|
Advanced Search Options
Case Laws
Showing 81 to 100 of 1013 Records
-
2011 (7) TMI 1326
Issues involved: Appeal against order of CIT(A) regarding allowance of VSAT & Transaction charges u/s 40A(a)(ia) and mark to market loss in future & option.
Allowance of VSAT & Transaction charges: The ITAT Mumbai upheld the CIT(A)'s decision to allow VSAT & Transaction charges as deductible expenditures, citing precedents where it was established that Stock Exchanges do not provide technical services, and fees paid for facilities are not subject to TDS u/s 40(a)(ia). The ITAT emphasized that stock exchanges offer infrastructure for trading, not technical services, and the speed and efficiency of screen-based trading do not constitute technical services. The payment in question was deemed not a fee for technical services, and the order of the CIT(A) was confirmed based on previous decisions.
TDS provisions: Referring to the case of Kotak securities ltd, the ITAT reiterated that stock exchanges do not provide managerial or technical consultancy services, and transaction fees are for using exchange facilities, not for services rendered. The provisions of section 194J were found not applicable, and there was no obligation to deduct tax at source. Consequently, the disallowance made u/s 40(a)(ia) was deleted, aligning with the previous Coordinate Bench decision.
Mark to market loss in future & option: The ITAT upheld the CIT(A)'s decision to allow the mark to market loss in future & option as an allowable loss, following the principles established by the Hon'ble Supreme Court. The A.O.'s view that the loss in forward contracts is notional was countered by the CIT(A), who allowed the loss as an expenditure u/s 37(1) based on the Supreme Court judgment. The ITAT agreed that the notional loss in derivative transactions is a valid business loss and upheld the CIT(A)'s decision.
Conclusion: The appeal of the Revenue was dismissed by the ITAT Mumbai, affirming the decisions of the CIT(A) regarding the allowance of VSAT & Transaction charges and mark to market loss in future & option. The ITAT found no reason to differ from the CIT(A)'s findings and rejected the Revenue's appeal.
-
2011 (7) TMI 1325
Issues involved: Disallowance of miscellaneous and staff welfare expenses, disallowance of deduction of interest amounting to Rs. 4,89,55,754.
Disallowed expenses: Ground Nos. 1 & 2 regarding disallowance of miscellaneous expenses of Rs. 69,733/- and staff welfare expenses of Rs. 13,209/- were not pressed by the assessee and thus dismissed. Remaining grounds for adjudication are Ground Nos. 3 & 4, pertaining to disallowance of deduction of interest amounting to Rs. 4,89,55,754.
Interest deduction disallowance: The AO disallowed the interest paid by the assessee on borrowed funds, totaling Rs. 4,89,55,754, as expenses not relatable to the assessee's business. The assessee contended that the interest paid on borrowed funds is allowable as deduction u/s 36(1)(iii) of the Act since the company is predominantly an investment company. The AO and CIT(A) relied on the previous year's order and disallowed the interest. However, the Tribunal noted the difference in taxable income due to dividend income earned and exempted in previous years. The matter was remitted back to the AO for fresh examination considering the specific circumstances of the current year.
Decision: The Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO for reevaluation, considering the unique circumstances of the year under consideration. The appeal of the assessee was treated as partly allowed for statistical purposes.
-
2011 (7) TMI 1324
Issues:
1. Appeal against order of Tribunal in ITA No. 1519/PN/2008 under section 254(2) of the Act.
Analysis:
The applicant filed a miscellaneous application against the Tribunal's order regarding the assessability of an amount under the head income from business instead of capital gain. The applicant argued that the amount should be assessed as capital gain, citing various decisions of co-ordinate Benches of the Tribunal in their favor. The applicant claimed that the Tribunal's decision contained a mistake apparent from the record and sought rectification under section 254(2) of the Act. The Departmental Representative (DR) supported the Tribunal's order, contending that accepting the applicant's position would amount to impermissible review of the Tribunal's order.
Upon reviewing the submissions and evidence, the Tribunal found that the case did not warrant invoking the provisions of section 254(2) of the Act. The Tribunal observed that the applicant's request essentially sought a review of the Tribunal's order under the guise of rectification, which is not allowed under the law. Consequently, the Tribunal rejected the miscellaneous application filed by the assessee. The Tribunal dismissed the application, upholding the original order regarding the assessability of the amount under the head income from business. The order was pronounced in open court on 27th July 2011.
-
2011 (7) TMI 1323
Issues Involved:
1. Validity of the order dated 18th February, 2011 passed by the Debts Recovery Appellate Tribunal.
2. Discharge of guarantors' liability upon settlement with the principal debtor.
3. Applicability of Section 134 of the Contract Act regarding discharge of surety.
4. Imposition of exemplary costs on the Bank.
Summary:
Issue 1: Validity of the Order Dated 18th February, 2011
The Bank filed Writ Petition Nos. 29076 and 29083 of 2011 to quash the order dated 18th February, 2011 passed by the Chairperson of the Debts Recovery Appellate Tribunal in Appeal Nos. 614 and 663 of 2005. The appeals were filed against the Tribunal's order dated 10th August, 2005 in T.A. No. 1415 of 2000, which allowed the Bank's claim against the guarantors but dismissed it against the Company.
Issue 2: Discharge of Guarantors' Liability
The Appellate Tribunal allowed the appeals, holding that once the Bank accepted Rs. 78,16,428.42 towards "full and final settlement of the claim" from the Official Liquidator, the liability of the principal debtor was discharged. Consequently, the guarantors' liability, being coextensive with that of the principal debtor u/s 128 of the Contract Act, was also discharged.
Issue 3: Applicability of Section 134 of the Contract Act
The Bank argued that the surety is not discharged u/s 134 of the Contract Act as there was no contract between the borrower and the Bank. However, the Court rejected this argument, stating that the Official Liquidator had stepped into the shoes of the Company, and the Bank had agreed to the settlement, thereby discharging the surety.
Issue 4: Imposition of Exemplary Costs
The Court noted that the Bank should have restrained itself from pursuing T.A. No. 1415 of 2000 after agreeing to the settlement amount. The Bank's failure to disclose the application and affidavit filed before the Company Judge warranted the imposition of exemplary costs. Consequently, the writ petitions were dismissed with costs of Rs. 25,000/- each.
Conclusion:
The High Court dismissed the writ petitions, upholding the Appellate Tribunal's order that the guarantors were discharged from liability due to the Bank's acceptance of the settlement amount. The Court imposed exemplary costs on the Bank for unnecessarily pursuing the matter.
-
2011 (7) TMI 1322
Interest on Refund u/s 244A - The AO has passed order on January 2006 under sec. 254/154/148 of the IT Act, 1961 vide which a refund amount has been determined - But refund has actually been granted on 29th May, 2006 - HELD THAT:- There was statutory liability on the Revenue to pay the interest on the refund which was retained for seeking the administrative approval. As the refund was granted to the assessee only on 29th May, 2006, therefore, the assessee was entitled for the interest upto the said date and the AO was not justified in granting the interest only upto January, 2006 - Decision in favour of Assessee.
Interest on Retained Interest u/s 244A - Assessee's contention was that interest was short allowed for four months, so interest on interest was also payable u/s 244A - AO stated that there was no delay in granting relief or refund as procedure and instructions of CBDT were followed
HELD THAT:- Following the ratio laid down by the Hon'ble Supreme Court in the SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [2006 (1) TMI 55 - SUPREME COURT], where it was held that "even assuming that there is no provision for payment of compensation, compensation for delay is required to be paid as per the act itself recognizes in principle of the liability of the Department to pay interest when excess tax was retained and the same principle should be extended to cases where interest was retained." We, therefore, direct the AO to allow the interest to the assessee also on the interest which was payable on the amount to be refunded. - Decision in favour of Assessee.
-
2011 (7) TMI 1321
Issues Involved:
1. Whether sub-rules (1) and (2) of Rule 57 of the Second Schedule to the Income Tax Act, 1961 empower the Debt Recovery Officer to extend the time prescribed for the auction purchaser to pay the purchase money.
Issue-Wise Detailed Analysis:
1. Interpretation of Rule 57(1) and Rule 57(2):
The primary issue is whether the Debt Recovery Officer has the authority to extend the time prescribed under Rule 57(1) and (2) for the auction purchaser to pay the purchase money. The petitioner, an auction purchaser, failed to pay the balance 75% of the purchase money within 15 days as required by Rule 57(2). The Recovery Officer extended the time upon the petitioner's request, allowing the payment after the prescribed period. The third respondent challenged this extension, leading to a series of legal proceedings.
2. Legal Precedents and Mandatory Nature of Rules:
The court examined various judgments to determine if the rules are mandatory. In Manilal Mohanlal Shah v. Sardar Sayed Ahmed Sayed Mohamad (AIR 1954 SC 349), the Supreme Court held that the deposit of 25% of the purchase money immediately after the sale is mandatory under Order XXI, Rule 84 of the Civil Procedure Code. The court also referenced Balram v. Ilam Singh (1996) 5 SCC 705, where it was held that non-compliance with Rule 84 renders the sale a nullity. Similarly, in Rao Mahmood Ahmed Khan v. Sh. Ranbir Singh (AIR 1995 SC 2195), the Supreme Court found Rule 285-D of the U.P. Zamindari Abolition and Land Reforms Act, which is akin to Rule 57(1), to be mandatory.
3. Applicability of Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act:
Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, applies the provisions of the Second and Third Schedules to the Income Tax Act, 1961, with necessary modifications. This section empowers the Recovery Officer to follow these provisions as far as possible but allows for modifications to suit the context of debt recovery.
4. Discretion of the Recovery Officer:
The court noted that while Rule 57(1) is mandatory, Rule 57(2) allows for some discretion. Rule 58 provides that in default of payment within the prescribed period, the deposit may be forfeited, and the property resold. However, the Recovery Officer has discretion in deciding whether to forfeit the deposit. The court found that the Recovery Officer could extend the time for payment under Rule 57(2) if such modifications are included in the sale notice, aligning with the objective of speedy debt recovery.
5. Judgment of Andhra Pradesh High Court:
The court referred to P. Mohanreddy v. Debts Recovery Appellate Tribunal (AIR 2004 AP 94), where it was held that the Recovery Officer has discretion to extend the time for deposit under Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act. However, the court distinguished this case by emphasizing that Rule 57(1) is mandatory, and any extension must be explicitly stated in the sale notice.
6. Conclusion and Order:
The court concluded that:
- Sub-rule (1) of Rule 57 is mandatory, and the Recovery Officer has no power to extend the time for the initial 25% deposit.
- Sub-rule (2) of Rule 57 is not mandatory and can be modified to allow extensions if stated in the sale notice.
- In the absence of such a clause in the sale notice, the Recovery Officer cannot extend the time for the 75% balance payment beyond 15 days.
Given these conclusions, the court found that the Recovery Officer's extension of time in the petitioner's case was unsustainable due to the lack of a clause in the sale notice permitting such an extension. Consequently, the writ petition was dismissed, and the order of the Debts Recovery Appellate Tribunal setting aside the sale was upheld.
-
2011 (7) TMI 1320
Issues involved: Appeal against order of Ld. Commissioner of Income- (Appeals)-Gandhinagar u/s 80IB(10) and section 40A(3) of the Income-tax Act, 1961.
Claim u/s 80IB(10): The assessee's claim of Rs. 12,71,980 u/s 80IB(10) was rejected by the Assessing Officer due to lack of details regarding commencement of work and measurement of plot. Ld. CIT(Appeals) upheld the rejection stating that details about construction and area were missing.
Arguments for u/s 80IB(10): Assessee contended that construction work as per approved plan had commenced in Dec'01 and was completed in 2007, fulfilling all conditions of Section 80IB(10). Previous year's deduction was allowed, and reliance was placed on a relevant ITAT Ahmedabad Benches decision.
Decision on u/s 80IB(10): Tribunal found ambiguity in whether the claim for A.Y 2004-05 was for the same project. The matter was remanded to the Assessing Officer for fresh adjudication to allow the assessee to substantiate the claim.
Addition u/s 40A(3): An addition of Rs. 80,000 u/s 40A(3) was made for cash payment of Rs. 4 crore to purchase land, which was disallowed by the Assessing Officer and upheld by Ld. CIT(Appeals).
Arguments for u/s 40A(3): Assessee claimed cash payments were made as per farmers' insistence due to lack of bank accounts. However, no evidence was provided. The issue was remanded to the AO for further adjudication with the opportunity for the assessee to submit supporting evidence.
Conclusion: The appeal was allowed for statistical purposes, and the matter was remanded back to the Assessing Officer for fresh adjudication on both u/s 80IB(10) and section 40A(3) claims.
Separate Judgement: None.
-
2011 (7) TMI 1319
Issues involved: Interpretation of administrative order by the Chairman of the Company Law Board regarding the constitution of the Principal Bench and transfer of matters, Grievance regarding the composition of the Principal Bench, Exercise of administrative power by the Chairman, Authority of the Chairman in assigning matters to different benches, Dismissal of appeal and imposition of costs.
Interpretation of Administrative Order:
The appeal challenged an administrative order by the Chairman of the Company Law Board directing the matter to be heard by the Principal Bench. The appellant contended that the Principal Bench must consist of the Chairman and not just a member. The order dated April 26, 2010, directed the matter to be heard before the Company Law Board, Principal Bench, New Delhi. The Chairman's power to transfer matters to the Principal Bench was highlighted. The Chairman's decision was based on administrative powers and the notification dated March 17, 2008, allowing him to transfer pending matters. The court found that the Chairman's decision was within his authority, and no interference was warranted based on the arguments presented.
Grievance Regarding Composition of Principal Bench:
The appellant had previously raised a similar issue in another appeal but withdrew it to approach the Chairman of the Company Law Board. An application was then made to the Chairman to determine whether the matter should be heard by the Principal Bench in New Delhi or another bench with a different composition of members. The court emphasized that the constitution of the Bench and assignment of business fell under the Chairman's domain. Litigants cannot choose the bench for their matters, as it is the Chairman's prerogative. The court dismissed the appeal, stating that no interference was necessary based on the Chairman's findings and observations.
Exercise of Administrative Power by the Chairman:
The Chairman's role as the administrative head of all the Benches of the Company Law Board was crucial. The court reiterated that the Chairman had the authority to transfer matters to the Principal Bench as per the notification. Litigants cannot assert a right to choose a specific bench for their cases. The court emphasized that the Chairman's decisions regarding the assignment of matters were final, and unless bias was proven satisfactorily, no grievances could be raised against the Chairman's administrative powers.
Dismissal of Appeal and Imposition of Costs:
The court found the appeal to be misconceived and dismissed it with a cost of Rs. 25,000 to be deposited with the Company Law Board within one month. The Company Law Board was given the authority to appropriate the cost as per the final order in the main Company Petition. A related civil application was also disposed of in light of the main appeal's outcome.
-
2011 (7) TMI 1318
Issues involved:
1. Cancellation of registration u/s 12AA
2. Approval under section 80G(5)
Cancellation of registration u/s 12AA:
The assessee's registration u/s 12A was cancelled by the ld. DIT(E) based on the grounds that the assessee was involved in business activities generating significant surplus and had not carried out any charitable activities. The assessee challenged this order on various grounds, including misinterpretation of law and facts. The counsel argued that the Director did not have the authority to cancel registration granted u/s 12A. The Hon'ble Delhi High Court clarified that the power to cancel registration u/s 12A(a) was vested in the Commissioner/Director only from 1st June, 2010, and not before. Thus, the cancellation of registration by the DIT(Exemptions) before this date was deemed incompetent.
Approval under section 80G(5):
The assessee's request for approval under section 80G(5) was rejected by the ld. DIT(E) based on the assessment that the assessee was primarily engaged in commercial activities of letting out properties for substantial rental income, with minimal charitable donations made. The assessee appealed this decision, arguing that the leasing of school buildings to educational trusts was a charitable activity. The Tribunal upheld the assessee's contention, citing previous decisions where it was established that the leasing activity was in furtherance of charitable objectives. The Tribunal also noted that the assessee was entitled to the benefit of section 11 based on binding precedents from earlier years. Therefore, the Tribunal allowed both appeals, affirming that the activities of the assessee were indeed charitable in nature, and thus, approval under section 80G was justified.
-
2011 (7) TMI 1317
Issues Involved:
1. Deceptive similarity between the trademarks FORZID and ORZID.
2. Validity of the registration of the trademark FORZID.
3. Prior user rights and registration of ORZID.
4. Acquiescence and honest concurrent use defenses.
5. Impact of the prior interim injunction refusal by the Madras High Court.
Detailed Analysis:
1. Deceptive Similarity:
The court examined whether the trademarks FORZID and ORZID are deceptively similar. It held that "FORZID is nothing but ORZID prefixed by a soft consonant F." The court emphasized that the entire word mark ORZID is being used as part of the word mark FORZID, with only an addition of a single letter "F." This minimal change does not sufficiently distinguish FORZID from ORZID to avoid deception or confusion among average customers with imperfect recall. The court applied the "essential feature" test from Durga Dutt Sharma v. N.P. Laboratories, concluding that the entire word mark ORZID is subsumed in UBPL's mark FORZID, making them deceptively similar.
2. Validity of the Registration:
The court referenced Section 9(2)(a) and Section 11(1)(b) of the Trade Marks Act, 1999, which prohibit the registration of marks likely to deceive the public or cause confusion. It was found that the registration of FORZID by UBPL was invalid due to its deceptive similarity to ORZID. The IPAB's decision to remove FORZID from the Register of Trade Marks was upheld, as the registration was hit by Section 9 (1)(a) and (2)(a) and Section 11 (1) and 2(a) of the Trade Marks Act, 1999.
3. Prior User Rights and Registration:
OCPL was the prior user of the trademark ORZID since 1999 and had obtained registration for it. The court noted that UBPL's adoption of FORZID subsequent to OCPL's registration gave rise to serious doubts about the bona fide adoption of the impugned trade mark by UBPL. The court held that OCPL's prior registration and use of ORZID entitled it to seek rectification of the later mark FORZID.
4. Acquiescence and Honest Concurrent Use Defenses:
The court found that UBPL's defenses of acquiescence and honest concurrent use were unconvincing. There was no evidence to show that OCPL had knowledge of UBPL's use of FORZID and took no steps to seek an injunction against UBPL. The court emphasized that the plea of acquiescence was not supported by the facts.
5. Impact of the Prior Interim Injunction Refusal by the Madras High Court:
The court addressed the argument that the IPAB should have considered the Madras High Court's refusal of an interim injunction to OCPL. It clarified that the IPAB is not bound by the High Court's interim orders, which are tentative and not final determinations. The IPAB is expected to form an independent view on the matter. The court noted that the IPAB's decision was based on a thorough analysis of the facts and law, and it was not invalidated by the prior interim injunction refusal.
Conclusion:
The court upheld the IPAB's order dated 14th October 2008, directing the removal of the trademark FORZID from the Register of Trade Marks. The writ petition and the pending application were dismissed with costs of Rs. 5,000 to be paid by UBPL to OCPL within four weeks. The interim order was vacated.
-
2011 (7) TMI 1316
Issues Involved:
1. Disallowance of finance charges paid on borrowed funds.
2. Disallowance u/s 14A of the Act.
3. Deletion of addition out of total foreign traveling expenses incurred.
Summary:
1. Disallowance of Finance Charges Paid on Borrowed Funds:
The Assessee appealed against the disallowance of Rs. 52,48,328/- as finance charges on borrowed funds. The AO observed that the Assessee had invested Rs. 52,13,26,800/- in subsidiaries without earning any income and had interest-bearing funds amounting to Rs. 19,20,67,163/-. The AO disallowed the interest claim, stating that the Assessee used borrowed funds for non-business purposes. The CIT(A) upheld the AO's decision, but the Tribunal referred to the judgment in Reliance Utilities and Power Ltd., holding that if sufficient interest-free funds are available, it is presumed that investments are made from such funds. The Tribunal found that the Assessee had sufficient own funds and allowed the appeal.
2. Disallowance u/s 14A of the Act:
The Assessee contested the disallowance of Rs. 61,87,099/- u/s 14A, arguing that no expenses were incurred to earn the dividend income of Rs. 14,81,581/-. The AO applied Rule 8D, which was confirmed by the CIT(A). The Tribunal referred to the judgment in Godrej & Boyce Mfg. Co. Ltd., which stated that Rule 8D applies from the assessment year 2008-09 and the AO must determine the expenditure reasonably. The Tribunal remitted the matter back to the AO for fresh determination in light of the said judgment.
3. Deletion of Addition Out of Total Foreign Traveling Expenses Incurred:
The revenue appealed against the deletion of Rs. 19,59,000/- out of foreign travel expenses. The AO disallowed the expenses, stating that the Assessee failed to correlate the expenses with business purposes. The CIT(A) deleted the disallowance, noting that the Assessee provided sufficient evidence, including newspaper articles, proving the business purpose of the travel. The Tribunal upheld the CIT(A)'s decision, finding no infirmity in the deletion of the disallowance.
Conclusion:
The Assessee's appeal was allowed for statistical purposes, and the revenue's appeal was dismissed.
-
2011 (7) TMI 1315
Issues involved: The judgment involves disputes regarding deduction of educational expenses and disallowance of contributions towards Provident Fund, ESI, and Pension Fund.
Deduction of Educational Expenses (Assessment Year 2003-04): The assessee claimed deduction for educational expenses of directors' sons studying abroad, but the Assessing Officer disallowed it. The Commissioner of Income-tax (Appeals) upheld the disallowance citing relevant judgments. The assessee contended that the expenditure was allowable, but the Tribunal found no error in disallowing it under section 37(1) of the Income-tax Act, 1961.
Disallowed Contributions towards Provident Fund, ESI, and Pension Fund: The dispute involved disallowance of employees' and employer's contributions on the grounds of late payments. The assessee argued that the payments were made before the due date of filing the return under section 139(1) of the Act, relying on legal precedents. The Departmental Representative contended that employees' contributions were not allowable due to late payment. The Tribunal ruled in favor of the assessee, allowing both employer's and employees' contributions based on legal interpretations and judgments, reversing the Commissioner of Income-tax (Appeals) decision.
Conclusion: The Tribunal upheld the disallowance of educational expenses deduction for the assessment year 2003-04 but allowed the appeal regarding contributions towards Provident Fund, ESI, and Pension Fund. The Tribunal also allowed the appeal for the assessment year 2004-05 concerning the disallowance of employees' contributions towards PF and ESI. The judgments were pronounced on July 29, 2011.
-
2011 (7) TMI 1314
Issues involved: The judgment involves the addition of perquisites u/s 15 read with section 17(2)(iv) of the Act to the total income of the assessee, based on expenses incurred through credit cards and paid by the employer company.
Summary:
1. Background and Assessment Proceedings:
The assessee, an individual and Director in a company, filed a return declaring total income. The Assessing Officer (AO) added expenses paid by the employer company through credit cards as perquisites u/s 17. The assessee appealed to the CIT(Appeals) claiming double taxation due to fringe benefit tax paid by the employer.
2. Decision of CIT(Appeals):
The CIT(Appeals) upheld the addition of expenses as perquisites, citing personal nature of expenses and lack of evidence for business purpose. He referred to legal precedents and dismissed the appeal, directing the AO to verify certain contentions.
3. Tribunal's Decision:
The Tribunal considered the CBDT Circular on fringe benefit tax, which clarified that such tax is a levy on employees for privileges provided by the employer. Referring to AO's acceptance in previous assessments, the Tribunal held that only the balance amount, not covered by fringe benefit tax paid by the employer, should be added to the assessee's income as perquisite. The Tribunal set aside the CIT(Appeals) order and remanded the matter to the AO for recomputation.
In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing the treatment of expenses covered by fringe benefit tax and directing the AO to reevaluate the perquisite value.
-
2011 (7) TMI 1313
Application u/s 11 of the Arbitration and Conciliation Act - enforcement of arbitration clause - Jurisdiction of arbitrator to consider the counter claim - Under agreement, the Appellant entrusted a construction work to the Respondent. Clause 25 of the agreement provided for settlement of disputes by arbitration. As per the contract, the work had to be commenced on 16.11.1992 and completed by 5.5.1994. On the ground that the contractor did not complete the work even by the extended date of completion (31.3.1995), the contract was terminated by the Appellant. Respondent raised certain claims and gave a notice to the Appellant to appoint an arbitrator in terms of the arbitration clause. As the Appellant did not do so, the Respondent filed an application u/s 11, and the said application was allowed and arbitrator was appointed. The arbitrator called upon the parties to file their statement. the Respondent filed its claim statement before the arbitrator. The Appellant filed its Reply Statement with counter claim. The arbitrator considered the fourteen claims of the contractor and four counter claims of the Appellant. he rejected the other claims of Respondent and Appellant. Feeling aggrieved the Respondent filed an application to the civil court. The Appellant challenged the civil court judgment by filing an arbitration appeal before the High Court. The Bombay High Court held that the arbitrator had No jurisdiction to entertain or allow such a counter claim as the same had neither been placed before the court in the proceedings u/s 20 nor the court had referred it to the arbitrator. The said judgment of the High Court is challenged in this appeal by special leave.
HELD THAT:- The arbitration clause in this case contemplates all disputes being referred to arbitration by a sole arbitrator. It refers to an Appointing Authority (Chief Engineer, CPWD), whose role is only to appoint the arbitrator. Though the arbitration clause requires the party invoking the arbitration to specify the dispute/s to be referred to arbitration, it does not require the appointing authority to specify the disputes or refer any specific disputes to arbitration nor requires the Arbitrator to decide only the referred disputes. It does not bar the arbitrator deciding any counter claims. In the absence of agreement to the contrary, it has to be held that the counter claims by the Appellant were maintainable and arbitrable having regard to Section 23 read with Section 2(9) of the Act.
In view of the above, this appeal is allowed and the order of the High Court affirming the judgment of the trial court, is set aside. Consequently the award of arbitrator is upheld in its entirety and the challenge thereto by the Respondent is rejected.
-
2011 (7) TMI 1312
Issues Involved:
1. Cancellation of admission for post-graduate course in N.R.I. category.
2. Definition and eligibility of 'Non-Resident Indian' (N.R.I.) under the Income Tax Act.
3. Application of the doctrine of promissory estoppel.
4. Compliance with the guidelines laid down by the Supreme Court regarding N.R.I. quota admissions.
Detailed Analysis:
1. Cancellation of Admission for Post-Graduate Course in N.R.I. Category:
The petitioner, a student, challenged the cancellation of her admission to a post-graduate course in General Medicine under the N.R.I. category for the academic year 2011-2012. The respondent college initially accepted her application and granted provisional admission. However, the admission was later canceled on the grounds that her stay abroad on a visitor's visa did not qualify her as an N.R.I.
2. Definition and Eligibility of 'Non-Resident Indian' (N.R.I.) Under the Income Tax Act:
The petitioner argued that her stay outside India for 186 days qualified her as an N.R.I. under Section 6 of the Income Tax Act, 1961. The court examined the definitions under Sections 2(30), 2(42), and 6 of the Income Tax Act. It concluded that simply staying outside India for 182 days or more does not automatically qualify one as an N.R.I. The court emphasized that the petitioner's stay on a visitor's visa did not meet the criteria for N.R.I. status as per the relevant provisions and the intent behind the N.R.I. quota.
3. Application of the Doctrine of Promissory Estoppel:
The petitioner contended that the cancellation of her admission violated the principle of promissory estoppel, arguing that she had altered her position based on the respondent's promise of admission. The court refuted this, stating that promissory estoppel requires clear and positive intention and equity from the petitioner. It was noted that the provisional nature of the admission and the subsequent discovery of the petitioner's ineligibility justified the cancellation. The court held that enforcing the doctrine in this case would perpetuate an illegality.
4. Compliance with the Guidelines Laid Down by the Supreme Court Regarding N.R.I. Quota Admissions:
The respondent argued that the cancellation was in line with the Supreme Court's guidelines in P.A. Inamdar and Ors. v. State of Maharashtra and Ors., which emphasized that N.R.I. quota seats should be utilized bona fide by NRIs and their children or wards. The court agreed, underscoring that the petitioner's admission under the N.R.I. quota was not justified as neither she nor her parents were NRIs. The court highlighted the need for strict adherence to the guidelines to prevent misuse of the N.R.I. quota.
Conclusion:
The court concluded that the petitioner did not meet the eligibility criteria for N.R.I. status and that the respondent's decision to cancel the admission was justified. The petition was rejected, with the court emphasizing the importance of adhering to statutory definitions and Supreme Court guidelines to maintain the integrity of the N.R.I. quota admissions. The court also noted that it could not interfere with the internal administrative decisions of educational institutions unless there was a clear violation of statutory provisions or arbitrariness.
-
2011 (7) TMI 1310
Issues involved:
The judgment involves a joint petition filed u/s 391 to 394 of the Companies Act, 1956 seeking sanction of the Scheme of Amalgamation of three companies.
Details of the Judgment:
1. The petition was filed by Transferor Company No. 1, Transferor Company No. 2, and Transferee Company seeking sanction of the Scheme of Amalgamation.
2. The registered offices of all companies are situated in New Delhi.
3. Details regarding the incorporation dates and capital of the companies were provided in the petition.
4. Memorandum, Articles of Association, and audited Annual Accounts were enclosed with the petition.
5. Resolutions approving the Scheme were passed by the Board of Directors of the companies.
6. No pending proceedings u/s 235 to 251 of the Act were reported.
7. The share exchange ratio for amalgamation was specified in the Scheme.
8. Meetings of shareholders and creditors were dispensed with as per earlier directions.
9. The petition seeking sanction of the Scheme was filed after issuing notices to relevant authorities.
10. Citations were published in newspapers as directed, and affidavits of service and publication were filed.
11. The Official Liquidator reported no complaints against the proposed Scheme.
12. The Regional Director's report highlighted the status change of employees post-amalgamation.
13. Observations regarding company status and name change procedures were made by the Regional Director.
14. A rejoinder affidavit clarified that approval of the Scheme is sufficient for necessary company actions.
15. Objections raised by the Regional Director were addressed.
16. No objections were received from any other party.
17. Both Deputy Registrar of Companies and Official Liquidator had no objections to the petition.
18. Sanction was granted to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956.
19. The Petitioner Companies agreed to deposit a sum in the Common Pool fund of the Official Liquidator.
20. The petition was allowed as per the terms mentioned in the judgment.
-
2011 (7) TMI 1309
Issues Involved:
1. Existence and validity of the Arbitration Clause.
2. Jurisdiction of civil courts regarding arbitration agreements.
3. Applicability of the Arbitration and Conciliation Act, 1996 (A and C Act).
4. Maintainability of civil suits challenging arbitration agreements.
5. Prima facie finding of an arbitration agreement by courts.
6. Remedies available to parties disputing arbitration agreements.
Detailed Analysis:
1. Existence and Validity of the Arbitration Clause:
The central issue was whether the Arbitration Clause in the "Century 21 International Sub Franchise Agreement" applied to the Plaintiff/Appellant. The Appellant argued that the Arbitration Clause was only between Realogy Corporation and DGS Realtors Pvt. Ltd., and not applicable to him personally, despite being the Managing Director of DGS Realtors Pvt. Ltd. The court noted that the Arbitration Clause allowed each party to appoint an arbitrator, but this did not include the Appellant personally. The court concluded that the Plaintiff/Appellant should not be compelled to submit to arbitration as he did not agree to be personally bound by the Arbitration Clause.
2. Jurisdiction of Civil Courts Regarding Arbitration Agreements:
The court examined whether civil courts have jurisdiction to entertain suits challenging the existence or validity of arbitration agreements. The judgment referred to several precedents, including Spentex Industries Ltd. v. Dunvant S.A., Bhatia International v. Bulk Trading S.A., and SBP and Co. v. Patel Engineering, which collectively indicated that civil courts should generally refrain from intervening in arbitration matters except where explicitly permitted by the A and C Act.
3. Applicability of the Arbitration and Conciliation Act, 1996 (A and C Act):
The court discussed the applicability of Part I and Part II of the A and C Act. It was clarified that Section 11 of the A and C Act, which deals with the appointment of arbitrators, applies to both domestic and international arbitrations. The court emphasized that the Act aims to minimize court intervention and expedite the arbitration process.
4. Maintainability of Civil Suits Challenging Arbitration Agreements:
The court analyzed various judgments to determine the maintainability of civil suits challenging arbitration agreements. It was noted that the Supreme Court in Kvaerner Cementation India Ltd. v. Bajranglal Agarwal had ruled that civil courts should not entertain suits challenging arbitration agreements, as the Arbitral Tribunal has the power to rule on its own jurisdiction under Section 16 of the A and C Act. The judgment also referenced the decision in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd., which held that a prima facie finding on the existence of an arbitration agreement is mandatory before referring parties to arbitration.
5. Prima Facie Finding of an Arbitration Agreement by Courts:
The court underscored the necessity for courts to make a prima facie determination regarding the existence of an arbitration agreement before referring parties to arbitration. This requirement ensures that parties are not unjustly compelled to arbitrate disputes they did not agree to arbitrate. The court cited the decision in SBP and Co. v. Patel Engineering, which affirmed that courts must decide on the existence of a valid arbitration agreement before referring disputes to arbitration.
6. Remedies Available to Parties Disputing Arbitration Agreements:
The judgment outlined the remedies available to parties disputing arbitration agreements. It was noted that if a party receives a notice from the Arbitral Tribunal, they can immediately object to its jurisdiction on the grounds that they are not a necessary or proper party to the proceedings. Additionally, parties can argue that the arbitration agreement is null and void, inoperative, or incapable of performance. The court also highlighted that Section 45 of the A and C Act allows courts to refer parties to arbitration unless the agreement is found to be null and void, inoperative, or incapable of being performed.
Conclusion:
The court concluded that the Plaintiff/Appellant was not personally bound by the Arbitration Clause and should not be compelled to submit to arbitration. The judgment emphasized the importance of a prima facie finding on the existence of an arbitration agreement by courts and clarified the limited circumstances under which civil courts can intervene in arbitration matters. The appeals were dismissed, affirming the principle that arbitration agreements should be respected and enforced unless found to be invalid or inapplicable.
-
2011 (7) TMI 1308
Issues involved:
The judgment deals with the issue of the maintainability of a civil writ petition in light of an arbitration clause in a dealership agreement.
Summary:
1. The respondent, a petitioner, had its retail outlet dealership terminated by the appellant-Corporation due to a change in land ownership without approval. The respondent filed a civil writ petition seeking to quash the termination decision, which was allowed by the Single Judge. The appellant argued that the petition was not maintainable due to the arbitration clause in the agreement.
2. The main issue raised was the maintainability of the civil writ petition in light of the arbitration clause in the dealership agreement, which mandated arbitration for dispute resolution.
3. The Single Judge held that despite the availability of an alternative remedy through arbitration, the High Court could still entertain the writ petition in certain circumstances justifying the exercise of extraordinary writ jurisdiction under Article 226.
4. The appellant contended that the respondent should have pursued arbitration as per the agreement, citing relevant judgments supporting the referral of disputes to arbitration. The cancellation of the dealership was considered a determinative right suitable for arbitration.
5. The respondent opposed the appellant's arguments, relying on a Supreme Court judgment stating that the existence of an arbitration clause does not preclude parties from approaching the High Court for relief without exhausting alternative remedies.
6. The Division Bench disagreed with the Single Judge's decision, citing Supreme Court precedent that an arbitration clause generally bars invoking the writ jurisdiction of the High Court unless exceptional circumstances warrant otherwise.
7. The Bench emphasized that in commercial transactions like this case, the role of an arbitration clause is crucial, and without patent illegality or violation of fundamental rights, the Court should defer to arbitration proceedings.
8. Ultimately, the Bench allowed the appeal, setting aside the Single Judge's judgment and directing the parties to initiate arbitration proceedings without prejudice to their rights.
-
2011 (7) TMI 1307
Issues Involved:
1. Quashing of letters dated 21st June 2010, 3rd May 2011, and 3rd June 2011.
2. Alleged violation of principles of natural justice.
3. Maintainability of the writ petition due to the existence of an arbitration clause.
4. Interpretation of Article 4.1.1 of the Concession Agreement.
5. Whether the writ jurisdiction can be invoked in contractual disputes.
Summary:
1. Quashing of Letters:
The petitioner sought to quash letters dated 21st June 2010, 3rd May 2011, and 3rd June 2011, and to restrain the respondent from implementing these letters. The letters pertained to alleged violations of a concession agreement by the petitioner, including unauthorized use of rail terminal facilities by other private operators and a demand for Rs. 40 crores.
2. Alleged Violation of Principles of Natural Justice:
The petitioner contended that the order dated 3rd June 2011, demanding Rs. 40 crores and threatening termination of the Concession Agreement, was issued without a show cause notice or an opportunity for a hearing, violating principles of natural justice. The respondent countered that a show cause notice was served on 21st June 2010, and the petitioner replied on 28th June 2010, thus fulfilling the requirement of natural justice.
3. Maintainability of the Writ Petition:
The petitioner argued that the existence of an arbitration clause does not bar the writ jurisdiction of the court. The respondent contended that the petitioner should invoke the arbitration clause rather than the writ jurisdiction. The court noted that while the existence of an arbitration clause does not absolutely bar writ jurisdiction, it is generally not appropriate for disputes involving interpretation of contractual terms and serious disputed facts.
4. Interpretation of Article 4.1.1 of the Concession Agreement:
The petitioner argued that Article 4.1.1 allowed them to extend rail terminal facilities to other Private Container Train Operators (PCTOs) without prior approval. The respondent disagreed, stating that the article did not authorize such actions without specific permission. The court found that the interpretation of Article 4.1.1 and the related factual disputes were not suitable for adjudication under writ jurisdiction.
5. Whether the Writ Jurisdiction Can Be Invoked in Contractual Disputes:
The court referred to several Supreme Court judgments, emphasizing that writ jurisdiction is generally not appropriate for disputes involving contractual terms, especially when serious disputed facts are involved. The court concluded that the present case involved such disputes and was not suitable for writ jurisdiction.
Conclusion:
The court dismissed the petition, finding no merit in the arguments presented. However, it directed the respondent to decide the petitioner's representation dated 15th June 2011 before the expiry of the 60-day period mentioned in the order dated 3rd June 2011, ensuring an opportunity for a hearing.
-
2011 (7) TMI 1306
The High Court of Bombay dismissed the appeal as the questions raised were already decided against the Revenue in a previous case. No costs were awarded.
........
|
9911796707
