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Indian Laws - Case Laws
Showing 421 to 440 of 26755 Records
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2024 (4) TMI 29
Dishonour of cheque - Legally recoverable debt or liability - respondent/accused was acquitted of the offence under Section 138 of the NI Act - want of supporting certificate under section 65B of the Evidence Act - inadmissible evidence - HELD THAT:- There is evidence in the form of ledger book Ex. AW-1/1 which shows the supply of material by the respondents/accused to the complainant. That apart there is also an admission of the complainant in his cross-examination that the accused used to sell goods to the complainant. On the other hand, the complainant failed to produce and prove the bill and invoices raised against the accused. He also failed to prove the statement of account despite admitting that he maintains the account statement and the bills regarding supply of material to the accused were entered in the account statement.
The view taken of the evidence by the learned Trial Court is a plausible view and no perversity has been pointed out in the same.
It is trite law that the scope of interference in an appeal against acquittal is very limited. Unless it is found that the view taken by the Court is impossible or perverse, it is not permissible to interfere with the finding of acquittal. Equally if two views are possible, it is not permissible to set aside an order of acquittal, merely because the Appellate Court finds the view of conviction to be more probable. The interference would be warranted only if the view taken is not possible at all.
There are no infirmity in the impugned judgment and no interference is warranted - appeal dismissed.
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2024 (4) TMI 1
Dishonour of Cheque - MoU between the parties contained an arbitration clause, pursuant to which arbitration proceedings have been initiated - maintainability of complaint under Section 138 NI Act - HELD THAT:- The arbitration proceedings as well as the proceedings under Section 138 of the NI Act arise from separate causes of action and the pendency of the arbitration proceedings would not affect the proceedings under Section 138 of the NI Act. There is no merit in the contention of the petitioners that the complaint under Section 138 of the NI Act is not maintainable in view of the ongoing arbitration proceedings between the parties. Additionally, whether the aforesaid cheque was given as a security or not is something which can only be proved as a matter of defence during trial.
There is no merit in the present petition - the present petition is dismissed.
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2024 (3) TMI 1364
Rejection of the application for anticipatory bail without considering the application on merits for the reason of issuance of proclamation under Section 82, Cr. PC - HELD THAT:- It is evident that for reasons best known to the appellants, subsequent to the filing of the final report in terms of the provisions under Section 173 (2), Cr.P.C in FIR No. 79/2020 and issuance of summons, issuance of bailable warrants and issuance of non-bailable warrants; pursuant to the failure of the appellants to appear before the Court on the date fixed for their appearance based on bailable warrants, they did not care to take any action in accordance with law except moving applications for bail. Same was the position even after the issuance of the proclamation under Section 82, Cr.PC.
What is required as proof for absconding is the evidence to the effect that the person concerned was knowing that he was wanted and also about pendency of warrant of arrest. A detailed discussion is not warranted in this case to understand that the appellants were actually absconding. It is not in dispute that they were served with the “summons”. The fact that bailable warrants were issued against them on 12.04.2022 is also not disputed, as the appellants themselves have produced the order whereunder bailable warrants were issued against them. We have already referred to Section 70 (2), Cr. PC which would reveal the position that once a warrant is issued it would remain in force until it is cancelled by the Court which issued it or until its execution. There is no case for the appellants that either of such events had occurred in this case to make the warrants unenforceable.
In view of the proviso under Section 438(1), Cr.PC, it cannot be contended that if, at the stage of taking up the matter for consideration, the Court is not rejecting the application, it is bound to pass an interim order for the grant of anticipatory bail.
The factual narration made would reveal the consistent disobedience of the appellants to comply with the orders of the trial Court. They failed to appear before the Trial Court after the receipt of the summons, and then after the issuance of bailable warrants even when their co-accused, after the issuance of bailable warrants, applied and obtained regular bail. Though the appellants filed an application, which they themselves described as “bail-cum-surrender application” on 23.08.2022, they got it withdrawn on the fear of being arrested. Even after the issuance of nonbailable warrants on 03.11.2022 they did not care to appear before the Trial Court and did not apply for regular bail after its recalling.
Thus, there is no ground for interfering with the order of the High Court rejecting the application for anticipatory bail rather not considering application on merits. Since their action is nothing short of defying the lawful orders of the Court and attempting to delay the proceedings, this appeal must fail.
Appeal dismissed.
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2024 (3) TMI 1352
Validity and correctness of the Interim Award - impleadment of Petitioners as party Respondents to the Arbitration proceedings despite not being signatories to the Arbitration Agreement - Section 34 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- The Supreme Court in Cox and Kings [2023 (12) TMI 427 - SUPREME COURT (LB)] has held that where at a referral stage impleadment of a non-signatory to the Arbitration Agreement is raised, the Referral Court should leave it for the Arbitral Tribunal to decide whether the non-signatory is bound by the Arbitration Agreement. Thus, it is clear that the Arbitral Tribunal has the power to decide whether the non-signatory is bound by the Arbitration Agreement and to implead the non-signatory if answered in the affirmative.
It is not found from a reading of the decision of the Supreme Court in Cox and Kings Ltd. that merely by there being no prayer for impleadment of a non-signatory in the Section 11 Application, the applicability of the doctrine of 'group of companies' by the Sole Arbitrator is excluded. The Arbitrator does have the power/authority to implead the non-signatory if such non-signatory is otherwise liable to be impleaded on the basis of the 'group of companies' doctrine - there are no merit in the submission of Mr. Rustomjee that in the event the issue of joinder of a non-signatory to an Arbitration Agreement is not raised before the Referral Court, the Arbitral Tribunal on its own accord does not have the power to determine this issue and/or allow the impleadment of a non-signatory to an Arbitration Agreement.
The Arbitrator under Section 16 of the Arbitration Act has the power to determine issues of jurisdiction which in my view would include whether the Arbitrator has jurisdiction over non-signatories to an Arbitration Agreement. Any such decision taken by the Arbitrator can always be the subject matter of a challenge by the Petitioners in a Petition filed under Section 34 of the Arbitration Act after the final Award is passed.
There are no valid grounds raised under Section 34 of the Arbitration Act which can at all result in the impugned award being set aside - Arbitration Petition is dismissed.
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2024 (3) TMI 1351
Seeking appointment of a sole arbitrator to adjudicate the disputes between itself and PNB Housing Finance Limited - HELD THAT:- The scope of inquiry by a referral court in a petition under Section 11 of the A&C Act is confined to examination of the existence of an arbitration agreement. The referral proceedings are preliminary and summary and not in the nature of a mini-trial. Rarely as a demurrer, the referral court may decline reference when there is not even a vestige of doubt that the claim is non-arbitrable. If there is a slightest doubt, the rule is to refer the dispute/s to arbitration.
It can be seen that the arbitration clause is widely worded and any dispute "arising out of" or "in connection with" or "the performance of" the SPA is to be referred to arbitration thereunder. Given the width of the arbitration agreement, it cannot be said that the various facets with regard to which DLF has sought to raise disputes are unconnected with the SPA.
This Court is not required to conduct an in-depth inquiry as to whether the disputes sought to be raised by the petitioner/DLF afford any valid cause of action to the petitioner on the basis of the provision of SPA or not. This is an aspect which necessarily requires an in-depth examination on merits and necessarily required to be gone into by a duly constituted arbitral tribunal.
The existence of a valid arbitration agreement, of sufficient width and amplitude, is not in doubt - As held in Interplay between Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re, [2023 (12) TMI 897 - SUPREME COURT (LB)] "the scope of examination under Section 11(6A) should be confined to the existence of an arbitration agreement on the basis of Section 7. Similarly, the validity of an arbitration agreement, in view of Section 7, should be restricted to the requirement of formal validity such as the requirement that the agreement be in writing."
Signatories to Arbitration Agreement - HELD THAT:- Prima facie, despite assignment of the SPA to Omkara, PNBHFL would be a necessary party as regards pre-assignment disputes, including dispute/s relating to non-acceptance of the offer of DLF and/or dispute/s concerning purported irregularities in the assignment of debt - in case of an assignment of a contract, unlike novation, the assignor is not discharged of its obligation under the contract assigned. Therefore, prima-facie, it cannot be said that PNBHFL is not a necessary party in the proposed arbitration proceedings.
Impleadment/joinder of assignee/Omkara in the proposed arbitration proceedings - HELD THAT:- The law is also well settled that where there is an assignment of a contract containing an arbitration agreement, the assignee will be bound by the arbitration agreement. The assignee would take both the benefit and burden of the arbitration agreement i.e., the assignee can invoke the arbitration agreement to pursue a claim and can be compelled to arbitrate a dispute raised by another party.
Impleadment/joinder of the non-signatories in the proposed arbitration proceedings - HELD THAT:- The ambit of non-consensual theories like "alter ego", "estoppel", or "single economic entity" is materially different from the ambit of consent-based theories. The non-consensual theories place emphasis on the overriding considerations of good faith and equity to bind non-signatories to an arbitration agreement, whereas consent-based theories place emphasis on mutual intent of the parties to arbitrate a dispute - in a given case non-signatories may be bound with the arbitration agreement on the basis of both the consensual and non-consensual theories. After piercing the corporate veil of a company, it may be found that the shareholder or parent corporation had in fact impliedly consented to the arbitration agreement. The decision to join a non-signatory oft rests on more than one factor.
This Court is inclined to refer respondent Nos. 6 and 7 to arbitration, however, granting liberty to the said respondents to raise appropriate jurisdictional objections as regards substantive existence of the arbitration agreement qua the said respondents. All contentions of the said respondents in this regard shall be duly considered by the arbitral tribunal.
There is no impediment in appointing an independent sole arbitrator to adjudicate the disputes between the parties - Petition allowed.
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2024 (3) TMI 1348
Seeking review of the order - scope of Review - Review of an order based on consensus - consent of the parties were there or not - error apparent on the face of records or not - HELD THAT:- In the present case, the core grounds raised on which the review petition rests, in our considered opinion are beyond the scope of the provisions of Order 47 Rule 1 CPC and the law laid down by the Hon’ble Supreme Court and the Hon’ble High Court. The Review Applicant in the guise of the Review Petition wants this Bench to rewrite its Judgment, which is not possible under review jurisdiction. As already stated above review is not an appeal in disguise and there is no error apparent on the face of the record. Therefore, the Division Bench rightly confirmed the order of the learned Single Judge, which does not warrant any review.
There are no merits in the Review petition - review petition dismissed.
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2024 (3) TMI 1324
Dishonour of Cheque - power of an Appellate Court to order payment pending an appeal against conviction under Section 138 of the Act - Interpretation of the provisions of Section 148 of the Negotiable Instruments Act, 1881 - HELD THAT:- In Surinder Singh Deswal [2019 (5) TMI 1626 - SUPREME COURT], the Supreme Court had to consider the object and purpose of the amendment in Section 148 of the N.I. Act in the backdrop of the general power available to the Appellate Court under Section 389 of the Cr.P.C. to suspend the sentence imposed by the trial court. Noticing that the provisions of Section 148 of the N.I. Act, as amended, conferred powers on an Appellate Court that was considering an appeal against a conviction and sentence under Section 138 of the N.I. Act, which powers were an exception to the general power available to an Appellate Court under Section 389 of the Cr.P.C. to unconditionally suspend the sentence pending appeals challenging a conviction and sentence, the Supreme Court found that while it was no doubt true that under the amended Section 148 of the N.I. Act, the word used in the context of exercising the discretion is “may”, it is generally to be construed as a “rule” or “shall” and it was only in exceptional cases, for which special reasons had to be assigned, that an Appellate Court could refrain from issuing a direction to deposit the prescribed percentage of the fine or compensation awarded by the trial court.
The express provisions of Section 148 of the N.I. Act, as amended, and its stated object as discernible from the Statement of Objects and Reasons of the Amendment Act No.20 of 2018.
Applications disposed off.
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2024 (3) TMI 1278
Cancellation of allotment of land on the basis of an alleged false affidavit - whether the petitioner had submitted a bona fide and genuine affidavit at the time of submission of his application seeking allotment of alternate plot of land in lieu of the compulsory land acquisition of his property? - HELD THAT:- The Allahabad High Court in IN RE : RAM KUMAR RAMNIWAS OF NANPARA [1952 (8) TMI 32 - HIGH COURT OF ALLAHABAD] had held that the HUF is not like a corporation or a limited concern and it cannot, therefore, be said that it had a legal entity quite distinct and separate from that of those who constituted it. It further observed that HUF is a status which can only be acquired by birth or adoption and the head or karta of that family has certain rights by which he can bind every member of the family though, the property may not belong to him and belongs to all. In another words, it appears to this Court that though the HUF may be a legal entity for the purposes of Income Tax and may hold a property in its own name, yet it cannot be said that the individual members constituting it, do not have any share in the said property. The share in such property on devolution may change or vary in proportions with the increase or decrease in the members constituting the HUF. This surely cannot mean that the individual members do not have any rights whatsoever over the HUF property.
It is clear that the HUF under the Income Tax Act, 1961 is a juridical person. However, the right or entitlement of the individual members constituting such HUF in respect of any property owned by it, has also been accepted. The role of karta in respect of such property is also clearly delineated - All the analysis leads this Court to the firm conclusion that the property belonging to the HUF also belongs to each of the individual constituents in the proportionate share. In another words, every member of the HUF has some share in the said property.
Thus, it is clear that though the Defence Colony Property was placed in the common hotchpotch of the HUF in the year 1962, yet the shares of the petitioner as also his wife and two minor children, as they then were, in the said property cannot be undisputed. As to what were the proportion of shares, is irrelevant to consider in the present dispute - this Court needs to examine as to whether the petitioner can now be said to have violated the eligibility conditions at the time of filing the affidavit in support of the application for allotment of alternate plot of land.
As on that date, not only the petitioner but also the family members, who individually constituted the HUF had a proportionate share in the Defence Colony Property. This fact was not disclosed. In the considered view of this Court, this was a concealment of material fact, which would have otherwise disentitled the petitioner from allotment of alternate plot of land as per the 1961 Scheme - The argument that the petitioner had thrown the self-acquired Defence Colony Property in the common hotchpotch of the HUF in the year 1962 even before the compulsory acquisition of his lands in the year 1964, and as such, had not committed any concealment is concerned, the same is recorded only to be rejected. The said rejection is on the basis of the aforesaid reasons in the preceding paragraphs, holding that each of the individual members of the HUF had proportionate share in such property.
The sanctity of the declaration and solemn affirmation was to be maintained at all times. In case an applicant furnished a false declaration or concealed material facts, it would be direct violation/contravention of mandatory condition of allotment. Since the petitioner had not disclosed the existence of a HUF property of which the petitioner himself was the karta and his wife and two minor children were the remaining members, in the considered opinion of this Court, that sanctity was broken.
Though the Defence Colony property was claimed to have been thrown in the common hotchpotch of the HUF in the year 1962, there was no reason furnished by the petitioner as to why the mutation of the said property in the name of HUF was not applied for till the month of January, 1979 which was finally carried out by the authority on 26.10.1979. Admittedly, the said property was leased out on rent indicating that the petitioner was not in dire need of an alternate plot of land.
There is no doubt that there was a delay however, keeping in view the ratio down by the Supreme Court in SP CHENGALVARAYA NAIDU VERSUS JAGANNATH [1993 (10) TMI 315 - SUPREME COURT], whereby it was categorically laid down that ‘fraud vitiates all solemn acts’. On the strength of this, this Court is of the considered opinion that the petitioner had obtained the allotment of an alternate plot by concealment of material facts amounting to fraud and as such cannot be heard to say that the respondents have delayed adjudication of the show cause notice. In that view of the matter, the said argument has no substance.
There is no merit in the writ petition and the same is dismissed.
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2024 (3) TMI 1168
Time Limitation - Election Petition filed to challenge result of an Election (public) - Whether any procedural deficiency in the proceedings filed online within the prescribed limitation period designated with objection can be labelled as proceedings filed beyond limitation? - HELD THAT:- This Court observed that any deficiency in filing the Appeal / Application for failure to file the physical documents, cannot make the Appeal or the proceedings which was registered on the online portal within the prescribed period of limitation to be labelled and held to be barred by limitation. This Court held that once the proceedings are filed albeit under the online method within the prescribed limitation, any deficiency in the same certainly could be removed later on as the law does not provide that proceedings be strictly filed sans deficiency and only then the proceedings would be held to be validly filed.
While referring to the e-filing Rules applicable to the present case, it is seen that there is nothing in the said Rules which could construe that the proceedings which have been filed by Petitioners on 20.11.2023 would debar them from maintaining the Election Petition. It is clear that the Petition is filed online and electronically by them before the end of the limitation period generating the remark “Document not serial”. This Court has held that to take an extreme view that if there is deficiency in filing it would debar the party from maintaining the action would tantamount to patent absurdity and it would result in gross injustice prejudicially affecting the legitimate right of persons to a legal remedy (access to justice). It is trite that parties will undoubtedly have an opportunity to remove the deficiencies, if any, which may prevail at the time of filing the proceedings, after the proceedings are filed.
This Court has observed that procedural compliances can never defeat the substantive remedy and right to pursue substantive challenge and proceedings when filed within the limitation period - In the present case the procedural deficiency noted as “Document not serial” after admittedly electronically filing and registration of the Election Petition online on 20.11.2023 cannot be held to be as the Petition being not filed within the limitation period. What is crucial is the fact of receiving the Petition in the record of the Registry, which infact has been accomplished.
The impugned orders dated 21.12.2023 passed by the learned Trial Court though have rejected the Application filed by Writ Petitioners which was on account of considering the physical filing of the Election Petition two days later, the jurisdiction of this Court and the amplitude of this Court while hearing writs under its extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India is extremely wide - The objection raised or subsequent act of the Petitioners to file the Petition physically later cannot render the electronic filing of the Petition on 20.11.2023 as nugatory. Petitioners’ right to maintain challenge is upheld as the Petitions are held to have been filed on 20.11.2023 online, despite the objection raised. The objection undoubtedly being a curable defect. This Court can always cure the defect of the action which is occurred.
Both the aforesaid Election Petitions have been filed within limitation on 20.11.2023 which was supposed to expire on 21.11.2023. They have therefore to be accepted as filed within limitation - Petition allowed.
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2024 (3) TMI 1133
Rejection of bid - requirement of uploading annual turnover certificate issued by the Chartered Accountant for the last five financial years bearing UDIN of Institute of Chartered Accountants of India with breakup of civil works and total works in each financial year is mandatory condition of contract and breach thereof - substantially responsive in terms of clause 25.1 of the ITB - submission/uploading of turnover for at least one out of the last five financial years bearing UDIN is substantial compliance of clause 4.2 (III)(a) read with clause 4.4 B(a) III (a) of the ITB and bid submitted by respondent No. 5 or not - HELD THAT:- Admittedly, in the instant case, the bid amount is more than Rs.200 lacs and, therefore, the bidder was required to show a minimum financial turnover equivalent to 75% of the amount put to bid. He was further required to show that at least 50% of such financial turnover which is equivalent to 75% of the bid amount is from civil engineering construction works. The bidder was also required to show that he had satisfactorily completed, as prime Contractor or sub-contractor, at least one similar work equal in value to one-third of the estimated cost of work of any Government/Semi Government Department (excluding maintenance cost for five years) for which the bid was invited.
The official respondents are fair in admitting before this Court that they did not take into consideration the turnover certificate issued by the Chartered Accountant on 23.12.2022 in respect of five years i.e 2017-18, 2018-19, 2019-20, 2020-21 and 2021-2022. The official respondents have, however, failed to explain by giving any cogent reason as to why and how the certificate dated 23.12.2022 which as per the official respondents was not admissible to be considered, has been relied upon to import the execution of requisite volume of civil work into the tax audit report which they considered to determine bid capacity of the respondent No. 5. The decision of the Technical Evaluation Committee in relying upon a part of annual turnover certificate dated 23.12.2022 issued by the Charted Accountant without bearing UDIN is, on the face of it, illegal, arbitrary and seemingly unfair and biased against the petitioner and in favour respondent No. 5.
It is true that to qualify for award of contract, the bidder is required to show that he has achieved in any one of the last five financial years, a minimum financial turnover of which 50% is from civil engineering construction work, equivalent to the amount of 75% of the bid amount where the bid amount is more than 200 lakhs, yet the requirement of submission of annual audit reports of five financial years cannot be dispensed with. The Technical Evaluation Committee was obliged to strictly adhere to clause 25 of the ITB and determine, inter alia, amongst other conditions that the bid submitted by respondent No. 5 was conforming to the eligibility criteria defined in Clauses 3 and 4 of the ITB.
This Court finds that the decision taken by the official respondents on 24.12.2022 is not only non-compliant in so far as the mandatory terms and conditions of ITB are concerned, but is otherwise irrational, arbitrary, unfair and in violation of Article 14 of the Constitution - Without entering into this controversy and with a view to doing the complete justice in the matter, this petition is disposed of in the following manner: Impugned decision taken on 24.12.2022 by the official respondents is quashed. The respondents are directed to issue fresh e-NIT inviting fresh bids from the eligible bidders for the subject work and proceed to conclude the bidding process strictly in accordance with the terms and conditions of the contract and the legal position stated above without any further waste of time.
Keeping the public interest in view and also that the execution of the work is already delayed, it is impressed upon the official respondents to embark upon the exercise of issuing fresh e-NIT at the earliest and conclude the same without any further waste of time.
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2024 (3) TMI 971
Dishonour of Cheque - vicarious liability of director - petitioner argues that he had resigned and had ceased to be a Director of the accused company w.e.f. 10.08.2017 and thereafter, he had no concern with the day-to-day affairs and decisions of the company qua its business transactions - HELD THAT:- In the present case, one handwritten line has been added in the complaint i.e. “accused no. 2 to 4 are responsible of day to day affairs of accused no. 1”, and even the complete language of Section 141 of NI Act has not been reproduced, let alone any specific detail about any role played by either of the petitioner in issuance or dishonour of cheque in question or as to how were they-in-charge of or responsible for the day-to-day affairs of the accused company when the cheque in question had been issued or dishonoured. Even before the learned Trial Court, the complainant had submitted the copies of Articles of Association and Memorandum of Association of the accused company, in which the details of Directors, as they were at the time of formation of company in the year 2015, were mentioned, and the updated data of the company available in the records of Registrar of Companies or Ministry of Corporate Affairs website was not placed before the learned Trial Court.
The petitioners had resigned much prior to the issuance of cheque and the complainant has not disputed the factum of their resignations. The Director who had signed the cheque in question i.e. Nikhil Mehta (accused no. 3) continues to be the Director of the accused company till date, whereas the records show that the present petitioners had resigned in the year 2017 itself. Thus, the petitioners cannot be made liable under Section 138/141 of NI Act, in such facts and circumstances.
Petition allowed.
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2024 (3) TMI 908
Application allowed under Section 11(6) of the Arbitration & Conciliation Act 1996 - appointment of Sole Arbitrator to adjudicate the dispute between the parties to the present lis - HELD THAT:- A perusal of sub-section (5) of Section 7 of the Arbitration Act itself would reveal that it provides for a conscious acceptance of the arbitration clause from another document, by the parties, as a part of their contract, before such arbitration clause could be read as a part of the contract between the parties - It is thus clear that a reference to the document in the contract should be such that shows the intention to incorporate the arbitration clause contained in the document into the contract.
The present case is a ‘two-contract’ case and not a ‘singlecontract’ case.
In view of Clause 1.0, the documents stated therein shall also form part of the agreement. In view of Clause 2.0, all terms and conditions as contained in the tender issued by the DVC to the NBCC shall apply mutatis mutandis except where these have been expressly modified by the NBCC. Clause 7.0 specifically provides that the redressal of dispute between the NBCC and the respondent shall only be through civil courts having jurisdiction of Delhi alone. Clause 10.0 further provides that the L.O.I. shall also form a part of the agreement - the intention between the parties is very clear. Clause 7.0 of the L.O.I. which also forms part of the agreement specifically provides that the redressal of the dispute between the NBCC and the respondent shall only be through civil courts having jurisdiction of Delhi alone. It is pertinent to note that Clause 7.0 of the L.O.I. specifically uses the word “only” before the words “be through civil courts having jurisdiction of Delhi alone”.
When there is a reference in the second contract to the terms and conditions of the first contract, the arbitration clause would not ipso facto be applicable to the second contract unless there is a specific mention/reference thereto - the present case is not a case of ‘incorporation’ but a case of ‘reference’. As such, a general reference would not have the effect of incorporating the arbitration clause. In any case, Clause 7.0 of the L.O.I., which is also a part of the agreement, makes it amply clear that the redressal of the dispute between the NBCC and the respondent has to be only through civil courts having jurisdiction of Delhi alone.
The learned single judge of the Delhi High Court has erred in allowing the application of the respondent. The impugned orders are quashed and set aside - Appeal allowed.
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2024 (3) TMI 907
Framing of charges - Owning of assets disproportionate to known sources of income - Whether the courts below were justified in refusing to quash and set aside the order on charge dated 21.02.2006 and the charges as framed on 28.02.2006? - Case against the Additional Chief Architect in New Delhi Municipal Corporation - HELD THAT:- In the present case, the probative value of the Orders of the Income Tax Authorities, including the Order of the Income Tax Appellate Tribunal and the subsequent Assessment Orders, are not conclusive proof which can be relied upon for discharge of the accused persons. These orders, their findings, and their probative value, are a matter for a full-fledged trial. In view of the same, the High Court, in the present case, has rightly not discharged the appellants based on the Orders of the Income Tax Authorities.
In RADHESHYAM KEJRIWAL VERSUS STATE OF WEST BENGAL [2011 (2) TMI 154 - SUPREME COURT], this Court was concerned with a fact situation where the Petitioner therein was being prosecuted under the Foreign Exchange Regulation Act, 1973 for payments made by him in Indian currency in exchange for foreign currency without any general or specific exemption from the Reserve Bank of India. The Enforcement Directorate had commenced both an adjudication proceeding and a prosecution under the provisions of the Foreign Exchange Regulation Act, 1973. It so transpired that the Adjudicating Officer found that no documentary evidence was available to prove the foundational factum of the Petitioner therein entering into the alleged transactions which fell foul of the Act and thereafter directed that the proceedings be dropped.
There are no merit in these appeals and the appeals are dismissed.
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2024 (3) TMI 906
Dishonour of Cheque - vicarious liability of directors - sufficient averments to issue process against the directors, including the Petitioners or not - HELD THAT:- The liability under Section 141 of the Act, 1881 for commission of the offence punishable under Section 138 of the Act, is in the nature of a vicarious liability. It is trite that vicarious liability for an offence is required to be strictly construed. From the text of Section 141 of the Act, it becomes evident that the liability is incurred not on account of the position a person holds, but by reason of the role such person plays in the management of the affairs of the company. Liability does not depend upon the designation or status of the person sought to be roped in. Conversely, it could be shown that though a person does not hold a particular designation, yet he was in-charge of and responsible to the affairs of the company, and, therefore, liable to be prosecuted by invoking the constructive criminality under Section 141 of the Act.
In the case of POOJA RAVINDER DEVIDASANI VERSUS STATE OF MAHARASHTRA & ANOTHER [2014 (12) TMI 1070 - SUPREME COURT], the Supreme Court enunciated that the law laid down by the Supreme Court is that for making a director of a company liable for the offence committed by the company under Section 141 of the Act, there must be specific averments against the director showing as to how and in what manner, such director was responsible for the conduct of the business of the company.
The facts in the case of SUNITA PALITA & OTHERS VERSUS M/S PANCHAMI STONE QUARRY [2022 (8) TMI 55 - SUPREME COURT], appear to be on all four with the case at hand, as the Appellants therein were also shown to be independent and non-executive directors of the company. Non-executive directors are not involved in the day to day affairs of the company or in running of its business. The endeavour of Mr. Kumar to bank upon the information disclosed in the annual statement of account does not advance the cause of the Respondent No. 1 – complainant. The very fact that the Petitioners were made members of the audit and corporate social responsibility committee appears to be in consonance with the role of the Petitioners as independent non-executive directors of Isinox Ltd.
The complaints singularly lack any averment that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, the Petitioners. In the absence of such averments, the prosecution of the Petitioners by invoking the provisions contained in Section 141(2) of the Act also, would be legally impermissible.
The conspectus of aforesaid discussion is that the prosecution of the Petitioners who are the independent non-executive directors of Isinox Ltd. for an offence punishable under Section 138 read with Section 141 of the Act, 1881 would amount to abuse of the process of the court and wholly unjustifiable - Petition allowed.
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2024 (3) TMI 905
Dishonour of Cheque - legally enforceable debt or not - insufficiency of funds - seeking leave of the Court to summon bank officials along with record pertaining to the concerned bank account for the financial years 2019-2020 and 2020-2021 - Section 311 Cr.P.C. read with Section 91 Cr.P.C. - HELD THAT:- The singular reason for filing an application under Section 311 Cr.P.C. by the Petitioner was to prove through the bank officials and the financial statements that there were sufficient funds in the bank account pertaining to which the dishonoured cheques were issued, so as to set up a defence against the alleged offence under Section 138 of the NI Act. As rightly pointed out by counsel for Respondent No. 2, learned MM has noted in the impugned order itself that the dishonour of cheques was not on account of insufficiency of funds or exceeding arrangement. In fact, the learned Court has categorically noted, after referring to bank return memos Exs. CW-1/8, CW-1/9, CW-1/10 and CW1/11 and the evidence of Respondent No. 2’s witness CW-1 that reason for dishonour of the cheques in question was ‘payment stopped by drawer’.
The apprehension of the Petitioner is misplaced and no infirmity is found with the impugned order, warranting interference by this Court. Moreover, Respondent No. 2 has reiterated its stand that the funds maintained by the Company/accused were neither insufficient nor the amounts under the impugned cheques exceeded arrangement.
Petition disposed off.
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2024 (3) TMI 904
Levy of stamp duty on schemes of amalgamation or restructuring - Validity of the Circular dated 20.11.2018, issued by the Inspector General of Registration in No. 49282/P1/2018 and / or G.O.(Ms.) No. 29, Commercial Taxes and Registration (J1) dated 01.03.2019 and G.O.(Ms.) No. 47, Commercial Taxes and Registration (J1) dated 19.02.2020.
Whether or not the order of the Court sanctioning the scheme of amalgamation / restructuring or merger can be deemed to be an instrument? - HELD THAT:- The Hon'ble Supreme Court in the HINDUSTAN LEVER VERSUS STATE OF MAHARASHTRA [2003 (11) TMI 335 - SUPREME COURT] dealt with the similar definition of the term 'instrument' under the Bombay Stamp Act and held that on a consideration of Section 394 of the Companies Act, it is clear that upon such Orders of the Court, the undertaking of the transferor company stood transferred to the transferee company with all its movable, immovable and tangible assets and on presentation of certified copy of the said Order of the Court to the Registrar of Companies, the transferor of company stands amalgamated in the transferee company along with all its assets and liabilities and as such the Court Order along with the amalgamation scheme appended to it, is an instrument - In the present context, whereunder the Registrar being a public officer, under Section 35 is mandated not to act upon in the scheme of amalgamation, unless it is duly stamped, the said argument of certified copy will not hold good. Therefore, the submissions made on behalf of the petitioners in this regard is rejected and the question is answered that the Orders of Court/Tribunal sanctioning schemes of amalgamation/restructuring/de-merger etc., along with such schemes appended thereto, shall be ‘instruments’ within the meaning for the purposes of the Act.
Whether or not amalgamation / restructuring can be termed as a transfer inter vivos amounting to conveyance? - HELD THAT:- The scheme of amalgamation results in transfer of the rights, assets and liabilities of the transferor company vesting in the transferee company in praesenti and therefore there is a transfer inter vivos - it can be seen that amalgamation, merger or other such arrangements shall be within the meaning of ‘conveyance’ in more than one sense. As a matter of fact, such schemes, originally being dealt with under Sections 391-394 of the Companies Act, 1953 and now under Chapter XV (Sections 230-240) of the Companies Act, 2013. Except doing away with the definition of ‘transferor company’ and ‘transferee company’ in respect of amalgamation and imposing certain additional requirements of disclosure etc., the essential features of the transactions remains the same - the order sanctioning amalgamation / restructuring appended by the scheme as such is an instrument of conveyance liable to duty under Article -23 of the Act and no further legislative action is necessary to bring the same within the ambit of duty.
As far as the impugned circular dated 20.11.2018 is concerned, it only attempts to clarify the existing position by quoting the relevant Judgments and addressing the registering officers that they should be aware that the scheme of amalgamation submitted by the Companies and sanctioned by the High Court are classifiable as ‘Conveyance’ and will be subject to duty under Article -23 of Schedule -I of the Act - there are no illegality in the said Circular dated 20.11.2018.
If the Orders are instruments amounting to conveyance, then whether the levy in the present manner, that is, prescription through an executive order is valid? - HELD THAT:- As far as the notification in G.O.Ms.No.29 dated 01.03.2019, it states that it is to reduce the duty chargeable under the Act. Therefore, the State of Tamil Nadu is well within its powers to reduce or remit the duty chargeable under the Act. So long as the power is exercised to reduce the duty chargeable under the Act, the same would be perfectly in order. When it is only a question of reduction or remitting, it can be by an Order passed in exercise of power under Section 9(1)(a) of the Act.
If so, the mode of computation, that is, 2 % of the value of the immovable property or 0.6 % of the net value of the shares transferred whichever is higher is in order? - HELD THAT:- While exercising the powers under Section 9(1)(a), reducing the duty from 5 % to 2 % of the market value of the property is a clear and fair exercise of power and it merely reduces the duty chargeable as per Article- 23. As far as the second limb of the notification, to compute the Stamp Duty on 0.6 % of the aggregate of the market value of the shares and then adopt the value whichever is higher is concerned, firstly it introduces a new mode of computation, which is not found in Article -23. Therefore, the same tantamounts to amending Article -23, which would require legislative action. Secondly, it was pointed out across the bar that there are several instances where the aggregate market value of the shares in respect of the transferee company which is amalgamated may run to several crores, whereas it may have an immovable property of a meagre value within the State of Tamil Nadu in which case, as per the notification if 0.6% of the aggregate market value of the shares which is higher would only be taken, then the same would result in increase in duty which would be more than 5 % of the duty chargeable under Article- 23 - to the last sentence of the notification contained in the impugned Government Order, in G.O.(Ms.) No. 29 dated 01.03.2019, i.e., “or 0.6 percent of the aggregate of the market value of the shares, whichever is higher” alone is struck down and rest of the notification shall stand.
Whether the retrospective application of the impugned Government Order with effect from 01.04.1956, by way of G.O.Ms.No.47 dated 19.02.2020 is valid? - HELD THAT:- Conveyance it was chargeable at various rates periodically prescribed and is presently at the rate of 5 % . It can be seen that from 01.04.1956 at no point of time, it was less than 2% and the G.O.(Ms.) No. 29 dated 01.03.2019 only reduces the duty to 2 %. Therefore the petitioners have no ground to complain of G.O.(Ms.) No. 47 dated 19.02.2020, which only makes the application of the beneficial provision of G.O.(Ms.) No. 29 dated 01.03.2019 as retrospective. As a matter of fact, Section 9(1) (a) of the Act itself expressly authorises the State to exercise such a power retrospectively. Thus, the retrospective applicability per se cannot be termed as illegal - the G.O.(Ms.) No. 47 dated 19.02.2020 is upheld.
Whether the stamp duty paid in other States, while registering the amalgamation orders are liable to be taken into account and set off as against the duty payable, while presenting the document for registration in the State of Tamil Nadu? - HELD THAT:- Once the instrument is already presented for registration in other States and again presented for registration within the State of Tamil Nadu, then, Section 19 -A of the Act, which is a Tamil Nadu amendment of the Indian Stamp Act, 1899, which will come into play - The very question was dealt with in detail by the Constitution Bench of the Hon'ble Supreme Court in New Central Jute Mills Co. Ltd. And Ors Vs. State of West Bengal and Ors., [1963 (1) TMI 65 - SUPREME COURT] while considering the identical provision 19 -A of the Uttar Pradesh amendment. The Hon'ble Supreme Court has held that though the execution of instrument may be in other States, when the instrument relates to any property situate within the State, then the liability also arises with reference to the State, where the property is situate also.
Thus, it is clear that upon presentation in the State of Tamil Nadu, the duty has to be calculated as per the rate payable in Tamil Nadu and thereafter, upon comparison, if the duty paid in any other State is higher than the State of Tamil Nadu, then the same has to be taken into consideration and no duty shall be payable. If the duty paid is lesser than what is payable in the State of Tamil Nadu, then whatever amount paid is to be set off and the balance duty is to be paid on the instrument of amalgamation.
Appeal disposed off.
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2024 (3) TMI 842
Rejection of bid as petitioner had not submitted the IT return - Specific criteria for bids of the tenders - petitioner submits that no specific years for filing Income Tax Returns were mentioned in the Tender Notice. Further in terms of Section 44 AB(a) read with Explanation 2 of Section 139 of the Act, 1961, the due date for submitting the return of income for auditing the same was 31st day of October of the assessment year, as the petitioner’s gross receipts was over Rs. 1 Crore for the year ending 31.03.2022. As such, there was no opportunity for the petitioner to have submitted the IT return for the year 2022-2023, in terms of the tender notice dated 06.08.2023
HELD THAT:- The clauses of the tender notice requiring the bidders to submit their IT Return for the last Assessment Year and the Financial Statement of last 3 years from the Chartered Accountant have been submitted by the petitioner. The only problem that has arisen is that the State respondents wanted the IT Return for the Assessment Year 2023-2024. This Court is well aware of the judgments of the Supreme Court, which is to the effect that the decision-making process of the employer or the owner of project in accepting or rejecting the bid of a tenderer should not be interfered with, unless the decisions are found to be arbitrary and irrational. A mere disagreement with the decision-making process or the decision of the Administrative Authority is no reason for a Writ Court to interfere in a tender proceeding, as the author of a tender document is the best person to understand and appreciate it’s requirement and interpret it’s documents.
The problem that however arises in the present case is that the respondents have not stated clearly, the specific years of the Financial Statement that were required by the tenderers. In the present case, the petitioner whose gross receipts was over Rs. 1 crore, was required to have his Income Return audited, in terms of Section 44 AB(a) read with Explanation 2 of Section 139 of the Act, 1961. When the statutory law provides that the petitioner had until 31st October of the Assessment Year to have his return on income audited, there was no infirmity with the petitioner not submitting his Income Tax Return for the period prior to 2022-2023, as the period for submitting the same for auditing had not expired as per the Act, 1961. This is purely due to the fact that the State respondents in the tender notice have not clearly specified the years for which the IT Returns were required to be submitted by the tenderers.
Thus this Court is of the view that in terms of the judgment of the Supreme Court in Dutta Associates Pvt. Ltd. [1996 (11) TMI 490 - SUPREME COURT] the respondents have not been transparent, fair and open, as the respondents should have made a clarification/specification in the tender notice.
This Court is of the view that the petitioner’s bid would have to be considered to be valid. In the alternative, the respondents should give an opportunity to the petitioner to submit the IT Return for the Assessment Year 2023-2024. The respondents shall thereafter consider the petitioner’s bid along with all other valid bidders.
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2024 (3) TMI 841
Prayer to direct the respondent- C.B.I. to furnish/ supply the copy of the post trap memo - seeking to know the reason of arrest - HELD THAT:- hat is reflected from the record is that all the three persons against whom allegations were levelled by the complainant have been arrested. This Court is not in a position to appreciate the stand taken by the C.B.I. before the court below, which is evident from the reply filed by the C.B.I., before the Special Court, a copy of which has been placed at Page No.43 of the paper book, wherein it is stated that accused Punit Singh has not signed on post trap memorandum, hence, same is not falling in the category of recovery memo and also that the investigation of the case is at initial stage and vital witnesses are yet to be examined and documents are to be collected and thus, the copy of the post trap memo cannot be provided to the accused.
The concept of fair trial may not be confined only to the prosecution and the same with equal force is applicable to the accused and if there is nothing extraordinary, in usual course, the copies of necessary documents must be provided to the accused persons of a crime, even at the stage of investigation and so much material should be provided by the investigating agency to the accused which may at least reflect the necessary evidence and material appearing against accused resulting in his arrest and confinement.
This Court is of the considered view that the Central Bureau of Investigation should have provided a copy of post trap memo of date 31.1.2024 to the applicant - Application allowed.
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2024 (3) TMI 840
Dishonour of Cheque - petitioner has not responded to the legal notice - complaint lacks necessary averments - vicarious liability of Director - HELD THAT:- In the present case, the petitioner has placed on record unimpeachable and uncontroverted material in the form of DIR-11, which is also accompanied by receipt issued by the Ministry of Corporate Affairs of issuance of the said form. The said form indicates that the petitioner who even otherwise was only a non-executive additional director, had resigned from the said post much prior to the date on which the subject cheques came to be dishonoured. The Form DIR-11 as well as the other documents placed on record have not been disputed by learned counsel for the respondent during the course of arguments.
Reference in this regard may be made to the decision of SUNITA PALITA & OTHERS VERSUS M/S PANCHAMI STONE QUARRY [2022 (8) TMI 55 - SUPREME COURT] wherein it was observed when a complaint is filed against a Director of the company, who is not the signatory of the dishonoured cheque, specific averments have to be made in the pleadings to substantiate the contention in the complaint, that such Director was in charge of and responsible for conduct of the business of the Company or the Company, unless such Director is the designated Managing Director or Joint Managing Director who would obviously be responsible for the company and/or its business and affairs.
The second issue whether a written guarantee or a letter of guarantee by an erstwhile Director would make him vicariously liable came up before the Supreme Court in POOJA RAVINDER DEVIDASANI VERSUS STATE OF MAHARASHTRA & ANOTHER [2014 (12) TMI 1070 - SUPREME COURT], wherein it was held that the same may amount to a civil liability but not vicarious liability under the NI Act.
The Court even otherwise, is also convinced that the complaint is bereft of appropriate pleadings alleging that the petitioner was in charge of, and responsible for the conduct of the business of the accused company - In the totality of the facts and circumstances, the petitioner cannot be made responsible for the dishonour of cheque, and the continuation of the criminal complaint against him would be nothing but an abuse of the process of law.
The petition is allowed.
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2024 (3) TMI 789
Dishonour of Cheque - vicarious liability of the director - appellant was in-charge of day-to-day affairs of the Company or not - HELD THAT:- In the case of SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA [2005 (9) TMI 304 - SUPREME COURT], this Court was considering the question as to whether it was sufficient to make the person liable for being a director of a company under Section 141 of the Negotiable Instruments Act, 1881. This Court considered the definition of the word “director” as defined in Section 2(13) of the Companies Act, 1956 - It was held that merely because a person is a director of a company, it is not necessary that he is aware about the day-today functioning of the company. This Court held that there is no universal rule that a director of a company is in charge of its everyday affairs. It was, therefore, necessary, to aver as to how the director of the company was in charge of day-to-day affairs of the company or responsible to the affairs of the company. This Court, however, clarified that the position of a managing director or a joint managing director in a company may be different.
It could thus clearly be seen that this Court has held that merely reproducing the words of the section without a clear statement of fact as to how and in what manner a director of the company was responsible for the conduct of the business of the company, would not ipso facto make the director vicariously liable.
It can thus be clearly seen that there is no averment to the effect that the present appellant is in-charge of and responsible for the day-to-day affairs of the Company. It is also not the case of the respondent that the appellant is either the Managing Director or the Joint Managing Director of the Company - It can thus clearly be seen that the averments made are not sufficient to invoke the provisions of Section 141 of the N.I. Act qua the appellant.
The judgment and order passed by the High Court dated 26th April, 2022 is quashed and set aside - Appeal allowed.
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