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Indian Laws - Case Laws
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2024 (5) TMI 793
Dishonour of Cheque - vicarious liability - demand notice not addressed to the petitioners in their individual capacity - Proviso (b) to Section 138 of the NI Act - proceedings can be initiated against all the Trustees of a Trust or not - Section 141 of the NI Act - HELD THAT:- Proviso (b) to Section 138 of the NI Act read with Section 142 of the NI Act shows that for the maintainability of a complaint for an offence under Section 138 of the NI Act, the payee or the holder in due course of the cheque, as the case may be, should make a demand for the payment of the said amount of money by giving a notice in writing ‘to the drawer of the cheque’ within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. The notice, therefore, is to be given ‘to the drawer of the cheque’ - In the present cases, the cheques are drawn by the accused no. 2 Trust. It is, therefore, the ‘drawer of the cheques’. The notice has, admittedly, been issued to the ‘drawer’, that is, the accused no. 2- Trust. The same has been addressed to be served on the drawer/Trust through its Trustees. Presently, it is not disputed by the petitioners that they are the Trustees of the accused No. 2-Trust.
Section 141 of the NI Act states that where the offence under Section 138 of the NI Act is committed by a company, every person who, at the time the offence was committed, was in-charge and was responsible to the company for the conduct of the business of the company, shall be ‘deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly’ - the only plea of the petitioners is the lack of notice under Proviso (b) to Section 138 of the NI Act and the purported lack of pleadings in the Complaint Cases against the petitioners herein in their individual capacity.
In Kirshna Texport and Capital Markets Ltd. [2015 (6) TMI 344 - SUPREME COURT] the Supreme Court, considering the provision of Proviso (b), Section 141 and Section 7 of the NI Act has held 'Section 138 of the Act does not admit of any necessity or scope for reading into it the requirement that the Directors of the Company in question must also be issued individual notices under Section 138 of the Act. Such Directors who are in charge of affairs of the Company and responsible for the affairs of the Company would be aware of the receipt of notice by the Company under Section 138. Therefore, neither on literal construction nor on the touchstone of purposive construction such requirement could or ought to be read into Section 138 of the Act.'
The above judgment would squarely apply to the facts of the present cases. There is no requirement for separate notice(s) to be issued to each of the Trustees of the accused no. 2-Trust to make them vicariously liable and to be proceeded against in terms of Section 138 of the NI Act read with Section 141 of the NI Act. The notice having been served on the Trust through its Trustees, all the Trustees are deemed to have been duly served with the legal/demand notice(s), thereby meeting the requirement of Proviso (b) to Section 138 of the NI Act.
The averments are sufficient for the purpose of attracting Section 141 of the NI Act against the petitioners. Even otherwise, in their capacity as Trustees of the accused no. 2, the petitioners are officers in charge of the Trust. The petitioners shall have to lead their defence under Section 141 of the NI Act, in case they are to escape their liability as the Trustees of the accused no. 2- Trust, who is the drawer of the cheque(s) in question. Such defence is not to be considered by this Court or the learned Trial Court at this stage.
There are no merits in the present petitions. The same are, accordingly, dismissed.
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2024 (5) TMI 790
Defreezing of bank accounts - Scope of the Expression "Forthwith" - delay on part of the police in reporting the seizure to the jurisdictional Magistrate - HELD THAT:- In deciding whether the police officer has properly discharged his obligation under Section 102(3) Cr.P.C., the Magistrate would have to, firstly, examine whether the seizure was reported forthwith. In doing so, it ought to have regard to the interpretation of the expression, ‘forthwith’. If it finds that the report was not sent forthwith, then it must examine whether there is any explanation offered in support of the delay. If the Magistrate finds that the delay has been properly explained, it would leave the matter at that. However, if it finds that there is no reasonable explanation for the delay or that the official has acted with deliberate disregard/ wanton negligence, then it may direct for appropriate departmental action to be initiated against such erring official. It is again reiterated that the act of seizure would not get vitiated by virtue of such delay.
The reasoning adopted by the High Court cannot be sustained - This takes to the consequential question, namely, whether at this distance of time, it is to be directed that freezing of the bank accounts afresh? The answer has to be in the negative, since undisputedly by virtue of the impugned order, the bank accounts of the respondents has been defreezed and resultantly, the Respondents would have operated the accounts and amount of Rs.19,83,036/- which had been frozen would have been withdrawn. The ends of justice would be met and the interest of prosecution would be served if the Respondents are called upon, forthwith, to execute a bond undertaking to deposit the amount (which has been thus far withdrawn from the seized bank accounts) before the jurisdictional Court in the event the Court were to return a finding of guilt against the accused persons.
The appeals are allowed in part.
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2024 (5) TMI 772
Dishonour of Cheque - whether filing of a premature complaint debars, filing of a fresh complaint when the time becomes ripe to file the complaint? - HELD THAT:- The answer to the question is no more res integra as the Hon’ble Supreme Court of India in the case of YOGENDRA PRATAP SINGH VERSUS SAVITRI PANDEY & ANR. [2014 (9) TMI 1129 - SUPREME COURT] which was also relied upon by the Hon’ble Supreme Court of India in the case of Gajanad Burange vs. Laxmi Chand Goyal [2022 (9) TMI 213 - SC ORDER] wherein the Hon’ble Supreme Court has categorically observed that in case of a premature complaint in a case involving the offence punishable under section 138 of the Negotiable Instruments Act, 1881 in case of a premature complaint, complainant was given the liberty to file a fresh complaint. In the case of Gajanad Burange vs. Laxmi Chand Goyal, the Hon’ble Supreme Court of India even gave liberty to the complainant to approach the court concerned to condone the delay in filing the fresh complaint, as per the proviso of section 142 of the Negotiable Instruments Act, 1881.
It is a settled principle of law that the offence punishable under section 138 of the Negotiable Instruments Act, 1881 stands on a different footing from other penal offences. There is no specific provision debarring filing of a second complaint in respect of the same cheque upon its being dishonoured while presented for the second time - This Court is of the considered view that at this stage it will not be proper to quash the entire proceedings of Complaint Case No.568 of 2021 when the learned Chief Judicial Magistrate, Seraikella-Kharsawan has not committed any illegality in taking cognizance of that case, merely because the premature complaint being Complaint Case No. 451 of 2021, was prior to Complaint Case No.568 of 2021.
Thus, this Court is of the considered view that filing of a premature complaint in respect of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 does not debar, filing of a fresh complaint; when the time becomes ripe to file such complaint.
This Court do not find any merit in this case - petition dismissed.
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2024 (5) TMI 737
Special Package of Incentives - Imposition of cap on the total IPA allowable in respect of a unit based on Fixed Capital Investment - Whether the Special Package of Incentives granted in favour of ACL stipulated any overall financial cap based on Fixed Capital Investment for release of IPA? - HELD THAT:- ACL claims to have commenced its commercial production with effect from May 31, 2007. Eligibility Certificate for Incentives for Mega Project under the WBIS, 2000 appears to have been issued on May 18, 2010 by WBIDS in favour of ACL. Clause (b) of the Eligibility certificate dated May 18, 2010 states that the IPA @ 75% of VAT and CST paid in the previous year for which IPA would be released for five years and two months from the date of commencement of commercial production i.e., 31.05.2007, without any cap - This Court, therefore, holds that the special package approved for ACL does not stipulate any overall financial cap based on Fixed Capital Investment for release of IPA.
The finding of the Additional Chief Secretary is based on irrelevant materials as the observation of the Finance Department relates to WBIS, 2004 which does not have any manner of application to the case on hand. That apart the finding is based on incorrect interpretation of the relevant clauses of the order dated 02.03.2006. The findings of the Additional Chief Secretary in his order dated 14.02.2019, suffer from perversity.
In the case on hand, the State upon being satisfied that ACL is entitled to Special Package of Incentives as a Mega Project, issued the order dated 02.03.2006. Admittedly, IPA was released in favour of ACL for a considerable length of time. The State thereafter did not disburse IPA of the subsequent period(s), which prompted ACL to approach this Court. The stand of the State that IPA has a financial cap as reflected in the order of the Additional Chief Secretary, has not been accepted by this court as will be evident from the observation made herein before. ACL approached the writ court seeking to enforce the order dated 02.03.2006. The said action cannot be said to be tainted with illegality.
There is no pleading in support of the stand of the State that certain terms are opposed to public policy. Except the submission advanced at the Bar, no materials in support thereof have been produced before this Court. The Additional Chief Secretary, in his order dated 14.02.2019, only stated that the interpretation should not be contrary to the public policy of the State without disclosing as to how release of IPA over and above FCI limit would be opposed to public policy.
This court is not inclined to accept the argument of the learned Advocate General that release of IPA over and above the FCI limit would be opposed to public policy and that the same is against public interest - The learned Single Judge was right in holding that the attempt of the authorities of the State was mala fide and arbitrary and designed to defeat ACL’s legitimate claim for the balance amount under Special Package.
The appeal stands dismissed.
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2024 (5) TMI 736
Dishonour of Cheque - requirement to deposit a minimum of 20% of the fine or compensation - speedy disposal of cases relating to dishonor of cheques so as to see that due to delay tactics by unscrupulous drawers of dishonored cheques due to easy filing of appeals and obtaining stay in proceedings - Section 148 of The Negotiable Instruments Act 1881 - HELD THAT:- It would be relevant to discuss Section 148 of The Negotiable Instruments Act 1881, which has been inserted in the Act through Negotiable Instruments (Amendment) Act, 2018 (Act No 20 of 2018) to provide, inter alia, speedy disposal of cases relating to dishonor of cheques so as to see that due to delay tactics by unscrupulous drawers of dishonored cheques due to easy filing of appeals and obtaining stay in proceedings, injustice caused to payee of dishonored cheque who has spent considerable time and resource in court proceedings to realise value of cheque, thus, having observed that such delay has compromised sanctity of cheque transaction, Parliament thought it fit to amend Section 148 Purposive interpretation of Section 148 would be in furtherance of Objects and Reasons of amendment of Section 148 and also Section 138 of the Negotiable Instruments Act, 1881.
In the instant case, the Appellate court although vide order dated 27.03.2024 had admitted the appeal and also allowed the Bail Application moved by the applicant/petitioner but by the same order despite admitting the appeal preferred by the applicant/appellant had erroneously ordered to pay 50% of the fine as ordered vide impugned order dated 01.03.2024 within a period of 30 days from the date of the order and also provided that in case of non-deposition of fine by the appellant/applicant, the order of granting bail to the appellant/applicant shall stand automatically cancelled, thus, the appellate court while passing the impugned order dated 27.03.2024 by which it has only stayed 50% of the fine as directed vide order dated 01.03.2024 passed by the trial court has failed to consider the Statutory Provisions as enshrined under Section 148(1) and 148(2) of the Negotiable Instrument Act, 1881 which resulted in miscarriage of justice.
The issue involved in this case has broadly been dealt by Hon'ble the Supreme Court of India in the case of SURINDER SINGH DESWAL @ COL. S.S. DESWAL AND OTHERS VERSUS VIRENDER GANDHI [2019 (5) TMI 1626 - SUPREME COURT] wherein the Apex Court has been pleased to observe that The Negotiable Instruments Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of the dishonour of cheques. So as to see that due to delay tactics by the unscrupulous drawers of the dishonoured cheques due to easy filing of the appeals and obtaining stay in the proceedings, an injustice was caused to the payee of a dishonoured cheque who has to spend considerable time and resources in the court proceedings to realise the value of the cheque and having observed that such delay has compromised the sanctity of the cheque transactions, Parliament has thought it fit to amend Section 148 of the NI Act. Therefore, such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 of the NI Act and also Section 138 of the NI Act.
This Court finds that the Appellate Court has erred in law while ordering to pay 50% of the fine imposed by the learned trial court while convicting him under Section 138 of the Negotiable Instruments Act, 1881 till the disposal of the appeal preferred by the appellant/applicant before the Appellate Court. Thus, this Court deems it appropriate to dispose of this application under Section 482 Cr.P.C. with modification of the impugned order dated 27.03.2024 to the extent that the applicant is directed to deposit 20% of the fine imposed upon him by the trial court within sixty days' from the date of this judgment and the bail already granted by the Appellate Court shall continue till the disposal of the appeal pending before the Appellate Court.
The present application under Section 482 Cr.P.C. is finally disposed of.
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2024 (5) TMI 661
Dishonour of Cheque - insufficiency of funds - cheque issued in discharge of a debt or not - rebuttal of presumption in terms of Section 118 read with Section 139 of NI Act - HELD THAT:- The High Court found that the debt/liability, in discharge of which, according to the petitioner, the cheques were issued, did not reflect in the petitioner’s balance-sheet. The other partners of the firm did not depose as prosecution witnesses to establish that the cheque-amounts were advanced to the accused as financial assistance. The respondent no.1/accused has put up a plausible defence as regards the reason for which the petitioner’s funds had come to her account. Both the appellate fora, on going through the evidence did not find existence of any “enforceable debt or other liability”. This strikes at the root of the petitioner’s case.
As the impugned decision is primarily based on considering the evidences produced by the respective parties, it is not considered necessary to individually deal with the ratio of the respective decisions relied on by the learned senior counsel representing the parties. The principles emerging from these authorities have been applied in the judgment of the High Court.
Petition dismissed.
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2024 (5) TMI 660
Restoration of securities held by the appellant which were allegedly illegally sold by the respondent-firm - HELD THAT:- The fact remains that as on 9th May, 2017, the respondent was liable to pay a sum of Rs.21,70,143/- which the respondent has not offered till date. In fact the liability of the respondent to pay the said amount of Rs.21,70,143/- was recognized by the Award made by the Appellate Arbitral Tribunal on 27th September, 2013.
Therefore, to put an end to the litigation which started in 2012, considering the present age of the appellant, this is a fit case to exercise Extra Ordinary Jurisdiction of this Court under Article 142 of the Constitution of India. It is proposed to direct the respondent to pay simple interest at the rate of 12% per annum on the amount of Rs.21,70,143/- from 27th September, 2013 which is the date of the Award of the Appellate Arbitral Tribunal.
The impugned judgment is modified and it is ordered by directing that the respondent shall pay a sum of Rs.21,70,143/- to the appellant along with simple interest thereon at the rate of 12% per annum with effect from 27th September, 2013 within a period of two months from today.
Appeal allowed.
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2024 (5) TMI 614
Dishonour of Cheque - legal heir of deceased - substitution of the opposite party (deceased complainant) - It is the case of the petitioner that the opposite party is not the sole legal heir of deceased - HELD THAT:- The Supreme Court in Rashida Kamaluddin Syed & Anr. v. Shaikh Saheblal Mardan (Dead) through LRs. & Anr. [2007 (3) TMI 725 - SUPREME COURT] held that 'it is clear that on the death of Shaikh Saheblal, the case did not abate. It was, therefore, open to the sons of complainant to apply for continuation of proceedings against accused persons.'
The learned Sessions Judge has allowed the application for substitution of the opposite party herein as one of the legal heirs of deceased Swapan Guha. The learned Judge had rightly held that it is for the legal heirs who intend to continue the prosecution on the original complainant’s death, who is to be permitted to prosecute the accused persons - Considering the said order under revision, this Court finds no irregularity in the said order, the same being in accordance with law thus requires no interference by this Court.
This Court has observed that there are other legal heirs of deceased Swapan Guha. The learned Sessions Judge has also clearly held in his order under revision that there are other legal heirs. But as the opposite party being one of the legal heirs wishes to proceed with the case, the learned Trial Court has rightly allowed the same.
The present revisional application is, thus, disposed of.
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2024 (5) TMI 613
Dishonour of Cheque - conviction of accused - discharge of existing legal liability - in spite of notice being duly served the cheque amount was not paid by the appellant - HELD THAT:- This Court finds that the cheque in question was issued by the appellant herein in discharge of his existing legal liability which he could not successfully rebut.
The demand notice has been duly served upon the accused/appellant and proved before the Trial Court and in spite of notice being duly served the cheque amount was not paid by the appellant herein - From the evidence on record, this Court finds that the learned Trial Court has considered the materials and the evidence on record in accordance with law and, as such, the said order of conviction being in accordance with law requires no interference by this Court.
In Tedhi Singh vs Narayan Dass Mahant [2022 (3) TMI 797 - SUPREME COURT] the Supreme Court held 'we would think that in the totality of facts of this case the appellant has not established a case for interference with the finding of the Courts below that the offence under Section 138 N. I. Act stands committed by the appellant. We have been told that the amount of compensation in a sum of Rs.7 Lakhs which is relatable to the cheque amount has been deposited already in the Trial Court.'
The judgment and order dated 18.03.2017 passed by the learned Additional District & Sessions Judge, (F.T.C. No. II) at Calcutta in Criminal Revision No. 01 of 2015 and the judgment and order of conviction and sentence passed by the learned Metropolitan Magistrate, 19th Court, Calcutta, dated 27.10.2014, in case no. C/16014/2011, convicting and sentencing the petitioner to suffer S.I. for one month and to pay Rs. 4,00,000/- to the complainant as compensation within three months in default to suffer simple imprisonment for a period of six months, is hereby modified - The substantive sentence to suffer S.I. for one month is set aside - Revision application disposed off.
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2024 (5) TMI 612
Dishonour of Cheque - Continuation of proceedings during moratorium period - vicarious liability of director - Despite moratorium, whether institution or continuation of proceedings under Section 138 or 141 of the NI Act against the erstwhile Directors or the persons in-charge of or responsible for conduct of the business of a corporate debtor could be continue? - after resolution plan under Section 31 of the IB Code by Adjudicating Authority and in the light of provisions of Section 32-A of the IB Code, such criminal proceedings will stand terminated against a corporate debtor or not.
HELD THAT:- As per Section 14 of the IB Code, the adjudicating authority shall declare moratorium for prohibiting institution of suit or continuation of pending suit or proceedings against a corporate debtor including execution of any judgment, decree or order. The object of a moratorium provision such as Section 14 is to see that there is no depletion of a corporate debtor's assets during the insolvency resolution process so that it can be kept running as a going concern during this time, thus maximising value for all stakeholders - Notably, moratorium provision does not extinguish any liability, civil or criminal, but only casts a shadow on proceedings already initiated and on proceedings to be initiated. This moratorium shall remain into force till the date of approval of resolution plan or liquidation order under Section 31 of the IB Code. Then, Section 32-A of the IB Code comes into play.
Section 32-A(1) operates only after the moratorium comes to an end. On approval and commencement of the corporate resolution plan, the liability of a corporate debtor for an offence committed prior to commencement of corporate insolvency shall cease and a corporate debtor shall not be prosecuted for an offence if in the resolution plan there is a change in management or control of the corporate debtor to a person other than a promoter and other person mentioned in Section 32A of the IB Code - Interestingly, per the second proviso of Section 32A(1) of IB Code, a natural person, who was in any manner in charge of or responsible to the corporate debtor for the conduct of its business or associated with a corporate debtor in any manner and who was directly or indirectly involved in the commission of such offence shall continue to be liable to be prosecuted and punished for an offence committed by a corporate debtor.
The applicant nos. 2 and 3 are the natural persons through whom the applicant no. 1-Company was managed, rather they are signatories to the cheques in question. The complaint specifically mentions that at the relevant time, the applicant nos. 2 and 3 were managing the day to day affairs and business of the applicant no. 1-Company - the protection of cessation of liability for prior offence under Section 32-A of the IB Code is applicable only to a corporate debtor i.e. a Company and that too only if the management of the Company is changed in the resolution approved by the adjudicating authority - there are substance in the argument of the learned counsel for the non-applicant that the applicant nos. 2 and 3 cannot be protected by Section 32-A of the IB Code.
The protection provided to a corporate debtor under Section 32-A(1) of absolving from its liability for an offence committed prior to commencement of the corporate insolvency process will not be available to the applicant no. 1, a corporate debtor also. Therefore, the applicant no. 1-Company (corporate debtor) is also not absolved from its criminal liability for an offence committed prior to commencement of insolvency proceedings.
There are no merit in the submission of the learned counsel for the applicants. The proceedings against the applicants, for the offence punishable under Section 138 of the NI Act, shall continue against the applicants, the company as well as its directors. Thus, the application is sans merits and fails.
The application is dismissed.
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2024 (5) TMI 611
Grant of Regular Bail - misappropriation and transfer of money into various shell companies - Hawala transactions - seeking to include the additional conditions in the interim bail order - it was held by High Court that As this Court granted interim bail on medical grounds, this Court thought fit that the petitioner was not supposed to conduct public meetings and rallies - HELD THAT:- As jointly prayed for by the learned Senior counsels for the parties, the matter is adjourned for ten weeks.
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2024 (5) TMI 610
Breach of fundamental rights or not - Seeking withdrawal of condition that appellant shall not create any untoward situation in public and shall not be involved in any political activities, directly or indirectly - HELD THAT:- The imposition of such condition would breach the fundamental rights of the appellant and no such conditions could have been imposed - the condition imposed by the High Court is quashed and set aside - appeal allowed.
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2024 (5) TMI 608
Seeking refund of chit amount deposited until stoppage of the business - illegal termination of the chit fund business and consequent non-refund of the subscription amount - deficiency of service - OP refused to re-pay the subscription amount since, according to it, the complainant owed certain dues to it and therefore, it adjusted the subscription amount against pending dues of the complainant.
The OP had raised a plea in its version that the complainant does not satisfy the definition of consumer since the service was obtained for a commercial purpose.
HELD THAT:- The significance of deconstructing the definition of consumer into three parts was for the purpose of explaining on whom lies the onus to prove each of the different parts. There can hardly be any dispute that the onus of proving the first part i.e. that the person had bought goods/availed services for a consideration, rests on the complainant himself. The carve out clause, in the second part, is invoked by the service providers to exclude the complainants from availing benefits under the Act. The onus of proving that the person falls within the carve out must necessarily rest on the service provider and not the complainant. This is in sync with the general principle embodied in Section 101 and 102 of the Evidence Act that ‘one who pleads must prove’. Since it is always the service provider who pleads that the service was obtained for a commercial purpose, the onus of proving the same would have to be borne by it.
Having held that the onus to prove that the service was obtained for a commercial purpose is on the service provider, we may clarify the standard of proof that has to be met in order to discharge the onus. The standard of proof has to be measured against a ‘preponderance of probabilities’. The test to determine whether service obtained qualified as a commercial purpose is no longer res integra in view of this Court’s decision in Lilavathi v. Kiritlal [2019 (11) TMI 1824 - SUPREME COURT]. Para 19 sets out the principles on which it must be determined whether the onus of proving ‘commercial purpose’ has been properly discharged by the service provider.
The question of inquiring into the third part will only arise if the service provider succeeds in crossing the second part by discharging its onus and proving that the service obtained was for a commercial purpose. Unless the service provider discharges its onus, the onus does not shift back to the complainant to show that the service obtained was exclusively for earning its livelihood through the means of self-employment. In the facts of this case, the OP has merely pleaded in its version that the service was obtained for a commercial purpose. No evidence has been led to probabilise its case other than merely restating its claim on affidavit. It is now well too settled that a plea without proof and proof without plea is no evidence in the eyes of law.
Appeal dismissed.
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2024 (5) TMI 518
Dishonour of Cheque - liability created in favour of the Complainant by the Accused or not - MoU between the manufacturer and the retailer - The retailer issued multiple cheques to the distributor, which were subsequently dishonoured - presumption under Section 139 of NI Act was rebutted by the Accused - differences in the evidences - presumption of innocence in criminal trial - evidentiary value of evidence - proof of foundational facts for drawing of presumption under Section 139 of NI Act on the basis of available documents - HELD THAT:- The view of the trial Court is hyper technical view. The trial Court has overlooked the basic facts about the roles played by CW No. 1 and CW No. 2. The trial Court scrutinized their evidence by presuming that they are the witness to prove a particular fact only but in fact, they are the witness in respect of the facts forming transaction right from placing of the orders till filing of complaint. The trial Court overlooked the fact that the Complainant is not a natural person but an artificial entity working through natural persons and that too, in the office situated at different places. The trial Court decided the complaint as if the trial of bodily offences is being conducted.
The complaint under Section 138 of NI Act is based on the documents and proved by giving oral evidence. On some occasion, these complaints involve business transactions. It involves the correspondence in between the parties made in usual course. Such correspondence throws light on the intention of the parties. The trial Court overlooked the difference in relationship in between the H.P., and Kores, Kores and Ambitious and Ambitious and H.P., and Ambitious.
No doubt, Kores on behalf of H.P., was selling the products to the Sub-distributors. It is true that the MoU in between H.P., and Kores was not produced. There must be some financial terms. However, it is already observed the relationship in between Kores and Ambitious, stand on different footing. It is purely sale and purchase of products. Ambitious was getting some incentives from H.P. Ambitious was not satisfied - The MoU is restricted only to incentives by way of sale promotion and it has nothing to do with basic transaction of sale and purchase of products. This defence was taken by the Ambitious just to avoid a lawful payment to Kores. This finding is given on the basis of available documents and on the basis of documents not produced by the Ambitious including the Court litigation.
The cheques are the cheques within the purview of instruments. The instructions given for not depositing these cheques by Ambitious could not be substantiated by bona fide dispute with Kores. In fact, it was a dispute with the H.P. Coupled with this fact, no evidence was adduced to prove the sufficiency of amount in the account by Ambitious. The Kores have complied with the provisions of Section 138 of the NI Act relating to issuance of notice in time, receipt of notice and filing of complaint in time - the judgment of acquittal needs to be reversed - the Accused has committed offence punishable under Section 138 of the NI Act.
The order of conviction upheld - appeal allowed.
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2024 (5) TMI 517
Constitutional validity of para 83 of the EPF Scheme and para 43A of the Pension Scheme - international workers - grievance of the petitioners is that, under para 83 of the EPF Scheme, “international workers” are covered under the Act and Scheme, irrespective of their salary drawn by them. The employees other than the international workers, who draw exceeding Rs. 15,000/- per month is outside the purview of the Scheme.
HELD THAT:- Section 5 of the EPF & MP Act states that the Central Government may, by notification in the Official Gazette, frame a Scheme to be called the Employees’ Provident Fund Scheme for the establishment of provident funds under this Act for the employees or for any class of employees and specify establishments or class of establishments to which the said Scheme shall apply and they shall be established, as soon as, may be after the framing of the scheme, a Fund in accordance with the provisions of this Act and the Scheme.
On reading of Section 7 of the said Act, it is thus clear that the modification of the Scheme is a statutory power which the Central Government initially exercises and then the notification is placed before each of the houses of the parliament for its ratification - In the instant case, the Government of India has the power under Section 7(1) of the EPF & MP Act to modify the Scheme from time to time and the competence of the Central Government to introduce or modify the Scheme is apparent from Section 7 of the EPF & MP Act.
The aims and objects of introducing para 83 of the EPF Scheme as could be seen is, to protect the Indian employees going abroad to work from being subjected to the social security and the retirement clause of their post-country which are prejudicial to their interest and to motivate these countries for entering into such agreements with India and to make it happen is to provide for reciprocal treatment to the nationals of these countries while they work in India - Keeping in view the aims and objects of the main EPF & MP Act, when a ceiling amount of Rs. 15,000/- per month has been placed as a threshold for an employee to be a member to the scheme, para 83 of the EPF Scheme ought not to have an unlimited threshold for international workers while denying the same benefit to Indian workers. There being no commonality of interest of the aims and objectives of EPF & MP Act, 1952 and para 83 of EPF Scheme, para 43A of EP Scheme to be struck down as incompatible, arbitrary, unconstitutional and ultra vires.
Thus, there is discrimination between the Indian employees working in a non-SSA country (who are not international workers as per definition) and foreign employees from a non-SSA working in India who are classified as international workers. There is no rational basis for this classification nor there is reciprocity that compels to classify foreign employees from non-SSA countries as international workers - The introduction of para 80 and 81 under the Scheme in respect of working journalists and the cine employees cannot be equated with bringing international workers under the EPF Scheme. In the case of working journalists, considering the fact that they undergo a lot of risk on duty, the said amendment was made.
The introduction of para 83 of Employees’ Provident Fund Scheme and para 43A of Employees’ Pension Scheme are hereby struck down as unconstitutional and arbitrary and consequently, all the orders passed thereof are unenforceable.
Writ Petitions are allowed.
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2024 (5) TMI 458
Recovery of time-barred debt - extinguishment of debt or not - Use of the Haryana Public Moneys (Recovery of Dues) Act, 1979, and the State Financial Corporation Act, 1951, for recovering time-barred debts. - HELD THAT:- While the Court focused on the implication of a notification under Section 71 of the Kerala Revenue Recovery Act whereunder the Government could declare the Act applicable to any institution, the attention of the Court in STATE OF KERALA & ORS. VERSUS V.R. KALLIYANIKUTTY & ANR. [1999 (4) TMI 609 - SUPREME COURT] was not drawn to the powers envisaged under the State Financial Corporations Act which were also applicable to the recovery of debts in Kerala. As noticed above, the statement of objects and reasons of the State Financial Corporations Act refers to providing State Financial Corporations with ‘special privileges in the matter of enforcement of claims against borrowers’.
This Court in V.R. Kallliyanikutty held that the words ‘amounts due’ occuring in the Kerala Revenue Recovery Act would only include legally recoverable debts i.e. debts which are not time-barred.
The Court in K.C. Ninan [2023 (5) TMI 1251 - SUPREME COURT], after a comprehensive analysis of the scheme of the Electricity Act, held that the power to initiate proceedings to recover the electricity dues was independent of the power to disconnect electrical supply. Thereafter, the Court noticed the decision in V.R. Kalliyanikutty and concluded that statute of limitation only barred a remedy, while the right to recover the loan through ‘any other suitable manner provided’ remains untouched. Having so held, the Court rejected the argument of the auction purchasers and concluded that the bar of limitation under Section 56(2) of the Electricity Act would only restrict the remedy of disconnection under Section 56 of the Electricity Act and that the Electric Utilities were entitled to reocver electricity arrears through civil remedies or in exercise of its statutory power.
Thus, for a comprehensive consideration and an authoritative pronouncement after taking into account all aspects, including those dealt with hereinabove, the matter needs to be placed before the Hon’ble Chief Justice of India to constitute an appropriate three-judge bench.
Let the papers along with this order be placed before Hon’ble the Chief Justice of India for seeking appropriate directions from His Lordship, in this regard.
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2024 (5) TMI 457
Dishonour of Cheque - vicarious liability of Executive Director - petitioner (resident Indian Director) was having control of the affairs of the company or not - Validity of summons issued by the Trial Court - HELD THAT:- In KK. AHUJA VERSUS VK. VORA [2009 (7) TMI 758 - SUPREME COURT] the Supreme Court highlighted the difference between the position of a Managing Director of the Company vis-à-vis an ordinary Director, as far as Section 141 of the NI Act is concerned, and held that if the accused is the Managing Director of a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company; Law presumes that the Managing Director is in charge of and is responsible to the company for the conduct of its business.
In National Small Industries Corporation Limited [2010 (2) TMI 590 - SUPREME COURT] the Supreme Court reiterated that if the accused is a Managing Director or Joint Managing Director, then it is not necessary to make specific averments in the complaint and by virtue of their position, they are liable to be proceeded with.
The submission of the petitioner that the petitioner has since resigned, also cannot make the petitioner escape his liability under Section 138 read with Section 141 of the NI Act, at this Stage. In S.P. Mani & Mohan Diary [2022 (9) TMI 846 - SUPREME COURT], the Supreme Court has held that different persons can be in-charge of the company when each of the series of acts of commission and omission essential to complete the commission of offence by the company were being committed. Therefore, “every person who was in charge of and was responsible to the company for the conduct of its business at the time any of the components necessary for the commission of the offence occurred may be “proceeded against”, but may not be “punished” if he succeeds in proving that the offence was committed without his knowledge and despite his due diligence; the burden of proving that remaining on him.
There are no merit in the present petitions. The same are dismissed.
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2024 (5) TMI 407
Reimbursement of additional expenditure incurred due to an increase in the rates of royalty and associated sales tax on soil, sand and crushed stone aggregates - Non-payment for executed work of embankment with soil/pond ash for the initial 150 mm depth stripped in accordance with the requirements of the contract - Reimbursement of additional costs incurred due to an increase in the forest transit fee rates - scope of interference in a petition under Section 34 of the Arbitration Act - HELD THAT:- This Court, in the case of UHL POWER COMPANY LTD. VERSUS STATE OF HIMACHAL PRADESH AND STATE OF HIMACHAL PRADESH VERSUS UHL POWER COMPANY LTD. [2022 (1) TMI 307 - SUPREME COURT] held that the jurisdiction of the Court under Section 34 is relatively narrow and the jurisdiction of the Appellate Court under Section 37 of the Arbitration Act is all the more circumscribed.
The Division Bench held that the imposition of a tax or upward revision of an already existing tax or levy through subsequent legislation is admittedly akin to the levy of additional royalty. The Division Bench relied upon a decision of the same Court in the case of the NATIONAL HIGHWAYS AUTHORITY OF INDIA VERSUS M/S ITD CEMENTATION INDIA LIMITED [2015 (4) TMI 1096 - SUPREME COURT]. The Division Bench in the impugned judgment held that the claim made on account of the increase in royalty, sales tax, forest transit fee, etc., was covered in favour of the respondent by the said decision.
Whether the claim for the construction of embankment forms part of the activity of clearing and grubbing and was not payable as embankment work? - HELD THAT:- The Division Bench held that nothing is shown that indicates that the construction of the embankment can be said to have been done in a manner where the lower part of the embankment is made only by carrying out the activity of backfilling. The High Court also noted that the appellant sought to make deductions after initially paying the amounts for the embankment. The Division Bench was right in holding that the majority opinion of technical persons need not be subjected to a relook, especially when the learned Single Judge had also agreed with the view taken by the Arbitral Tribunal.
The learned Single Judge and the Division Bench of the High Court have examined the challenge to the award within four corners of limitation imposed by Sections 34 and 37 of the Arbitration Act. The view taken by the Arbitral Tribunal, the learned Single Judge and the Division Bench cannot be found fault with.
There are no merits in the appeal - appeal dismissed.
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2024 (5) TMI 364
Right of the Bonafide purchasers - Auction sale held in favour of appellant - sale challenged on the ground that the Bank had not followed the statutory procedure prescribed under the Security Interest (Enforcement) Rules, 2002 - notice as required under Rules 8(6) and 8(7) had neither been issued nor served upon the borrower - HELD THAT:- In view of the concurrent finding based on the admission by the Bank that mandatory notice of 30 days was not given to the Borrower before holding the auction/sale, the setting aside of the auction/sale cannot be faulted with. The same has to be approved - Once the sale is set aside, the status of the appellants as owners would automatically revert to that of tenants. The status of possession at best could have been altered from that of an owner to that of tenants but Bank would not have any right to claim actual physical possession from the appellants nor would the appellants be under any obligation to handover physical possession to the Bank. The DRT fell in error on the said issue. Therefore, the direction issued by the DRT that the Bank will first take possession and thereafter refund the auction money with interest applicable to fixed deposits, is not a correct direction.
The entire controversy has arisen because of the Bank not following the prescribed mandatory procedure for conducting the auction sale and, therefore, the Bank must suffer and should be put to terms for unnecessarily creating litigation. As of date the dues of the Bank have been fully discharged and an additional amount of the auction money is lying with the Bank since 2009. This amount is to be returned to the appellants. In such facts and circumstances of the case, the award of interest on the auction money at the rate applicable to fixed deposits is not a correct view. The rate of interest deserves to be enhanced.
Thus, the setting aside of the auction sale is affirmed - status of the appellants as tenants shall stand restored leaving it open for the borrower as owner of the property to evict the appellants in accordance to law - entire auction/sale money lying with the Bank (R-1 & 2) shall be returned to the appellants along with compound interest @12 per cent per annum to be calculated from the date of deposit till the date of payment - Borrower Respondent nos.3 and 4 and the Bank–Respondent nos.1 and 2, would streamline their accounts and the Bank upon settlement of the same will issue a No Dues Certificate to the Borrower.
The impugned order is modified - appeal disposed off.
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2024 (5) TMI 322
Dishonour of Cheque - Cheating - wrongful retention of hard-earned money of the complainant - Compoundable offences - frustration of settlement - appellant could not pay the complainant on the deadlines stipulated in the said settlement - HELD THAT:- As per section 147 of the NI Act, all offences punishable under the Negotiable Instruments Act are compoundable. However, unlike Section 320 of CrPC, the NI Act does not elaborate upon the manner in which offences should be compounded. To fill up this legislative gap, three Judges Bench of this Court in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [2010 (5) TMI 380 - SUPREME COURT], passed some guidelines under Article 142 of the Constitution of India regarding compounding of offence under Section 138 of NI Act. But most importantly, in that case, this Court discussed the importance of compounding offence under Section 138 of the NI Act and also the legislative intent behind making the dishonour of cheque a crime by enacting a special law.
This Court has time and again reiterated that in cases of section 138 of NI Act, the accused must try for compounding at the initial stages instead of the later stage, however, there is no bar to seek the compounding of the offence at later stages of criminal proceedings including after conviction, like the present case - In the case at hand, initially, both sides agreed to compound the offence at the appellate stage but the appellant could not pay the amount within the time stipulated in the agreement and the complainant now has shown her unwillingness towards compounding of the offence, despite receiving the entire amount. The appellant has paid the entire Rs.1.55 crore and further Rs.10 lacs as interest.
In the present case, the appellant has already been in jail for more than 1 year before being released on bail and has also compensated the complainant. Further, in compliance of the order dated 08.08.2023, the appellant has deposited an additional amount of Rs.10 lacs. There is no purpose now to keep the proceedings pending in appeal before the lower appellate court. Here, we would like to point out that quashing of a case is different from compounding - if the continuance of criminal appeals pending before Additional Sessions Judge against the appellant’s conviction, is allowed then it would defeat all the efforts of this Court in the last year where this Court had monitored this matter and ensured that the complainant gets her money back.
It is a fact that the appellant failed to procure and supply the ‘machine’ even after taking the advance money from the complainant but there is nothing on record to show that the appellant had any ill intention of cheating or defrauding the complainant from the very inception. The transaction between the parties was purely civil in nature which does not attract criminal law in any way - Even though complainant is unwilling to compound the case but, considering the totality of facts and circumstances of the present case which we have referred above, we are of the considered view that these proceedings must come to an end.
The impugned order is set aside - appeal allowed.
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