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1987 (1) TMI 505
Issues:
Conviction under Section 302 read with section 34 IPC for murder based on eyewitness testimony in a dark place with disputed lighting conditions.
Analysis:
The judgment pertains to an appeal against the conviction of the appellant and three others under Section 302 read with section 34 IPC for the murder of one Ved Prakash. The deceased was the younger brother of a Registered Medical Practitioner, and the incident occurred at the clinic where both the deceased and his brother were present. The prosecution's case relied on the eyewitness accounts of P.W. 3 and P.W. 4, who witnessed the accused attacking the deceased with knives near a gurdwara. The trial court convicted the accused based on the evidence presented.
During the trial, the defense attempted to establish that the place of occurrence was dark due to fused electric tubes, making identification of the assailants difficult for the eyewitnesses. A defense witness, an Electrician, testified about the non-functioning street lights in the area prior to the incident. However, the court found this evidence to be unconvincing and unreliable, as the witness failed to prove the alleged letter from the Gurdwara Manager or his role in replacing the electric tubes.
The defense also questioned the ability of the eyewitnesses to identify the accused in the dark. However, the court noted that there was no cross-examination of P.W. 3 regarding the identification of the accused, and P.W. 4's testimony about the color of the accused's shirt supported the prosecution's version.
Additionally, the Investigating Officer testified that while the light was insufficient for completing the inquest proceedings, it was not entirely dark at the scene of the crime. The court found no merit in the argument that the lack of sufficient light hindered the identification of the assailants, as the IO had recorded statements from the eyewitnesses under the existing lighting conditions.
Ultimately, both the trial court and the High Court upheld the conviction, concluding that the prosecution had successfully proven the presence of functioning electric tube lights near the place of occurrence. The appeal was dismissed, affirming the guilt of the appellant and the other accused in the murder case.
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1987 (1) TMI 504
The Supreme Court found that the petitioner's detention was unlawful due to denial of the opportunity to make a representation, violating Article 22 of the Constitution. The detenu was entitled to be released and was confirmed to be on parole. The appeal was allowed in favor of the petitioner. (Case Citation: 1987 (1) TMI 504 - Supreme Court)
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1987 (1) TMI 503
Issues:
1. Whether a sanction to prosecute is equivalent to a sanction to take cognizance?
Analysis:
The judgment delves into the distinction between obtaining a sanction to prosecute and a sanction to take cognizance under Sections 132 and 197 of the Criminal Procedure Code (CrPC). It highlights that these sanctions serve different purposes and are directed towards different entities. The absence of either sanction results in different consequences, affecting the complainant and the court differently. The judgment emphasizes that a sanction under Section 132 does not act as a substitute for a sanction under Section 197. It clarifies that while the former empowers the complainant to initiate proceedings, the latter grants jurisdiction to the court to take cognizance of the offense. The court cannot proceed without the necessary sanction, as it lacks jurisdiction in such cases. The judgment concludes by setting aside the order of the High Court and quashing the proceedings against the appellant due to the absence of the required sanction under Section 197. It notes that this decision does not equate to an acquittal on merits, leaving the option open for further proceedings based on a valid sanction.
In summary, the judgment underscores the crucial distinction between sanctions to prosecute and to take cognizance as per Sections 132 and 197 of the CrPC. It elucidates that these sanctions serve different purposes and are directed towards different entities, emphasizing that one cannot substitute the other. The absence of the requisite sanction affects the complainant and the court differently, leading to a lack of jurisdiction in the absence of the necessary sanction. Consequently, the court cannot proceed with the case in the absence of the mandated sanction. The judgment ultimately quashes the proceedings against the appellant due to the absence of the required sanction under Section 197, without prejudice to any future proceedings that may be initiated with the appropriate sanction.
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1987 (1) TMI 502
Issues Involved:
1. Bail application under fresh circumstances.
2. Charges framed against the petitioner.
3. Allegations and evidence against the petitioner.
4. Previous bail refusals and new developments.
5. Petitioner's involvement in other legal cases.
6. Petitioner's financial and business involvement.
7. Apprehensions of fleeing from justice.
Detailed Analysis:
1. Bail Application under Fresh Circumstances:
The petitioner, previously denied bail multiple times, sought reconsideration of his bail application due to new circumstances and developments. The court acknowledged that fresh bail applications can be considered if new materials, further developments, and different considerations are presented. The Supreme Court's precedent in Bahu Singh v. State of U.P. supported this view, stating that an order refusing bail does not preclude another application on a later occasion with new materials.
2. Charges Framed Against the Petitioner:
The petitioner, along with a co-accused, was initially charged under Sections 420, 467, 468, 471 read with Section 120-B of the Indian Penal Code. However, the Chief Metropolitan Magistrate declined to charge them under Sections 467, 468, and 471, framing charges only under Section 420 read with Section 120-B. Both the accused and the state filed revision petitions against this order.
3. Allegations and Evidence Against the Petitioner:
The petitioner, as Chairman of Esal Group of Companies, and his co-accused, a General Manager at Punjab National Bank's London Branch, were accused of conspiring to defraud the bank using false and forged bills of exchange and shipping documents. The alleged fraud involved submitting forged bills purporting to show shipments of sugar, resulting in a financial loss of approximately $7.649 million to the bank. The investigation revealed that the supporting documents were forged and the vessel mentioned was not engaged in the shipment.
4. Previous Bail Refusals and New Developments:
The court had previously refused bail due to the gravity of the allegations and the apprehension that the petitioner might flee from justice. However, the petitioner presented several new considerations:
- No trial had commenced or was likely to commence soon.
- The petitioner had been granted bail in another case (Sobhraj Jail-break case), where no legally admissible evidence was found against him.
- The Calcutta High Court had recognized the petitioner's entitlement to bail under Section 437(6) Cr.P.C. but refused it due to his involvement in other cases in Delhi.
- The petitioner had procured a fake passport, but it was argued that he could have left India using his valid passport as no case was pending against him at that time.
- The petitioner was negotiating with the Indian government to resolve his financial issues, indicating he would not flee from justice.
5. Petitioner's Involvement in Other Legal Cases:
The petitioner's involvement in other legal cases, such as the Sobhraj Jail-break case and a case in Calcutta under Sections 419, 420, 468, and 471 IPC and Section 12(1)(b) of the Passport Act, influenced previous bail refusals. However, new developments in these cases, including the grant of bail and the recognition of entitlement to bail, were presented as fresh considerations.
6. Petitioner's Financial and Business Involvement:
The petitioner had significant financial and business involvement, including owning 74% shares in Jokai India Ltd., one of the largest tea companies. It was argued that his continued detention would hinder his ability to resolve financial issues and that his assets far exceeded his liabilities, making it unlikely he would flee from justice.
7. Apprehensions of Fleeing from Justice:
The court considered the state's apprehension that the petitioner might flee from justice. However, it was argued that the petitioner had substantial assets in India, was negotiating with the government to resolve financial issues, and had been a credible client of the bank. The court found that the apprehension was not reasonable and real, and the petitioner's continued detention was unjust.
Conclusion:
The court directed that the petitioner be admitted to bail on furnishing a bail bond of Rs. 10 lakhs with two sureties in similar amounts. The petitioner was required to surrender his passport, report to the investigating officer every Saturday, and not leave India without court permission. The court emphasized the importance of balancing personal liberty with legal considerations and ensuring a fair trial.
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1987 (1) TMI 501
Issues Involved:
1. Liability to pay damages for unauthorized occupation of government accommodation.
2. Applicability of promissory estoppel against the government.
3. Authority to deduct damages from commuted pension under Section 11 of the Pensions Act, 1871.
Detailed Analysis:
1. Liability to Pay Damages for Unauthorized Occupation of Government Accommodation:
The central issue is whether a government servant who retains accommodation beyond the concessional period is liable to pay damages equivalent to the market rent without receiving a specific notice from the Directorate of Estates. The respondent, a former Squadron Leader, retained a government-allotted flat beyond the permissible period after his transfer from Delhi, leading to unauthorized occupation. The High Court had ruled that the liability to pay market rent was contingent upon the Directorate serving a notice. However, the Supreme Court held that under SR 317-B-22, the liability to pay damages is absolute and not contingent on any notice. The Court clarified that the rule mandates payment of market rent for unauthorized occupation, irrespective of any notice from the Directorate.
2. Applicability of Promissory Estoppel Against the Government:
The High Court had applied the doctrine of promissory estoppel, stating that the government was estopped from claiming market rent due to its inaction and acceptance of normal rent. The Supreme Court disagreed, stating that there was no representation or conduct by the government that could induce the respondent to believe he could occupy the flat on normal rent. The Court emphasized that the respondent was aware of the rules and the consequences of unauthorized occupation. Therefore, the doctrine of promissory estoppel does not apply in this case, as there was no inducement or detrimental reliance by the respondent.
3. Authority to Deduct Damages from Commuted Pension under Section 11 of the Pensions Act, 1871:
The respondent challenged the unilateral deduction of damages from his commuted pension, arguing it was contrary to Section 11 of the Pensions Act, 1871. The High Court failed to address this crucial issue. The Supreme Court held that Section 11 protects pension and commuted pension from attachment, seizure, or sequestration. The Court cited precedents and government circulars supporting the view that commuted pension retains its character as pension until it reaches the hands of the pensioner. Therefore, the government's action of deducting Rs. 20,482.78 from the respondent's commuted pension was unlawful. The Court directed the government to refund the deducted amount and suggested that the government consider dropping proceedings for recovery if the respondent foregoes his claim for interest.
Conclusion:
The Supreme Court reversed the High Court's judgment, holding that the liability to pay market rent for unauthorized occupation is absolute and not contingent on notice. The doctrine of promissory estoppel does not apply, and the government's deduction from the commuted pension was unlawful under Section 11 of the Pensions Act, 1871. The Court ordered the refund of the deducted amount and suggested the government consider dropping further recovery proceedings.
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1987 (1) TMI 500
Issues Involved:
1. Whether the Beri Chetty community constitutes a religious denomination.
2. Whether the suit temple is a denominational temple.
3. Validity of the compromise decree dated 24.9.1963.
Summary:
1. Whether the Beri Chetty community constitutes a religious denomination:
The plaintiffs claimed that the Beri Chetty community is a religious denomination following the tenets of Sri Dharmasivacharya Mutt. However, the court found that the plaintiffs failed to prove that they are a religious denomination. The court noted that the term "religious denomination" is not defined in any enactments or the Constitution. It examined various definitions and concluded that the plaintiffs did not demonstrate a common faith, organization, or distinctive name. The evidence showed that the Beri Chetty community did not have a "Guru" after Dharmasivacharya left in 1876, and the rituals in the suit temple were not different from other public temples. Therefore, the plaintiffs did not meet the criteria for being a religious denomination.
2. Whether the suit temple is a denominational temple:
The court examined the history and management of the suit temple and found that it was not established by a religious leader for the spiritual benefit of the Beri Chetty community. The temple was constructed by a member of the community and managed by the Vaniga Vaisyar, not exclusively by the Beri Chetty community. The court also noted that the temple rituals were conducted by Brahmin priests, and the public had access to the temple. Therefore, the suit temple was not a denominational temple intended for the spiritual benefit of the Beri Chetty community.
3. Validity of the compromise decree dated 24.9.1963:
The plaintiffs argued that the compromise decree was not binding on the community because it was entered into by their counsel without proper authority. The court found that the counsel for the plaintiffs had acted with authority and that the community had accepted the terms of the compromise for nearly five years. The court noted that the community had not taken timely action to set aside the compromise decree and had allowed the appointment of trustees by the Commissioner, H.R. & C.E. Department. Therefore, the court saw no reason to set aside the compromise decree.
Conclusion:
The court dismissed the suit with costs, finding no merit in the plaintiffs' claims. The Beri Chetty community was not recognized as a religious denomination, the suit temple was not a denominational temple, and the compromise decree was upheld.
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1987 (1) TMI 499
Issues:
Assessment of tax liability under Section 3-AAAA of U.P Sales Tax Act, 1948; Failure of the assessee to furnish complete details of selling dealers for tax assessment; Interest liability under Section 8(1) contingent on selling dealers' tax liability.
Analysis:
Assessment of Tax Liability under Section 3-AAAA:
The Tribunal assessed whether the assessee was liable to pay tax under Section 3-AAAA of the U.P Sales Tax Act, 1948. The Tribunal's decision was based on the purchases made by the assessee from small agriculturists or dealers with a turnover below Rs. 50,000. However, the Assistant Commissioner's order did not mention purchases from agriculturists, and the Tribunal introduced a new finding about purchases from petty agriculturists not raised earlier. The court held that the Tribunal erred in finding purchases from small agriculturists, as this was not established by the Department or the Assistant Commissioner. The Tribunal's decision was deemed unjustified as it introduced new elements not presented in the initial assessment.
Failure to Furnish Details of Selling Dealers:
Section 3(2) stipulates that a dealer is not liable to pay tax if the turnover is less than Rs. 50,000, unless specified otherwise. The Revenue argued that the assessee failed to provide complete details of selling dealers, hindering the Department from assessing their turnover for tax liability determination. The court agreed that it was the assessee's responsibility to furnish these details for a proper investigation. Due to the incomplete information provided, the court remanded the case to the Tribunal for further inquiry into the selling dealers' turnover to ascertain tax liability accurately.
Interest Liability under Section 8(1) and Precedents:
Regarding interest liability under Section 8(1), the Tribunal found the assessee liable for tax. However, the appellant cited a previous court decision to contest this liability. The court noted that this issue could be resolved effectively once the Tribunal determined the selling dealers' tax liability. If the selling dealers were liable to pay tax, Section 3-AAAA could not be applied to the assessee, absolving them of interest liability. The court directed the Tribunal to reconsider the cases in light of the Supreme Court and previous High Court decisions after obtaining complete details of the selling dealers.
In conclusion, the High Court allowed the revisions, set aside the Tribunal's order, and directed the Tribunal to obtain complete details of selling dealers for accurate tax liability assessment. The cases were to be redecided based on the revised findings and in accordance with the law.
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1987 (1) TMI 498
Issues Involved:
1. Default in Payment of Rent
2. Acquisition of Alternate Suitable Residence
3. Non-User of Premises
4. Subletting of Premises
Summary:
1. Default in Payment of Rent:
The defendant argued that the plaintiff could not claim possession on the ground of default as there were no arrears of rent at the time of the initial suit notice dated 21st August 1975. The plaintiff's subsequent notice dated 14th April 1977, which claimed arrears of rent, could not be used to amend the plaint and claim possession. The court agreed, stating that the condition precedent for filing a suit for possession on the ground of non-payment of rent is the issuance of a notice u/s 12(2) of the Bombay Rent Act. The plaintiff's claim for possession on the ground of default set up by amendment of the plaint was invalid.
2. Acquisition of Alternate Suitable Residence:
The defendant contended that the lower courts erred in holding that he had acquired alternate suitable residence. The defendant had been allotted railway quarters due to his employment, but he retired during the pendency of the appeal and surrendered the quarters. The court held that the plaintiff could not claim possession on the ground of acquisition of alternate suitable residence u/s 13(1)(l) of the Bombay Rent Act, considering the subsequent fact of the defendant's retirement.
3. Non-User of Premises:
The defendant argued that the plaintiff had not established total non-user of the premises. The court referred to the Supreme Court's decision in Vora Rahimbhai Haji Hasanbhai v. Vora Sunderlal Manilal, which held that non-user for a continuous period of six months without reasonable cause suffices for a claim under Section 13(1)(k). The court found that the defendant was not using the premises without reasonable cause for a continuous period of six months prior to the filing of the suit, justifying the decree for possession on the ground of non-user.
4. Subletting of Premises:
The defendant argued that the plaintiff had not provided cogent evidence of subletting. The court, however, found that the defendant was not residing in the suit premises and that a third party, Bansali, was in occupation. The lower courts inferred subletting based on the evidence of Bansali's presence and his acceptance of the attornment notice. The court upheld the decree for possession on the ground of subletting.
Conclusion:
The court confirmed the decrees for possession passed by the lower courts on the grounds of non-user and subletting. The petition was dismissed, and the defendant was granted time to vacate the premises until 30th June 1987, provided an undertaking was filed within two weeks.
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1987 (1) TMI 497
Issues Involved:
1. Validity of the Punjab Police Rules, 1934 after the promulgation of the Delhi Police (Appointment and Recruitment) Rules, 1980.
2. Validity of the relaxation order dated 3.10.1981 issued by the Deputy Commissioner of Police.
3. Constitutional validity of preferential treatment based on descent under Article 16 of the Constitution.
Detailed Analysis:
1. Validity of the Punjab Police Rules, 1934 after the promulgation of the Delhi Police (Appointment and Recruitment) Rules, 1980:
The appellants contended that since Rule 32, which repealed the Punjab Police Rules, 1934, was introduced on May 2, 1983, the Punjab Police Rules, 1934 remained in force until that date. The Delhi Administration argued that the Punjab Police Rules, 1934 ceased to be in force on December 31, 1980, with the promulgation of the Delhi Police (Appointment and Recruitment) Rules, 1980. The Court held that the Punjab Police Rules, 1934 were repealed by necessary implication with the promulgation of the new rules on December 31, 1980. The addition of Rule 32 in 1983 did not revive the old rules. Thus, the appellants could not rely on Rule 12.14(3) of the Punjab Police Rules, 1934 for preferential treatment in recruitment.
2. Validity of the relaxation order dated 3.10.1981 issued by the Deputy Commissioner of Police:
The appellants relied on an order dated 3.10.1981 by the Deputy Commissioner of Police, which relaxed the qualifications for the sons of Delhi policemen. The Delhi Administration contended that the order was invalid as it was based on the assumption that Rule 12.14(3) of the Punjab Police Rules, 1934 was still in force and that only the Administrator (Lt. Governor) had the authority to relax the rules under Rule 30 of the Delhi Police (Appointment and Recruitment) Rules, 1980. The Court agreed with the Delhi Administration, stating that the Deputy Commissioner of Police did not have the authority to relax the rules, and any such relaxation should have been made by the Administrator. Consequently, the relaxation order dated 3.10.1981 was invalid.
3. Constitutional validity of preferential treatment based on descent under Article 16 of the Constitution:
The appellants claimed preferential treatment based on Rule 12.14(3) of the Punjab Police Rules, 1934, which provided preference to sons and near relatives of police officers. The Court held that such preferential treatment based on descent was unconstitutional under Article 16 of the Constitution, which guarantees equality of opportunity in public employment and prohibits discrimination on the grounds of descent. The Court cited the case of Gazula Dasaratha Rama Rao v. The State of Andhra Pradesh, where a similar provision was held unconstitutional. The Court concluded that any preference in public employment based solely on descent was invalid, and the appellants' claim for relaxation based on their status as sons of police officers was not sustainable.
Conclusion:
The appeal was dismissed, and the appellants were not entitled to be recruited as Constables based on the invalid relaxation order and the unconstitutional preferential treatment. The Court clarified that the judgment would not affect the appointments already made under the relaxed rules.
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1987 (1) TMI 496
Issues Involved:
1. Validity of the document executed by Bysani Sundaramma.
2. Alleged undue influence and fraud in the execution of the document.
3. Proper valuation of the suit for the purpose of court-fees and jurisdiction.
4. Entitlement to the relief of declaration and injunction as prayed for by the plaintiff.
Issue-wise Detailed Analysis:
1. Validity of the Document Executed by Bysani Sundaramma:
The primary issue in this case was the validity of the document executed by Bysani Sundaramma on 15.11.1976. The plaintiff alleged that the document was "sham and nominal," fabricated, and not executed by Sundaramma due to her mental and physical incapacity. The trial court dismissed the suit, finding no vitiating circumstances, while the appellate court reversed this decision, highlighting the non-production of the document and the suspicious circumstances surrounding its execution.
The High Court noted several suspicious circumstances, such as the shaky signatures of Sundaramma, the involvement of the second appellant in typing and procuring the stamp papers, and the execution of two special powers of attorney for the same purpose. The court concluded that these circumstances, coupled with the failure of the appellants to produce the document and their non-appearance as witnesses, cast significant doubt on the validity of the document.
2. Alleged Undue Influence and Fraud in the Execution of the Document:
The plaintiff contended that the document was obtained by undue influence and fraud, exploiting Sundaramma's sick condition. The trial court found no undue influence, but the appellate court inferred undue influence due to the suspicious circumstances and the non-production of the document.
The High Court emphasized that the defendants, who were in a position to provide crucial evidence regarding Sundaramma's state of health and the execution of the document, failed to do so. The court drew adverse inferences from the defendants' non-appearance and the lack of explanation for the execution of two special powers of attorney. The court held that the document was not proved to be executed by Sundaramma with full understanding and free will.
3. Proper Valuation of the Suit for the Purpose of Court-fees and Jurisdiction:
The trial court initially returned the plaint, requiring it to be valued under Section 40 of the Court-Fees Act. The plaintiff's counsel amended the prayer to declare the document as "sham and nominal" to avoid higher court fees. The High Court clarified that the case should be decided based on the averments in the body of the plaint, not merely the prayer. The court held that the change in the prayer did not affect the plaintiff's case, as the primary issue was the validity of the document.
4. Entitlement to the Relief of Declaration and Injunction as Prayed for by the Plaintiff:
The plaintiff sought a declaration that the document was sham and nominal and an injunction to restrain the defendants from registering or acting upon it. The trial court dismissed the suit, but the appellate court granted the relief, finding the document vitiated by undue influence.
The High Court upheld the appellate court's decision, albeit for different reasons. The court found that the document was not proved to be executed by Sundaramma with full understanding and free will. Consequently, the plaintiff was entitled to the relief sought, and the second appeal was dismissed.
In conclusion, the High Court dismissed the second appeal, affirming the appellate court's decision to grant the plaintiff's relief. The court emphasized the suspicious circumstances surrounding the execution of the document, the defendants' failure to provide crucial evidence, and the adverse inferences drawn from their non-appearance. The plaintiff's case was upheld, and the document was declared invalid.
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1987 (1) TMI 495
Issues:
1. Application for recall of order dated 12-8-1986 and grant of a fresh hearing.
2. Interpretation of the power to amend an order under S.129-B(2) of the Customs Act, 1962.
3. Dispute regarding refund claim on account of valuation.
4. Allegation of error in the order of the Appellate Collector.
5. Application for rectification under S.129-B(2) of the Act.
6. Scope and distinction between rectification, review, and restitution.
Analysis:
1. The Tribunal dismissed an application seeking a recall of the order dated 12-8-1986, emphasizing that once an order is pronounced or communicated, it cannot be recalled but may be amended to rectify any apparent mistake under S.129-B(2) of the Customs Act, 1962.
2. The application, although not explicitly for amendment, was treated as such by the Tribunal. The facts of the case involved a dispute over a refund claim for customs duty on "white coconut oil," with the Appellate Collector rejecting the claim on grounds of limitation and non-pressing of the valuation issue.
3. The applicant contended that the valuation claim was consistently urged, citing discrepancies in the Appellate Collector's observations. However, the Tribunal found no error apparent from the record and dismissed the application, noting that the claim not being pressed before the Collector was not adequately challenged during the proceedings.
4. The Tribunal rejected the argument that the Collector's observation was in relation to another appeal, emphasizing the need for a clear demonstration of error apparent from the record for rectification under S.129-B(2) of the Act.
5. The Tribunal discussed the principles of rectification, review, and restitution, highlighting that rectification is limited to correcting obvious mistakes on the record and cannot be used for a reevaluation of the order based on new evidence or arguments.
6. The Tribunal concluded that the application was misconceived and dismissed it, emphasizing that the impression left on the counsel during the hearing does not dictate the final decision, which is based on a thorough deliberation of the facts and legal principles involved.
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1987 (1) TMI 494
The High Court held that the Tribunal's decision on valuation cannot be interfered with as it is a question of fact. Reopening assessments based on a Valuation Officer's report after original assessments are completed is not justified. The Court dismissed the applications.
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1987 (1) TMI 493
Issues Involved:
1. Validity of the High Court's decision to vacate the restraint order.
2. Jurisdiction of the Indian Court versus the American Court.
3. Enforceability of the arbitral award under the Indian Arbitration Act, 1940.
4. Potential for conflicting judgments between Indian and American courts.
5. Appropriateness of granting a restraint order against the Western Company.
Summary:
1. Validity of the High Court's Decision to Vacate the Restraint Order:
The Supreme Court examined whether the High Court was correct in vacating the restraint order that initially prevented the Western Company from proceeding with an action in a USA Court to enforce an arbitral award. The High Court vacated the interim order on the grounds that the Western Company could enforce the award in the US Court, ONGC could contest the award's enforcement in the US, and the US proceedings were not vexatious or oppressive.
2. Jurisdiction of the Indian Court versus the American Court:
The arbitration clause in the contract specified that disputes would be governed by the Indian Arbitration Act, 1940, and the laws of India. Under Indian law, an arbitral award is not enforceable until it is made a rule of the Court. The Supreme Court emphasized that the Indian Court alone has jurisdiction to determine the enforceability of the award, and the Western Company's action in the US Court could lead to conflicting judgments, creating legal chaos.
3. Enforceability of the Arbitral Award under the Indian Arbitration Act, 1940:
The award rendered by the Umpire might be set aside by the Indian Court, leading to an anomalous situation if the US Court enforces it. The Supreme Court noted that under the Indian Arbitration Act, an award is unenforceable until it is made a rule of the Court, and the Western Company's action in the US Court violated the arbitration clause by seeking confirmation of the award under American law.
4. Potential for Conflicting Judgments:
The Supreme Court highlighted the risk of conflicting decisions between the Indian and American courts. If the American Court confirms the award while the Indian Court sets it aside, it would result in irreversible damage to ONGC, as the Western Company could recover the awarded amount in the US despite the award being invalid in India.
5. Appropriateness of Granting a Restraint Order:
The Supreme Court found considerable force in ONGC's arguments and concluded that not granting a restraint order would be unjust and oppressive to ONGC. The Court decided to grant the restraint order but made it conditional upon ONGC paying the undisputed amount to the Western Company, emphasizing the need to act in a just and equitable manner.
Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's order vacating the restraint order, and restored the initial restraint order. The Court directed ONGC to pay the undisputed amount to the Western Company, subject to the final outcome of the arbitration petition pending in the Bombay High Court. The matter was referred to a Division Bench for expeditious disposal.
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1987 (1) TMI 492
Issues Involved:
1. Authority to Amend Clause V of the Memorandum of Association.
2. Validity of Amending Clause V by an Ordinary Resolution.
3. Interpretation of Article 5 of the Articles of Association.
4. Consistency between Article 5 and Article 62 of the Articles of Association.
5. Past Practice of Amending Article 5 by Special Resolution.
Detailed Analysis:
1. Authority to Amend Clause V of the Memorandum of Association:
The appellants argued that the Articles of Association did not authorize shareholders to amend Clause V of the Memorandum of Association, asserting that such an amendment could only be made by a Special Resolution. The court examined the relevant provisions of the Memorandum and Articles of Association, as well as the Companies Act, 1956. It was noted that Article 62 of the Articles of Association provided that the company could increase its share capital in a General Meeting, which implied the power to amend Clause V of the Memorandum of Association.
2. Validity of Amending Clause V by an Ordinary Resolution:
The appellants contended that the increase in share capital required a Special Resolution. The court referred to legal commentaries and precedents, including Palmer's Company Law and Gore-Browne on Companies, which indicated that in the absence of a specified type of resolution in the Articles, an Ordinary Resolution suffices. The court concluded that Article 62 did not specify the need for a Special Resolution, thereby allowing the increase in share capital through an Ordinary Resolution.
3. Interpretation of Article 5 of the Articles of Association:
Article 5 described the authorized share capital of the company. The appellants argued that this article imposed a limit on the authorized share capital, which could not be exceeded without a Special Resolution. The court, however, interpreted Article 5 as descriptive of the current state of affairs rather than imposing a limit. It was also noted that if Article 5 were to be read as limiting the share capital, it would conflict with Article 62, which allows for an increase in share capital by an Ordinary Resolution.
4. Consistency between Article 5 and Article 62 of the Articles of Association:
The court addressed the textual inconsistency between Article 5 and Article 62. It was held that to reconcile these articles, Article 5 should be read as subject to Article 62, or Article 62 should be read as overriding Article 5. This interpretation was supported by the Privy Council decision in Ram Kissendas Dhanuka v. Satya Charan Law, which allowed for such cross-references to reconcile inconsistent provisions.
5. Past Practice of Amending Article 5 by Special Resolution:
The appellants pointed to the past practice of amending Article 5 by Special Resolution as indicative of the correct interpretation. The court rejected this argument, stating that the clear provisions of the Articles allowed for the increase of authorized capital by an Ordinary Resolution as per Article 62. The past practice was deemed irrelevant in light of the clear language of the Articles.
Conclusion:
The court dismissed the appeal, holding that the resolutions passed to increase the authorized share capital and amend Clause V of the Memorandum of Association were validly passed by an Ordinary Resolution. The suit was also dismissed in accordance with the decision in the appeal. The application for leave to appeal to the Supreme Court was rejected as no substantial question of law of general importance was found to arise in the case.
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1987 (1) TMI 491
Issues Involved:
1. Power of Maharashtra Revenue Tribunal (M.R.T.) to remand proceedings.
2. Validity of remand order in the absence of an appeal or cross-objection by the State.
3. Validity of oral partition claimed by the petitioners.
4. Determination of pot-kharab land.
Issue-wise Detailed Analysis:
1. Power of Maharashtra Revenue Tribunal (M.R.T.) to Remand Proceedings:
The petitioners argued that the M.R.T. lacked the power to remand proceedings in an appeal under section 33 of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 ("Old Ceiling Act"). They contended that the powers of the M.R.T. in appeal are codified in section 34 of the Old Ceiling Act, which does not explicitly include the power to remand. The court examined section 33(3) of the Old Ceiling Act, which provides that the M.R.T. shall exercise all the powers and follow the same procedure as a Court under the Code of Civil Procedure (CPC) when deciding appeals. The court concluded that the power to remand is inherent in appellate jurisdiction and is necessary to ensure justice. It further noted that section 34 is merely declaratory and that the M.R.T. inherently possesses the power to remand proceedings, as supported by the provisions of section 33(3) of the Old Ceiling Act.
2. Validity of Remand Order in the Absence of an Appeal or Cross-Objection by the State:
The petitioners argued that since the State did not file an appeal or cross-objection, the M.R.T. lacked jurisdiction to remand the case for a fresh decision. The court referred to the Supreme Court's decision in State of Maharashtra v. Suresh Chandra & others (AIR 1986 SC 1192), which held that if the surplus holder does not object to the remand order and submits to the trial court's jurisdiction, they cannot later challenge the remand order. The court found that the petitioners had submitted to the trial court's jurisdiction after the remand and, therefore, could not now contest the validity of the remand order. The court rejected the petitioners' contention, affirming the M.R.T.'s power to remand the proceedings.
3. Validity of Oral Partition Claimed by the Petitioners:
The petitioners claimed that an oral partition of the land was effected on 15-12-1957, supported by the testimony of Dr. Gholap and Patwari Wadgu. However, the court noted that the alleged partition was only recorded in the revenue records on 07-01-1962. The lower courts found the evidence of Dr. Gholap insufficient to prove the partition, as it did not establish that the petitioner No. 1 was examined by him around the time of the alleged partition. The court also found the testimony of Patwari Wadgu unreliable, as there was no evidence that the oral partition was officially noted in 1957. The court concluded that the lower courts' findings on the partition were not perverse and could not be interfered with in the writ jurisdiction.
4. Determination of Pot-Kharab Land:
The petitioners contested the determination of pot-kharab land. The M.R.T. had previously remanded the case, stating that the Naib Tahsildar's report allowing 6.51 acres of pot-kharab land was not sufficient evidence. After remand, the S.D.O. determined the pot-kharab land based on khasra entries, as the petitioners failed to provide independent evidence. The court upheld the S.D.O.'s determination, noting that the petitioners bore the burden of proving the pot-kharab land, particularly after the Naib Tahsildar's report was excluded.
Conclusion:
The court dismissed the writ petition, affirming the M.R.T.'s power to remand proceedings and the validity of the remand order despite the absence of an appeal or cross-objection by the State. The court also upheld the lower courts' findings on the oral partition and the determination of pot-kharab land. There was no order as to costs.
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1987 (1) TMI 490
Issues Involved:
1. Claim of investment allowance on 'electrical installations'.
2. Claim for additional depreciation on 'electrical installations'.
3. Disallowance under section 40A(5) regarding perquisites to the 'technical adviser'.
4. Disallowance of vehicle expenses.
Issue-wise Detailed Analysis:
1. Claim of Investment Allowance on 'Electrical Installations':
The primary issue revolves around whether 'electrical installations' qualify for investment allowance under section 32A of the Income-tax Act, 1961. The Income Tax Officer (ITO) disallowed the claim, asserting that 'electrical installations' do not fall under the definition of 'plant' as per section 43 of the Act. The Commissioner (Appeals) upheld this view without detailed consideration of the assessee's arguments or relevant judicial precedents. The assessee argued that 'electrical installations' are integral to the manufacturing process of mischmetal, used in flints for lighters, and should be treated as 'plant'. The Tribunal observed that the revenue's interpretation was narrow and that the definition of 'plant' should be broadly construed, including items integral to the manufacturing process. The Tribunal concluded that 'electrical installations' in this case form part of 'plant and machinery' and allowed the investment allowance claim, subject to legal conditions.
2. Claim for Additional Depreciation on 'Electrical Installations':
The second issue pertains to the claim for additional depreciation on 'electrical installations'. During the hearing, the assessee's counsel chose not to press this claim. Consequently, the Tribunal rejected this common ground for all three years under appeal.
3. Disallowance under Section 40A(5) Regarding Perquisites to the 'Technical Adviser':
The third issue involves the disallowance under section 40A(5) related to perquisites provided to the 'technical adviser'. The ITO disallowed amounts of Rs. 437, Rs. 855, and Rs. 2,809 for three years, respectively, on the grounds that perquisites exceeded statutory limits. The assessee contended that 'royalty' paid to the technical adviser should be considered part of his salary, which would bring the perquisites within statutory limits. The Tribunal noted that while the definition of 'salary' under section 17 is broad, there was no evidence on record to confirm if 'royalty' was part of the employment terms. The Tribunal remanded the issue back to the ITO for all three years to ascertain the facts and determine if 'royalty' formed part of the technical adviser's salary.
4. Disallowance of Vehicle Expenses:
The final issue concerns the disallowance of vehicle expenses amounting to Rs. 615 for the assessment year 1981-82. The ITO disallowed 15% of the total claim of Rs. 4,102, which was confirmed by the Commissioner (Appeals). The assessee argued that the expenses were incurred for employees' scooters used for office purposes and did not include the director's personal car expenses. The Tribunal accepted the assessee's contention, noting no such disallowance was made in previous assessment years. Consequently, the Tribunal allowed the claim for vehicle expenses.
Conclusion:
The appeals were partly allowed, with the Tribunal granting the investment allowance on 'electrical installations', rejecting the additional depreciation claim, remanding the section 40A(5) issue for further examination, and allowing the vehicle expenses claim.
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1987 (1) TMI 489
The Delhi High Court ruled that the assessee company was not entitled to relief under section 80-O of the Income Tax Act on the gross receipt of Rs. 57,320 for the assessment year 1968-69. The decision was based on a Supreme Court ruling that deductions under section 80-O should be calculated on the basis of net income, not gross income.
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1987 (1) TMI 488
The High Court of Allahabad allowed the revision against an order by the Sales Tax Tribunal, stating that service of notice under Section 21 on the dealer's counsel was invalid after an amendment to Rule 77-A in 1979. The court set aside the proceedings under Section 21 for the assessment year 1975-76. (Citation: 1987 (1) TMI 488 - ALLAHABAD HIGH COURT)
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1987 (1) TMI 487
Issues Involved:
1. Eligibility for deduction under Section 80J of the Income-tax Act, 1961.
2. Disallowance of provision for gratuity under Section 40A(7) of the Income-tax Act, 1961.
3. Disallowance of vehicle upkeep and repair expenses and depreciation.
4. Assessment of rental income as business income.
5. Charging of interest under Section 217 of the Income-tax Act, 1961.
Detailed Analysis:
1. Eligibility for Deduction under Section 80J:
The primary issue was whether the assessee was entitled to the deduction under Section 80J for the assessment years 1975-76 to 1978-79. The assessee argued that it had set up a new industrial unit with new machinery and substantial fresh capital investment, which resulted in increased sales and profits. The Income Tax Officer (ITO) rejected the claim on the grounds that the assessee maintained composite accounts and did not set up a separate, independent industrial unit. The Commissioner (Appeals) disagreed with the ITO, stating that the new unit was economically viable and distinct from the old business, thus meeting the requirements for Section 80J deduction.
The Tribunal found that the ITO's objections regarding composite accounts and the nature of the new unit were not sustainable in law. The Tribunal cited various judicial pronouncements, including CIT v. Dunlop Rubber Co. (I) Ltd., which held that composite accounts could still allow for the calculation of profits for the new unit. The Tribunal also noted that the new unit was economically viable and distinct, thus qualifying for Section 80J deduction.
However, the Tribunal had to consider the revenue's argument that the new unit was financed entirely by borrowed capital, which was raised for the first time at the appellate stage. The Tribunal ultimately decided that the plea of borrowed capital was valid and should be considered, following the Supreme Court decision in Lohia Machines Ltd. v. Union of India, which held that Section 80J deduction is not allowable on borrowed capital. Therefore, the Tribunal concluded that the assessee was entitled to Section 80J deduction only on the capital invested by the assessee and not on the borrowed capital.
2. Disallowance of Provision for Gratuity under Section 40A(7):
The assessee claimed deductions for gratuity provisions for the assessment years 1974-75 to 1976-77. The ITO disallowed these claims, and the Commissioner (Appeals) upheld the disallowance, stating that the provisions did not meet the requirements of Section 40A(7). The Judicial Member initially allowed the entire claim based on a Patna High Court decision, but the Accountant Member pointed out that this decision was overruled by the Supreme Court in Nickles Engg. Co.'s case, which emphasized compliance with Section 40A(7).
The Third Member confirmed that the provision for gratuity could only be allowed if the conditions of Section 40A(7) were met, following the Supreme Court's decision in Shree Sajjan Mills Ltd. v. CIT. The matter was referred back to the Bench to verify if the conditions were satisfied.
3. Disallowance of Vehicle Upkeep and Repair Expenses and Depreciation:
For the assessment year 1974-75, the ITO disallowed one-fourth of the vehicle upkeep and repair expenses and depreciation, attributing it to personal use by the directors. The Commissioner (Appeals) reduced the disallowance to one-sixth. The assessee argued that the director had his own car and that similar disallowances were not upheld in previous years. The Tribunal found no basis for the disallowance and deleted it for the assessment years 1974-75, 1977-78, and 1978-79.
4. Assessment of Rental Income as Business Income:
For the assessment year 1977-78, the ITO assessed the rental income under Section 22, but the Commissioner (Appeals) treated it as business income. The Tribunal upheld the Commissioner (Appeals)'s decision, following a precedent set in IT Appeal No. 560 (Pat.) of 1983.
5. Charging of Interest under Section 217:
The ITO charged interest under Section 217 for the assessment year 1977-78, which the Commissioner (Appeals) found unjustified as the assessee had filed an estimate. The Tribunal dismissed the revenue's appeal on this issue.
Conclusion:
The Tribunal allowed the assessee's appeals for the assessment years 1975-76 and 1976-77 in full and partly allowed the appeals for the assessment years 1974-75, 1977-78, and 1978-79. The revenue's appeals for the assessment years 1976-77 to 1978-79 were dismissed. The matter regarding the provision for gratuity was referred back to the Bench for verification of compliance with Section 40A(7).
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1987 (1) TMI 486
The Supreme Court allowed the appeal, set aside the lower court's orders, and condoned the delay. The case will go back to the District Judge for further proceedings. No costs were awarded.
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