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2003 (2) TMI 502
Issues Involved:
1. Allowance of expenses against 'On money' received.
2. Application of a 12% profit rate on both accounted and unaccounted turnover.
3. Rejection of the 'Project Completion Method' for computing profits.
4. Charging of interest u/s 234B.
Summary:
1. Allowance of expenses against 'On money' received:
The department's appeal challenged the CIT(A)'s direction to allow expenses against 'On money' received by the assessee, which were not recorded in the books, and to tax only 12% of the 'On money' as the assessee's income. The Tribunal upheld the CIT(A)'s decision, noting that the department failed to provide material evidence to support a higher rate of gross profit. The Tribunal dismissed the departmental appeal, confirming that the CIT(A) correctly followed the ITAT's previous decision for the assessment year 1991-92.
2. Application of a 12% profit rate on both accounted and unaccounted turnover:
The Assessing Officer (AO) rejected the book results, applying a 12% profit rate on the gross receipts, including 'On money' receipts, due to substantial unrecorded receipts and expenses. The CIT(A) upheld this approach for the unrecorded transactions but allowed deductions for expenses. The Tribunal, upon difference of opinion between the Judicial and Accountant Members, referred the matter to a Third Member. The Third Member agreed with the Judicial Member, holding that the book results should not be accepted and a 12% profit rate should be applied to both accounted and unaccounted turnover. Consequently, the Tribunal decided in favor of the revenue, rejecting the assessee's grounds and dismissing the appeal.
3. Rejection of the 'Project Completion Method' for computing profits:
The AO and CIT(A) rejected the 'Project Completion Method' adopted by the assessee, estimating profits at 12% on the gross turnover of Rs. 5,86,67,554, against the actual profits of Rs. 35,89,659 (6.12%) shown by the assessee. The Tribunal upheld this rejection, noting that the AO was justified in applying the 12% rate due to the unreliability of the assessee's books, which omitted substantial receipts and expenses.
4. Charging of interest u/s 234B:
The Tribunal held that the charging of interest u/s 234B has a consequential effect, and relief may be allowed to the assessee accordingly.
Conclusion:
The Tribunal, in accordance with the majority view, decided in favor of the revenue, rejecting the book results shown by the assessee and applying a 12% profit rate on both accounted and unaccounted turnover. The appeal of the assessee was dismissed.
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2003 (2) TMI 501
Issues Involved:
1. Jurisdiction of the Commissioner u/s 11(1) proviso of the Land Acquisition Act.
2. Nature of the power exercised by the Commissioner.
3. Applicability of Section 15A of the Land Acquisition Act.
Summary:
Jurisdiction of the Commissioner u/s 11(1) proviso of the Land Acquisition Act:
The appellants challenged the jurisdiction of the Commissioner under the proviso to Section 11(1) of the Land Acquisition Act, arguing that the Commissioner had no authority to reappreciate the material on record as an appellate authority. They contended that the Commissioner's role was limited to approving or not approving the award made by the Land Acquisition Officer (the Collector).
Nature of the power exercised by the Commissioner:
The Supreme Court examined whether the Commissioner's power under the proviso to Section 11(1) was administrative or appellate. The Court concluded that the power of granting or not granting previous approval is administrative in nature and does not equate to appellate power. The Commissioner can only confirm, ratify, assent, sanction, or consent to the proposed award but cannot reverse the findings or issue directions to the Collector as if exercising appellate jurisdiction.
Applicability of Section 15A of the Land Acquisition Act:
The Court noted that Section 15A of the Act provides the State Government with appellate power to call for records or proceedings of the Collector before any award is made. This power includes satisfying itself as to the legality or propriety of any finding or order passed and issuing directions accordingly. The Commissioner, while considering the proposed award, can bring any concerns to the notice of the appropriate Government to exercise its power under Section 15A but cannot exercise this power himself.
Conclusion:
The Supreme Court held that the Commissioner's power under the proviso to Section 11(1) is limited and administrative in nature. The Commissioner cannot sit in appeal against the proposed award made by the Collector. The Court also noted conflicting views in previous judgments and referred the matter to a larger Bench for settling the law.
Order:
The papers in this appeal shall be placed before the Hon'ble Chief Justice of India for necessary orders.
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2003 (2) TMI 500
Issues Involved:
The assessment of interest amount received on short term deposit as income from business for the purpose of relief under section 80HHC of the Income-tax Act, 1961.
Judgment Details:
The appeal was filed by M/s. Southern Cashew Exporters against a common order of the Income-tax Appellate Tribunal for the assessment years 1994-95 and 1995-96, specifically focusing on the assessment year 1994-95. The questions raised by the assessee pertained to the treatment of interest amount received on short term deposit as income from business under section 80HHC of the Income-tax Act. The Assessing Officer categorized the amount under 'Other sources', but the first appellate authority considered it for section 80HHC relief. However, the Tribunal overturned the first appellate authority's decision and upheld the Assessing Officer's view, leading to the appeal by the assessee. The Court noted that the questions raised were similar to previous judgments against the assessee and in favor of the department, thus finding no merit in the appeal and dismissing it.
In conclusion, the Court upheld the Tribunal's decision to treat the interest amount received on short term deposit as income from 'Other sources' rather than as income from business for the purpose of section 80HHC relief under the Income-tax Act, 1961.
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2003 (2) TMI 499
Issues Involved:
1. Whether the assessee had written off a debt within the period of less than three months at the end of the previous year from the date of advance or more than two years from the date of advance?
2. Whether the assessee is entitled to deduction in respect of the claim of a debt notwithstanding the uncontroverted finding of the Assessing Officer that the claim was not genuine?
3. Whether the assessee is entitled to deduction of any debt written off in the books of account as a bad debt and the Assessing Officer has no power to question the genuineness of the claim?
Summary:
1. Period of Debt Write-off:
The Assessing Officer (AO) noted that the debt was written off within less than three months from the date of advance, specifically from January 1991 to March 1991. The CIT(A) accepted the assessee's claim that the debt was written off two years after the advance. The Judicial Member agreed with the AO, confirming the short period, while the Accountant Member accepted the assessee's contention of a two-year gap. The Third Member confirmed the AO's finding of a short period, making the issue academic.
2. Genuineness of the Claim:
The AO found the claim of Rs. 1,83,500 as incredulous and intended to reduce tax liability, noting the debt was written off on humanitarian grounds. The CIT(A) allowed the claim, stating that post-amendment of section 36(1)(vii), it was sufficient if the debt was written off as irrecoverable. The Judicial Member emphasized the need for the debt to be established as bad, while the Accountant Member opined that post-amendment, the assessee need not prove the debt became bad, and writing it off was sufficient. The Third Member concurred with the Accountant Member, emphasizing that the amendment aimed to reduce litigation and align taxable income with real income.
3. Assessing Officer's Power to Question Genuineness:
The AO questioned the genuineness of the debt, suggesting it was written off to reduce tax liability. The CIT(A) held that post-amendment, the AO could not question the genuineness if the debt was written off. The Judicial Member believed the AO retained the power to question the genuineness, while the Accountant Member held that the amendment removed this power, focusing only on the write-off. The Third Member supported the Accountant Member's view, stating that the amendment intended to simplify the process and reduce disputes over the year of allowability.
Conclusion:
The Third Member's concurrence with the Accountant Member's view led to the majority decision that the assessee's write-off of the debt as irrecoverable in the books was sufficient for claiming deduction u/s 36(1)(vii). The appeal by the department was dismissed.
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2003 (2) TMI 498
Issues Involved:
1. Binding Nature of Arbitration Clause
2. Objections to the Arbitration Award
3. Review Petition for Future Interest
4. Maintainability of Appeals and Cross Objections
5. Execution of Decree Based on Arbitration Award
Summary:
1. Binding Nature of Arbitration Clause:
The primary issue was whether the arbitration clause in the original contract between the parties was binding on the current parties. The Court deemed this issue irrelevant for the decision of the appeals.
2. Objections to the Arbitration Award:
Disputes arose, leading to arbitration under the Arbitration Act, 1940. The arbitrator's award was non-speaking, and the respondents sought to make it a rule of the Court u/s 14 of the Act. The appellants filed objections u/s 30 and 33, challenging the award's validity. The Court dismissed these objections and upheld the award.
3. Review Petition for Future Interest:
The respondents filed a review petition seeking future interest on the decretal amount, which was dismissed by the learned single Judge. The respondents then filed an appeal before the Division Bench, which was also dismissed as not maintainable u/s 39 of the Act.
4. Maintainability of Appeals and Cross Objections:
The appellants filed an appeal with a delay of 230 days, seeking condonation of delay, which was dismissed. They argued that their appeal could be treated as a cross objection u/r 22 of Order 41 of the CPC. The Court held that cross objections are maintainable in appeals u/s 39 of the Arbitration Act, 1940, but only if the original appeal is competent. Since the original appeal by the respondents was dismissed as not maintainable, the cross objection could not be heard.
5. Execution of Decree Based on Arbitration Award:
The appellants objected to the execution of the decree based on the award, arguing the absence of an arbitration agreement. The Executing Court overruled this objection, and the High Court dismissed the appeal against this decision.
Conclusion:
The Supreme Court dismissed the appeals, affirming that cross objections are maintainable in appeals u/s 39 of the Arbitration Act, 1940, only if the original appeal is competent. The appeal filed by the appellants was dismissed as time-barred and could not be treated as a cross objection. The execution of the decree based on the arbitration award was upheld.
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2003 (2) TMI 497
Issues Involved:
1. Liability of the Insurance Company when the driver's license is alleged to be fake.
2. Legal precedents and statutory provisions regarding the defenses available to Insurance Companies u/s 96(2) of the Motor Vehicles Act, 1939 and u/s 149 of the Motor Vehicles Act, 1988.
3. Interpretation of "breach" in the context of insurance policies and the liability of the insurer.
4. The duty of insurers to satisfy judgments and awards against persons insured in respect of third-party risk.
Summary:
1. Liability of the Insurance Company when the driver's license is alleged to be fake:
The Insurance Company sought to avoid liability on the ground that the driver's license was fake. However, the Supreme Court noted that the Appellants failed to prove that the license was fake. The Motor Accident Claims Tribunal and the High Court both held that even if the license was fake, the Insurance Company was liable to pay the compensation as they failed to prove that the insured had deliberately committed any breach of any condition.
2. Legal precedents and statutory provisions regarding the defenses available to Insurance Companies u/s 96(2) of the Motor Vehicles Act, 1939 and u/s 149 of the Motor Vehicles Act, 1988:
The Supreme Court reiterated the settled law that an Insurance Company can only defend on grounds enumerated in Section 96(2) of the Motor Vehicles Act, 1939, and Section 149 of the Motor Vehicles Act, 1988. The Court referred to the cases of British India General Insurance Co. Ltd. v. Captain Itbar Singh, Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, and Sohan Lal Passi v. P. Sesh Reddy, which established that the insurer must pay to third parties and can only recover from the insured if there was a deliberate breach by the insured.
3. Interpretation of "breach" in the context of insurance policies and the liability of the insurer:
The Court emphasized that the term "breach" implies a willful infringement or violation by the insured. It was held that the insurer must establish that the insured was guilty of a deliberate breach. If the insured had taken all necessary precautions, such as hiring a licensed driver, the insurer could not avoid liability even if the license turned out to be fake.
4. The duty of insurers to satisfy judgments and awards against persons insured in respect of third-party risk:
The Court clarified that u/s 149 of the Motor Vehicles Act, 1988, the insurer must pay to the third party even if the policy is void or canceled, subject to the provisions of the section. The insurer can only avoid liability on the grounds specified in Section 149(2). The Court held that the insurer remains liable to the third party but may recover from the insured if it proves that the insured was aware of the fake license and still permitted the person to drive.
Conclusion:
The Supreme Court dismissed the appeal with costs, reiterating that the Insurance Company must pay the compensation to the third party and can only recover from the insured if there was a deliberate breach by the insured. The amount deposited was allowed to be withdrawn by the claimants.
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2003 (2) TMI 496
Issues Involved:
1. Immunity of ICRISAT from being sued under Article 226.
2. Whether ICRISAT qualifies as a 'State' or authority under Article 12.
3. Applicability of writ jurisdiction under Article 226 to ICRISAT.
4. Contractual nature of employment and enforceability of contractual rights through writ petitions.
5. Compliance with procedural fairness and natural justice in disciplinary actions.
Summary:
1. Immunity of ICRISAT from being sued under Article 226:
The High Court held that ICRISAT was an international organization immune from being sued due to a Notification issued in 1972 u/s 3 of the United Nations (Privileges and Immunities) Act, 1947. The Supreme Court affirmed this, stating that the immunity granted to ICRISAT under the 1947 Act was valid and that a writ under Article 226 could not be issued to ICRISAT.
2. Whether ICRISAT qualifies as a 'State' or authority under Article 12:
The Supreme Court examined whether ICRISAT could be considered a 'State' or authority under Article 12. It concluded that ICRISAT did not fulfill the criteria as it was not set up by the Government, was not controlled by the Government, and its financial contribution from the Indian Government was minimal. Therefore, ICRISAT was not a 'State' or authority under Article 12.
3. Applicability of writ jurisdiction under Article 226 to ICRISAT:
The Court held that a writ under Article 226 lies only when the petitioner establishes that his or her fundamental right or some other legal right has been infringed. Since ICRISAT is not a statutory body nor does it perform a public function or discharge a public or statutory duty, a writ under Article 226 could not be issued against it.
4. Contractual nature of employment and enforceability of contractual rights through writ petitions:
The Court noted that the appellants had a contractual relationship with ICRISAT and any right or obligation between the two parties was purely contractual in nature. It reiterated that a writ petition under Article 226 cannot be resorted to in order to enforce a contractual right, and no writ would lie to quash an order terminating a contract of service, albeit illegally, unless the order was made by a statutory body acting in breach of a mandatory obligation imposed by a statute.
5. Compliance with procedural fairness and natural justice in disciplinary actions:
The Court found that the disciplinary actions taken against the appellants were in accordance with the procedural rules framed by ICRISAT, which were fair and in keeping with the domestic law. The Personnel Policy Statement framed by ICRISAT dealing with internal discipline was in terms of clause 6 (2) of the March agreement, and it was not shown how these guidelines deviated from or did not approximate to the established disciplinary procedures followed by other private concerns in the country.
Conclusion:
The Supreme Court dismissed the appeals, holding that ICRISAT was immune from being sued under Article 226, was not a 'State' or authority under Article 12, and that the contractual nature of employment did not warrant the issuance of a writ under Article 226. The disciplinary actions taken were found to be in compliance with procedural fairness and natural justice.
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2003 (2) TMI 495
Issues Involved:
1. Classification of profit on the sale of an incomplete flat as long-term capital gain.
2. Taxation of discounted interest amount received from the National Housing Bank on an accrual basis instead of on a receipt basis.
3. Disallowance of brokerage paid for the sale of rights in a flat.
Detailed Analysis:
Issue 1: Classification of Profit on Sale of Incomplete Flat as Long-Term Capital Gain
The revenue contended that the CIT(A) erred in treating the profit on the sale of an incomplete flat as a long-term capital gain. The assessee, an individual, booked a flat in 1981 and sold her right to occupy the flat before its completion in 1991. The Assessing Officer (AO) argued that the sale of the right to occupy the flat should be treated as income from other sources or short-term capital gain, as the flat was not in existence at the time of sale. The CIT(A) disagreed, holding that the assessee's interest in the property included the ownership of the land, which had appreciated over time, thus qualifying as a long-term capital gain. The Tribunal endorsed the CIT(A)'s findings, noting that the right to occupy a flat constitutes a capital asset held for more than 36 months, and hence, the transaction resulted in a long-term capital gain.
Issue 2: Taxation of Discounted Interest Amount from National Housing Bank
The AO taxed the entire discounted interest amount of Rs. 23,50,000 received by the assessee in the assessment year 1992-93, arguing that it should be taxed on a receipt basis. The CIT(A) deleted this addition, but the Tribunal overturned this decision, citing the Kerala High Court's ruling in CIT v. Varghese Mani, which held that the entire interest accrues in the accounting year when an option to receive interest at a discount rate is exercised. The Tribunal directed the AO to tax the entire discounted interest amount in the assessment year 1992-93, with instructions to rectify any double taxation in subsequent years.
Issue 3: Disallowance of Brokerage Paid for Sale of Rights in Flat
The assessee claimed a deduction for brokerage of Rs. 1,50,000 paid to brokers for selling the flat rights. The AO disallowed this claim due to insufficient evidence, as the brokers were not produced for examination, and the payment was made in cash without proper verification. The CIT(A) upheld the disallowance, and the Tribunal agreed, emphasizing the lack of substantiation for the brokerage payment and the absence of proof of services rendered by the brokers. The Tribunal concluded that the claim was non-genuine and justified the disallowance.
Conclusion:
The Tribunal partly allowed the revenue's appeal by treating the discounted interest amount as taxable in the year of receipt and dismissed the assessee's appeal regarding the brokerage disallowance. The Tribunal upheld the CIT(A)'s decision to classify the profit on the sale of the incomplete flat as a long-term capital gain.
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2003 (2) TMI 494
... ...
... ... ..... elay condoned. The appeal is dismissed.
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2003 (2) TMI 493
Issues Involved:
1. Specific performance of an agreement to sell.
2. Cancellation of the agreement on the grounds of loan nature.
3. Appellate Court's power to modify the decree without cross-appeal or cross-objection.
4. Scope of power under Order 41 Rule 33 of the CPC.
Summary:
1. Specific Performance of an Agreement to Sell:
The respondent filed a suit for specific performance of an agreement to sell dated 03.11.1988, later novated by an agreement dated 15.7.1991. The consideration for the sale was Rs. 2,90,000/-, with Rs. 2,40,000/- already received by the vendor, leaving a balance of Rs. 50,000/- to be paid at the time of execution and registration of the sale deed. The Trial Court, in its judgment dated 20.5.1994, directed the appellants to deposit Rs. 2,40,000/- with interest, failing which the respondent could execute the sale deed after depositing Rs. 50,000/-.
2. Cancellation of the Agreement on Grounds of Loan Nature:
The appellants filed a suit seeking cancellation of the agreement, claiming the transaction was a loan of Rs. 60,000/-, with added interest capitalized by the respondent. The Trial Court found the appellants were cultivating the land and would suffer hardship if the sale deed was executed. The Trial Court's decree included a conditional order for specific performance if the appellants failed to deposit the money.
3. Appellate Court's Power to Modify the Decree Without Cross-Appeal or Cross-Objection:
The appellants appealed, and the High Court stayed the execution of the decree subject to deposit conditions. The first Appellate Court dismissed the appeals but modified the decree to grant specific performance in favor of the respondent without any cross-appeal or cross-objection by the respondent. The High Court upheld this decision, stating the first Appellate Court committed no error under Order 41 Rule 33 of the CPC.
4. Scope of Power Under Order 41 Rule 33 of the CPC:
The Supreme Court examined whether the first Appellate Court could modify the decree to grant specific performance without a cross-appeal or cross-objection by the respondent. It was held that the first Appellate Court did not have jurisdiction to modify the decree in such a manner. The Court emphasized that a respondent must file a cross-objection to seek modification of the decree to their advantage. The Supreme Court restored the Trial Court's decree and accepted the appellants' offer to pay an additional Rs. 1,20,000/- as compensation to the respondent.
Conclusion:
The appeals were allowed, setting aside the first Appellate Court's judgment and restoring the Trial Court's decree. The appellants were relieved from specifically performing the agreement, and the deposited amount of Rs. 2,40,000/- along with interest was to be released to the respondent. An additional Rs. 1,20,000/- was to be deposited by the appellants within eight weeks. The costs were to be borne by the parties as incurred.
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2003 (2) TMI 492
The Supreme Court dismissed the appeal in the case, as per the judgment by Ruma Pal and B.N. Srikrishna, JJ. (2003 (2) TMI 492 - SC).
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2003 (2) TMI 491
Issues Involved:
1. Legality of dispensing with an enquiry before dismissal.
2. Scope of judicial review in administrative decisions.
3. Allegations of mala fides and victimization.
4. Loss of confidence as a ground for dismissal.
5. Award of back wages and compensation.
Detailed Analysis:
1. Legality of Dispensing with an Enquiry Before Dismissal:
The core issue was whether the employer could dismiss the employee without holding an enquiry. The disciplinary authority justified dispensing with the enquiry on grounds of impracticability, citing threats and violent behavior by the employee that could intimidate witnesses. The Supreme Court noted that while the disciplinary authority has the discretion to dispense with an enquiry under Rule 30 of the Indian Railway Construction Co. Ltd. (Conduct, Discipline, and Appeal) Rules, 1981, such discretion must be exercised judiciously and not arbitrarily. The Court found that the reasons given for dispensing with the enquiry were not substantiated with concrete evidence, making the decision appear presumptuous.
2. Scope of Judicial Review in Administrative Decisions:
The judgment emphasized that judicial review of administrative decisions is limited to examining the decision-making process rather than the decision itself. The Court reiterated principles from landmark cases like the Wednesbury case and the CCSU case, which outline that administrative actions can be reviewed on grounds of illegality, irrationality, and procedural impropriety. The Court found that the High Court had not properly evaluated the impracticability of holding an enquiry and had instead focused on alleged mala fides without sufficient evidence.
3. Allegations of Mala Fides and Victimization:
The employee alleged that the dismissal was due to victimization for union activities and was motivated by mala fides. The Court noted that allegations of mala fides require clear and convincing proof, which was lacking in this case. The High Court's approach in accepting the mala fides argument without specific allegations or impleading the concerned individuals was criticized. The Supreme Court highlighted that the burden of proving mala fides is heavy and cannot be based on vague assertions.
4. Loss of Confidence as a Ground for Dismissal:
The employer argued that the employee's misconduct led to a loss of confidence, which justified his dismissal. The Supreme Court acknowledged that acts reflecting on an employee's character, reputation, and integrity could justify dismissal. The Court found that the employee's aggressive behavior and threats could legitimately lead to a loss of confidence by the employer. However, it also noted that the long passage of time since the incident weakened the employer's position.
5. Award of Back Wages and Compensation:
The Court addressed the issue of back wages and compensation, noting that reinstatement does not automatically entitle an employee to full back wages. It referenced previous judgments to emphasize that the award of back wages involves judicial discretion and should consider all relevant circumstances. The Supreme Court directed a payment of Rs. 12 lakhs towards back wages, in addition to an interim payment of Rs. 3 lakhs, as a full and final settlement, considering the long passage of time and the employer's loss of confidence.
Conclusion:
The Supreme Court balanced the conflicting interests by acknowledging the procedural lapses in dispensing with the enquiry while also recognizing the employer's legitimate concerns about the employee's misconduct and loss of confidence. The decision to award back wages and compensation aimed to provide a fair resolution given the prolonged litigation and the impracticality of reinstating the employee after such a long time. The appeal was disposed of with directions for the payment to be made within eight weeks.
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2003 (2) TMI 490
Issues Involved:
1. Competence of the Executor to sell the property without consent of other legatees.
2. Validity and enforceability of the agreement dated 4-12-1979.
3. Existence of a concluded agreement for sale.
4. Right of the second plaintiff to seek specific performance.
5. Hardship to defendants if the agreement is enforced.
6. Allegation of unfair advantage taken by the plaintiff.
Summary:
Issue 1: Competence of the Executor to Sell Property
The court examined whether the Executor, Defendant No.1, had the absolute power to sell the property without the consent of other legatees. The Will dated 25.4.1972 allowed the Executor to sell the property but also gave the legatees an option to partition the property. The court concluded that if the legatees expressed a desire to partition before the sale, the Executor must consent to it.
Issue 2: Validity and Enforceability of Agreement Dated 4-12-1979
The agreement of sale dated 4.12.1979 was scrutinized. The court noted that the agreement was subject to ratification by the co-heirs, indicating it was not a concluded contract. The restrictive covenant was not for the benefit of Plaintiff No.1, and thus, the agreement was not enforceable.
Issue 3: Existence of a Concluded Agreement for Sale
The court determined that the agreement was conditional and not a concluded contract. The term "subject to ratification by the co-heirs" indicated that the agreement required approval from other legatees, making it a condition precedent for a concluded contract.
Issue 4: Right of the Second Plaintiff to Seek Specific Performance
The court found that the second plaintiff could not seek specific performance as the agreement itself was not enforceable due to the lack of a concluded contract.
Issue 5: Hardship to Defendants if the Agreement is Enforced
The court considered the hardship that would befall Defendants 2 to 7 if the agreement was enforced. Given the subsequent events, including a partition suit and the allocation of the property to the respondents, enforcing the agreement would not be equitable.
Issue 6: Allegation of Unfair Advantage Taken by the Plaintiff
The court found that Plaintiff No.1, a practicing advocate, had an upper hand and created a scare in the mind of Defendant No.1 regarding the Rent Controller's actions. This undue influence and the subsequent conduct of Plaintiff No.1 led the court to conclude that it was not fair and equitable to decree specific performance.
Conclusion:
The appeal was dismissed as the agreement dated 4.12.1979 was not a concluded contract and could not be specifically enforced. The court also decided not to exercise its discretionary jurisdiction in favor of the plaintiffs under Section 20 of the Specific Relief Act, 1963.
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2003 (2) TMI 489
... ...
... ... ..... is dismissed on the ground of delay as well as on merits.
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2003 (2) TMI 488
Issues Involved:
1. Applicability of the Standards of Weights and Measures Act, 1976, and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, to vacuum cleaners.
2. Legality of the seizure of vacuum cleaners by the Senior Inspector, Legal Metrology.
3. Interpretation of "commodity in packaged form" and related terms under the Act and Rules.
Summary:
1. Applicability of the Act and Rules to Vacuum Cleaners:
The petitioner, a company engaged in manufacturing and marketing vacuum cleaners, contended that the Standards of Weights and Measures Act, 1976 (the Act), and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (the Rules), do not apply to vacuum cleaners. The vacuum cleaners are sold as single pieces and not by weight, measure, or number. They are placed in cartons for protection during transportation and storage, which do not qualify as "packages" under the Act and Rules. The respondents argued that the vacuum cleaners, along with their accessories, are pre-packaged commodities as defined in Rule 2(1) of the Rules and thus subject to the Act and Rules.
2. Legality of the Seizure:
The Senior Inspector, Legal Metrology, seized five boxes containing vacuum cleaners from the petitioner's premises, alleging a violation of Section 39 of the Act read with Rules 23(6) and 23(7). The petitioner received a notice indicating prosecution unless the offense was compounded u/s 73 of the Act. The petitioner argued that the Act and Rules do not apply to their products and sought a declaration to that effect.
3. Interpretation of "Commodity in Packaged Form":
The court examined the definitions and provisions under the Act and Rules. Section 2(b) of the Act defines "commodity in packaged form" as a commodity packaged in units suitable for sale. Section 39 mandates labeling requirements for such commodities. Rule 2(1) of the Rules defines "pre-packed commodity" and includes commodities packed without the purchaser being present, with a predetermined quantity. The court noted that the Act and Rules apply to commodities intended to be sold in packaged form and not to all products sold in non-packaged form.
Judgment:
The court concluded that vacuum cleaners sold by the petitioner are not "pre-packed commodities" or "commodities in packaged form" as defined under the Act and Rules. The vacuum cleaners are sold as single pieces, and the packaging is for protection during transit and storage, not for sale. The court referred to previous judgments, including those of the Madras High Court and this Court, which supported this view. The court held that the seizure of vacuum cleaners was unjustified and allowed the writ petition, declaring that the Act and Rules do not apply to the petitioner's vacuum cleaners. The writ petition was allowed without any order as to costs.
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2003 (2) TMI 487
Issues Involved:
1. Compliance with Section 50 of the Narcotic Drugs and Psychotropic Substances Act (NDPS Act).
2. Mention of independent witnesses in the initial ruqqa.
3. Production of the secret informer in court.
4. Compliance with Sections 42 and 52A(2) of the NDPS Act.
5. Quantum of sentence.
Issue-wise Detailed Analysis:
1. Compliance with Section 50 of the NDPS Act:
The appellant argued that there was no compliance with Section 50 of the NDPS Act as the offer made to him was partial, only mentioning a Gazetted Officer and not a Magistrate. The court found this argument unconvincing because the recovery was from the appellant's briefcase, not his person. Therefore, compliance with Section 50 was deemed unnecessary. The court cited the judgment in *State of Punjab v. Baldev Singh* and *Kalema Tumba v. State of Maharashtra* to support this view.
2. Mention of Independent Witnesses in the Initial Ruqqa:
The appellant contended that the names of independent witnesses were not mentioned in the initial ruqqa (Exhibit PA/1). The court held that this omission did not adversely affect the prosecution's case. The ruqqa was a simple intimation sent to the SHO about the receipt of secret information and was not the basis for the FIR. The formal FIR was registered based on a subsequent ruqqa (Exhibit PE). The court found no requirement in law to mention the names of independent witnesses in the ruqqa.
3. Production of the Secret Informer in Court:
The appellant argued that the prosecution should have produced the secret informer in court. The court dismissed this argument, stating that there is no legal requirement to produce the secret informer during the trial. The prosecution is not obligated to disclose the name of the secret informant in any document sent for the registration of the FIR.
4. Compliance with Sections 42 and 52A(2) of the NDPS Act:
The appellant claimed non-compliance with Section 42, which requires secret information to be reduced to writing. The court found that the secret information was indeed reduced to writing (Exhibit PA) and sent to the SHO, fulfilling the requirement. Regarding Section 52A(2), which pertains to the disposal of seized property, the court noted that it comes into play only after recovery and is directory, not mandatory. The court cited *Amarjit Kaur v. State of Haryana* to support this interpretation.
5. Quantum of Sentence:
The appellant argued that the sentence was too stringent. The court acknowledged that the appellant had been in custody since 1998, was not a previous convict, and had suffered a protracted trial. Considering these factors, the court reduced the substantive sentence from fifteen years to twelve years but maintained the fine of Rs. one lac, as it is the minimum required by law.
Conclusion:
The court found no infirmity in the conviction and upheld it. However, it reduced the substantive sentence to twelve years, maintaining the fine. The appeal was dismissed with this modification in the quantum of sentence.
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2003 (2) TMI 486
Issues Involved:
1. Whether a letters patent appeal would lie against the judgment of a learned Single Judge of the High Court filed u/s 299 of the Indian Succession Act, 1925.
Summary:
Issue 1: Letters Patent Appeal Against Judgment u/s 299 of the Indian Succession Act, 1925
The core issue in this appeal is whether a letters patent appeal is maintainable against the judgment of a Single Judge of the High Court filed u/s 299 of the Indian Succession Act, 1925. The appellant's counsel argued that such an appeal would be governed by Section 104 of the Code of Civil Procedure, 1908, which bars appeals from orders that are not decrees. The counsel cited various cases to support this contention, emphasizing that the judgment under challenge was not a decree and hence not appealable under Section 104.
The respondents' counsel, however, argued that the matter is covered by the Supreme Court's judgment in Sharda Devi v. State of Bihar, which supports the maintainability of such appeals. The Court noted that the Indian Succession Act, 1925 is a special Act, and Section 299 provides for an appeal to the High Court in accordance with the provisions of the Code of Civil Procedure, 1908.
The Court examined Sections 295 and 299 of the Act, which outline the procedure for contentious cases and appeals from orders of the District Judge, respectively. It was observed that although contentious proceedings do not result in a decree, the procedural provisions of the Code of Civil Procedure are applicable. The right of appeal in contentious proceedings is found in Section 299 of the Act itself, not in Section 104 of the Code of Civil Procedure.
The Court further analyzed various High Court judgments and noted the differing views on whether orders in contentious probate proceedings are decrees. It was highlighted that some High Courts prepare formal decrees, while others do not. The Court concluded that Section 104 of the Code of Civil Procedure does not bar appeals under special statutes like the Indian Succession Act.
The Supreme Court emphasized that the appellate jurisdiction of superior courts is not excluded simply because a subordinate court exercises special jurisdiction. The Court referred to the principles of statutory interpretation and previous judgments, including Shah Babulal Khimji v. Javaben D. Kania, which supported a broader interpretation of the term "judgment" under Clause 15 of the Letters Patent.
The Court concluded that the order passed by the Single Judge was appealable to the Letters Patent Bench. Consequently, the objection regarding the maintainability of the appeal was rightly overruled by the High Court. The appeal was dismissed, and the High Court was directed to decide the letters patent appeal expeditiously.
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2003 (2) TMI 485
Issues Involved:
1. Constitutionality of the Haryana Validation of Octroi and Surcharge Act, 1980.
2. Levy of octroi on common salt versus industrial salt.
3. Retrospective application of Haryana Act No. 7 of 1980.
4. Alleged violation of Articles 14, 19(1)(g), 301, and 304 of the Constitution.
5. Refund of octroi paid on salt since July 1975.
6. Alternative remedies available under Sections 99 and 100-A of the Haryana Municipal Act, 1973.
Detailed Analysis:
1. Constitutionality of the Haryana Validation of Octroi and Surcharge Act, 1980:
The petitioners challenged the constitutionality of the Haryana Validation of Octroi and Surcharge Act, 1980, arguing that it violated Articles 14, 19(1)(g), and 301 of the Constitution. The court examined whether the Act's retrospective application was arbitrary and discriminatory. The court found that the Act was applicable to all industries in Yamunanagar and not just the petitioner, thus it did not violate Article 14. The court also noted that an individual or a group could be classified for legislative purposes if there was a sufficient basis for it.
2. Levy of Octroi on Common Salt versus Industrial Salt:
The petitioners argued that there was no distinction between common salt and industrial salt, and therefore, the levy of octroi on industrial salt was unjustified. The court rejected this argument, stating that industrial salt and common edible salt are different commodities. The court emphasized that industrial salt is uncrushed and unrefined, devoid of iodine, whereas common edible salt is iodized and refined. The court upheld the classification and the levy of octroi on industrial salt.
3. Retrospective Application of Haryana Act No. 7 of 1980:
The petitioners contended that the retrospective application of the Act was arbitrary and unconstitutional. The court dismissed this argument, stating that the retrospective validation was within the legislative competence and did not violate any fundamental rights. The court also noted that the petitioners had already shifted the incidence of octroi to the ultimate consumers, and thus, the doctrine of unjust enrichment applied.
4. Alleged Violation of Articles 14, 19(1)(g), 301, and 304 of the Constitution:
The petitioners argued that the levy of octroi violated Articles 14, 19(1)(g), 301, and 304 of the Constitution. The court found that the classification between common edible salt and industrial salt was based on intelligible differentia and had a rational nexus with the object of the statute, thus not violating Article 14. The court also held that octroi was a compensatory tax and did not impede inter-State trade, thus not violating Articles 301 and 304. The court further stated that the levy of octroi did not impose unreasonable restrictions on the petitioners' right to trade under Article 19(1)(g).
5. Refund of Octroi Paid on Salt Since July 1975:
The petitioners sought a refund of the octroi paid on salt since July 1975. The court rejected this claim, stating that the petitioners had already passed on the burden of octroi to the consumers. The court applied the doctrine of unjust enrichment, which prevents the refund of taxes if the burden has been passed on to another party.
6. Alternative Remedies Available Under Sections 99 and 100-A of the Haryana Municipal Act, 1973:
The respondents argued that the petitioners had alternative remedies available under Sections 99 and 100-A of the Haryana Municipal Act, 1973. The court acknowledged this argument but proceeded to address the constitutional issues raised by the petitioners.
Conclusion:
The court dismissed the petition, upholding the constitutionality of the Haryana Validation of Octroi and Surcharge Act, 1980, and the levy of octroi on industrial salt. The court found no violation of Articles 14, 19(1)(g), 301, and 304 of the Constitution and denied the petitioners' claim for a refund of the octroi paid since July 1975.
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2003 (2) TMI 484
Issues Involved:
1. Whether a decree for ejectment passed by a civil court for a commercial tenancy in Delhi before the Supreme Court's declaration in Gian Devi Anand Vs. Jeevan Kumar is executable.
2. Whether the decree passed by a court lacking inherent jurisdiction is null and void.
3. Applicability of the doctrine of prospective overruling.
Summary:
Issue 1: Executability of Decree for Ejectment
The primary issue was whether a decree for ejectment passed by a civil court for a commercial tenancy in Delhi before the Supreme Court's declaration in Gian Devi Anand Vs. Jeevan Kumar, which held that such a tenancy is heritable, is executable. The decree-holder served a notice to quit u/s 106 of the Transfer of Property Act, 1882, and subsequently filed a suit for possession and mesne profits. An ex-parte decree was passed, and the execution application was filed. The judgment-debtors objected to the execution, citing the Supreme Court's ruling in Gian Devi Anand's case, which declared commercial tenancies heritable, thereby questioning the civil court's jurisdiction.
Issue 2: Decree Passed by Court Lacking Jurisdiction
The executing court overruled the objections, stating it could not go beyond the decree. The High Court upheld this view, relying on the doctrine of res judicata. However, the Supreme Court clarified that a decree passed by a court lacking inherent jurisdiction is a nullity and can be challenged at any stage, including execution proceedings. The Court emphasized that the interpretation of the law in Gian Devi Anand's case relates back to the date of the law itself, making the civil court's decree non-est.
Issue 3: Doctrine of Prospective Overruling
The High Court's invocation of the doctrine of prospective overruling was deemed misplaced. The Supreme Court noted that this doctrine, initially applicable to constitutional matters, has since been extended to statutory matters. However, the Court in Gian Devi Anand's case did not specify that its ruling would be prospective. Therefore, the interpretation given by the Supreme Court applies retrospectively, invalidating the civil court's decree.
Conclusion:
The Supreme Court set aside the orders of the High Court and the executing court, holding that the civil court's decree for ejectment was a nullity due to lack of jurisdiction. The judgment-debtors could successfully object to the execution of such a decree. The appeal was accepted, and it was held that the decree obtained by the decree-holder could not be executed, with parties bearing their own costs.
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2003 (2) TMI 483
Issues Involved:
1. Illegal sale of electricity by abusing official position.
2. Absence of written agreement and lack of government sanction.
3. Pecuniary advantage to M/s. Graphite India Ltd. (M/s. GIL).
4. Alleged scarcity of electricity in Kerala.
5. Compliance with Section 43 of the Electricity (Supply) Act, 1948, and Rule 68 of Kerala State Electricity Board Rules, 1957.
6. Mens rea and intention in criminal misconduct.
Detailed Analysis:
1. Illegal Sale of Electricity by Abusing Official Position:
The appellants, during their tenure as Minister for Electricity and Chairman of the Kerala State Electricity Board (KSEB), were accused of illegally selling 1,22,41,440 units of electricity to M/s. GIL, resulting in a pecuniary advantage of Rs. 19 lakhs. The prosecution alleged that the appellants abused their official positions to facilitate this transaction. However, the court found no evidence that the appellants gained any personal benefit from this transaction. The defense argued that the electricity was supplied to Karnataka based on a state-level decision and that no specific quantity was earmarked for M/s. GIL. The court concluded that the electricity was supplied to Karnataka and not directly to M/s. GIL, and there was no evidence of the appellants abusing their positions.
2. Absence of Written Agreement and Lack of Government Sanction:
The prosecution highlighted the absence of a written agreement and government sanction for the supply of electricity to M/s. GIL. The court noted that while it would have been proper to have a written agreement, the absence of one did not constitute a criminal offense. The supply of electricity was negotiated at the ministerial level between the states of Kerala and Karnataka, and the rate of 42 paise per unit was agreed upon. The court found no violation of Section 43 of the Electricity (Supply) Act, 1948, or Rule 68 of the Kerala State Electricity Board Rules, 1957, as the arrangement was made at a higher governmental level.
3. Pecuniary Advantage to M/s. GIL:
The prosecution claimed that M/s. GIL received electricity at a lower rate (64 paise per unit) compared to other consumers (80 paise per unit), resulting in a pecuniary advantage. The court found that the rate was fixed by the Karnataka Electricity Board (KEB) and not influenced by the appellants. The decision to supply electricity at a lower rate was a matter of KEB's policy and not attributable to any actions by the appellants. The court concluded that the appellants did not cause any pecuniary advantage to M/s. GIL.
4. Alleged Scarcity of Electricity in Kerala:
The High Court had found that there was a scarcity of electricity in Kerala during the relevant period. However, the Supreme Court noted that there was no evidence to substantiate this claim. The defense argued that there was no scarcity of electricity in Kerala during the relevant period, and the court found that the prosecution failed to prove this allegation.
5. Compliance with Section 43 of the Electricity (Supply) Act, 1948, and Rule 68 of Kerala State Electricity Board Rules, 1957:
The court examined whether the supply of electricity violated Section 43 of the Electricity (Supply) Act, 1948, and Rule 68 of the Kerala State Electricity Board Rules, 1957, which require government consent for the sale of electricity outside the state. The court found that the arrangement for the supply of electricity was made at the ministerial level between the states of Kerala and Karnataka, and therefore, the provisions were not applicable. The court concluded that there was no violation of these provisions.
6. Mens rea and Intention in Criminal Misconduct:
The court emphasized the necessity of mens rea (guilty mind) and intention for criminal misconduct under Section 5(1)(d) of the Prevention of Corruption Act, 1947. The court found no evidence of any effort or initiative by the appellants to sell electricity to M/s. GIL or to cause any pecuniary advantage to M/s. GIL. The appellants' actions were in response to requests from the state of Karnataka, and there was no element of corrupt or illegal means. The court concluded that the prosecution failed to prove the necessary mens rea and intention for the offense.
Conclusion:
The Supreme Court allowed the appeals, setting aside the conviction and sentence of the appellants under Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947. The court found that the prosecution failed to prove the charges against the appellants, and there was no evidence of illegal sale of electricity, pecuniary advantage to M/s. GIL, or violation of legal provisions. The appellants were acquitted, and their surety bonds were discharged.
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