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Indian Laws - Case Laws
Showing 181 to 200 of 26755 Records
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2024 (8) TMI 841
Constitutionality of Electoral Bond Scheme and provisions in cognate legislation including those Representation of the People Act 1951, the Companies Act 2017 and the Income Tax Act, 1961 - invocation of jurisdiction under Article 32 of the Constitution - HELD THAT:- At the present stage, absent a recourse to the remedies which are available under the law to pursue such grievances, it would both be premature and inappropriate for this Court; premature because the intervention of this Court under Article 32 of the Constitution must be preceded by the invocation of normal remedies under the law and contingent upon the failure of those remedies; and inappropriate because the intervention of this Court, at the present stage, would postulate that the normal remedies which are available under the law would not be efficacious.
This Court entertained a batch of petitions challenging the constitutional validity of statutory provisions embodying the Electoral Bond Scheme and the consequential amendments which were made to diverse statutes. The only remedy for challenging such legislative changes lies in the invocation of the power of judicial review. Allegations involving criminal wrong doing, on the other hand, are of a distinct nature where recourse to the jurisdiction of this Court under Article 32 of the Constitution should not be taken as a matter of course particularly, in view of the remedies available in law.
The constitution of an SIT headed by a former Judge of this Court or otherwise should not be ordered in the face of remedies which are available under the law governing the criminal procedure. Likewise, matters, such as the reopening of assessments pertain to the specific statutory jurisdiction conferred upon assessing authorities under the Income Tax Act 1961 and other statutes.
The jurisdiction under Article 32 of the Constitution is declined to be exercised - petition dismissed.
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2024 (8) TMI 775
Rejection of bail under IPC and UAPA - allegation is that, the first floor premises are being used for objectional activities of an organisation called Popular Front of India (PFI) - reasonable grounds for believing that the accusations against the appellant are prima facie true, or not - Section 43D (5) of the UAPA - HELD THAT:- There is nothing in the charge sheet which shows that the appellant has taken part in or has committed unlawful activities as defined in the UAPA. There is no specific material to show that the appellant advocated, abetted, or incited commission of any unlawful activities. A terrorist act is defined in Section 15(1). Assuming that the co-accused were indulging in terrorist acts or were making any act preparatory to the commission of terrorist acts, there is absolutely no material on record to show that there was any conspiracy to commit any terrorist act to which the appellant was a party. There is no material produced on record to show that the appellant advocated, abetted, advised, or incited the commission of terrorist acts or any preparatory activity.
Taking the charge sheet as correct, it is not possible to record a prima facie finding that the appellant knowingly facilitated the commission or preparation of terrorist acts by letting out the first floor premises. Again, there is no allegation in the charge sheet against the appellant that he organised any camps to impart training in terrorism.
On plain reading of the charge sheet, it is not possible to record a conclusion that there are reasonable grounds for believing that the accusation against the appellant of commission of offences punishable under the UAPA is prima facie true - it is impossible to record a prima facie finding that there were reasonable grounds for believing that the accusation against the appellant of commission of offences under the UAPA was prima facie true. No antecedents of the appellant have been brought on record.
There was no reason to reject the bail application filed by the appellant - appellant is directed to be enlarged on bail on the terms and conditions as may be fixed by the Special Court. For that purpose, the appellant shall be produced before the Special Court within a maximum of 7 days from today - Appeal allowed.
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2024 (8) TMI 774
Dishonour of cheque - legally enforceable liability - rebuttable presumption - burden on the respondent to rebut the presumption by introducing evidence was initially not done for no justifiable/valid reason - plea for adducing additional evidence under Section 391 of the Code, the presumption has not been dislodged as required under law, and still the accused has been acquitted.
HELD THAT:- This Court in DASHRATH RUPSINGH RATHOD VERSUS STATE OF MAHARASHTRA & ANOTHER [2014 (8) TMI 417 - SUPREME COURT] held that “An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank.” The fact that the cheque was issued as a consequence of failure to repay the loan taken by the respondent from the appellant to which the interest was added would more or less settle the issue. However, in the present case, a discrepancy apropos the rate of interest, whether it be 1.8%, 2.4% or 3% per month was not sufficient to disbelieve the claim of the appellant.
The reasoning given by the Appellate Court, having taken note of the Tamil Nadu Act, fails to appreciate that even going by what has been written on the pronote i.e., 1.8% per month would lead to the interest being 21.6% per annum, which also is above the cap of 12% per annum prescribed in the Tamil Nadu Act. Thus, if the parties amongst themselves, agreed to a rate which is not in conformity with the Tamil Nadu Act, it was for the respondent to raise an objection or move the appropriate forum for getting the same corrected/taken care of, so that the interest rate did not exceed 1% per month but having agreed to a rate of 1.8% per month, the subsequent amount of interest calculated @ 3% per month does not have much force for it was upon the respondent to challenge the rate of interest. The respondent also cannot be said to be a layman, and being a subscriber to a chitfund company, he is expected to be aware of the laws and also of what is beneficial for him.
The Appellate Court’s order as also the impugned judgment are set aside. The order of the learned Trial Court stands restored albeit with certain modifications. It is considered appropriate to direct the respondent to pay fine amounting to one and a half (1½) times the amount mentioned in the cheque - Appeal allowed.
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2024 (8) TMI 706
Dishonour of Cheque - Time-barred debt and its acknowledgment - whether cheques were issued for a legally enforceable debt or other liability should be decided only at the time of trial and not at this stage? - HELD THAT:- The issue as to whether by subsequent conduct did the Petitioner promise the Respondent to pay the amount or not is a question of fact which can be decided only in trial. The Apex Court in Yogesh Jain vs. Sumesh Chadha, [2022 (10) TMI 1198 - SUPREME COURT] has held that the issue as to whether the debt is time barred or is legally enforceable or not ought not to be considered at the initial stage.
The object of the NI Act is to enhance the acceptability of cheques and inculcate faith in the efficiency of negotiable instruments for transaction of business. In the opinion of this Court, the true purport of Section 138 of the NI Act would not be fulfilled if the debt or other liability is interpreted to include only a debt that exists as on the date of drawing of the cheque. The Parliament has used the expression debt or other liability and the explanation appended to Section 138 of the NI Act states that the debt would mean a legally enforceable debt, however, the expression also uses the word other liability. In the opinion of this Court, the word other liability would have to be something other than a legally enforceable debt and must be given a meaning of its own. The legislature has purposely used two distinct phrases i.e., legally enforceable debt and other liability.
The issue as to whether the debt is time barred or is legally enforceable or not or as to whether the cheques were deposited after an understanding was reached between the parties regarding payment of liability or as to whether the cheques could have been deposited at any time for repayment of liability or whether it was a part discharge of liability etc. cannot be decided at the time of issuing of summons and the same can be considered only in the trial and not at this stage.
This Court is not inclined to quash the present complaint at this juncture. The Ld. Trial Court is requested to proceed with the complaint in accordance with law - Petition disposed off.
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2024 (8) TMI 705
Dishonour of Cheque - Maintainability of petition - Liability of partners - equal and efficacious remedy of appeal - Complaint not maintainable for the reason that it does not have the necessary averments against the Petitioners - whether the complaint, as framed, should be permitted to proceed ahead or should the complaint be quashed for want of necessary averments? - HELD THAT:- The position of a Partner is distinct from Director of a company. Section 18 of the Partnership Act specifically provides that a partner is an agent of the firm for the purpose of business of the firm. Section 19 states that the act of a partner which is done to carry on the business of the kind carried on by the firm, binds the firm. Section 23 states that an admission or representation made by a partner concerning the affairs of the firm is evidence against the firm, if it is made in the ordinary course of business. Section 25 states that every partner is liable jointly with all the other partners and also severally, for all acts of the firm done while he is a partner.
In a company, every Director is not responsible for the conduct of the business of the company but in a partnership firm all the working partners are responsible for the conduct of day-to-day business of the firm as every partner is a representative of the other partners of the firm. In view of the above, the averment that an accused is a partner is sufficient to show that that partner is responsible for the conduct of the affairs of the firm. All the judgments relied on by the learned Counsel for the Petitioner, which pertains to directors of a firm, are, therefore, clearly distinguishable.
A perusal of the abovementioned Section shows that until and unless a public notice of the retirement is given, a partner of the firm continues to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement. There is nothing on record to show that a public notice has been given. However, since Ms. Anju Khanna, i.e. the Petitioner No. 1 herein, was only a sleeping partner of the firm, this Court is inclined to exercise its jurisdiction under Section 482 Cr.P.C to quash the Complaint qua Ms. Anju Khanna, i.e. Petitioner No. 1 herein only. As far as Petitioners No. 2 & 3 are concerned the complaint shall proceed ahead against them.
The Petition is disposed of.
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2024 (8) TMI 704
Dishonour of Cheque - discharge of the legal debt/liability - preponderance of probablities - whether Respondent had paid back the money or not and if not, the same was payable? - HELD THAT:- Indisputably, Respondent has been acquitted by the learned Trial Court and therefore, the first issue that needs consideration is the scope and ambit of interference by an Appellate Court in a judgment acquitting the accused. Appellate Court has, no doubt, wide powers to re-appreciate the evidence in an appeal against acquittal and come to a different conclusion, on facts and law, but there is no gainsaying that this power must be exercised with due care and caution since the presumption of innocence at the start of the trial is strengthened by acquittal of the accused by a judicial order.
It is a settled law that in matters relating to dishonour of cheques, Courts have to consider whether the ingredients of Section 138 of NI Act are made out and if so, whether the accused is able to rebut the statutory presumption under Section 139 of NI Act.
Coming to the present case, the undisputed position that obtains is that Respondent admitted execution of promissory note Ex. CW1/B and agreement Ex. CW1/C as well as his signatures on 7 cheques in question Ex. CW1/E and Ex. CW1/H-1 to Ex. CW1/H-6. It is also established through cheque return memos dated 12.07.2010 and 06.08.2010, Ex. CW1/F and by Ex. CW1/I-1 to Ex. CW1/I-6, that on presentation with the bank, all 7 cheques were returned unpaid with remarks “Funds Insufficient”.
Whether Respondent had any legally enforceable debt or liability to pay the allegedly due amount under the cheques in question to the Petitioner? - HELD THAT:- Reading Section 139 and applying the same, there is little doubt that since Petitioner was the holder of the cheques in question and the signatures on the cheques were not denied by the Respondent, presumption shall be drawn that the cheques were issued for discharge of a debt or other liability. The presumption under Section 139 of NI Act is, however, a rebuttable presumption. At this stage, I may allude to observations of the Supreme Court in BASALINGAPPA VERSUS MUDIBASAPPA [2019 (4) TMI 660 - SUPREME COURT], wherein the Supreme Court, before proceeding to the judgments under Sections 118 and 139 of NI Act noticed the general principles pertaining to burden of proof on an accused especially in a case where some statutory presumption regarding guilt of the accused has to be drawn.
In RANGAPPA VERSUS SRI MOHAN [2010 (5) TMI 391 - SUPREME COURT] the Supreme Court observed that presumption under Section 139 of NI Act is rebuttable and it is open to the accused to raise a defence and contest that the cheque was not issued in furtherance of an enforceable debt or liability. It was also held that in the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden and therefore when an accused has to rebut the presumption under Section 139 of NI Act, the standard of proof for doing so is “preponderance of probabilities”.
This Court is unable to find any infirmity in the finding of the Trial Court that Respondent was able to set up a plausible defence, which on the principle of preponderance of probability, rebutted the presumption in favour of the Petitioner under Section 139 of NI Act. Execution of agreement Ex. CW1/D-8 reflecting the execution of documents regarding transfer/sale of the property as security for loan of Rs.25 lacs; Respondent being in possession of the coloured photocopies of the documents executed on 27.11.2009 coupled with absence of any explanation by the Petitioner on how these were with the Respondent; doubts over availability of funds to the extent of Rs.50 lacs with the Petitioner; his failure to prove the alleged two separate transactions of purchase of property and loan, certainly raises doubts over Petitioner’s version and defence of the Respondent appears to be a probable defence.
Thus, presumption under Section 139 of the NI Act stands rebutted. Once presumption under Section 139 was rebutted by the Respondent, burden of proof shifted on the Petitioner and as held by the learned Trial Court, Petitioner was unable to discharge the burden and the Respondent was rightly acquitted of the offence punishable under Section 138 of NI Act. Thus, no ground for grant of leave to appeal is made out.
Petition seeking leave to appeal is hereby dismissed.
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2024 (8) TMI 653
Enforcement of an arbitral award expressed in foreign currency - what is the correct and appropriate date to determine the foreign exchange rate for converting the award amount expressed in foreign currency to Indian rupees? - what would be the date of such conversion, when the award debtor deposits some amount before the court during the pendency of proceedings challenging the award?
HELD THAT:- In the present case, it is important to note the terms on which the two deposits of Rs. 7.5 crores and Rs. 50 lakhs were made. From the order of the High Court dated 15.10.2010, it is clear that such order for deposit of Rs. 7.5 crores and for furnishing a bank guarantee of an Indian bank for the release of the deposit was made in accordance with the consent of the parties.
The facts in this case are similar to Renusagar [1993 (10) TMI 232 - SUPREME COURT] for an analogy to be drawn. Here as well, the deposit was made during the pendency of the proceedings under the objections petition. It was permitted to be withdrawn against a bank guarantee of an Indian bank. Here the respondent was entirely unable to withdraw the amount, while the issue there was that it was only unable to convert the amount to US dollars. However, in both cases, the respondent failed to move the Court for necessary orders to be able to receive and utilise the amount. In this case, there is the added fact that the respondent consented to the deposit and the condition requiring security. In light of these similarities, it is appropriate to adopt the Court’s approach in Renusagar.
The deposit of Rs. 7.5 crores stands converted as on the date of deposit (22.10.2010), when the rate of exchange as submitted by the appellants is 1 euro = Rs. 59.17. The submission that the respondent was unable to furnish a bank guarantee of an Indian bank, also rejected. This argument is only to serve its own interest to be able to benefit from a higher exchange rate but does not address the principle that operates while enforcing a sum expressed in foreign currency.
A similar logic underscores the statutory provisions in Order 21, Rule 1 and Order 24 of the Code of Civil Procedure, 190852 to determine whether interest will continue to operate on an amount deposited before a court - A constitution bench of this Court in Gurpreet Singh v. Union of India [2006 (10) TMI 493 - SUPREME COURT] extensively discussed the rules governing interest calculation when the defendant/ judgment-debtor deposits some part of the amount. Order 24 governs deposits at the pre-decretal stage and Order 21, Rule 1 at the post-decretal stage.54 The essence of these provisions is that on any amount deposited into the court, interest shall cease to run from the date when the depositor serves a notice to the plaintiff/decree-holder. Similarly, when payment is tendered to the decree-holder outside the court, interest ceases on such amount even if the payment is refused.
Order 21, Rule 1 embodies a rule of prudence that once the amount is tendered to the decree-holder by the judgmentdebtor, whether in the form of a court deposit or other forms of payment such as demand draft or cheque, the judgment-debtor cannot be made liable to then pay interest on such amount.
It is clear that the exchange rate on 22.10.2010 would apply to that extent and non-withdrawal by the respondent of Rs. 7.5 crores was in its own discretion and inaction. However, since the order of 03.06.2011 permits withdrawal of Rs. 50 lakhs on the completion of the proceedings, that would be the appropriate date for determining the exchange rate. Here, the revision proceedings were complete on 01.07.2014. Hence, it would be appropriate to apply the exchange rate as on this date to convert the deposit of Rs. 50 lakhs.
The statutory scheme of the Act makes a foreign arbitral award enforceable when the objections against it are finally decided. Therefore, as per the Act and the principle in Forasol (supra), the relevant date for determining the conversion rate of foreign award expressed in foreign currency is the date when the award becomes enforceable - When the award debtor deposits an amount before the court during the pendency of objections and the award holder is permitted to withdraw the same, even if against the requirement of security, this deposited amount must be converted as on the date of the deposit - After the conversion of the deposited amount, the same must be adjusted against the remaining amount of principal and interest pending under the arbitral award. This remaining amount must be converted on the date when the arbitral award becomes enforceable, i.e., when the objections against it are finally decided.
Appeal allowed in part.
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2024 (8) TMI 652
Enforcement of a money-award rendered in favour of the petitioner - Calculation of rate of interest on the money award - to be calculated on the basis of the bank rate fixed by the Reserve Bank of India (RBI) as on the appointed date or be calculated on the basis of the fluctuating rates at different points of time as notified by the RBI from the appointed date till the date of payment - Section 16 of the MSME Act - HELD THAT:- Upon a comprehensive assessment of the provisions of Section 16, the inevitable conclusion is that the interest envisaged therein is to be paid at the rate of three times the RBI notified rates, the incidence of which would be at each monthly rest, meaning thereby that the rates would be fluctuating along with the RBI-notified rates at variable points of time, to be taken at each monthly interval which is the point of incidence of such rates.
Accordingly, the version of the award-debtor is accepted. The rate of interest has to be calculated from the appointed date till the date of repayment, calculated on the basis of compound interest with monthly rests, the rate of interest being taken at each point of incidence at each monthly rest, in terms of the RBI rates prevalent at that point of time, multiplied by three. Hence, the award-debtor is to pay interest to the award-holder at the variable rates of interest as notified by the RBI from time to time, multiplied by three, throughout the period, calculated at each monthly interval at the then prevailing rates.
The mode of calculation having thus been determined, the award-debtor is directed to make the full payment of interest as per the calculations in the light of the observations above to the award-holder within four (04) weeks from date. For such purpose, along with such payment of the entire interest component over and above the principal awarded amount, deducting the amounts already paid/deposited in terms of court orders, the award-debtor shall also file in court a copy of the detailed calculations for arriving at the amount paid to the award-holder.
The award holder will be at liberty to withdraw (if deposited), alternatively utilize (if paid directly) the amount already deposited/paid by the award debtor.
The matter shall next be listed under the heading “For Orders” on August 6, 2024 when the award-debtors shall file an affidavit of compliance, showing payment of such entire amount of interest along with the principal to the award-holder, annexing to the said affidavit a break-up of the detailed calculations of interest till the date of payment.
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2024 (8) TMI 650
Denial to release the appellant on bail - right to speedy trial as enshrined under the Constitution of India - HELD THAT:- The requirement of law as being envisaged under Section 19 of the National Investigation Agency Act, 2008 mandates that the trial under the Act of any offence by a Special Court shall be held on day-to-day basis on all working days and have precedence over the trial of any other case and Special Courts are to be designated for such an offence by the Central Government in consultation with the Chief Justice of the High Court as contemplated under Section 11 of the 2008.
In the recent decision, SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION & ANR. [2022 (8) TMI 152 - SUPREME COURT], prolonged incarceration and inordinate delay engaged the attention of the court, which considered the correct approach towards bail, with respect to several enactments, including Section 37 NDPS Act. The court expressed the opinion that Section 436A (which requires inter alia the accused to be enlarged on bail if the trial is not concluded within specified periods) of the Criminal Procedure Code, 1973 would apply.
If the State or any prosecuting agency including the court concerned has no wherewithal to provide or protect the fundamental right of an accused to have a speedy trial as enshrined under Article 21 of the Constitution then the State or any other prosecuting agency should not oppose the plea for bail on the ground that the crime committed is serious. Article 21 of the Constitution applies irrespective of the nature of the crime.
The impugned order passed by the High Court is set aside - The appellant is ordered to be released on bail subject to the terms and conditions which the trial court may deem fit to impose - appeal allowed.
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2024 (8) TMI 588
Dishonour of Cheque - time limitation - complaint case instituted under section 138 of N.I. Act within the period of 30 days from the date of issuance of legal notice demanding the cheque amount from its drawer is pre-matured or not - necessity to make averments in the complaint about the service of notice to the accused or accused has evaded or deliberately not replied to the legal notice - HELD THAT:- The condition precedent for taking cognizance as prescribed under section 138 of proviso (c) and 142(b) are satisfied. Admittedly, notice was sent by the speed post on 07.01.2001 and the complaint was filed on 20.04.2001. Even if the presumption of deemed service within a reasonable time of 30 days (i.e., 16.02.2001) is taken, the accused was required to make payment within 15 days i.e. on or about 02.03.2001. The complaint petition which should have been filed on 02.04.2001 was filed on 20.04.2001 was clearly barred by the limitation. It was further observed that proviso appended to section 138 of N.I Act limits the applicability of the main provisions. Unless the conditions precedent for taking cognizance the offence under section 138 of NI Act is satisfied, the court will have no jurisdiction to take cognizance. The complaint petition in view of section 142 (b) of the NI Act was required to be filed within one month from the date on which the cause of action arose in terms of the clause (c) of the proviso to section 138 of the NI Act.
The legal notice admittedly was issued on 17.01.2001. It was sent by the speed post. It was supposed to be served within a couple of days. Although the actual date of service of notice was allegedly not known, the complaint proceeded on the basis that the same was served within a reasonable period. The complaint petition admittedly was filed on 20.04.2001. The notice having been sent on 17.01.2001, if the presumption of the service of notice within a reasonable time is raised, it should be deemed to have been served at best within the period of 30 days from the date of issuance of thereof. In the situation, the complaint was hopelessly time barred.
It is crystal clear that in the instant case, legal notice was issued on 19.12.2007 and the complaint was instituted just within one month i.e. 18.01.2008. As per presumptions under section 114 of Illustration(f) of the Evidence Act and section 27 of General Clauses Act, the service of notice upon the accused within a reasonable time is to be deemed and anything otherwise has to be rebutted by the accused by leading evidence.
The complainant is not required to prove the service of notice on accused before institution of the case. In the instant case, the drawer has not denied about receipt of copy of complaint with summons and he appeared and contested the case throughout without raising any other substantial issues absolving him from the legal liability. Accordingly, a dishonest drawer of cheque can’t get a premium from his own default. It is not out of place to observe that the learned trial courts must always adhere to the aims and object of giving notice to accused and examine the contents of complaint petition at the very stage of its registration and ensure that all legal formalities are complied with as prescribed under section 138 & 142 of N.I. Act, so as to alleviate any technical issue to crop up at the trial.
The judgment passed by the learned Appellate Court cannot be sustained in view of the legal principles propounded by the Hon’ble Apex Court as discussed above, which is hereby set aside.
The case is remitted back to learned Appellate Court to re-hear the appeal and pass a fresh judgment after giving opportunity of hearing to the parties. Both parties are directed to appear before the concerned Appellate Court within six weeks from the date of this order - this revision application is allowed.
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2024 (8) TMI 469
Debarring the appellant for a period of five years - appellant contended that the Corporation could only impose a penalty for late payments under clause 9 and not blacklisting - HELD THAT:- Blacklisting has always been viewed by this Court as a drastic remedy and the orders passed have been subjected to rigorous scrutiny.
In ERUSIAN EQUIPMENT & CHEMICALS LTD. VERSUS STATE OF WEST BENGAL & ANR. [1974 (11) TMI 89 - SUPREME COURT], this Court observed that 'The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction.'
What is significant is that while setting out the guidelines prescribed in USA, the Court noticed that comprehensive guidelines for debarment were issued there for protecting public interest from those contractors and recipients who are non-responsible, lack business integrity or engage in dishonest or illegal conduct or are otherwise unable to perform satisfactorily - blacklisting will not only debar the person concerned from dealing with the concerned employer, but because of the disqualification, their dealings with other entities also is proscribed. Even in the terms and conditions of tender in the present case, one of the conditions of eligibility is that the agency should not be blacklisted from anywhere.
The appellant, after the award of the tender, has admittedly paid an amount of Rs. 3,71,96,265/-, though, according to the Corporation, the outstanding amount as on the date of the debarment was Rs. 14,63,24,727/-.
It is found that the appellant, after the award of the tender, has admittedly paid an amount of Rs. 3,71,96,265/-, though, according to the Corporation, the outstanding amount as on the date of the debarment was Rs. 14,63,24,727/-. However, as would be clear from the facts discussed hereinabove, right from the inception there have been issues between the appellant and the Corporation with regard to the fulfilment of the reciprocal obligations in the bid document. There has been exchange of correspondence between the parties with each side blaming the other for not performing the reciprocal obligations.
The impugned judgment set aside - appeal allowed.
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2024 (8) TMI 468
Dishonour of Cheque - insufficient funds - presumption contemplated by virtue of Section 118 of the NI Act 1881 - standard of preponderance of probabilities - reasons to believe - HELD THAT:- Earlier, a case of dishonour of a cheque was dealt through provisions of Section 420 read with Section 415 of the IPC 1860. To enhance the acceptability of cheques as well as to provide for adequate safeguards to prevent harassment of honest drawers through painting the liability arising out of dishonour of a cheque with a punitive brush, an amendment to the NI Act 1881 was brought about by introducing Chapter VIII. Thence, seeking to promote credibility in transactions through the medium of banking channels and operations as well as their efficacy.
This Court in ICDS. LTD. VERSUS BEENA SHABEER [2002 (8) TMI 577 - SUPREME COURT], has held that proceedings under Section 138 of the NI Act 1881 can be initiated even if the cheque was originally issued as security and was subsequently dishonoured owing to insufficient funds. The failure to honour the concerned cheque is per se deemed as a commission of an offence under Section 138 of the NI Act 1881.
The NI Act 1881 enlists three essential conditions that ought to be fulfilled before the said provision of law can be invoked. Firstly, the cheque ought to have been presented within the period of its validity. Secondly, a demand of payment ought to have been made by the presenter of the cheque to the issuer, and lastly, the drawer ought to have had failed to pay the amount within a period of 15 days of the receipt of the demand. These principles and pre-requisites stand well established through Judgment of this Court in SADANANDAN BHADRAN VERSUS MADHAVAN SUNIL KUMAR [1998 (8) TMI 541 - SUPREME COURT]. There is an explicit limitation of 30 days, beginning from period when the cause of action arose, prescribed by the statute vide Section 142(b) of the NI Act 1881 to initiate proceedings under Section 138 of the NI Act 1881.
Since a presumption only enables the holder to show a prima facie case, it can only survive before a court of law subject to contrary not having been proved to the effect that a cheque or negotiable instrument was not issued for a consideration or for discharge of any existing or future debt or liability - In this backdrop, it is pertinent to make a reference to a decision of 3-Judge Bench in BIR SINGH VERSUS MUKESH KUMAR [2019 (2) TMI 547 - SUPREME COURT] which went on to hold that if a signature on a blank cheque stands admitted to having been inscribed voluntarily, it is sufficient to trigger a presumption under Section 139 of the NI Act 1881, even if there is no admission to the effect of execution of entire contents in the cheque.
Admittedly, the Appellant was able to establish that the signature on the cheque in question was of the Respondent and in regard to the decision of this Court in Bir Singh, a presumption is to ideally arise - The Respondent has been able to shift the weight of the scales of justice in his favour through the preponderance of probabilities.
Upon perusal of the aforementioned principles and applying them to the facts and circumstances of the present matter, it is evident that there is no perversity and lack of evidence in the case of the respondentaccused. The concurrent findings have backing of detailed appraisal of evidences and facts, therefore, do not warrant interference in light of above enlisted principles.
Appeal dismissed.
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2024 (8) TMI 390
Interpretation of interest clauses in an arbitration award - whether interest is payable on interest or whether 15% interest per annum awarded would be on the principal sum award plus 12% per annum interest on it for the preaward period? - HELD THAT:- Section 34 of the CPC provides that where the decree is for payment of money, the court may order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged. Again, the reading of the aforesaid Sub-Section (1) of Section 34 CPC would reveal that the interest is payable on the principal sum adjudged and not on interest part of the award.
The Interest Act, 1978 vide Sub-Section (3) of Section 3 specifically lays down that nothing in Section 3 which permits the court to award interest shall empower the court to award interest upon interest. It means that ordinarily the courts are not entitled to award interest upon interest unless specifically provided either under any statute or under the terms and conditions of the contract.
It is evident that ordinarily courts are not supposed to grant interest on interest except where it has been specifically provided under the statute or where there is specific stipulation to that effect under the terms and conditions of the contract. There is no dispute as to the power of the courts to award interest on interest or compound interest in a given case subject to the power conferred under the statutes or under the terms and conditions of the contract but where no such power is conferred ordinarily, the courts do not award interest on interest.
Neither the Act specifically empowers the Arbitrator or the court to award interest upon interest or compound interest nor there is any other provision which provides for grant of compound interest or interest upon interest. Even Section 34 CPC is silent in this regard whereas Sub-Section (3) of Section 3 of the Interest Act specifically prohibits the same.
It is not deemed appropriate under the facts and circumstances of the case to exercise our discretionary jurisdiction under Article 136 of the Constitution of India so as to interfere with the opinion expressed concurrently by the two courts below - SLP dismissed.
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2024 (8) TMI 389
Dishonour of cheque - existence of legally and enforceable debt or liability - dispute of Civil nature for which the institution of criminal proceedings warranted or not - HELD THAT:- It is admitted that the entire deal was for purchase of 5 Acres of land for a total sale consideration of Rs. 7.75 Crores from the petitioner, which initially was agreed to be purchased by one Ms. Sindhu, who subsequently, introduced the petitioner and buyer No. 1, Mr. Ramalingu, who agreed to substitute Ms Sindhu and instead purchased the entire piece of land.
The perusal of these documents would show that while an Agreement to Sell was admittedly executed on 12.05.2022, there are inherent contradictions in the assertions made by the petitioner about the Sale Deed having been already executed; if the Sale Deed was already executed, there was no question of there being an Agreement to Sell. Rather from the perusal of these documents, aside from there being inherent contradictions in the various clauses, it is the defence of the petitioner that he has paid the entire sale consideration that these cheques were issued as the security cheques and that a Sale Deed had been duly executed in his favour on payment of the sale consideration.
The respondent has denied the execution of Sale Deed and has claimed it to be a fabricated document produced by the Petitioner in his defence, which needs to be proved by him by way of evidence. In fact, the cross examination of the respondent got deferred for production of the Original sale Deed. It cannot be said that a complaint under Section 138 of the N.I. Act, filed by the respondent No. 2, does not prima facie disclose the commission of an offence or that it is liable to be quashed - Pertinently, the Apex Court in the case of M.M.T.C Ltd. vs. Medchl Chemicals & Pharma (P) Ltd. [2001 (11) TMI 837 - SUPREME COURT] has held that the burden of proving that there is no existing debt or liability on the respondents and merely on the basis of averments in the petition, the Court cannot conclude that there was no existing debt or liability in that regard.
The petitioner has admitted the issue of cheques by him and date of 22.05.2023 has also been put by him giving rise to the presumption in favour of the respondent. Secondly, the petitioner had neither challenged the Order of summoning or framing of Notice. Thirdly, it is at the stage of cross-examination of the complainant when the petitioner intends to confront with the alleged Sale Deed which is denied by the respondent, which is being produced by him and he needs to prove his defence.
There is absolutely no merit in the present Petition claiming that no prima facie case is disclosed by the petitioner in his complaint under S.138 N.I. Act, which is hereby dismissed.
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2024 (8) TMI 388
Challenge to order passed by the Debt Recovery Tribunal (DRT), allowing the sale of a mortgaged apartment at below the approved reserve price in an auction - unsecured creditor treated as a secured creditor and that too with priority over the secured creditors (beneficiaries of a mortgage over the secured asset) - HELD THAT:- SCB is a creditor of the Karias and may have a cause of action to recover its dues from the Karias, for which it has instituted the SCB Recovery Suit, which would be eventually adjudicated. Should SCB succeed, the decree therein would have to be executed against the Karias.
The issue at hand is not whether SCB may have a legitimate right to recovery of the security deposit under its LLA which was admittedly entered into not only after the creation of the mortgage in favour of the Petitioner, but also after the Original Application was filed. Instead, the issue at hand is whether SCB has any right over the Secured Asset to recover its dues from the Karias. The Petitioner being a prior mortgagee in whose favour the Karias created the mortgage over the Secured Asset, it is the Petitioner who has the foremost and highest priority over recovery of proceeds of sale of the Secured Asset. SCB does not have a charge over the Secured Asset, and even if one were to treat its rights under the LLA as a fetter of some kind over the Secured Asset (and thereby an “encumbrance”), such fetter cannot in any manner rank superior to the rights of the mortgagee over the Secured Asset.
SCB, the unsecured creditor was now, by virtue of the Impugned Orders converted into a secured creditor, and worse, in preference to the consortium of banks led by IOB, the secured creditors, whose interest is now owned by the Petitioner.
The LLA having been executed after initiation of the proceedings for enforcement of the mortgage, and the entry of SCB into the premises of the Secured Asset behind the back of the mortgagee, inexorably lead to even equities not being in favour of SCB, on whose strength, the Purported Acquirers seek to justify that their bid was made at a deep discount to the reserve price. SCB having been treated as a holder of a “charge” and such charge being effectively treated as superior to even a mortgagee, no option left, but to set aside the Impugned Orders and direct the DRT to conduct the auction afresh.
Sumikin Bussan [2006 (5) TMI 567 - BOMBAY HIGH COURT] and its implications - HELD THAT:- It is evident that SCB may be a protectee against the Karias on terms reduced to writing in the LLA. SCB would have recourse to the Karias to enforce its protection. However, SCB would simply be unable to claim any protection against IOB and the Petitioner, and those claiming through such mortgagee. SCB cannot claim to have any recourse to the proceeds of the sale of the Secured Asset, and towards this end, the DRT and the DRAT failed to apply their mind to this vital facet of the matter, and instead, perhaps thinking of their decision as a practical matter, permitted the sale in the auction at a price below the reserve price, justifying such sale by alluding to SCB having a “charge” and taking into account the amount they believed would need to be paid to SCB for SCB to give up possession.
Equitable Considerations do not arise - HELD THAT:- The DRT and the DRAT ought to have been mindful of the fact that the reserve price was one of the core features of the auction. Just as the Purported Acquirers submit that IOB had agreed to the approach of the DRT to auctioning the Secured Asset (for the element of leaving it to the buyer to evict SCB after the acquisition), it must also be remembered that an integral feature of the terms of the auction was that the sale would not be at below the reserve price - the DRT Receiver, upon receiving the bids and comparing them with the DRTapproved reserve price, rightly concluded that the auction deserved to be declared as a failure. The only means for the DRT over-ruling this obvious position was the treatment of SCB as a beneficiary of a “charge” and that too superior to the mortgagee, which aspect has been dealt with extensively earlier.
The Impugned Orders have not only granted relief on issues that form the subject matter of the SCB Recovery Suit, but also execute the same against the Secured Asset (the execution would have had to be against the Karias). We say nothing more, particularly since the matter is relegated to the DRT to conduct the proceedings afresh and to auction the Secured Asset in accordance with law and to rule on the same in accordance with the law declared by us in this judgement.
The DRT Order upholding the sale of the Secured Asset to the Purported Acquirers, and all consequential actions such as issuance of the sale certificate and other formalities flowing from the DRT order are hereby quashed and set aside - The DRT is directed to conduct and oversee an auction afresh in accordance with law, treating the mortgagee as the only secured creditor with a charge in the form of the mortgage over the Secured Asset - SCB is free to pursue recovery proceedings against the Karias to recover the amount so deposited, which is in fact, the subject matter of the SCB Recovery Suit.
Petition allowed.
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2024 (8) TMI 387
Payment of interest during the period from 1 July 2016 to 31 December 2019 - rejection of prayer of Appellant for exclusion of Covid-19 lockdown period for payment of interest.
Payment of interest from 1 July 2016 - HELD THAT:- It is undisputed position that the possession has not been handed over by 31 December 2019 and therefore it is quite unnecessary to decide the exact effect of the statements made by the Respondents before the MahaRERA on 4 July 2018. Therefore, Appellant cannot rely upon order dated 4 July 2018 for the purpose of escaping the liability to pay interest for the period prior to 31 December 2019.
Whether indication of fresh date of completion of project while registering ongoing project under Section 4(2) (l)(C) of RERA read with Rule 4(2) of Maharashtra Regulations would amount to alteration of agreement between the parties vis-aà-vis Promoter’s liability to pay interest under Section 18? - HELD THAT:- Under Section 4(2)(l)(C) of RERA, the promoter is required to make a declaration about the time period within which he undertakes to complete the project - under the provisions of Section 4(2)(l)(C) of RERA read with Rule 4(2) of Maharashtra Regulations, it is incumbent for a promoter to make declaration of the period within which he undertakes to complete the pending project. It is Appellant’s case that since it has declared 31 December 2019 as the date for completion of the project, the said date must be taken into consideration for the purpose of determination of interest under the provisions of Section 18 of the Act.
The issue as to whether the provisions of Section 4(2)(l)(C), of RERA Act enables the promoter to give fresh timeline in violation of the time period stipulated in the agreement came up before the Division Bench of this Court in Neelkamal Realtors [2017 (12) TMI 1580 - BOMBAY HIGH COURT]. In that case, constitutional validity of certain provisions of RERA were challenged. The two learned Judges of the Division Bench have rendered separate Judgments with same conclusion in Neelkamal Realtors. Justice Naresh Patil (as he then was) in his Judgment has held in para 128 that RERA does not contemplate rewriting of contract between the flat purchaser and the promoter.
Mere indication of date 31 December 2019 by the Appellant while registering the project under the provisions of Section 4(2)(l)(C) of RERA and Regulation 4(2) of Maharashtra Regulations does not affect the obligations on his part arising out of agreement executed with the Respondents. Under that agreement, the Appellant undertook to hand over possession of the flat to the Respondents on 30 June 2016. Therefore, the Tribunal has rightly directed the Appellant to pay interest to the Respondents from 1 July 2016. I do not find any serious error being committed by the Tribunal in directing payment of interest by taking into consideration the timeline specified in the agreement and by ignoring the timeline declared at the time of registration of the project.
Liability of the Appellant to pay interest after issuance of Occupancy Certificate on 27 April 2022 - HELD THAT:- The conduct on the part of the Appellant exhibited vide letter dated 17 May 2022 in not adjusting the amount of interest payable from 1 January 2020 and in demanding interest from the Respondents is totally unreasonable and exhibits disinclination to hand over possession of the flat to the Respondents. The Appellant is responsible for non-handing over of possession of the flat even after issuance of Occupancy Certificate and must be made liable to pay interest till possession of the flat is delivered. In fact during the course of hearing of the present Appeals, the dispute was referred to mediation which unfortunately failed - The conduct exhibited by the Appellant leaves no manner of doubt that it is solely responsible for non-handing over of possession of the flat to the Respondents after issuance of Occupancy Certificate. Therefore, no solace can be provided to the Appellant in respect of liability to bear interest after issuance of Occupancy Certificate.
No substantial question of law is involved in the Appeals filed by the Appellant - appeals dismissed.
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2024 (8) TMI 252
Prayer to accept and mark as an exhibit a certified copy of sale deed - Whether certified copy of a sale deed could be considered a public document so as to allow it to be marked as an exhibit waiving the formal proof? - Whether this document could be marked an exhibit waiving the requirement of formal proof?
Prayer to accept and mark as an exhibit a certified copy of sale deed - HELD THAT:- Admittedly, the document in question was filed before the settlement of issue and, therefore, it was available at the time of admission-denial of the documents. Merely marking a document exhibit does not mean it has become an admissible piece of evidence. An objection to its admissibility does not get excluded when the document is marked as exhibit.
Reference could be made to the Hon’ble Supreme Court decision in the case of Roman Catholic Mission Vs. State of Madras & Anr., [1966 (1) TMI 88 - SUPREME COURT]. Therefore, the Court could always look into such document considering its relevance and other aspects to test its admissibility. Hence, the impugned order could not be faulted on the aforesaid count.
Whether certified copy of a sale deed could be considered a public document so as to allow it to be marked as an exhibit waiving the formal proof? - HELD THAT:- The Division Bench of Madhaya Pradesh High Court in the case of Smt. Rekha Rana & Ors. Vs. Smt. Ratneshree Jain, [2005 (8) TMI 727 - MADHYA PRADESH HIGH COURT] has held the proposition that a certified copy of a sale deed is a public document or a registered sale deed is a public document are erroneous. It has further been held that a registered document (deed of sale etc.) is not a public document. It is a private document. Further, a certified copy of a registered document, copied from Book and issued by the Registering Officer, is neither a public document, nor a certified copy of a private document, but is a certified copy of a public document. In other words, a certified copy of a registered document is a certified copy of public document - thus, it could be safely concluded that the certified copy of a registered sale deed would fall under the category of public document under Section 74 (2) of the Evidence Act.
Whether this document could be marked an exhibit waiving the requirement of formal proof? - HELD THAT:- The definition of public document under Section 74 of the Evidence Act takes in public records kept in any state of private document. A certified copy is therefore admissible in evidence both under Section 65 (e) and 65 (f) of the Evidence Act. The certified copy is, therefore, secondary evidence of public record of sale deed kept in the office of the Registrar. Invoking Section 57(5) of the Registration Act, the said copy becomes admissible for the purpose of proving the contents of the original document itself. Therefore, the certified copy becomes admissible in evidence but proof of execution could not be dispensed with.
Thus, the certified copy of sale deed can be produced in proof of the contents of the public document or part of public document of which it purports to be a copy. It can be produced as secondary evidence of the public document without laying any foundation. However, a word of caution may be added that it will only prove the contents of the original document and not be a proof of execution of the original document.
There are no hesitation in holding that the impugned order passed by the learned Munsif, Begusarai does not suffer from any infirmity - petition dismissed.
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2024 (8) TMI 251
Application of limitation for arbitration under the National Highway Act - whether the writ petition is maintainable, challenging a decision of the Arbitrator under the National Highway Act, 1956, in a petition filed under Article 226 of the Constitution of India?
HELD THAT:- It is clear from Section 2(4) of the Arbitration and Conciliation Act that Section 43 will not apply to every arbitration under any other enactment. This means that if no limitation is prescribed under any other enactment, provisions of the Limitation Act would not apply to such arbitration under such enactment. In the light of the above, the Limitation Act will not apply for arbitration under the National Highway Act.
The question of interfering with the writ petition challenging the decision has been dealt with by the Division Bench of this Court in writ appeal No.1364/2024. This Court, in categorical terms, held that the remedy to challenge the decision of the Arbitrator, who is the District Collector, is by invoking the provisions under Section 34 of the Arbitration and Conciliation Act. Thus it is clear that the writ petition is not maintainable against the decision of the Arbitrator, who happens to be a District Collector.
The writ petition is not maintainable - the impugned judgment set aside - appeal allowed.
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2024 (8) TMI 196
Notification dated 29.05.2015 issued by the Central Government in exercise of the powers conferred by Section 9 of the MSMED Act - whether Banks/ Non-Banking Financial Companies (NBFCs) are not obliged to adopt the restructuring process as contemplated in the Notification dated 29th May, 2015 issued by the Ministry of Micro, Small and Medium Enterprises, on its own without there being any application by the Petitioners/ MSMEs?
HELD THAT:- The RBI in order to make the said Framework contained in the Notification dated 29.05.2015 compatible with the existing regulatory guidelines on “Income Recognition, Asset Classification and provisioning pertaining to Advances” issued to the banks by the RBI, had made certain changes in the said Framework, in consultation with the Central Government and issued revised Framework along with the operating Instructions vide the Communication dated 17th March, 2016, addressed to all the Scheduled Commercial Banks.
It cannot be gainsaid that the Banking Regulation Act 1949 basically seeks to regulate banking business and mandates a statutory comprehensive and formal structure of banking regulation and supervision in India. Section 21 and Section 35A of the said Act empower the Reserve Bank of India to frame the policy and give directions to the banking companies in relation to the advances to be followed by the banking companies. Such directions have got to be read as supplement to the provisions of the Banking Regulation Act and accordingly are required to be construed as having statutory force and mandatory.
What is contemplated in the “Framework for Revival and Rehabilitation of MSMEs” contained in the Instructions/ Directions stated hereinabove, is required to be followed prior to the classification of the borrower’s account, (in the instant case MSMEs loan account), as Non-Performing Assets. The said Instructions contained in the Notification dated 29.05.2015 as part of measures taken for facilitating the promotion and development of MSMEs issued by the Central Government in exercise of powers conferred under Section 9 of the MSMED Act, followed by the Directions issued by the RBI in exercise of the powers conferred under Section 21 and 35A of the Banking Regulation Act, the Banking companies though may be ‘secured creditors’ as per the definition contained in Section 2 (zd) of the SARFAESI Act, are bound to follow the same, before classifying the loan account of MSME as NPA.
When it is mandatory or obligatory on the part of the Banks to follow the Instructions/Directions issued by the Central Government and the Reserve Bank of India with regard to the Framework for Revival and Rehabilitation of MSMEs, it would be equally incumbent on the part of the concerned MSMEs to be vigilant enough to follow the process laid down under the said Framework, and bring to the notice of the concerned Banks, by producing authenticated and verifiable documents/material to show its eligibility to get the benefit of the said Framework.
The findings recorded by the High Court in the impugned order that the Banks are not obliged to adopt the restructuring process on its own or that the Framework contained in the Notification dated 29.05.2015, as revised from time to time could not be said to be mandatory in nature, are highly erroneous and cannot be countenanced - the impugned order therefore is set aside - appeal allowed.
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2024 (8) TMI 195
Direction to approach jurisdictional Assistant Commissioner of the Sub-Division, seeking redressal of grievance - substantive direction - amendment to Rule 23 as per Notification dated 08th March, 2023 - HELD THAT:- Indulgence granted in the matter broadly agreeing with the submission made by the counsel for the appellant. There is already the Grant Order and that the same is affirmed in appellant’s appeal decided by the Appellate Tribunal. What has been left over for consideration at the hands of the authorities was only the question of the payment for the subject grant. When there is statutory Tribunal’s order, relegating the appellant to the Assistant Commissioner for seeking a fresh grant is not justified.
Awrit of mandamus issued to the second respondent to formalize the grant in favour of the appellant in terms of extant rules; the appellant is liable to pay the charges under the pre-amendment Rules of 2023.
Appeal allowed.
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