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2004 (4) TMI 628
Applicability of the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996 - Commencement of arbitration proceedings - Validity of the notice for appointment of an arbitrator -Maintainability of the Letters Patent Appeal - Majority decision - The parties, hereto entered into an agreement on 7.4.1992 in terms whereof the first respondent herein was to manufacture and pack in its factory a wide range of ice cream for and on behalf of the appellant. The agreement was to remain valid for five years.
S.B. Sinha, J. - HELD THAT:- It is one thing to say that the parties agree to take recourse to the procedure of the 1996 Act relying on or on the basis of tenor of the agreement as regard applicability of the statutory modification or reenactment of the 1940 Act but it is another thing to say, as has been held by the High Court, that the same by itself is a pointer to the fact that the appellant had agreed thereto. If the arbitral proceedings commenced for the purpose of the applicability of the 1940 Act in September 1995, the question of adopting a different procedure laid down under the 1996 Act would not arise.
We are of the view that in this case, the 1940 Act shall apply and not the 1996 Act. However, it is accepted at the Bar that the learned arbitrators had already entered into the reference. The proceedings before the arbitrators were not stayed. Only making of the award was stayed. Thus, we are of the opinion that although the old Act would apply, the entire arbitral proceedings need not be reopened and the arbitrators may proceed to give their award. The above shall be filed in the court having jurisdiction whereafter the parties may proceed in terms of the old Act. We hope and trust that the award shall be made and all the legal proceedings shall come to an end at an early date and preferably within a period of four months from the date of the communication of this order. This order has been passed in the interest of justice and in the peculiar facts and circumstances of this case.
We are, however, of the opinion that the High Court of Delhi has rightly held that the letters patent appeal was not maintainable. Civil Appeal No. 9672 of 2003 is, therefore, allowed and Civil Appeal Nos. 9673-74 of 2003 are dismissed. No costs.
S.H. Kapadia, J. - HELD THAT:- In the present matter, one is concerned with transitional provision, i.e. Section 85(2)(a) which enacts as to how the statute will operate on the facts and circumstances existing on the date it comes into force and, therefore, the construction of such a provision must depend upon its own terms and not on the basis of Section 21.
In Thyssen's case [1999 (10) TMI 636 - SUPREME COURT], Section 48 of the old Act and Section 85(2)(a) of the 1996 Act came for consideration. It has been held by this Court that there is a material difference between Section 48 of the 1940 Act, which emphasized the concept of "reference" visa-vis Section 85(2)(a) of the 1996 Act which emphasizes the concept of "commencement"; that there is a material difference in the scheme of two Acts; that the expression "in relation to" appearing in Section 85(2)(a) refers to different stages of arbitration proceedings under the old Act; and lastly that Section 85(2)(a) provides for limited repeal of the 1940 Act therefore, I am of the view that one cannot confine the concept of 'commencement' under Section 85(2)(a) only to Section 21 of the 1996 Act which inter alia provides for commencement of arbitral proceedings from the date on which a request to refer a particular dispute is received by the respondent.
To sum up, in this case, the question concerns interpretation of transitional provisions; that Section 85(2)(a) emphasizes the concept of "commencement" whereas Section 48 of the 1940 Act emphasized the concept of "reference"; that Section 83(2)(a) provides for implied repeal; that the scheme of 1940 Act is different from the 1996 Act; that the word "reference" in Section 48 of the old Act had different meanings in different contexts; and for the said reasons, 1 am of the view that while interpreting Section 85(2)(a) in the context of the question raised in this appeal, one cannot only rely on Section 21 of 1996 Act.
The parties entered into an agreement on 7.4.1992 which contained an arbitration Clause 20, which inter alia stated that in the case of dispute between the parties arising in relation to the contract, the dispute shall be referred to a single arbitrator, in case both sides agree upon one such arbitrator and failing such agreement, the dispute shall stand referred to two arbitrators, one to be appointed by the either party, and in case of disagreement, between the two arbitrators, the dispute was to be referred to an umpire to be appointed by the two arbitrators.
Before entering upon the reference under Clause 20 quoted above, all such arbitration proceedings were to be governed by the provisions of the Arbitration Act, 1940 or under any statutory re-enactment This clause is similar to the one considered by this Court in the case of Delhi Transport Corporation Ltd. [2003 (4) TMI 437 - SUPREME COURT]. On the strength of the agreement dated 7.4.1992, the respondent herein filed title suit No. 40 of 1995 for injunction and in the said suit, the appellant herein applied for stay u/s 34 of the 1940 Act. Suffice it to state that on 6.5.1997, when the matter came up before the High Court, the parties agreed that all disputes between them may be referred to arbitrators chosen by the parties as per the agreement. A consent order was accordingly passed on that day by the High Court referring the dispute to the arbitrators. Therefore, for all practical purposes, the arbitration commenced on 6.5.1997, by which time the 1996 Act had come into force. In the circumstances, I am in agreement with the majority decision of the arbitrators that the proceedings in the present case would be governed by the provisions of the 1996 Act.
Thus, I respectfully dissent from the opinion of Sinha, J. Consequently I am of the view that this Civil Appeal ought to fail and be dismissed with no order as to costs.
Thus, Civil Appeal No. 9672/2003 is allowed - Civil Appeal Nos. 9673-9674/2003 are dismissed.
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2004 (4) TMI 627
Issues Involved:
1. Legality of the detention order dated 22/12/1975.
2. Validity of proceedings under Section 6(1) and Section 7 of SAFEMA.
3. Impact of revocation of the detention order on subsequent SAFEMA proceedings.
4. Procedural fairness and natural justice in SAFEMA proceedings.
5. Delay in challenging the SAFEMA proceedings.
Detailed Analysis:
1. Legality of the Detention Order Dated 22/12/1975:
The petitioners challenged the detention order dated 22/12/1975, issued under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA). The order was revoked on 21/03/1977 by the Government of Goa, Daman & Diu, under Section 11(1) of COFEPOSA. The court determined that the revocation of the detention order rendered it non-existent from 21/03/1977.
2. Validity of Proceedings under Section 6(1) and Section 7 of SAFEMA:
The court examined whether the proceedings under Section 6(1) and the order under Section 7 of SAFEMA, based on the revoked detention order, were valid. It was established that a valid detention order is a sine qua non for initiating proceedings under Section 6(1) of SAFEMA. Since the detention order was revoked in 1977, the subsequent notice issued under Section 6(1) on 10/02/1995 was deemed illegal and without jurisdiction.
3. Impact of Revocation of the Detention Order on Subsequent SAFEMA Proceedings:
The court emphasized that the revocation of the detention order under Section 11(1) of COFEPOSA had the same effect as a cancellation by a competent court. Therefore, the absence of a valid detention order at the time of initiating proceedings under Section 6(1) of SAFEMA invalidated the entire process. The court cited relevant case law, including the Division Bench decision in Niranjan Dahyabhai Choksi & Anr. v. Union of India & Anr., and the Supreme Court decision in Ibrahim Bachu Bafan v. State of Gujarat and Ors., to support this conclusion.
4. Procedural Fairness and Natural Justice in SAFEMA Proceedings:
The petitioners contended that they were not provided with the grounds for detention, violating the principles of natural justice and Article 22(5) of the Constitution of India. The court found merit in this argument, noting that the failure to supply these documents impeded the petitioners' ability to make an effective representation, rendering the proceedings under Section 7 of SAFEMA illegal.
5. Delay in Challenging the SAFEMA Proceedings:
The respondents argued that the petition should be dismissed due to delay. However, the court found that the petitioners acted within a reasonable timeframe, challenging the SAFEMA proceedings soon after the appellate tribunal's decision on 20/03/2001. The court concluded that the delay argument did not hold, given the chronology of events.
Conclusion:
The court allowed the petition, quashing the detention order dated 22/12/1975 and the subsequent proceedings under Section 6(1) and Section 7 of SAFEMA. The court ruled that the initiation of proceedings under SAFEMA without a valid detention order was illegal, and the entire process was set aside. The rule was made absolute with no orders as to costs, and direct service was permitted.
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2004 (4) TMI 626
Issues Involved:
1. Maintainability of the complaint under Section 138 of the Negotiable Instruments Act.
2. Authorization to represent the complainant company.
3. Legal infirmity due to the resignation of the initial authorized representative.
4. Validity of the trial court's judgment based on the above grounds.
Detailed Analysis:
1. Maintainability of the Complaint under Section 138 of the Negotiable Instruments Act:
The complaint was filed under Section 138 of the Negotiable Instruments Act, which pertains to the dishonor of cheques due to insufficient funds. The trial court initially took cognizance of the complaint but later dismissed it on the grounds of legal infirmity, stating that the complaint was not maintainable in law.
2. Authorization to Represent the Complainant Company:
The complainant company was represented by its Chief Commercial Manager-cum-Administrative Officer, who had the authorization to file the complaint. However, after the resignation of the said officer, the trial court allowed another representative, Kanuri Prasad, to look after the proceedings but not to depose on behalf of the company.
3. Legal Infirmity Due to the Resignation of the Initial Authorized Representative:
The trial court held that the complaint suffered from legal infirmity as the initial representative, Vinod Kumar, had resigned, and there was no valid authorization for him to continue representing the company. The court found that the prior authorization (Ex. P-4) became ineffective after his resignation, and there was no evidence of a new authorization by the Board of Directors.
4. Validity of the Trial Court's Judgment:
The appellate court disagreed with the trial court's view, citing several precedents. It emphasized that once the complaint is validly filed and taken cognizance of, the resignation of the initial representative does not invalidate the complaint. The appellate court referred to decisions such as *EENADU A DAILY NEWSPAPER, VIJAYAWADA v. J. SHIVA SHANKER* and *M.M.T.C. LTD. v. MEDCHL CHEMICALS & PHARMA (P) LTD.*, which held that a company can rectify any defect in representation at any stage and that the complaint remains valid even if the initial representative resigns.
Conclusion:
The appellate court concluded that the trial court's judgment did not stand the scrutiny of law and set it aside. The case was remanded back to the trial court for fresh consideration based on the evidence already recorded. The trial court was directed to dispose of the matter within one month from the date of receipt of the appellate court's order.
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2004 (4) TMI 625
Issues Involved:
1. Cancellation of letter dated 1.11.1988 by the Special Officer.
2. Entitlement of legal heirs to the possession of Flat No. A-2.
3. Maintainability of the writ petition.
4. Compliance with financial obligations and legal formalities.
5. Rights of legal heirs under the West Bengal Cooperative Societies Act, 1983.
6. Validity of re-allotment of the flat by the Society.
7. Role and actions of the Special Officer.
Issue-Wise Detailed Analysis:
1. Cancellation of Letter Dated 1.11.1988 by the Special Officer:
The appellant sought the cancellation of the letter dated 1.11.1988 issued by the Special Officer, which stated that the flat had been re-allotted due to the lack of a timely claim by the legal heirs. The court found that the Special Officer's action of re-allotting the flat without giving an opportunity to the legal heirs and without deciding who was entitled to the flat was improper, illegal, arbitrary, and motivated.
2. Entitlement of Legal Heirs to the Possession of Flat No. A-2:
The appellant argued that the legal heirs of the deceased member, Sati Prasanna Bhowmick, were entitled to inherit and be allotted the apartment. The court held that under Section 87 of the West Bengal Cooperative Societies Act, 1983, the flat constitutes heritable and transferable immovable property. The legal heirs are entitled to inherit the flat as per the mandatory provisions of the statutes, and the right, title, and interest of the deceased member in the apartment devolve upon his heirs.
3. Maintainability of the Writ Petition:
The respondents contended that the writ petition was not maintainable as the Society was not a State or an instrumentality of the State. However, the court concluded that the writ petition was maintainable since the Special Officer, appointed under the provisions of the Act, is a statutory officer and thus should be regarded as a public authority. Additionally, Article 226 of the Constitution extends to issuing directions to any person, not just public authorities.
4. Compliance with Financial Obligations and Legal Formalities:
The respondents argued that the father of the appellant had not paid the full amount for the flat, thus acquiring no right, title, or interest. The court noted that the appellant was ready and willing to pay the balance amount and comply with all formalities. The court found that the Society had not made any demand for money or communicated any liability regarding the flat during the lifetime of Sati Prasanna Bhowmick.
5. Rights of Legal Heirs under the West Bengal Cooperative Societies Act, 1983:
The court examined Sections 79, 80, 82, 85, and 87 of the Act, which deal with the transfer and devolution of a deceased member's share or interest. The court emphasized that the preferential claim goes to the heirs and legal representatives of the deceased member in the absence of any nominee. The court concluded that the legal heirs were entitled to the flat as per the provisions of the Act and Rules.
6. Validity of Re-allotment of the Flat by the Society:
The court found that the re-allotment of the flat by the Special Officer to a stranger, without considering the legal heirs' claim, was illegal. The court noted that the flat had not been allotted to a third party and remained vacant. The court held that the Special Officer's action of re-allotting the flat without deciding the rightful claimant was improper and motivated.
7. Role and Actions of the Special Officer:
The Special Officer, appointed by the High Court, had issued letters demanding payment of dues and later re-allotted the flat due to the absence of a timely claim by the legal heirs. The court found that the Special Officer's actions were arbitrary and not in compliance with the legal provisions. The court held that the Special Officer, being a statutory functionary, should have considered the legal heirs' claim before re-allotting the flat.
Conclusion:
The Supreme Court held that the legal heirs of the deceased member were entitled to inherit the flat as per the provisions of the West Bengal Cooperative Societies Act, 1983. The court found that the re-allotment of the flat by the Special Officer was illegal and arbitrary. The writ petition was deemed maintainable, and the court directed that the flat be allotted to the legal heirs of the deceased member.
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2004 (4) TMI 624
Issues Involved:
1. Legality of the notification dated 28th February, 2003.
2. Entitlement and period of toll collection by respondent No. 5.
3. Alleged undue benefits to respondent No. 5.
4. Compliance with the Bombay Motor Vehicles Tax Act, 1958.
5. Validity of increased toll rates from 1st March, 2003.
6. Petitioner's standing and claims of being an affected party.
Detailed Analysis:
1. Legality of the Notification Dated 28th February, 2003:
The petitioner challenged the notification dated 28th February, 2003, which allowed respondent No. 5 to collect toll at increased rates. The court found that the increase in toll rates after three years was in accordance with tender condition No. 8.2, which stated, "The rates of toll shall be increased after every three years." The initial notification issued on 28th February, 2000, mistakenly showed the same toll rates for the entire period due to an oversight. This mistake was rectified by the notification dated 28th February, 2003, permitting the increase in toll rates.
2. Entitlement and Period of Toll Collection by Respondent No. 5:
The court noted that respondent No. 5 was awarded the contract under the "Build, Operate and Transfer" (BOT) scheme, which allowed it to collect toll until 3rd December, 2005. The construction was completed within 11 months and 18 days, ahead of the two-year period stipulated in the agreement. As per the terms, respondent No. 5 was entitled to start toll collection immediately upon completion of the construction. The court found no illegality in allowing respondent No. 5 to collect toll during the construction period and up to the specified date.
3. Alleged Undue Benefits to Respondent No. 5:
The petitioner alleged that respondent No. 5 had been granted undue benefits by the state authorities. The court, however, found no evidence of undue or undeserving benefits being conferred upon respondent No. 5. The toll collection was in line with the terms of the agreement, and the figures submitted by respondent No. 5 showed that it had not yet recovered the total "capital outlay" and was still incurring losses. The court emphasized that it would not disbelieve the figures provided by a public authority unless there was clear evidence of arbitrariness.
4. Compliance with the Bombay Motor Vehicles Tax Act, 1958:
The court examined Section 20 of the Bombay Motor Vehicles Tax Act, 1958, which authorizes the state government to impose tolls on motor vehicles passing over a bridge or through a tunnel constructed, repaired, improved, or strengthened. The court found that the BOT scheme and the toll collection by respondent No. 5 were in consonance with the provisions of the Act. The Act allows for the recovery of the total capital outlay, including costs of construction, maintenance, and reasonable returns.
5. Validity of Increased Toll Rates from 1st March, 2003:
The court upheld the validity of the increased toll rates from 1st March, 2003, as per the revised notification dated 28th February, 2003. The increase was in accordance with the tender condition that allowed for toll rate increments every three years. The court found that the initial notification's oversight was promptly addressed by respondent No. 5, which had informed the state authorities about the mistake and requested a corrigendum.
6. Petitioner's Standing and Claims of Being an Affected Party:
The petitioner claimed to be an affected party as he frequently traveled to Sangli District for business purposes and had to pay the toll. The court acknowledged the petitioner's standing but found no merit in his claims. The court noted that the petitioner's arguments did not substantiate any illegality or arbitrariness in the toll collection process.
Conclusion:
The court concluded that the petition lacked substance and dismissed it. The toll collection by respondent No. 5 was found to be legal, in accordance with the agreement and the provisions of the Bombay Motor Vehicles Tax Act, 1958. The court emphasized that there was no undue benefit conferred upon respondent No. 5, and the increased toll rates were justified. The petition was dismissed with no order as to costs.
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2004 (4) TMI 623
Issues:
Challenge to demand of road tax for a truck; Application of doctrine of piercing the corporate veil.
Analysis:
- The petitioner challenged the demand of road tax for a truck, arguing that M/s. Nav Instalments should be liable for the tax as it is a different legal entity. The petitioner, a private limited company, claimed to have handed over the truck to M/s. Nav Instalments and should not be responsible for the taxes.
- The court noted that the truck in question was in the custody of M/s. Nav Instalments, whose managing partner was also the Managing Director of the petitioner company. The court referred to the doctrine of piercing the corporate veil, citing a previous decision where it was held that the corporate personality can be disregarded in certain circumstances.
- The court discussed the legal principle that a company is a distinct legal entity separate from its directors and shareholders, emphasizing that this principle was not meant to aid tax evasion. They referred to various cases where the doctrine of lifting the corporate veil was applied to look at the reality behind the corporate structure.
- Referring to Supreme Court observations, the court highlighted that the exceptions to the rule of corporate personality can expand over time to meet new requirements, indicating a growing horizon for the doctrine of lifting the corporate veil.
- The court dismissed the petition, stating that the discretionary remedy of a writ petition would not be exercised in this case under Article 226. The court found that Vishnu Bhagwan Agrawal was controlling both the petitioner company and M/s. Nav Instalments, leading to the decision to dismiss the petition.
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2004 (4) TMI 622
Allotment of Preference Shares - Non-sending of Notices and Balance Sheets - Delisting of Shares - Non-registration of Shares - Exclusion of the Petitioners from Management - Leasing of Lands - HELD THAT:- A perusal of the various allegations made in the petition and the findings given by us would indicate that except the allotment of preference shares in exclusion of the petitioner; non-representation of the petitioners’ group on the Board and leasing of properties of the company, others are not material. It is an admitted fact that the relationship between the two groups has not been cordial for a very long time. With the intervention of two eminent personalities, the parties have resolved a number of issues resulting in parting of ways in other companies. We are of the view that the disputes in respect of the present company also should be resolved by one of the groups going out of the company. Since the respondents hold 52 per cent shares in the company, it would be appropriate to direct the petitioners to go out of the company on receipt of proper consideration. In a number of cases as cited by Shri Mylsamy, this Board has divided the business of the company between the two groups of family members.
In the present case, the company is not having any business except running a hotel, but is in possession of a vast real estate. Therefore, we are of the view that instead of cash consideration being paid to the petitioners for their shares, the assets and properties of the company could be divided and properties to the extent of 44 per cent by value could be given to the petitioners. Determination of the value of the company as a whole and the value of 44 per cent shares held by the petitioner could be done by an independent valuer. On the basis of the valuation report, the respondents could prepare two or three alternate packages of assets and properties to be given to the petitioners to the extent of 44 per cent of the value of the company, and the petitioners could have the liberty to chose one of the packages. Once the petitioners choose one of the packages, they will no longer be shareholders of the company and the company could reduce its share capital to the extent of 44% of the shares at the face value. This would complete the parting of ways between the two groups as far as this company is concerned. Accordingly we direct so.
The parties will appear before us on 20-5-2004 at 2.30 p.m. to suggest a mutually acceptable valuer to determine the value of the company at which time further directions regarding valuation will be given.
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2004 (4) TMI 621
Issues:
- Legality of judgment regarding defaulters and demands raised against them.
- Validity of orders issued by the Election Officer of the appellant-society.
- Adjudication of defaulters in appropriate proceedings.
- Refund of payments and direction for fresh adjudication.
Analysis:
The judgment in question pertains to the legality of a Division Bench of the Delhi High Court's decision regarding the status of respondents 1 to 3 as defaulters and the demands raised against them. The High Court had held that the demands prior to a specific date were unsustainable and directed a refund for any payments taken by the society from them. The respondents had filed a writ petition challenging the orders issued by the Election Officer of the society and seeking a fresh inquiry into defaulters before an upcoming election. The High Court's decision was based on whether the writ petitioners were defaulters, which was deemed inappropriate for a writ application. The Court highlighted that issues affecting civil rights should be adjudicated in forums provided by cooperative society statutes rather than through writ petitions.
The Supreme Court found that the High Court's judgment was unsustainable due to various reasons. The direction for refund to other members and the decision on defaulters without proper consideration of relevant materials were deemed incorrect. The Court emphasized that decisions in election proceedings should not foreclose the right of the society to recover amounts through statutory arbitration proceedings. The matter was remitted back for fresh adjudication, clarifying that the focus should be on determining defaulters for the election process, not final civil liabilities. Respondents 1 to 3 had already applied for arbitration, the appropriate procedure for adjudicating civil liabilities, which the High Court was advised to consider before further adjudication.
In conclusion, the Supreme Court disposed of the appeal, emphasizing the importance of following statutory procedures for adjudicating disputes within cooperative societies. The judgment highlighted the need for proper consideration of relevant materials and adherence to legal processes, directing the High Court to reexamine the issues raised in the writ petition in light of the respondents' arbitration application.
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2004 (4) TMI 620
Validity of the conditional offers and rebates - Jurisdiction and scope of the Arbitrator's decision - High Court's interference with a non-speaking award - HELD THAT:- It has not been shown before us on behalf of the Union of India that there exists any provision in the contract which precluded the arbitrator from deciding the dispute or there existed any specific bar in the contract precluding the contractor to raise such a claim. Once it is held that the Arbitrator had the jurisdiction, no further question shall be raised and the court will not exercise its jurisdiction unless it is found that there exists any bar on the face of the award. [Pure Helium India (P) Ltd. vs. Oil & Natural Gas Commission [2003 (10) TMI 384 - SUPREME COURT].
Furthermore, as we do not find that there existed any material on records to show that the Arbitrator while making an award ignored any material documents, the impugned judgment cannot be sustained, which is set aside accordingly.
The Supreme Court set aside the High Court's judgment, reinstating the Arbitrator's award. The contractor's appeal was allowed, and the Union of India's appeal was dismissed. The Arbitrator's interpretation of the contract and the conditional offers was upheld, affirming the limited scope of judicial interference in arbitration awards.
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2004 (4) TMI 619
Issues:
1. Interpretation of the ground for eviction under the H.P. Urban Rent Control Act, 1987.
2. Applicability of the law regarding subletting and possession in the context of partnership deeds.
3. Inheritance of tenancy rights and obligations by the heirs of a deceased tenant.
Analysis:
1. The judgment dealt with the interpretation of the ground for eviction under the H.P. Urban Rent Control Act, 1987. The appellant, as the landlord, sought eviction of the respondents from a shop on the grounds of subletting and default in rent payment. The lower courts had dismissed the eviction plea based on the precedent set by A.S. Sulochana Vs. C. Dharmalingam, which required the guilt of the tenant seeking eviction, not that of the predecessor, to be established for subletting. However, the Supreme Court opined that the judgments based on this precedent could not be sustained, as the heirs of a deceased tenant inherit both rights and obligations, including rent arrears.
2. The judgment also discussed the applicability of the law regarding subletting and possession concerning partnership deeds. It highlighted that while a partnership deed could be used to disguise subletting, the true nature of the transaction must be examined. The court emphasized that merely entering into a partnership does not necessarily imply subletting if the tenant retains control over the premises. However, if the partnership is a cover for subletting, the landlord can challenge it and prove the actual possession transfer.
3. Lastly, the judgment addressed the inheritance of tenancy rights and obligations by the heirs of a deceased tenant. It clarified that unless a legal barrier against heritability exists, heirs inherit both the rights and obligations of the deceased tenant. The court emphasized that heirs cannot inherit only rights without obligations, as that would absolve them of liabilities such as unpaid rent. Therefore, the judgments based on the precedent of A.S. Sulochana's case were set aside, and the matter was remanded for a fresh decision based on the evidence presented by both parties.
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2004 (4) TMI 618
Cancellation of appointment based on fraudulent misrepresentation - Principles of natural justice - Reservation for Other Backward Classes (O.B.C.) in Kendriya Vidyalayas - HELD THAT:- It is not in dispute that so far as the State of Haryana is concerned, at the relevant point of time, Ahirs/Yadavs were not treated as O.B.C. An enquiry was conducted by the District Magistrate wherein it was found that the respondent belonged to the State of Haryana and not the State of Rajasthan and, thus, was not entitled to obtain the said certificate.
It is also not in dispute that he had given an opportunity to show cause as to why his appointment should not be cancelled not only by the appointing authority but also by the appellate authority. In terms of Section 58 of the Indian Evidence Act, facts admitted need not be proved. It is also a well-settled principle of law that the principles of natural justice should not be stretched too far and the same cannot be put in a strait-jacket formula.
Furthermore, the respondent herein has been found guilty of an act of fraud. In our opinion, no further opportunity of hearing is necessary to be afforded to him. It is not necessary to dwell into the matter any further as recently in the case of Ram Chandra Singh v. Savitri Devi & Ors.[2003 (10) TMI 610 - SUPREME COURT].
The Supreme Court found the respondent guilty of fraud, emphasizing that fraud vitiates every solemn act and that fraudulent misrepresentation is deceitful. Given the seriousness of the fraud committed by the respondent, the Court held that no further opportunity of hearing was necessary. The Court set aside the orders of the Central Administrative Tribunal and the High Court, ruling in favor of the appellant and allowing the civil appeal without costs.
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2004 (4) TMI 617
Allotment of industrial plots by the Union Territory, Chandigarh (UTC) - Challenges to the notification declaring land as reserved forest - New industrial policy of 1990 and its implications - Discrimination between consentees and non-consentees - Compensation and redressal for affected allottees - HELD THAT:- We are of the view that the rule of reasonableness and fairness by which every statutory authority is bound, demands that the consentees, who, for no fault on their part, were deprived of the original plots of larger sizes, should not be further made to suffer by demanding from them higher price for the alternative plots of smaller sizes. It would be highly iniquitous to demand from them higher price for smaller sizes of plots and add to their losses caused by undue delay in setting up their industries. The Administration is mainly to be blamed for the situation in which the allottees of plots find themselves today. In preparing scheme and allotting plots, it could not have ignored the notification reserving a part of land for the forest and the restriction to the extent of 900 metres around the Air-Force base. The allottees of the plots have paid full or part price and that amount throughout remained with the Administration.
In such circumstances, the Administration must bear a portion of loss, if any, occasioned to it and compensate to some extent the loss caused to the consentees who never objected to allotment of alternative plots of smaller sizes. The direction no. 2 of the High Court, therefore, to the extent of charging price from the consentees as prevailing on the date of draw of lots i.e. 27.3.1991, deserves to be set aside and substituted with the directions that the consentees on being allotted a particular plot of smaller size shall be charged the same price which was prevailing at the time of original allotment of the plot in their favour. Necessary adjustment or refund of price, as the case may be, shall be given to them for the small size of plot allotted.
Non-consentees are concerned, we are not prepared to accept that by their action and/or inaction, they can claim parity for allotment with the consentees. The consentees have to be considered in priority as, at the first available opportunity, they agreed to the offer of alternative plots of smaller sizes. The non-consentees not only questioned the offer made by the Administration to provide them plots of smaller sizes but even assailed the government notification declaring major part of the land in the scheme as reserved forest. They might have a legitimate right to approach the courts for necessary reliefs but having failed in their challenges in the court, they can claim no right of being treated similarly with consentees who right from the earliest opportunity were willing and trying through the Administration and the court for early allotment of alternative plots.
The consentees and the non-consentees, on the basis of their actions and inactions, constitute two different classes of allottees and a differential treatment to them cannot be held to be unjustified or in violation of Article 14 of the Constitution. On a just and reasonable ground, the consentees deserve a more favourable treatment than non-consentees more so because plots of small sizes available in the existing scheme in Phase-I & II are extremely limited in number.
In the affidavit, there is a second category shown by the Administration as comprising such allottees from whom consent was not asked for as it was proposed to allot them the same size of plot measuring one kanal which they had applied for. In this category, from whom no consent was needed, are allottees of one kanal of plots. Thirteen applicants have been found to have given complete information and fulfilling requisite environmental norms. Their names are also mentioned under category-II of the affidavit.
We have stated, that there is no justification for the non- consentees to claim parity with consentees. The third category pointed out by the Administration and some of whom are also before us represented through their counsel are allottees of one kanal of plots. They are being offered same size of alternative plots and from them no consent was asked for. This category of allottees of one kanal of plot are also required to be accommodated in the available alternative plots.
On this identification of 23 consentees and 13 allottees of one kanal of plot each, the Administration is justifiably required to consider their cases to allot them alternative plots available in industrial areas phase-I and phase-II as shown in their chart (Annnexure-A) annexed to their affidavit.
As a result, the appeals and connected matters are disposed of by substituting/modifying above- mentioned directions for the directions contained in the impugned order of the High Court.
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2004 (4) TMI 616
Issues:
1. Taxability of "Good Night Mats" as insecticide or unclassified item.
Analysis:
The case involves two revisions challenging the Trade Tax Tribunal's order regarding the taxability of "Good Night Mats." The Assessing Authority initially classified the mats as an unclassified item, rejecting the dealer's claim that they should be taxed as insecticides. However, the Tribunal, based on a certificate from the manufacturer, determined that the mats are indeed insecticides containing "Allethrin 4 per cent." The Tribunal concluded that the mats should be taxed at 6 per cent with a surcharge, contrary to the initial classification.
Upon review, the Court referred to previous cases to interpret tax classifications. In the case of Commissioner of Sales Tax v. S/s. Balsara Hygene Products Limited, the Court held that products like Odomass can be considered medicine even if sold outside of traditional medicine shops. The Court also referenced a Supreme Court judgment in the case of Ram Autar Budhi Prasad v. Assistant Sales Tax Officer, emphasizing that tax entries should be understood in common parlance rather than a technical sense.
Furthermore, the Court cited a recent Supreme Court case, Alpine Industries v. Collector of Central Excise, which reiterated the principle of interpreting tax entries based on their popular understanding. In this case, the Supreme Court ruled that a product known as "Lip Salve" was not a medicine as it did not require a prescription from a doctor or a chemist. The Court emphasized the "Commercial Parlance theory" in tax classification.
In analyzing the specific issue of "Good Night Mats," the Court considered the manufacturer's certificate and compared it to a previous Supreme Court case involving a similar product known as "Jet Mats." Despite the manufacturer's certification, the Court concluded that "Good Night Mats" should be classified as a Mosquito Repellant rather than an insecticide. Citing the Supreme Court's authoritative pronouncement on similar cases, the Court set aside the Tribunal's order and deemed the mats taxable as an unclassified item.
In conclusion, the Court allowed the revision, overturning the Tribunal's order and clarifying the tax classification of "Good Night Mats" as a Mosquito Repellant subject to taxation as an unclassified item.
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2004 (4) TMI 615
Issues:
1. Interpretation of regulations for promotion within the Tamil Nadu Housing Board.
2. Validity and applicability of executive instructions issued by the Government of Tamil Nadu.
3. Conflict between statutory regulations and executive instructions in promotion criteria.
4. Judicial review of administrative decisions regarding promotion criteria.
Analysis:
The judgment by the Supreme Court of India dealt with a case involving the Tamil Nadu Housing Board and the promotion criteria for the post of Assistant Executive Engineer. The Board had framed regulations known as Madras State Housing Board Service Regulations, 1969, which specified the eligibility criteria for promotion to the said post. The regulations mandated that Junior Engineers needed 10 years of service for promotion, while Draftsmen required 15 years of service. The Board prepared a promotion panel excluding certain individuals who had not met the service criteria. The individuals challenged this decision through a writ petition under Article 226 of the Constitution, which was initially dismissed by the High Court.
The High Court, on appeal, interpreted that in the absence of a specific quota for promotion, an Executive Order from 1984 would apply. This Executive Order linked promotions to the pay-scale received by employees when no quota was fixed in the feeder category. The Government of Tamil Nadu had issued instructions regarding promotions based on pay scales in different feeder categories. However, the Supreme Court highlighted that the eligibility criteria specified in the statutory regulations were mandatory and had not been questioned for validity. The Court emphasized that if the regulations mandated a certain service period for promotion, executive instructions could not override these criteria.
The Court held that giving preference to Draftsmen over Junior Engineers based on pay scales, as per the executive instructions, would render the eligibility criteria in the regulations meaningless. It concluded that the executive instructions could not supersede the statutory regulations, as this would lead to an absurd outcome. Therefore, the Court found that the High Court had erred in allowing the appeal of the respondents challenging the promotion panel prepared by the Board. Consequently, the Supreme Court set aside the judgments and orders under challenge, allowing the appeal of the appellant-Board, with no order as to costs.
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2004 (4) TMI 614
Issues:
1. Whether brought forward depreciation loss could be set off against capital gain.
Analysis:
The appeal involved a dispute regarding the set off of business loss, specifically the carry forward of depreciation against short-term capital gain. The assessee claimed the set off, which was disallowed, leading to the appeal. The main contention was whether the carry forward depreciation, being part of current depreciation, should have been allowed against the short-term capital gain. The learned Authorised Representative argued that the amendment regarding set off of losses against capital gain was prospective in nature. Reference was made to a speech by the Finance Minister, emphasizing that the proposed amendment limiting the carry forward of unabsorbed depreciation would only have a future impact. The representative also cited a relevant case law to support the argument.
The Departmental Representative, on the other hand, supported the orders of the lower authorities. The Tribunal carefully considered the submissions from both sides and referred to a decision by the Calcutta Bench of the Tribunal in a similar case. The Calcutta Bench had held that the unabsorbed cumulative depreciation up to a certain assessment year merged with the pool of current depreciation for a subsequent assessment year, making it available for set off. Relying on this precedent and the clarification in the Finance Minister's speech, the Tribunal decided the issue in favor of the assessee. As a result, the appeal was allowed.
This judgment clarifies the treatment of carry forward depreciation in relation to setting off against capital gains. It establishes that the unabsorbed cumulative depreciation can be merged with current depreciation for set off purposes, as clarified by the Finance Minister's speech and supported by relevant case law. The decision provides a clear interpretation of the relevant provisions and ensures consistency in the application of tax laws in such cases.
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2004 (4) TMI 613
Ownership and title of the suit properties - Validity of the Wakf Board's declaration of the suit properties as Wakf properties - Admissibility of additional evidence by the appellant - Claim of adverse possession by the respondent - HELD THAT:- Pertaining to the ownership claim of Appellants over the suit property there is no concrete evidence on record. The contention of Appellants that one Arabian saint Mahabari Khandayat came to India and built the Mosque and his lineal descendents possessed the property cannot be accepted if it is not substantiated by evidence and records. As far as a title suit of civil nature is concerned there is no room for historical facts and claims. Reliance on borderline historical facts will lead to erroneous conclusions. The question for resolution herein is the factum of ownership, possession and title over the suit property. Only admissible evidence and records could be of assistance to prove this.
On the other hand, Respondent produced the relevant copy of the Register of Ancient Protected Monuments maintained by the Executive Engineer in charge of the Ancient Monuments (Exb P1) wherein the suit property is mentioned and the Government is referred to as the owner. Since the manner of acquisition is not under challenge the entry in the Register of Ancient Protected Monuments could be treated as a valid proof for their case regarding the acquisition of suit property under the appropriate provisions of the Ancient Monuments Act. Gaining of possession could be either by acquisition or by assuming guardianship as provided under section 4 thereof.
Relevant extracts of Exb P2 - CTS records fortifies their case. It shows that the property stands in the name of Respondent. Moreover, the evidence of Syed Abdul Nabi who is the power of attorney holder (of defendants 2A and 2B in the Original suit) shows that the suit property has been declared as a protected monument and there is a signboard to this effect in the suit property. He also deposed that the Government is in possession of the suit property and the Government at its expenditure constructed present building in the suit property. On a conjoint analysis of Exb P1, P2 and deposition of Syed Abdul Nabi, it could be safely concluded that the Respondent is in absolute ownership and continuous possession of the suit property for the last about one century. Their title is valid. The suit property is government property and not of a Wakf character.
The Old Wakf Act is enacted "for the better administration and supervision of wakfs." Under section 4 of the Old Wakf Act, Survey Commissioner(s) could only make a " survey of wakf properties existing in the State at the date of commencement of this Act." Wakf Board could exercise its rights only over existing wakf properties. Since the suit property itself is not an existing wakf property the Appellant cannot exercise any right over the same. Therefore, all the subsequent deeds based on the presumption that the suit property is a Wakf Property are of no consequence in law.
The Notification bearing No. KTW/531 ASR/74/7490 dated 21/04/1976 issued by the Appellant and Karnataka Gazette Notification page No. 608/Part VI dated 08/07/1976 is null and void. The same is liable to the deleted. In view of this, the aspects relating to treating Gazette Notification as notice and limitation need not be looked into. As regards the compliance of notice u/s 56 of the Old Wakf Act, the High court based on evidence and facts ruled that the same is complied with. This is a finding of fact based on evidence.
As we have already found, Respondent obtained title under the provisions of Ancient Monuments Act. The element of Respondent's possession of the suit property to the exclusion of the Appellant with the animus to possess it is not specifically pleaded and proved. So are the aspects of earlier title of Appellant or the point of time of disposition. Consequently, the alternative plea of adverse possession by Respondent is unsustainable. High Court ought not have found the case in their favour on this ground.
In the result, these appeals stand dismissed.
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2004 (4) TMI 612
Title: Supreme Court Judgment - Delay Condoned
Court: Supreme Court
Citation: 2004 (4) TMI 612 - SC
Judges: Ruma Pal and P. Venkatarama Reddi, JJ.
Decision: Review petitions dismissed.
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2004 (4) TMI 611
Issues involved:
1. Interpretation of Rule 57AD (2) of the Central Excise Rules, 1944 regarding maintaining separate accounts for dutiable and exempted products.
2. Applicability of CENVAT credit and liability under Rule 57AD (2) (b) of the Central Excise Rules, 1944.
3. Dispute over the requirement to pay an amount equal to 8% of the price of exempted goods.
4. Consideration of the Tribunal's decision in the case of Dharamsi Morarjee Chemical Co. Ltd. regarding the reversal of credit.
Analysis:
1. The case involved a dispute regarding the interpretation of Rule 57AD (2) of the Central Excise Rules, 1944, which mandates manufacturers to maintain separate accounts for dutiable and exempted products. The Revenue contended that the respondents failed to maintain separate accounts for inputs used in both types of products, leading to show cause notices for demanding an amount equal to 8% of the price of exempted goods.
2. The Revenue argued that as per Rule 57AD (2), manufacturers must maintain separate accounts for inputs used in dutiable and exempted products. Failure to do so could result in a demand for an amount equal to 8% of the price of exempted goods. However, the respondents had reversed the entire credit with interest, which, according to the Tribunal, absolved them of any liability under Rule 57AD (2) (b) of the Central Excise Rules, 1944.
3. The Tribunal considered the submissions from both sides and noted that the respondents had initially availed CENVAT credit on inputs used in both dutiable and exempted products. It was undisputed that the entire credit was subsequently deposited or reversed with interest. The Tribunal referenced a previous decision in the case of Dharamsi Morarjee Chemical Co. Ltd., which highlighted that once the credit was reversed, the manufacturer could not be deemed to have taken any credit of the duty. Therefore, the Tribunal rejected the Revenue's claim for an amount equal to 8% of the price of exempted goods.
4. In line with the decision in the case of Dharamsi Morarjee Chemical Co. Ltd., where the Tribunal emphasized that if the credit is reversed by the assessee, the provisions of Rule 57AD (2) do not apply. The Tribunal found that since the respondents had reversed the entire credit, the Revenue's demand for the amount equal to 8% of the price of exempted goods was not sustainable. Consequently, all appeals filed by the Revenue were rejected based on the precedent set by the aforementioned case.
This detailed analysis of the judgment provides a comprehensive understanding of the legal issues and the Tribunal's decision regarding the interpretation and application of Rule 57AD (2) of the Central Excise Rules, 1944 in the context of maintaining separate accounts for dutiable and exempted products.
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2004 (4) TMI 610
Issues Involved:
1. Whether the election petition filed by the appellant was lacking in material facts as required under section 83(1)(a) of the Representation of the People Act, 1951.
2. Whether the appellant was holding an office of profit on the date of scrutiny, thereby disqualifying him under Article 102(1)(c) of the Constitution.
3. Whether there is a difference between "voluntary retirement" and "resignation" in service jurisprudence.
Issue-wise Detailed Analysis:
1. Lack of Material Facts in Election Petition:
The core issue was whether the election petition filed by the appellant contained the material facts required under section 83(1)(a) of the Representation of the People Act, 1951. The High Court held that the appellant failed to plead two crucial material facts: the acceptance of his voluntary retirement application by the appointing authority before the date of scrutiny and the acceptance of his request for waiver of the three-month notice period. The absence of these facts led to the dismissal of the election petition. The Supreme Court affirmed this decision, emphasizing that an election petition must include a concise statement of material facts necessary to formulate a complete cause of action. The Court cited precedents, including the case of Sopan Sukhdeo Sable and Ors. v. Assistant Charity Commissioner and Ors., to distinguish between 'material facts' and 'particulars,' underscoring that omission of a single material fact results in an incomplete cause of action.
2. Office of Profit and Disqualification:
The appellant's nomination papers were rejected by the Returning Officer on the grounds that he was holding an office of profit on the date of scrutiny, as his voluntary retirement had not been accepted within the required notice period. The appellant argued that he had relinquished his charge and was not holding an office of profit. However, the Court held that the appellant should have explicitly stated in his petition that his request for waiver of the notice period was granted and that he ceased to be a government servant on the date of scrutiny. The failure to include these material facts justified the rejection of his nomination papers and the dismissal of his election petition.
3. Difference Between Voluntary Retirement and Resignation:
The appellant contended that there was no difference between "voluntary retirement" and "resignation" in service jurisprudence. However, the Court rejected this argument, citing the case of Reserve Bank of India and Anr. v. Cecil Dennis Solomon and Anr., which established that voluntary retirement and resignation are distinct concepts with different legal implications. Voluntary retirement requires the completion of a specified period of service and the approval of the appointing authority, whereas resignation can be unilateral and does not necessarily require prior permission. The Court also referenced the case of UCO Bank and Ors. v. Sanwar Mal to further clarify the distinction, noting that voluntary retirement is a bilateral process involving the employer's acceptance, whereas resignation terminates the employer-employee relationship upon acceptance.
Conclusion:
The Supreme Court upheld the High Court's decision to dismiss the election petition for lack of material facts, affirming that the appellant's failure to plead essential facts regarding the acceptance of his voluntary retirement and waiver of the notice period was fatal to his case. The Court also clarified the legal distinction between voluntary retirement and resignation, reinforcing the requirement for explicit approval in cases of voluntary retirement. Consequently, the appeal was dismissed with no order as to costs.
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2004 (4) TMI 609
Issues:
- Jurisdiction of State Commission to entertain the complaint
- Deficiency in service on the part of the Railway administration
- Liability of Railway administration for loss suffered by the appellant
Jurisdiction of State Commission:
The appellant filed a complaint claiming compensation before the State Commission, alleging that the Railway administration failed to provide protection when she was assaulted and robbed while travelling. The State Commission allowed the claim partly, awarding compensation. The Railway administration contended that the State Commission had no jurisdiction to entertain the complaint under the Consumer Protection Act, 1986. However, the State Commission found the Railway administration negligent in preventing the incident due to their prior knowledge and awarded compensation to the appellant based on the deficiency in service.
Deficiency in service on the part of the Railway administration:
The State Commission concluded that the Railway administration did not take reasonable steps to prevent the incident despite being aware of the yearly occurrences of mob violence on the route. The Railway administration's negligence in providing security measures and protection to passengers, especially an old and sickly lady like the appellant, was evident. The State Commission found the Railway administration liable for the loss suffered by the appellant due to their failure to curb lawlessness by ticketless travellers. The National Commission, without valid reasons, overturned the State Commission's decision, prompting the appellant to appeal.
Liability of Railway administration for loss suffered by the appellant:
The National Commission observed the absence of adequate police force mobilization by the Railway administration before the incident, indicating negligence. The appellant cited a previous court judgment establishing the Railway administration's statutory liability for such incidents. The Supreme Court upheld the State Commission's decision, emphasizing the Railway administration's breach of common law duty to provide reasonable care to passengers. The Court found the Railway administration at fault for the incident and ordered them to pay compensation to the appellant, rejecting the National Commission's decision to set aside the State Commission's order.
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