|
Advanced Search Options
Case Laws
Showing 21 to 40 of 480 Records
-
1998 (11) TMI 683
Issues Involved:
1. Maintainability of the suit.
2. Adequate and equally efficacious alternate remedy under the Delhi Municipal Corporation Act.
3. Bar of jurisdiction under Section 347-E of the Delhi Municipal Corporation Act.
4. Availability of alternative remedy and bar under Section 41(H) of the Specific Relief Act.
Detailed Analysis:
1. Maintainability of the Suit:
The primary issue addressed was whether the suit filed by the plaintiffs was maintainable. The plaintiffs sought a permanent injunction to restrain the defendants from demolishing or sealing their property, alleging that no pre-decisional notice was served, thus violating the principles of natural justice. The court examined the allegations and the procedural requirements under the Delhi Municipal Corporation Act, particularly the necessity of a pre-decisional notice before any demolition action.
2. Adequate and Equally Efficacious Alternate Remedy:
The court noted that under Sections 343 and 347 of the Delhi Municipal Corporation Act, there existed an adequate and equally efficacious alternate remedy. Section 343(1) empowers the Commissioner to order the demolition of unauthorized constructions, provided a reasonable opportunity to show cause is given. The Act also provides for an appeal mechanism under Section 343(2) to the Appellate Tribunal and further to the Administrator under Section 347D. The court emphasized that these provisions offer a complete remedy for the grievances of the plaintiffs.
3. Bar of Jurisdiction under Section 347-E of the Delhi Municipal Corporation Act:
Section 347-E explicitly bars the jurisdiction of courts to entertain any suit, application, or proceeding in respect of any order or notice appealable under Sections 343 or 347B. The court highlighted that the plaintiffs did not challenge the demolition order dated 3.8.1987 in their plaint, nor did they amend the plaint to include this challenge after the written statement was filed. The court relied on the Supreme Court's principles in Shiv Kumar Chadha Vs. MCD, which state that courts should not ordinarily entertain suits related to demolition proceedings initiated under Section 343(1) unless there is a prima facie jurisdictional error.
4. Availability of Alternative Remedy and Bar under Section 41(H) of the Specific Relief Act:
The court also considered Section 41(H) of the Specific Relief Act, which bars the grant of an injunction when an equally efficacious relief is obtainable through other usual modes or proceedings. Since the plaintiffs had an adequate remedy through the appeal provisions under the Delhi Municipal Corporation Act, the court found that the suit for an injunction was also barred under Section 41(H) of the Specific Relief Act.
Conclusion:
The court concluded that the suit was barred under Section 347-E of the Delhi Municipal Corporation Act and Section 41(H) of the Specific Relief Act. Consequently, the plaint was rejected under Order 7, Rule 11(d) of the Code of Civil Procedure. The court advised the plaintiffs to pursue their remedy before the Appellate Tribunal as per the provisions of the Act and ordered them to pay the costs of the defendant.
-
1998 (11) TMI 682
Issues Involved:
1. Utilization of surplus land under Section 10A of the Punjab Security of Land Tenures Act, 1953.
2. Inheritance and exemption of surplus land under Section 10A(b) of the Punjab Act.
3. Compliance with procedural requirements for utilization of surplus land.
4. Validity of possession and allotment of surplus land.
5. Execution of "Kabuliyat" or "Patta" under Rule 20C of the Punjab Security of Land Tenures Rules, 1953.
Detailed Analysis:
1. Utilization of Surplus Land under Section 10A of the Punjab Security of Land Tenures Act, 1953:
The core issue was whether the surplus land declared under the Punjab Act was utilized before the death of the landowner, Banarsi Das, in 1971. Section 10A(a) authorizes the State Government to utilize any surplus area for the resettlement of tenants ejected or to be ejected. The appellants contended that the land was not utilized as per the statutory requirements before the death of Banarsi Das, thus it should not be considered surplus.
2. Inheritance and Exemption of Surplus Land under Section 10A(b) of the Punjab Act:
The appellants argued that the land inherited by them upon the death of Banarsi Das should be exempt from being declared surplus under Section 10A(b). They claimed that since the land was inherited by them and their mother, who were small farmers, it should be exempted from the surplus pool. The court, however, noted that if the land had already been utilized, the exemption would not apply as per Section 10-B.
3. Compliance with Procedural Requirements for Utilization of Surplus Land:
The court examined whether the procedural requirements for the utilization of surplus land, as stipulated in the Punjab Act and the Rules, were followed. This included the issuance of a certificate in Form K-6, delivery of possession to the tenant, and the execution of "Kabuliyat" or "Patta". The court found that the procedural steps were followed, and possession was delivered to Mangat Ram in 1964, as evidenced by the revenue records and various affidavits.
4. Validity of Possession and Allotment of Surplus Land:
The appellants challenged the validity of the possession and allotment of the surplus land to Mangat Ram. The court found that possession was indeed delivered to Mangat Ram in 1964, and he remained in continuous possession. The findings of the lower authorities, including the Collector, Commissioner, and Financial Commissioner, were upheld, indicating that the land was utilized before the death of Banarsi Das.
5. Execution of "Kabuliyat" or "Patta" under Rule 20C of the Punjab Security of Land Tenures Rules, 1953:
The appellants contended that the land could not be considered utilized as Mangat Ram did not execute the "Kabuliyat" in favor of Banarsi Das. The court noted that the execution of "Kabuliyat" is a mandatory requirement under Rule 20C. However, it presumed that all antecedent formalities, including the execution of "Kabuliyat", were complied with, as possession was delivered by the Revenue Circle Officer. The court also emphasized that the absence of "Kabuliyat" on record does not imply non-execution, as it is a document kept by the landowner.
Conclusion:
The Supreme Court dismissed the appeal, affirming that the surplus land was utilized before the death of Banarsi Das, and the procedural requirements were duly followed. The land inherited by the appellants could not be exempted from the surplus pool as it was already utilized. The findings of the lower authorities were upheld, and the possession and allotment in favor of Mangat Ram were deemed valid.
-
1998 (11) TMI 681
Issues involved:
Appeal against judgment under Kerala Land Reforms Act, interpretation of Section 103 of the Act, High Court's jurisdiction under Article 227 of the Constitution of India.
Judgment Summary:
The Supreme Court granted leave to appeal against the High Court's judgment under the Kerala Land Reforms Act. The dispute centered on whether the appellant was the cultivating tenant, with the High Court overturning the lower tribunals' decisions due to non-consideration of material documents. The appellant argued that the High Court exceeded its jurisdiction under Section 103 of the Act by not identifying any erroneous decision of a question of law. The Court acknowledged the appellant's stance that the lower tribunals did not fail to decide any question of law erroneously. However, it noted that the High Court, under Article 227 of the Constitution of India, could quash orders if relevant documents were not considered, potentially leading to a different conclusion. Consequently, the High Court's decision to set aside the tribunals' orders was upheld, and the appeals were dismissed without costs.
In conclusion, the Supreme Court clarified the distinction between the powers of the High Court under Article 227 of the Constitution of India and the revision powers under Section 103 of the Act. While the lower tribunals did not commit errors in deciding questions of law, the High Court could intervene if material documents were not considered, affecting the factual findings. This additional power of the High Court under the Constitution justified the overturning of the tribunals' orders in this case. The Court declined to interfere further under Article 136 of the Constitution of India, affirming the dismissal of the appeals.
-
1998 (11) TMI 680
Issues Involved:
1. Distribution of funds realized from the security held by secured creditors.
2. Rights of secured creditors versus rights of workmen under the Companies Act, 1956.
3. Application of Sections 529, 529A, and 530 of the Companies Act, 1956.
4. Determination and enforcement of workmen's charge on the security.
5. Procedural requirements for proving claims in winding up proceedings.
Detailed Analysis:
1. Distribution of Funds Realized from Security Held by Secured Creditors:
The appeals challenge the order directing the distribution of Rs. 1,500 per workman on an adhoc basis from the Rs. 2.6 crores realized from the security held by secured creditors. The secured creditors were not granted access to an equivalent amount. The secured creditors sought the release of a like amount in their favor, arguing that the realization of security should be accessible to them, as it is their money subject to the workmen's charge under Section 529 of the Companies Act.
2. Rights of Secured Creditors versus Rights of Workmen under the Companies Act, 1956:
The secured creditors argued that the money realized from the security is primarily theirs, except for the portion statutorily charged in favor of the workmen. The court noted that the secured creditors have a right to the money until their dues are fully satisfied, and if the workmen's share is undetermined, no amount should be released to either party.
3. Application of Sections 529, 529A, and 530 of the Companies Act, 1956:
Section 529 creates a charge in favor of workmen on the security held by secured creditors. The charge is proportionate to the outstanding dues of the workmen and the secured creditors. Section 529A gives priority to workmen's dues and the unsatisfied portion of secured creditors' dues due to workmen's participation in the security. Section 530 deals with preferential payments, excluding workmen from the definition of employees for this purpose, as their dues are covered under Section 529A.
4. Determination and Enforcement of Workmen's Charge on the Security:
The court emphasized that before enforcing the workmen's charge, the extent of their proportion in the security must be determined. This determination is necessary to know the amount to be appropriated for workmen's dues. The Official Liquidator is responsible for this determination and for enforcing the workmen's charge.
5. Procedural Requirements for Proving Claims in Winding Up Proceedings:
The court highlighted the necessity for workmen to lodge and prove their claims before the Official Liquidator. This process ensures that the claims are verified and admitted, facilitating the determination of workmen's proportion in the security. The court criticized the delay in initiating this process, stressing that it should begin promptly to expedite the winding-up process and distribution of realizations.
Conclusion:
The court found substance in the secured creditors' contention that they should have access to an equivalent amount disbursed to the workmen. It directed that an amount equal to what was disbursed to the workmen be paid to the secured creditors on a rateable basis. The payment to the workmen was subject to the Official Liquidator verifying the genuineness of their claims. The appeals were disposed of as partly allowed, with no order as to costs.
-
1998 (11) TMI 679
Issues Involved:
1. Jurisdiction of the Company Law Board under Section 111 and Section 111A of the Companies Act, 1956.
2. Rectification of the register of members, cancellation of duplicate share certificates, and issuance of fresh shares.
3. Entitlement to bonus shares and compliance with Section 113(2) of the Companies Act, 1956.
Issue-wise Detailed Analysis:
Issue No. 1: Jurisdiction of the Company Law Board
The Company Law Board (CLB) examined whether it had jurisdiction to entertain the petition under Section 111 for rectification of the register of members regarding public limited companies. The CLB referred to the case of *Shashi Prakash Khemka v. NEPC Micon Ltd.* [1997] 90 Comp Cas 228, which held that with the coming into force of Sub-section (14) of Section 111 on September 20, 1995, Section 111 was no longer applicable to public companies. Although the petition was not maintainable under Section 111(4), the CLB considered it on merits under Section 111A to meet the ends of justice. The CLB rejected the company's contention that the petitioner failed to approach within two months of the transfer, citing *Shashi Prakash Khemka v. JVEPC Micon Ltd.* [1999] 95 Comp Cas 583 (CLB) and *NEPC Agro Foods Ltd. v. Hindustan Thompson Associates Ltd.* [1999] 95 Comp Cas 532 (Mad). Thus, the petition was maintainable under Section 111A.
Issue No. 2: Rectification, Cancellation, and Issuance of Shares
The petitioner alleged irregularities in issuing duplicate certificates and registering the transfer of shares, citing non-compliance with Section 108 of the Act. The CLB noted that the petitioner had not taken steps to trace the original share certificates, whereas the company had lodged a police complaint about the missing certificates. The petitioner did not initially question the issuance of duplicate certificates but later reconciled with the company's actions. The CLB found no convincing evidence that the shares were missing from the petitioner's custody. The duplicate certificates were issued under the authority of the transfer committee, and the petitioner had consented to the transfer of shares, as evidenced by his letters and withdrawal of the civil suit. The CLB concluded that the transfer was effected with the petitioner's consent and no violation of Section 108 was established.
Issue No. 3: Entitlement to Bonus Shares
The petitioner claimed entitlement to 200 bonus shares and alleged non-compliance with Section 113(2) of the Act by the company. The company argued that under Section 206A, it was obliged to keep the issue of bonus shares in abeyance while the transfer of original shares was pending. The CLB agreed with the company, noting that the petitioner had executed transfer instruments for the bonus shares, and the company acted in accordance with the law. The CLB found no merit in the petitioner's claim regarding the bonus shares.
Conclusion:
The CLB dismissed the petition, finding no grounds for rectification of the register, cancellation of duplicate certificates, or issuance of fresh shares. The petitioner had consented to the transfer, and the company had acted within legal bounds. The petitioner's claims of coercion and non-compliance were not substantiated, and the company had taken adequate precautions to protect the petitioner's interests. The petition was dismissed without any order as to costs.
-
1998 (11) TMI 678
Issues Involved:
1. Partial Eviction of Tenant-Defendant
2. Cross-Objection by Plaintiff-Respondent for Full Eviction
3. Mesne Profits Quantification
4. Requirement for Landlord's Own Occupation under West Bengal Premises Tenancy Act, 1956
5. Evidence and Cross-Examination
6. Alternative Accommodation and Controlled Companies
7. Legal Interpretation and Precedents
Issue-wise Detailed Analysis:
1. Partial Eviction of Tenant-Defendant:
The appeal arises from a judgment and decree dated 9-7-1996 permitting partial eviction of the tenant-defendant and ordering a reference as to mesne profits. The tenanted area involved is nearly 37,000 square feet, with eviction allowed for 26,305 square feet by the first Court.
2. Cross-Objection by Plaintiff-Respondent for Full Eviction:
The plaintiff-respondent filed a cross-objection claiming entitlement to full eviction and requested the Court to quantify mesne profits. The premises in question is located at 4, Mangoe Lane, a congested office locality in Calcutta.
3. Mesne Profits Quantification:
The plaintiff claimed mesne profits at Rs. 15 per square foot. During the appeal, an interlocutory appellate order allowed the appellant to occupy the premises on deposit of charges at Rs. 25 per square foot for 24,000 square feet. The Court ultimately allowed mesne profits at Rs. 15 per square foot per month from the date of the first Court's decree for 26,305 square feet, and from the date of the appellate decree for the remaining area.
4. Requirement for Landlord's Own Occupation under West Bengal Premises Tenancy Act, 1956:
The primary legal issue was whether the landlord's requirement for space for its own departments, which also serve its controlled companies, qualifies as "own occupation" under Section 13(1)(ff) of the West Bengal Premises Tenancy Act, 1956. The Court concluded that the requirement for the landlord's own departments, even if they serve associated companies, satisfies the condition for "own occupation."
5. Evidence and Cross-Examination:
The evidence provided by Bhaskar Gupta, the principal witness for the plaintiff, went largely unchallenged by the defendants. The Court emphasized the importance of cross-examining witnesses to challenge their credibility, citing the principle from Browne v. Dunn and its application in Indian jurisprudence.
6. Alternative Accommodation and Controlled Companies:
The defendants argued that the plaintiff had alternative accommodation at 2, Fairlie Place, which it did not utilize. The Court found that the plaintiff's controlled companies' occupation of vacated space did not constitute alternative accommodation in the tenancy sense. The Court held that the plaintiff's need for space for its controlled companies is reasonably related to its own need.
7. Legal Interpretation and Precedents:
The Court discussed numerous cases and statutes, including the definition of "landlord" in the West Bengal Premises Tenancy Act, 1956, and the interpretation of "own occupation." It concluded that the requirement for the landlord's own departments, even if converted into companies, does not alter the landlord's need for space. The Court also addressed the concept of piercing the corporate veil, stating that the degree of control exercised by the plaintiff over its subsidiaries was not challenged and thus did not affect the plaintiff's claim.
Conclusion:
The Court allowed the plaintiff's claims in full, granting eviction from the entirety of the three floors under occupation of the defendant. The cross-objection succeeded, and mesne profits were quantified at Rs. 15 per square foot per month. The appeal by the defendants failed, and the decree was altered to reflect full eviction and mesne profits without the necessity of a reference. The Court also granted a stay of operation of the appellate decree for four months.
-
1998 (11) TMI 677
Issues Involved:
The issues involved in this case are:
1. Whether the award of interest prior to the date of the reference was within the power and jurisdiction of the arbitrator?
2. Even if it was within the jurisdiction of the arbitrator, whether Clause 1.9 barred such consideration?
3. Whether such an objection could have been raised before the court in objections under Section 30 of the Act?
4. Whether the reduction of interest from 15.5 per cent to 6 per cent from the date of the decree till satisfaction of the decree as ordered by the High Court was justified?
Issue 1:
The Supreme Court noted a previous decision that ruled the arbitrator had the authority to award interest even for the pre-reference period. The Court found that the arbitrator had the power to grant such pre-reference period interest, especially since the cause of action for reference arose after the enactment of the Interest Act, 1978.
Issues 2 and 3:
The Court examined Clause 1.9 of the Contract, which prohibited claims for delayed payment due to disputes. The Court found that the claim for interest by way of damages was not barred by this clause, as it pertained to specific types of amounts related to disputes between the parties. The Court held that the arbitrator's interpretation of the clause was valid, and objections under Section 30 of the Arbitration Act could not be raised against it.
Issue 4:
Regarding the reduction of interest from 15.5 per cent to 6 per cent, the Court found that the arbitrator was limited by the law to award only 6 per cent interest. However, the Court clarified that the trial court had the discretion to award 15.5 per cent interest, which could not be set aside by the High Court. Therefore, the Court allowed the cross-appeal to modify the interest rate to 15.5 per cent per annum from the date of the decree till payment.
In conclusion, the Supreme Court dismissed Civil Appeal No. 7643 of 1995 and allowed the Civil Appeal arising out of Special Leave Petition (Civil) No. 6307 of 1995 to the limited extent of modifying the interest rate. The judgment of the High Court was modified accordingly, and the order of the trial court was confirmed.
-
1998 (11) TMI 676
Issues Involved:
1. Deletion of disallowance of Rs. 48,05,871 for provision for compensation under the voluntary retirement scheme (VRS).
2. Deletion of interest amount of Rs. 14,19,296 charged under section 215 of the Income Tax Act.
Issue-wise Detailed Analysis:
1. Deletion of Disallowance of Rs. 48,05,871 for Provision for Compensation under VRS:
The department appealed against the deletion of disallowance of Rs. 48,05,871, which was the provision for compensation under the voluntary retirement scheme (VRS). The assessee company, a manufacturer of empty hard gelatine capsules, introduced a VRS in 1986, and 218 employees opted for it. The total liability was computed at Rs. 91,33,219, with Part I amounting to Rs. 43,27,348 paid before the end of the accounting year and Part II amounting to Rs. 48,05,871 to be paid ten months after retirement. The assessee, following the mercantile system of accounting, debited the entire amount in its accounts for the year.
The Assessing Officer (AO) did not dispute the revenue nature of the expenditure but concluded that the liability for Part II payment did not accrue during the year, deeming it contingent upon certain conditions. Consequently, the AO disallowed the claim for Part II payment.
The CIT(A) allowed the claim, reasoning that there was no tax planning scheme, the assessee intended not to treat the money as its own, the event giving rise to the liability occurred during the relevant previous year, and it had no correlation with the subsequent year's income-earning activity.
The department's representative argued that Part II liability was contingent, referencing clauses of the VRS and the Supreme Court decision in Shree Sajjan Mills Ltd. v. CIT.
The assessee's counsel contended that the liability had accrued during the year, with payment being a procedural aspect, and cited several case laws supporting the accrual of liability.
Upon consideration, it was determined that the liability for Part II was contingent, as it depended on employees not taking up employment in similar units within ten months of retirement. This was supported by definitions and guidelines from the ICAI and various case laws, distinguishing the present case from those cited by the assessee.
The tribunal concluded that the CIT(A) was not justified in allowing the deduction of additional compensation amounting to Rs. 48,05,871, and restored the disallowance made by the AO.
2. Deletion of Interest Amount of Rs. 14,19,296 Charged under Section 215 of the Income Tax Act:
The second issue was the deletion of interest amounting to Rs. 14,19,296 charged under section 215. The AO levied interest under section 215, but the CIT(A) canceled it, observing that the main difference between estimated and assessed income arose from the unforeseen disallowance of additional compensation.
The assessee estimated its income at Rs. 10 lakhs and paid advance tax accordingly but was assessed at Rs. 74,21,920. The tribunal disagreed with the CIT(A), referencing the Supreme Court decision in Central Provinces Manganese Ore Co. Ltd. v. CIT, which held that the jurisdictional fact attracting the levy could not be disputed, and it was a matter of satisfying the relevant authority for reduction or waiver of interest.
The tribunal restored the levy of interest, advising the assessee to approach the AO for reduction or waiver under section 215(4) if desired.
Conclusion:
The appeal of the department was allowed, restoring both the disallowance of Rs. 48,05,871 for provision for compensation under VRS and the interest amount of Rs. 14,19,296 charged under section 215.
-
1998 (11) TMI 675
Issues Involved:
1. Validity of Section 68 of the Foreign Exchange Regulation Act, 1973 (FERA) under Articles 14 and 21 of the Constitution.
2. Interpretation of the term "in charge of and responsible to" in Section 68.
3. Applicability of Mens Rea (guilty mind) to contraventions under FERA.
4. Whether simultaneous adjudication and prosecution proceedings can be initiated under FERA.
5. Applicability of Section 68 to penalty proceedings under Sections 50 and 51 of FERA.
Detailed Analysis:
1. Validity of Section 68 of FERA under Articles 14 and 21 of the Constitution:
The petitioners argued that Section 68 is violative of Articles 14 and 21 of the Constitution, as it imposes liability through legal fiction without actual contravention by the accused. They contended that the burden of proving innocence is unjust and violates the "due process" doctrine under Article 21. The court, however, held that Section 68 does not violate Articles 14 and 21. The court emphasized that the legislative intent behind Section 68 is to ensure compliance with FERA, and the provision is just, reasonable, and fair. The court also noted that the procedural safeguards under FERA, including the requirement for a complaint by specific officers and the non-cognizable nature of offences, provide adequate protection to the accused.
2. Interpretation of the term "in charge of and responsible to" in Section 68:
The petitioners contended that the term "in charge of and responsible to" should be read conjunctively, meaning that an individual must be both in charge of and responsible for the conduct of the business to be held liable. The court disagreed, stating that the terms are synonymous and mutually exchangeable. The court held that a person in charge of the business is necessarily responsible for it, and vice versa. The court found that the notices issued by the Directorate of Enforcement were compliant with Section 68, as they specified the positions of the individuals in relation to the business of the company at the time of contravention.
3. Applicability of Mens Rea to contraventions under FERA:
The petitioners argued that Mens Rea should be an essential ingredient of contraventions under FERA, relying on legislative history and judicial precedents. The court, however, held that Mens Rea is not required for contraventions under Sections 8 and 9 of FERA. The court noted that the legislative history and the Supreme Court's decision in Mayer Hans George case established that contraventions under FERA are absolute offences, and the burden of proving the absence of Mens Rea lies on the accused. The court also pointed out that Section 59 of FERA, which presumes culpable mental state, applies only to offences requiring such a state, and not to all contraventions under the Act.
4. Whether simultaneous adjudication and prosecution proceedings can be initiated under FERA:
The petitioners contended that prosecution under Section 61 cannot be initiated until adjudication under Sections 50 and 51 is complete, relying on the Supreme Court's decision in Rayala Corporation case under the 1947 Act. The court rejected this argument, stating that the scheme under the 1973 Act is different and more stringent. The court held that prosecution and penalty proceedings under FERA are independent and can proceed simultaneously. The court emphasized that the mandate of Section 56 is clear and does not leave any discretion to the authorities in this regard.
5. Applicability of Section 68 to penalty proceedings under Sections 50 and 51 of FERA:
The petitioners argued that Section 68, which deals with offences by companies, cannot be applied to penalty proceedings under Sections 50 and 51. The court agreed, stating that Section 68 specifically refers to liability for punishment and does not extend to penalty proceedings. The court noted that Section 50 provides for penalties against the company as a person contravening the Act, and extending Section 68 to penalty proceedings would create an anomaly. The court held that while Section 68 cannot be invoked for penalty proceedings, the notices issued under Section 68 do not invalidate the proceedings, and penalties can still be imposed under Sections 50 and 51.
Conclusion:
The petitions were dismissed, and the court upheld the validity and applicability of Section 68 of FERA, while clarifying its limited scope concerning penalty proceedings. The court also affirmed the independence of adjudication and prosecution proceedings under FERA.
-
1998 (11) TMI 674
Issues Involved:
1. Constitutional validity of the Kerala Industrial Establishments (National and Festival Holidays) (Amendment) Act, 1990.
2. Violation of Fundamental Rights under Article 19(1)(g).
3. Reasonableness of restrictions under Article 19(6).
4. Compliance with Directive Principles of State Policy.
5. Applicability of principles of natural justice in legislative action.
Summary:
1. Constitutional Validity of the Amending Act:
The Supreme Court examined the constitutional validity of the Kerala Industrial Establishments (National and Festival Holidays) (Amendment) Act, 1990, which increased national holidays from three to four and festival holidays from four to nine, raising the total compulsory paid holidays from seven to thirteen. The appellants challenged this amendment, arguing it violated their Fundamental Right under Article 19(1)(g) to carry on their trade, business, or profession.
2. Violation of Fundamental Rights under Article 19(1)(g):
The appellants contended that the increased holidays imposed unreasonable restrictions on their right to carry on trade or business, resulting in a loss of production and financial burden due to payment of wages for non-working days. The Court noted that Article 19(1)(g) is not absolute and is subject to reasonable restrictions under Article 19(6).
3. Reasonableness of Restrictions under Article 19(6):
The Court referred to several precedents, including the classic judgment in State of Madras vs. V. G. Row, to determine the reasonableness of restrictions. It emphasized that the test of reasonableness should consider the nature of the right infringed, the purpose of the restrictions, and the prevailing conditions. The Court found that the restrictions imposed by the Amending Act were reasonable and in the interest of the general public.
4. Compliance with Directive Principles of State Policy:
The Court highlighted that while Directive Principles of State Policy are not enforceable, they are fundamental in governance and should guide the State in making laws. Article 43, which mandates the State to secure a living wage and decent working conditions for workers, was particularly relevant. The Court noted that the increased holidays aimed to ensure workers' leisure and social and cultural opportunities, aligning with Article 43.
5. Applicability of Principles of Natural Justice in Legislative Action:
The appellants argued that they should have been given an opportunity to be heard before the amendment was enacted. The Court rejected this argument, stating that principles of natural justice do not apply to legislative actions. The Legislature, exercising its plenary power under Article 245, is not required to provide a hearing before enacting a law.
Conclusion:
The Supreme Court upheld the constitutional validity of the Kerala Industrial Establishments (National and Festival Holidays) (Amendment) Act, 1990. It ruled that the increased holidays did not violate the Fundamental Right under Article 19(1)(g) and were reasonable restrictions under Article 19(6). The Act was also consistent with the Directive Principles of State Policy. The appeal was dismissed without any order as to costs.
-
1998 (11) TMI 673
Issues:
1. Eviction order quashed by High Court under Article 227 of the Constitution of India.
2. Dispute over sub-letting and tenancy rights.
3. Interpretation of Section 15A of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
4. Validity of eviction decree based on unlawful subletting.
5. Sufficiency of averments in the plaint regarding subletting.
6. Jurisdiction of High Court under Article 227.
Analysis:
1. The landlords obtained an eviction order from the Court of Small Causes, which was confirmed in appeal but quashed by the High Court under Article 227. The Supreme Court granted leave to appeal against this decision.
2. The dispute involved the claim by the second respondent to be the daughter of the original tenant, Shanta Sabnis, and the contention that the first respondent was in possession under a leave and license agreement. The trial court found in favor of the landlords, holding that the first respondent's possession amounted to unlawful subletting.
3. The interpretation of Section 15A of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 was crucial. The trial court rejected the first respondent's claim for protection under this section, concluding that his induction into the building constituted unlawful subletting.
4. The appellate authority upheld the eviction decree and extended it to include subletting to the third defendant, despite the sub-tenant having vacated the premises. The High Court, however, overturned these findings based on the absence of clear averments in the plaint regarding subletting.
5. The High Court's decision was primarily based on the insufficiency of averments in the plaint regarding subletting. The single judge emphasized the necessity of specific allegations in the pleading to establish unlawful subletting, which the landlords had failed to provide initially.
6. The High Court's intervention under Article 227 was deemed excessive as it exceeded its jurisdiction. The Supreme Court held that the High Court erred in disturbing the concurrent findings of the lower courts based on the adequacy of the averments in the plaint. Consequently, the Supreme Court allowed the appeal, setting aside the High Court's judgment and reinstating the trial court's order.
-
1998 (11) TMI 672
Issues Involved:
1. Whether money received by the employees of the Indian subsidiary, by exercise of stock option granted to them, constitutes income from salaries.
2. Whether tax has to be deducted u/s 192 of the Income-tax Act, 1961, by the applicant-company on the amount earned by the employees of the subsidiary from the exercise of stock option granted to them.
Summary:
Issue 1: Income from Salaries
The applicant, a US-based company, proposed a stock option agreement for employees of its fully owned Indian subsidiary. The employees could subscribe to shares of the US company at a pre-determined price lower than the market price, sell them in the US market, and repatriate the net gain to India. The core question was whether the money received by the employees from this scheme constitutes income from salaries.
The ruling referenced cases such as Bentley v. Evans and Abbott v. Philbin, which dealt with similar issues under English law. It was established that the benefit derived from stock options is a perquisite or profit arising out of employment. Under Indian law, "salary" includes perquisites or profits in lieu of or in addition to any salary or wages as defined u/s 17. The court concluded that the benefit from the stock option scheme, offered by the American parent company to the employees of the Indian subsidiary, constitutes additional remuneration and thus falls under the definition of "salary" u/s 15 and 17 of the Income-tax Act.
Issue 2: Tax Deduction u/s 192
The second issue was whether the applicant-company must deduct tax at source u/s 192 on the amount earned by the employees from the stock option scheme. The court noted that the American company, by offering the stock option, effectively took on the responsibility of paying what is considered "salary" to the employees of the Indian subsidiary. Consequently, the provisions of section 192, which mandate the deduction of tax at source on salary payments, were applicable. The American company was thus obligated to deduct income tax at source before making any payments to the employees.
Conclusion
The Authority for Advance Rulings concluded that:
1. The money received by the employees from the exercise of the stock option constitutes income from salaries.
2. The applicant-company is required to deduct tax at source u/s 192 on the amount earned by the employees from the stock option scheme.
Both questions were answered in the affirmative and in favor of the Revenue.
-
1998 (11) TMI 671
Issues Involved:
1. Validity of the licence for importing Acrylic Scrap Material.
2. Whether the exported goods used Acrylic Material.
3. Correct availing of the benefit of Notification No. 203/92.
4. Overvaluation of the exported goods.
5. Undervaluation of the imported goods.
Issue-wise Detailed Analysis:
1. Validity of the Licence for Importing Acrylic Scrap Material:
The appellants held a licence allowing the import of "Relevant Plastic Scrap Materials" for the manufacture of garbage plastic bags. The Tribunal observed that the term "Plastics" included acrylic material, thus validating the licence for importing acrylic scrap material. The flexibility clause in the Import & Export Policy allowed the import of any plastic scrap not listed as a sensitive item, which included acrylic scrap.
2. Whether the Exported Goods Used Acrylic Material:
The appellants claimed that the garbage bags exported contained acrylic strips. The Tribunal examined various statements and test reports. The Chemical Examiner's reports indicated the presence of acrylic material in the exported bags. Despite some discrepancies in weight and material composition, the Tribunal found no substantial evidence to discard the Chemical Examiner's findings. The statements of the workers and the Power-of-Attorney holder did not conclusively prove the non-use of acrylic material. Therefore, the Tribunal accepted that acrylic material was used in the exported goods.
3. Correct Availing of the Benefit of Notification No. 203/92:
Notification No. 203/92 required that imported materials should not be disposed of before fulfilling the export obligation and realizing the export proceeds. The Tribunal noted that the appellants had sold the imported materials before the full realization of export proceeds, violating condition (vi) of the notification. The Tribunal emphasized that the condition should be interpreted strictly, and the benefit of the notification could not be availed if the export proceeds were not fully realized before the sale of imported materials.
4. Overvaluation of the Exported Goods:
The Tribunal found that the lower authority had rightly suspected the overvaluation of the exported goods based on the cost of production and the declared export value. The appellants' declared value was significantly higher than the cost of production. The Tribunal directed the lower authority to re-examine the value of the exported goods in terms of Section 14 of the Customs Act, considering the parameters of international trade.
5. Undervaluation of the Imported Goods:
The Tribunal upheld the lower authority's finding that the imported acrylic scrap was undervalued. The appellants accepted the revision of the value from US $150 to US $240 per MT for the scrap. The Tribunal also upheld the enhancement of the value for off cuts and photoframes from US $240 to US $450 per MT based on contemporaneous imports. The imported goods were rightly confiscated under Section 111(m) of the Customs Act for misdeclaration of value.
Final Determination:
The Tribunal remanded the matter for re-determination of the value of the exported goods and the quantum of goods that could be imported duty-free. The final determination of the redemption fine and penalty would depend on the extent of overvaluation of the exported goods. The Tribunal also directed that penalty could be levied either on the partnership firm or the partners, but not both. The duty demand of Rs. 72,47,895/- was confirmed, and the appeals were disposed of accordingly.
-
1998 (11) TMI 670
... ...
... ... ..... aik, JJ. ORDER Appeal dismissed.
-
1998 (11) TMI 669
Issues: Determination of whether rents from a godown constitute business income or income from house property.
Summary:
The appeal concerns the classification of rents received for a godown as business income or income from house property. The Assessing Officer assessed the income as Property Income based on ownership, citing legal precedents. The CIT(A) upheld this decision, referencing a Supreme Court ruling. The appellant argued that the godowns were used for business purposes, providing detailed evidence of commercial activities conducted in the warehouses. The appellant cited a Gujarat High Court case and various agreements to support their claim. The appellant also referenced legal principles from the Gujarat High Court and Supreme Court decisions, emphasizing the commercial nature of the assets. The President of ITAT Mumbai reviewed additional Supreme Court decisions related to property ownership and leasing for business purposes. The President concluded that the godowns were commercial assets intended for business use, thus classifying the rent receipts as business income. Consequently, the orders of the lower authorities were set aside, and the appeal was allowed.
-
1998 (11) TMI 668
Issues:
1. Disciplinary authority's power to order a fresh or de novo enquiry.
2. Validity of the High Court's decision regarding the authority to order a fresh enquiry.
3. Interpretation of Rule 27(c)(2) and its application in the case.
4. Comparison of powers between the Disciplinary Authority and the appellate authority.
5. Direction for expeditious completion of the enquiry.
Analysis:
1. The respondent, an Asst. Sub-Inspector in CRPF, was transferred but failed to report for duty at the new location, leading to charges of disobedience, neglect of duty, and misconduct. An enquiry was conducted, but the Disciplinary Authority found irregularities and ordered a fresh enquiry. The High Court initially allowed the appeal, stating the Disciplinary Authority lacked the power to order a fresh enquiry, but the Supreme Court disagreed. The Court held that Rule 27(c) empowered the Disciplinary Authority to set aside findings and order a de novo enquiry in case of vital defects, ensuring justice and proper procedure.
2. The respondent's counsel argued based on a previous case that the Disciplinary Authority cannot order a fresh enquiry. However, the Supreme Court clarified that if there are serious defects or crucial evidence is omitted, the Disciplinary Authority can order a new enquiry under Rule 27(c). The Court emphasized the distinction between setting aside an enquiry due to procedural flaws versus personal dissatisfaction with the report, supporting the Authority's power to ensure a fair process.
3. Rule 27(c)(2) mandates that material evidence must be oral or documentary, recorded directly by the enquiry officer, allowing cross-examination. In this case, letters were improperly treated as witness statements, violating the rule. The Court upheld the Disciplinary Authority's decision to set aside the enquiry due to procedural violations, highlighting the importance of following prescribed procedures for evidence collection.
4. The Court rejected the High Court's reasoning that only the appellate authority could order a fresh enquiry, emphasizing that the Disciplinary Authority must be satisfied with the enquiry process. The judgment clarified that the Authority can order a new enquiry if significant defects impact the rights of the parties involved, ensuring a just and thorough investigation.
5. Considering the prolonged proceedings, the Court directed the completion of the enquiry within three months for a timely resolution. The appeal was allowed, and the writ petition was dismissed, with no costs imposed. The Court's decision upheld the Disciplinary Authority's power to order a fresh enquiry in cases of procedural irregularities, ensuring fairness and adherence to legal standards.
-
1998 (11) TMI 667
Issues Involved:
The judgment involves determining whether taxes paid in excess and interest paid by revenue authorities to a UK company constitute 'debt-claims of every kind' under the Double Taxation Avoidance Agreement between India and the United Kingdom.
Taxes Paid in Excess:
The applicant, a UK company, sought clarification on whether taxes paid in excess of tax due, along with interest, would be considered 'debt-claims of every kind' under the DTAA. The company had received income from various sources in India, and the Assessing Officer later discovered a refund due to the company. The interest on this refund was determined under section 244/243 of the Income-tax Act, and the company argued that it should be taxed according to the DTAA provisions. The judgment clarified that the interest income, arising in India due to delayed refund, should be assessed as per the DTAA, specifically paragraph 2 of article 12. It was established that the applicant did not have a permanent establishment in India, and the interest was statutory, not arising from business operations. Therefore, the interest paid on delayed refund falls under paragraph 2 of article 12 of the DTAA, and the application was successful.
Interest Paid by Revenue Authorities:
The second issue pertained to interest of a specific amount paid by revenue authorities under section 244/243 of the Income-tax Act, along with tax refunds due to the UK company. The company argued that this interest should qualify as 'income from debt-claims of every kind' under the DTAA. The judgment analyzed the provisions of the DTAA, particularly article 12, and concluded that the interest paid on delayed refund, being a debt owing and payable, was not connected to any permanent establishment in India. The interest arose solely due to the delay in refunding excessive tax collections, falling under paragraph 2 of article 12 of the DTAA. Therefore, both questions raised by the applicant were answered affirmatively in favor of the company.
-
1998 (11) TMI 666
Issues Involved:
1. Addition on account of benami investment in properties at Bangalore.
2. Disallowance of fees paid for acquiring membership of Otters Club.
3. Addition on account of low household withdrawals.
4. Restriction of deductions u/s 80RR.
5. Addition u/s 28(iv) of the Income-tax Act.
Summary:
1. Addition on account of benami investment in properties at Bangalore:
The premises of the assessee were searched u/s 132, leading to the discovery of an agreement indicating a Rs. 31 lakh investment in Bangalore properties. The Assessing Officer treated this as the assessee's undisclosed income. However, the Tribunal found that the agreement and statements from relevant parties indicated that the investment was made by Mrs. Kiran Mohan, not the assessee. The Tribunal noted that the possession of the agreement by the assessee was reasonably explained and directed the deletion of the Rs. 31 lakh addition.
2. Disallowance of fees paid for acquiring membership of Otters Club:
The Assessing Officer disallowed Rs. 2,50,000 paid for club membership, treating it as income from undisclosed sources. The Tribunal referenced several judicial decisions supporting the deduction of such fees and found no justification for treating it as undisclosed income. The addition was directed to be deleted.
3. Addition on account of low household withdrawals:
The Assessing Officer added Rs. 4 lakhs due to perceived low household withdrawals. The Tribunal found that the withdrawals were reasonable based on the assessee's income in earlier years and that no material evidence supported the addition. Therefore, the addition was deleted.
4. Restriction of deductions u/s 80RR:
The Assessing Officer restricted deductions u/s 80RR, but the Tribunal held that such disallowances could not be made in proceedings to assess undisclosed income u/s 158BC. The Tribunal directed that the disallowance be deleted.
5. Addition u/s 28(iv) of the Income-tax Act:
The Assessing Officer added Rs. 3,91,650 as income from profession u/s 28(iv) for expenses incurred on the assessee's family during foreign trips. The Tribunal found that the assessee's health necessitated family accompaniment and that such additions could not be considered in proceedings for undisclosed income. The addition was directed to be deleted.
Conclusion:
The Tribunal allowed the assessee's appeal, directing the deletion of all contested additions and disallowances.
-
1998 (11) TMI 665
Issues Involved:
1. Legality of the High Court's jurisdiction in entertaining the revision petition.
2. Professional conduct and ethics of legal counsel in boycotting court proceedings.
3. Validity and implications of the order passed by the Additional District Judge.
4. Request for transfer of the case to another court.
Detailed Analysis:
1. Legality of the High Court's Jurisdiction in Entertaining the Revision Petition:
The Supreme Court found that the High Court committed a jurisdictional error by entertaining the revision petition filed by the respondent challenging the order dated 21.5.1998. The order was not revisable by the High Court due to the specific interdict embodied in the proviso to Section 115(1) of the Code of Civil Procedure (CPC). The proviso restricts the High Court from varying or reversing any order unless it would finally dispose of the suit or cause irreparable injury. The Supreme Court noted that neither condition was met in this case, as the order did not dispose of the suit nor would its standing cause irreparable injury or a failure of justice.
2. Professional Conduct and Ethics of Legal Counsel in Boycotting Court Proceedings:
The judgment emphasized that judicial functions should not be obstructed by tactics such as boycotts or pressure strategies from litigants or counsel. The court criticized the conduct of the respondent's counsel, who abstained from appearing in court due to a boycott call by the Delhi Bar Association, labeling such behavior as unprofessional and unbecoming of an advocate's status. The court reiterated the duty of advocates to attend court proceedings and fulfill their professional obligations, as highlighted in previous decisions, such as Lt. Col. S.J. Chaudhary v. State, where it was stressed that failing to attend after accepting a brief constitutes a breach of professional duty.
3. Validity and Implications of the Order Passed by the Additional District Judge:
The Supreme Court upheld the order passed by the Additional District Judge on 21.5.1998, finding no legal infirmity or potential for causing a failure of justice. The order was a result of the respondent's counsel's decision to boycott the court, and the Supreme Court held that the party responsible for creating such a situation could not later complain about the resulting order. The court reaffirmed that no court is obliged to adjourn proceedings due to a strike or boycott by advocates.
4. Request for Transfer of the Case to Another Court:
Despite the appellant expressing no objection to transferring the case, the Supreme Court rejected the plea for a change of court. The court emphasized that a change of court is not warranted merely because both parties agree, as this could allow parties to avoid a particular court and choose one of their preference. The Supreme Court stressed that such an option should not be available to parties, and directed the Additional District Judge, Tis Hazari, to proceed with the case according to law.
In conclusion, the Supreme Court quashed the revisional proceedings entertained by the High Court and instructed the trial court to continue with the case, thereby allowing the appeal.
-
1998 (11) TMI 664
The Supreme Court dismissed the appeal in the case of Mrs. Sujata V. Manohar and Mr. A.P. Misra JJ. The citation is 1998 (11) TMI 664 - SC Order. The Tribunal's decision was in 1997 (89) E.L.T. 123.
........
|
9911796707
