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2023 (12) TMI 427
Validity of the ‘Group of Companies’ doctrine in the jurisprudence of Indian arbitration - whether there can be a reconciliation between the group of companies doctrine and well settled legal principles of corporate law and contract law? - doctrine of competence-competence.
As per Dr. Dhananjaya Y Chandrachud, CJI
HELD THAT:- The questions of law referred to this Constitution Bench answered as follows:
a. The definition of “parties” under Section 2(1)(h) read with Section 7 of the Arbitration Act includes both the signatory as well as non-signatory parties;
b. Conduct of the non-signatory parties could be an indicator of their consent to be bound by the arbitration agreement;
c. The requirement of a written arbitration agreement under Section 7 does not exclude the possibility of binding non-signatory parties;
d. Under the Arbitration Act, the concept of a “party” is distinct and different from the concept of “persons claiming through or under” a party to the arbitration agreement;
e. The underlying basis for the application of the group of companies doctrine rests on maintaining the corporate separateness of the group companies while determining the common intention of the parties to bind the nonsignatory party to the arbitration agreement;
f. The principle of alter ego or piercing the corporate veil cannot be the basis for the application of the group of companies doctrine;
g. The group of companies doctrine has an independent existence as a principle of law which stems from a harmonious reading of Section 2(1)(h) along with Section 7 of the Arbitration Act;
h. To apply the group of companies doctrine, the courts or tribunals, as the case may be, have to consider all the cumulative factors laid down in OIL AND NATURAL GAS CORPORATION LTD. VERSUS M/S DISCOVERY ENTERPRISES PVT. LTD. & ANR. [2022 (4) TMI 1350 - SUPREME COURT]. Resultantly, the principle of single economic unit cannot be the sole basis for invoking the group of companies doctrine;
i. The persons “claiming through or under” can only assert a right in a derivative capacity;
j. The approach of this Court in CHLORO CONTROLS (I) P. LTD. VERSUS SEVERN TRENT WATER PURIFICATION INC. & ORS. [2014 (1) TMI 830 - SUPREME COURT] to the extent that it traced the group of companies doctrine to the phrase “claiming through or under” is erroneous and against the well-established principles of contract law and corporate law;
k. The group of companies doctrine should be retained in the Indian arbitration jurisprudence considering its utility in determining the intention of the parties in the context of complex transactions involving multiple parties and multiple agreements;
l. At the referral stage, the referral court should leave it for the arbitral tribunal to decide whether the non-signatory is bound by the arbitration agreement; and
m. In the course of this judgment, any authoritative determination given by this Court pertaining to the group of companies doctrine should not be interpreted to exclude the application of other doctrines and principles for binding non-signatories to the arbitration agreement.
The Registry shall place the matters before the Regular Bench for disposal after obtaining the directions of the Chief Justice of India on the administrative side.
As per PAMIDIGHANTAM SRI NARASIMHA, J.
While concurring with the judgment of the learned Chief Justice, following conclusions arrived at:
I. An agreement to refer disputes to arbitration must be in a written form, as against an oral agreement, but need not be signed by the parties. Under Section 7(4)(b), a court or arbitral tribunal will determine whether a non-signatory is a party to an arbitration agreement by interpreting the express language employed by the parties in the record of agreement, coupled with surrounding circumstances of the formation, performance, and discharge of the contract. While interpreting and constructing the contract, courts or tribunals may adopt well-established principles, which aid and assist proper adjudication and determination. The Group of Companies doctrine is one such principle.
II. The Group of Companies doctrine, As delineated in para 40 of Discovery Enterprises is also premised on ascertaining the intention of the non-signatory to be party to an arbitration agreement. The doctrine requires the intention to be gathered from additional factors such as direct relationship with the signatory parties, commonality of subject-matter, composite nature of the transaction, and performance of the contract.
III. Since the purpose of inquiry by a court or arbitral tribunal under Section 7(4)(b) and the Group of Companies doctrine is the same, the doctrine can be subsumed within Section 7(4)(b) to enable a court or arbitral tribunal to determine the true intention and consent of the non-signatory parties to refer the matter to arbitration. The doctrine is subsumed within the statutory regime of Section 7(4)(b) for the purpose of certainty and systematic development of law.
IV. The expression “claiming through or under” in Sections 8 and 45 is intended to provide a derivative right; and it does not enable a non-signatory to become a party to the arbitration agreement. The decision in Chloro Control tracing the Group of Companies doctrine through the phrase “claiming through or under” in Sections 8 and 45 is erroneous. The expression ‘party’ in Section 2(1)(h) and Section 7 is distinct from “persons claiming through or under them”. This answers the remaining questions referred to the Constitution Bench.
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2023 (12) TMI 426
Allegation of Misconduct against the petitioner acting as Commissioner of Income Tax (Appeals) / CIT(A) - officials exercising quasi-judicial functions - exemption from disciplinary proceedings - exercise of power of judicial review akin to adjudicating an appeal arising out of an impugned decision - disciplinary proceedings are at the final stage - HELD THAT:- In ZUNJARRAO BHIKAJI NAGARKAR VERSUS UNION OF INDIA [1999 (8) TMI 142 - SUPREME COURT], the Supreme Court was concerned with a case wherein the appellant while working as a Collector of Central Excise, Nagpur was issued a memorandum with allegations that he favoured the assessee therein, by not imposing penalty on it under Rule 173Q of the Central Excise Rules 1944, when he passed the order in Original No. 20/95 on March 2, 1995, despite holding that the assessee had clandestinely manufactured and cleared the excisable goods wilfully and evaded the excise duty and had ordered confiscation of the goods.
After considering UNION OF INDIA AND OTHERS VERSUS KK. DHAWAN [1993 (1) TMI 255 - SUPREME COURT] and various other judgments, the Supreme Court was of the view that merely because the penalty imposable was not imposed, it cannot be said that by not levying penalty, the appellant has favoured the assessee or shown undue favour to him. It was also held that if every error of law were to constitute a charge of misconduct, it would impinge upon the independent functioning of quasi-judicial officer like the appellant therein. It further held that to maintain a charge-sheet against a quasi-judicial authority, something more has to be alleged than a mere mistake of law, e.g., in the nature of some extraneous consideration influencing the quasi judicial order. Since nothing of that sort was alleged against the appellant therein, the impugned chargesheet was rendered illegal / quashed.
The Supreme Court in the case of Zunjarrao Bhikaji Nagarkar has held that the negligence in case of quasi-judicial adjudication is not perceived as carelessness, inadvertence or omission, but as culpable negligence. In other words, if the view of the competent authority, is that the impugned order passed by an officer reveals culpable negligence while discharging quasi-judicial function, then such a conduct can be made subject matter of disciplinary proceedings. But, whether culpable negligence shall sustain, is a matter of evidence to be produced and considered by the disciplinary authority.
The UPSC advice has also come. The petitioner has been given a copy of the UPSC advice and Inquiry Report. She has also submitted her representation on the Inquiry Report. If that be so, the proceedings are at the final stage. Unfortunately, neither the copy of the report of the inquiry officer nor the UPSC advice and the representation made by the petitioner, have been placed on the record of this Court for the reasons best known. Surely, the petitioner in her representation may have taken the jurisdictional pleas as urged by Dr. Kothari in this petition on the Charge Memorandum - this Court instead of deciding the pleas itself, the disciplinary authority should first consider the same by keeping in view, the law laid down by the Supreme Court, this Court and other High Courts, along with criteria laid down by CVC vide its Circular dated October 24, 2016, without being influenced by any conclusion drawn by us in this judgment and pass a final order. If the disciplinary authority agrees with the pleas of Dr. Kothari/petitioner, then it shall close the proceedings. But if the disciplinary authority is of the view that the Charge Memorandum has been rightly issued, the disciplinary authority shall pass a reasoned order in the manner directed by us in that regard, so also on the Inquiry report.
By not interfering with the impugned judgment of the Tribunal, the writ petition is disposed off.
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2023 (12) TMI 364
Payment of insurance claim amount in favour of the nominee - Right of nominee as collector of sum or as absolute owner - Right of legal heirs - direction to disbursement of assured claim amount to the petitioner and her son, who are the legal heirs of the deceased S.Arul - whether the impugned communication of the second respondent requires the interference of this Court and this Court has to issue a consequential direction to the first and second respondents to pay the assured claim amount to the petitioner and her son?
HELD THAT:- A beneficiary nominee means a nominee who is entitled to receive the entire sum assured under the insurance policy absolutely. On the other hand, a collector nominee means a nominee other than a beneficiary nominee It is true that on a plain reading of Section 39(7) of the Act, this distinction has been done away with. However, the legislature was careful enough to identity who all will fall within the category of nominees who in law will be considered as a beneficiary nominee. While categorizing those persons, the legislature was careful enough to bring in the parents, spouse, children, spouse and children or any of them. If the legislature had thought it fit to make everyone as a beneficiary nominee, there was no need for the legislature to specifically prescribe those persons who will fall within the ambit of Section 39 (7) of the Insurance Act, 1938. The fact that such a conscious description of persons, who fall under Section 39(7) of the Act has been prescribed by the legislature, shows that the legislature only wanted those persons who are closely related to the deceased policy holder alone to be treated as beneficiary nominees. In the instant case, the third respondent is admittedly the brother of the deceased policy holder and the third respondent cannot be brought within the scope of Section 39(7) of the Act. If the third respondent cannot be brought within the scope of Section 39(7) of the Act, it would only mean that he will be treated as a collector nominee.
The concept of nomination is only to ensure that the Insurance Company does not get into the area of dispute and the Company washes of its hands by handing over the sum assured to the nominee. If the nominee falls within the scope of Section 39(7) of the Act, those persons described therein automatically takes it as a beneficiary nominee. If the person does not fall within the scope of Section 39(7) of the Act, he can only be treated as a collector nominee and he has to hold the money in trust subject to the claims made by the legal representatives who are entitled to a share in the sum assured. This position continues even after the amendment made to the Insurance Act in the year 2015. If every nominee is brought within the scope of Section 39(7) of the Act, this Court will be doing violence to the plain language used in the said provision and it will be certainly beyond the scope of the said provision.
This Court holds that the third respondent as a nominee can only collect the sum assured from the Insurance Company and hold it in trust and it will be subject to the claims made by the legal heirs of the deceased under the personal law governing them. This Court cannot find fault with the impugned communication issued by the second respondent dated 24.06.2021, in this regard.
Whether the petitioner and her son will have to once again go through the process of initiating recovery proceedings against the third respondent, if in case, the third respondent does not hand over the sum assured to them? - HELD THAT:- In the instant case, as between the petitioner and the third respondent, it is the petitioner and her son who are entitled to receive the sum assured as Class-I legal heirs. The Hindu Succession Act that governs the parties makes it very clear that the Class I legal heirs will be entitled to take the share absolutely to the exclusion of the other heirs. The third respondent, who is the brother of the deceased falls under the category Class-II legal heir and therefore, he is excluded from succeeding to the sum assured. Hence, in the absence of any dispute on the status of the parties, this Court in order to render substantial justice, directs the second respondent to hand over the entire sum assured to the petitioner.
This Writ Petition is disposed of.
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2023 (12) TMI 296
Recovery of dues - priority over the charges - whether the different departments of the State including Excise and Revenue will have priority over the secured creditors’ debt? - HELD THAT:- Apparently, the petitioner-Bank is the secured creditor and has created the first charge over the property in question as far as back in the year 2008 and thereafter in 2012 as against the charge created by the Excise Department in the year 2017 and, therefore, has the first right to realize its dues.
The issue in question is no longer res integra in view of the authoritative judgment of the Hon’ble Supreme Court in Punjab National Bank Vs. Union of India & Ors. [2022 (2) TMI 1171 - SUPREME COURT] where it was held that the provisions contained in the SARFAESI Act, 2002, even after insertion of Section 11E in the Central Excise Act, 1944 w.e.f. 08.04.2011, will have an overriding effect on the provisions of the Act of 1944.
The legal position has thereafter been reiterated in a recent judgment of this Court in Mankind Life Sciences Private Limited vs. The State of Himachal Pradesh & Anr., [2023 (10) TMI 867 - HIMACHAL PRADESH HIGH COURT], wherein it was held that Once the petitioner has only purchased the Industrial Plots-Immovable Properties, which had been leased out to the Original Lessee by department of industries and the petitioner has never purchased the past or ongoing business of the original lessee therefore, the petitioner-auction purchaser cannot be fastened with the liability of State taxes, which had accrued and were connected with and were solely attributable to the business of the original lessee only.
In view of the settled legal position, this Court is left with no other option, but to allow the instant petition by directing respondents No. 1 and 2 to remove the red entry qua the property in question made in the revenue record i.e. rapat No. 484 , dated 27.5.2017 forthwith - petition allowed.
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2023 (12) TMI 163
Dishonour of Cheque - Vicarious liability - petitioner is an Independent Non-Executive Director - petitioner within the ambit of Section 141 of the NI Act or not - HELD THAT:- Section 141 NI Act extends criminal liability in case of a company to every person who at the time of the offence, was in charge of and was responsible for the conduct of the business of the company. A company is a juristic person and every person who at the time of commission of offence is in charge and responsible for the conduct of the business of the company is liable for the offence stated to be committed by the company. The criminal liability arises when the offence was committed and not on the basis of merely holding a designation or office in a company. Section 141 of the NI Act mandates that a person is criminally liable when at the time of commission of offence was in charge and responsible for the conduct of the business of the company and person connected with the company may not fall within the ambit of section 141 of the NI Act.
The Supreme Court in Siby Thomas V M/s Somany Ceramics Ltd., [2023 (10) TMI 487 - SUPREME COURT] observed that it is the primary responsibility of the complainant to make specific averments in the complaint, so as to make the accused vicariously liable.
It is the primary responsibility of the complainant to make specific averments in the complaint so as to make the accused vicariously liable. If the basic averment is made in the complaint under section 138 of NI Act that the Director was in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed then Magistrate can issue process against such Director. The complaint should specifically spell out how and in what manner the Director was in charge of or was responsible to the accused company for conduct of its business and mere bald statement that he or she was in charge of and was responsible to the company for conduct of its business is not sufficient.
Section 141 of the NI Act provides for a constructive liability which is created by a legal fiction - The petitioner as per Form 32 was appointed as Additional Director on 29.06.2001 and resigned as Director with effect from 10.11.2012. Form 32 appears to be a declaration regarding appointment of a director etc. in the company or any change thereto as per section 303(2) of the Companies Act, 2013. It reflects that when the cheque in question was issued, the petitioner was a director in the accused no 1. The petitioner was not shown as Independent Non-Executive Director of the accused no. 1 in Form 32 as pleaded and alleged by the petitioner.
It is reflecting that the petitioner was not a party to the execution of Inter Corporate Deposit Agreement, Memorandum of Settlement dated 27.05.2003 and Consent Award dated 21.07.2003 and the cheque in question was not issued under his signature. However the petitioner was appointed as Additional Director and resigned as Director from the accused no. 1 and was one of the Director when the cheque in question was issued, the petitioner cannot be absolved from vicarious liability arising out of cheque in question by pleading that he was not a party to the execution of Inter Corporate Deposit Agreement, Memorandum of Settlement dated 27.05.2003 and Consent Award dated 21.07.2003 and the cheque in question was not issued under his signature. The arguments advanced by learned Senior Counsel on above legal and factual propositions are without any force.
There is no legal and factual infirmity in the order dated 11.10.2018 passed by the trial court and impugned order passed by the revisional court - Petition dismissed.
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2023 (12) TMI 162
Dishonour of Cheque - challenge to reversal and acquittal passed by the Additional Sessions Judge - discharge of a liability or debt or not - rebuttal of presumption - appellant failed to discharge his burden - HELD THAT:- Section 138 of the Negotiable Instruments Act, 1881, has provided for punishment regarding an offence of dishonour of cheque which was delivered in discharge in whole or in part of any debt or other liability and for the reasons of insufficiency etc. of the funds in the account of the drawer. The statutory presumption as enumerated under Section 139 of the said Act in favour of the holder of the cheque is that the holder has received the same in due discharge of the whole or part of any debt or other liability.
The Supreme Court in the case of Bir Singh Vs. Mukesh Kumar [2019 (2) TMI 547 - SUPREME COURT] has held that presumption is a rule of evidence and do not conflict with the presumption of innocence which requires the prosecution to prove it beyond reasonable doubt. It has been held in a catena of judgment of various constitutional Courts including the Apex Court that the presumption under Section 139 of the Act is ‘rebuttable presumption’ in nature, since the accused issuing the cheque is at liberty to prove to the contrary.
The presumption of law pursuant to the provisions under Section 139 of the Negotiable Instruments Act, 1881, would not release the prosecution from burden of proving the fact that the relevant point of time there existed a legally enforceable debt as against the accused persons, in this case also the Court has to ascertain if such a initial burden is discharged by the prosecution appropriately or not. Only then the Court should apply the presumption as above against the accused persons to expose them for rebuttal of the same.
Considering the nature of transaction as shown by the ‘exhibit 1’, I find that the decision of the first appellate Court that money if at all changed hands, was pursuant to the business undertaken by the present appellant and the cheque was handed over as a security in lieu of obtaining the amount. This is more so, when there is no doubt in view of ‘exhibit 1’ that the parties have agreed for paying interest over the amount, for over a considerable period of time - the prosecution in this case has not been successful in discharging its initial burden that the cheque was issued by the present respondents in discharge of their legally enforceable debt towards the appellant.
The initial burden of prove lied on the appellant himself to come up with the adequate material before the Court to show that on the particular date he had a legally enforceable debt recoverable from the respondents. As elaborately discussed above, the appellant had failed in discharging his such burden. The rest of the questions raised in this appeal would only be unnecessary for discussion any further.
This Court finds no irregularity or illegality in the impugned judgment of the first appellate Court - Appeal dismissed.
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2023 (12) TMI 108
Professional misconduct - Disciplinary proceedings against Chartered Accountant (CA) - Abatement of proceedings of death of the accused - Procedure to be followed by Director on a complaint - Correctness of closing the complaint of the Petitioner - direction to the Respondent No. 1 to re-open her complaint and conduct a disciplinary enquiry against the Respondent No. 2 - HELD THAT:- Rule 8 provides for the procedure to be followed by the Director on receiving a complaint. Under Rule 8(1)(b) of the Rules, Director of the Institute has to send a copy of the complaint to the firm calling upon the firm to disclose the name or names of the member or members concerned. In terms of the said Rules, on receiving the complaint of the Petitioner the Respondent No. 1/ICAI vide letter dated 17.08.2020 called upon Respondent No. 2 firm to disclose the name of the member answerable to the complaint and Respondent No. 2 by its letter dated 27.08.2020 informed Respondent No. 1/ICAI that the Audit in question was carried by CA Vijay Kumar Lalla who passed away on 18.11.2017. In terms of Rule 8(2) a member whose name is disclosed by the firm shall be responsible for answering the complaint. Name of CA Vijay Kumar Lalla was disclosed by the Respondent No. 2/Firm. CA Vijay Kumar Lalla was associated as a partner with the Respondent No. 2/Firm at the time of occurrence of the alleged misconduct. It is not the case of the Petitioner that no one has owned the responsibility for the allegations made against the firm and therefore, in absence of such responsibility the disciplinary proceedings can be initiated against Chartered Accountant firm.
In the present case, the Respondent No. 2/Firm has disclosed the name of CA Vijay Kumar Lalla, who conducted the Audit of Respondent No. 3/IIC. The complaint was filed by the Petitioner after three years of the report of Audit and by the time the said CA Vijay Kumar Lalla had passed away. It is well settled that disciplinary proceedings cannot continue after the death of the concerned person.
Thus, it cannot be said that the Respondent No. 2/Firm has whittled away from its responsibility and the Respondent No. 1/ICAI is at fault for closing the complaint of the Petitioner. Therefore, this Court is of the opinion that the decision of Respondent No. 1/ICAI in closing the complaint of the Petitioner does not require any interference by this Court - petition dismissed.
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2023 (12) TMI 107
Dishonour of Cheque - insufficient funds - whether the complainant has proved the case against the Accused for the offence under Section 138 of the Negotiable Instruments Act? - correctness of conviction of accused - HELD THAT:- A person, who signs a Cheque and makes it over to the Payee remains liable unless he adduces evidence to rebut the presumption that the Cheque had been issued for payment of a debt or in discharge of a liability. The presumption is that the existence of a legally enforceable debt is to be presumed in favour of the complainant and the accused has to adduce evidence to rebut the presumption under section 139 of Negotiable Instruments Act. But in the case on hand the complainant failed to prove the case, per contra the accused probabilished his defence through sufficient evidence thereby the said case laws will not be helpful to decide the case in favour of the complainant.
The trial Court in its judgment, has taken a view that the Accused has not denied the signature found in the complaint and the complainant proved her financial capacity to pay the amount by pledging her jewels and mortgaging the properties. But those mortgaged documents are unregistered documents and cannot be relied and those documents were also not marked. Further, the alleged pledging of jewels were not proved and only the complainant produced the redemption of jewels in the year 2010. But the alleged lending money was given in the year 2008. Further the trial Court failed to consider that P.W.2 himself admitted the employment under the first accused company and he only managed the accounts of the company and had transactions with the Bank and the Bank account was inoperative from 24.09.2005 onwards. Thereby the accused has probablized his defense.
The trial Court has erroneously convicted the Accused by holding that the complainant has proved her case - the judgment of the trial Court is not sustainable and the judgment of the Appellate Court is well reasoned.
There is no perverse or infirmity found on the judgment of the Appellate Court, thereby there is no warrant to interfere by this Court - Criminal appeal dismissed.
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2023 (12) TMI 74
Dishonour of Cheque - Legally enforceable debt or not - whether the officials could have acted in such a manner and asked the applicants to make good the payment without there being any adjudication in accordance with the provisions of the Excise Act and the Rules framed therein? - HELD THAT:- In order to attract the penal provisions for the bouncing of a cheque, it is essential that the dishonoured cheque should have been issued in discharge, wholly or in part, or any debt or other liability of the drawer to the payee. The explanation to Section 138 of the Negotiable Instruments Act defines the expression “debt or other liability” as a legally enforceable debt or other liability. Unless the two conditions set out in Section 138 of the Act are satisfied, no criminal liability can be fastened. This is also in accordance with the general scheme as laid down in Section 118(a) of the Negotiable Instruments Act. It also enforces the doctrine of consideration as laid down in Section 2(d) of the Indian Contract Act, 1872.
In the facts of the cases on hand where there is no legally enforceable debt is found and considering the above judgment which is passed in identical facts and the ratio laid down on the aspect that there should be legally enforceable debt existing on the date of issuance as well as presentation of cheques and accordingly considering the ratio laid down in the judgments of M/s Indus Airway Pvt. Ltd. [2014 (4) TMI 464 - SUPREME COURT], Sampelly Satyanarayana Rao [2016 (9) TMI 867 - SUPREME COURT] and Dashrathbhai Trikambhai Patel [2022 (10) TMI 424 - SUPREME COURT], all these applications are allowed.
Application disposed off.
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2023 (12) TMI 1
Cancellation of sale deed on dishonor of cheque - Dismissal of suit filed by the appellant/plaintiff - suit was filed for cancellation of the sale deed and to restrain the defendants from interfering the possession of the plaintiff - contradiction in sales amount as per two agreements - HELD THAT:- In the case of non payment of sale consideration, the issue came up for consideration before the Supreme Court in the matter of Dahiben Versus Arvindbhai Kalyanji Bhanusali (Gajra) [2020 (7) TMI 786 - SUPREME COURT] wherein the Supreme Court at paras 29.7 held that if the sale consideration has not been paid, it could not be a ground for cancellation of sale deed.
Following the judgment of Madhya Pradesh High Court in the matter of J.B.O. Association vs. State of M.P. [2002 (12) TMI 652 - MADHYA PRADESH HIGH COURT] wherein the High Court held that in case of conflict between two decisions of the Apex Court Benches comprising of equal number of judges, decision of earlier bench is binding unless explained by the latter bench of equal strength in which case the later decision is binding. Therefore, it was held that the decision of the earlier Division Bench unless distinguished by the decision of latter Division Bench, would be binding on the High Court and the subordinate courts.
Therefore, in the instant case if the plaint averments are accepted that the sale having been made, the only recourse left to the appellant was to file a suit for recovery and evidence would show that for dishonour of the cheque proceeding has already been drawn and the complaint was filed under Section 138 of the Negotiable Instrument Act. As such the agreement Ex.P/3 cannot be given over riding effect over registered document of sale whereby the property has been transferred to the defendant. Consequently, the document Ex.P/3 wherein the plaintiff relied that in case non payment the agreement deemed to be cancelled cannot be given a legal precedent.
There are no merit in the appeal, warranting interference in the impugned judgment and decree passed by the Court below, which is just and proper - appeal dismissed.
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2023 (11) TMI 1314
Dismissal of appeal and the judgment and decree of the Trial Court decreeing the suit for possession and mesne profits - HELD THAT:- It is to be emphasized that irrespective of what was decided in the case of Suraj Lamps and Industries [2011 (10) TMI 8 - SUPREME COURT] the fact remains that no title could be transferred with respect to immovable properties on the basis of an unregistered Agreement to Sell or on the basis of an unregistered General Power of Attorney. The Registration Act, 1908 clearly provides that a document which requires compulsory registration under the Act, would not confer any right, much less a legally enforceable right to approach a Court of Law on its basis. Even if these documents i.e. the Agreement to Sell and the Power of Attorney were registered, still it could not be said that the Respondent would have acquired title over the property in question. At best, on the basis of the registered agreement to sell, he could have claimed relief of specific performance in appropriate proceedings. In this regard, reference may be made to Sections 17 and 49 of the Registration Act and Section 54 of the Transfer of Property Act, 1882.
Law is well settled that no right, title or interest in immovable property can be conferred without a registered document.
The embargo put on registration of documents would not override the statutory provision so as to confer title on the basis of unregistered documents with respect to immovable property. Once this is the settled position, the Respondent could not have maintained the suit for possession and mesne profits against the Appellant, who was admittedly in possession of the property in question whether as an owner or a licensee.
In case the Respondent wanted to evict the Appellant treating him to be a licensee, he could have maintained a suit on behalf of the true owner or the landlord under specific instructions of Power of Attorney as landlord claiming to have been receiving rent from the Appellant or as Attorney of the true owner to institute the suit on his behalf for eviction and possession. That being not the contents of the plaint, the reasoning given by the High Court in the impugned order cannot be agreed upon.
The impugned judgment deserves to be set aside and the suit deserves to be dismissed. Accordingly, the appeal is allowed - The impugned judgment is set aside and the suit is dismissed.
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2023 (11) TMI 1309
Dismissal of appeal - no representation on behalf of the appellants before the High Court - Order XLI Rule 17 of the CPC - HELD THAT:- The Explanation of Order XLI Rule 17 of the CPC categorically states that if the appellant does not appear when the appeal is called for hearing it can only be dismissed for non-prosecution and not on merits.
However, the impugned judgment is a dismissal of the appeal on merits which is contrary to the aforesaid provisions and particularly the Explanation thereto. On that short ground alone the appeal is allowed the impugned order is set aside.
Appeal is restored on the file of the High Court.
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2023 (11) TMI 1304
Relaxation in the essential eligibility qualifications could be made post the last date fixed for receipt of application from the candidates - essential eligibility qualifications specified in the 2014 Rules - statutory regime in place to accord recognition to an Institution - clarificatory letter/relaxation order is in ignorance of such statutory regime or not - absence of prior consultation with the Commission, the relaxation/clarificatory order could be considered in conformity with the provisions of Rule 18 of the 2014 Rules - requirement for a written and computer typing test prior to selection, possession of one year diploma in Computer Science/Computer Application/Information Technology from a recognised University/Institution by a candidate - eligibility of qualifications other than the one prescribed by the 2014 Rules or the advertisement - State (i.e., the employer) could be forced to fill all vacancies advertised or not.
Whether relaxation in the essential eligibility qualifications could be made post the last date fixed for receipt of application from the candidates? - HELD THAT:- It is well settled that eligibility criteria/conditions, unless provided otherwise in the extant Rules or the advertisement, must be fulfilled by the candidate by the last date for receipt of applications specified in the advertisement.
In the instant case, it is not shown that the advertisement reserved the power to relax the essential eligibility qualifications specified in the advertisement at any later stage. Rather, the advertisement is specific that eligibility criteria must be fulfilled by an aspiring candidate by the last date fixed for receipt of the application. It is not demonstrated that after the decision to relax the eligibility criteria was taken, the same was widely publicised, and the last date to apply under the advertisement was extended to enable persons benefited by such relaxation to apply and compete. In these circumstances, the power to relax the eligibility criteria, even if it existed, was not exercised in consonance with the settled legal principles and it violated the constitutional mandate enshrined in Articles 14 and 16 of the Constitution.
Whether the essential eligibility qualifications specified in the 2014 Rules were ambiguous as to warrant clarification or relaxation with a view to declare certain other qualifications as equivalent to the one specified in the said Rules? - Whether there was a statutory regime in place to accord recognition to an Institution? If yes, whether the clarificatory letter/relaxation order is in ignorance of such statutory regime and is, therefore, invalid? - Whether, in absence of prior consultation with the Commission, the relaxation/clarificatory order could be considered in conformity with the provisions of Rule 18 of the 2014 Rules? - HELD THAT:- If there existed a statutory procedure for granting recognition, an Institution cannot be considered recognized dehors that procedure. No doubt, as held by a Constitution Bench of this Court in MOHAMMAD SHUJAT ALI VERSUS UOI. [1974 (5) TMI 114 - SUPREME COURT], issue of equivalence is a technical issue and where the decision of the Government is based on the recommendation of an expert body, the Court should not lightly disturb its decision unless it is based on extraneous or irrelevant considerations or actuated by mala fides or is irrational and perverse or manifestly wrong. But this is not a case of mere treating degrees or certificates obtained from a recognized Institution/University as equivalent to the one specified, rather it is of granting recognition to certain courses conducted by private institutes, whether recognized or not as per the extant statutory regime. This amounts to changing the eligibility criteria midway because the extant Rules and the advertisement both stipulated that the diploma/specified course had to be from a recognized Institution/University.
As there appears nothing on record to indicate that wide publicity of such relaxation in the specified qualifications was made, and opportunity was afforded to similarly situated candidates to apply and compete, considering the manner in which the relaxation was accorded, the same falls foul of the constitutional mandate enshrined in Articles 14 and 16 of the Constitution.
Whether in view of requirement for a written and computer typing test prior to selection, possession of one year diploma in Computer Science/Computer Application/Information Technology from a recognised University/Institution by a candidate was not an essential eligibility qualification? - HELD THAT:- A plain reading of the 2014 Rules and the advertisement would indicate that possession of one year diploma in Computer Science/ Computer Application/ Information Technology from a recognised University/ Institution is an essential qualification which must be possessed by a candidate desirous of appointment on the post concerned. The High Court has also not treated the same as a non-essential qualification. In this view of the matter, the argument that requirement to hold one year diploma in the specified courses was not an essential qualification, is rejected.
Whether candidates holding qualifications other than the one prescribed by the 2014 Rules or the advertisement, though allegedly higher, could be considered eligible? - HELD THAT:- There exists no provision in the extant Rules or the advertisement to treat any other qualification as higher or equivalent to the one specified therein, the claim of such candidates, who could not demonstrate that they held the prescribed essential qualifications, is liable to be rejected and has rightly been rejected by the High Court as well.
Whether the State (i.e., the employer) could be forced to fill all vacancies advertised? - whether it could be restrained from carrying it forward for filling it as per the amended/new Rules? - HELD THAT:- It is well settled that an employer cannot be forced to fill all the existing vacancies under the old Rules. The employer may, in a given situation, withdraw an advertisement and issue a fresh advertisement in conformity with the new or amended Rules. Even a candidate included in the merit list has no indefeasible right to appointment even if the vacancy exists.
The direction(s) contained in paragraphs 33 and 34 of the impugned judgment of the High Court setting aside the closure of the selection process for Post Code 556 and to re-cast the merit list as well as fill up remaining posts of Post Code 556, with the aid of relaxation/ clarification dated 21.08.2017/ 18.09.2017 read with communication dated 19.03.2018, after segregating it from those advertised as Post Code 817, are set aside.
Appeal disposed off.
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2023 (11) TMI 1289
Permissibility of reappointment in respect of a Tenure Post - applicability of outer-age limit stipulated under sub-section (9) of Section 10 of the Act 1996 in the case of reappointment of Vice-Chancellor - reappointment of Vice-Chancellor has to follow the same process as a fresh appointment under Section 10 of the Act 1996 or not - Chancellor abdicate or surrender his statutory power of reappointment of the Vice-Chancellor or not.
Whether reappointment is permissible in respect of a Tenure Post? - HELD THAT:- The statute itself has provided for reappointment with some object in mind. The ordinary meaning that can be ascribed to the term “reappointment” is the act or process of deciding essentially that someone should continue in a particular job. Ordinarily, the object behind providing for reappointment is twofold. First is “retention” i.e., where the incumbent to the office/post during his term is found to be extraordinary and has established himself or herself to be an asset to the institution, then in such circumstance, such person is retained with a view to allow him to continue on the same post for one more term. Secondly, having regard to the nature of the post the organization or institution may not be in a position to fill up the post in a time bound manner and in such circumstances, the provision for reappointment may enable the organization or institution to relieve itself of the tedium of going through the entire selection process afresh every time the post becomes vacant - the reappointment is permissible even in case of a tenure post.
Whether the outer-age limit stipulated under sub-section (9) of Section 10 of the Act 1996 is applicable in the case of reappointment of Vice-Chancellor? - HELD THAT:- The doctrine of purposive construction may be taken recourse to for the purpose of giving full effect to the statutory provisions, and the courts must state what meaning the statute should bear, rather than rendering the statute a nullity, as statutes are meant to be operative and not inept. The courts must refrain from declaring a statute to be unworkable. The rules of interpretation require that construction which carries forward the objectives of the statute, protects interest of the parties and keeps the remedy alive, should be preferred looking into the text and context of the statute. Construction given by the court must promote the object of the statute and serve the purpose for which it has been enacted and not efface its very purpose. The courts strongly lean against any construction which tends to reduce a statute to futility - The court must adopt a construction which suppresses the mischief and advances the remedy and to suppress subtle inventions and evasions for continuance of the mischief, and pro privato commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bono publico. The court must give effect to the purpose and object of the Act for the reason that legislature is presumed to have enacted a reasonable statute.
The outer age limit of sixty years provided in sub-section (9) of Section 10 of the Act 1996 will not apply, when it comes to reappointment under sub-section (10) of Section 10 of the Act 1996.
Whether the reappointment of Vice-Chancellor has to follow the same process as a fresh appointment under Section 10 of the Act 1996? - HELD THAT:- In STATE OF WEST BENGAL VERSUS ANINDYA SUNDAR DAS AND ORS. [2022 (10) TMI 1260 - SUPREME COURT], it was held that by virtue of such amendment the reappointment was no longer subject to the provision / section detailing the ordinary procedure for appointment of Vice-Chancellor, and thus, this Court had no hesitation in holding that the legislature’s intent was to allow reappointment by the Chancellor itself without following the ordinary process of appointment.
In the case at hand, sub-section (10) of Section 10 of the Act, 1996, provides for reappointment and does not even contain the words “subject to provisions of this section”. This is as good as to reflect the legislature’s intention of permitting reappointment without following the ordinary process of appointment of Vice-Chancellor - it is not necessary to follow the procedure of appointment as laid down in Section 10 of the Act 1996 for the purpose of reappointment.
Did the Chancellor abdicate or surrender his statutory power of reappointment of the Vice-Chancellor? - HELD THAT:- he UGC Regulations provide for the procedure to be adopted for appointment of Vice-Chancellor. The UGC Regulations are silent in so far as reappointment of the Vice-Chancellor is concerned. There is no specific procedure prescribed by the UGC under its regulations for the purpose of reappointment of Vice-Chancellor. The entire focus of the Chancellor is on the aforesaid. However, nothing has been said in the counter-affidavit filed on behalf of the Chancellor as regards Chancellor’s own independent satisfaction or judgment for the purpose of reappointment of the respondent No. 4 as ViceChancellor.
It is now well settled that a writ of quo warranto lies if any appointment to a public office is made in breach of the statute or the rules. In the case on hand, we are not concerned with the suitability of the respondent No. 4. The “suitability” of a candidate for appointment to a post is to be judged by the appointing authority and not by the court unless the appointment is contrary to the statutory rules/provisions. We have reached to the conclusion that although the notification reappointing the respondent No. 4 to the post of Vice-Chancellor was issued by the Chancellor yet the decision stood vitiated by the influence of extraneous considerations or to put it in other words by the unwarranted intervention of the State Government.
The impugned judgment and order passed by the High Court dated 23.02.2022 is hereby set aside. As a consequence, the Notification dated 23.11.2021, reappointing the respondent No. 4 as the Vice-Chancellor of the Kannur University is hereby quashed.
Appeal allowed.
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2023 (11) TMI 1286
Jursdiction - power to grant anticipatory bail Under Section 438 of the Code of Criminal Procedure - power of the High Court or the Court of Session to grant anticipatory bail Under Section 438 of the Code of Criminal Procedure could be exercised with respect to an FIR registered outside the territorial jurisdiction of the said Court or not - practice of granting transit anticipatory bail or interim protection to enable an Applicant seeking anticipatory bail to make an application Under Section 438 of the Code of Criminal Procedure before a Court of competent jurisdiction is consistent with the administration of criminal justice or not.
HELD THAT:- This Court's jurisprudence on Section 438 of Code of Criminal Procedure, particularly in Gurbaksh Singh Sibbia [1980 (4) TMI 295 - SUPREME COURT] and Sushila Aggarwal [2020 (1) TMI 1193 - SUPREME COURT], has towed the line of wise exercise of judicial discretion while interpreting the silence of the Parliament to imply an intention to facilitate the grant of essential procedural relief to secure the right to life and personal liberty Under Article 21.
Whilst the Constitution Bench in Gurbaksh Singh Sibbia ruled against the procedural and substantive restrictions on the grant of relief of anticipatory bail, the Constitution Bench in Sushila Aggarwal held that the period of anticipatory bail cannot be limited, and may extend till the end of trial. The judgment of the Constitution Bench in Gurbaksh Singh Sibbia, in para 13, emphasises that, 'the High Court and the Court of Session to whom the application for anticipatory bail is made ought to be left free in the exercise of their judicial discretion to grant bail if they consider it fit so to do on the particular facts and circumstances of the case and on such conditions as the case may warrant.'
A remedy such as anticipatory bail secures citizens afflicted in difficult life circumstances - and such difficulties would keep evolving as our collective lives and legal systems become more complex - The omission of any qualification of the expression 'the High Court or the Court of Session,' ought to be constructed in a fashion that furthers the constitutional ideal of safeguarding personal liberty. It would be in furtherance of fostering personal liberty enshrined in Article 21 of the Constitution of India in entrusting a wider jurisdiction to the Court of Session and the High Court in the grant of anticipatory bail, than in foreclosing the same by restructuring the exercise of jurisdiction in the matter of grant of anticipatory bail.
The exercise of the jurisdiction for grant of extra-territorial anticipatory bail must be cognizant of the possibility of forum shopping - it is deemed necessary to take note of the evolution of the law on inter-state arrests, as this lies at the heart of 'apprehension of arrest,' for which the extraordinary jurisdiction of the High Court and Court of Session are attracted in case the Accused resides in or is located in a territorial jurisdiction different from the jurisdiction in which cognizance of crime is taken by the Court of competent jurisdiction.
Considering the constitutional imperative of protecting a citizen's right to life, personal liberty and dignity, the High Court or the Court of Session could grant limited anticipatory bail in the form of an interim protection Under Section 438 of Code of Criminal Procedure in the interest of justice with respect to an FIR registered outside the territorial jurisdiction of the said Court, and subject to the fulfilment of conditions imposed.
The impugned orders are set aside - appeal allowed.
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2023 (11) TMI 1278
Dishonour of Cheque - non-payment against one dishonoured cheque - sufficient opportunity to be provided to a person who issues the cheque - HELD THAT:- Once a cheque is issued by a person, it must be honoured and if it is not honoured, the person is given an opportunity to pay the cheque amount by issuance of a notice and if he still does not pay, he is bound to face the criminal trial and consequences. It is seen in many cases that the petitioners with malafide intention and to prolong the litigation raise false and frivolous pleas and in some cases, the petitioners do have genuine defence, but instead of following due procedure of law, as provided under the N.I. Act and the Cr.PC, and further, by misreading of the provisions, such parties consider that the only option available to them is to approach the High Court and on this, the High Court is made to step into the shoes of the Metropolitan Magistrate and examine their defence first and exonerate them. The High Court cannot usurp the powers of the Metropolitan Magistrate and entertain a plea of accused, as to why he should not be tried under Section 138 of the N.I. Act. This plea, as to why he should not be tried under Section 138 of the N.I. Act is to be raised by the accused before the Court of the Metropolitan Magistrate under Section 251 of the Cr.PC & under Section 263(g) of the Cr.PC.
The parameters of the jurisdiction of the High Court, in exercising jurisdiction under Section 482 Cr.PC, are now almost well-settled. Although it has wide amplitude, but a great deal of caution is also required in its exercise. The requirement is, the application of well known legal principles involved in each and every matter. Adverting back to the facts of the present case, this Court does not find any material on record which can be stated to be of sterling and impeccable quality warranting invocation of the jurisdiction of this Court under Section 482 Cr.PC at this stage. More so, the defence as raised by the petitioner in these petitions requires evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.PC and the same can only be proved in the Court of law.
There are no ground for quashing the CC NI Act 2459 of 2023 is made out and also there are no flaw or infirmity in the proceedings pending before the Trial Court. However, the Trial Court shall certainly consider and deal with the contentions and the defence of the petitioner in accordance with law.
Petition dismissed.
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2023 (11) TMI 1274
Direction to deposit Rs. 6 crores in a separate interest-bearing account in the name of the Limited Liability Partnership (LLP) namely Concrete Developers LLP - HELD THAT:- The arbitrator was of the view that there is a likelihood that the legal heirs of the claimant (the respondent no.1 herein) would remain embroiled in litigation and that the claimant is entitled to accounts and to share in the profits in the LLP in accordance with the LLP Agreement. The arbitrator also expressed concern of the claimant being left without a remedy in the event the right of the deceased partner in a running business is not protected considering the substantial profits made by the LLP after the demise of the deceased partner.
Essar House Private Limited vs. Arcellor Mittal Nippon Steel India Limited [2022 (9) TMI 672 - SUPREME COURT] actually helps the respondent no.1 since the Supreme Court reiterated the wide power conferred on the Court to pass orders securing the amount in dispute in arbitration and proceeded to hold that the Court exercising such power should not withhold relief if a strong prima facie case is made out and the balance of convenience is in favour of an interim order.
The facts and circumstances which were presented before the learned arbitrator or were disclosed in fits and spurts by the appellant/surviving partners fully justify the impugned interim order dated 17.4.2023. There can be no jurisdictional objection to the impugned order as the Act of 1996 grants the arbitral tribunal plenary powers to pass such orders for preserving the dispute in the arbitration. The order also does not suffer from any factual or legal infirmity and is certainly not arbitrary or perverse.
The Court is accordingly of the view that the impugned order does not call for any interference - Application dismissed.
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2023 (11) TMI 1272
Bar of admissibility created by Section 35 of the Indian Stamp Act 1899 applies to the agreement(s) to sell dated 04.02.1988 executed by the parties - copy of a document be adduced as secondary evidence when the original instrument is not in possession of the party or not - applicability of decision of this Court in Jupadi Kesava Rao v. Pulavarthi Venkata Subha Rao [1971 (1) TMI 111 - SUPREME COURT].
Whether the bar of admissibility created by Section 35 of the Indian Stamp Act 1899 (Stamp Act) applies to the agreement(s) to sell dated 04.02.1988 executed by the parties? - HELD THAT:- The Explanation inserted in Article 23 of Schedule I-A contained in the Act creates a new obligation for the party and, therefore, cannot be given retrospective application. Thus, it will not affect the agreement(s) executed prior to such amendments - If the documents sought to be admitted are not chargeable with duty, Section 35 has no application. Thus, in the present case, since the document was dated 04.02.1988, the instrument was not chargeable with duty. It follows therefrom that when such document(s) are not required to be stamped, then no bar could be imposed due to it being not duly stamped.
Can a copy of a document be adduced as secondary evidence when the original instrument is not in possession of the party? - Whether, in the facts of the present case, would the decision of this Court in Jupadi Kesava Rao v. Pulavarthi Venkata Subha Rao be binding as held by both the Courts below? - HELD THAT:- Section 35 of the Stamp Act which forbids the letting of secondary evidence in proof of its contents. The Section excludes both the original instrument and secondary evidence of its contents if it needs to be stamped or sufficiently stamped. This bar as to the admissibility of documents is absolute. Where a document cannot be received in evidence on the ground that it is not duly stamped, the secondary evidence thereof is equally inadmissible in evidence.
In relation to secondary evidence of unstamped/insufficiently stamped documents, the position has been succinctly explained by this Court in Jupudi Kesava Rao wherein it dealt with an issue, i.e., whether reception of secondary evidence of a written agreement to grant a lease is barred by the provisions of Sections 35 and 36 of the Stamp Act and answered it in affirmative.
Thus, if a document that is required to be stamped is not sufficiently stamped, then the position of law is well settled that a copy of such document as secondary evidence cannot be adduced. The present facts, however, differ - The Trial Court and the High Court have relied on Jupadi Kesava Rao to hold that the Plaintiffs cannot lead secondary evidence as the document sought to be produced needed to be duly stamped.
It is a settled position of law that where the question is whether the document is liable to stamp duty and penalty, it has to be decided at the threshold even before marking a document. In the present case, the document in question was not liable to stamp duty - in the instant case, the Plaintiff's prayer for leading the secondary evidence ought to be allowed in so far as the documents sought to be introduced as secondary evidence be taken by the concerned Court and exhibited, with its admissibility being decided independently, in accordance with law under the Evidence Act.
Appeal allowed.
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2023 (11) TMI 1263
Seeking grant of bail - offences under Sections 147, 148, 149, 241, 323, 307, 353, 332, 333, 337, 393, 448, 427, 506 and 120-B of the Indian Penal Code, 1860 (I.P.C.) and under Section 27 of the Arms Act - HELD THAT:- When the offences alleged, inter alia, includes one under Section 307, IPC and the accused concerned is so arraigned with the aid of Section 149, IPC, such submissions, reflected in paragraph or the mere factum of completion of investigation by itself, cannot be the reason(s) for grant of bail without due consideration of the relevant aspects. At any rate, mere claim of innocence or undertaking to participate in the trial or contention of absence of specific allegation of any overt act cannot, in such circumstances, be assigned as reasons for grant of bail in a case of serious nature.
The impugned order deserves to be set aside and the matter is liable to be remanded to the High Court for fresh consideration in accordance with law - appeal disposed off by way of remand.
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2023 (11) TMI 1261
Grant of Regular Bail - misappropriation and transfer of money into various shell companies - Hawala transactions - seeking to include the additional conditions in the interim bail order - HELD THAT:- It is evident from the record that the petitioner has been shown as an accused one year and ten months after the registration of the crime. The case against him was filed just before his arrest. There is no indication on the record that, during this period of one year and ten months, the petitioner interfered with the investigation. The Prosecution has not made any such claim either.
This Court directed the petitioner to abstain from making any public comments relating to the case and from organizing or participating in public rallies and meetings. In the said order, this Court observed that the petitioner holds the position of the National President of Telugu Desam Party and restricting him from appearing before print, electronic media, or any social media platform to make statements or express opinions during his interim bail period affects his fundamental right to freedom of speech. As this Court granted interim bail on medical grounds, this Court thought fit that the petitioner was not supposed to conduct public meetings and rallies.
This Court directed the petitioner, while disposing of interim bail application on medical grounds, to place the details about his treatment in a closed cover to the Superintendent, Central Prison, Rajamahendravaram, at the time of his surrender. In view of granting of regular bail, this Court views that a direction can be given to the petitioner to file such medical record before the Special Court, Vijayawada, on or before 28.11.2023.
Accordingly, the interim bail granted to the petitioner/A.37 vide common order dated 31.10.2023 is made absolute, and the petitioner/A.37 is ordered to be released on regular bail on the bail bond already furnished by him in respect of this case. However, the condition imposed in respect of his organizing or participating in public rallies and meetings shall stand relaxed from 29.11.2023 onwards. The petitioner/A.37 is directed to produce the medical reports, regarding his treatment, before the Special Court, Vijayawada on or before 28.11.2023 instead of producing the same before the Superintendent, Central Prison, Rajamahendravaram. The remaining conditions imposed in the common order shall be followed by the petitioner/A.37 scrupulously.
This Criminal Petition is disposed of.
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