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Showing 461 to 480 of 1203 Records
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2021 (11) TMI 743
Disallowance of provision for warranty - CIT(A) accepted the assessee’s submissions and working as being correct and allowed the claim of the assessee - HELD THAT:- A perusal of the order of the CIT(A) shows that he has accepted the submissions of the assessee without actually examining the weight of the submissions of the assessee. CIT(A) has simply accepted the submissions provided by the assessee and after duly reproducing the submissions in the impugned order has noted that in view of the submissions made by the assessee and the case laws cited and in view of the facts and circumstances of the case, the impugned disallowance is deleted.
While making the deletion, the Ld. CIT(A) has not given any reasoning as to why the submissions of the assessee were found to be satisfactory for the purpose of making provision of warranties. CIT(A) has not adjudicated the issue before him by examining the various details and documents submitted by the assessee and has simply accepted the contentions of the assessee without returning a finding on fact. In such a situation, we deem it appropriate to restore this issue to the file of the CIT(A) for considering the issue afresh and, thereafter, adjudicate on the issue by passing a speaking order after giving proper opportunity to the assessee. Accordingly, the Department succeeds on ground No.1 and the same stands allowed for statistical purpose.
Disallowance U/s 14A r.w.r. 8D - HELD THAT:- AO has simply applied the procedure prescribed in Rule 8D of the Income Tax Rules to compute the amount disallowable u/s 14A of the Act without appreciating that in the present case, no part of interest could have been said to have been incurred in relation to exempt income. In the assessment order, the Assessing Officer has not pointed out even a single expenditure having been incurred by the assessee during the year which was having proximate nexus with the exempt dividend income earned during the year.
Assessing Officer, while computing the disallowance u/s 14A, considered the entire investments whereas the disallowance u/s 14A read with Rule 8D is in relation to the income which does not form part of the total income and this can only be done by taking into consideration the investment which has given rise to the income which does not form part of the total income. CIT(A) has returned a categorical finding of fact on the issue and has computed the disallowance after excluding those investments which were not related to the earning of dividend income. Such is also the mandate in the case of ACB India Ltd. vs. ACIT [2015 (4) TMI 224 - DELHI HIGH COURT] and plethora of other judgments. We also note that the assessee is not in appeal before this Tribunal against the amount of disallowance U/s 14A as confirmed by the Ld. CIT(A). Accordingly, we find no reason to interfere with the finding of the Ld. CIT(A)
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2021 (11) TMI 742
Bogus LTCG - Addition u/s 68 - onus to prove genuineness of the transactions - HELD THAT:- As relying on MR. ANIL AGRAWAL (HUF) , MUMBAI VERSUS DCIT-CENTRAL CIRCLE-3 (4) , MUMBAI [2021 (4) TMI 1252 - ITAT MUMBAI] impugned additions are not sustainable in the eyes of law. The assessee had discharged the primary onus of establishing the genuineness of the transactions whereas the onus as casted upon revenue to corroborate the impugned additions by controverting the documentary evidences furnished by the assessee and by bringing on record, any cogent material to sustain those additions, could not be discharged by the revenue. The whole basis of making additions is third-party statement and no opportunity of cross-examination has been provided to the assessee to confront these parties. As against this, the assessee’s position that that the transactions were genuine and duly supported by various documentary evidences, could not be disturbed by the revenue. Hence, going by the factual matrix and respectfully following the binding judicial precedents as enumerated in the order, the additions made by Ld. AO and confirmed by Ld. CIT(A), are not sustainable - Decided in favour of assessee.
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2021 (11) TMI 741
Revision u/s 263 by CIT - Faulty computation of ALP - As per CIT assessment is erroneous as reference to TPO was not made - HELD THAT:- PCIT has failed to specify as to how and on what ground the assessment order is erroneous and/ or which part of the CBDT instructions were not adhered to by the AO. Merely not recording the satisfaction Ld AO on the records does not make the assessment order erroneous and prejudicial to the interest of revenue, as is decided in the various judicial pronouncement by various courts. We have also perused Instruction no 3/2016 and are of the opinion that it was not mandatory for the AO to make a reference to the TPO.
Even as per the order and the show cause notice u/s 263 which has been issued it is evident that the selection of the case was for complete scrutiny and the issues was not on transfer pricing parameters risk factors.The Instruction No. 3 of 2016 in para 3.3 states that where cases are selected for scrutiny on non transfer pricing risk parameters but also having international transactions or specified domestic transactions, shall be referred to TPO in specified circumstances
The said clause 3.3 of the Instruction specifies three situations and we find that none of the situation is applicable in the case of the assessee. The clause (a) states where there are international transactions or specified transactions or both and the taxpayer has not filed any report required to be submitted under section 92E. This is not a situation in the case of the assessee, and report was submitted and also during the assessment the same was submitted. The second situation where in previous assessments if any addition on account of transfer pricing adjustment of more than ten crores and addition being upheld in appellate proceedings is also not applicable in the case of the assessee, and this is not a case where search or seizure or survey operations had been carried out. In such a situation it cannot be said that the assessment is erroneous as reference to TPO was not made. See M/S AMIRA PURE FOODS PVT. LTD. VERSUS THE PR. C.I.T, CENTRAL GURGAON [2017 (12) TMI 189 - ITAT DELHI] - Decided in favour of assessee.
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2021 (11) TMI 740
Disallowance u/s 14A r.w.Rule 8D - Amount assessee had earned a dividend income - HELD THAT:- Hon’ble Delhi High Court in the case of Joint Investment P.Ltd. [2015 (3) TMI 155 - DELHI HIGH COURT] held that “by no stretch of imagination can Section 14A or Rule 8D be interpreted so as to mean that the entire tax exempt income is to be disallowed. The window for disallowance is indicated in Section 14A, and is only to the extent of disallowing expenditure; incurred by the assessee in relation to the tax exempt income. This proportion or portion of the tax exempt income surely cannot swallow the entire amount as has happened in this case.”
Respectfully following the ratio laid down by the Hon’ble Delhi High Court, we direct the Assessing Officer to restrict the disallowance to the extent of exempt income on dividend income earned by assessee as u/s 14A r.w.Rule 8D of Rules. Thus, grounds raised by the assessee in this appeal are partly allowed.
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2021 (11) TMI 739
Capital gain computation - year of assessment - Year of transfer of asset u/s 2(47) - HELD THAT:- The joint development agreement was executed on 6.11.2013 and from the assessment order the AO has himself accepted that the transfer took place as per sec.2(47) rws 53A of the Transfer of Property Act which was taken place for the previous year ending only on 31.3.2014 relevant to AY 2014-15, therefore, the capital gain should be arising in the AY 2014-15 - Decided against revenue.
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2021 (11) TMI 738
Classification of goods - sweet corn or maize? - Scope of Show cause notice (SCN) - Levy of penalty u/s 112 of CA - Recovery of differential duty - statutory intent of primacy of section 114A of Customs Act, 1962 had been overlooked in the adjudication order - HELD THAT:- There has been no controverting of the claim of the importer that the impugned goods are ‘sweet corn’ which is, essentially, a vegetable but, owing to design of nature for propagation of the species through seed, finding fitment elsewhere too in the tariff. As use is not the criteria for classification, save where explicitly intended, the tariff accords recognition of these as ‘cereals’ to enable national policy to be determined accordingly and within the enumerations under the relevant subheading. Nonetheless, ‘sweet corn’, though a fresh cereal thereby, is further excepted from such coverage by the general notes pertaining to chapter 10 in the Explanatory Notes to the Harmonized System of Nomenclature (HSN). Consequently, ‘sweet corn’ is not ‘cereal’ for the purposes of exclusion from chapter 12 of the First Schedule to Customs Tariff Act, 1975.
The permission envisaged under the Policy on Seed Development, 1988, requiring appropriate clearance by the competent authority empowered by the Plant Quarantine (Regulation of Imports into India) Order, 2003, has also made it abundantly clear that the seeds are intended for sowing. While not sufficing for classification, it does establish the description of the goods impugned in this proceeding - The adjudicating authority has not undertaken classification of the impugned goods in accordance with the General Rules for the Interpretation of the Harmonized System but set out to deny the effective rate of duty available to specific enumerations. The classification claimed by the importer in the bill of entry, even if substitutable by a more apt tariff item, cannot be discarded owing to absence of such proposal in the show cause notice.
Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 737
Confiscation - reduced quantum of redemption fine and penalty - want of IEC code for import of raw materials by the appellant for Railway Project, Government of India - HELD THAT:- It is only a venial breach at the most, which is also for no fault of the appellant, as the appellant had made application for IEC number in proper time. The delay in grant of IEC number is wholly attributable to the Government of India , Department of Foreign Trade, Ministry of Commerce. Accordingly, the appellant had produced the IEC code before the Addl. Commissioner of Customs/Adjudicating Authority, before passing of the adjudication order and prayed for amendment in the bill of entry as per the provisions of Section 149 of the Customs Act.
The order of confiscation is bad. Accordingly, the confiscation and redemption fine are set aside. The penalty imposed under Section 112(a) is reduced to ₹ 1,000/- - Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 736
Reassessment of Bill of Entry - case of the Revenue is that respondent should have appealed before the Commissioner (Appeals) against the assessment of the Bill of Entry whereas they have filed appeal against the rejection of reassessment made by the assessing authority - HELD THAT:- The assessee filed appeal before Commissioner (Appeals) against rejection of reassessment request made by them before the assessing authority. Therefore, the assessment was very much alive before the Commissioner (Appeals). There is no other remedy available for the assessee except to file an appeal before the Commissioner (Appeals). Therefore, now the Revenue cannot challenge the direction of reassessment given by the Ld. Commissioner. Therefore, on this score Revenue appeal does not sustain.
The assessing authority is directed to reassess the Bill of Entry as directed by the Ld. Commissioner (Appeals) in the impugned order - appeal dismissed - decided against Revenue.
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2021 (11) TMI 735
Winding up of company - Seeking to implead the applicant as a respondent - seeking permission to applicant to file necessary pleadings and further documents - rule 11 and 34 of the National Company Law Tribunal Rules, 2016 - whether all shareholders/stakeholders of a company facing wound up proceedings filed under section 271(e) of the Companies Act, 2013 must invariable to be impleaded and heard prior to ordering wound up of a company?
HELD THAT:- The applicant is bound by the decisions taken by its main company, wherein it is holding shares. As long as it has no grievances against the affairs of Devas company, the applicant has no locus standi to intervene in the main company petition. The contention of applicant that amount awarded is an asset and Antrix is debtor is not tenable and it is baseless, as long as the award has not attained its finality, through judicial process. Admittedly, the validity of Award is in question and the same is sub judice.
The contention that rights of shareholders to carry on business through the instrumentality of a company is a right guaranteed under article 19(1)(g) of Constitution of India, and it cannot be taken away by this hon'ble Tribunal acting under the Companies Act, 2013 on mere conjectures and allegations without finding of a competent court of law, is mere misconception of law - rights of shareholders can be exercised through board of directors elected by them. Every shareholder cannot claim and defend the cases filed against their company, whether it is winding up petition or other cases and, it is the responsibility of company represented by its board of directors, to defend those cases, as a legal entity. It is misconception of law that every shareholders/stakeholders are to be heard in every case filed against a company.
There are cases where creditors can file petition seeking to wind up of a company on the ground that company is unable to pay its debts and if debt in question is paid, petition itself can be closed. But here in, the case is different that the incorporation itself and subsequent affairs are being run in fraudulent manner and unlawful object. The instant application is nothing but to delay proceedings and to support Devas in the main company petition and it is proxy war.
Since the Tribunal finds that Devas is a fit company to wind up by way of separate order dated May 25, 2021 the instant application is not maintainable and it is liable to be dismissed - Application dismissed.
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2021 (11) TMI 734
Removal of directorship of the Petitioner - CONSISTENCY with the restriction provided under the Articles of Association or not - grant of interim stay of resolution passed in EOGM - implementation of the Resolutions passed in the board meetings - HELD THAT:- The instant Appeal is against the interim order dated 19.07.2021 passed by the National Company Law Tribunal, Mumbai Bench, Court-IV in CA-201/2021 in CP-193(MB)/2021 and the main petition is still to be heard on merit.
We are restraining from expressing our views and while passing the impugned order has considered the provisions of Articles 25 and 26 of the Articles of Association and have committed no illegality.
The plea raised by the Appellant in the memo of Appeal that the Article of Association of company cannot supersede the provisions of Companies Law and this Article was itself subject to the provisions of the Companies Act, 2013 is concerned, only can be decided while hearing the main petition i.e. CP-193(MB)/2021 is still pending before the Ld. National Company Law Tribunal, Mumbai Bench, Court-IV for hearing and adjudication.
There is no illegality in the impugned order - Appeal dismissed.
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2021 (11) TMI 733
Liability/Deemed liability in respect of the allotment to the Appellants - agreement with ANS (Corporate Debtor/Respondent) or paid money to ANS for allotment of flats or not - jural relationship between the Appellants and ANS - breach of contract or not - Section 3 (6) of the Insolvency and Bankruptcy Code, 2016.
Whether RPD being agent of ANS collected the part sale consideration from the Appellants? - HELD THAT:- The MOU is an admitted document between the parties. There is the explicit terms and conditions of the MOU that the MOU shall not be deemed constitute a partnership between the parties hereto nor shall make one an agent of the other. Thus, we are unable to convince with the argument of Ld. Counsel for the Appellants that RPD has collected the amount from the Appellants being an agent of ANS. Actually, this is an agreement to complete the construction of five towers i.e. D, E, F, G & K and after completion of construction, RPD and ANS were free to sell their saleable area directly and collect the consideration. However, they have to deposit the sale proceeds from the sale of their respective areas in the account in the name of ANS Apartments Pvt. Ltd. A/c Shri Rajneegandha Greens only.
Whether there is jural relationship between the Appellants and ANS? - HELD THAT:- From the documents as per terms of MOU and Minutes of meeting, RPD was free to sell its share of saleable area directly and collect all dues in favour of ANS and the same is required to be deposited in the bank A/c of Shri Rajneegandha Greens (Dedicated Joint Signatory Account). As per the minutes of meeting dated 15.04.2313, the RPD was required to send printed agreement in triplicate pre-signed by the costumers to ANS and ANS was required to return two copies with in two working days. There is no such flat buyer agreement placed on record. In clause 3 of minutes of meeting dated 11.05.2013 the same condition was reagitated in the minutes of meeting and no document has been placed on record to show that the list of all flats allotted to Shri Rajneegandha Greens be made available to RWA - it is clear that part consideration has been collected from the Appellants but the same has not been deposited by the RPD in the A/c of Shri Rajneegandha Greens as per clause 17 and 31 of the MOU. There is nothing on record to show that in response to these letters ANS has issued credit note and allotment letters in favour of the Appellants.
Thus, RPD has not deposited the amount collected from the Appellants in the A/c of Shri Rajneegandha Greens as agreed terms of the MOU and therefore, the ANS has not issued any credit note/allotment letters in favour of the Appellants. Thus, Ld. Adjudicating Authority has rightly held that there is no jural relationship between the Appellants and ANS. The RPD has not collected the part sale consideration from the Appellants as an agent of ANS.
The RP as well as Ld. Adjudicating Authority has rightly rejected the claims of the Appellants - Appeal dismissed.
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2021 (11) TMI 732
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- It was only on 06.08.2016 after the receipt of the information under RTI, that the Appellant got the knowledge of recovery for the very first time and filed the Section 9 Application on 04.06.2019, well within three years - The Hon’ble Supreme Court in B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [2018 (10) TMI 777 - SUPREME COURT] has observed that the right to sue accrued on the ‘date of default’. This decision has to be understood and interpreted keeping in view the factual matrix of each case.
In the instant case the Respondent/’Corporate Debtor’ does not deny the main contention of the Appellant that the decision with respect to recovery and deduction of the Arbitral amount was never communicated to the Appellant. Even in their reply before the Adjudicating Authority and before this Tribunal and in the submissions filed, the ‘Corporate Debtor’ is completely silent with respect to this communication having been made to the Appellant herein - the date of knowledge of happening of the default is a relevant date.
The part payment made on 31.03.2016 further extends the ‘date of default’ keeping in view the facts and circumstances of the attendant case on hand. The challenge to the Arbitral Award was dismissed on 06.10.2018. The recovery made in 2016 was provisional, subject to the challenge against the Arbitral Award, which got dismissed on 06.10.2018 and the same was not challenged further. The Application was filed on 04.06.2019 which is within three years of this date.
The Hon’ble Supreme Court in DENA BANK (NOW BANK OF BARODA) VERSUS C. SHIVAKUMAR REDDY AND ANR. [2021 (8) TMI 315 - SUPREME COURT] has noted that once a recovery certificate is issued authorising the Creditor to realise its decretal dues, a fresh right accrues to the Creditor to recover amount of the final Judgement/Order/decree - In the instant case, the challenge to the Arbitral Award was dismissed on 06.10.2018, and hence has attained finality, the part payment was made on 31.03.2016 and therefore the Application filed on 04.06.2019 is not barred by Limitation.
The Learned Adjudicating Authority shall proceed in accordance with law keeping in view the timelines under the Code - Appeal allowed - decided in favor of appellant.
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2021 (11) TMI 731
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - applicability of time limitation - HELD THAT:- It is seen from the record that three years form the date of NPA i.e. 28.02.2005, as per Article 137 of the Limitation Act, 1963, expires on 28.02.2005.
The BIFR reference was abated as the Corporate Debtor did not modify the pending reference therefore the deemed date of abatement of reference relates back to 13.08.2015. Section 22(5) of SICA, 1968 is not attracted to the present case since the period of limitation i.e. 3 years had already expired before the BIFR reference was made by the Corporate Debtor. Any reference before the BFIR is abated, if secured creditors have taken measures under Section 13(4) of the SARFAESI Act, 2002 as provided for under Section 41 of the SARFAESI Act, 2002. The period between 25.04.2006 when the Corporate Debtor was declared sick by BIFR under SICA and 04.05.2016 when the reference was dismissed cannot be excluded form computing the limitation period - The argument of the Learned Counsel that 05.05.2016 should be taken as the first accrual of the cause of action is unsustainable, as the period of limitation i.e. 3 years had already expired before the BIFR reference was made by the Corporate Debtor. The documentary evidence on record does not establish any acknowledgment of liability made in writing, signed by the party against whom the property or right is claimed and hence Section 18 of the Limitation Act, 1963 cannot be made applicable to the facts of the instant case.
In the instant case, it is clear that the right to sue accrued when the default occurred way back on 28.02.2002. The material on record does not evidence any acknowledgment of liability under Section 18 of the Limitation Act, 1963 to extend the limitation period. The dismissal of the BIFR reference, relied upon by the Learned Counsel for the Appellant, is also dated 04.05.2016 which is beyond three years form the date of default. The Application under Section 7 was filed on 04.06.2019 for an amount which even according to the Appellant, fell due on 14.02.2008 and cannot revive a debt which is no longer due as it is time barred.
The Ld. Adjudicating Authority has rightly dismissed the Application filed under Section 7 of the Code, as barred by limitation - the Appeal is dismissed.
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2021 (11) TMI 730
Area Based Exemption - availment of inadmissible cenvat credit (on inputs) on improper and inadmissible documents - extended period of limitation - HELD THAT:- The disallowance under each of the annexures to the show cause, is of similar nature. Further, from the demonstration made by the counsel for the appellant, it is satisfying that this is a case of only clerical error and the appellant’s Plant No.9 has received the inputs in question, making the proper entries in the records and have further made the payments through its bank accounts. It is also found that there is no other allegation as to diversion of raw materials or of any fraudulent activity on the part of the appellant.
Extended period of limitation - HELD THAT:- The extended period of limitation is not available to the Revenue. Further, cenvat credit in dispute is allowable to the appellant/assessee.
Appeal allowed -
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2021 (11) TMI 729
Rejection of turnover appearing in the books of accounts - turnover shown in the account books is higher than the turnover disclosed in the return - disallowance of claim of damage which is less than 1% - HELD THAT:- Seeing the first year of business of the revisionist, the revenue cannot compel the revisionist to manage the affair of its business or to conduct its business according to whims of the assessing authority. The revisionist have all rights to manage its business affairs according to his wisdom. In absence of any material brought on record by the authorities, the revenue cannot compel the dealer to sell its products at a rate fixed by the revenue without bringing on record any exemplars. Therefore, the view taken by the Tribunal as well as the lower authorities that the goods were sold at lesser price is bad.
Further the record reveals that only on the basis of surmises and conjucture, the account books of the assessee have been rejected and turnover has been enhanced which cannot be justified. It is already well-settled that in the absence of any definite adverse material accounts kept in regular course of business cannot be disbelieved and must be given credence and due weight - In the case in hand, no adverse material whatsoever was brought on record to disbelieve the account books maintained by the revisionist and therefore rejection of account books and enhancement of turnover is uncalled for.
The Tribunal is directed to pass an order under Section 11(8) within a period of two months from the date of receipt of a copy of this order - revision is allowed with cost of ₹ 2000/- (two thousand), which shall be paid to the revisionist within a period of one month from today and compliance report of the same be submitted by the opposite party to the Registrar General of this Court within 45 days from today.
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2021 (11) TMI 728
Validity of award of interest by the sole arbitrator - earnest money and security deposits or not - in view of the specific clause 16(2) of the GCC, whether the contractor is entitled to any interest pendente lite on the amounts payable to the contractor other than upon the earnest money or the security deposit?
HELD THAT:- An identical question came up for consideration before this Court in the recent decision of this Court in the case of GARG BUILDERS VERSUS BHARAT HEAVY ELECTRICALS LIMITED [2021 (10) TMI 250 - SUPREME COURT] where it was held that the High Court was justified in rejecting the claim of the appellant seeking pendente lite interest on the award amount.
Merely because the appellant has claimed interest, does not imply that the contractor shall be entitled to interest pendente lite. Even if the appellant would have been awarded interest, the same also was not permissible and could have been a subject matter of challenge. In short, there cannot be an estoppel against law.
The learned Arbitrator in the instant case has erred in awarding pendente lite and future interest on the amount due and payable to the contractor under the contract in question and the same has been erroneously confirmed by the High Court - the impugned judgment and order passed by the Division Bench of the High Court in an appeal under Section 37 of the 1996 Act and the order passed by the learned Single Judge in an application under Section 34 of the 1996 Act and the award passed by the learned Arbitral Tribunal awarding pendente lite and future interest on the amounts held to be due and payable to the contractor under the contract are hereby quashed and set aside.
Appeal allowed.
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2021 (11) TMI 727
Dishonor of Cheque - seeking acquittal of applicant from the charge under Section 138 of the Negotiable Instruments Act on the basis of the compromise entered into between the parties - invocation of extraordinary jurisdiction of this Court under Section 482 of the Cr.P.C. - HELD THAT:- This petition under Section 482 of the Cr.P.C. has been filed by the applicant to acquit the applicant from the charge under Section 138 of the Negotiable Instruments Act on the basis of the compromise entered into between the parties. It is a case of abuse of process of law. It is true that Section 482 of the Code of Criminal Procedure gives inherent powers to the High Court to make such orders as may be necessary to prevent the abuse of process of law or to secure the ends of justice. However, Section 482 does not confer unlimited jurisdiction upon the High Court and the inherent powers, being in the nature of exception and not a rule, should be used sparingly and with great care and caution.
Even in the various cited judgments, Supreme Court has held that whether to exercise the inherent power or not, would depend upon the facts and circumstances of the case.
In the present case, when the coordinate Bench of this Court dismissed the revision as non maintainable and also dismissed the application seeking suspension of sentence and grant of bail on the ground that the applicant is absconding and his presence is necessary to maintain the application as well as the revision, filing of this petition under Section 482 of the Cr.P.C. is not maintainable and it is an abuse of process of law - revision petition dismissed.
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2021 (11) TMI 726
Dishonor of Cheque - statutory period prescribed under the provisions of Section 138 of the Negotiable Instruments Act, 1881 not satisfied - legally enforceable debt or not - presumptions regarding existing debt or not - whether on the date of filing of the complaint case under Section 138 of the Negotiable Instruments Act, 1881, the cause of action had crystalized or the complainant itself was pre-mature?
HELD THAT:- This Court finds that admittedly, there is no evidence of service of the legal notice to the petitioner and accordingly, the learned courts below has considered deemed service of notice by referring to the General Clauses Act.
This Court is of the considered view that presumption regarding service of notice sent through registered cover can be drawn only upon expiry of 30 days from the date of dispatch of notice as has been held by the Hon’ble Supreme Court in SUBODH S. SALASKAR VERSUS. JAYPRAKASH M. SHAH & ANR [2008 (8) TMI 795 - SUPREME COURT]. In the said judgment, the notice was sent through speed post and although the actual date of service of notice was not known, the Complainant proceeded on the basis that the same was served within the reasonable period. It was held that if the presumption of notice within the reasonable period is raised, the deemed service at best can be taken to be 30 days from the date of its issuance and the accused was required to make payment in terms of the said notice within 15 days thereafter and the complaint petition therefore could have been filed after expiry of 15 days given to the accused for payment of money after receipt of notice.
This Court finds that the law has been well settled by the aforesaid judgement that the cause of action for filing a Complaint case under Section 138 of the N.I. Act could not arise prior to expiry of 15 days from the date of service of the legal notice on the accused - this Court also finds that even if the best case of the Complainant is taken into consideration, then the date of dispatch of the legal notice regarding bouncing of the cheque by the complainant is 19.11.2009 (through registered cover), the date of deemed service of legal notice upon the petitioner would be 18.12.2009 (30 days from dispatch of legal notice) and 15 days from the date of service of notice would expire only on or about 02.01.2010 and present complaint case has been filed on 22.12.2009 i.e. on the 4th day from the deemed service of notice, if taken as 18.12.2009.
The condition precedent for filing the case under Section 138 of the Negotiable Instruments Act, 1881, having not been satisfied, the Complaint itself was not maintainable on the day it was filed and accordingly, the petitioner could not have been convicted under the said Section. The question of any presumption regarding existing debt under Section 139 of the Negotiable Instruments Act, 1881 also could not arise as the Complaint itself was not maintainable - petitioner is acquitted from the charge thereunder and is discharged from the liability of the bail bonds.
Petition allowed.
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2021 (11) TMI 725
Dishonor of Cheque - drawer of cheque - Vicarious liability - petitioner has contended that she is not the signatory to the dishonoured Cheque and the said Cheque was issued from the Joint Account maintained by her along with her husband - Section 138 read with Section 141 of the N.I. Act - HELD THAT:- The plain reading of Section 138 makes it clear that it has to be strictly interpreted, as penal provision is made for commission of offence as prescribed under Section 138 of the N.I. Act. It is drawer of the Cheque, who has to be made liable for the payment of amount of money due to the payee or the holder of the Cheque within the statutory limits as provided, after the receipt of the legal notice demanding the cheque money. If the drawer of the Cheque fails to make payment of the said amount of money, then such person shall be deemed to have committed offence - Section 138 of the N.I. Act being a penal provision, it entails a conviction and sentence at the end of the criminal proceedings. There is a statutory presumption under Section 139 of the N.I. Act in favour of the holder of the Cheque. A prosecution under Section 138 of the N.I. Act is ultimately to bring the offender to suffer penal consequences.
It appears that the present petitioner has been joined in criminal proceedings just as being the joint account holder with the husband. As per the facts of the case, the Cheque was issued by accused no.1 in his personal capacity. The wife has no business relationship, nor was having any transaction with the complainant on her personal basis, thus, she cannot be made vicariously liable for the act of the husband. It appears that the learned trial Court Judge has not considered the averments of the complaint and has not examined the status of the proposed accused prior to order for issuance of summons against the present petitioner, who was joined in the criminal proceedings merely under the status of being wife of the accused no.1 and holding a joint account with the husband - The proceedings under Section 138 of the N.I. Act cannot be misused by any of the parties. The culpability is attached with the dishonour of the Cheque and it is only the drawer of the Cheque who can be made accused in any proceedings under Section 138 of the N.I. Act. From the bare reading of Section 138 of the N.I. Act, it transpires that the liability of the drawer of the Cheque, who has issued the Cheque from the joint account maintained by him and his wife, does not specifically bear any implication to make the wife equally liable when the Cheque was drawn by her husband, and therefore, no vicarious liability can be fastened on the holder of a joint account, by a mere fact that the dishonoured cheque was issued by the drawer of such a cheque from the same bank account.
Application allowed.
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2021 (11) TMI 724
Dishonor of Cheque - insufficiency of funds - acquittal of the accused - compounding of offences - HELD THAT:- Having taken note of the fact that entire amount of compensation stands deposited with the trial Court and accused has no objection in releasing the same in favour of the complainant, this Court finds no impediment in accepting the prayer made in the application while exercising power under section 147 of the Act as well as in terms of the law laid down by the Hon'ble Apex Court in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [2010 (5) TMI 380 - SUPREME COURT], whereby it has been categorically held that Court exercising power under Section 147 of the Act can proceed to compound the offences even in those cases where accused stands convicted.
The instant matter is ordered to be compounded and judgment dated 5.4.2021 passed by learned Sessions Judge, Shimla, in Criminal Appeal No. 51-S/10 of 2018 and the judgment of conviction and order of sentence dated 24.11.2018, passed by learned Judicial Magistrate, 1st Class, Court No. 5, Shimla, District Shimla, H.P., in case No. 183-3 of 2014, are quashed and set-aside. The petitioner-accused is acquitted of the charge framed against him under Section 138 of the Act. The bail bonds of the accused are ordered to be discharged.
Petition disposed off.
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