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Indian Laws - Case Laws
Showing 441 to 460 of 26755 Records
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2024 (3) TMI 750
Ex-parte ad-interim injunction against the appellants - Defamatory Article authored by Defendant Nos. 3-5 and published by Defendant Nos. 1 and 2 as stated in the present Suit are defamatory to the Plaintiff - Article titled as “India Regulator Uncovers $241 Million Accounting Issue at Zee” was published on the website about the status of the Zee-Sony merger as well as an ongoing investigation carried out by the the Securities and Exchange Board of India qua the Respondent.
Appellants’ contend that appellant nos. 1 & 2 are companies incorporated under the Companies Act, 1956 and operate and function as a media publication under the name of “Bloomberg”. The appellant no. 3 is the Editor, South Asia and Middle East, of the appellant no. 1 company and the appellants’ no. 4 & 5 are journalists of the appellant no. 1 company. The respondent is a company incorporated under the Companies Act and is engaged inter alia in the business of media and entertainment.
As submitted Article in question is not only ex-facie defamatory but also suffers from inherent contradictions. The headline of the said Article is deceptive which in no manner is in consonance with the contents mentioned in the body of the Article. The headline is an eyecatcher and the Article is against the spirit of journalistic conduct. SEBI has not released any so called finding, which bear any connection to the purported $ 241 million diversion of funds. The Article has not only implicated the respondents as being guilty of the diversion of illegal funds but has also taken the liberty to fix the quantum of such a fictitious amount. It was submitted that a malicious story has been cooked to intentionally tarnish the reputation & public image of the respondent and there is 15% drop in the share price of the respondent.
HELD THAT:- The position of law is well settled with respect to the scope of interference by an appellate Court in an interlocutory injunction granted by the Court of first instance while exercising its discretion and substituting its own discretion.
It is settled law that unless there is a grave urgency shown as to entertain an appeal against an ex-parte ad-interim order, an appeal is not maintainable either under Order XLI Rule 1 of the Code of Civil Procedure or under Section 10 of the Delhi High Court Act against an ex-parte ad-interim order. Order XXXIX Rule 3 read with Order XLIII Rule 1 of the Code of Civil Procedure shows that in fact no appeal lies against an order passed under Order XXXIX Rule 3 of the Code of Civil Procedure. It is also settled law as laid down by the Hon’ble Supreme Court in the case of Wander Ltd & Anr vs Antox India Pvt. Ltd.[1990 (4) TMI 280 - SUPREME COURT] that it will not be appropriate for the Appellate Court to substitute its own discretion differently from the discretion exercised by the Court of first jurisdiction.
As would be evident from the impugned order, the learned ADJ has clearly taken into consideration relevant factors for the purpose of grant of ex-parte ad-interim injunction. Further, there is no final adjudication on the subject matter of the suit which is at the very threshold. The learned ADJ is yet to hear the Appellants and dispose of the interim application.
Insofar as the other submissions of the Appellants on their defence and the documents placed with their written submissions are concerned, these issues were not placed before the learned ADJ. The appellants have rushed to this Court without exploring the option of filing their reply to the application under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure and/ or application under Order XXXIX Rule 4 of the Code of Civil Procedure for modification of the ex-parte ad-interim order.
A reading of the impugned order suggests that the learned ADJ applied his mind to the facts of this case and satisfied himself that prima facie there was enough material to come to the conclusion for the purpose of granting an ex-parte ad-interim injunction, otherwise the entire purpose of filing the application would have been rendered infructuous. Being conscious of the provisions of Order XXXIX Rule 3A of the Code of Civil Procedure, the learned ADJ has fixed the next date of hearing as 26.03.2024 for deciding the application under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure. I, thus, do not find any ground to interfere with the order impugned herein. Consequently, the appeal along with pending applications, stands dismissed.
However, in case of any kind of urgency, the parties are at liberty to approach the Court of learned ADJ for an early hearing. It is clarified that the appellants to comply with the directions of learned ADJ vide order dated 01.03.2024 within three days from today.
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2024 (3) TMI 749
Disqualification of qualified bidder - disqualified on the ground that false information regarding ‘GST’ number was incorporated in the Tender submitted by the Petitioner - HELD THAT:- It is trite law that Tendering Authority has right to incorporate the conditions of Tender and also seek the compliance from the bidders. Pertinently, in present case condition no.11 mandates that Bidders must furnish GST numbers as well as the details of returns for financial year 2022-2023 certified by the Competent Authority. It is not the case of the Respondents that the petitioner has misrepresented or submitted false documents depicting that he is complaint of the condition no.11. The aforesaid fact was very well before the Tendering Authority since the Petitioner had not submitted the GST returns or the certificate of clearance. However, the Committee of 11 Class-1 officers, on scrutiny of the technical bids, declared the petitioner as qualified. Pertinently, one more bidder, who has not submitted GST returns, is also declared as qualified, although technical evaluation report takes special note of such non-compliance, disqualification was not ordered on that count.
The condition no.11 under the tender was waived by the Tendering Authority. Pertinently, there is a reason for such waiver. As can be seen from the notification issued by the Ministry of Finance, Government of India, (Department of Revenue) – Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union Territory or Local Authority or Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution has been exempted.
It is, therefore, evident that waiver of condition no.11 by the Tendering Authority was based on rational. Such waiver is neither a mistake of fact or accidental omission. This appears to be thoughtful decision to waive unessential tender condition - the Tendering Authority/Respondent no.3 has chosen not to insist condition no.11 since it was of little or no significance or it was classified as non-essential condition of eligibility being ancillary or subsidiary with main object to be achieved by the condition. It is well settled that Tendering Authority may deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases.
Once it is concluded that there was deliberate/thoughtful waiver of the condition no.11 by the Tendering Authority, by which the petitioner was declared as qualified, although he was not holding GST registration or clearance certificate, it is difficult to justify the subsequent order disqualifying petitioner relying upon the same condition - when the petitioner objected to such an action of respondent no.3 through his representation and later-on by filing present petition, a show cause notice appears to have been issued to him quoting non-compliance of the condition no.11 and, consequently, second impugned order of disqualification of the petitioner has been passed.
The Petitioner is qualified and entitled to participate in the further process of E-Tender floated under notice dated 13.7.2023 and entitled to be dealt with as the Lowest Bidder (L-1) - Petition allowed in part.
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2024 (3) TMI 586
Constitutional validity of Electoral Bond Scheme and the provisions of the Finance Act 2017 which amended the provisions of the Representation of People Act 1951 and the Income Tax Act 1961 - non-disclosure of information regarding the funding of political parties is violative of the right to information of citizens under Article 19(1)(a) of the Constitution or not - crux of the submission of the SBI is that the matching of information to ascertain who contributed to which political party is a time-consuming process since the information is maintained in two separate silos - HELD THAT:- The Miscellaneous Application filed by the SBI seeking an extension of time for the disclosure of details of the purchase and redemption of Electoral Bonds until 30 June 2024 is dismissed. SBI is directed to disclose the details by the close of business hours on 12 March 2024.
During the pendency of the proceedings before the Constitution Bench, ECI had, in compliance with the interim order passed by this Court, filed its statements which have been maintained in the custody of the Court. Copies of the statements which were filed by the ECI before this Court would be maintained in the Office of the ECI. ECI shall forthwith publish the details of the information which was supplied to this Court in pursuance of the interim orders on its official website.
The Miscellaneous Application for extension of time shall accordingly stand dismissed.
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2024 (3) TMI 585
Legislative competence, the constitutional validity and the vires of the Himachal Pradesh Water Cess on Hydropower Generation Act, 2023 - Case of State is that Since water is a State’s subject matter and comes under entry 17 of List-II, therefore, the State has legislative competence to make law and hence there is no violation of article 265 of the Constitution of India.
Nature and event of taxation under the impugned Act - HELD THAT:- The power to tax is on generation of electricity and user of water is only incidental. The “user of water” is not being taxed and it is only the “user of water for generation of electricity”, who is being taxed. Therefore, it is a tax on generation of electricity. If it was the quantum of water used, then the height from which the water would fall as a measure to determine the rate of cess would be wholly irrelevant. It is evidently clear from the aforesaid notification dated 16.02.2023 that the quantification is not based on the use of water, but is based on the height from which the water falls. The “use of water” in fact does not go by the text of the impugned Act. It is “generation of electricity” that is the “bone” and “water drawn” is only the “flesh”. The taxable event is “hydropower generation” and not the “usage of water” because if there is no generation, then there is no “tax”. Moreover, if the cess was on “usage of water”, then how could the height, at which the water falls on the turbine, be made the taxable event?
It is settled principle of law that standard adopted as a measure of levy, although not determinative, is at least indicative of the nature of the tax. Weighed alongwith and in the light of other relevant circumstances, the method adopted by the legislature would be relevant in determining the character of the impost.
The impugned levy varies in quantum with the quantum of electricity generated but not the quantum of water drawn and, thus, makes it clear that its character or nature is such that it is inextricable with electricity generation. Thus, there are no hesitation to answer the point in favour of the petitioners by concluding that by the impugned Act cess is sought to be imposed on “generation of electricity” as against “water” and, therefore, it is a misnomer that tax is levied on “water” and not “generation of electricity”, and is, therefore, not a water tax - answered in favour of petitioners.
Pith and substance of the taxing legislation which assumes significance not to the question of bonafides or malafides but in examining the competence of the legislature - HELD THAT:- In determining whether an enactment is a legislation with respect to the given power, what is relevant is whether in its “pith and substance”, it is law upon the subject matter in question. Therefore, it is necessary here to subject the impugned Act to the test of “pith and substance” to ascertain its true intent and character, which is relevant in determining as to which list it would fall under and also to trace the State's competence to have promulgated the impugned Act arises. As per Article 265, no tax can be levied or collected except by authority of law.
Competence of the State to promulgate the impugned Act whether can be traced to Entry 49 of List-II to the Seventh Schedule of the Constitution as contended by the State - HELD THAT:- It is well settled that while the widest amplitude should be given to the language used in one entry, every attempt has to be made to harmonise its contents with those of other entries, so that the latter may not be rendered nugatory.
Competence to promulgate the impugned Act whether can be traced to Entry 50 of List-II as contended by the State - HELD THAT:- The State's competence to impose impugned levy cannot be traced to Entry 50 of List-II as contended by it. Activity of non-consumptive drawl of water for generation of hydropower, where the water drawn is allowed to flow back to its source, being a single inextricable event cannot be brought under the purview of taxing mineral rights - even Entry 50 of List-II cannot be held to countenance the States’ taxation on water drawl for generation of electricity.
Competence to promulgate whether can be traced to Entry 45 of List-II - HELD THAT:- The State's competence to promulgate the impugned Act cannot be traced to Entry 49 of List-II. Therefore, Rekchand's case [1997 (5) TMI 441 - SUPREME COURT] is not applicable in the present case and the State's competence cannot be traced to Entry 45 of List-II - in Rekchand case, the levy was imposed on drawl of flowing water by artificial contrivance for industrial purpose. The rates of such levy were specified under Resolution. It was on account of the definition of land under the Transfer of Property Act, 1882, which included right to water flowing therefrom, the said levy was sustained by the Hon'ble Supreme Court under Entry 45, List-II.
Competence to promulgate whether can be traced to Entries 17 & 18 read with 66 of List-II as a “tax” - HELD THAT:- The State has relied on Entries 17 & 18 of List-II to demonstrate its competence to have legislated the Impugned Act. In this regard, it is a settled principle of law that taxation entries are distinct from general regulatory entries. Entries 1 to 44 in List-II are regulatory, whereas Entries 45 to 63 are taxing entries. Therefore, the legislative competence to impose any tax on water drawn for hydropower generation cannot be imposed by the State by referring to Entries 17 & 18 of List-II being regulatory entry - considering the charging section, taxable event and nature of levying under the impugned Act as well as subjecting the impugned Act to the test of “pith and substance”, it is absolutely clear that the impugned Act imposes tax on generation of electricity and not merely on water as a subject or on drawl of water, which the State is not competent to do. It also imposes an inter-State tax on inter-State supply of electricity for which again the State is not competent to do so.
Competence to promulgate whether can be traced to Entries 17, 18 read with 66 of List II as a “fee - HELD THAT:- Once it is held that the cess sought to be imposed by the impugned Act is not on the “water drawn” but on the “generation of electricity”, then, it is the Central Government alone which could levy tax on generation electricity - Noticing that electricity is goods - the Hon’ble Supreme Court CST vs. M.P. Electricity Board [1968 (11) TMI 85 - SUPREME COURT] observed that levy of State duty on production of electricity is covered with the phrase “other goods manufactured” in Entry 84 of List I and this is within the exclusive jurisdiction of the Parliament. Consequently, it was declared that the State has competence to levy tax only on the sale and consumption of electricity - the Hon’ble Supreme Court held that the levy on generation of electricity is not within the legislative competence of the State - Point answered in favor of petitioner.
Without prejudice, the impugned Act is unconstitutional for it suffers from vice of excessive delegation - HELD THAT:- In the instant case, three essential components can be clearly identified within the impugned statute, which are taxable events, “the person liable to pay tax” and the “rate of tax”. However, the impugned legislation fails to identify the fourth and equally critical component i.e. measure of tax, which is the value on which the rate of tax will be applied for computing the tax liability - In exercise of powers vested under Section 15(2) of the impugned Act that the State Government issued a Notification dated 26.08.2023, whereby the tariff structure on water cess was fixed on the basis of “Head”. However, even the said notification failed to prescribe the measure of tax and instead proceeded to prescribe tariff rate without any indication or measure on which such tariff rate will be applied. Moreover, measure of tax being vague, based upon the “assessment” or water drawn, which would form the basis of the tax imposed is also vague and fraught with lack of adequate guidelines, as is evident from the combined reading of Section 12 with Section 17 of the impugned Legislation.
The preamble of the impugned Act merely states that it is an act to levy water cess on hydropower generation in the State of Himachal Pradesh, the Statement of Objects and reasons merely states that the objective of the impugned Act is revenue generation. Therefore, on account of having delegated power to fix rates of impugned levy to Government of Himachal Pradesh without any legislative policy or guidance, the impugned Act is unconstitutional - point is accordingly answered in favour of the petitioners.
Promissory Estoppel - HELD THAT:- The question of promissory estoppel has been rendered academic and, therefore, need not be answered.
To conclude, it was held as follows:
(i) The provisions of the Himachal Pradesh Water Cess on Hydropower Electricity Generation Act, 2023, are declared to be beyond the legislative competence of the State Government in terms of Articles 246 and 265 of the Constitution of India and, thus, ultra vires the Constitution.
(ii) Consequently, the Himachal Pradesh Water Cess on Hydropower Electricity Generation Rules 2023, are also quashed and set aside.
(iii) Sections 10 and 15 of the Himachal Pradesh Water Cess on Hydropower Electricity Generation Act, 2023, as have been made applicable to the existing projects, are also declared to be ultra vires the Constitution and are accordingly quashed and set aside.
(iv) The amount, if any, recovered by the respondents from the petitioners under the provisions of the Himachal Pradesh Water Cess on Hydropower Electricity Generation Act, 2023 and the Rules framed thereunder are ordered to be refunded within four weeks from today.
(v) The letter/notice issued by the State Government/Himachal Pradesh State Commission for Water Cess on Hydropower Generation pursuant to the impugned Act, Rules, seeking recovery of water cess from the petitioners, are declared as illegal and are accordingly quashed and set aside.
The petition is allowed.
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2024 (3) TMI 584
Seeking exemption from pre-litigation mediation, as required by Section 12-A of the Commercial Courts Act, 2015 - Proceedings u/s 138 of the Negotiable Instruments Act, 1881 - suit for recovery alongwith interest and future interest - HELD THAT:- The plaintiff’s case here is predicated only on the fact that it has already undertaken efforts to settle the disputes between parties. Appellant refers to in paragraph 3 of the application, wherein it is stated that the parties were also referred to mediation. However, I do not find this case to be supported by the documents annexed to the application. There is no report of any mediation centre stating that mediation has failed. The orders of the learned Judicial Magistrate, Chandigarh, annexed to the application, also demonstrate only that the parties submitted before the Court that there was chance of compromise, but the attempt was ultimately found to be futile.
In the present case, there is no record that an attempt has been made in mediation, and that no urgent relief is sought. Pre-litigation mediation was therefore mandatory.
The application is consequently dismissed, and the plaint is also rejected under Order VII Rule 11 of the Code of Civil Procedure, 1908. The suit is accordingly dismissed.
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2024 (3) TMI 583
Arbitration agreement - Refusal to grant work order - L1 bidder in the tender process - forfeiture of the Earnest Money Deposit (EMD) - GST payable was @ 12% - Subsequently, by a notification of the Government, rate was enhanced from 12% to 18% - Wednesbury test - it is argued that if prayer of the petitioner, is allowed, would tantamount to a modification of the tender terms - since there was an acceptance on the part of the parties with regard to the tender conditions, the same has to be treated on the same footing as a contract.
HELD THAT:- In the facts of the present case, although the State takes a stand that the prayer of the petitioner would tantamount to rewriting the contract between the parities, it is not so in view of the Memorandum issued by the State itself on November 22, 2022. The said Memorandum, in no uncertain terms, provides for enhancement of GST by 6% from 12% to 18%, even in cases where work order has been issued. In cases where the tender is under process and there is clear indication of rate of GST @ 12%, the Memorandum provides for enhancement by 6% on account of GST. The acceptance order dated January 16, 2023 was issued subsequent to the November 22, 2022 Memorandum and, as such, was subject to the operation of the said Memorandum.
Since the petitioner had participated in the tender before the enhancement of GST from 12% to 18%, the provisions of the Memorandum dated November 22, 2022 were squarely applicable in the present case. Thus, the respondent authorities ought to have honoured the commitment of the State issued by way of a Memorandum dated November 22, 2022 by enhancing the GST from 12% to 18% and/or permit the petitioner to refurnish the quotations by incorporating such 6% enhancement, which was the precise request of the petitioner vide its communication dated April 17, 2023.
It is well-settled that State actions have to be scrutinized on a higher standard of fairness than the action of private employers.
Supreme Court in [2019 (3) TMI 600 - SUPREME COURT] categorically applied the Wednesbury test and opened up a window for judicial review even regarding the tender terms where there is arbitrariness, discrimination, unreasonableness and malice. The present instance is one where there is palpable arbitrariness and discrimination against the petitioner insofar as the respondents refused to apply the provision of the Memorandum dated November 22, 2022 to the petitioner, despite the petitioner coming under the purview of the same.
Hence, on the score of such arbitrariness and discrimination, the respondent authorities fail the Wednesbury test and, as such, their action is palpably unreasonable and discriminatory against the petitioner.
Since the expression of the petitioner’s interest to terminate the tender was obviously under State coercion and duress, the same cannot said to be an unqualified intention on the part of the petitioner or any admission on the part of the petitioner regarding termination of the tender or the work order envisaged thereunder. Hence, the said action of the petitioner cannot be held to be on such a high footing that the same would preclude the petitioner’s very challenge to the respondents’ action in not giving effect to the Memorandum dated November 22, 2022 in respect of the petitioner.
Thus, the respondents were duty-bound to permit the petitioner to enhance the GST rates by 6 per cent in terms of their own Memorandum dated November 22, 2022 read in conjunction with Notification No. 03/22-Central Tax (Rate) dated July 13, 2022 whereby the enhancement of GST rates took effect, coupled with WBGST Rate Notification No. 1393-FT dated August 23, 2022 whereby the State of West Bengal adopted the GST enhancement.
Thus, the impugned action of the respondents in refusing such request of the petitioner and consequential refusal to issue work order and forfeiture of the EMD cannot be sustained.
Thus, as a consequence of the setting aside of the refusal by the respondents to give the work order to the petitioner, all subsequent action taken by the State, including subsequent tender, if any issued, are hereby set aside.
The respondents shall issue work order to the petitioner by permitting the petitioner to incorporate the enhancement of 6% to the GST rates in its freshly quoted rates. Such fresh quotation shall be given by the petitioner to the respondent authorities within a week from date. Upon such rates being served on the respondent authorities, the respondent authorities shall issue the work order in terms thereof in favour of the petitioner pursuant to the tender-in-question. Alternatively, the respondent will be at liberty to refund the entire earnest money paid by the petitioner with interest @ of 10% till the date of such payment to the petitioner, in which case subsequent action taken by the State in issuing fresh tender shall be sustained.
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2024 (3) TMI 486
Dishonour of Cheque - civil nature dispute - main contention of the petitioners is that the transaction between them and respondent No. 2 was purely of civil nature as such, the respondents could not have given a criminal colour to it by registering the impugned FIR - whether in the face of aforesaid nature of dispute between the parties, it would be open to set the criminal proceedings into motion at the instance of one party to the dispute against the other and whether this Court in exercise of its jurisdiction under Section 482 Cr.P.C. can quash impugned proceedings?
HELD THAT:- This issue has been discussed and deliberated upon by the Supreme Court in the case of INDIAN OIL CORPORATION VERSUS NEPC INDIA LTD & ORS [2006 (7) TMI 575 - SUPREME COURT] has held that A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceedings are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.
From the foregoing enunciation of the law on the subject, it is clear that a commercial transaction or a contractual dispute apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. It is also clear that the scope of a civil proceeding is different from a criminal proceeding and the mere fact that the allegations relate to a commercial transaction or breach of contract for which a civil remedy is available, is not by itself a ground to quash the criminal proceedings.
In the present case, the petitioner-Mohd Afzal Beigh despite having the knowledge that he was not the owner of the property in question, represented to respondent No. 2 that he is owner of the property in question.
Whether the action of petitioner-Mohd. Afzal Beigh amounts to the offence of cheating? - HELD THAT:- The fraudulent intention on the part of petitioner Mohd Afzal Beigh was existing there from the very inception of the transaction between the parties. It is not a case where petitioner-Mohd Afzal Beigh was owner of the property and he had agreed to sell the said property to respondent No. 2 and for any reason, he could not execute the sale deed, but it is a case, where he falsely represented to respondent No. 2 that he is owner of the property in question, which he was not. So from the very beginning, he was knowing that it was not within his power and competence to execute the sale deed in respect of the land in question in favour of respondent No. 2, but despite this, he entered into agreement to sell with respondent No. 2 and made her to part with partial amount of sale consideration. Thus, offence under Section 420 IPC, which is a cognizable offence, is made out from the allegations made in the complaint and the material available on record.
Petitioner-Mohd Afzal Beigh has executed a number of affidavits declaring therein that he has received an amount of Rs. 1.80 crores from respondent No. 2, which he has been unable to repay to her. Subsequently cheques have also been issued by his wife petitioner- Fehmida Kouser in connection with repayment of the aforesaid amount but the cheques have been dishonoured, in respect of which separate proceedings are stated to be pending. There are allegations against the petitioners that after receiving the amount from respondent No. 2 they have diverted the funds and out of the said funds, petitioner-Abdul Rashid Beigh has constructed a building in his village. This prima facie goes on to show that the petitioners were having fraudulent intention while entering into transaction with respondent No. 2 and all the petitioners appear to be having a role in it.
The power under Section 482 Cr.P.C. to quash the criminal proceedings has to be exercised sparingly only in deserving cases in the circumstances illustrated in the aforesaid judgment. Even allegations of mala fides against the informant by itself is not a ground for quashing the criminal proceedings. The defence set up by the petitioners particularly the petitioners-Abdul Rashid and Fehmida Kouser can be looked into by the Investigating Agency during the investigation of the case and not by this Court in their proceedings by holding a mini trial. Having regard to the fact that allegations made in the impugned FIR disclose commission of cognizable offences, therefore, exercise of jurisdiction under Section 482 Cr.P.C. to quash the proceedings in the instant case would amount to stifling a legitimate prosecution, which is not permissible in law.
There are no merit in the instant petitions. The same are dismissed.
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2024 (3) TMI 443
Market fee/mandi shulk - Whether ghee is a product of livestock under the provisions of The Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966? - whether the Government notification (G.O. Ms. No.286 dated 05.07.1994), which inter alia notifies ghee as one of the products of livestock for the purpose of regulation of purchase and sale of ghee in all notified market areas was published after due compliance of the procedure contemplated under the provisions of the Act?
HELD THAT:- The argument that “ghee” is not a product of livestock is baseless, and bereft of any logic. The contrary argument that “ghee” is indeed a product of livestock is logically sound. Livestock has been defined under Section 2(v) of the Act, where Cows and buffalos are the livestock. Undisputedly, “ghee” is a product of milk which is a product of the livestock.
The majority opinion of the Full Bench decision in Kommisetty Nammalwar [2009 (5) TMI 1021 - ANDHRA PRADESH HIGH COURT] while referring to the judgments of this Court in Park Leather Industry (P) Ltd. v. State of U.P. [2001 (2) TMI 893 - SUPREME COURT]]; Kishan Lal v. State of Rajasthan [1990 (3) TMI 323 - SUPREME COURT]; Ram Chandra Kailash Kumar v. State of U.P. [1980 (3) TMI 262 - SUPREME COURT] and Smt. Sita Devi (Dead) by LRs. v. State of Bihar & Ors. [1994 (11) TMI 439 - SUPREME COURT] held that all animal husbandry products would fall within the meaning of ‘products of livestock’ as defined under Section 2 (xv) of the Act. Further, the majority decision has also held that the inclusion of “ghee” as a livestock product cannot be faulted merely because it is derived from another dairy product. It was observed by the High Court that even though “ghee” is not directly obtained from milk, which is a product of livestock, it would still be a “product of a product of livestock”.
The second argument of the appellant that the procedure given under Section 3 of the Act has not been followed, is also not correct. There is a basic difference between the notification which has to be made under Section 3 of the Act and the notification which has to be made subsequently under Section 4 of the Act. What has to be done under Section 3 is a onetime measure where the Government notifies an area where purchase and sale of agricultural produce, livestock and products of livestock can be made. This is a one-time exercise - A perusal of Sections 3 and 4 of the Act clearly shows that whereas a draft notification is mandatory under Section 3 and so is the hearing of objections to the draft notification, there is no similar provision under Section 4 of the Act.
Market fee - HELD THAT:- Since the 1994 notification had an effect which made ‘Ghee’ a product that could be regulated under provisions of the Act, Market Committees were empowered to levy fee on the sale and purchase of ‘ghee’ as per section 12 of the Act. During the pendency of the matter before the High Court, the appellants were not required to pay market fee as they were granted interim protection by the High Court. After the majority decision of the High Court in Kommissetty Nammalwar [2009 (5) TMI 1021 - ANDHRA PRADESH HIGH COURT], market committees started issuing demand notices to the producers of ‘Ghee’ asking them to pay fees from the date of the notification in the year 1994 to the date of the High Court judgment i.e. 01.05.2009.
As per section 4(2) of the Act, the Market Committee has the duty to enforce the provisions of the Act within a notified area. Section 4(3), which empowers Market Committees to establish markets within the notified area, also directs that these Market Committees have to provide facilities in the markets for the purchase and sale of notified products. Appellants’ argument that these Market Committees did not provide any facilities has already been dealt with and rejected by the High Court and we are also of the same view as that taken by the High Court. The appellants have availed the facility given by the Market Committee and hence they are liable to pay the fee.
Appeal dismissed.
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2024 (3) TMI 442
Criminal breach of trust - loan and its repayment - dishonest intention or not - proceeding under Section 138 of the N.I. Act is pending - Parallel proceedings or not - HELD THAT:- In the present case, the dispute relates to a loan and its repayment. There is absolutely no material on record to prima facie show that the accused has dishonestly mis-appropriated or converted the property for his own use. There is a strong case of repayment in this case.
In respect of the present dispute even though a proceeding under Section 138 of the N.I. Act is pending, the present case under Sections 406/409/420/120B of IPC on the same dispute is maintainable as, though the facts may overlap but the ingredients of offences in the two proceedings are entirely different.
In the present case, admittedly there was a business transaction between the parties but there is no case against the petitioners that he dishonestly induced the complainant. There was neither any deceit nor any inducement to deceive the complainant. The transaction was admittedly for the benefit of both the parties. The fact of wrongful loss of one resulting in wrongful gain of another is not present in this case as loan has been admitted and the dispute relates to its repayment. Thus the ingredients required to constitute the offence under Section 420 IPC are clearly absent in the present case.
In the present case there is no materials to show that there was any existence of dishonest/fraudulent intention while making any initial promise that is from the beginning of formation of contract - The petitioners were repaying the loan as agreed, when they decided to the clear the dues prematurely.
In the Present case, there is no substance in the allegations and no material exists to prima facie make out the complicity of the petitioner in a cognizable offence as alleged. As such the proceedings in this case should be quashed by exercising this courts inherent powers for ends of justice and to prevent the abuse of process of the court.
Revision application allowed.
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2024 (3) TMI 441
Dishonour of Cheque - application seeking summoning of the records/documents/books of accounts mentioned in the said application for purposes of cross-examination of the Authorised Representative of the respondent/complainant company dismissed - HELD THAT:- The present petition was first listed before this Court on 26.04.2022. This Court directed the petitioner to file a three page summary clearly identifying the documents of which the petitioner seeks summoning before the learned Trial Court, and referring to the relevance of the said documents within the context of the proceedings under Section 138 of the NI Act instituted by the respondent against the petitioner.
The petitioner is seeking the production of documents only with the intent of conducting a fishing and roving inquiry and to, in fact, embarrass the trial. Such attempt of the petitioner cannot be allowed to succeed. In any case, if the learned Trial Court is later of the opinion that these documents were relevant to be produced by the respondent for proving the case against the petitioner, the Court will draw an adverse inference of their non-production against the respondent. However, at this stage, this Court is of the opinion that the documents, production of which are sought for by the petitioner, are neither relevant nor necessary for a proper and fair adjudication of the Complaint filed by the respondent.
In KAILASH VERMA VERSUS PUNJAB STATE CIVIL SUPPLIES CORPN. [2005 (1) TMI 406 - SUPREME COURT], the Supreme Court has held the power under Section 482 of the Criminal Procedure Code has to be exercised sparingly and such power shall not be utilised as a substitute for second revision. Ordinarily, when a revision has been barred under Section 397(3) of the Code, the complainant or the accused cannot be allowed to take recourse to revision before the High Court under Section 397(1) of the Criminal Procedure Code as it is prohibited under Section 397(3) thereof. However, the High Court can entertain a petition under Section 482 of the Criminal Procedure Code when there is serious miscarriage of justice and abuse of the process of the court or when mandatory provisions of law are not complied with and when the High Court feels that the inherent jurisdiction is to be exercised to correct the mistake committed by the revisional court.
There are no merit in the present petition. The same is, accordingly, dismissed.
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2024 (3) TMI 399
Dishonour of Cheque - acquittal of accused - evidence on record has not been properly appreciated by the learned trial court - appellant submits that the evidence produced by the respondent/accused before the trial court does not rebut the said presumption as the same is contradictory and un-reliable in nature - whether there was a compromise between the parties in pursuance whereof any payments were made by the respondent to the appellant? - HELD THAT:- The facts relating to issuance of cheques and dishonour of the cheques for insufficiency of funds are not in dispute, therefore, in terms of Section 139 of the NI Act, it has to be presumed that the appellant has received the cheques in discharge of whole or part of the debt or liability. However, the said presumption is rebuttable, as is clear from the provisions contained in Section 139 of the NI Act.
The Supreme Court has, in the case of RANGAPPA VERSUS SRI MOHAN [2010 (5) TMI 391 - SUPREME COURT] while discussing the legal position as regards the nature of presumption that arises under Section 139 of the NI Act and the standard of proof required to rebut such presumption, observed it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of ‘preponderance of probabilities’. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
From a perusal of the afore-quoted observations of the Supreme Court, it is clear that once a presumption arises in terms of Section 139 of the NI Act on the basis of the facts proved on record, the person against whom presumption is drawn is not precluded from rebutting it and proving the contrary. It is also clear that the rebuttal does not have to be conclusively established but the person against whom the presumption has arisen, has to adduce such evidence in support of his defence that the Court may either believe the defence to exist or consider its existence to be reasonably probable. The standard of reasonability has to be that of a prudent person.
Adverting to the facts of the instant case, the respondent/accused while making his statement under Section 242 of the J&K Cr. P.C. has clearly stated that after issuance of the cheques in question, there was a compromise between the parties before SHO, Police Station, Chanderkote, DW-Diljit Singh as the appellant/complainant had held up his vehicle at Chanderkote. It is his defence that during the compromise an amount of Rs. 50,000/- was paid to the complainant and the balance amount was paid to him after withdrawing the same from the ATM after some days, but in spite of this, he did not return the cheques. In order to establish this defence, the respondent/accused has examined DW-Shafiq Ahmad and DW-Mohd Amin, who were working as Mates with the respondent. The statement of the then SHO, Police Station, Chanderkote, Diljit Singh has also been recorded.
The defence of respondent/accused that he had paid the cheque amount to the appellant, even before the same were presented for encashment, appears to be probable.
So far as the allegation regarding receipt of demand notice by respondent/accused is concerned, the same has never been put to him to seek an explanation from him at the time of recording his statement under Section 242 of J&K Cr.PC. The learned Magistrate did not explain the particulars of the fact relating to service of demand notice upon him while recording his statement under Section 242 of the J&K Cr. P.C., though it is an essential ingredient of offence under Section 138 of NI Act. The statement of the accused under Section 342 Cr.P.C. has not been recorded at all by the learned trial Magistrate on the ground that no such statement was required to be recorded in a summons trial case. Thus, even the evidence regarding service of demand notice has not been put to the accused for seeking his explanation.
The view taken by the learned trial Magistrate that there was no requirement of recording the statement of the accused under Section 342 Cr. P.C. is not in accordance with law. Thus, even in summons trial cases a criminal court is obliged to question the accused generally on the case after the witnesses of the prosecution have been examined.
It is a settled law that the incriminating circumstances, regarding which no explanation has been called from the accused, cannot be used against him while deciding veracity of the accusation against him. The evidence which has not been put to an accused has to be eschewed from consideration. Therefore, the evidence, as regards service of demand notice upon the respondent/accused having not been put to him, cannot be taken into consideration while deciding the veracity of the accusations against him.
If the drawer of the cheque pays a part of whole of the sum between the period the when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque. Therefore, unless the part payment is endorsed on the cheque as per the Section 56 of the NI Act, the complaint under Section 138 of NI Act would not be maintainable once part payment is made by the accused - even if the contention of the learned counsel for the appellant that payment of Rs. 2,10,000/- by the accused to the appellant is not sufficiently proved, still then in the absence of endorsement on the cheques regarding receipt of Rs. 40,000/-, the complaint could not have proceeded.
This Court is of the considered view that the accused/respondent has succeeded in probablizing his defence so as to rebut the presumption that had arisen in favour of the appellant/complainant. The view taken by the learned trial court is definitely a passible one, as such, this Court does not find any ground to interfere in the impugned judgment passed by said court - Appeal dismissed.
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2024 (3) TMI 398
Dishonour of Cheque - Seeking setting aside of summoning order - vicarious liability on partner of a firm - requirements of Section 141 of the NI Act, satisfied or not, especially in view of the fact that in a previous complaint between the same parties, with respect to the same subject matter, the present petitioner was not named as an accused (as a person in-charge of conduct of day to day affairs of the accused partnership firm).
HELD THAT:- In the present case as noted hereinabove, the allegation with respect to the present petitioner is to the extent that she alongwith with other accused in the said complaint were partners of the partnership firm and “are responsible for the day to day affairs of the Accused No. 1 and are incharge and in control and management of the Accused No. 1”. A further reading of the complaint reflects that the subject matter of the same was a Development Agreement dated 16.03.2018 for developing a land owned by respondent no. 2. It is an admitted case that the said agreement has not been signed by the present petitioner. It is a matter of record that respondent no. 2, in the previous complaint filed on the basis of said Development Agreement did not implead the present petitioner as an accused.
The name of the petitioner is conspicuously not mentioned as an accused or a person responsible for the affairs of the said partnership firm. In the complaint that is the subject matter of the present petition, no averment has been made by respondent no. 2, to state that the petitioner, although not named in the previous complaint but on account of some subsequent development, came to know that she was incharge of affairs and also responsible for conduct of business of the accused partnership firm at the relevant time. In view of the fact that the previous complaint did not name the present petitioner, it was incumbent upon respondent no. 2 to place on record more particulars about the role of the present petitioner in the complaint.
The petitioner is admittedly a 65 years old lady and the accused partnership firm is a family concern. The reliance placed by respondent no. 2 on Income Tax Returns for the financial year 2015-16, filed under the signatures of the petitioner cannot bring her case within Section 141 of the NI Act. As held in SIBY THOMAS VERSUS M/S. SOMANY CERAMICS LTD. [2023 (10) TMI 487 - SUPREME COURT] it is be shown that the petitioner was responsible for the affairs of the partnership and in control of the same for the relevant transaction, .i.e., present cheques in question which are dated 27.07.2018 and 05.08.2018. Admittedly, the petitioner is not a signatory to the cheque. Apart from the above basic averment, nothing has been placed on record to show the petitioner’s involvement in the firm or with respect to the subject transaction.
The summoning order dated 25.07.2019, arising out of CC No. 344/2019, qua the petitioner, is hereby quashed - petition allowed.
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2024 (3) TMI 397
Declaration of bodies corporate, their promoters and directors, as “wilful defaulters” - seeking various declaratory reliefs whereby adherence to principles of natural justice, including provision of inspection of relevant material, is sought to be read into the due process stipulated by the Respondent No. 2, the Reserve Bank of India - HELD THAT:- The Union Bank is firmly of the view that it is not obligated to provide any material to prove its allegations and that the onus is on the Petitioner to prove his innocence. Therefore, the stance of Union Bank is in conflict with first principles of the rule of law in India. Put differently, once a bank has accused someone of being a wilful defaulter (without providing supporting material), the person accused has to shoulder the onus and burden of proving his innocence. The affidavit in reply makes no bones about the Union Bank’s belief that no underlying material needs to be disclosed to any noticee under the Master Circular - There cannot be a concept more alien to the constitutional protections available under the rule of law in India. The aforesaid stance flies in the teeth of the “imperative” requirements of transparency stipulated by the RBI in the Master Circular.
It is now trite law that in proceedings that can inflict serious civil consequences on any citizen, the noticee should be able to appreciate the case made out against him so that he may deal with the allegations to the best of his ability. The only means of doing so is to provide detailed proper notice of the reasons for having formed a prima facie view when calling upon the noticee to show cause why such prima facie view must not translate into a final view. Such an approach would enable the noticee to understand in a cogent manner the case that he is supposed to meet.
Union Bank is granted liberty to make a proper disclosure of materials and information on which the SCN is based. Once such disclosure is made to the Petitioner, the Petitioner is at liberty to submit a fresh reply to the SCN, after which a reasoned draft order may be issued by the Identification Committee. This draft order of the Identification Committee shall be served on the Petitioner so as to enable him to make his representation to the Review Committee why the said order ought not to be confirmed. Thereafter, a reasoned final order may be passed by the Review Committee, if it is found that there has been a wilful default attributable to the Petitioner.
The Union Bank is permitted to withdraw the final order dated 28th February, 2023 passed by the Review Committee as also the draft order dated 5th August, 2022 purported to have been passed by the Identification Committee, insofar as it relates to the Petitioner - Any agency, including Respondent Nos. 3 to 6, that has published or disseminated the name of the Petitioner identifying him as a wilful defaulter on the strength of the orders that now stand withdrawn by Union Bank, shall forthwith remove such identification from publicly accessible information resources.
Petition disposed off.
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2024 (3) TMI 396
Disciplinary proceeding against the govt officer - Punishment of withholding of 10% of monthly pension for a period of three years - misconduct - failure to maintain absolute integrity - lack of devotion to duty - violation of Rule 3(1)(i), 3(1)(ii) and 3(1)(iii) of the Central Civil Services (Conduct) Rules, 1964 - HELD THAT:- Neither the inquiry report nor the order of punishment dated 26th April, 2013 passed by the Disciplinary Authority has recorded any finding about doubtful integrity of the petitioner. The Disciplinary Authority in his order, on the other hand, records a categorical finding that “the charge of lack of integrity against the Charged Officer could not be substantiated”. It is also to be noticed that even the Inquiry Officer has not found any such material on record which would lead him to doubting the integrity of the petitioner; the finding rather is that there was no malice or mala fide intent on the part of the petitioner and further that there was no allegation of any corrupt practice or extending undue benefit to the importer, against the petitioner.
Accordingly, neither is there any material nor any finding recorded by the Inquiry Officer or the Disciplinary Authority about doubtful integrity of the petitioner even qua the conduct of the petitioner which became subject matter of disciplinary proceeding against him. To charge and punish a government servant for violation of Rule 3(1)(i) of the Conduct Rules, 1964, it should be proved that the officer concerned has failed to maintain absolute integrity. Since there is nothing on record which even remotely suggest that petitioner failed to maintain absolute integrity, no punishment on that count will be permissible against him. The finding recorded by the Inquiry Officer as also by the Disciplinary Authority are otherwise - in this view of the matter the petitioner in the instant case cannot be said to have found to have failed to maintain absolute integrity.
So far as Rule 3(1)(ii) of the Conduct Rules, 1964 is concerned, it mandates that every government servant shall at all times maintain devotion to duty and any breach thereof will amount to misconduct - So far as the facts in the instant case are concerned, there is nothing on record; neither is there any finding recorded by the Inquiry Officer or by the Disciplinary Authority that the petitioner was habitual of failing in performance of the tasks assigned to him within the timeframe for the purpose and with the quality of performance expected of him. The petitioner was charged for solitary act of cancellation of bonds and bank guarantees without proper scrutiny and verification of documents put up before him, however, the explanation given by the petitioner was that he cancelled the bonds and bank guarantees on the recommendation of the Appraisal Officer. Apart from the solitary incident in terms of the charge memorandum, nothing is available on record which may establish the charge of the petitioner having failed habitually in performance of the tasks assigned to him.
Any penalty under Rule 9 of the Pension Rules, 1972 can precipitate in two circumstances, namely, (i) if a government servant is found guilty of grave misconduct or negligence and (ii) such misconduct causes pecuniary loss to the government. From a perusal of the Inquiry Officer’s report as also the findings recorded by the Disciplinary Authority in the punishment order dated 26th April, 2013, breach of either Rule 3(1)(i) or 3(1)(ii) or 3(1)(iii) of the Conduct Rules, 1964 is not made out. There is no finding on record relating to pecuniary loss caused on account of the alleged misconduct of the petitioner in the order of punishment dated 26th April, 2013. In absence of finding of proof of charge of pecuniary loss to the government and also because on the basis of material available on record of the departmental proceeding, no breach of Rule 3(1)(i), 3(1)(ii) and 3(1)(iii) of the Conduct Rules, 1964 is found, the impugned order passed by the Disciplinary Authority dated 26th April, 2013 inflicting punishment of recovering 10% of monthly pension for a period of three years, in our opinion, is not sustainable.
The order of punishment dated 26th April, 2013 is hereby quashed - writ petition allowed.
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2024 (3) TMI 274
Disciplinary proceedings - Reliance on confessional statements made by accused persons during the investigation - Petitioner, who at the relevant point of time, was working as Superintendent of Central Excise - Landing of smuggled explosives, arms and ammunitions which were used in conducting bomb blast in Mumbai during the year 1993 - Penalty of compulsory retirement from Government service in terms of Rule 11(vii) of the Central Civil Services (Classification, Control & Appeal) Rules, 1965 - entitled to only 65% of the full compensation of pension and gratuity under Rule 40 of the Central Civil Services (Pension) Rules - contravention of provisions of Rule 3(1), (i), (ii) and (iii) of the Central Civil Services (Conduct) Rules 1964 - principles of judicial review.
Whether the confessional statements made by accused persons during the course of investigation of a criminal case where the employees were not tried as co-accused and the accused persons retracted from the confessional statements in their deposition during the course of trial, forms sufficient evidence to bring home the charges in departmental proceedings? - Whether there is any evidence on record of the departmental proceedings drawn and conducted against the employees in these cases other than the confessional statements made by certain co-accused persons in the criminal case during the course of investigation before the Investigating Agency/Officer, on the basis of which the charges leveled against them can be said to be proved or it is a case of no evidence?
HELD THAT:- The legal principle which emerges as per cumulative reading of Sections 25 and 26 of the Indian Evidence Act and Sections 161 and 162 of the Cr.P.C. is that any statement made before a Police Officer cannot be proved during the course of a criminal trial and accordingly no confession made by any person in custody of Police Officer shall be proved against such person. The statement recorded under Section 161 of the Cr.P.C. can, during the course of trial, be used only for the purpose of contradiction.
Since in the instant matters, the Disciplinary Authority has relied upon the confessional statement made during the course of investigation by the Investigating Officer of a criminal case pertaining to TADA, it is also noted that Section 15 of the TADA Act which carves an exception to the provisions of the Indian Evidence Act and the Cr.P.C., however, the exception is circumscribed by certain conditions. According to Section 15 of the TADA Act, a confession made by a person before a Police Officer not below the rank of a Superintendent of Police and recorded by such Police Officer, shall be admissible in trial of such person or co-accused, abettor or conspirator for an offence under the TADA Act - However, so far as the admissibility of confessional statement under Section 15 of the TADA Act against co-accused or abettor or conspirator is concerned, the proviso appended to Section 15 needs to be noticed, according to which, for such confessional statement to be admissible against co- accused, such co-accused should be charged and tried in the same case together with the accused whose confessional statement is relied upon as an evidence against co-accused.
Analyzing the evidence available on record of the disciplinary proceedings, it is found that the department has relied upon the confessional statements made by four accused persons during the course of investigation of criminal case and these accused persons are (i) Uttam Potdar (smuggler) (ii) Mohd. Sultan Sayyed, Superintendent, Customs Officer (iii) R. K. Singh, Assistant Commissioner and (iv) Dawood M. Phanse (smuggler). These persons were not examined during the course of departmental proceedings; rather, to prove the confessional statement Police Officers were examined. Smt. Meeran Chadha Borwankar, Superintendent of Police was examined before the Inquiry Officer as witness in the departmental proceedings. This witness in the departmental proceedings has only stated she had recorded the confessional statement of Uttam Potdar during the course of investigation of the criminal case conducted by her and that the confessional statement was made by Uttam Potdar without any duress.
The principle that any punishment order passed in disciplinary proceedings can be subjected to judicial review in a case where the punishment order is based on no evidence, is already well established. From these discussions, it is apparent and well established that it is a case where despite existence of no evidence to prove the charge in the departmental proceedings, the employees have been punished by the Disciplinary Authority. The evidence available on record is only the confessional statements made by the accused persons during the course of investigation of the criminal case which, for the reasons already stated, could not be made basis of inflicting the punishment upon the employees in this case. In absence of any evidence, it is not even a case where guilt of the employees in the departmental proceedings can be said to have been proved even on preponderance of probabilities.
There are no hesitation to hold that the Tribunal, while passing the impugned judgment and order dated 13th June 2013 in Original Application No. 465 of 2010 was in error in dismissing the said Original Application - petition allowed.
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2024 (3) TMI 273
Dishonor of cheques - Condonation of delay of 1259 days in filing the complaint for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - sufficient reason to condone the delay or not - HELD THAT:- The nature of the proceedings in a complaint under Section 138 of the Act, assumes significance. Learned Counsel for the Petitioner made an earnest endeavour to draw home the point that the prosecution for an offence under Section 138 of the Act, entails punishment, and, therefore, a strict interpretation is the norm. The courts below could not have, therefore, condoned the delay in a light manner.
Chapter XVII came to be inserted in the N.I. Act by the Amendment Act, 1988 with the object of enhancing the acceptability of the cheques for the settlement of liabilities. The primary object of visiting the penal consequences to the dishonour of the cheque is not mere penal, but also to maintain the efficiency and value of a negotiable instrument in commercial transactions by making the accused to honour the negotiable instrument and pay the amount for which such instrument had been drawn. The object of provisions contained in Chapter XVII has thus been described as both punitive and compensatory.
The Supreme Court in P. MOHANRAJ & ORS. VERSUS M/S. SHAH BROTHERS ISPAT PVT. LTD. [2021 (3) TMI 94 - SUPREME COURT] delved into the question as to whether the proceedings under Section 138 of the Act, are quasi criminal in nature. In paragraph No. 84 of the said judgment, the Supreme Court concluded that given the hybrid nature of a civil contempt proceeding, described as ‘quasi-criminal’ by several judgments of the Supreme Court, there was nothing wrong with the same appellation ‘quasi-criminal’ being applied to Section 138 proceeding for the reasons given by the Supreme Court on an analysis of Chapter XVII of the Act, 1888.
Another three Judge Bench of the Supreme Court again had an occasion to consider the nature of the proceedings under Chapter XVII of the Act, 1888 in the case of M/S GIMPEX PRIVATE LIMITED VERSUS MANOJ GOEL [2021 (10) TMI 378 - SUPREME COURT]. The Supreme Court observed that the nature of the offence under Section 138 of the NI Act is quasi-criminal in that, while it arises out of a civil wrong, the law, however, imposes a criminal penalty in the form of imprisonment or fine. The purpose of the enactment is to provide security to creditors and instil confidence in the banking system of the country.
In the case of DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [2010 (5) TMI 380 - SUPREME COURT] the Supreme Court has observed that it is quite obvious that with respect to offence of dishonour of cheques, it is compensatory aspect of the remedy which should be given priority over the punitive aspect.
The aforesaid being the nature of the proceedings under Section 138 of the Act, 1881, the circumstances in which the complainant could not lodge the complaint, within the prescribed period, deserves to be apprised in a slightly different perspective than a case where the prosecution is under an enactment, the primary object of which, is punitive. The conduct of the parties also becomes relevant.
In the case at hand, there are documents which indicate that after the service of the demand notice, the accused had not only acknowledged the liability, but also expressly requested the complainant not to act on the demand notice. Subsequently, again a MOU was executed acknowledging the liability and promising to pay the amount in five installments. There are number of messages exchanged between the parties on Whatsapp, which lend prima facie credence to the claim of the complainant that he was made to believe the representations of the accused and forebear from lodging the complaint.
The learned Magistrate cannot be said to have committed an error in exercise of discretion to condone the delay. The Revisional Court was justified in refraining from interfering with the exercise of discretion by the learned Magistrate. As the courts below cannot be said to have exercised the discretion in the manner which could be termed perverse and the discretion has been exercised positively to condone the delay which promotes the cause of substantive justice, this Court does not find any reason to interfere with the impugned orders - Petition dismissed.
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2024 (3) TMI 265
Application under Section 156(3) of the Code - misuse of digital signature of the petitioner, uploaded false returns by even including the names of clients whom the petitioner has never dealt with - non-submission of PF and ESI returns of the company - HELD THAT:- It appears that no report in final form has yet been submitted in respect of Jadavpur Police Station Case No.59 dated 07.04.2023 - Let the investigating agency conclude the investigation expeditiously and in accordance with law.
The petition disposed off.
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2024 (3) TMI 222
Dishonour of Cheque - security cheque or not - lease deed has been obtained by misrepresentation or not - rebuttal of presumption u/s 139 of the NI Act - HELD THAT:- In the present case, as the debt or liability in terms of the Agreement to Sell and/or the Addendum itself had not arisen, Section 138 of the NI Act was not attracted and the ingredients of the offence were not satisfied - Though the power under Section 482 of the Cr.P.C. is to be exercised sparingly and in the rarest of rare cases, at the same time, where, from a bare reading of the complaint, the offence is not made out, the power must be exercised to quash such a complaint.
In S.P. Mani & Mohan Dairy v. Snehalatha Elangovan, [2022 (9) TMI 846 - SUPREME COURT], the Supreme Court has held The Court concerned would owe a duty to discharge the accused if taking everything stated in the complaint is correct and construing the allegations made therein liberally in favour of the complainant, the ingredients of the offence are altogether lacking.”
Applying the abovementioned principles enunciated by the Supreme Court to the facts of the present case, as the Complaint filed by the respondent lacks the necessary averments that would give rise to the debt and/or liability of the petitioners for which the cheque had been issued, the complaint filed by the respondent deserves to be quashed.
Complaint, being pending before the Court is hereby quashed - Petition allowed.
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2024 (3) TMI 221
Dishonour of Cheque - Rebuttal of presumption - Financial Capacity - misuse of Cheque by the complainant - The petitioner argued that the complainant did not have the financial capacity to lend the amount mentioned in the cheques, as it was not reflected in his income tax returns. - presumption of legal liability under Section 139 of the Negotiable Instruments Act to be read with Section 118 of the Act - rebuttal of presumption - HELD THAT:- Petitioner does not dispute his signature on any of the two cheques in question. His defence is that said cheques have been misused by the complainant. Once signature on the cheques are not in dispute, there is a presumption of legal liability under Section 139 of the Negotiable Instruments Act to be read with Section 118 of the Act, in favour of the complainant, though the said presumption is rebuttable.
In Rangappa vs. Sri Mohan [2010 (5) TMI 391 - SUPREME COURT], a three judge bench of the Hon’ble Supreme Court held that Section 139 of the NI Act includes the presumption regarding the existence of a legally enforceable debt or liability and that the holder of a cheque is also presumed to have received the same in discharge of such debt or liability. It was clarified in the aforesaid decision that the presumption of the existence of a legally enforceable debt or liability is, of course, rebuttable and it is open to the accused to raise a defence, wherein the existence of a legally enforceable debt or liability can be contested. Without doubt, the initial presumption is in favour of the complainant - An accused may not be expected to discharge an unduly high standard of proof, reverse onus clause requires the accused to raise probable defence for creating doubt about the existence of a legally enforceable debt or liability for thwarting the prosecution. The standard of proof for doing so would necessarily be on the basis of “preponderance of probabilities” and not “beyond shadow of any doubt.”
In present case, in order to rebut the presumption, petitioner contended that complainant did not have the financial capacity; that he did not show the amount allegedly lent to the complainant in his income tax returns; and that cheques were managed by the complainant, when he was working as accountant with the accused and which he later on misused - Learned Trial Court rightly observed that no further question was asked from the complainant as to when the land was sold and for how much sale. Thus, the financial capacity of the complainant to lend the money is duly established.
The complainant is not obliged to prove the loan or the financial capacity. Once the presumption under Section 139 of the NI Act is available to the complainant, entire burden shifts upon the accused to rebut that presumption, which in the present case accused-petitioner has utterly failed - In Rohitbhai Jivanlal Patel v. State of Gujarat & another [2019 (3) TMI 769 - SUPREME COURT], it was held by the Hon’ble Supreme Court thatIn the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the Trial Court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing the loan to the accused and want of examination of the relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the Trial Court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the accused-appellant. The aspect relevant for consideration had been as to whether the accused-appellant has brought on record such facts/material/circumstances which could be of a reasonably probable defence."
It is held that the learned Trial Court rightly concluded that the defence as pleaded by the accused was not probable and thus, he had failed to rebut the presumption under Section 139 of the Negotiable Instruments Act available to the complainant. Learned Appellate Court has also considered all the pleas as raised by the petitioner accused. This Court does not find any illegality in the impugned order.
Present revision is hereby dismissed.
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2024 (3) TMI 175
Seeking grant of bail - charges under the UAP Act along with other charges under the Indian Penal Code and Arms Act - reliance placed on disclosure statement - HELD THAT:- The test for rejection of bail is quite plain. Bail must be rejected as a 'rule', if after hearing the public prosecutor and after perusing the final report or Case Diary, the Court arrives at a conclusion that there are reasonable grounds for believing that the accusations are prima facie true. It is only if the test for rejection of bail is not satisfied - that the Courts would proceed to decide the bail application in accordance with the 'tripod test' (flight risk, influencing witnesses, tampering with evidence). This position is made clear by Sub-section (6) of Section 43D, which lays down that the restrictions, on granting of bail specified in Sub-section (5), are in addition to the restrictions under the Code of Criminal Procedure or any other law for the time being in force on grant of bail.
The question of entering the 'second test' of the inquiry will not arise if the 'first test' is satisfied. And merely because the first test is satisfied, that does not mean however that the Accused is automatically entitled to bail. The Accused will have to show that he successfully passes the 'tripod test'.
The material available on record indicates the involvement of the Appellant in furtherance of terrorist activities backed by members of banned terrorist organization involving exchange of large quantum of money through different channels which needs to be deciphered and therefore in such a scenario if the Appellant is released on bail there is every likelihood that he will influence the key witnesses of the case which might hamper the process of justice. Therefore, mere delay in trial pertaining to grave offences as one involved in the instant case cannot be used as a ground to grant bail. Hence, the aforesaid argument on the behalf the Appellant cannot be accepted.
The material on record prima facie indicates the complicity of the Accused as a part of the conspiracy since he was knowingly facilitating the commission of a preparatory act towards the commission of terrorist act Under Section 18 of the UAP Act - Bail application dismissed.
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