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• 1981 (1) TMI 295
  
  Issues:
  1. Prosecution beyond the period of limitation under Section 75 of the Punjab Excise Act and Section 468 of the Code of Criminal Procedure.
  
  Analysis:
  The case involved a challenge to the prosecution proceedings initiated against the Petitioners for the possession of illicit liquor beyond the period of limitation as prescribed under Section 75 of the Punjab Excise Act and Section 468 of the Code of Criminal Procedure. The Petitioners contended that the Magistrate had no power to take cognizance of the offence due to the delay in filing the challan. The Respondent, on the other hand, argued that special sanction from the State Government was obtained for prosecution after the limitation period had expired, thereby justifying the delay in filing the challan.
  
  The Court examined the relevant provisions of the Excise Act and the Code of Criminal Procedure to determine the legality of the prosecution proceedings. Section 468 of the Code sets out the period of limitation for different categories of offences, with specific timelines based on the severity of punishment. Additionally, Section 470(3) of the Code provides for the exclusion of time taken to obtain consent or sanction in computing the period of limitation.
  
  The Court emphasized the importance of harmonizing the provisions of the Excise Act and the Code of Criminal Procedure. It concluded that prosecution under the Excise Act must be initiated within one year, as specified in Section 75(2) of the Act. The Court clarified that even if Section 468 allows for a three-year limitation period for certain offences, the special sanction from the State Government is crucial for launching prosecution beyond the one-year limit prescribed by the Excise Act.
  
  Since the provisions of Section 470(3) of the Code were not applicable in the present case, and the challan was filed well beyond the three-year period specified in Section 468, the Court held that the Magistrate lacked the authority to take cognizance of the offence. The Court highlighted that the power under Section 473 of the Code to extend the limitation period could only be exercised if the delay was properly explained or in the interest of justice, which was not the case here.
  
  Consequently, the Court allowed the petition and quashed the proceedings against the Petitioners in the Court of the Judicial Magistrate First Class, Kharar, as the prosecution was initiated beyond the statutory limitation period without proper justification or satisfaction of the Court.

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• 1981 (1) TMI 294
  
  Issues:
  1. Compliance with constitutional safeguards under Article 22(5) regarding preventive detention.
  2. Delay in disposing of the detenu's representation and non-supply of documents and materials forming the basis of detention.
  3. Interpretation of the term "effective representation" under Article 22(5).
  4. Importance of upholding the rights of a citizen in preventive detention cases.
  5. Government's responsibility in ensuring compliance with constitutional safeguards in detention cases.
  
  Detailed Analysis:
  
  1. The petition was filed by the detenu's sister seeking release due to alleged non-compliance with constitutional safeguards in preventive detention cases. The detenu was arrested, and only the grounds of detention were initially served without accompanying documents and materials forming the basis of detention. The detenu's representation was disposed of after a significant delay, raising concerns about the adherence to safeguards under Article 22(5) of the Constitution.
  
  2. The primary argument for the petition's success was based on the failure to supply the documents and materials integral to the grounds of detention to the detenu promptly. The Supreme Court emphasized the necessity of providing detenus with all relevant documents and materials to enable them to make an effective representation against their detention. The delay in disposing of the detenu's representation was also highlighted as a crucial factor in determining the validity of the detention order.
  
  3. The interpretation of the term "effective representation" under Article 22(5) was a key point of contention. The Court stressed that detenus must be informed of all materials considered against them to have a meaningful opportunity to challenge their detention. The failure to supply documents referenced in the grounds of detention along with the grounds themselves was deemed to render the representation illusory rather than effective.
  
  4. The judgment underscored the significance of upholding a citizen's rights in cases of preventive detention without trial. It emphasized the need for strict adherence to constitutional safeguards under Article 21 and Article 22(5) to prevent any unjust deprivation of liberty. The Court highlighted that any departure from these safeguards could render the detention order void.
  
  5. The Court expressed deep concern over the repeated non-compliance with constitutional safeguards by detaining authorities. It called for personal accountability of officials responsible for preparing detention orders that do not meet the required standards. The judgment emphasized the government's responsibility in ensuring that detaining authorities strictly adhere to constitutional requirements to prevent unjust detentions and subsequent legal challenges.
  
  In conclusion, the Supreme Court held that the detenu's continued detention was void due to non-compliance with constitutional safeguards. The Court directed the detenu's immediate release and urged the government to take necessary actions to ensure compliance with these safeguards in future detention cases.

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• 1981 (1) TMI 293
  
  Issues Involved:
  1. Admissibility of an insufficiently stamped and unregistered document.
  2. Compliance with the Gram Panchayat Act regarding surcharge.
  3. Use of an unregistered document for collateral purposes.
  4. Impact of non-payment of surcharge on admissibility.
  
  Issue-wise Detailed Analysis:
  
  1. Admissibility of an Insufficiently Stamped and Unregistered Document:
  The plaintiff sought to admit an exchange deed dated 14-6-1958 to prove possession of the disputed property. The Principal District Munsif refused to admit the document due to insufficient stamping and lack of registration. The court emphasized that under Section 35 of the Stamp Act, an instrument chargeable with duty must be stamped to be admissible in evidence. The proviso to Section 35 allows a document to be received in evidence upon payment of stamp duty and penalty if initially unstamped or insufficiently stamped. The court noted that the document in question had been impounded by the R.D.O., who imposed duty and penalty, and a certificate was appended confirming compliance with Section 35. Thus, the document satisfied the requirements of Section 35 and could be admitted for collateral purposes.
  
  2. Compliance with the Gram Panchayat Act Regarding Surcharge:
  The lower court refused to admit the document because the surcharge required by Sections 69 and 73 of the Gram Panchayat Act was not paid. It was undisputed that transactions involving immovable property under village panchayat jurisdiction require a 5% surcharge on the property's value. The court found that the R.D.O. did not collect this surcharge when impounding the document. The court held that the non-payment of surcharge under the Gram Panchayat Act does not fall under the provisions of Section 35 of the Stamp Act, which governs the admissibility of documents based on stamp duty and penalty.
  
  3. Use of an Unregistered Document for Collateral Purposes:
  The plaintiff argued that the document was tendered for collateral purposes, specifically to prove possession rather than title. The court acknowledged that under Section 49 of the Registration Act, an unregistered document can be received in evidence for collateral purposes if it complies with Section 35 of the Stamp Act. The court cited precedent where unregistered documents were admitted for collateral purposes, such as proving possession, in conformity with the proviso added by the Amendment Act of 1929 to Section 49 of the Registration Act.
  
  4. Impact of Non-payment of Surcharge on Admissibility:
  The court determined that the lower court's refusal to admit the document based on non-payment of surcharge was unjustified. The court noted that the Gram Panchayat Act and its relevant rules do not incorporate Section 35 of the Stamp Act concerning the duty on property transfers. The court referred to a Division Bench decision in Manavala Naicker v. K. R. Gopala, which dealt with a similar issue under the Madras District Municipalities Act. The court concluded that the legislature did not intend for the surcharge under the Gram Panchayat Act to affect the admissibility of documents under Section 35 of the Stamp Act. Consequently, the document could be admitted in evidence for the limited purpose for which it was tendered, despite the non-payment of surcharge.
  
  Conclusion:
  The court set aside the lower court's order and directed it to receive the document in evidence for the limited purpose of proving possession. The defendant retained the right to challenge the document's genuineness and raise other contentions. The Civil Revision Petition was allowed without costs.

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• 1981 (1) TMI 292
  
  The Supreme Court allowed a habeas corpus petition filed by the wife of the detenu, who was arrested under the COFEPOSA Act. The detenu was not provided with all documents relied upon in the order of detention, rendering the detention void. The detenu was ordered to be released immediately. (Case citation: 1981 (1) TMI 292 - Supreme Court)

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• 1981 (1) TMI 291
  
  Issues Involved:
  1. Validity of the appellant's election under the Representation of the People Act, 1951.
  2. Effect of subsequent acquittal on disqualification due to conviction and sentence.
  3. Applicability of Section 100(1)(a) versus Section 100(1)(d)(i) of the Act.
  4. Interpretation of the term "disqualified" under the Act and the Constitution.
  5. Impact of the date of scrutiny of nominations on the disqualification.
  
  Issue-wise Detailed Analysis:
  
  1. Validity of the appellant's election under the Representation of the People Act, 1951:
  
  The primary question was whether the election of a candidate, whose conviction and sentence exceeding two years were pending appeal at the time of nomination scrutiny, could be declared void under Section 100(1) of the Act. The High Court of Madhya Pradesh had declared the appellant's election void, leading to this appeal.
  
  2. Effect of subsequent acquittal on disqualification due to conviction and sentence:
  
  The appellant was convicted and sentenced to imprisonment exceeding two years. However, his conviction was quashed by the Supreme Court during the pendency of the election petition. The Court held that the acquittal retrospectively wiped out the conviction and sentence, making it as if the conviction never existed. This principle was supported by the precedent in Manni Lal v. Parmai Lal, where it was stated, "An order of acquittal particularly one passed on merits wipes off the conviction and sentence for all purposes, and as effectively as if it had never been passed."
  
  3. Applicability of Section 100(1)(a) versus Section 100(1)(d)(i) of the Act:
  
  The respondent initially challenged the election under both Section 100(1)(a) and Section 100(1)(d)(i). However, during arguments, the challenge under Section 100(1)(a) was given up, and the case was pressed only under Section 100(1)(d)(i). The Court noted that the primary question was whether the appellant was disqualified at the date of scrutiny of the nomination papers, which would determine if his nomination was properly accepted by the Returning Officer.
  
  4. Interpretation of the term "disqualified" under the Act and the Constitution:
  
  The Court examined the definition of "disqualified" under Section 7(b) of the Act and Article 102 of the Constitution. It was argued that the term "disqualified" should be interpreted to include the entire election process, from nomination to the declaration of results. However, the Court held that the disqualification must be judged with reference to the date of the election, as per Section 67A, which defines the date of election as the date on which a candidate is declared elected.
  
  5. Impact of the date of scrutiny of nominations on the disqualification:
  
  The Court emphasized that under Section 36(2)(a), the crucial date for determining disqualification is the date of scrutiny of nominations. However, it concluded that the subsequent acquittal of the appellant by the Supreme Court during the pendency of the election petition retrospectively annulled the disqualification, making it non-existent even at the date of scrutiny. The Court stated, "The acquittal of the appellant before the decision of the election-petition pending in the High Court, had, with retrospective effect, made his disqualification non-existent, even at the date of the scrutiny of nominations."
  
  Conclusion:
  
  The Supreme Court allowed the appeal, set aside the judgment of the High Court, and dismissed the election petition of the respondent. The Court held that the appellant's subsequent acquittal retrospectively wiped out his disqualification, rendering his nomination valid. The parties were directed to bear their own costs.

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• 1981 (1) TMI 290
  
  Issues Involved:
  1. Validity of the declaration of raw cashewnut as an essential article under the Kerala Essential Articles Control (Temporary Powers) Act, 1961.
  2. Validity of the Kerala Raw Cashewnuts (Procurement and Distribution) Order, 1977.
  3. Whether raw cashewnut is considered a foodstuff and thus an essential commodity under the Central Essential Commodities Act, 1955.
  4. Competence of the State Government of Kerala to regulate raw cashewnut under the Kerala Act.
  
  Issue-wise Detailed Analysis:
  
  1. Validity of the Declaration of Raw Cashewnut as an Essential Article:
  The core issue is whether the State Government of Kerala could declare raw cashewnut as an essential article under Section 2(a) of the Kerala Essential Articles Control (Temporary Powers) Act, 1961. The Kerala Act allows the State Government to declare any article, not being an essential commodity as defined in the Essential Commodities Act, 1955 (Central Act), as an essential article. The Supreme Court noted that the Kerala Act does not specify any article as essential but defines "essential article" as any article declared by the Government by notified order, excluding those defined as essential commodities under the Central Act.
  
  2. Validity of the Kerala Raw Cashewnuts (Procurement and Distribution) Order, 1977:
  The Order was issued by the State Government of Kerala under Section 3 of the Kerala Act to regulate the procurement and distribution of raw cashewnuts. The Order included provisions such as the prohibition of sale to unauthorized persons, appointment of Co-operative Societies as sub-agents, and other restrictions on processing and distribution. The explanatory note stated that the Order aimed to ensure the maintenance of supplies of raw cashewnuts for continued employment and equitable distribution at fair prices.
  
  3. Whether Raw Cashewnut is Considered a Foodstuff:
  The petitioners argued that raw cashewnut is a foodstuff, which is an essential commodity under the Central Act, and thus cannot be declared as an essential article under the Kerala Act. The Court examined the definition of "essential commodity" under the Central Act, which includes "foodstuffs, including edible oilseeds and oils." The Court applied the rule of statutory construction, noscitur a sociis, to interpret "foodstuffs" in a broader sense, including articles consumed by humans after processing. The Court cited several precedents where raw materials used in food production, such as paddy and turmeric, were considered foodstuffs.
  
  4. Competence of the State Government of Kerala:
  The Court addressed the argument that the State Government could regulate raw cashewnut as it was used as industrial raw material. However, the Court rejected this contention, stating that the language of Section 2(a)(v) of the Central Act and the purpose of the Central Act indicate that "foodstuffs" should be given a wider meaning. The Court also noted that the Central Act's provisions on essential commodities include those used for industrial purposes or export. The Court concluded that since raw cashewnut is a foodstuff under the Central Act, the Kerala Government lacked the authority to declare it as an essential article under the Kerala Act.
  
  Conclusion:
  The Supreme Court quashed the declaration by the Kerala Government that raw cashewnut is an essential article under the Kerala Act and the subsequent Order regulating its procurement and distribution. The Court held that raw cashewnut is a foodstuff and thus an essential commodity under the Central Act, rendering the Kerala Government's actions beyond its legislative competence. The petitions were allowed, and all other contentions, including alleged infringement of fundamental rights, were left open. The Court suggested that any adverse impact on the cashewnut industry and employment could be addressed by appropriate legislative or governmental action under Entry 33 of List III of the Seventh Schedule to the Constitution.

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• 1981 (1) TMI 289
  
  The Supreme Court granted special leave in a case where the Appellant's appeal delay was considered justified. The Court set aside the Rent Control tribunal's order, remanded the appeal, and directed it to be heard on merits. Parties to appear before the Rent Control Tribunal on 2.02.1981, with a disposal deadline of six weeks and a stay on dispossession in the interim.

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• 1981 (1) TMI 288
  
  The Supreme Court allowed a petition for habeas corpus, setting aside the order of detention due to two infirmities: documents not supplied along with grounds of detention and delay in disposing of representation. The detenu was directed to be released immediately. (Case: 1981 (1) TMI 288 - SC)

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• 1981 (1) TMI 287
  
  The Supreme Court allowed the petition filed by the son-in-law of the detenu, directing the detenu's release due to non-compliance with constitutional safeguards under Article 22(5). The order of detention was rendered void as documents were not supplied with the order and the representation was disposed of after a significant delay. (Case Citation: 1981 (1) TMI 287 - Supreme Court)

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• 1981 (1) TMI 286
  
  Issues Involved:
  1. Interpretation of Section 14 of the Official Secrets Act, 1923.
  2. Whether Section 14 of the Act deprives the accused of the right to access statements of witnesses.
  3. Validity of the High Court's direction to hold the Commitment Inquiry by another Magistrate.
  4. The propriety of the Magistrate's and lawyer's conduct regarding the production of notes.
  
  Detailed Analysis:
  
  1. Interpretation of Section 14 of the Official Secrets Act, 1923:
  The central controversy in this case revolves around the interpretation of Section 14 of the Official Secrets Act, 1923. The appeal challenges the judgment of the Calcutta High Court, which had set aside the trial court's order and remitted the case for fresh hearing. The High Court had interpreted Section 14 to mean that the court has the discretion to exclude the public from the proceedings and prohibit the publication of any evidence given in the course of the proceedings. The Supreme Court examined the language of Section 14 and concluded that it is an enabling provision that allows the court to hold proceedings in camera but does not override the provisions of the Criminal Procedure Code (CrPC) relating to enquiries or trials. The Court emphasized that Section 14 does not deprive the accused of the right to access statements of witnesses recorded by the police or the Magistrate.
  
  2. Whether Section 14 of the Act deprives the accused of the right to access statements of witnesses:
  The High Court had held that Section 14 of the Act not only allows the exclusion of the public from the proceedings but also bars the accused from accessing statements of witnesses. The Supreme Court disagreed with this interpretation, stating that Section 14 does not prohibit the accused from getting copies of the statements recorded by the police or the Magistrate. The Court highlighted that depriving the accused of this right would be unreasonable and prejudicial, violating Articles 14 and 21 of the Constitution. The Court clarified that the term "publication of any evidence" in Section 14 is meant to prevent public disclosure during the hearing, not to deny the accused access to the evidence.
  
  3. Validity of the High Court's direction to hold the Commitment Inquiry by another Magistrate:
  The High Court had directed that the Commitment Inquiry be held by another Magistrate, criticizing the trial Magistrate for not compelling the defense lawyer to produce his notes. The Supreme Court found no impropriety in the Magistrate's conduct, stating that the Magistrate was justified in not compelling the lawyer to surrender his register, which contained privileged communication. The Court held that the High Court's strictures against the Magistrate and the lawyer were unwarranted. The Supreme Court did not agree with the High Court's direction to have the case tried by another Magistrate, noting that the original Magistrate might have been transferred by now, and the case should be inquired into by an available Magistrate.
  
  4. The propriety of the Magistrate's and lawyer's conduct regarding the production of notes:
  The High Court had criticized the defense lawyer for refusing to show his notebook, which contained notes of the evidence. The Supreme Court upheld the lawyer's claim of privilege under Section 126 of the Evidence Act, stating that the register contained instructions from the client, which are privileged communications. The Court found no impropriety in the lawyer's conduct and held that the Magistrate was correct in not compelling the lawyer to produce the register. The Court emphasized that the lawyer's actions were in line with the law, and the High Court's strictures were unjustified.
  
  Conclusion:
  The Supreme Court overruled the High Court's interpretation of Section 14 of the Official Secrets Act, 1923, holding that it does not deprive the accused of the right to access statements of witnesses. The Court found no fault in the conduct of the Magistrate and the defense lawyer and deemed the High Court's strictures against them unwarranted. The case was directed to be inquired into by an available Magistrate in light of the Supreme Court's observations. The appeal was disposed of accordingly.

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• 1981 (1) TMI 285
  
  Issues:
  1. Interpretation of the term "Company" under Section 3(e) of the Land Acquisition Act.
  2. Determination of whether the Food Corporation of India qualifies as a "Company" under the Act.
  3. Analysis of the legal status of the Food Corporation of India as a Government department or an autonomous body.
  4. Examination of the acquisition proceedings for compliance with Chapter VII of the Land Acquisition Act.
  
  Analysis:
  
  1. The primary issue in this case was the interpretation of the term "Company" under Section 3(e) of the Land Acquisition Act. The court examined the definition provided in the Act, which includes entities incorporated under Indian law. The judges emphasized that a company created under Indian law falls within the scope of the Act.
  
  2. The court delved into whether the Food Corporation of India met the criteria to be considered a "Company" under the Land Acquisition Act. It was highlighted that the Food Corporation of India was established by the Central Government under the Food Corporation Act, 1964, thereby constituting it as a body corporate with attributes akin to a company under Indian law.
  
  3. The legal status of the Food Corporation of India was a crucial aspect of the judgment. The court distinguished between a Government department and an autonomous body, noting that the Corporation had its own identity, could hold property, enter contracts, and engage in legal proceedings independently. While acknowledging government involvement in appointments and funding, the court concluded that the Corporation maintained a separate legal persona.
  
  4. Lastly, the court scrutinized the land acquisition proceedings to ascertain compliance with Chapter VII of the Land Acquisition Act, which pertains to acquisitions for companies. It was observed that the necessary procedures for acquiring land for the Food Corporation of India were not duly followed, leading to the conclusion that the acquisition was not in accordance with the law.
  
  In conclusion, the Supreme Court dismissed the appeal, affirming that the land acquisition for the Food Corporation of India was invalid due to non-compliance with statutory requirements. The judgment underscored the Corporation's classification as a "Company" under the Act, emphasizing its distinct legal identity and the need for adherence to procedural norms outlined in the legislation for such acquisitions.

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• 1981 (1) TMI 284
  
  Issues Involved:
  1. Admissibility and nature of the documents as promissory notes.
  2. Authenticity and consideration of the promissory notes.
  3. Material alteration of the promissory notes.
  4. Authority of the third defendant to execute the promissory notes on behalf of the firm.
  5. Liability of the firm and the second defendant.
  6. Entitlement to interest on the amounts claimed.
  
  Detailed Analysis:
  
  1. Admissibility and Nature of the Documents as Promissory Notes:
  - Contention: The defendants argued that the documents (Exts. A1, A2, and A37) were not promissory notes because they did not mention the "promisee" and were not executed to the "order" of the payee.
  - Judgment: The court held that the documents satisfied the definition of promissory notes under Section 4 of the Negotiable Instruments Act. It was not necessary for the promise to include the words "to order" or explicitly name the payee in the body of the document. The documents were addressed to the respective promisees and clearly indicated the payee with certainty.
  
  2. Authenticity and Consideration of the Promissory Notes:
  - Contention: The defendants claimed the promissory notes were collusive, without consideration, and merely letters of security.
  - Judgment: The court found that the transactions were genuine and supported by consideration. The evidence of the plaintiffs (PWs 1 and 4) and the corroborative entries in the account books were sufficient to establish the authenticity of the transactions. The court dismissed the defendants' claims of collusion and lack of consideration.
  
  3. Material Alteration of the Promissory Notes:
  - Contention: The defendants alleged that the stamps on the promissory notes were affixed and canceled after execution, constituting material alteration.
  - Judgment: The court held that there was no material alteration. The stamps were affixed and canceled in an effectual manner as required by Section 12 of the Stamp Act. The court found no suspicious circumstances or evidence of tampering. The cancellation by drawing lines across the stamps was deemed lawful and effective.
  
  4. Authority of the Third Defendant to Execute the Promissory Notes on Behalf of the Firm:
  - Contention: The second defendant argued that the third defendant had no authority to borrow money on behalf of the firm without his consent, as per the partnership agreement (Ext. B1).
  - Judgment: The court held that the third defendant, as the Managing Partner, had the implied authority to borrow money for the firm under Sections 18 and 19 of the Partnership Act. The court found no substantial restriction on this authority in Ext. B1. The promisees (PWs 1 and 4) were not aware of any restrictions, and the third defendant represented that he had the authority to borrow.
  
  5. Liability of the Firm and the Second Defendant:
  - Contention: The second defendant contended that the promissory notes did not bind the firm as they were not executed in the firm's name.
  - Judgment: The court held that the promissory notes were executed in a manner that bound the firm. The use of the expression "we promise to pay" and the letterheads containing the firm's name indicated that the third defendant acted on behalf of the firm. The court found that the firm and the second defendant were liable under the promissory notes.
  
  6. Entitlement to Interest on the Amounts Claimed:
  - Contention: The trial court denied interest as there was no agreement to pay interest.
  - Judgment: The court held that even if there was no agreement to pay interest, the plaintiffs were entitled to interest under Section 80 of the Negotiable Instruments Act at the rate of 6% per annum from the date the money was due until realization.
  
  Conclusion:
  The High Court set aside the trial court's judgment and decreed the suits as prayed for by the plaintiffs with costs. The plaintiffs were entitled to the amounts claimed under the promissory notes along with interest at 6% per annum from the dates of the promissory notes until recovery. The appeals were allowed with costs.

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• 1981 (1) TMI 283
  
  Issues Involved:
  1. Conviction for offenses under the Drugs and Cosmetics Act, 1940.
  2. Legality of additional sentence of imprisonment for the same offenses.
  3. Sentencing under section 18(c) punishable under section 27(a)(ii).
  4. Sentencing under section 18A punishable under section 28.
  5. Validity of High Court's order punishing twice for the same offenses with the aid of section 34(2) of the Act.
  6. Conviction under section 18(a)(i) and section 18(a)(vi) of the Drugs and Cosmetics Act, 1940.
  7. Sentencing under section 27(b) for offenses under section 18(a)(i) and section 18(a)(vi).
  8. Conviction and sentencing under section 22(1)(c) of the Act.
  
  Summary:
  
  1. Conviction for offenses under the Drugs and Cosmetics Act, 1940:
  The High Court set aside the acquittal of the three appellants and convicted them of various offenses under the Drugs and Cosmetics Act, 1940. The first appellant, a firm, was found to have 33 out of 42 items of drugs not listed in the approved list of drugs appended to their license, constituting an offense u/s 18(c) punishable u/s 27(a)(ii). Additionally, one sample of Sodium Bromide I.P. Batch No. 1 was found to be sub-standard, constituting an offense u/s 18(a)(i) punishable u/s 27(b). The appellants also failed to disclose the source of acquisition of the drugs, constituting an offense u/s 18A punishable u/s 28.
  
  2. Legality of additional sentence of imprisonment for the same offenses:
  The High Court sentenced the third appellant to additional imprisonment for the same offenses using section 34(2) of the Act. The Supreme Court found this additional sentence illegal, stating that section 34(2) imposes liability on those not directly in charge of the company's management but responsible for the offense by consent, connivance, or neglect. The further punishment awarded to the third appellant with the aid of section 34(2) was set aside.
  
  3. Sentencing under section 18(c) punishable under section 27(a)(ii):
  The High Court imposed a fine of Rs. 2000 on each of the three appellants for the offense u/s 18(c). However, section 27(a)(ii) mandates a sentence of imprisonment of not less than one year in addition to the fine unless special reasons are recorded for a lesser period. The Supreme Court remitted the case to the High Court to reconsider the sentence for appellants 2 and 3.
  
  4. Sentencing under section 18A punishable under section 28:
  The High Court imposed a fine of Rs. 2000 for the offense u/s 18A, which is punishable u/s 28. Section 28 prescribes imprisonment for a term up to one year or a fine up to Rs. 500 or both. The Supreme Court noted that no fine exceeding Rs. 500 could be imposed for an offense u/s 18A and remitted the case to the High Court for appropriate sentencing.
  
  5. Validity of High Court's order punishing twice for the same offenses with the aid of section 34(2) of the Act:
  The writ petition questioning the validity of the High Court's order punishing the third appellant twice for the same offenses with the aid of section 34(2) was rendered unnecessary due to the Supreme Court's decision in the appeal.
  
  6. Conviction under section 18(a)(i) and section 18(a)(vi) of the Drugs and Cosmetics Act, 1940:
  In a separate appeal, the High Court set aside the acquittal of the appellants and convicted them for offenses u/s 18(a)(i) and 18(a)(vi) of the Act. The appellants were found guilty of having in their stock and exhibiting for sale drugs not of standard quality and disposing of prohibited drugs in contravention of a prohibitory order u/s 22(1)(c).
  
  7. Sentencing under section 27(b) for offenses under section 18(a)(i) and section 18(a)(vi):
  The High Court sentenced each appellant to pay a fine of Rs. 1000 on each count for offenses u/s 18(a)(i) and 18(a)(vi), with appellants 2 and 3 to undergo simple imprisonment for one month in default of payment.
  
  8. Conviction and sentencing under section 22(1)(c) of the Act:
  The High Court further convicted the appellants for an offense punishable u/s 22(

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• 1981 (1) TMI 282
  
  Issues Involved
  1. Impact of statutory changes on the right of a landlord to evict a tenant from a non-residential building.
  2. Jurisdiction of the civil court to entertain the suit for ejectment.
  3. Validity and effect of the notification issued under Section 3 of the East Punjab Urban Rent Restriction Act, 1949.
  4. Interpretation of the Haryana Urban (Control of Rent and Eviction) Act, 1973, and its amendments.
  5. Continuation of rights and liabilities under the repealed law.
  
  Detailed Analysis
  
  1. Impact of Statutory Changes on the Right of a Landlord to Evict a Tenant
  The court examined the effects of statutory changes on the landlord's right to evict tenants from non-residential buildings. The Plaintiff-Respondent filed a suit for ejectment and arrears of rent, asserting that the shop was exempted from the East Punjab Urban Rent Restriction Act, 1949, due to a notification issued under Section 3 of the Act. The exemption was because the building was constructed in 1969.
  
  2. Jurisdiction of the Civil Court to Entertain the Suit for Ejectment
  The Appellant contested the suit, arguing that the rent restriction laws applied, and thus, the civil court had no jurisdiction. The court found that the civil suit was properly entertained by the Sub-Judge 1st Class, Fatehabad, on August 2, 1973, and decreed on September 30, 1976. The new Act, amended in 1978, did not affect the jurisdiction of the civil courts as the notification exempting the building from the Act remained valid.
  
  3. Validity and Effect of the Notification Issued Under Section 3 of the East Punjab Urban Rent Restriction Act, 1949
  The Governor of Haryana issued a notification on October 22, 1971, exempting buildings constructed in 1968, 1969, and 1970 from the provisions of the Act for five years. The court held that the special jurisdiction of the Rent Controller was ousted by this notification, allowing landlords to approach ordinary civil courts for ejectment.
  
  4. Interpretation of the Haryana Urban (Control of Rent and Eviction) Act, 1973, and Its Amendments
  The Haryana Urban (Control of Rent and Eviction) Act, 1973, repealed the old Act but included provisions for exemptions similar to the old Act. The court interpreted Section 1(3)(ii) of the new Act, which exempted non-residential buildings completed after March 31, 1962, from its provisions. The 1978 amendment to the new Act, which recast Section 1(3), did not nullify the earlier exemptions granted under the old Act.
  
  5. Continuation of Rights and Liabilities Under the Repealed Law
  The court referred to Section 22 of the Punjab General Clauses Act, 1898, which maintains the validity of notifications issued under a repealed Act if they are not inconsistent with the new Act. The notification issued under the old Act was deemed consistent with the new Act and thus remained in force. The court concluded that the civil court had jurisdiction to entertain the suit, and the notification from October 22, 1971, continued to be valid.
  
  Conclusion
  The court dismissed the appeal, affirming that the civil court had jurisdiction to entertain and decree the suit for ejectment and arrears of rent. The statutory changes and the amendments to the Haryana Urban (Control of Rent and Eviction) Act, 1973, did not affect the validity of the notification issued under the old Act, and the rights and liabilities under the repealed law continued to be in force. The judgment emphasized the importance of interpreting statutory provisions to maintain the jurisdiction of civil courts and uphold valid decrees.

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• 1981 (1) TMI 281
  
  Issues Involved:
  1. Simultaneous application of Sections 5(1)(iv) and 2(m)(ii) of the Wealth-tax Act, 1957.
  2. Exemption under Section 5(1)(iv) for a part of the house used for residential purposes.
  3. Deductibility of mortgage debt under Section 2(m)(ii).
  
  Detailed Analysis:
  
  1. Simultaneous application of Sections 5(1)(iv) and 2(m)(ii) of the Wealth-tax Act, 1957:
  The case revolves around the simultaneous application of Section 5(1)(iv) and Section 2(m)(ii) of the Wealth-tax Act, 1957, during the wealth-tax assessment for the year 1971-72. Section 5(1)(iv) exempts one house or part of a house used exclusively for residential purposes, subject to a monetary limit of Rs. 1,00,000. Section 2(m)(ii) specifies that debts secured on assets not chargeable to wealth-tax shall not be deducted in computing net wealth. The court clarified that the Wealth-tax Act taxes net wealth, not assets per se, meaning exemptions apply to the value of assets, not the assets themselves.
  
  2. Exemption under Section 5(1)(iv) for a part of the house used for residential purposes:
  The assessee owned a house, lived in one-half, and rented out the other half. The house was valued at Rs. 1,23,000, with a mortgage debt of Rs. 40,403. The Wealth-tax Officer (WTO) exempted the value of the residential half (Rs. 61,500) under Section 5(1)(iv). The court emphasized that the exemption under Section 5(1)(iv) applies to the value of the house or part thereof, not the physical asset itself. The court rejected the department's argument that the exemption attaches to the asset itself, irrespective of the quantum of exemption.
  
  3. Deductibility of mortgage debt under Section 2(m)(ii):
  The WTO bifurcated the mortgage debt, disallowing half (Rs. 20,202) under Section 2(m)(ii) and allowing the rest. The Tribunal ruled that the entire mortgage debt (Rs. 40,403) was deductible. The court agreed with the Tribunal, stating that Section 2(m)(ii) does not contemplate a debt secured on a partially exempt asset. The court reasoned that the legislative intent was to prevent double benefits-exemption of asset value and deduction of secured debt-but since the debt was secured on a house partially exempt and partially taxable, it did not fall neatly into the categories envisaged by Section 2(m)(ii).
  
  The court concluded that the debt secured on a property, which is neither wholly taxable nor wholly exempt, is not clearly provided for in the statute. The court also rejected the argument that a debt must be disallowed in whole if secured on a partially exempt asset, emphasizing that the statute does not contemplate such a situation.
  
  Conclusion:
  The court answered the question of law in favor of the assessee, affirming that the entire mortgage loan on the property should be deducted, even though the loan was secured on a property half of which was exempted. The assessee was awarded costs, with counsel's fee set at Rs. 500.

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• 1981 (1) TMI 280
  
  Issues involved: Dispute over property possession; Clarification of High Court order in criminal proceeding.
  
  Summary:
  The appeal before the Supreme Court arose from a dispute over the possession of a property at Birhana Road, Kanpur. The property was initially owned by Khem Raj and later purchased by Pyare Lal. The appellant, Smt. Sooraj Devi, and her son, Kailash Chandra Jain, were also involved in the ownership claim. Kailash Chandra Jain was convicted in a criminal proceeding under section 448 of the Indian Penal Code, and the High Court directed the property to be restored to Pyare Lal's possession. The appellant objected, leading to a series of legal actions including a clarification application under section 482 of the Code of Criminal Procedure. The High Court dismissed the application, prompting the appeal to the Supreme Court.
  
  In analyzing the case, the Supreme Court noted the ongoing civil litigation related to the property. Various civil suits were filed by different parties claiming ownership rights over the property. The main issue before the Supreme Court was whether the High Court was justified in refusing to entertain the appellant's application seeking clarification of the earlier order.
  
  The Supreme Court examined the relevant legal provisions, including section 362 of the Code of Criminal Procedure, which limits the power of courts to alter or review judgments. The appellant sought a declaration that the High Court's order did not affect her rights in the property. However, the Court found that the application did not fall under the category of clerical or arithmetical errors that could be corrected post-judgment. The Court also clarified that the inherent power of the court cannot be used to circumvent the statutory limitations on altering or reviewing judgments.
  
  Ultimately, the Supreme Court upheld the decision of the High Court to dismiss the application and affirmed the appeal's dismissal. The Court emphasized that the findings in the criminal proceeding should not impact the ongoing civil suits or any related proceedings.

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• 1981 (1) TMI 279
  
  Issues Involved:
  1. Jurisdiction of the Court of Small Causes vs. Arbitrator
  2. Applicability of the Bombay Rent, Hotel and Lodging House Rates Control Act, 1947
  3. Interpretation of the 'leave and licence' agreement
  4. Public policy considerations in tenancy disputes
  5. Validity of the arbitration clause in the 'leave and licence' agreement
  
  Issue-wise Detailed Analysis:
  
  1. Jurisdiction of the Court of Small Causes vs. Arbitrator:
  The core issue was whether the Court of Small Causes or an arbitrator had jurisdiction to resolve the dispute concerning the possession of the studios. The Court held that the Bombay Rent Act confers exclusive jurisdiction on the Court of Small Causes to entertain and try any suit or proceeding between a landlord and tenant relating to recovery of rent or possession of any premises. The Act also excludes the jurisdiction of any other Court, including an arbitrator, from entertaining such disputes. The Court emphasized that public policy requires disputes under the Rent Act to be resolved by the specialized courts constituted under the Act.
  
  2. Applicability of the Bombay Rent, Hotel and Lodging House Rates Control Act, 1947:
  The appellant argued that after the 1973 Amendment, the status of the appellant was that of a 'deemed tenant' under Section 15A of the Act. The Court agreed, stating that the amendment deemed licensees in occupation of premises on February 1, 1973, to be tenants. The Court also clarified that the definition of 'premises' under the Act includes buildings given on licence for business purposes, thus bringing the 'leave and licence' agreement within the ambit of the Act.
  
  3. Interpretation of the 'leave and licence' agreement:
  The agreement provided 'leave and licence' for the use of studios and other premises, as well as machinery and equipment. The Court found that the agreement was a composite one, granting licence to use both the premises and the equipment for producing films. The Court rejected the respondent's argument that the licence was primarily for the business of shooting films, with the use of the premises being merely incidental. The Court held that the studios given on licence were 'premises' under the Act, thus attracting its protective provisions.
  
  4. Public policy considerations in tenancy disputes:
  The Court underscored that the Bombay Rent Act is a welfare legislation aimed at protecting tenants from harassment by landlords. It is a matter of public policy that disputes under the Act be resolved by specialized courts. The Court noted that allowing arbitration agreements to override the jurisdiction of the Court of Small Causes would nullify the rights conferred on tenants by the Act, which is against public policy.
  
  5. Validity of the arbitration clause in the 'leave and licence' agreement:
  The Court declared the arbitration clause in the 'leave and licence' agreement to be inoperative. It reasoned that the dispute concerning the possession of the studios fell squarely within the jurisdiction of the Court of Small Causes under the Bombay Rent Act. The Court also noted that the respondent had filed a written statement in the suit before the Court of Small Causes without seeking a stay under Section 34 of the Arbitration Act, thereby precluding them from seeking arbitration.
  
  Conclusion:
  The appeals were allowed with costs, and the arbitration clause in the agreement dated March 28, 1970, was declared inoperative. The application for reference to arbitration was dismissed, affirming that the Court of Small Causes had exclusive jurisdiction to adjudicate the dispute.

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• 1981 (1) TMI 278
  
  Issues Involved:
  1. Validity of resignation under coercion.
  2. Jurisdiction of the High Court under Article 226.
  3. Compliance with natural justice.
  4. Entitlement to back-wages upon reinstatement.
  
  Detailed Analysis:
  
  1. Validity of Resignation under Coercion:
  The appellant, while on probation as a Lecturer, was subjected to a departmental enquiry for dereliction of duty. On March 19, 1976, the appellant submitted a letter of apology and a resignation letter just before the enquiry commenced. The Tamil Nadu Government, upon appeal, held that the resignation was not voluntary and directed reinstatement. The High Court quashed this order, but the Supreme Court noted that the circumstances under which the resignation was obtained suggested coercion. The simultaneous submission of the apology and resignation letters, and the unusual setting of their submission, indicated that the resignation was part of a deal to drop the enquiry. The Government was justified in concluding that the resignation was not voluntary.
  
  2. Jurisdiction of the High Court under Article 226:
  The High Court, in quashing the Government's order, acted beyond its jurisdiction under Article 226 of the Constitution. The Supreme Court emphasized that the High Court should not have re-evaluated the evidence or the conclusions reached by the Government. The High Court's role in issuing writs of certiorari is limited to correcting errors of law or jurisdictional excesses, not to act as an appellate body.
  
  3. Compliance with Natural Justice:
  The Government failed to comply with the rules of natural justice as required under Section 39(2)(i) of the Tamil Nadu Private Colleges (Regulation) Act, 1976, by not giving the respondent an opportunity to make representations before deciding the appeal. The Supreme Court acknowledged this lapse but decided that remitting the case for re-hearing would serve no useful purpose, given the nature of the charges and the likely outcome.
  
  4. Entitlement to Back-Wages upon Reinstatement:
  The Supreme Court noted that the Government did not make a direction for the payment of back-wages upon reinstatement, which it could have done under Section 39(2)(iii) of the Act. The case was remitted to the Government to decide on the appellant's entitlement to arrears of pay and allowances, with an opportunity for both parties to present their contentions and evidence. The Government must consider any salary earned by the appellant elsewhere during the period of his dismissal.
  
  Conclusion:
  The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the Government's order for reinstatement. The matter was remitted to the Government to decide on the appellant's entitlement to back-wages, ensuring compliance with principles of natural justice. There was no order as to costs.

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• 1981 (1) TMI 277
  
  Issues involved: The issues involved in this case are the validity of notices issued u/s 148 of the Income-tax Act, 1961 for four consecutive assessment years, and the grounds for challenging these notices based on the assessment of income in the hands of an individual versus a Hindu Undivided Family (HUF), and the disclosure of material facts by the assessee.
  
  Validity of Notices u/s 148: The petitioner challenged the notices issued u/s 148 on the grounds that the income had already been assessed in the hands of Shri Ram Prasad 'individual,' thus there was no escapement of income within the meaning of section 147(a) of the Act that could be taxed in the hands of Shri Ram Prasad (HUF). The petitioner also argued that there was no failure to disclose fully and truly all material facts necessary for assessment, as all relevant information was available to the Assessing Officer from the account books produced during the assessment of the firm.
  
  Legal Principles for Reopening Assessment: The judgment highlighted the legal principles governing the reopening of assessments u/s 147(a) of the Income-tax Act. It emphasized that for a valid jurisdiction under this section, two conditions must be satisfied: the Assessing Officer must have reason to believe that income chargeable to tax has escaped assessment, and this belief must be based on either omission or failure to disclose material facts by the assessee. The Court clarified that the Assessing Officer's belief must be held in good faith and be that of an honest and reasonable person, and judicial review is limited to ensuring the existence of conditions justifying the reassessment.
  
  Assessment in Different Capacities: The judgment explained that even if the same income has been assessed in the hands of an individual, it does not preclude the revenue authorities from reassessing the income in the hands of an HUF if legally liable. The distinction between individual and HUF as separate units of taxation was emphasized, and the Court rejected the argument that assessment in the wrong hands would prevent initiating appropriate proceedings against the legally liable person.
  
  Duty to Disclose Material Facts: The judgment discussed the duty of the assessee to disclose all material facts necessary for assessment, as required by section 147. It cited legal precedents to emphasize that mere production of evidence is not enough, and the assessee must disclose all primary facts, including those that may not be apparent from the evidence produced but are necessary for assessment. The Court rejected the argument that production of account books during assessment proceedings absolved the assessee from the duty to make full and true disclosure.
  
  Judicial Review and Redressal: The judgment highlighted that issuing a writ is not automatic and that the Act provides for appeal and revision mechanisms to address grievances. It advised the petitioner to participate in the reassessment proceedings and present its case before the authorities. The Court declined to interfere with the notices at that stage, allowing the petitioner to seek redress through the hierarchy of authorities under the Act.
  
  Conclusion: The Court dismissed the writ petition challenging the notices u/s 148, stating that the petitioner would have the opportunity to address its grievances during the reassessment proceedings. The stay order was discharged, and no costs were awarded.

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• 1981 (1) TMI 276
  
  Issues involved: Interpretation of Sec. 5(A) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 in the context of a Criminal Habeas Corpus Writ for quashing an order of detention.
  
  Summary:
  The Supreme Court heard an appeal challenging a judgment of the Gujarat High Court in a Criminal Habeas Corpus Writ case regarding the quashing of an order of detention. The High Court's decision was based on the relevance of one of the grounds of detention, specifically ground No. 7. The Supreme Court examined the interpretation of Sec. 5(A) of the Act, which deals with the severability of grounds of detention. The High Court's understanding that Sec. 5(A) requires only one ground related to smuggling to be valid, and if other grounds are clear, the detention is not vitiated, was deemed legally erroneous by the Supreme Court.
  
  The Supreme Court disagreed with the High Court's reasoning, stating that all grounds of detention under Sec. 3 of the Act must be related to preventing smuggling activities. The Court emphasized that Sec. 5(A) allows for each ground of detention to be considered separately, and the presence of an irrelevant ground does not necessarily invalidate the entire detention order. The purpose of Sec. 5(A) is to ensure that even if one ground is irrelevant, as long as the other grounds are clear and specific, the detention order remains valid.
  
  The detenu's counsel conceded that the High Court's interpretation of Sec. 5(A) was incorrect and did not challenge the validity of the Act itself. The Supreme Court, therefore, overruled the High Court's decision, declaring it legally erroneous. The appeal was dismissed, affirming the High Court's order to quash the detention, with the clarification on the interpretation of Sec. 5(A) provided by the Supreme Court.

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