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2009 (3) TMI 1070
Involvement of serious acts of misconduct proved against Booking Clerk and removed from service - Challenged the Non-reasoned order of High Court - Respondent filed an application before the Labour Court and admitted that certain entries in register entered by him could not be made - Labour Court directed re-instatement with 50% backwages - writ petition was filed which was dismissed summarily after issuance of notice to the respondent who filed his reply - basic stand of the appellant is that the order is non-reasoned and the High Court had not even considered the various stands highlighted by the appellant.
HELD THAT:- It appears that the High Court had initially issued notice and reply was filed by the respondent. After that the High Court has dismissed the writ petition in a summary manner. It cannot be said that the various aspects highlighted by the appellant were without any substance. What would have the effect of it was to be enquired in the writ petition which apparently has not been done. The order reads as follows:
''Impugned order does not suffer from any infirmity warranting interference by this Court. Consequently writ petition is dismissed.''
As the quoted portion of the order goes to show that practically no reason was indicated, the dismissal of the writ petition in such summary manner without indicating any reason is clearly indefensible.
Reasons introduce clarity in an order. On plainest consideration of justice, the High Court ought to have set forth its reasons, howsoever brief, in its order indicative of an application of its mind, all the more when its order is amenable to further avenue of challenge. The absence of reasons has rendered the High Court's judgment not sustainable.
The attempt to draw an analogy on the power of this Court under Article 136 of the Constitution of India, 1950 (in short the `Constitution') and the practice of rejecting appeals at the SLP stage invariably without assigning reasons with the one to be exercised while dealing with a writ petition has no meaning and is illogical. First of all, the High Court is not the final court in the hierarchy and its orders are amenable to challenge before this Court, unlike the obvious position that there is no scope for any further appeal from the order made declining to grant special leave to appeal.
It has been on more than one occasion reiterated that Article 136 of the Constitution does not confer any right of appeal in favour of any party as such and it is not that any and every error is envisaged to be corrected in exercising powers under Article 136 of the Constitution of India. The powers of this Court under Article 136 of the Constitution are special and extraordinary and the main object is to ensure that there has been no miscarriage of justice. That cannot be said to be the same with a writ petition. This position is highlighted in Dr. Vishnu Dev Sharma v. State of U.P. and Ors [2008 (1) TMI 979 - SUPREME COURT OF INDIA].
Hence, the impugned order of the High Court is clearly unsustainable and is set aside. The matter is remitted to the High Court to hear the Civil Misc. Writ Petition to be disposed of by a reasoned order.
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2009 (3) TMI 1069
Issues involved: Appeal by Revenue challenging ITAT's reliance on statement of witness and genuineness of share transactions.
Summary:
Issue (a): Reliance on witness statement without evidence of share transactions.
The Revenue appealed questioning ITAT's heavy reliance on a witness's statement, Shri Satish Mandowara, who failed to provide evidence of share purchase and sale. The Revenue argued that overwhelming evidence showed the transactions were not genuine. However, the High Court found that the Tribunal's decision was based on factual findings from another case involving the respondent's husband, Mukesh Marolia. The Revenue could not demonstrate any errors in these findings, and the appeal was dismissed due to lack of merit.
Issue (b): Genuineness of share transactions despite bogus contract notes.
The second issue raised by the Revenue was the Tribunal's justification of the share transactions' genuineness, despite discovering bogus contract notes and broker bills during a survey. The High Court noted that the Tribunal's decision was consistent with the findings in Mukesh Marolia's case. As the Revenue failed to establish any flaws in these findings and the appeal in the husband's case was dismissed, the questions raised in the appeal were deemed irrelevant, leading to the dismissal of the appeal.
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2009 (3) TMI 1068
Issues involved:
The issues involved in this case are the challenge against a decree in a civil suit, the collusiveness of the suit, the interpretation of Section 17 of the Registration Act, 1908, and the inconsistency in previous court decisions regarding the interpretation of the exception in Section 17(2)(vi).
Challenge against Decree in Civil Suit:
The appellants, daughters of Bhagwana, challenged the decree in Civil Suit No. 630 of 1980 as collusive, seeking to set it aside. The trial court decreed Civil Suit No. 234 of 1982 in their favor, but the first appellate court reversed this decision. The High Court also dismissed the second appeal by the appellants against the judgment of the first appellate court.
Collusiveness of the Suit:
The First Appellate Court found that the judgment and decree in Civil Suit No. 630 of 1980 were not collusive. Bhagwana, the defendant in the suit, supported the decree and was alive when another suit was filed. The appellants did not participate in the trial to claim any right in the disputed land.
Interpretation of Section 17 of the Registration Act:
The appellants argued a violation of Section 17 of the Registration Act, 1908. The exception in Section 17(2)(vi) states that a decree or order of a court, not expressed to be made on a compromise, regarding immovable property not part of the suit, requires registration. The court noted conflicting interpretations in previous cases and found difficulty in accepting the view that the exception covers only pre-existing rights.
Inconsistency in Previous Court Decisions:
There is inconsistency between the decisions in Bhoop Singh v. Ram Singh Major and K. Raghunandan v. Ali Hussain Sabir regarding the interpretation of the exception in Section 17(2)(vi) of the Registration Act. The court found it necessary to refer the matter to a larger bench for a clear interpretation of the exception.
Conclusion:
The Supreme Court upheld the decision of the High Court regarding the collusiveness of the suit and the interpretation of Section 17 of the Registration Act. However, due to the inconsistency in previous court decisions, the matter was referred to a larger bench for a definitive interpretation of the exception in Section 17(2)(vi).
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2009 (3) TMI 1067
Issues involved: The judgment involves the appointment of candidates to vacancies in the Income Tax Appellate Tribunal (ITAT) for the positions of Judicial Member (JM) and Accountant Member (AM) in the unreserved category.
Judgment Details:
Issue 1: Vacancies for JM/UR and AM/UR
- The Union of India challenged an order by the Central Administrative Tribunal regarding the appointment of an advocate and two Chartered Accountants to the ITAT.
- The Selection Board recommended candidates for the vacancies, including wait-listed candidates.
- Unexpected vacancies arose for JM/UR and AM/UR positions due to resignations and declined offers.
- The Union of India failed to appoint the candidates recommended by the Selection Board, leading to the dispute.
Issue 2: Legality of Appointment
- The candidates argued that there were clear vacancies for AM/UR positions as only three out of five were filled.
- The Union of India's failure to appoint the candidates was deemed illegal and arbitrary.
- The Additional Solicitor General contended that waitlisted candidates do not have a right to appointment, citing legal precedents.
Issue 3: Legal Precedents and Reasonable Explanation
- Legal precedents were cited regarding the appointment of candidates from waitlists and merit lists.
- The Supreme Court emphasized the need for a reasonable basis for not filling vacancies.
- The Union of India's explanation for not filling vacancies based on proposed rule amendments was deemed unreasonable.
- The judgment highlighted the importance of respecting Selection Board recommendations and reducing backlog in the ITAT for public interest.
Conclusion:
- The Tribunal's order was upheld, directing the Union of India to process the appointment of the candidates to the respective vacancies within a specified timeframe.
- The writ petitions were dismissed with no costs awarded.
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2009 (3) TMI 1066
Issues involved: Examination of whether separate accounts were being maintained by the appellant for dutiable and exempted boilers.
Summary:
Issue 1: Maintenance of separate accounts
The appellant, engaged in manufacturing boilers, claimed to maintain separate accounts for dutiable and exempted products without availing any credit for inputs used in the exempted product. The Assistant Commissioner initially dropped the proceedings after verifying the separate accounts. However, the Revenue appealed before the Commissioner (Appeals) who reversed the decision based on a lack of separate account verification. The Tribunal noted that the Commissioner (Appeals) did not examine the fact of separate account maintenance properly. The Tribunal found that the original adjudicating authority had verified and confirmed the separate accounts, contrary to the Commissioner's observation based on a single instance of credit utilization. The Tribunal set aside the Commissioner's order and remanded the matter for a fresh decision considering the verified separate records.
Outcome:
The Tribunal disposed of the stay petition and appeal accordingly.
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2009 (3) TMI 1065
Issues involved: High Court's order directing payment in installments for liquidating bank dues, challenge to proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, one-time settlement failure, High Court's jurisdiction in entertaining writ petition.
Challenge to High Court's Order: The Supreme Court reviewed a case where the High Court directed the respondent to pay &8377; 10 lakhs in installments to settle the dues of the appellant bank. The appellant bank had extended a financial facility to the respondent, who failed to abide by the terms of the one-time settlement. Despite the availability of a statutory alternative remedy under Section 17 of the Act, the High Court entertained the writ petition, which the Supreme Court deemed as erroneous.
Securitisation and Reconstruction Act Proceedings: The appellant bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The respondent's account was declared as a non-performing asset, leading to the filing of O.A. No.70 of 2002 before the Debts Recovery Tribunal. Subsequently, notices were issued under Section 13(2) and 13(4) of the Act. The Tribunal passed a decree in favor of the appellant bank for a specific sum along with interest. The respondent challenged these proceedings in a writ petition, which was stayed by the High Court subject to the respondent depositing &8377; 10 lakhs, a condition that was not fulfilled.
Dismissal of Writ Petition: The Supreme Court found the High Court's approach to be erroneous as the respondent had failed to comply with the one-time settlement terms. The Supreme Court allowed the appeal, setting aside the impugned order and dismissing the writ petition filed by the respondent before the High Court.
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2009 (3) TMI 1064
Ad hoc appointments - Doctrine of equality - dozens appointments made without sanctioned posts and without following the procedure prescribed vide circular - violation of the rules and relevant instructions - Order of reinstatement - Equality of opportunity - The competent authority passed orders terminating the services of the respondents, who challenged the same by filing a petition under Article 226 of the Constitution of India, which was registered as CWJC No. 7816.
The respondents pleaded that the action taken against them was vitiated due to violation of the rules of natural justice and arbitrary exercise of power because the concerned authority did not give them the effective opportunity of hearing and the instruction contained in memorandum dated 16.4.1996 could not have been applied to their case because they had been appointed prior to cut off date specified therein i.e. 28.10.1991. The appellant herein contested the writ petition by asserting that the services of the writ petitioners were terminated because their initial appointments were illegal.
ld Single Judge relied upon the order passed in CWJC No. 5140 and quashed the termination of the respondents' services with a direction that they be reinstated with consequential benefits.
Letters Patent Appeal No. 61 of 2007 filed by the appellant was dismissed by the Division Bench on the ground that similar appeals filed in the cases of Arun Kumar and others and Arjun Chaudhary had already been dismissed. In the opinion of the Division Bench, a different view could not be taken in the case of the respondents because that would give rise to an anomalous situation.
HELD THAT:- For ensuring that equality of opportunity in matters relating to employment becomes a reality for all, Parliament enacted the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 (`the 1959 Act'). Section 4 of that Act casts a duty on the employer in every establishment in public sector in the State or a part thereof to notify every vacancy to the employment exchange before filling up the same.
In Union of India and Ors. v. N. Hargopal and Ors.[1987 (4) TMI 491 - SUPREME COURT] and Arun Kumar Nayak v. Union of India and Ors.[2006 (9) TMI 589 - SUPREME COURT] held that in terms of Section 4 of the 1959 Act, every public employer is duty bound to notify the vacancies to the concerned employment exchange so as to enable it to sponsor the names of eligible candidates and also advertise the same in the newspapers having wider circulation, employment news bulletins, get announcement made on radio and television and consider all eligible candidates whose names may be forwarded by the concerned employment exchange and/or who may apply pursuant to the advertisement published in the newspapers or announcements made on radio/television.
Notwithstanding the basic mandate of Article 16 that there shall be equality of opportunity for all citizens in matters relating to employment for appointment to any office under the State, the spoil system which prevailed in America in 17th and 18th centuries has spread its tentacles in various segments of public employment apparatus and a huge illegal employment market has developed in the country adversely affecting the legal and constitutional rights of lakhs of meritorious members of younger generation of the country who are forced to seek intervention of the court and wait for justice for years together.
SPOIL SYSTEM - A BIRD'S EYE VIEW:- With a view to insulate the public employment apparatus in independent India from the virus of spoil system, the framers of the Constitution not only made equal opportunity in the matter of public employment as an integral part of the fundamental rights guaranteed to every citizen but also enacted a separate part, i.e., Part XIV with the title "Services under the Union and the States".
However, the hope and expectation of the framers of the Constitution that after independence every citizen will get equal opportunity in the matter of employment or appointment to any office under the State and members of civil services would remain committed to the Constitution and honestly serve the people of this country have been belied by what has actually happened in last four decades.
Unfortunately, some orders passed by the Courts have also contributed to the spread of spoil system in this country. The judgments of 1980s and early 1990s show that this Court gave expanded meaning to the equality clause enshrined in Articles 14 and 16 and issued directions for treating temporary/ad hoc/daily wage employees at par with regular employees in the matter of payment of salaries etc.
In some cases, the schemes framed for regularization of the services of the backdoor entrants were also approved. As a result of this, beneficiaries of spoil system and corruption garnered substantial share of Class III and Class IV posts and thereby caused irreparable damage to the service structure at the lower levels. Those appointed by backdoor methods or as a result of favoritism, nepotism or corruption do not show any commitment to their duty as public servant. Not only this, majority of them are found to be totally incompetent or inefficient.
Whether the High Court was justified in directing reinstatement of the respondents with consequential benefits? - HELD THAT:- In view of the contradictory assertions made by the parties on the issue of legality of the respondents' initial appointment, the minimum which the ld Single Judge should have done was to call upon the respondents to produce copies of the advertisement issued by the competent authority and/or requisition sent to the employment exchange and letters of interview, if any, issued to them to prove that they were appointed by following a fair procedure and after considering the claims of all eligible persons.
However, without making any endeavour to find out whether the appointments of the respondents were made after following some procedure consistent with the doctrine of equality, the ld Single Judge quashed the termination of their services simply by relying upon the order passed in another case and by observing that the writ petitioners (respondents herein) had been appointed before the cut off date i.e. 28.10.1991 specified in letter dated 16.4.1996 and they had worked for almost 10 years.
The so-called regularization of the services of the respondents on which heavy reliance was placed by the learned senior counsel appearing on their behalf in the context of averments of the counter affidavit filed before this Court by Shri Prasannjeet Kumar Singh (respondent No. 3) is a proof of nepotism practiced by the officer and deserves to be ignored. For the reasons best known to them, the respondents have not produced copy of the order by which their services were regularised. Perhaps none exists.
The statement furnished by counsel for the appellant, which is accompanied by documents marked `A' and `B', shows that in less than 7 months of the respondents appointment (except respondent No. 1 who is said to have been appointed with effect from 9.10.1991), Regional Director, Animal Husbandry, Gaya, is said to have written confidential memorandum bearing No. 20 dated 11.5.1992 (Annexure `A') to District Animal Husbandry Officer, Aurangabad, Gaya that ad hoc appointments made vide Memorandum No. 1467 dated 9.10.1991 are being regularized temporarily by the local appointments committee constituted on 11.5.1992.
What is most amazing to notice is that the local appointments committee was constituted on 11.5.1992, the committee met on the same day and regularised the ad hoc appointments and on that very day the Regional Director sent confidential letter to his subordinate, i.e., the District Animal Husbandry Officer informing him about the regularization of ad hoc appointments. No rule or policy has been brought to our notice which empowers the appointing authority to regularize ad hoc appointments within a period of less than 7 months. Therefore, we have no hesitation to hold that the exercise undertaken by Regional Director for showing that appointments of the respondents were regularized by the local appointments committee on 11.5.1992 was a farce.
Therefore, we hold that the initial appointments of the respondents were made in gross violation of the doctrine of equality enshrined in Articles 14 and 16 and the provisions of the 1959 Act and the ld Single Judge gravely erred by directing their reinstatement with consequential benefits.
The issue which remains to be considered is whether the Division Bench of the High Court was justified in refusing to examine legality and legitimacy of the initial appointments of the respondents only on the ground that the State had not challenged the dismissal of Letters Patent Appeals filed in other cases.
In our view, the approach adopted by the Division Bench was clearly erroneous. By now it is settled that the guarantee of equality before law enshrined in Article 14 is a positive concept and it cannot be enforced by a citizen or court in a negative manner. If an illegality or irregularity has been committed in favour of any individual or a group of individuals or a wrong order has been passed by a judicial forum, others cannot invoke the jurisdiction of the higher or superior Court for repeating or multiplying the same irregularity or illegality or for passing wrong order.
In view of the above stated legal position, the order passed by the Division Bench dismissing the Letters Patent Appeal cannot be sustained.
Appeal is allowed, the orders of the ld Single Judge and Division Bench are set aside and the writ petition filed by the respondents is dismissed.
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2009 (3) TMI 1063
Issues involved:
The issue involves eligibility for concessional rate of duty u/s Notification No. 8/97 for cotton yarn manufacturing using imported wax as consumables.
Summary:
Issue 1: Eligibility for concessional rate of duty under Notification No. 8/97
The case involved manufacturers of cotton yarn functioning as 100% E.O.U. who cleared yarn to DTA using imported wax as consumables. Revenue alleged non-compliance with raw material sourcing requirements and issued a Show Cause Notice for duty demand and penalties u/s 11AB of Central Excise Act, 1944. Adjudicating authority denied concessional duty rate eligibility, leading to the appeal. Appellants argued that wax was used for grazing yarn, not as raw material, citing precedents and twin tests for raw material determination. Revenue contended that wax is essential for yarn manufacture, hence not eligible for the benefit. The Tribunal analyzed expert evidence and previous decisions, concluding that wax is a consumable, not a raw material, as per Apex Court judgments and circulars. Upholding the appellants' contention, the impugned order was set aside, allowing the appeal.
Decision:
Respecting the precedents and expert opinions, the Tribunal found in favor of the appellants, setting aside the impugned order and allowing the appeal with consequential relief.
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2009 (3) TMI 1062
Issues Involved
1. Applications with dissimilar reliefs, nature of.
2. Option under RDB Act not exercised.
3. Option for sale through the official liquidator withdrawn to pursue remedy under SARFAESI Act.
4. Objections for pursuing remedy under SARFAESI Act.
5. The points for consideration.
6. Relevant provisions of SARFAESI Act analogous provisions of other enactments containing non obstante clauses.
7. In case of seeming conflict, the attempt must be to harmonize.
Detailed Analysis
(I) Applications with dissimilar reliefs, nature of:
Two batches of applications were considered in relation to a company ordered to be wound up. The official liquidator was permitted to sell the assets with the assistance of secured creditors. An offer of 29.12 crores by Radha Raman Builders and Developers P. Ltd. failed due to non-deposit of 25% bid amount. HSIIDC opposed the offer, suggesting a revaluation for potentially higher offers.
(II) Option under RDB Act not exercised:
Bank of India, the sole secured creditor for the land, approached the Debts Recovery Tribunal (DRT) under the RDB Act and obtained a recovery certificate. However, the bank opted not to act under the RDB Act but consented to the sale under the Companies Act, later withdrawing consent due to delays and increased property value.
(III) Option for sale through the official liquidator withdrawn to pursue remedy under SARFAESI Act:
The company was ordered to be wound up on October 22, 1999. The first sale order was on May 28, 2004. A sale by the official liquidator was set aside on March 20, 2008. The applicant-reconstruction company reserved its right to recover dues under SARFAESI Act and initiated action under Section 13(2), with no objection from the official liquidator. The applicant contended it would undertake the liability of workmen's claims under Section 529A of the Companies Act.
(IV) Objections for pursuing remedy under SARFAESI Act:
HSIIDC contended that Bank of India did not object to the sale initially or when the sale was set aside and re-sale ordered. The assignee (applicant) could not have better rights than the assignor (Bank of India). HSIIDC argued that the assets should be sold by the official liquidator under court supervision for public interest, ensuring fair valuation and protection for creditors and workmen. HSIIDC had settled liabilities of several banks and had strong objections to recalling the sale order.
(V) The points for consideration:
The court considered the power of a secured creditor to stand outside the winding-up process and enforce security for dues recovery. The timing and manner of addressing the rights of several creditors, including workmen, were crucial. The court also examined whether the company court loses jurisdiction when a secured creditor claims assets during winding-up proceedings.
(VI) Relevant provisions of SARFAESI Act analogous provisions of other enactments containing non obstante clauses:
The arguments referenced analogous provisions in the State Financial Corporations Act (SFC Act) and RDB Act, which allow for property sale under relevant enactments, excluding the Companies Act except for workmen's claims under Section 529A. The SARFAESI Act, under Section 13(9), allows secured creditors to exercise rights if agreed upon by creditors representing at least three-fourths in value. Section 35 of the SARFAESI Act provides an overriding effect, while Section 37 states the Act's provisions are in addition to other laws. The RDB Act and SFC Act contain similar non obstante clauses.
(VII) In case of seeming conflict, the attempt must be to harmonize:
The court referred to several decisions emphasizing harmonizing provisions rather than seeing conflict. The Madras High Court in K. Chidambara Manickam v. Shakeena and the Bombay High Court in Rama Steel Industries v. Union of India dealt with the interplay of SARFAESI Act and RDB Act. The Supreme Court in Greater Bombay Co-operative Bank Ltd. v. United Yarn Tex. P. Ltd. and Transcore v. Union of India held that the SARFAESI Act provisions would prevail over the Companies Act, except for workmen's claims under Section 529A. The Allahabad High Court in BPL Display Devices Ltd., In re, allowed a reconstruction company to remain outside winding-up proceedings, emphasizing the need to inform the company court of sale processes.
The court concluded that while the SARFAESI Act allows for independent action, the official liquidator must be informed, and the sale process must be transparent. The reconstruction company was permitted to stay outside winding-up proceedings, but the sale must be conducted under SARFAESI Act rules, with expenses deducted and surplus proceeds deposited with the official liquidator.
Conclusion
The applications by the reconstruction company and other connected applications were disposed of with specific directions to ensure transparency and adherence to SARFAESI Act provisions while protecting the interests of all stakeholders, including workmen and other creditors.
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2009 (3) TMI 1061
The Supreme Court dismissed the case after condoning the delay. The citation is 2009 (3) TMI 1061 - SC. Justices S.H. Kapadia and V.S. Sirpurkar presided over the case. Petitioner represented by Mr. Amey Nargolkar, Mr. Kul Bharat, and Mr. B.V. Balaram Das.
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2009 (3) TMI 1060
The Supreme Court dismissed the appeal in the case with citation 2009 (3) TMI 1060. Judges were Mr. S.B. Sinha and Mr. P. Sathasivam.
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2009 (3) TMI 1059
Issues Involved:1. Dispensation of meetings for promoter/majority equity shareholder and creditors. 2. Approval of the scheme of amalgamation. 3. Directions for convening meetings of minority equity shareholders. Summary:1. Dispensation of Meetings for Promoter/Majority Equity Shareholder and Creditors:(1.) This joint application has been filed u/s 391 of the Companies Act, 1956, by the applicant-companies seeking directions of this Court to dispense with the requirement of convening the meetings of the promoter/majority equity shareholder of the transferor company and secured and unsecured creditors of the transferor and transferee companies. (8.) The transferor company has no secured creditor and has 13 unsecured creditors, whereas the transferee company has 5 secured creditors and 39 unsecured creditors. A direction is sought to dispense with the requirement of convening the meetings of the secured and unsecured creditors of the transferor and transferee companies to seek their approval to the proposed scheme of amalgamation. (9.) Learned senior counsel for the applicants submits that the scheme of amalgamation does not contemplate any compromise or arrangement with the secured and unsecured creditors and does not provide for any variation in the amounts owed or payable to them. The petitioner-companies undertake that upon notice being issued by this Court on the confirmation petition, it shall issue notice to the secured and unsecured creditors inviting objections, if any, to the scheme. (12.) In view of the statutory provision and judicial pronouncements, the Court finds merit in the prayer for dispensation of the meeting of the creditors. The undertaking given on behalf of the applicant-companies is accepted, and the requirement of convening the meetings of the secured and unsecured creditors is dispensed with. 2. Approval of the Scheme of Amalgamation:(6.) A copy of the scheme of amalgamation has been filed on record, detailing that the amalgamation will streamline operations, enhance operational efficiency, and maximize shareholder value. The scheme provides for a cash consideration of Rs. 110 for every fully paid-up equity share of the transferor company held by the minority shareholders. (10.) The scheme proposes that with effect from the appointed date, the amalgamating company, together with all its properties, assets, rights, benefits, and interests, shall be vested in the amalgamated company as a going concern, without any further deed or act, subject to the provisions of the scheme and in accordance with Sections 391, 394 of the Act. (11.) Reliance is placed on judicial precedents where courts have dispensed with the requirement of convening the meeting of the creditors on similar grounds. The Court accepts the submissions and finds merit in the prayer for dispensation of the meeting of the creditors. 3. Directions for Convening Meetings of Minority Equity Shareholders:(13.) The transferor company has approximately 7,143 equity shareholders. GE Capital (Mauritius) Investment Co. Ltd. (GECMIC) holds 92.74% of the paid-up equity share capital and has given its consent to the scheme. The meeting of the minority equity shareholders holding 7.26% of the equity share capital is directed to be held on May 2, 2009, at Air Force Auditorium, New Delhi. The quorum for the meeting shall be five members present in person. (14.) The transferee company has seven equity shareholders, and their meeting is directed to be held on May 2, 2009, at Air Force Auditorium, New Delhi. The quorum for the meeting shall be three members present in person. (15.) Notices for convening the meetings along with copies of the scheme and statement u/s 393 of the Companies Act, 1956, shall be sent to the minority equity shareholders and equity shareholders of the transferee company by UPC at least 21 days before the meeting date. Notice of the meetings shall also be published in newspapers. (16.) The chairpersons and alternate chairpersons will ensure that the meetings are conducted in a just, free, and fair manner. The fee for the chairpersons and alternate chairpersons is fixed, and they will file their reports within two weeks from the date of the meetings. (17.) The application stands allowed in the aforesaid terms.
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2009 (3) TMI 1058
Order for Cancellation of licence - "diazepam" detected on chemical examination of the toddy seized - defaulted in payment of kist, committed an offence punishable u/s 57A(iii) and Section 55(1) of the Abkari Act - Interpretation of the provisions of the Kerala Abkari Act and the Rules framed as the Kerala Abkari Shops (Disposal in Auction) Rules, 1974 ("the Rules") - Heydon’s Rule - HELD THAT:- Although the license was granted for one year, appellants had in fact entered into a contract for three years. Indisputably, they participated in the bid which was held for a period of three years. The effect of the bid for the said period, however, would be considered a little later.
As the said auction was confirmed, appellants started conducting their businesses. Indisputably, they furnished security. Some of them paid their kist regularly. Two sets of proceedings were initiated, as noticed hereinbefore, one in terms of Rule 6(28) and another in terms of Rule 6(30) of the Rules.
The principles contained in the Heydon’s Rule shall squarely be attracted in this case. It is a settled principle of interpretation of statute that when an amendment is made to an Act, or when a new enactment is made, Heydon’s rule is often utilized in interpreting the same. For the purpose of construction of Rule 6(30), as it stands now, the Court is entitled to look to the legislative history for the purpose of finding out as to whether the mischief prior to such amendment is sought to be rectified or not. Applying the Heydon’s rule, we have no other option but to hold that such was the intention on the part of the Rule making authority.
It is also not a case that forfeiture was ordered in view of the judgment of conviction passed against the licensees. The step taken by the respondent State, for forfeiture of amount of deposit as also recovery of the amount of loss purported to have been sustained by them, could have taken recourse to in terms of Rule 6(34) if they were convicted. Recourse thereto could have been taken only by the appropriate authority. The same would not automatically follow only because the licence was cancelled in terms of Rule 6(30) of the Rules. Therefore, the Board, in our opinion, was not correct to hold that the consequences laid down in Rule 6(28) would automatically be attracted. We have noticed hereinbefore that the order passed under Rule 6(28) of the Rules must be confirmed by the Excise Commissioner. Such is not the requirement in case of cancellation of licence under Rule 6(30).
We are of the opinion that it was impermissible for the Assistant Commissioner of Excise to pass the said order dated 19.12.1997 opining that the consequences of forfeiture under rule 6(28) is automatic upon cancellation of licence under Rule 6(30).
We have noticed hereinbefore that the Commissioner of Excise being a higher authority had already expressed his opinion that application of Rule 6(28) of the Rules is automatic consequent upon the cancellation of licence in terms of sub-rule (30) of Rule 6. Assistant Commissioner of Excise could not have taken a different view.
If only the Assistant Commissioner of Excise had the original authority to issue such a notice and not the Commissioner of Excise being an higher authority, the law laid down by this Court in Commissioner of Police, Bombay vs. Gordhandas Bhanji [1951 (11) TMI 17 - SUPREME COURT] would have been applicable. The proceeding, thus, in a case of this nature should have been initiated by the Assistant Commissioner of Excise and not by the Commissioner of Excise. Where the statutory authority, it is well known, exercises his jurisdiction conferred on him by a statute, he has to apply his own mind and the procedures laid down therefore must be scrupulously followed.
It is furthermore a well settled principle of law that a statutory authority must exercise its jurisdiction within the four corners of the statute. Any action taken which is not within the domain of the said authority would be illegal and without jurisdiction.
Damages can be imposed on a licensee either for violation of the provisions of a statute on the part of the licensee and/or under the contract. So far as the damages to be levied under statute is concerned, it will be governed by the provisions of the statute. However, if damages are to be computed under the contract, the provisions of the Indian Contract Act and/or the terms of the contract would be relevant. Ordinarily, they should not be mixed up. If having regard to the provisions of Section 18A of the Act no contract for a period of more than one year could have been granted, damages could not have been calculated on the basis of the contract.
The order of cancellation as also the forfeiture of security amount was passed. No statement had been made as to how and in what manner the State suffered any loss. If the amount of security is to be taken into consideration indisputably there would be no default.
We may not moreover lose sight of another fact. Raids were conducted; shops were sealed on specific allegations, namely, the licensees had mixed some poisonous substance with liquor. They were prosecuted for adding ‘Diazepem’. Evidently, the fact that the chemical report showed that ‘Diazepem’ had been mixed with toddy have prejudiced the licensing authority. Such prejudice is apparent even on the face of the impugned order passed by the High Court.
Therefore, we are of the opinion that it was not a case where even Rule 6(28) could have also been resorted to. As we have not applied our mind to the judgment rendered by the criminal court leading to the acquittal of the appellants, we leave the parties to seek any other remedies available to them in law,
The impugned judgment of the High Court is set aside. These appeals are allowed. Consequently the Writ Petitions stand allowed to the extent indicated above.
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2009 (3) TMI 1057
Issues Involved:
1. Whether the Uttar Pradesh Ganna Kishan Sansthan (the "Sansthan") is a 'State' within the meaning of Article 12 of the Constitution of India.
Summary:
Issue 1: Whether the Uttar Pradesh Ganna Kishan Sansthan (the "Sansthan") is a 'State' within the meaning of Article 12 of the Constitution of India.
The Supreme Court examined whether the Sansthan, a society registered under the Societies Registration Act, qualifies as a 'State' u/s Article 12 of the Constitution of India. The Sansthan was established by a Government Order dated 4.08.1975 to take over functions previously performed by the Cane Development Department, including training cane-growers to increase sugar production. The management and expenses of the training centers were transferred to the Sansthan, funded by the U.P. Sahkari Ganna Samiti Sangh and Sakkar Vishesh Nidhi.
The respondent, appointed as Computer Officer/Data Processing Officer, challenged the abolition of his post and termination of his services by filing a writ petition. The High Court's Full Bench held that the Sansthan is a 'State' within the meaning of Article 12.
Article 12 defines 'the State' to include the Government and Parliament of India, the Government and legislature of each State, and all local or other authorities within the territory of India or under the control of the Government of India. The Court referred to various precedents, including Rajasthan State Electricity Board v. Mohan Lal, Ajay Hasia v. Khalid Mujib Sehravardi, and Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, to determine the criteria for an entity to be considered a 'State'.
The Court applied the tests from Pradeep Kumar Biswas, which include formation, objects and functions, management and control, and financial aid. The Sansthan was created under a Government charter, managed by a Governing Council dominated by public servants, and substantially financed by the Government. The Sansthan's functions, such as providing scientific training for sugarcane cultivation, were deemed public functions.
The Court noted that the Sansthan's budget was significantly funded by the Government, and its management included government officials. Rule 41 of the Sansthan's Rules allowed the Governor of Uttar Pradesh to issue directives, indicating deep and pervasive State control.
Based on these findings, the Supreme Court concluded that the Sansthan is financially, functionally, and administratively dominated by the Government, qualifying it as a 'State' within the meaning of Article 12. Consequently, the appeal was dismissed with costs assessed at Rs. 50,000.
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2009 (3) TMI 1056
Application for grant of probate - Disputed Will - Effect of pendency of a probate proceeding vis-`-vis a criminal case involving allegations of forgery of a Will - Judgment in rem - appellant filed an application for quashing of the FIR which was, however, dismissed observing that the appellants would be at liberty to move the trial court by way of moving an application for stay of the criminal trial pending adjudication of the question of the genuineness of the Will by the Civil Court.
HELD THAT:- Axiomatically, if judgment of a civil court is not binding on a criminal court, a judgment of a criminal court will certainly not be binding on a civil court. We have noticed that Section 43 of the Evidence Act categorically states that judgments, orders or decrees, other than those mentioned in sections 40, 41 and 42 are irrelevant, unless the existence of such judgment, order or decree, is a fact in issue, or is relevant under some other provisions of the Act. No other provision of the Evidence Act or for that matter any other statute has been brought to our notice.
As and when a judgment is rendered in one proceeding subject to the admissibility thereof keeping in view Section 43 of the Evidence Act may be produced in another proceeding. It is, however, beyond any cavil that a judgment rendered by a probate court is a judgment in rem. It is binding on all courts and authorities. Being a judgment in rem it will have effect over other judgments. A judgment in rem indisputably is conclusive in a criminal as well as in a civil proceeding.
We have noticed the decision in K.G. Premshanker [2002 (9) TMI 849 - SUPREME COURT]. Mr. Dwivedi, however, would submit that the court therein was concerned with a case involving Section 42 of the Evidence Act. The learned counsel may be correct as it was held that Section 41 is an exception to Sections 40, 42 and 43 of the Act providing as to which judgment would be conclusive proof of what is stated therein.
Pendency of two proceedings whether civil or criminal, however, by itself would not attract the provisions of Section 41 of the Evidence Act. A judgment has to be pronounced. The genuineness of the Will must be gone into. Law envisages not only genuineness of the Will but also explanation to all the suspicious circumstances surrounding thereto besides proof thereof in terms of Section 63(c) of the Indian Succession Act, and Section 68 of the Evidence Act.
FIR was lodged not only in regard to forgery by the Will but also on the cause of action of a trespass. Appellant admittedly is facing trial u/s 420, 468 and 448 of the IPC. It is, thus, possible that even if the Will is found to be genuine and that no case u/s 468 of the IPC is found to have been made out, appellant may be convicted for commission of other offences for which he has been charged against, namely, trespass into the property and cheating. If it is found that the appellant is guilty of trespass, he may be asked to handover possession of the premises in question to the complainant.
Whereas the criminal case is pending before the Delhi court, the testamentary suit has been filed before the Jharkhand High Court. Since 2003 not much progress has been made therein. The Will has not been sent to the handwriting expert for his opinion, which is essential for determination of the question in regard to the genuineness of the Will. It is alleged that the Will was registered at Hazaribagh after the death of the testatrix. For the last seven years in view of the pendency of the matters before the High Courts in different proceedings initiated by the appellant, the criminal case has not proceeded, although as noticed hereinbefore charge-sheet has been filed and cognizance of the offence has been taken.
We, therefore, are of the opinion that it is not a fit case where we should exercise our discretionary jurisdiction under Article 136 of the Constitution of India having regard to the facts and circumstances of the present case.
We find no merit in this appeal. The appeal is dismissed.
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2009 (3) TMI 1055
The Bombay High Court heard an appeal regarding the liability to collect tax at source under Section 206C(1C) of the Income Tax Act, 1961 in relation to octroi collected by an agent appointed by the assessee. The appeal raised questions on whether octroi collected is different from toll and whether it falls within the ambit of Section 206C(1C).
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2009 (3) TMI 1054
Issues Involved:
The issues involved in this case are:
1. Sustenance of deletion of unexplained cash credits under Section 68 of the Income Tax Act.
2. Deletion of addition made by disallowing the claim on account of commission paid by the assessee.
Unexplained Cash Credits Issue:
The appeal was filed by the Revenue under Section 260A of the Income Tax Act against the Tribunal's judgment regarding the deletion of a sum of Rs. 27,75,000 made by the Assessing Officer on account of unexplained cash credits under Section 68 of the Act for the block period 01.04.1996 to 04.04.2002. The Assessing Officer had made various additions, including the unexplained cash credits and the disallowance of commission. The CIT(A) reversed the Assessing Officer's order, noting that the credits were disclosed in the regular books of accounts and were reflected in the audited balance sheet for the assessment year 2002-03. The CIT(A) concluded that the addition made under Section 158BC of the Act was not justified as it could have been examined in the regular assessment proceedings. The Tribunal sustained the CIT(A)'s decision, stating that the credits were recorded in the books of accounts and the creditors had confirmed the transaction.
Commission Disallowance Issue:
The second issue pertained to the deletion of the addition of Rs. 34,89,970 made by the Assessing Officer by disallowing the claim on account of commission paid by the assessee. The CIT(A) held that the Assessing Officer could not have resorted to the block assessment provisions to examine the genuineness of the claim. The Tribunal sustained the deletion of the addition, noting that the entry pertaining to the commission was recorded in the regular books of accounts and the Revenue failed to produce evidence to demonstrate any error in the CIT(A)'s findings.
Conclusion:
The High Court upheld the Tribunal and CIT(A)'s decisions on both issues. Regarding the unexplained cash credits, the Court agreed that the credits were disclosed in the regular books of accounts and found no fault with the Tribunal's decision. As for the commission disallowance, the Court noted that the commission was part of the total amount allowed by the Assessing Officer and could not be disallowed. The Court dismissed the appeal, stating that no substantial question of law arose for consideration.
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2009 (3) TMI 1053
The Supreme Court dismissed the appeal in the case with citation 2009 (3) TMI 1053 - SC. Judges were Mr. S.H. Kapadia and Mr. Aftab Alam.
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2009 (3) TMI 1052
Issues Involved:
1. Jurisdiction of the Kerala State Electricity Board (KSEB) to revise tariffs post the enactment of the Electricity Regulatory Commissions Act, 1998.
2. Obligation of the State to constitute the Electricity Regulatory Commission under the 1998 Act.
3. Applicability of the principles laid down in the 1998 Act for tariff revision by the KSEB.
4. Validity of the 2002 Tariff Revision Order by KSEB.
Summary:
1. Jurisdiction of KSEB to Revise Tariffs Post-1998 Act:
The Supreme Court examined whether KSEB had the jurisdiction to revise tariffs after the enactment of the Electricity Regulatory Commissions Act, 1998 (1998 Act). It was held that until the Kerala State Electricity Regulatory Commission (KSERC) was constituted, the power to determine the tariff remained vested in the Board u/s 49, 59, and clause (j) of Section 79 of the Electricity (Supply) Act, 1948 (1948 Act). The Court noted, "The 1948 Act has not been repealed or replaced by the 1998 Act."
2. Obligation of the State to Constitute the Electricity Regulatory Commission:
The Court clarified that Section 17 of the 1998 Act did not impose a mandatory obligation on the State to constitute the Commission. The language used in Section 17 was directory, not mandatory, as it stated, "The State Government may, if it deems fit, by notification in the Official Gazette, establish... a Commission." The Court emphasized that the law does not contemplate a vacuum in its operation.
3. Applicability of the Principles Laid Down in the 1998 Act:
The Court held that the principles enumerated in clauses (c) to (g) of sub-section (2) of Section 29 of the 1998 Act were not binding on the State Electricity Boards until the Commission was constituted. The Court stated, "It would be absurd to suggest that the principles required to be adopted by the Commission were per force required to be adopted by the Electricity Boards despite the fact that the Commission did not come into existence."
4. Validity of the 2002 Tariff Revision Order by KSEB:
The Court upheld the validity of the 2002 Tariff Revision Order issued by KSEB, stating that the Board had the requisite jurisdiction to revise the tariff till the Commission was constituted. The Court noted, "The power to make tariff would bring within its folds the power to revise the same."
Conclusion:
The Supreme Court concluded that the KSEB had the jurisdiction to revise tariffs until the KSERC was constituted. The decision in BSES Ltd. v. Tata Power Company Ltd. was distinguished based on its facts, and the Court clarified that the principles of the 1998 Act were not binding on the KSEB until the Commission was established. The matter was referred back to an appropriate Bench for determination of other substantial questions of law raised in the appeal.
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2009 (3) TMI 1051
The Supreme Court condoned the delay and dismissed the Special Leave Petition regarding a penalty of Rs. 10,000 without interference. The question of law is kept open. (Case Citation: 2009 (3) TMI 1051 - SC)
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