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2008 (7) TMI 1069
Issues involved:
The petitioner challenged orders dated 22.07.99 and 03.11.99 passed by the respondent regarding the Kar Vivad Samadhan Scheme, 1998 (KVSS).
Summary:
The petitioner, a partnership firm, appealed against certain additions to its income for A.Y. 1994-95 before the Income Tax Appellate Tribunal, Ahmedabad. During this time, the Kar Vivad Samadhan Scheme, 1998 (KVSS) was introduced. The petitioner filed a declaration under KVSS on 31.12.98 and paid the tax arrears determined by the respondent on 03.03.99. However, the respondent rejected the petitioner's request for the benefit under KVSS, stating that the payment was made beyond the prescribed time limit. The petitioner challenged these orders in the present petition.
The petitioner's senior advocate argued that the 30-day time limit for payment under KVSS should be calculated from the date of receipt of the order, not from the date the order was passed. The advocate cited a Supreme Court judgment to support this interpretation. The Revenue's counsel contended that the period should be computed from the date of the order itself.
After considering the arguments and relevant provisions, the Court held that the 30-day period for payment under KVSS should be calculated from the date of receipt of the order. As the petitioner had made the payment within this timeframe, the Court allowed the petition, quashed the orders dated 22.07.99 and 03.11.99, and made the rule absolute with no order as to costs.
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2008 (7) TMI 1068
Issues Involved:
1. Applicability of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
2. Applicability of the Reserve Bank of India Act, 1934.
3. Applicability of Section 420 read with Section 34 of the Indian Penal Code (IPC).
Issue-wise Detailed Analysis:
1. Applicability of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978:
The primary question was whether the "LIS Deepasthambham Scheme" fell under the definition of a "money circulation scheme" as per Section 2(c) of the Act. The scheme involved collecting Rs. 625 from participants, promising them lottery tickets and a magazine subscription, with an assurance of doubling their investment based on the enrolment of additional members.
The Court referred to the definition of "money circulation scheme" in Section 2(c) and previous judgments, particularly *State of West Bengal v. Swapan Kumar Guha*, to interpret its scope. The Court noted that the scheme in question had both the essential elements: (i) making quick or easy money, and (ii) dependency on the enrolment of additional members. The scheme promised double the investment once 14 more members were enrolled, satisfying the requirement of an event or contingency relative to the enrolment of members.
The Court rejected the argument that the scheme did not attract Section 2(c) because there was no obligation on the part of the unit holder to enlist more members. It clarified that the law does not require the enrolment to be done by the members themselves; it suffices if the payment is dependent on the enrolment of more persons into the scheme.
The Court upheld the trial court's decision to frame charges under Sections 4 and 5 read with Sections 2(c) and 3 of the Act, finding that a prima facie case was made out.
2. Applicability of the Reserve Bank of India Act, 1934:
The trial court had discharged the accused for offences under Sections 45I(bb), 45S, and 58B of the Reserve Bank of India Act, 1934. The High Court agreed with this decision, noting that the learned Additional Advocate General/Special Public Prosecutor conceded that the facts of the case did not attract these provisions.
The Supreme Court did not find any reason to interfere with this part of the High Court's decision, as the State had not preferred an appeal against it, making the decision final.
3. Applicability of Section 420 read with Section 34 of the Indian Penal Code (IPC):
Section 420 IPC deals with cheating and dishonestly inducing delivery of property. The Court emphasized the elements of cheating as defined in Section 415 IPC, which include deception, fraudulent or dishonest inducement, and resultant harm or damage.
The Court found that the scheme involved false representations by the promoters, who knew that the promises of doubling the investment were unworkable and impracticable. The promoters induced the public to part with money based on these false promises, satisfying the elements of cheating.
The trial court and the High Court had both found that a prima facie case of cheating was made out. The Supreme Court agreed, stating that the promoters' actions prima facie constituted an offence under Section 420 read with Section 34 IPC.
Conclusion:
The Supreme Court upheld the framing of charges against the accused under Sections 4 and 5 read with Sections 2(c) and 3 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, and under Section 420 read with Section 34 IPC. The Court dismissed the appeals, emphasizing that the observations made were limited to the framing of charges and did not reflect on the merits of the case. The Court clarified that the trial would proceed on its merits without being influenced by these observations.
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2008 (7) TMI 1067
Issues involved: Conversion of a writ petition to a Special Leave Petition, entitlement to benefit of judgment for non-appealing accused, exercise of inherent power for administration of justice.
Conversion of Writ Petition to Special Leave Petition:
The petition initially filed as a writ petition was converted to a Special Leave Petition (SLP) against the judgment of the High Court. The Supreme Court noted this conversion and decided to dispose of the matter in accordance with its judgment in a previous case.
Entitlement to Benefit of Judgment for Non-Appealing Accused:
In this case, five persons were tried for an offense under Section 302 read with Section 149 of the Indian Penal Code. While three accused persons filed Special Leave Petitions, the appellant did not. The Supreme Court considered whether the appellant, who did not file a Special Leave Petition, was entitled to the benefit of a judgment that altered the conviction of the other accused persons.
Exercise of Inherent Power for Administration of Justice:
The Court discussed the exercise of inherent power for the administration of justice. It was highlighted that the Court retains inherent power and jurisdiction to deal with extraordinary situations in the interest of justice. Reference was made to cases where the Court had granted benefits such as acquittal or reduction of sentence to non-appealing accused by exercising suo motu power.
In conclusion, the Court decided to alter the appellant's conviction to Section 304 Part I of the IPC and imposed a custodial sentence of 10 years with a fine, similar to the other accused persons who had filed Special Leave Petitions. This decision was based on the principle that the appellant stood on a similar footing with the appealing accused persons. The appeal was allowed based on these considerations.
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2008 (7) TMI 1066
Issues involved: Challenge to penalty imposed under Section 15A(a) of the Securities and Exchange Board of India Act, 1992 for failure to provide necessary information during investigations.
Summary:
The appellant was penalized with a fine of Rs. 5 lacs for failing to provide required information during investigations into dealings in a particular company's scrip. Despite multiple summons and opportunities, the appellant did not furnish the requested details, hindering the regulator's investigative duties. The appellant's claim of inability to provide information due to a raid by income tax authorities was rejected as investigations were initiated prior to the raid and records were available. The Tribunal upheld the penalty, stating that the appellant's actions were a deliberate attempt to obstruct the investigations.
The Tribunal noted that the appellant's behavior indicated an attempt to evade providing essential information sought by the investigating officer, which was crucial for investigating market irregularities. Despite being issued multiple summons and opportunities to respond, the appellant failed to comply, impeding the regulator's statutory duty. The Tribunal found no merit in the appellant's argument that records were seized by income tax authorities, as investigations were ongoing prior to the seizure and the appellant had ample time to provide the required information. The appellant's excuse of unavailability of company officers was deemed insufficient to justify the delay in furnishing information.
Ultimately, the Tribunal upheld the penalty imposed on the appellant under Section 15A(a) of the Act, emphasizing the seriousness of the appellant's failure to cooperate with the investigations. The appeal was dismissed, and no costs were awarded.
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2008 (7) TMI 1065
Interpretation of Statutes - Deduction u/s 80HHC - Net expenditure was claimed as interest expenditure - Calculation of deduction u/s 80HHC - excluding the receipts from DEPB - Rejection of books of account u/s 145(3) - Trading addition - estimation of income - reducing the GP rate to 21.26 per cent as against 24 per cent - Disallowance of a sum out of interest.
Interpretation of Statutes - Deduction u/s 80HHC - Net expenditure was claimed as interest expenditure - HELD THAT:- On identical issues, this Bench has been taking the consistent decisions where the income earned as interest on FDRs has to he treated as income from other sources and not income from business and the interest expenditure has been held to be allowable u/s 37(1)/36(1)(iii) of the Act. No netting in such cases can be done - there are no infirmity in the order of the ld CIT (A) who has rightly confirmed the action of the AO in treating the interest income as income from other sources and no netting has been allowed. Thus, ground No. 1 of the assessee is dismissed.
Calculation of deduction u/s 80HHC - excluding the receipts from DEPB - HELD THAT:- In the present case, the intent of the legislature is clear and we find no ambiguity with respect to the taxability of the profit on the transfer of DEPB and the authorities below need not call the aid of other rule of construction of statutes. If this is done, this will tantamount to straining the statute which is not permitted in view of the decisions of Hon'ble Supreme Court of India in the case of State of Punjab v. Jalandhar Vegetables [1965 (11) TMI 101 - SUPREME COURT] and Innamuri Gopalam v. State of AP[1963 (4) TMI 18 - SUPREME COURT] - Moreover, the revenue cannot adopt different ways of taxing one receipt, i.e., if the assessee utilizes the said entitlements for imports, no tax is levied on the part of profit which has resulted from the savings in the import duty whereas if it is not utilized and sold in the market, the same is taxed. Therefore, such cost cannot become the part of the profit. Essentially it has to be reduced from the sale consideration - DEPB entitlements are given to supplement the input cost of exports which is a fixed percentage of the export which differs from the different products. It is this imputed or attributed cost which is to be set off against DEPB receipts to arrive at the sums taxable u/s 28(iiid) of the Act. Therefore, it is only the profit on the transfer of DEPB Scheme which has to be treated as income u/s 28(iiid) of the Act. On identical issue, the reliance has rightly been placed by the ld AR on the following decisions in Glenmark Laboratories Ltd. v. Dy. CIT[2007 (12) TMI 236 - ITAT BOMBAY-K] - Therefore, theAO is directed to allow the claim of the assessee. The order of the ld CIT(A) is reversed on this issue. Thus, ground No. 2. of the assessee is allowed.
Rejection of books of account u/s 145(3) - Trading addition - estimation of income - reducing the GP rate to 21.26 per cent as against 24 per cent - HELD THAT:- Assessee did not produce the stock register for the reasons best known to him. No defect has been pointed out by the auditor cannot help the assessee and therefore, the results declared by the assessee cannot be considered as accurate. We find no infirmity in the order of the ld CIT (A) who has rightly upheld the applicability of Section 145(3) - We uphold the views of the ld CIT (A) that the comparable cases relied upon by the AO cannot be the basis for estimation of income since the said cases are the manufacture of garments whereas the assessee is manufacturer of made ups. Moreover, the AO has not brought on record whether the said cases are at all comparable with the present case or not. No material has been provided to the assessee with regard to the said comparable cases - The results of the assessee have been accepted for the AY's 2001-02 and 2002-03 under the assessments u/s 143(3) of the Act which have to be kept into consideration though each year is an independent year in the Income-tax proceedings. Therefore, past results of the assessee are the best guide. The assessee has declared GP rate of 20.46 per cent in the immediately preceding year whereas during the impugned year, the assessee has declared better GP rate of 20.75 per cent - In view of decision in the case of CIT v. Gotan Lime Khanij Udhyog [2001 (7) TMI 19 - RAJASTHAN HIGH COURT], even if the rejection of books of account have been upheld, in the circumstances of the present case, no addition is called for. The ld CIT (A) has not given any basis for making the application of GP rate of 21.26 per cent and has ignored the past results declared by the assessee. Therefore, the order of the ld CIT (A) for sustaining the addition is reversed - Thus, ground for Rejection of books of account u/s 145(3) is dismissed and ground for confirming the trading addition of the assessee is allowed and solitary ground for reducing the GP rate of the revenue is dismissed.
Rejection of books of account - trading addition - HELD THAT:- In the present case, We find the explanation of the assessee as convincing for fall in GP and therefore, no addition can be made even if the books of account are rejected in view of decision in the case of CIT v. Gotan Lime Khanjit Udyog (supra). Therefore, the order of the ld CIT (A) for sustaining the trading addition is reversed. Thus, ground No. 1 of. the assessee is dismissed and ground No. 2 of the assessee is allowed.
Disallowance of a sum out of interest - loan is diverted by the assessee by way of investment and advancement of loans to various persons which are not connected with his business activities - HELD THAT:- The vital fact has been ignored by both the authorities below. The assessee is having the surplus capital and any investment made out of own capital of the assessee, cannot be a subject for disallowance of interest paid to the banks. The cases relied upon by the authorities below are no help to the Revenue as submitted by the learned Authorised Representative. The cases relied upon by Mr. Rajeev Sogani in the case of Radico Khaitan Ltd.[2004 (9) TMI 37 - ALLAHABAD HIGH COURT], Prem Heavy Engineering Works (P) Ltd. [2005 (4) TMI 603 - ALLAHABAD HIGH COURT], Britannia Industries Ltd. [2005 (6) TMI 19 - CALCUTTA HIGH COURT], support our views and therefore, no disallowance on account of interest can be made. Therefore, the disallowance confirmed by the ld CIT (A) is directed to be deleted. Thus, ground No. 4 of the assessee is allowed.
Appeal allowed in part.
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2008 (7) TMI 1064
Issues Involved:
The issue involves determining whether the Appellate Tribunal was correct in directing the Assessing Officer to consider the Annual Letting Value (ALV) based on the rent received by the assessee or the rental agreement, rather than the gross rental value determined by the Small Causes Court.
Summary:
The case involved a Private Ltd. Company with properties, including Shantisadan in Ahmedabad. The assessee reported rental income of Rs. 27,467 based on the rental agreement, but the Assessment Officer assessed it at Rs. 1,57,675 based on the Small Causes Court's valuation. The Commissioner of Income Tax(Appeals) upheld this decision. The Appellate Tribunal directed the assessment based on the actual rent received, citing the Rent Control Act's provisions.
The Revenue argued that the Small Causes Court's ALV should be the basis for taxation, as done for other properties of the assessee. On the other hand, the Assessee relied on legal precedents stating that ALV should align with standard rent under the Rent Control Act. The Madras High Court's decision was referenced to support this argument.
The Court emphasized that in the absence of a standard rent determination under the Rent Control Act, the actual rental income should be considered for assessment. The Tribunal's decision to base assessment on actual rental income was upheld, citing the Rent Control Act's provisions and rejecting the Municipality's ALV determination.
In conclusion, the Court ruled in favor of the Assessee, directing assessment based on actual rental income rather than the ALV determined by the Small Causes Court.
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2008 (7) TMI 1063
Issues Involved:
1. Interpretation of Section 13 of the Official Secrets Act, 1923 (OS Act).
2. Validity of the Central Government's notification rescinding the empowerment of the Chief Metropolitan Magistrate (CMM) to try offences under the OS Act.
3. Impact of the rescinded notification on pending cases and the option exercised by the accused to be tried by the CMM.
4. Jurisdictional competency of the Court of Sessions versus the Magistrate of the First Class under the OS Act.
Detailed Analysis:
1. Interpretation of Section 13 of the Official Secrets Act, 1923 (OS Act):
The judgment primarily focuses on the interpretation of Section 13 of the OS Act, which restricts the trial of offences to courts not inferior to that of a District or Presidency Magistrate, unless specially empowered. The court emphasized that Section 13(2) makes it clear that offences under the OS Act are generally intended to be tried by the Court of Sessions, even if a Magistrate of the First Class is specially empowered. The court highlighted that the special empowerment of a Magistrate of the First Class is an exception rather than the rule, indicating the Legislature's intent for serious offences under the OS Act to be tried by higher courts.
2. Validity of the Central Government's Notification Rescinding the Empowerment of the CMM:
The court upheld the validity of the Central Government's notification dated 21.6.2006, which rescinded the earlier notification empowering the CMM to try offences under the OS Act. The court reasoned that the power to appoint includes the power to withdraw the appointment. Consequently, the withdrawal of the special empowerment of the CMM was within the Central Government's authority, and the administrative decision of the Delhi High Court to transfer cases from the CMM to the Court of Sessions was valid.
3. Impact of the Rescinded Notification on Pending Cases and the Option Exercised by the Accused:
The court addressed the issue of pending cases where the accused had exercised the option to be tried by the CMM. It was noted that the impugned notification did not specifically save ongoing proceedings, meaning that the withdrawal of the special empowerment rendered the option exercised by the accused ineffective. The court referred to common law principles and previous judgments to conclude that pending proceedings would be governed by the amended law, and the trial would now proceed in the Court of Sessions.
4. Jurisdictional Competency of the Court of Sessions Versus the Magistrate of the First Class Under the OS Act:
The court analyzed the competency of different courts to try offences under the OS Act. It was determined that the Court of Sessions would ordinarily have jurisdiction to try such offences unless a Magistrate of the First Class was specially empowered. The court referred to previous judgments and statutory provisions to support this interpretation. The court also addressed concerns about the potential loss of an appellate forum, concluding that the right to appeal is statutory and not absolute, and the transfer of cases to the Court of Sessions did not unjustly deprive the accused of any legal remedy.
Conclusion:
The court dismissed the petitions challenging the administrative decision to transfer cases from the CMM to the Court of Sessions, upholding the Central Government's notification and affirming the jurisdictional competency of the Court of Sessions to try offences under the OS Act. The judgment emphasized the legislative intent for serious offences under the OS Act to be tried by higher courts and validated the procedural changes brought about by the rescinded notification.
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2008 (7) TMI 1062
Issues Involved:
1. Quashing of chargesheet and proceedings.
2. Determination of appellant's age at the time of the alleged offense.
3. Right to a speedy investigation and trial.
Summary:
1. Quashing of Chargesheet and Proceedings:
The appeal arises from the High Court's dismissal of a petition u/s 227 of the Constitution read with Section 482 CrPC, seeking quashing of the chargesheet and proceedings in Special Case No.3 of 1991. The chargesheet filed on 22nd February 1991, implicated twelve persons, including the appellant, for offenses u/s 120B, 409, 420, 465, 468, 471, 477(A), and 34 IPC, and Sections 5(1)(c)(d) along with Section 5(c) of the Prevention of Corruption Act, 1947, and Sections 13(1)(c)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988. The High Court dismissed the petition, stating that the chargesheet prima facie disclosed the commission of offenses by the appellant.
2. Determination of Appellant's Age:
The appellant argued that he was a minor at the time of the alleged offenses in 1981, being born on 18th September 1963, and thus could not be proceeded against. The High Court rejected this plea, noting the appellant failed to produce any document proving his date of birth. The Supreme Court did not delve into the merits of this issue due to the decision on the right to a speedy trial.
3. Right to a Speedy Investigation and Trial:
The Supreme Court emphasized the constitutional right to a speedy trial u/s Article 21, which encompasses all stages of criminal prosecution, including investigation. The Court noted the undue delay in the case: the FIR was lodged on 12th May 1987, the chargesheet was filed on 22nd February 1991, and no trial proceedings had commenced by April 1999. The Court found the delay unjustifiable and not attributable to the appellant. Citing precedents, the Court held that the prolonged investigation and trial violated the appellant's right to a speedy trial. Consequently, the Supreme Court quashed the criminal proceedings against the appellant, recognizing the extreme mental stress and strain endured due to the prolonged delay.
Conclusion:
The appeal was allowed, and the proceedings against the appellant in the criminal case arising out of FIR No.78 of 1987 were quashed.
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2008 (7) TMI 1061
Issues Involved:
1. Alleged violation of interim orders by the respondents.
2. Whether the respondents' actions constituted 'civil contempt'.
3. The validity of the sale and transfer of property during the interim orders.
4. The appropriateness of the respondents' defense and apology.
5. The suitable punishment for the respondents if found guilty of contempt.
Detailed Analysis:
1. Alleged Violation of Interim Orders by the Respondents:
The petitioners filed contempt petitions against the respondents for allegedly violating orders passed by the Supreme Court on April 26, 2004, and January 10, 2005. The orders restrained the respondents from transferring or dealing with the disputed property. Despite these orders, the respondents executed agreements, accepted payments, and sold the property without notifying the petitioners, thereby allegedly committing willful disobedience and intentional violation of the Court's orders.
2. Whether the Respondents' Actions Constituted 'Civil Contempt':
The Court examined whether the respondents' actions amounted to 'civil contempt' under Section 2(b) of the Contempt of Courts Act, 1971, which defines civil contempt as willful disobedience to any judgment, decree, direction, order, writ, or other processes of a court. The Court found that the respondents had indeed violated the interim orders by entering into agreements, accepting payments, and transferring the property without notice to the petitioners. The Court emphasized that the orders were clear, and the respondents' actions were in direct contravention of those orders.
3. The Validity of the Sale and Transfer of Property During the Interim Orders:
The respondents argued that the transactions were related to part 'B' of the property, which was not under dispute, and that some transactions were completed after the interim orders were vacated. However, the Court found this defense to be an afterthought and unsupported by evidence. The Court noted that the sale deeds did not distinguish between parts 'A' and 'B' of the property and that the respondents had made unequivocal statements in the sale deeds about their clear and marketable title, despite the ongoing litigation.
4. The Appropriateness of the Respondents' Defense and Apology:
The respondents tendered an unconditional apology, arguing that any breach was unintentional and that they had acted in good faith. The Court, however, found the apology to be insincere and a tactical move to avoid punishment. The Court held that the apology lacked genuine contrition and was not offered at the earliest opportunity. The Court emphasized that an apology should be a sincere act of regret and not a mere formality to escape consequences.
5. The Suitable Punishment for the Respondents if Found Guilty of Contempt:
The Court referred to several legal provisions and precedents to determine the appropriate punishment for contempt. The Court concluded that the respondents' willful and deliberate disobedience of the Court's orders warranted a strict response to uphold the dignity of the judiciary and the rule of law. The Court ordered the respondents to undergo simple imprisonment for a term of two weeks (fourteen days) under Section 12 of the Contempt of Courts Act, 1971, read with Section 94(c) and Rule 2-A of Order XXXIX of the Code of Civil Procedure, 1908, and Article 129 of the Constitution.
Conclusion:
The Supreme Court found the respondents guilty of civil contempt for willfully disobeying its interim orders by transferring the disputed property without notice to the petitioners. The respondents' defense and apology were deemed insincere and insufficient to mitigate their actions. Consequently, the Court imposed a punishment of two weeks' simple imprisonment to maintain the authority of the judiciary and ensure compliance with its orders.
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2008 (7) TMI 1060
The Bombay High Court rejected the appeal as the order was based on a decision accepted by the department, citing the case of Larsen & Toubro Ltd. v. Commissioner of Central Excise, Chennai, 2006 (3) S.T.R. 321 (Tri.-LB).
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2008 (7) TMI 1059
Issues involved: The issues involved in the judgment are whether the Tribunal was justified in holding that the Revenue failed to establish the charge of clandestine removal despite producing sufficient evidence, and whether the Tribunal was justified in holding that the Revenue was required to conduct further verification from the buyers of the goods when there was already evidence available to establish the charge of clandestine removal.
Issue 1: Revenue's failure to establish clandestine removal
The appellant-Revenue argued that they had discharged the onus to prove clandestine removal of goods, citing evidence such as statements from a Director, watchman, and driver. However, upon review of the Order-in-Original, it was found that the respondent-assessee had denied the allegations made by the Revenue. The Director stated that his statement was recorded under coercion, casting doubt on the reliability of the evidence presented by the Revenue.
Issue 2: Requirement for further verification
The Tribunal based its decision on the entries in a register maintained by the security staff at the factory gate. It was emphasized that such entries cannot solely uphold the charge of clandestine removal without corroborating evidence. Citing established law, it was noted that charges of clandestine removal must be proven beyond doubt with sufficient and affirmative evidence, not assumptions. The Tribunal questioned why the Revenue did not conduct further verification from buyers or purchasers, despite details being available in the register. Due to the lack of further investigation, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.
The Tribunal's findings were based on an appreciation of the evidence on record, leading to the dismissal of the appeal as no substantial question of law was identified.
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2008 (7) TMI 1058
The Karnataka High Court dismissed the appeal as the question of law was similar to a previous judgment answered against the revenue. (Citation: 2008 (7) TMI 1058 - KARNATAKA HIGH COURT)
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2008 (7) TMI 1057
The Supreme Court dismissed the case. The citation is 2008 (7) TMI 1057 - SC. The High Court reference is 2007 (1) TMI 173 - Delhi High Court. The judges were Hon'ble Mr. Justice S.H. Kapadia and Hon'ble Mr. Justice B. Sudershan Reddy. Petitioner represented by Mr. Goolam E. Vahanvati SG, Ms. Shweta Garg, and Mr. B.V. Balaram Das. Respondent represented by Mr. P.N. Monga, Mr. S.S. Ray, Mr. Manu Mong
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2008 (7) TMI 1056
Issues Involved:
1. Entitlement of Tata Power Company Limited (TPC) to distribute electricity directly to consumers within the area of supply of Reliance Energy Limited (REL).
2. Interpretation of the terms and conditions of the licenses held by TPC and REL.
3. The concept of a level playing field in the electricity distribution sector.
4. Jurisdiction and authority of the Maharashtra Electricity Regulatory Commission (MERC) and the Appellate Tribunal for Electricity in issuing directions and orders.
5. Historical context and amendments to the licenses held by TPC.
Detailed Analysis:
1. Entitlement of TPC to Distribute Electricity Directly to Consumers:
The central question was whether TPC was entitled under its licenses to effect distribution of electricity directly to customers within REL's area of supply. MERC initially held that TPC was entitled to supply energy directly to all or any consumers in the BSES area of supply. However, it also observed that such entitlement might give TPC an unfettered right but no obligation to supply power, which could be against the provisions of Section 22(2)(e) of the ERC Act. The Appellate Tribunal for Electricity, however, held that TPC had not been granted a license to undertake retail distribution of electricity in the area within which REL had been distributing power in retail to customers directly and could only undertake bulk supplies to licensees such as REL.
2. Interpretation of the Terms and Conditions of the Licenses:
The interpretation of the terms and conditions of the licenses granted to TPC was a significant issue. The licenses held by TPC included the 1907, 1919, 1921, and 1953 licenses, which allowed TPC to supply electricity for various purposes, including bulk supply to other licensees and direct supply to consumers. The Appellate Tribunal found that TPC's licenses did not entitle it to supply electricity directly to retail consumers, but the Supreme Court disagreed, holding that TPC's licenses did allow it to supply energy directly to all consumers, irrespective of their demand, except for specific consumers indicated in Sub-clause (I) of Clause 5 of the licenses.
3. The Concept of a Level Playing Field:
MERC introduced the concept of a level playing field to promote competition, efficiency, and economy in the electricity industry. It directed TPC to engage a consultancy firm to study the issues relating to Sections 42 and 14 of the Electricity Act, 2003, and restrained TPC from offering new connections to consumers with energy requirements below 1000 KVA. The Supreme Court found that MERC overstepped its jurisdiction by making out a third case regarding the establishment of a level playing field, which had not been made out by BSES and was not part of the reliefs prayed for.
4. Jurisdiction and Authority of MERC and the Appellate Tribunal:
MERC's jurisdiction and authority to issue directions and orders were questioned. MERC's decision to restrain TPC from supplying energy to consumers with a demand below 1000 KVA was found to be contrary to its own findings that TPC was entitled to supply energy directly to all consumers. The Appellate Tribunal's interpretation of TPC's licenses was also found to be erroneous by the Supreme Court, which quashed the orders passed by both MERC and the Appellate Tribunal.
5. Historical Context and Amendments to the Licenses:
The historical context and amendments to the licenses held by TPC were crucial in understanding the scope of TPC's entitlement to supply electricity. The Supreme Court noted that TPC had been supplying energy directly to retail consumers within areas that later came to be included in BSES's area of supply and that no objections were raised until TPC submitted its proposed tariff for domestic consumers in 1998. The amendments to the licenses, including the removal of restrictions on TPC's supply rights in 1964 and the transfer of distribution rights to the Maharashtra State Electricity Board in 1980, were also considered.
Conclusion:
The Supreme Court quashed the orders passed by MERC and the Appellate Tribunal, holding that TPC was entitled to effect supply of electrical energy in retail directly to consumers whose maximum demand is less than 1000 KVA, apart from its entitlement to supply energy to other licensees for their own purposes and in bulk, within its area of supply as stipulated in its licenses. The court emphasized that MERC had overstepped its jurisdiction and that the Appellate Tribunal had misinterpreted the provisions of the licenses.
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2008 (7) TMI 1055
Title: High Court BOMBAY HIGH COURT Citation: 2008 (7) TMI 1055 - BOMBAY HIGH COURT
Judges: D.K.DESHMUKH & J.P.DEVADHAR, JJ.
Representation: Mr.Vimal Gupta for Appellant, Mr.Parag Pardiwala i/b. Vigil Juris for Respondent.
Summary: The High Court upheld the Tribunal's order based on a previous judgment, Commissioner of Income Tax Vs. Mulla and Mulla and Craigie, Blunt and Caroe, 1991 ITR 198. The appeals were disposed of accordingly.
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2008 (7) TMI 1054
The Bombay High Court admitted the case based on the substantial question of law regarding the nature of services provided by the Appellants being considered as Franchisee Services under Section 65(105)(zze) of the Finance Act. The issue was whether the obligation not to engage in providing similar services for any other person was satisfied in the Appellants' case.
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2008 (7) TMI 1053
Issues Involved:
1. Legality of possession notice and sale notice issued by the respondent Bank.
2. Whether the Bank can proceed under the SARFAESI Act after obtaining a preliminary decree from a Civil Court.
3. Availability and necessity of alternative remedy under Section 17 of the SARFAESI Act.
Summary:
Issue 1: Legality of Possession Notice and Sale Notice
The petitioner filed a writ petition challenging the possession notice dated 22.08.2007 and the sale notice published on 17.11.2007, claiming them to be ultra vires, unconstitutional, and illegal. The petitioner argued that the Bank's action under the SARFAESI Act after obtaining a preliminary decree was per se illegal, asserting that there cannot be two parallel actions after the suit is disposed of.
Issue 2: Bank's Right to Proceed under SARFAESI Act Post-Decree
The petitioner, who stood as a guarantor and mortgaged her property, contended that the debt had merged with the decree, and thus, the mortgage could no longer be considered a secured asset. However, the court found this argument unacceptable. The court highlighted that u/s 2(g) of The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the amount payable under a decree is also considered a debt. Furthermore, u/s 2(j) of the SARFAESI Act, the petitioner was classified as a defaulter due to the non-performing asset status of the borrower's account. The court emphasized that u/s 37 of the SARFAESI Act, the provisions of the Act are not in derogation of any other law, thus allowing the Bank to proceed under the SARFAESI Act despite the preliminary decree.
Issue 3: Alternative Remedy under Section 17 of SARFAESI Act
The court noted that the petitioner had an alternative remedy available u/s 17 of the SARFAESI Act, which allows for an appeal to the Debt Recovery Tribunal. The court referenced the Full Bench decision in Lakshmi Shankar Mills (P) Ltd. v. The Authorised Officer/Chief Manager, Indian Bank, which held that challenges to Section 13(3) notices should be addressed through the remedy available u/s 17 of the Act. The court reiterated that the Tribunal has wide powers to restore possession if the action taken under Section 13(4) is declared invalid.
Conclusion:
The court concluded that the actions taken by the respondent Bank, including the issuance of the possession notice and the subsequent sale notice, were not ultra vires, unconstitutional, or illegal. The writ petition was dismissed, and the petitioner was advised to avail the alternative remedy u/s 17 of the SARFAESI Act. Consequently, the connected petitions were also closed.
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2008 (7) TMI 1052
Issues involved: Challenge to pre-qualification criteria for procurement of TTF Sets in a tender notification.
Summary:
The writ appeal was filed against a judgment dismissing a writ petition challenging the pre-qualification criteria for procurement of TTF Sets in a tender notification. The criteria required tire manufacturers to have supplied a minimum average of 5000 sets of Tyre, Tube, and Flaps per annum in the preceding three years, along with a minimum average annual turnover of Rs. 500 crores from the sale of Tyres, Tubes, and Flaps. The petitioner alleged that these conditions were inserted to favor certain persons and exclude them. However, the learned single Judge concluded that there was no merit in the writ petition. The Judge noted that the decision to hike the minimum annual turnover from Rs. 200 crores to Rs. 500 crores was made to incorporate wider participation without being arbitrary or discriminatory. Citing Supreme Court judgments, the Judge held that interference in such policy matters is limited unless it is beyond discrimination or unreasonable. The writ appeal was dismissed as the Court agreed with the findings and conclusions of the learned single Judge, stating that the judgment did not warrant interference.
In conclusion, the Court found no merit in the writ appeal and dismissed it, upholding the decision of the learned single Judge regarding the pre-qualification criteria for procurement of TTF Sets in the tender notification.
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2008 (7) TMI 1051
Issues Involved:
1. Interpretation of the amendment to Section 202 Cr.P.C. by Act 25 of 2005.
2. Applicability of the amendment to prosecutions under Section 138 of the Negotiable Instruments Act.
3. Determination of whether the stipulation in the amendment is directory or mandatory.
4. Necessity of conducting an enquiry under Section 202 Cr.P.C. after recording the sworn statements under Section 200 Cr.P.C.
5. Consequences of non-compliance with the amended Section 202 Cr.P.C. in issuing process under Section 204 Cr.P.C.
Detailed Analysis:
1. Interpretation of the Amendment to Section 202 Cr.P.C. by Act 25 of 2005:
The amendment to Section 202 Cr.P.C. introduced the words "and shall in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction." The key question was whether this stipulation is directory or mandatory. The court noted that the amendment aimed to prevent harassment of accused persons residing outside the jurisdiction of the Magistrate by ensuring a more cautious approach before issuing process.
2. Applicability of the Amendment to Prosecutions under Section 138 of the Negotiable Instruments Act:
The court concluded that the amended Section 202 Cr.P.C. applies to prosecutions under Section 138 of the Negotiable Instruments Act. This is consistent with Section 4(2) of the Cr.P.C., which states that the provisions of the Code apply unless specifically excluded by the special law.
3. Determination of Whether the Stipulation in the Amendment is Directory or Mandatory:
The court discussed the difference between mandatory and directory provisions, emphasizing that non-compliance with a mandatory provision renders proceedings void, while non-compliance with a directory provision does not. The court concluded that the stipulation in the amendment, although couched in mandatory language, is directory in nature. This is because the purpose of the enquiry under Section 202 Cr.P.C. is to determine whether there is sufficient ground for proceeding, and if this satisfaction can be achieved at the end of the enquiry under Section 200 Cr.P.C., further enquiry under Section 202 Cr.P.C. is not necessary.
4. Necessity of Conducting an Enquiry under Section 202 Cr.P.C. after Recording the Sworn Statements under Section 200 Cr.P.C.:
The court held that if the requisite satisfaction for proceeding under Section 203/204 Cr.P.C. can be entertained based on the materials available after the enquiry under Section 200 Cr.P.C., it is not necessary to conduct a further enquiry under Section 202 Cr.P.C. The court emphasized that the purpose of the enquiry is to determine whether there is sufficient ground for proceeding, not to engage in a ritualistic process.
5. Consequences of Non-Compliance with the Amended Section 202 Cr.P.C. in Issuing Process under Section 204 Cr.P.C.:
The court concluded that non-compliance with the amended Section 202 Cr.P.C. does not ipso facto vitiate the cognizance taken or the process issued. The court stated that the requirement of conducting an enquiry under Section 202 Cr.P.C. is directory, and if the requisite satisfaction can be entertained based on the materials available, the non-compliance does not render the proceedings void.
Judgments:
1. Crl.M.C. No. 292 of 2008: The court dismissed the petition, holding that the cognizance taken and the issue of process do not warrant interference. The court found that there were adequate materials to induce the requisite satisfaction that there is sufficient ground to proceed.
2. Crl.M.C. No. 2247 of 2008: The court allowed the petition, directing the Magistrate to consider the question of issue of process on the basis of the available materials without proceeding to conduct a further enquiry under Section 202 Cr.P.C. The court set aside the direction to produce loan documents and examine the complainant further.
Conclusion:
The court provided a detailed analysis of the amendment to Section 202 Cr.P.C., concluding that while the amendment applies to prosecutions under Section 138 of the N.I. Act, the stipulation for conducting an enquiry under Section 202 Cr.P.C. is directory and not mandatory. The court emphasized the importance of the Magistrate's satisfaction that there is sufficient ground for proceeding and held that non-compliance with the amended Section 202 Cr.P.C. does not automatically vitiate the cognizance taken or the process issued.
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2008 (7) TMI 1050
Issues involved:
The issues involved in this case are whether a separate application is necessary for condonation of delay and whether the question of delay needs to be adjudicated before considering the matter on merit.
Issue 1: Requirement of separate application for condonation of delay
The deceased respondent had filed a claim petition for gratuity without an application for condonation of delay. The Appellate Authority allowed the appeal without considering Rule 7 and Rule 10 of the Payment of Gratuity (Central) Rules, 1972. The petitioner argued that the claim petition should have been accompanied by an application for condonation of delay as per the rules and relevant judgments. However, the legal representatives of the deceased respondent contended that Rule 7 does not necessitate a separate application for condonation of delay, and the Controlling Authority has the power to condone the delay under Rule 10.
Issue 2: Adjudication of delay before considering the matter on merit
The deceased respondent retired in 2005, issued a legal notice for gratuity, and filed a claim petition without an application for condonation of delay. Rule 7 mandates an application within 30 days, with provision for delayed applications showing sufficient cause. Rule 10 allows redressal before the Controlling Authority within 90 days, with provision for condoning delay. The Court noted that an application under Rule 10 must be made within the prescribed time and accompanied by an explanation for any delay. Failure to do so would render the Controlling Authority's proceedings in violation of Rule 10. The judgment emphasized the necessity of following the rules and providing sufficient cause for delayed claims.
Conclusion:
The Court held that in cases where an application is made beyond the prescribed time under Rule 10, an application for condonation of delay showing sufficient cause is necessary. Since the deceased respondent's claim petition was rejected solely due to the lack of an application for condonation of delay, the legal representatives were granted the opportunity to submit a fresh claim petition with the required application. The original order was quashed, and the petitioner was directed to make a fresh application in accordance with the law, with the refund of the deposited amount.
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