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Showing 21 to 40 of 514 Records

• 2005 (11) TMI 525
  
  Issues:
  - Reduction of duty amount confirmed in adjudication
  - Incorrect reduction of penalty
  - Clandestine removal of cement
  - Requirement of proof from raw material accounts
  - Penalty imposed by the Commissioner
  
  Reduction of Duty Amount Confirmed in Adjudication:
  The main issue revolved around the clandestine removal of cement by the respondent assessee. The Revenue alleged duty evasion of &8377; 7,60,759 due to the clearance of 4,558.450 MTs beyond the duty-paid clearance. The Commissioner, however, after examining the raw material account, found non-duty paid clearance only to the extent of 1320.530 MTs. The remaining quantity was claimed to be purchased from the market without any supporting evidence. The Revenue contended that the Commissioner erred in requiring proof from raw material accounts when clandestine removal was established through private records. The Tribunal upheld the original finding of clandestine removal based on evidence, rejecting the assessee's defense. Consequently, the duty demand was restored to the initial amount of &8377; 7,60,759 confirmed in adjudication.
  
  Incorrect Reduction of Penalty:
  The cross-objection by the assessee pertained to the penalty imposed by the Commissioner. The Tribunal found merit in the Revenue's appeal concerning duty demand, as evidence supported the clandestine removal of cement. The assessee's explanation of purchasing part of the cement from the market lacked substantiating evidence. Therefore, the Tribunal increased the penalty on the manufacturer to &8377; 4 lakhs, aligning with the duty demand restoration. The Tribunal rejected the cross-objection seeking a reduction in penalty, affirming the Commissioner's decision on penalty imposition.
  
  Clandestine Removal of Cement and Proof Requirement:
  The core issue was the alleged clandestine removal of cement by the assessee, leading to duty evasion. While the Revenue authorities confirmed duty evasion of &8377; 7,60,759 based on private records showing excess clearance, the Commissioner, upon scrutiny, found a lesser non-duty paid clearance supported by raw material accounts. The Tribunal upheld the original finding of clandestine removal, emphasizing the lack of evidence for the claimed market purchases. It deemed the Commissioner's requirement for proof from raw material accounts justified, thereby reinstating the duty demand to the initial confirmed amount.
  
  Penalty Imposed by the Commissioner:
  The Commissioner imposed a penalty on the manufacturer, which was challenged through a cross-objection by the assessee. The Tribunal, after reviewing the evidence, supported the Revenue's appeal regarding duty demand and clandestine removal. It increased the penalty to &8377; 4 lakhs in line with the duty demand restoration, rejecting the assessee's plea for a penalty reduction. The Tribunal's decision aligned the penalty with the findings on duty evasion and upheld the Commissioner's penalty imposition.
  
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• 2005 (11) TMI 524
  
  Issues Involved: Interpretation of service tax provisions on transfer of technical know-how.
  
  Summary:
  The Revenue appealed against OIA No. 342/2003, contending that the transfer of technical know-how by the assessee to their joint venture firm does not amount to advice consultancy or technical assistance under the Finance Act, 1994, and thus should attract service tax under the category of Consulting Engineers. However, the Commissioner and the Tribunal held that the activity of selling or transferring technical know-how does not fall under Consulting Engineering services.
  
  Upon review, it was found that the Tribunal had previously approved the Commissioner's view in various cases, including Yamaha Motors (I) Pvt Ltd. v. CCE Delhi, Turbo Energy Ltd. v. CCE Chennai, CCE v. Veleo Friction Material India (Pvt.) Ltd., Navinon Ltd. v. CCE Mumbai, and Aviat Chemicals Pvt. Ltd. v. CCE Mumbai. The Tribunal reiterated that the appellants did not provide any service within the category of Consulting Engineers but simply transferred their know-how, which does not qualify as Consulting Engineering services. Consequently, the appeal was dismissed in line with the precedent set by the cited judgments.

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• 2005 (11) TMI 523
  
  Issues Involved:
  1. Legality and justification of the bipartite settlement dated 18.8.1996.
  2. Binding nature of the settlement on non-members of the Association.
  3. Justification of the Central Government's reference to the Industrial Tribunal.
  4. Validity of requiring non-members to sign a receipt to avail benefits of the settlement.
  5. Appropriateness of judicial intervention in the reference made by the Central Government.
  
  Issue-Wise Detailed Analysis:
  
  1. Legality and Justification of the Bipartite Settlement Dated 18.8.1996:
  The settlement dated 18.8.1996 was entered into between the Bank and the Association (third respondent) under Section 18(1) of the Industrial Disputes Act, 1947. The Federation (second respondent) did not sign this settlement, leading to a dispute. The settlement was binding only on the parties to the agreement, i.e., the Bank and the Association. The Court noted that the settlement was not entered before a conciliation officer or tribunal, thus it did not bind those who were not parties to it.
  
  2. Binding Nature of the Settlement on Non-Members of the Association:
  The settlement included a clause that allowed non-members of the Association to avail of its benefits by signing a receipt. The Court held that this requirement was legal and justified, as it protected the Bank's interests. The settlement's benefits were extended to non-members who accepted it, and the receipt did not contain any terms detrimental to them. Therefore, the Bank's action of requiring a receipt was upheld.
  
  3. Justification of the Central Government's Reference to the Industrial Tribunal:
  The Central Government made a reference under Section 10(1) of the Act to the Industrial Tribunal, questioning the legality of requiring non-members to sign a receipt. The Court found this reference redundant and uncalled for, as there was no actual dispute or apprehended dispute between the Bank and the Federation. The reference did not specify any precise demand or refusal, making it ineffective and incapable of providing any benefit to the Federation.
  
  4. Validity of Requiring Non-Members to Sign a Receipt to Avail Benefits of the Settlement:
  The Court held that the Bank was justified in asking non-members to sign a receipt to avail the settlement benefits. This practice was deemed necessary to protect the Bank's interests and ensure that non-members who wanted to benefit from the settlement accepted its terms. The format of the receipt was considered non-detrimental and appropriate.
  
  5. Appropriateness of Judicial Intervention in the Reference Made by the Central Government:
  The Court emphasized that normally, writ petitions against references under Section 10 of the Act should not be entertained as parties can address their grievances before the tribunal. However, in this case, the futility of the reference was evident from the terms and admitted facts, requiring no further evidence. The Court cited precedents allowing judicial intervention when the reference is clearly redundant or without merit.
  
  Conclusion:
  The appeal was allowed, and the judgments and orders of the learned single Judge and the Division Bench of the High Court were set aside. The reference made by the Central Government to the Industrial Tribunal was quashed, with the Court concluding that there was no industrial dispute or apprehended dispute warranting such a reference. The Bank's requirement for non-members to sign a receipt to avail settlement benefits was upheld as legal and justified.

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• 2005 (11) TMI 522
  
  Issues Involved:
  1. Valuation of closing stock.
  2. Application of Section 80 HHC of the Income-tax Act.
  3. Consistency in the method of accounting.
  4. Powers of the Assessing Officer under Section 145 of the Income-tax Act.
  5. Determination of real income and notional profits.
  
  Detailed Analysis:
  
  1. Valuation of Closing Stock:
  The assessee valued the closing stock for the Assessment Year 1992-93 at Rs. 130 per kg, while the opening stock was valued at Rs. 90 per kg. This method was consistently followed, with the closing stock of one year becoming the opening stock of the next. The Assessing Officer found this method resulted in an artificially inflated profit, which was against the principles of accountancy and law. The High Court upheld this view, stating that the method adopted was incorrect and aimed at inflating deductions under Section 80 HHC.
  
  2. Application of Section 80 HHC of the Income-tax Act:
  The assessee claimed benefits under Section 80 HHC for the First Year, arguing that the increased valuation was due to market factors and the devaluation of the Rupee against the U.S. Dollar. The Assessing Officer and the High Court concluded that the method adopted was a device to inflate deductions under Section 80 HHC, which was not permissible.
  
  3. Consistency in the Method of Accounting:
  The assessee argued that the method of accounting had been consistently followed since 1985-86. However, the High Court and the Assessing Officer found that merely following a particular system consistently did not justify its correctness if it resulted in an improper reflection of income. The Tribunal initially allowed the assessee's method, but the High Court overruled this, emphasizing the need for a method that accurately reflects true income.
  
  4. Powers of the Assessing Officer under Section 145 of the Income-tax Act:
  Section 145 allows the Assessing Officer to determine the income if the method employed by the assessee does not properly deduce the income. The High Court and the Assessing Officer exercised this power, finding that the assessee's method resulted in notional profits and did not reflect the true income. The Supreme Court upheld this view, stating that the Assessing Officer's discretion was exercised judicially and reasonably.
  
  5. Determination of Real Income and Notional Profits:
  The Supreme Court emphasized that the real income, not notional profits, is taxable. The method adopted by the assessee resulted in notional profits by valuing the closing stock at a market value higher than the cost, which is not permissible. The Court cited established principles that the closing stock should be valued at cost or market value, whichever is lower, to reflect true profits. The rejection of the assessee's accounts was based on the principle that income not actually derived cannot be taxed.
  
  Conclusion:
  The Supreme Court dismissed the appeal, upholding the High Court's decision that the method adopted by the assessee was incorrect and aimed at inflating deductions under Section 80 HHC. The consistent method of accounting must accurately reflect true income, and the Assessing Officer's powers under Section 145 were correctly exercised to reject the notional profits shown by the assessee.

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• 2005 (11) TMI 521
  
  Issues:
  Conviction under the Narcotic Drugs and Psychotropic Substances Act, 1985; Compliance with Section 50 of the Act; Compliance with Section 42(2) of the Act.
  
  Analysis:
  The Respondents were initially convicted under Section 8 read with Section 15 of the Narcotic Drugs and Psychotropic Substances Act, 1985, and sentenced to rigorous imprisonment and fine. However, the High Court acquitted them based on non-compliance with Section 50 and Section 42(2) of the Act. The Supreme Court noted that Section 50 did not apply as the search and seizure were conducted from a truck, not from the person of the accused. Citing precedent, the Court clarified that search of an article carried by a person is not considered a search of the person under Section 50. Since the search was from a truck, Section 50 did not apply in this case.
  
  Regarding Section 42(2) of the Act, the Court emphasized that the search and seizure were conducted on a public carrier at a public place. Referring to a previous judgment, it was established that when a public conveyance is searched in a public place during daytime, the officer is not required to follow the proviso to Section 42 for searches between sunset and sunrise. As the search in this case was conducted during daylight hours, the requirements of Section 42(2) were not applicable. Consequently, the High Court's acquittal was deemed unjustified, and the trial court's conviction of the Respondents was upheld.
  
  In conclusion, the Supreme Court allowed the appeal, overturning the High Court's acquittal and reinstating the trial court's conviction and sentence against the Respondents. The Respondents were directed to be taken into custody to serve the remaining sentence, with a compliance report to be submitted to the Court within one month.

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• 2005 (11) TMI 520
  
  Issues:
  - Application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of a sole arbitrator.
  - Dispute over the nationality of the sole arbitrator based on the nationalities of the parties.
  - Interpretation of Section 11(9) of the Arbitration and Conciliation Act regarding the appointment of a sole arbitrator in international commercial arbitration.
  
  Analysis:
  1. The application before the Supreme Court was for the appointment of a sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. The petitioner, a company from the Netherlands, and the respondent, an Indian company, had entered into an agreement containing an arbitration clause. The agreement specified England (UK) as the venue for arbitration and English as the language for proceedings.
  
  2. The main issue arose from the disagreement between the parties on the nationality of the sole arbitrator to be appointed. The petitioner requested the appointment of an arbitrator with a neutral nationality, neither Dutch nor Indian, citing Section 11(9) of the Act. Section 11(9) allows for the appointment of an arbitrator of a nationality other than those of the parties in international commercial arbitration.
  
  3. The Court analyzed the provision of Section 11(9) and emphasized the discretionary nature of the word "may" in the statute. The Court clarified that while the provision allows for the appointment of a neutral arbitrator, it is not mandatory. Referring to previous judgments, the Court highlighted that the use of "may" does not impose an obligation to appoint a sole arbitrator with a neutral nationality.
  
  4. Based on the legal interpretation and precedents, the Court exercised its discretion and appointed Mr. Justice S.N. Variava, a retired Judge of the Court, as the sole arbitrator in the case. The Court clarified that the appointment of an arbitrator with a neutral nationality was not obligatory under Section 11(9) and proceeded with the appointment. The Court also directed the arbitrator to determine the remuneration and other costs, considering the arbitration venue in England (UK).
  
  5. The judgment concluded by disposing of the petition and instructing the Registry to forward a copy of the order to the appointed arbitrator promptly. The Court's decision clarified the discretionary nature of appointing a sole arbitrator with a neutral nationality in international commercial arbitration, highlighting the importance of legal interpretation and precedent in such matters.

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• 2005 (11) TMI 519
  
  Issues Involved:
  1. Acceptance of One Time Settlement (OTS) by the respondent bank.
  2. Contractual obligations and defaults by the petitioners.
  3. Jurisdiction and discretion under Article 226 of the Constitution of India.
  4. Impact on financial institutions and the economy due to non-recovery of loans.
  
  Issue-wise Detailed Analysis:
  
  1. Acceptance of One Time Settlement (OTS) by the respondent bank:

  The petitioners requested the court to direct the respondent State Bank of India to accept their One Time Settlement (OTS) offer of Rs. 25 Lakhs as per the Reserve Bank of India's guidelines. The bank had initially agreed to an OTS of Rs. 20 Lakhs but the petitioners failed to pay the full amount, paying only Rs. 10.86 Lakhs. The petitioners later increased the OTS offer to Rs. 25 Lakhs under alleged pressure from the bank, which the bank refused to accept. The bank contended that the petitioners abandoned the concessional settlement offer themselves and that the OTS scheme was a time-bound measure that had expired and could not be revived.

  2. Contractual obligations and defaults by the petitioners:

  The petitioners had an overdraft limit of approximately Rs. 18 Lakhs sanctioned in 1995, which was withdrawn in 1997 with Rs. 16 Lakhs outstanding. The bank initiated recovery proceedings, resulting in an ex-parte final order by the Debt Recovery Tribunal (DRT) holding the petitioners liable to pay Rs. 18,78,240/- along with interest. The petitioners failed to adhere to the financial discipline and committed various defaults, making them ineligible under the OTS scheme as clarified by the Reserve Bank of India. The petitioners had also disposed of stocks hypothecated with the bank and pocketed the proceeds.

  3. Jurisdiction and discretion under Article 226 of the Constitution of India:

  The court held that the matter was entirely contractual and no writ could be issued in this connection. A writ lies if there is a violation of law or error of law apparent on the face of the record, which was not the case here. The court emphasized that a writ cannot be issued merely on sympathetic considerations and that there are well-settled principles of exercise of writ jurisdiction. The court also noted that the petitioners were not entitled to the equitable remedy under Article 226 of the Constitution as they were defaulters.

  4. Impact on financial institutions and the economy due to non-recovery of loans:

  The court highlighted the adverse effects of non-recovery of loans on the economy, stating that recovery of tens of thousands of Crores of Rupees of bank loans is pending in the country, which holds up the industrialization of the nation. The court emphasized the need for fiscal discipline and observed that interfering with such recoveries causes incalculable harm to the economy as new businessmen cannot get loans if borrowers do not repay. The court cited several Supreme Court judgments underscoring the importance of regular realization of installments and the detrimental impact of non-payment on financial institutions.

  Conclusion:

  The court dismissed the petition, stating that there was no merit in it. The one-time settlement offered by the bank had expired and could not be revived. The bank could not be compelled to accept an amount less than the contractual amount, and the petitioners' defaults and irregularities in their account disqualified them from equitable relief. The court reiterated the importance of judicial restraint in matters relating to loan recoveries and the necessity of fiscal discipline for the economic progress of the nation.

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• 2005 (11) TMI 518
  
  Issues:
  1. Quashing of prosecution under Section 138 of the Negotiable Instruments Act, 1881 and Section 420 of the Indian Penal Code based on limitation.
  
  Analysis:
  The Supreme Court heard arguments from both parties regarding the quashing of the prosecution under Section 138 of the Negotiable Instruments Act, 1881, and Section 420 of the Indian Penal Code. The High Court had quashed the prosecution solely on the grounds that the complaint was filed two days after the expiry of the limitation period. The notice under Section 138 of the Act was sent on 4th January, 1997, served on the accused on 10th January, 1997, with a 15-day payment deadline expiring on 25th January, 1997. The cause of action to file the complaint arose on 26th January, 1997, excluding that day as per Section 12(1) of the Limitation Act, 1963. Consequently, the limitation period started from 27th January, 1997, and the complaint was filed on 26th January, 1997, within one month from that date, thus within the time limit.
  
  The Court referred to a previous judgment in M/s Saketh India Ltd. and Ors. v. M/s India Securities Ltd, where it was established that the day the cause of action arises must be excluded when calculating the limitation period for filing a complaint under Section 138 of the Act. Applying this principle, the Court found that the complaint in the present case was filed within the prescribed time limit, and the High Court erred in concluding a two-day delay in filing the complaint. Consequently, the Supreme Court held that the High Court's decision to quash the prosecution was unjustified. The appeal was allowed, the impugned order by the High Court was set aside, and the Trial Court was directed to proceed with the complaint in accordance with the law. The appeal was allowed, and the prosecution was reinstated for further proceedings.

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• 2005 (11) TMI 516
  
  Issues:
  1. Availment of Modvat credit on inputs and capital goods used in manufacturing exempted final products.
  2. Challenge to show cause notice on merits and limitation.
  3. Confirmation of demand and imposition of personal penalty by Commissioner of Central Excise.
  
  Issue 1: Availment of Modvat credit on inputs and capital goods used in manufacturing exempted final products
  
  The appellants were engaged in manufacturing products falling under Chapters 15 and 38 of the Central Excise Tariff Act, 1985, and availed Modvat credit for duty paid on inputs. The appellants utilized the credit for duty payment but were issued a show cause notice proposing to deny the credit on the grounds of using inputs in manufacturing final products wholly exempted from duty. The Commissioner confirmed the demand and imposed a personal penalty, leading to the appeal.
  
  Issue 2: Challenge to show cause notice on merits and limitation
  
  The appellants challenged the show cause notice both on merits and limitation. However, the Commissioner upheld the denial of Modvat credit and the penalty. The issue was examined in light of relevant Supreme Court decisions, emphasizing the revenue-neutral nature of the exercise when duty is paid on exempted goods.
  
  Issue 3: Confirmation of demand and imposition of personal penalty
  
  The Tribunal, after considering the settled position as per Supreme Court decisions, set aside the impugned order. Citing precedents like Commissioner of Central Excise (A) v. Narayan Polyplast, Commissioner of Central Excise v. Narmada Chematur Pharmaceuticals Ltd., and Punjab Tractors Ltd. v. Commissioner of Central Excise, the Tribunal allowed the appeals, emphasizing that denial of Modvat credit when duty is paid on exempted goods would go against the revenue-neutral principle.
  
  This judgment primarily dealt with the issue of Modvat credit availed on inputs and capital goods used in manufacturing exempted final products. The Tribunal relied on Supreme Court decisions to rule in favor of the appellants, emphasizing the revenue-neutral aspect when duty is paid on exempted goods. The impugned order denying the credit and imposing a penalty was set aside, highlighting the importance of established legal principles in such matters.

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• 2005 (11) TMI 515
  
  Supreme Court dismissed the appeal in the case with citation 2005 (11) TMI 515 - SC. Judges were Mrs. Ruma Pal and Mr. Dr. A.R. Lakshmanan.

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• 2005 (11) TMI 514
  
  Issues:
  1. Addition of Rs. 3.00 lacs made by the Assessing Officer based on the difference in cost of a second-hand Electric Motor.
  2. Validity of the CIT(A) order confirming the addition.
  3. Justification of the Assessing Officer's decision to add the amount to the assessee's income.
  
  Analysis:
  1. The case involved a dispute regarding the purchase of a second-hand 750 H.P. Electric Motor by the assessee for Rs. 50,000 from M/s. B. Gangadhar Engg. Co. The Assessing Officer suspected the purchase price and added Rs. 3.00 lacs to the assessee's income based on the difference between the estimated cost of Rs. 3.50 lacs and the actual cost incurred by the assessee. The CIT(A) upheld this addition, leading to the appeal before the ITAT.
  
  2. Upon hearing both parties and examining the records, the ITAT found that the evidence did not conclusively prove that the motor purchased was undervalued. The seller's statement and cross-examination did not provide substantial evidence to justify the addition made by the Assessing Officer. The sale bill did not mention the motor's capacity, creating ambiguity. The ITAT noted that the Assessing Officer failed to verify if the motor was indeed 750 H.P. and second-hand, which could have easily been done. Additionally, no evidence was presented to show that the motor was purchased for Rs. 3.50 lacs. Therefore, the ITAT concluded that the Assessing Officer's decision was based on suspicion and conjecture rather than concrete evidence, leading to the direction to delete the Rs. 3 lacs addition.
  
  3. In light of the above analysis, the ITAT allowed the appeal of the assessee, setting aside the CIT(A) order and directing the Assessing Officer to remove the addition of Rs. 3 lacs from the assessee's income. The judgment emphasized the importance of concrete evidence and proper verification in making additions to an assessee's income, highlighting the need for a factual basis rather than mere assumptions or suspicions in such matters.

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• 2005 (11) TMI 513
  
  Issues Involved:
  1. Withdrawal of POTA order by the State Government.
  2. Challenge to the POTA Review Committee's order.
  3. Grant of bail to accused Akshay Pratap Singh.
  4. Request for transfer of cases from U.P. to Delhi.
  
  Detailed Analysis:
  
  1. Withdrawal of POTA order by the State Government:
  The writ petitions challenged the withdrawal of the POTA order against the accused by the State Government on 29th August 2003. The court examined the validity of this withdrawal and found that the political changes influenced the decision to revoke the POTA order. The court held that the withdrawal order and the consequential application by the public prosecutor for withdrawing the cases were not sustainable. The court emphasized that the Public Prosecutor must act independently and not under political influence, as established in previous judgments (1983(1) SCC 438, 1980(3) SCC 435, 1996(2) SCC 610, 2002(3) SCC 510).
  
  2. Challenge to the POTA Review Committee's order:
  The Special Leave Petition (Crl) 5609 of 2004 challenged the POTA Review Committee's order dated 30.4.2004, which directed the release of the accused under Section 60 of POTA. The court analyzed the provisions of POTA, particularly Sections 3 and 4, and found that the Review Committee had erred in its interpretation. The court held that the possession of hazardous explosive substances and lethal weapons like AK-56 by the accused fell under Section 4(b) of POTA, which does not require the area to be notified. The Review Committee's order was set aside, and the court directed the prosecution of the accused under Section 3(3) and Section 4(b) of POTA, along with other provisions of the Explosive and Arms Act.
  
  3. Grant of bail to accused Akshay Pratap Singh:
  The SLP (Crl) 1521 of 2004 challenged the High Court's order granting bail to Akshay Pratap Singh. The court, while dismissing the petition, noted that the accused had already been in detention for a long time and did not interfere with the bail order. However, the court stated that the observations made by the High Court were contrary to its findings.
  
  4. Request for transfer of cases from U.P. to Delhi:
  The Transfer Petitions (Crl) Nos. 82-84 of 2004 sought the transfer of cases from the Special Judge, Kanpur Nagar U.P., to the Designated Court in Delhi, citing the likelihood of miscarriage of justice in U.P. due to political influence and threats to witnesses. The court agreed that there was a likelihood of miscarriage of justice and directed the transfer of the cases to a Special Judge in M.P., to be nominated by the Chief Justice.
  
  Conclusion:
  The court allowed the appeal in part, setting aside the POTA Review Committee's order and directing the prosecution of the accused under relevant sections of POTA, the Explosive Act, and the Arms Act. The withdrawal order by the State Government was quashed, and the transfer petitions were allowed to ensure a fair trial.

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• 2005 (11) TMI 512
  
  Issues:
  1. Applicability of market fee on sugar factories under Bihar Agricultural Produce Markets Act, 1960.
  2. Validity of amendments to the Act and challenges by affected sugar industries.
  3. Refund of market fee paid in the past as per the Supreme Court's decision.
  4. Dispute over the refund of amount deposited by the Appellants with the High Court.
  5. Review application by the Appellants against the High Court's order for refund.
  
  Analysis:
  
  1. The primary issue in this case revolved around the applicability of market fee on sugar factories under the Bihar Agricultural Produce Markets Act, 1960. The High Court had initially held that sugar factories engaged in purchasing sugarcane and selling sugar and molasses are liable to pay market fee under the Act. However, a Constitution Bench of the Supreme Court later ruled that the Act's provisions were not applicable to such factories, with a prospective effect. The Court clarified that past market fees paid would not be refunded, and no further fees would be collected for past transactions.
  
  2. The State of Bihar made amendments to the Act, including the deletion and subsequent revival of sugar from the commodities covered. The affected sugar industries challenged these provisions. The High Court upheld the amended provisions, leading to appeals filed in the Supreme Court. The Court's decision in the Belsund Sugar Co. Ltd. case clarified the prospective nature of the judgment, ensuring no refund of past market fees paid by the sugar mills.
  
  3. Following the Supreme Court's decision, a dispute arose regarding the refund of the amount deposited by the Appellants with the High Court under its interim order. The High Court rejected the Appellants' claim for a refund, directing the amount to be paid to the Market Committee or the Board. The Appellants filed a Special Leave Petition challenging this order, which was dismissed by the Supreme Court.
  
  4. The Appellants subsequently filed a review application before the High Court, seeking a review of the order denying the refund. The High Court dismissed the review application, stating that the Appellants could not re-argue points already decided. The Supreme Court, upon review, found no apparent mistake on the face of the record, upholding the High Court's decision and dismissing the appeal.
  
  5. The Supreme Court emphasized that the right of review is not an opportunity to re-argue previously rejected points. The Court affirmed the High Court's decision, stating that the Appellants could not be allowed to re-litigate issues already settled. Ultimately, the Supreme Court found no merit in the appeal and dismissed it, with no order as to costs.

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• 2005 (11) TMI 511
  
  Issues:
  Creditor's winding up petition based on non-payment of dues by the respondent company, defense of the respondent company regarding the quality of materials supplied, legal principles under Section 433(e) of the Companies Act, 1956, regarding winding up of a company, examination of the defense provided by the respondent company, determination of commercial insolvency, the significance of statutory demand notice under Section 434(1)(a) of the Act, the requirement of reasonable excuse for non-payment, consequences of non-compliance with demand notice, the discretion of the court in winding up proceedings, evaluation of the respondent company's defense and establishment of bona fides, the impact of the respondent company ceasing production and business operations on the winding up petition, orders and directions to be followed in the case.
  
  Analysis:
  
  1. The judgment involves a creditor's winding up petition against the respondent company due to non-payment of admitted dues. The respondent company raised a defense regarding the quality of materials supplied, claiming defects led to losses. The court examined the defense provided by the respondent and the legal principles under Section 433(e) of the Companies Act, 1956, emphasizing the need to investigate commercial insolvency.
  
  2. The court highlighted the significance of the statutory demand notice under Section 434(1)(a) of the Act, stating that non-compliance must be without reasonable excuse to establish inability to pay debts. The judgment clarified that a valid counterclaim or reason not to pay could affect the presumption of inability to pay, emphasizing the need for the company to show commercial insolvency.
  
  3. The judgment discussed the consequences of non-compliance with the demand notice and the creditor's right to institute winding-up proceedings. It outlined that reasonable cause could prevent such consequences, including bona fide disputes or payment arrangements. The court noted that a false defense or dishonored cheques could impact the decision to wind up the company.
  
  4. The court evaluated the respondent company's defense, finding it lacking in bona fides and an attempt to evade liability. The judgment emphasized the need for a genuine defense and proof of assurances made, especially in cases of non-payment and withholding of cheques. The respondent company ceasing production and being unable to pay dues further supported the winding-up petition.
  
  5. Finally, the court issued orders for advertising the winding-up petition, granting time for payment of outstanding dues, and restraining the respondent company from disposing of its assets. The judgment reflected a thorough analysis of the legal principles, defense presented, and the financial status of the respondent company in the context of the winding-up petition.

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• 2005 (11) TMI 510
  

  Application under Order 7 Rule 11(d) - barred by limitation - Suit for a declaration - acquisition of Schedule 'B' property - seeking injunction - instead of filing the written statement filed an application under Order 7 Rule 11 read with Section 151 of the Civil Procedure Code seeking rejection of the plaint - HELD THAT:- After hearing counsel for the parties, going through the plaint, application under Order 7 Rule 11(d) Civil Procedure Code and the judgments of the trial court and the High Court, we are of the opinion that the present suit could not be dismissed as barred by limitation without proper pleadings, framing of an issue of limitation and taking of evidence. Question of limitation is a mixed question of law and fact. Ex facie in the present case on the reading of the plaint it cannot be held that the suit is barred by time. The findings recorded by the High Court touching upon the merits of the dispute are set aside but the conclusion arrived at by the High Court is affirmed. We agree with the view taken by the trial court that a plaint cannot be rejected under Order 7 Rule 11(d) of the Civil Procedure Code.

  The interim stay granted by this Court staying the further proceedings of the trial court is vacated. The parties are relegated to contest the suit. The appellant is permitted to file the written statement within thirty days from today. It shall be open to the appellant to raise any plea available to it under the law including the plea of limitation, maintainability of the suit, etc. The plaintiff-respondents would also be at liberty to file the replication to the written statement, if any, within fifteen days of receipt of the copy of the written statement. The trial Court shall decide the points/issues raised in the suit without being influenced by any of the observations made in this order or that of the High Court or the trial Court.

  Since the suit is pending for the last four years, the trial Court is directed to dispose of the suit expeditiously, preferably within a period of one year from today. The appeal is disposed of accordingly.

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• 2005 (11) TMI 509
  
  Issues Involved:
  1. Validity of the annual return for the year 2003.
  2. Appointment of an independent board of directors and chairman.
  3. Appointment of an independent chartered accountant for auditing the company's books.
  4. Allegations of siphoning funds and investigation into the company's affairs.
  5. Restraint on alienating or encumbering the company's properties.
  6. Compensation for losses incurred by the company.
  7. Restoration of benefits to the petitioner and her children as shareholders.
  
  Detailed Analysis:
  
  Validity of the Annual Return for the Year 2003:
  The petitioner claimed that the annual return filed by the second respondent for the year 2003 was fraudulent and fabricated. The petitioner alleged that the second respondent manipulated the company's records to transfer the shares standing in the names of the petitioner and her children to himself and others. The petitioner and her children never transferred the impugned shares, and no consideration was received for these shares. The respondents argued that the petitioner and her children relinquished their rights in the company by acting upon a deed of arrangement and declaration executed in 2002, which was not challenged in any forum. The court found that the petitioner had accepted the benefits under the deed and was bound by its terms, thus failing to prove the annual return's fraudulence.
  
  Appointment of an Independent Board of Directors and Chairman:
  The petitioner sought the appointment of an independent board of directors and chairman to manage the company's affairs. However, the court did not address this issue directly, as the primary focus was on the validity of the share transfers and the annual return.
  
  Appointment of an Independent Chartered Accountant:
  The petitioner requested an independent chartered accountant to audit the company's books. This relief, along with the investigation into the company's affairs, was not pressed by the petitioner's counsel during oral submissions. Therefore, the court did not consider this request.
  
  Allegations of Siphoning Funds and Investigation into the Company's Affairs:
  The petitioner alleged that the second respondent siphoned funds from the company and sought an investigation under Sections 235/237 of the Companies Act, 1956. However, this relief was not pressed by the petitioner's counsel during oral submissions, and the court did not address these allegations.
  
  Restraint on Alienating or Encumbering the Company's Properties:
  The petitioner sought to restrain the respondents from alienating or encumbering the company's properties. This issue was not directly addressed by the court, as the primary focus was on the validity of the share transfers and the annual return.
  
  Compensation for Losses Incurred by the Company:
  The petitioner requested that the second respondent be directed to make good the loss suffered by the company due to the use of company funds for purchasing and developing immovable properties. This relief was not pressed by the petitioner's counsel during oral submissions, and the court did not consider this request.
  
  Restoration of Benefits to the Petitioner and Her Children as Shareholders:
  The petitioner sought the restoration of all benefits to herself and her children as shareholders of the company. The court found that the petitioner and her children had relinquished their rights in the company by acting upon the deed of arrangement and declaration, which they did not challenge in any forum. Therefore, the court concluded that the petitioner and her children were no longer shareholders and were not entitled to any relief claimed in the company petition.
  
  Conclusion:
  The court dismissed the company petition, concluding that the petitioner failed to satisfy the requirements of Sections 397/398 of the Companies Act, 1956. The interim injunction granted earlier was vacated. The court found that the petitioner and her children had relinquished their rights in the company by acting upon the deed of arrangement and declaration, which they did not challenge in any forum. Consequently, the petitioner was not entitled to any relief claimed in the company petition.

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• 2005 (11) TMI 508
  
  Issues Involved:
  1. Permanent injunction for infringement of trademark and copyright.
  2. Passing off, delivery up, rendition of accounts.
  3. Damages and compensation.
  4. Destruction of infringing goods.
  5. Costs of the proceedings.
  
  Issue-Wise Detailed Analysis:
  
  1. Permanent Injunction for Infringement of Trademark and Copyright:
  The plaintiff, a joint venture between Hero Group and Honda Motors Company, filed a suit against the defendant for infringing on their trademark "HERO HONDA" and associated logo. The plaintiff has been using the trademark since 1985 and has registered it under the relevant trademark laws. The court found that the plaintiff has exclusive rights to use the trademark and logo, and the defendant was counterfeiting the plaintiff's products, thus infringing on these rights. Consequently, the court granted a permanent injunction restraining the defendant from using the trademark "HERO HONDA" or any deceptively similar mark.
  
  2. Passing Off, Delivery Up, Rendition of Accounts:
  The plaintiff argued that the defendant's actions led to passing off inferior products as those of the plaintiff, causing loss of profits and damage to the brand's reputation. The court agreed with the plaintiff's claims and ruled that the defendant's actions constituted passing off. The court ordered the delivery up of all infringing products to the plaintiff for destruction to prevent further damage to the plaintiff's brand.
  
  3. Damages and Compensation:
  The plaintiff sought damages for loss of reputation and business due to the defendant's infringing activities. The court noted that the defendant had deliberately stayed away from the proceedings, which hindered an enquiry into the accounts for determining exact damages. However, the court awarded token damages of Rs. 5 lakhs, referencing similar cases where damages were awarded in the absence of specific evidence. The court emphasized that punitive damages are necessary to deter such unlawful activities and to compensate for the harm caused to the plaintiff's reputation and business.
  
  4. Destruction of Infringing Goods:
  The court noted that the seized goods, which were released on superdari to the defendant, were liable to be destroyed. The plaintiff was granted a decree for the delivery up of all infringing products so that they could be destroyed, thereby preventing further distribution of counterfeit goods.
  
  5. Costs of the Proceedings:
  The court ruled that the plaintiff was entitled to the costs of the present proceedings. This decision was based on the principle that a defendant who chooses to evade court proceedings should not benefit from such actions and must bear the consequences, including the costs incurred by the plaintiff in litigation.
  
  Conclusion:
  The court passed a decree for permanent injunction against the defendant, restraining them from using the trademark "HERO HONDA" and logo. The defendant was ordered to hand over the seized goods for destruction. The court awarded Rs. 5 lakhs in damages and granted the plaintiff the costs of the proceedings. The decree-sheet was to be drawn up upon the plaintiff paying the deficient court fee as per the court's earlier judgment.

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• 2005 (11) TMI 507
  
  Issues Involved:
  1. Dismissal of the suit claim on grounds of limitation.
  2. Equitable mortgage and period of limitation.
  3. Appropriation of the amount deposited in the "no lien account".
  4. Classification of the suit as a simple recovery suit or a suit for enforcement of mortgage.
  
  Detailed Analysis:
  
  1. Dismissal of the Suit Claim on Grounds of Limitation:
  The appellant-bank's suit was dismissed by the Debts Recovery Tribunal (DRT), Chandigarh, on January 13, 2005, for claims of Rs. 2,33,59,138 in TL-I, Rs. 1,14,29,922 in TL-II, and Rs. 1,07,18,243, holding that these claims were barred by limitation. However, the Tribunal directed the recovery of Rs. 3,87,50,236 as interest on the bank guarantee invoked. The appellant-bank contended that the Tribunal erred in dismissing the suit on grounds of limitation, arguing that the claim was secured by an equitable mortgage of four properties and that the period of limitation should be considered from the last correspondence dated April 3, 1995, under Section 19 of the Limitation Act, 1963. The appellant also argued that the period of recovery for a mortgage suit is 12 years under Order XXXIV, Rule 2 of the Code of Civil Procedure, and thus, the suit was within the limitation period.
  
  2. Equitable Mortgage and Period of Limitation:
  The appellant-bank argued that the Tribunal failed to consider the equitable mortgage of four properties and the relevant entries in the statement of account, which would bring the suit within the limitation period. The appellant contended that the suit, filed in March 1997, was within the limitation period based on entries dated December 12, 1994, December 13, 1994, and March 31, 1994. The Tribunal, however, held that the suit was barred by limitation and rejected the appellant's claim of a 12-year limitation period for a mortgage suit, stating that the suit was for recovery of money and not for enforcement of mortgage.
  
  3. Appropriation of the Amount Deposited in the "No Lien Account":
  The Tribunal examined whether the amount of Rs. 2,27,35,000 deposited by the defendants under settlement in a "no lien account" could be appropriated without the consent and authority of the defendants. The Tribunal found that the amount was deposited in response to a letter dated March 20, 1995, advising the defendants to deposit funds in a "no lien account". The Tribunal held that the appropriation of the amount by the appellant-bank on April 5, 1995, was unauthorized and could not be considered as an acknowledgment of liability under Section 19 of the Limitation Act, thereby not extending the period of limitation.
  
  4. Classification of the Suit as a Simple Recovery Suit or a Suit for Enforcement of Mortgage:
  The appellant-bank argued that the suit should be considered as a suit for enforcement of mortgage, which has a 12-year limitation period under Order XXXIV of the Code of Civil Procedure. The Tribunal, however, held that the relief sought in the suit was for recovery of money, with other incidental reliefs, and thus, it could not be construed as a suit for enforcement of mortgage. The Tribunal referred to a decision by the Debts Recovery Appellate Tribunal, Mumbai, in Kishor Kumar Agarwal v. State Bank of India [2000] II BC 97 (DRAT), which clarified that the provisions of Order XXXIV do not apply to the enforcement of security and that the suit in question was a simple suit for recovery of debt.
  
  Conclusion:
  The Tribunal dismissed the appellant-bank's appeal, holding that the suit was barred by limitation and that the appropriation of the amount deposited in the "no lien account" was unauthorized. The Tribunal also rejected the appellant's contention that the suit should be considered as a suit for enforcement of mortgage, affirming that it was a simple suit for recovery of money. The appeal was dismissed with no costs.

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• 2005 (11) TMI 506
  

  Enhancement of age of superannuation - Whether amendment made in Rule 56(a) of Uttar Pradesh Fundamental Rules ('the Rules') by Notification dated June 27, 2002 enhancing age of superannuation of government servants from 58 years to 60 years would be applicable to the employees of Uttar Pradesh Jal Nigam ('the Nigam') - HELD THAT:- In the present case, as Regulations have been framed by the Nigam specifically enumerating in Regulation 31 thereof that the Rules governing the service conditions of government servants shall equally apply to the employees of the Nigam, it was not possible for the Nigam to take an administrative decision acting u/s 15(1) of the Act pursuant to direction of the State Government in the matter of policy issued u/s 89 of the Act and directing that the enhanced age of superannuation of 60 years applicable to the government servants shall not apply to the employees of the Nigam.

  In our view, the only option for the Nigam was to make suitable amendment in Regulation 31 with the previous approval of the State Government providing thereunder age of superannuation of its employees to be 58 years, in case, it intended that 60 years which was the enhanced age of superannuation of the State Government employees should not be made applicable to employees of the Nigam. It was also not possible for the State Government to give a direction purporting to Act u/s 89 of the Act to the effect that the enhanced age of 60 years would not be applicable to the employees of the Nigam treating the same to be a matter of policy nor it was permissible for the Nigam on the basis of such a direction of the State Government in policy matter of the Nigam to take an administrative decision acting u/s 15(1) of the Act as the same would be inconsistent with Regulation 31 which was framed by the Nigam in the exercise of powers conferred upon it u/s 97(2)(c) of the Act.

  Thus, we are of the view that so long Regulation 31 of the Regulations is not amended, 60 years which is the age of superannuation of government servants employed under the State of Uttar Pradesh shall be applicable to the employees of the Nigam. However, it would be open to the Nigam with the previous approval of the State Government to make suitable amendment in Regulation 31 and alter service conditions of employees of the Nigam, including their age of superannuation. It is needless to say that if it is so done, the same shall be prospective.

  Hence, the appeals as well as writ petitions are allowed, orders passed by the High Court dismissing the writ petitions as well as those by the Nigam directing that the appellants of the Civil Appeals and petitioners of the Writ Petitions would superannuate upon completion of the age of 58 years are set aside and it is directed that in case the employees have been allowed to continue up to the age of 60 years by virtue of some interim order, no recovery shall be made from them but in case, however, they have not been allowed to continue after completing the age of 58 years by virtue of erroneous decision taken by the Nigam for no fault of theirs, they would be entitled to payment of salary for the remaining period up to the age of 60 years which must be paid to them within a period of three months from the date of receipt of copy of this order by the Nigam.

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• 2005 (11) TMI 505
  
  Issues:
  Customs order against petitioner, bank guarantee validity, appeal process, encashment of bank guarantee, communication to respondent No.3.
  
  Analysis:
  The High Court of BOMBAY delivered a judgment regarding a petition where the Commissioner of Customs had passed an adverse order against the petitioner on November 9, 2005. The petitioner had provided a bank guarantee from respondent No.3 to secure the interests of respondent Nos.1 and 2 in the proceedings. As the order was unfavorable to the petitioner, respondent Nos.1 and 2 sought to encash the bank guarantee. The bank guarantee was valid until December 22, 2005. The petitioner was advised to file an appeal against the order before the Customs, Excise and Service Tax Appellate Tribunal by the end of the month and apply for a stay order by December 15, 2005. If the necessary order was not obtained by then, respondent Nos.1 and 2 were permitted to encash the bank guarantee. It was explicitly stated that the bank guarantee should not be encashed in the interim, and both parties were directed to inform respondent No.3 about this decision. The petition was disposed of in accordance with this order, with no costs imposed. An authenticated copy of the order was to be provided to the parties for reference.

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