 1275 - DELHI HIGH COURT] applied in the case of Apollo International Ltd. where it was held that 'In the present case, the suit for recovery of money is a suit for recovery of money simplicitor. Counsel for the plaintiff does not press the interim applications under Order 38 Rule 5 of Code of Civil Procedure, 1908 (CPC) and Order 39 Rules 1 and 2 CPC. Accordingly, in the subject suit, there is no threat to the liquidation of the assets of the sick company and therefore no prior permission is required under Section 22 of SICA.'
Therefore, looking at it from any view of the matter that earlier a similar application was dismissed, the fact that petitioner had failed to comply with the repeated directions of the court to show that debt of the respondent/plaintiff was included in the scheme of rehabilitation, that every suit for recovery of moneys does not require prior permission under Section 22 of SICA, and the fact that now since the petitioner/defendant-company is out of BIFR and as stated in the present petition, there is no merit in the petition which is therefore dismissed.
-
2014 (9) TMI 1286 - PUNJAB AND HARYANA HIGH COURT
Seeking quashing of the FIR - there was neither sale nor purchase of the goods - evasion of tax - HELD THAT:- After going through the facts of the present case, this Court is of the view that under the VAT Act, 2005, there is a complete Code for initiate proceedings against a consignee, who makes an attempt to evade the tax. Registration of FIR would amount to an abuse of the process of Court and this fact had not been disputed by the respondents at the time when CRM-M-24853 of 2012 was allowed on 30.04.2013 (Annexure P-3). Since the Act provides for recovery and imposition of penalty, if an attempt is made to evade payment of VAT, registration of FIR is liable to be quashed.
Resultantly, FIR No. 104 dated 25.07.2012, under Sections 420, 467, 471, 120-B IP, registered at Police Station, Shambhu, District Patiala (Annexure P-1) is quashed with all consequential proceedings arising therefrom qua the petitioner.
Petition allowed.
-
2014 (9) TMI 1285 - DELHI HIGH COURT
Seeking directions to disburse the amount to the workers out of the available funds in the account of the company between the secured creditors and workers based on a calculation - HELD THAT:- The order is being passed to balance equities especially amongst the thousands of workmen of the appellant union, who are languishing and deprived of their legitimate dues for decades. In these facts, it cannot be denied that in the instant case interest of justice mandates that the amounts of the company including not only the principal amount received from the sale of its assets but also the accruals thereon in the nature of interest etc. be restored to the credit of the company and be made available for full and final disbursement between the creditors of the company.
There is no objection to the acceptance of the One Time Settlement as well as the entitlement of 2018 workers who were members of the appellant union in the sum of Rs.14,64,88,422/- as full and final payment to these workers. The same is hereby accepted.
The parties have stated on affidavits that they would not have any objection to the disbursement of One Time Settlement amount to the appellant. The parties shall remain bound by the consent, which they have given before us on affidavit. All claims of the appellant-Union’s 2018 workers shall stand finally satisfied upon receipt of the disbursement of the amount in terms of the One Time Settlement to them. It shall not be open for them to make any other or further claim after they receive the amounts thereof, which shall be in full and final settlement of all claims.
The Official Liquidator shall credit the account of the company with all amounts credited to the Common Pool Fund from the sale proceeds of the units of the company under liquidation after 1st November, 2005 till 13th August 2013 - Appeal disposed off.
-
2014 (9) TMI 1284 - PUNJAB AND HARYANA HIGH COURT
Seeking grant of Regular bail - 12 plastic bags were recovered while checking trenches and the same were supposedly be containing narcotic substance - commercial quantity of narcotic substance - HELD THAT:- Section 173(i) of the Cr.P.C. clearly shows that the investigation is to be completed without any unnecessary delay and as per provisions contained under Section 173(ii) of the Cr.P.C., the challan is to be filed on completion of investigation only and not prior to that. Thus, it is clear that the trial Court is to accept the challan only on completion of investigation and by considering that all allegations levelled in the FIR have been investigated completely and charge can be framed only after considering the complete investigation report.
In the present case, the charge has been framed against the petitioner without obtaining Chemical Examiner's Report and in the absence of Chemical Examiner's Report in case of NDPS Act, it cannot be said as to whether the substance found in the bags recovered from the petitioner was a narcotic substance or not. In the absence of CFSL report, the trial Court cannot take cognizance of the offence and in the absence of Chemical Analysis Report, the charge sheet/challan cannot be said to be completed. Failure to file complete charge-sheet within a prescribed period confers on the accused right to be released on bail and the court is not competent to take cognizance of the offence on incomplete charge-sheet. Charge sheet is not complete unless it is accompanied by requisites contemplated under Section 173(5) of the Code.
In the present case, the incomplete challan has been presented without having any Chemical Examiner's Report and even the charges were framed as the Chemical Examiner's Report is of subsequent date. The petitioner is in custody since 21.11.2013.
The trial Court is directed to send its report explaining therein as to how the charges have been framed without having any Chemical Examiner's Report as the Chemical Examiner's Report is of subsequent date of the order of framing of charge. The necessary explanation be submitted before this Court within a period of two weeks from the date of receipt of copy of this Order.
Adjourned to 30.10.2014.
-
2014 (9) TMI 1283 - ALLAHABAD HIGH COURT
Seeking enlargement on bail during the trial - bail sought on the ground of parity - HELD THAT:- This Court is of the view that the applicant has made out a case for grant of bail on the ground of parity.
Let the applicant, Mitthan Yadav be released on bail on his executing a personal bond and furnishing two sureties each in the like amount to the satisfaction of the court concerned in Case Crime No. 237 of 2013, under sections 147, 148, 149, 302, 307, 394, 411, 454, 506, 120B and 34 I.P.C., P.S. Kavinagar, district-Ghaziabad with the conditions imposed - application allowed.
-
2014 (9) TMI 1282 - SUPREME COURT
Illegal gratification - prosecution has failed to prove the offence Under Section 7 of Prevention of Corruption Act, 1988 - HELD THAT:- When PW1 Ramesh himself had disowned what he has stated in his initial complaint in Exh.P1 before PW4 Inspector Santosh Kumar and there is no other evidence to prove that the accused had made any demand, the evidence of PW3 Kumaraswamy and the contents of Exh.P1 complaint cannot be relied upon to conclude that the said material furnishes proof of demand allegedly made by the accused. The High Court was not correct in holding the demand alleged to be made by the accused as proved. Mere possession and recovery of the currency notes from the accused without proof of demand will not bring home the offence Under Section 13(1)(d) of the Act and the conviction and sentence imposed on the Appellant are liable to be set aside.
The conviction and sentence imposed on the Appellant/accused Under Section 13(1)(d) read with Section 13(2) of the Act are set aside and he is acquitted of the charges - Appeal allowed.
-
2014 (9) TMI 1281 - SUPREME COURT
Money Laundering - Embezzlement of huge funds from the Exchange - irregularities in the allotment of shares of NMCE to NOL, including misuse/misappropriation of Exchange funds - Misuse of Exchange funds - Illegal payments from NMCE to his family members and other - HELD THAT:- It is informed that the petitioner evaded arrest from 26-4-2012 to 30-3-2013. His son, who is one of the main accused, is refusing to join investigation. The petitioner made a statement that his son will return to India to join investigation and this statement was recorded by the High Court in its order dated 30-7-2013. But till date, the assurance given to the High Court is not fulfilled. Even this Court had directed the petitioner to facilitate his son's coming back to India to join investigation, however, there is no positive response from the petitioner. His approach is evasive. There is no doubt that his purpose is to shield his son. The petitioner is, therefore, in breach of the condition imposed on him while granting provisional bail that he will cooperate with the investigating agency. The provisional bail was granted to him with the hope that the petitioner will cooperate with the Police. His conduct is to the contrary. The provisional bail, therefore, deserves to be cancelled and is accordingly cancelled. His bail bond stands cancelled.
The High Court has rightly declined bail to the petitioner. In our opinion, it is not necessary to interfere with the impugned order. Therefore, the Special Leave Petition is dismissed.
-
2014 (9) TMI 1280 - ITAT JODHPUR
Deduction u/s 80P(2)(a)(i) - assessee, is a Co-operative Credit Society in terms of Banking Regulation Act, 1949, and is engaged in providing credit facilities to its members - AO has treated the assessee society as a Agricultural Rural Development Bank and after applying Explanation appended to Section 80P(4) has disallowed deduction claimed, as exempt u/s 80P(2)(a)(i) - HELD THAT:- D.R. has relied on the order of Jaipur Bench rendered in the case of Kekri Sahakari Bhumi Vikas Bank Ltd. Vs ITO [2012 (6) TMI 407 - ITAT JAIPUR] a copy of which has been filed on record. We have carefully treaded through this order. In that case the facts indicated that it was involved in lending activities and, therefore, the matter was restored back to the file of ld. CIT(A). Therefore, no specific ratio decidendi is revealed from this order.
To the contrary, apart from assessee’s own case orders in other similar cases passed by this very Bench are available. In the case of Jodhpur Sahakari Bhoomi Vikas Bank Ltd., Mandore Road, Jodhpur Vs ITO [2014 (8) TMI 1238 - ITAT JODHPUR] the view favourable to the assessee has been taken. In assessee’s own case for other years the A.O. himself has allowed similar claim. Accordingly, we allow assessee’s claim, by following our earlier orders and in the consistency of finding by the A.O. and dismiss revenue’s appeal.
-
2014 (9) TMI 1279 - COMPANY LAW BOARD, KOLKATA
Preferential allotment - Under valuation of shares under Section 397/398 proceedings - major thrust of the submissions of the petitioners is based on the concept of equal shareholding of the parties, which has been claimed to exist since the inception of the company - HELD THAT:- The original partnership for running Glamor Polish Industries (GPI) which was subsequently taken over by the respondent company was not set up by joint participation of Late father of petitioner No. 1 and Late father of respondent No. 2. Further, the father of petitioner No. 1 became director in the company only on 14.10.1958, while the company was established in 1950. No further evidence has been brought on record by the petitioners to justify setting of the company jointly by the Late father of petitioner No. 1 and Late father of respondent No. 2. Therefore, the contentions of the petitioners that the company has been run on quasi-partnership principle having equal shareholding between the petitioners group and the respondents group are not acceptable.
Allotment of shares - HELD THAT:- There is no loss of negative control of the petitioners group as a result of impugned allotment. The case of Clemens is distinguishable because in that case, there were only two shareholders and a closely held family company between an aunt (55%) and a niece (45%) unlike the present case where there are numbers of shareholders and also directors, some of whom are outsiders. It is also pertinent to mention that the Articles of Association in the Clemens case, contained a negative covenant that provided non-transfer of shares unless a family member declines to accept the same which is not the case in the instant petition. Thus, the relevant case is of no assistance to the petitioners.
Time limitation - HELD THAT:- The petitioners did not challenge the impugned allotment within the limitation period as prescribed in law which is three years. In the case of ABP [2008 (1) TMI 967 - COMPANY LAW BOARD], it has been held that wrongful allotment of shares can have continuous effect so as to support a case of this nature. However, it is an admitted position in the instant case that post 1995 allotment, petitioner No. 1 and petitioner No. 2 have continuously accepted dividends based on their changed shareholdings without any opposition and thus, have acquiesced to the same and accordingly, are now estopped from raising any contention to the contrary - the petitioners have failed to make out any case against the rights issue of shares made in 1995 and therefore, no interference is called for on this aspect.
Preferential allotment of 4,00,000 equity shares of₹ 10/- each in consequence of an EoGM dated 21.08.2009 for cash at a premium of ₹ 5/- per share - HELD THAT:- With the evidence placed on records, it can be safely presumed that notice was received by petitioner No. 1 who chose not to attend as has been his practice of not attending any general meeting since 1999 - there is no plausible reason available to the petitioner to contend that notice was not received in 2009. Further emphasis has been placed by the respondents on the fact that majority of other shareholders have received such notices under UCP and had attended the meetings.
Allotment of 2,00,000 equity shares made on 23.03.2011 - HELD THAT:- The notices for convening of EoGM dated 23.03.2011 were duly received by petitioner No. 1 and petitioner No. 2 and the explanatory statements were also sent along with such notices. Special Resolution under Section 81(1A) of the Companies Act, 1956 was adopted in EoGM held on 23.03.2011 and the minutes in this regard clearly show that special resolutions were passed unanimously. Petitioner No. 1 and petitioner No. 2 did not attend such EoGM in spite of receipt of notices and did not place any objection to the passing of resolutions in the said meeting.
Valuation of shares arrived at by the company - HELD THAT:- Since the special resolutions have been passed by requisite number of shareholders and there has been strict compliance of Unlisted Public Companies (Preferential Allotment) Rules, 2013, duly certified by statutory auditors towards the allotment of shares and in absence of any ulterior motive which can be imputed on the respondent group of shareholders, no interference is called for towards preferential allotment of shares as per EoGM dated 23.03.2011.
Issue of bonus shares - HELD THAT:- There cannot be any complaint with regard to bonus shares as it was issued to all shareholders including petitioners. The bonus shares appear to have been issued in accordance with law and no ground has been made out by petitioners to show that issue of such bonus shares are in violation of the provisions of the Companies Act, 1956. Accordingly, no Interference is called for against such issue of bonus shares and the ground raised by the petitioners in this respect fails.
Allegation of lack of fiduciary duty on the part of the respondents to acquire a BMW car costing ₹ 51 lakhs when the average profit of the company was ₹ 35.06 lakhs per year - HELD THAT:- The necessary explanation has been provided by the respondents as recorded in para 3 (xxiv) of this order and there are no irregularity or defect in acquiring such BMW car for official use in running the business affairs of the company and there has been no financial impropriety or lack of probity in such acquisition of car resulting in alleged mismanagement of the company.
On determination of the value, in case the respondent group is willing to purchase the shares held by the petitioner group, they should pay the consideration within four weeks thereafter. Otherwise, the respondent company will purchase the shares and reduce the share capital of the company to the extent of the face value of the shares. On receipt of consideration, the petitioners shall hand over the shares along with transfer deeds duly signed for further necessary action in accordance with law.
After carrying out the mutual obligations cast on the petitioners and respondents as per this order, an affidavit of compliance shall be drawn by both the parties within 7 days of such compliance and the same should be produced before the Bench Officer for taking the same on record. The statutory auditor, after complying with the directions contained in this order, shall draw an affidavit to the said effect and furnish the same to the Bench Officer within 7 days of such compliance for keeping the same on record also.
Petition disposed off.
-
2014 (9) TMI 1278 - ANDHRA PRADESH HIGH COURT
Professional misconduct - company was posting losses year after year, though according to her, profits were being earned - Family dispute - HELD THAT:- The record does not disclose that the complainant made any effort to question the persons in management of the company, such as Managing Director or other Directors about the state of affairs. Unfortunately, the respondent is being made scapegoat in the family disputes of the owners of the company. On a perusal of the report of the Disciplinary Committee and the resolution of the Council, we find that they have mechanically arrived at the conclusions as to the misconduct
It is added here that every inadvertent omission cannot be treated as an act of misconduct. The implication of even the minute punishment imposed against a Chartered Accountant is far-reaching.
The complaint is dismissed.
-
2014 (9) TMI 1277 - ITAT KOLKATA
Revision u/s 264 - assessee submitted that the appeal has been wrongly filed by his client against the order passed by the ld. CIT u/s 264 on wrong advice
HELD THAT:- Upon careful consideration we are of the view that the file has been wrongly filed by the assessee against the order passed by the ld. CIT u/s 264 of the Act and hence the appeal is dismissed as withdrawn.
-
2014 (9) TMI 1276 - BOMBAY HIGH COURT
Seeking execution of the award against the claimant who is the Award Debtor in the arbitration - Violation of Section 25.1 of the Arbitration Agreement - Violation of Section 8 of the FEMA.
Violation of Section 25.1 of the Arbitration Agreement - HELD THAT:- The agreement between the parties or the enforcement of such agreement by the arbitral tribunal cannot require either of the parties to do any act prohibited under the law relating to foreign trade controls, export controls embargoes or international boycotts. The award which would require any of these would fall foul of the contract between the parties. An award which grants any amount to or against any party under the law and which would have to be paid in foreign exchange by one of the parties would not be included within the mischief of clause 21 of the contract.
There is, therefore, nothing that the learned Arbitral Tribunal has decided against any of the terms of the contract between the parties. Once that aspect has been determined as per the law governing the parties, this Court, in enforcement of the award which has been passed, cannot interfere with it.
Violation of Section 8 of the FEMA - HELD THAT:- Reliance placed upon the judgment in the case of Director of Enforcement Vs. MCTM Corporation Pvt. Ltd. and Ors. [1996 (1) TMI 351 - SUPREME COURT] to show that the same analogy was applied under Section 10 of the FERA, 1947 which was analogous to Section 16 of the FERA, 1973 so that the person, who had the right to receive FE could not refrain from doing or taking any action which would have effect of delaying or ceasing the receipt of such FE. It is held that the default would be complete on the failure to get FE receivable in India repatriated within the reasonable time after the right to receive the same accrues. It is observed that the reasonable time would depend upon the circumstances of each case and cannot depend upon any general formula. It is observed that if the delay in repatriation was not unreasonable there would be no contravention of Section 10(1)(a) of FERA.
In this case the delay in receiving the amount due is of 7 weeks with a corresponding consideration of payment of lesser amount if the negotiations fructified and the amended contract or new contract was executed - There would, therefore, be no contravention of Section 8 of FEMA.
The award dated 17th January, 2011 is seen to be enforceable and must be enforced by the Court.
-
2014 (9) TMI 1275 - ITAT AHMEDABAD
TDS u/s 194J - disallowance made u/s. 40(a)(ia) on account of payments made for services of market survey - HELD THAT:- Fee for professional services-FPS is defined in the Explanation to section 194J and it is exhaustive definition and of course, with the power to notify the professions. Therefore, the definition is exhaustive in form in view of the use of expression "means" and inclusive in substance as the Board has power to extend the list of professional services.
As per the said Explanation qua fee for professional services, the services rendered by a person in the course of carrying on listed professions and other notified professions constitutes fee for professional services and thus the payments in connection with such services attracts the provisions of section 194J - The payer is legally bound to make TDS at the rate of 10 per cent of such payment.
We have also examined the notification issued by the Board for the purpose of Explanation (a) to section 194J vide Notification No. S.O. 2085(E), dated August 21, 2008 and find the Board notified the services rendered by following persons in relation to the sports activities as "professional services" for the purpose of the said section, namely, sports persons, umpires and referees, coaches and trainers, team physicians and physiotherapists, event managers, commentators, anchors and sports columnists.
As decided in VYSYA BANK LIMITED. [2005 (9) TMI 55 - KARNATAKA HIGH COURT] when the definition of a word begins with ‘means’ it is indicative of the fact that the meaning of the word has been restricted; that is to say, it would not mean anything else but what has been indicated in the definition itself.
We find that no material was brought before us to show that market survey has also been notified as professional service within the meaning of section 194J - In absence of any such material brought before us, in our considered view, market survey is not covered by the provisions of section 194J - Consequently, the orders of the lower authorities in disallowing the expense are not sustainable. We, therefore, delete the disallowance and allow the ground of appeal of the assessee.
-
2014 (9) TMI 1274 - SUPREME COURT
Delay in Arbitral Proceedings - inspite of expiry of four years, the said tribunal did not complete the arbitral proceeding - whether such a course of action has to be necessarily adopted by the High Court in all cases, while dealing with an application Under Section 11 of the Act or there is a room for play in the joints and the High Court is not divested of exercising discretion under some circumstances? If yes, what are those circumstances? - HELD THAT:- It is this very aspect which was specifically dealt with by this Court in NORTH EASTERN RAILWAY VERSUS TRIPPLE ENGINEERING WORKS [2014 (8) TMI 1236 - SUPREME COURT]. Taking note of various judgments, the Court pointed out that the notion that the High Court was bound to appoint the arbitrator as per the contract between the parties has seen a significant erosion in recent past.
In the case of contracts between Government Corporations/State owned companies with private parties/contractors, the terms of the agreement are usually drawn by the Government company or public sector undertakings. Government contracts have broadly two kinds of arbitration clauses, first where a named officer is to act as sole arbitrator; and second, where a senior officer like a managing director, nominates a designated officer to act as the sole arbitrator - If the Government has nominated those officers as arbitrators who are not able to devote time to the arbitration proceedings or become incapable of acting as arbitrators because of frequent transfers etc., then the principle of 'default procedure' at least in the cases where Government has assumed the role of appointment of arbitrators to itself, has to be applied in the case of substitute arbitrators as well and the Court will step in to appoint the arbitrator by keeping aside the procedure which is agreed to between the parties. However, it will depend upon the facts of a particular case as to whether such a course of action should be taken or not. What we emphasise is that Court is not powerless in this regard.
The Appellant has not questioned the order of the High Court in so far as it has terminated the mandate of the earlier Arbitral Tribunal because of their inability to perform the task assigned to them. In such a situation, leaving the Respondent at the mercy of the Appellant thereby giving the power to the Appellant to constitute another Arbitral Tribunal would amount to adding insult to the serious injury already suffered by the Respondent because of non conclusion of the arbitral proceedings even when the dispute were raised in the year 2007.
Where the Government assumes the authority and power to itself, in one sided arbitration clause, to appoint the arbitrators in the case of disputes, it should be more vigilant and more responsible in choosing the arbitrators who are in a position to conduct the arbitral proceedings in an efficient manner, without compromising with their other duties. Time has come when the appointing authorities have to take call on such aspects failing which (as in the instant case), Courts are not powerless to remedy such situations by springing into action and exercising their powers as contained in Section 11 of the Act to constitute an Arbitral Tribunal, so that interest of the other side is equally protected.
There are no merit in the present appeal which is dismissed.
-
2014 (9) TMI 1273 - ITAT MUMBAI
Reopening of assessment u/s 147 - inability of the AO to produce the reasons recorded or to produce the evidence of supply of the copy of reasons to the assessee - HELD THAT:- Whatever may be the reason but it is mandated by the Hon’ble Courts that reasons to believe must necessarily show, indicate and communicate why and for what grounds/cause any income has escaped assessment. Recording of reasons has been emphasised and adverted to as the foundation of the jurisdiction of an AO, who initiates reassessment proceedings.
The validity of the reassessment proceedings is tested, by the Hon’ble Courts, on the basis of the underlying reasoning stated and recorded for opening of the reassessment. If the person affected by the action of the AO is not aware as to why the AO had found it fit to reopen his assessment, he will be in dark and will not be in position to defend himself.
Principles of natural justice demand that nobody should be penalise unheard. Without furnishing the assessee a copy of the reasons recorded would tantamount to punish the assessee without hearing him. The power of the to issue notice u/s. 147 of the Act is coupled with the duty to follow a prescribed method. A duty has been cast upon him to supply the copy of reasons recorded to the assessee.
Rights are always accompanied by duties and bigger rights brings higher the duties in picture. Power given to the AO by section 147 is not a simple power it is to unsettle the completed proceedings and it generally results in higher tax liability. Therefore, safeguards have been provided in the Act.
Duty of the AO to communicate the reasons to the assessee is the other side of the coin and is the right of the assessee. The assessee cannot be burdened only with duties. His duty is to file the return once he gets the notice. Similarly, his right to know the reasons starts once he files a return and asks the AO to supply him the copy of recorded reasons.
Case-issuance of notice u/s. 148 of the Act, the requests made by the assessee during assessment and after the assessment/appellate proceedings, the inability of the AO to produce the reasons recorded or to produce the evidence of supply of the copy of reasons to the assessee-we are of the opinion that validity of the assessment order and the subsequent order of the FAA cannot be upheld. Therefore, in the cases of Videsh Sanchar Nigam Ltd [2011 (7) TMI 715 - BOMBAY HIGH COURT] and Fomento Resorts and Hotels [2006 (11) TMI 645 - BOMBAY HIGH COURT] we are of the opinion that the order passed by the AO was not valid. The action of the AO has resulted in violation of basic principles of natural justice as well as invaluable right of the assessee. His order is beyond validity, so it is unsustainable. Decided in favour of assessee.
-
2014 (9) TMI 1272 - DELHI HIGH COURT
Seeking to restrain the respondent from invoking the letter terminating two Supply and Service Agreements - grievance relates to alleged breach of promise on part of the State where claimant has acted to his prejudice on basis of assurance or promise on the part of the State, but the agreement is short of a contract within the meaning of Article 299 of the Constitution - rights are purely contractual and claimant alleges breach by the State of a term of the contract.
HELD THAT:- The legal position which can be summarized would be that a bank guarantee is an independent contract between the bank and the beneficiary and disputes pertaining to bank guarantees have to be resolved de-hors the terms of the main contract between the parties or disputes relatable to the main contract between the parties. Where a bank guarantee is a conditional guarantee invocation thereof would have to be in strict conformity with the conditions on which the guarantee is issued. In such a case an injunction can be granted against payment under the bank guarantee if it is found that the condition upon which the guarantee was issued has not been complied with or met. But where the guarantee is unconditional and/or the bank has agreed to make payment without demur or protest, on the beneficiary invoking the bank guarantee the bank is obliged to honour the same for the reason like letters of credit, a bank guarantee if not honoured would cause irreparable damage to the trust in commerce and would deprive vital oxygen to the money supply and money flow in commerce and transaction which is necessary for economic growth. Disputes pertaining to the main contract cannot be considered by a court when a claim under a bank guarantee is made and the court would be precluded from embarking on an enquiry pertaining to the prima facie nature of the respective claim of the litigating parties relatable to the main dispute.
The dispute between the parties to the underlying contract has to be decided at the civil forum i.e. a civil suit if there exists no arbitration clause in the contract or before the arbitral tribunal if there exists an arbitration clause in the contract. Pendency of arbitration proceedings is no consideration while deciding on the issue of grant of an interim injunction. That certain amounts have been recovered under running bills and have to be adjusted for is of no concern in matters relating to invocation of bank guarantee. That there are serious disputes on questions as to who committed the breach of the contract are no circumstances justifying granting an injunction pertaining to a bank guarantee. Plea of lack of good faith and/or enforcing the guarantee with an oblique purpose or that the bank guarantee is being invoked as a bargaining chip, a deterrent or in an abusive manner are all irrelevant and hence have to be ignored. There are only two well recognized exceptions to the rule against permitting payment under a bank guarantee.
Contractual disputes cannot be projected by attempting to urge that the beneficiary under the bank guarantee is in default. Issues of fraud require pleadings to bring out a case of a fraud of an egregious nature and we do not find any brought out in the pleadings. The irretrievable injury or irretrievable injustice or special equity would mean a situation where the party at whose behest the bank guarantee is issued is rendered remediless.
Appeal dismissed.
-
2014 (9) TMI 1271 - DELHI HIGH COURT
Seeking to restrain respondent No. 1 from invoking, and respondents No. 2 and 3 from allowing any purported encashment of the bank guarantees submitted by the petitioner to respondent No. 1 pursuant to the contracts entered into between petitioner and respondent No. 1.
HELD THAT:- There are 8 bank guarantees which have been invoked by the respondent on 14th May, 2014 and the said bank guarantees contain different terms and conditions in the guarantee documents which are worded distinctly. The said aspect needs consideration in view of the well settled principle of law that the bank guarantee is a contract independent from the underlying contract and in order to test as to whether the invocation of the bank guarantee is as per the contract, the stipulations contained in the document of bank guarantee are germane as against the terms of the underlying contract/ main contract which may or may not be relevant depending upon the incorporation of the terms of the main contract in the guarantee documents.
From the reading of the terms of the Bank guarantees Nos. 0910310BG0000163 and 0910310BG0000165, it can be seen that the bank has guaranteed to repayment to said amount to the employer without cavil in the event the contractor fails to commence or fulfil the obligations under the terms of the contract and in the event of such failure refuses to repay all or part of the said advance payment to the employer. It is thus apparent that the liability of the bank would commence when the bank is informed about the demand on the ground of the failure to commence or fulfilment of the obligations under the terms of the contract and the refusal to pay the said sum or part of the advanced sum.
The repayment of the advance sum and/ or adjustment by way of the repayment and/or information as to refusal to repay by the contractor the said advance sum or part thereof are crucial facts which affect the liability of the bank as per the terms of the bank guarantee Nos.0910310BG0000163 and 0910310BG0000165. Accordingly, the said facts of the refusal to repay by the contractor or repayment of the advanced sum either in part or in full and adjustment of the advanced sum by way of the payment are pre- requisite conditions on the basis of which, the bank can honour the guaranteed sum after getting itself satisfied in terms of the bank guarantee.
The bank guarantees Nos.0910310BG0000163 and 0910310BG0000165 are conditional in nature and the invocation of the said bank guarantees by way of the letter dated 14th May, 2014 without fulfilment the mechanism provided in the guarantee documents by informing the petitioner about the repayment of the advanced sum and seeking the refusal or acceptance to repay is clearly contrary to the express terms of the guarantee documents. The said invocation is therefore prima facie contrary to the terms of the bank guarantee Nos.0910310BG0000163 and 0910310BG0000165 and as such liable to be interfered with by this Court.
The question relating to providing of the right to way or forest clearances by the respondent is a disputed question and cannot aid the petitioner at this stage by seeking to prevent the invocation of the bank guarantees at this stage and more so when the petitioner is not remediless and can always lodge its claim in arbitral proceedings if it has any in relation to breaches as alleged by the petitioner and the tenability of the same shall be examined by the Arbitral Tribunal.
It can be safely said that there is no such case of the special equities which is made out by the petitioner which leaves the petitioner as remediless to recover the said sum nor the said special equities as alleged by the petitioner are such which unequivocally establish the facts the complete non entitlement of the respondent to invoke the bank guarantees by the respondent. The respondent No. 1 has its own version of the nature of breaches done by the petitioner and the evaluation of the same cannot be done by this court on merits while deciding the application seeking interim measures at this stage. The said questions are disputed ones which are required to be examined and adjudicated by the arbitral tribunal to be appointed in the matter.
So far as bank guarantees Nos.0910310BG0000163 and 0910310BG0000165 are concerned, it hereby directed that the amount equivalent to what has been stated in the invocation letters dated 14th May, 2014 pertaining to the said bank guarantees i.e. Rs.9,60,63,392 is returned to the bank i.e. respondent No. 2 along with the interest accrued on the said amount and same be put in the original position. The petitioner shall keep the said bank guarantees alive by renewing them, if need arises. It is hereby clarified that the above direction does not preclude the parties to deal with the said bank guarantees as per mechanism provided in the guarantee documents.
The petition is accordingly disposed of.
-
2014 (9) TMI 1270 - SUPREME COURT
Allocation of Coal Blocks - HELD THAT:- A report dated 01.09.2014 has been submitted by the Central Bureau of Investigation (CBI). It is stated that Shri R.S. Cheema has been appointed as Special Public Prosecutor by the Government of India vide notification dated 27.08.2014 in cases pertaining to allocation of coal blocks as per this Court's order dated 25.07.2014. It is also stated in the report that Shri R.S. Cheema has now requested for attachment of three Senior Public Prosecutors, namely, (1) Shri A.P. Singh, Senior Public Prosecutor, ACB CBI, Guwahati, (2) Shri Sanjay Kumar, Senior Public Prosecutor, Special Crime-1, CBI Headquarter, New Delhi and (3) Shri V.K. Sharma, Senior Public Prosecutor, ACB, CBI, Delhi to assist him in cases pertaining to allocation of coal blocks.
The request made by Special Public Prosecutor, Shri R.S. Cheema is reasonable and may be accepted.
-
2014 (9) TMI 1269 - ITAT MUMBAI
Deduction u/s 80IB/80IC/80IE/10B - exclusion of the receipt by way of DEPB credit as they are not qualify to be included in the profits derived from the undertaking - HELD THAT:- The issue raised vide this ground has been decided against the assessee by the judgment of the Hon’ble Supreme Court in the case of Liberty India Ltd. [2009 (8) TMI 63 - SUPREME COURT]. As the receipts do not have a first degree nexus with the profit derived from the undertaking, respectfully following the judgment of the Hon’ble Supreme Court, ground No. 1 is dismissed.
Deduction from the income of the assessee being amount of credit under DEPB scheme - HELD THAT:- As in identical issue was considered by the Tribunal in assessee’s own case [2014 (7) TMI 1372 - ITAT MUMBAI] - We find that the Tribunal has decided this issue at para No. 5 of its order wherein it has followed the judgment of the Hon’ble Supreme Court in the case of CIT vs. Excel Industries Limited. [2013 (10) TMI 324 - SUPREME COURT] Respectfully following the decision of the co-ordinate Bench, ground No. 3 raised by the assessee is allowed.
Bogus purchases - HELD THAT:- We find that the Tribunal has considered this issue in assessee’s own case[2014 (7) TMI 1372 - ITAT MUMBAI] for A.Y. 2009-10 wherein it has followed the decision for A.Y. 2008-09 and accordingly the Tribunal has remanded this matter to the file of the A.O. for fresh adjudication after affording a reasonable opportunity of being heard to the assessee. As no distinguishing fact has been brought before us, respectfully following the findings of the co-ordinate Bench, we restore this issue to the file of the A.O. for fresh adjudication after hearing the assessee. Ground No. 4 is accordingly allowed for statistical purpose.
Weighted deduction u/s 35(2AB) - HELD THAT:- We restore this issue to the file of the A.O. for adjudicating the issue afresh as per the provisions of law after affording a reasonable opportunity of being heard to the assessee.
Deduction u/s 80IB of the Act on miscellaneous receipts, sale of scrap, miscellaneous sales/processing charges - HELD THAT:- We set aside the issue relating to the sale of scrap to the file of the A.O. The A.O. is directed to decide the issue afresh in the light of direction given in A.Y. 2008-09. In so far as the other receipts are concerned, respectfully following the decision of the Tribunal in A.Y. 2008-09, the A.O. is directed to allow the claim of deduction u/s 80IB of the Act. Ground No. 3 is accordingly allowed in part for statistical purpose.
Adjustment to value of opening stock in A.Y. 2010-11 in consonance with the adjusted valuation of closing stock in A.Y. 2009-10 - HELD THAT:- The fact of this issue is that the A.O. has enhanced the closing stock of A.Y. 2009-10 which was not contested by the assessee. The only point raised by the assessee was that corresponding effect should be given to the opening stock of A.Y. 2010-11 which the ld. CIT(A) directed to the A.O. We do not find any error or infirmity in this direction of the ld. CIT(A) as the value of the closing stock of one year has to be taken as the value of opening stock of the immediately succeeding year. This ground is accordingly dismissed.
-
2014 (9) TMI 1268 - SUPREME COURT
Quashing the criminal proceeding following the settlement between the parties - Financial Fraud with Bank - Onus on superior court to proceed to analyse the factual score - Exercise of inherent jurisdiction bestowed upon it Under Section 482 of the Code of Criminal Procedure or Under Article 226 of the Constitution of India, to quash the criminal proceeding solely on the ground that the parties have entered into a settlement and, therefore, the continuance of the criminal proceeding would be an exercise in futility, or the substantial cause of justice warrants such quashment to make the parties free from unnecessary litigation with the assumed motto of not loading the system with unfruitful prosecution.
HELD THAT:- It is not a simple case where an accused has borrowed money from the bank and diverted it somewhere else and, thereafter, paid the amount. It does not fresco a situation where there is dealing between a private financial institution and an accused, and after initiation of the criminal proceedings he pays the sum and gets the controversy settled. The expose' of facts tells a different story. As submitted by the learned Counsel for CBI the manner in which the letters of credits were issued and the funds were siphoned has a foundation in criminal law. Learned Counsel would submit that it does not depict a case which has overwhelmingly and predominantingly civil flavour. The intrinsic character is different. Emphasis is laid on the creation of fictitious companies.
In this context, we may usefully refer to a two-Judge Bench decision in Central Bureau of Investigation v. Jagjit Singh [2013 (10) TMI 1427 - SUPREME COURT] wherein the court being moved by the CBI had overturned the order of the High Court quashing the criminal proceeding and in that backdrop had taken note of the fact that accused persons had dishonestly induced delivery of the property of the bank and had used forged documents as genuine.
We are in respectful agreement with the aforesaid view. Be it stated, that availing of money from a nationalized bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, in a way, financial fraud.
The ultimate victim is the collective. It creates a hazard in the financial interest of the society. The gravity of the offence creates a dent in the economic spine of the nation. The cleverness which has been skillfully contrived, if the allegations are true, has a serious consequence. A crime of this nature, in our view, would definitely fall in the category of offences which travel far ahead of personal or private wrong.
It has the potentiality to usher in economic crisis. Its implications have its own seriousness, for it creates a concavity in the solemnity that is expected in financial transactions. It is not such a case where one can pay the amount and obtain a "no due certificate" and enjoy the benefit of quashing of the criminal proceeding on the hypostasis that nothing more remains to be done.
The collective interest of which the Court is the guardian cannot be a silent or a mute spectator to allow the proceedings to be withdrawn, or for that matter yield to the ingenuous dexterity of the accused persons to invoke the jurisdiction Under Article 226 of the Constitution or Under Section 482 of the Code and quash the proceeding. It is not legally permissible.
Ex consequenti, the appeal is allowed, and the order passed by the High Court is set aside.
The trial shall proceed in accordance with law
........
|
