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1979 (10) TMI 236
Issues Involved:
1. Rescinding of a contract and mutual arrangement regarding compensation.
2. Interpretation of the Foreign Exchange Regulations Act, 1947.
3. Alleged contravention of sections 5(1)(a) and 5(1)(b) of the Foreign Exchange Regulation Act, 1947.
4. Legality of the payment made by the respondent Mills.
5. The role and responsibilities of the Reserve Bank of India in granting permission for the transaction.
Issue-Wise Detailed Analysis:
1. Rescinding of a Contract and Mutual Arrangement Regarding Compensation:
The case arose from the rescinding of a contract between the respondent Mills and a foreign company, leading to a mutual arrangement for compensation. Initially, the Mills agreed to sell 1200 tons of Groundnut Extraction to the foreign company but later repurchased the commodity to sell it to another customer in Czechoslovakia. The foreign company consented to this, and it was agreed that the Mills would pay Rs. 51,000/- as compensation. The payment was to be made to Shri M.G. Mansukhani in Indian currency, as a deposit, and only after obtaining the requisite sanction from the Reserve Bank of India.
2. Interpretation of the Foreign Exchange Regulations Act, 1947:
The main legal question involved the interpretation of sections 5(1)(a) and 5(1)(b) of the Foreign Exchange Regulation Act, 1947. The Act prohibits making payments to or for the credit of any person resident outside India without the Reserve Bank's permission and acknowledging any debt that creates a right to receive a payment for a non-resident. The respondents argued that the payment was a deposit, not a payment to the foreign company, and no debt was acknowledged as the payment was contingent on Reserve Bank approval.
3. Alleged Contravention of Sections 5(1)(a) and 5(1)(b) of the Foreign Exchange Regulation Act, 1947:
The Directorate of Enforcement issued show-cause notices alleging that the Mills contravened sections 5(1)(a) and 5(1)(b) by making a payment to the foreign company and acknowledging a debt. The Mills contended that the payment was a deposit and no right to receive the payment was created until Reserve Bank approval. The Additional Director of Enforcement imposed a penalty of Rs. 25,000/- on the Mills for these alleged contraventions.
4. Legality of the Payment Made by the Respondent Mills:
The Appellate Board found that the payment was indeed a deposit and not a payment to the foreign company or for its credit. The Board held that no debt was acknowledged, and no right was created in favor of the foreign company until the Reserve Bank granted permission. The Board quashed the penalty imposed by the Additional Director of Enforcement, concluding that there was no contravention of sections 5(1)(a) and 5(1)(b).
5. The Role and Responsibilities of the Reserve Bank of India in Granting Permission for the Transaction:
The agreement stipulated that the payment would only be made to the foreign company after obtaining Reserve Bank approval. The Mills initially undertook to secure this permission but later transferred this responsibility to the foreign company. The High Court upheld the Appellate Board's finding that the payment was contingent on Reserve Bank approval, and no right to receive the payment was created until such approval was granted.
Conclusion:
The High Court dismissed the State's appeal, confirming the Appellate Board's order that quashed the penalty imposed on the respondent Mills. The Court held that the payment was a deposit, not a payment to the foreign company or for its credit, and no debt was acknowledged. The transaction was contingent on Reserve Bank approval, and no right to receive the payment was created in favor of the foreign company until such approval was obtained. The Court directed that any penalty already recovered be refunded to the respondent Mills.
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1979 (10) TMI 235
Issues:
1. Incorrect preparation of Probate by the Registry.
2. Inclusion of affidavit of valuation with Annexures 'A' and 'B' as part of the Probate.
Analysis:
Issue 1: Incorrect preparation of Probate by the Registry
The case involves a Will made by Mrs. Pushpa Tandon in 1971, with a petition filed by Mrs. Anita Rewal for the grant of probate under Section 276 of the Indian Succession Act, 1925. The Probate was ordered to be granted in May 1979. However, the Probate prepared by the Registry included details of property in Annexures 'A' and 'B,' which the petitioner's counsel argued was not in accordance with the Act. The court highlighted that the prescribed form for Probate under Section 289 of the Act does not allow for the mention of property details. The judgment emphasized that the Probate is granted to the executor to administer the deceased's entire estate, and the executor is required to file an inventory of all assets under Sections 317 and 318 of the Act. The court referred to Section 19-E of the Court-fees Act for cases of underestimation of estate value for court-fees purposes, emphasizing the importance of adhering to the prescribed form for Probate.
Issue 2: Inclusion of affidavit of valuation with Annexures 'A' and 'B' as part of the Probate
The petitioner's counsel argued that the affidavit of valuation with Annexures 'A' and 'B' should not form part of the Probate, as it is solely for determining court-fees under Section 19-I of the Court-fees Act. The counsel contended that there is no provision in the Indian Succession Act, 1925 for incorporating the affidavit of valuation in the Probate. The court agreed with this argument, stating that the affidavit of valuation filed under the Court-fees Act should not be attached to the Probate. The judgment highlighted that the Probate's effect extends over all the deceased's property, movable or immovable, as per Section 273 of the Act. Therefore, the court ordered the Probate to be corrected by removing the affidavit of valuation and directed the petitioner to comply with Sections 317 and 318 of the Indian Succession Act, 1925 for estate administration.
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1979 (10) TMI 234
Issues:
Appeal against division bench judgment of the Allahabad High Court setting aside conviction and sentence, credibility of eye witnesses, identification of accused, non-examination of injured witness, question of sentence.
Analysis:
The Supreme Court heard an appeal against a division bench judgment of the Allahabad High Court that had set aside the conviction and sentence imposed by the trial court on the respondents, acquitting them of the charges. The Supreme Court noted that the High Court had not properly considered the intrinsic merits of the evidence of the eye witnesses, particularly PWs 1 and 5, and had based its decision on surmises and conjectures. The Supreme Court found the High Court judgment to be not in accordance with the law and bordering on perversity. It emphasized the credibility of the eye witnesses and their natural and straightforward testimony, dismissing the High Court's rejection of their evidence as partisan or interested witnesses. The Court also highlighted that the murder took place inside a house near midnight, making it unlikely for witnesses from outside to have seen the occurrence. The evidence of PWs 1, 2, and 5 was found to be consistent and truthful, with no significant contradictions under cross-examination.
The Supreme Court addressed the issue of identification of the accused by PWs 1 and 5, emphasizing that there was sufficient light for them to identify the assailants based on the presence of a burning lantern near the courtyard. The Court rejected the High Court's reasoning regarding the positioning of the accused that could have obstructed the view of the witnesses. Additionally, the non-examination of an injured witness, Mt. Sudama, was deemed irrelevant as the testimony of PWs 1 and 5 was considered sufficient to establish the prosecution's case. The Court also noted the concession made by the respondent's counsel regarding the impossibility of supporting the High Court's acquittal decision.
Regarding the question of sentence, the Court agreed with the Sessions Judge's finding that the prosecution had established its case beyond a reasonable doubt. However, considering that the appellants had already been acquitted once and in light of the circumstances, the Court decided not to impose the death penalty. Instead, the Court convicted the respondents under Section 302/34 IPC for the murders and sentenced them to imprisonment for life. The Court allowed the appeal, set aside the High Court judgment, and restored the decision of the Sessions Judge, modifying the sentence accordingly. The respondents who were on bail were directed to surrender and serve the remaining portion of their sentence.
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1979 (10) TMI 233
Issues Involved:
1. Absorption and integration of District Board staff into Government service.
2. Promotional prospects and seniority determination for absorbed staff.
3. Rationality and fairness of the Government Order (G.O. No. 1968).
Issue-wise Detailed Analysis:
1. Absorption and Integration of District Board Staff into Government Service:
The Tamil Nadu Government absorbed District Board Schools into the public sector, resulting in the merger of teaching and non-teaching staff into Government service. Initially, the personnel from District Board Schools were kept as a separate service within the Tamil Nadu Educational Subordinate Service, leading to a lack of promotional prospects for the absorbed staff. This separation caused dissatisfaction and led to agitations and legislative representations. Eventually, the Government issued G.O. No. 1786 on October 17, 1974, to reconsider the integration of these services, resulting in the creation of 'A' Wing (Government Schools) and 'B' Wing (District Board Schools). Despite administrative difficulties, the Government aimed to integrate both wings while opening better promotional opportunities for the absorbed staff.
2. Promotional Prospects and Seniority Determination for Absorbed Staff:
The integration process involved fixing promotional ratios and determining common seniority. G.O. No. 1968 established a ratio of 5:3 for ministerial staff and 3:2 for teaching staff between the two wings. The Government justified this ratio based on the total numbers in each group, considering it a rational criterion for merging two streams. The Court acknowledged that integration in service jurisprudence is complex and some degree of flexibility must be allowed to the Government. The Court found no irrationality or arbitrariness in the promotional proportions and upheld the Government's decision.
3. Rationality and Fairness of the Government Order (G.O. No. 1968):
The primary contention was whether the length of service under the District Board should be considered for fixing seniority. The Court noted that the Government had consulted the Public Service Commission and considered the integration policy in detail. The decision to integrate and create a combined seniority list was based on a rational assessment of the situation, including the need to provide promotional opportunities to the absorbed staff. The Court found that the quality of service, qualifications, and nature of work were substantially similar between the two wings, justifying the integration policy. The Court also recognized that while some individuals might face hardships, the overall policy was not arbitrary or capricious.
Conclusion:
The Supreme Court held that the Government Order (G.O. No. 1968) was not violative of Articles 14 and 16 of the Constitution. The Court emphasized that administrative policies might evolve and change over time, and judicial intervention is warranted only in cases of clear unconstitutionality or irrationality. The petitions challenging the integration policy were dismissed, and each party was directed to bear its own costs.
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1979 (10) TMI 232
Issues:
1. Enhancement of sentence under the Prevention of Food Adulteration Act, 1954.
2. Validity of conviction based on admission of guilt after prosecution evidence.
3. Discrepancy in enforcement of food adulteration laws against small traders versus wholesalers and manufacturers.
Analysis:
Issue 1: Enhancement of sentence under the Prevention of Food Adulteration Act, 1954
The appellant was initially convicted by the Judicial Magistrate for selling adulterated turmeric powder under Section 16(1)(a)(i) of the Act. However, the High Court, in a suo motu exercise of revisional jurisdiction, enhanced the sentence due to the lenient punishment imposed by the Magistrate. The High Court increased the sentence to three months' simple imprisonment and raised the fine from Rs. 300 to Rs. 500. The appellant appealed this decision, challenging the enhanced sentence.
Issue 2: Validity of conviction based on admission of guilt after prosecution evidence
The appellant contended that his conviction was influenced by his admission of guilt, which was made after the prosecution evidence was closed and he had been examined under Section 313 of the CrPC. The appellant argued that the Magistrate's evaluation of evidence was affected by the belated admission of guilt, leading to a superficial assessment. The Supreme Court agreed with this argument, stating that the Magistrate's approach was colored by the admission of guilt, thereby vitiating the conviction. The Court emphasized that the evaluation of evidence should be independent of any admission of guilt by the accused.
Issue 3: Discrepancy in enforcement of food adulteration laws against small traders versus wholesalers and manufacturers
The Supreme Court expressed concern over the disproportionate enforcement of food adulteration laws against small traders compared to wholesalers and manufacturers. The Court noted that small traders, often not directly responsible for adulteration, bear the brunt of legal action while the actual culprits escape scrutiny. The Court criticized the Food Inspection Department for targeting small retailers instead of investigating upstream suppliers. The Court highlighted the systemic weakness in enforcing laws, leading to a perception of selective justice against small traders. The Court urged authorities to focus investigative efforts on wholesalers and manufacturers to address the root cause of food adulteration and ensure fair enforcement of the law.
In conclusion, the Supreme Court allowed the appeal, setting aside the High Court's order of enhanced sentence and the Magistrate's conviction. The case was remanded to the Magistrate for further proceedings, emphasizing the need for an unbiased evaluation of evidence independent of any admission of guilt. Additionally, the Court highlighted the importance of equitable enforcement of food adulteration laws to target the real culprits behind adulteration activities.
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1979 (10) TMI 231
Issues Involved:
1. Applicability of Promissory Estoppel against the Government.
2. Interpretation of Export Control Order and its amendments.
3. Classification of Argenti Nitras under the Export Control Order.
4. Validity of the Government's policy change on export restrictions.
5. Impact of pre-ban commitments on export licenses.
Detailed Analysis:
1. Applicability of Promissory Estoppel against the Government:
The judgment addresses whether promissory estoppel can bind the Government. It concludes that promissory estoppel is available against ordinary administrative action but not against policy decisions based on general considerations and public interest. The court emphasizes that the Government's representation must be clear and unambiguous, and the petitioners must have changed their position by acting on it.
2. Interpretation of Export Control Order and its Amendments:
The Export Control Order, 1977, issued under the Imports and Exports (Control) Act, 1947, regulates the export of goods. The court discusses the amendments made to item 77(ii) of Part B of Schedule I, which initially allowed the export of certain silver compounds but later banned their export. The amendments were challenged for their validity, but the court upheld them, stating that the Government has the discretion to change export policies based on national interest.
3. Classification of Argenti Nitras under the Export Control Order:
The petitioners argued that Argenti Nitras, a drug containing more than 50% silver, was not a silver compound under item 77(ii). The court, however, held that Argenti Nitras is a silver compound within the meaning of item 77(ii) and is thus subject to the export restrictions. The court relied on technical definitions and previous judgments to conclude that Argenti Nitras did not cease to be a silver compound even after processing.
4. Validity of the Government's Policy Change on Export Restrictions:
The court examined whether the Government's policy change on 30th March 1979, which restricted the export of silver compounds, was valid. The court held that the Government's policy decisions, especially those involving national interest and public welfare, are not subject to judicial review. The policy change was deemed necessary due to the country's foreign exchange position and other national interests.
5. Impact of Pre-Ban Commitments on Export Licenses:
The petitioners claimed that their pre-ban commitments should be honored based on the Export Policy 1978-79 and paragraph 316 of the Hand Book of Import-Export Procedures. The court found that the representation by the Government was not unconditional and that pre-ban commitments did not confer an absolute right to export. The Government's discretion to change the policy and deny export licenses was upheld, considering the public interest and the need to conserve silver.
Conclusion:
The court dismissed the writ petitions, holding that the Government's policy change was valid and necessary for national interest. The doctrine of promissory estoppel was not applicable as the Government's representation was conditional and subject to change. The classification of Argenti Nitras as a silver compound under the Export Control Order was upheld, and the pre-ban commitments did not guarantee the issuance of export licenses.
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1979 (10) TMI 230
Issues Involved:
1. Validity of the plaintiff's patent assignment.
2. Prima facie case for granting a temporary injunction.
3. Balance of convenience and irreparable loss.
4. Defendants' arguments against the injunction.
Detailed Analysis:
1. Validity of the Plaintiff's Patent Assignment
The plaintiff, M/s. National Research Development Corporation of India, filed an application under Order 39, Rules 1 and 2, and Section 151 of the Civil Procedure Code for a temporary injunction to restrain the defendants from infringing Patent No. 138571. The plaintiff alleged that it is the assignee of the patent, originally granted to CSIR and assigned to the plaintiff via an Assignment Deed dated 22nd May 1979. The defendants argued that the plaintiff is not an assignee as the name was not entered in the Register of Patents. However, the court noted that the deed was registered on 21st June 1979, making the plaintiff the assignee from the date of execution, i.e., 22nd May 1979, as per Section 68 of the Patents Act, 1970. Therefore, the plaintiff has locus standi to institute the suit.
2. Prima Facie Case for Granting a Temporary Injunction
The court examined whether there was a prima facie case for granting a temporary injunction. The plaintiff claimed that the patent is valid and has been infringed by the defendants, causing irreparable loss. The court noted that the patent had been worked and enjoyed without dispute for more than six years, which provides a strong presumption of its validity. The court also referenced Terrell on the Law of Patents, which states that a patent that has been worked for many years without dispute can be presumed valid for the purpose of granting a temporary injunction.
3. Balance of Convenience and Irreparable Loss
The court considered the balance of convenience and whether the plaintiff would suffer irreparable loss. The plaintiff argued that the defendants' infringement would cause irreparable loss that cannot be adequately compensated. The court agreed, noting that if the defendants were not injuncted, it would set a precedent for others to violate the patent, causing significant harm to the plaintiff. The balance of convenience, therefore, favored granting the injunction to protect the plaintiff's exclusive rights under the patent.
4. Defendants' Arguments Against the Injunction
The defendants argued that the plaintiff is not the inventor or assignee of the patent and that the patent claims are vague and do not involve any inventive step. They also claimed to have developed their own technology and that the plaintiff could be compensated in terms of money. However, the court found these arguments unconvincing. The correspondence between the parties indicated that the defendants were aware of the patent and had even sought a license from the plaintiff. The court noted that the defendants did not file any objections to the patent with the Patent Office, further indicating their acknowledgment of the patent's validity.
Conclusion:
The court confirmed the ex parte injunction dated 13th June 1979, restraining the defendants from infringing the plaintiff's Patent No. 138571 until the decision of the suit. The plaintiff's application for a temporary injunction (I. A. No. 1915 of 1979) was allowed, and the defendants' application for vacation of the stay (I. A. No. 1953 of 1979) was dismissed. The defendants were ordered to pay the costs of the proceedings to the plaintiff, with a counsel fee of Rs. 300/-.
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1979 (10) TMI 229
Issues Involved:
1. Passing off
2. Infringement of trade mark
3. Enquiry into accounts of profits
Detailed Analysis:
1. Passing Off:
The tort of passing off aims to protect commercial goodwill and ensure that a business's reputation is not exploited. The plaintiff must establish that their business or goods have acquired a reputation such that a substantial proportion of potential customers associate the name with them. In this case, the plaintiffs argued that the defendants' use of "Ellora Industries" as their trading name misled the public into believing that the defendants' time-pieces were associated with the plaintiffs' clocks sold under the trade mark "Elora." The court found that the defendants' trading name was likely to mislead the public and divert customers from the plaintiffs. The element of confusion is essential, and the court noted that both parties were in the same trade, increasing the likelihood of confusion. The court concluded that the defendants' use of "Ellora" constituted passing off as it misled the public into believing there was a connection between the defendants' and plaintiffs' businesses, thereby injuring the plaintiffs' goodwill.
2. Infringement of Registered Trade Mark:
The plaintiffs' trade mark "Elora" was registered under the Trade and Merchandise Marks Act, 1958, giving them the exclusive right to use it in relation to the goods for which it was registered. The court noted that trade mark infringement does not require proof of an intention to deceive; it is sufficient if the representation is calculated to deceive. The defendants' use of "Ellora Industries" was found to infringe the plaintiffs' trade mark as it created confusion regarding the source of the goods. The court emphasized that trade marks serve to identify the source of manufacture and that the defendants' trading style "Ellora Industries" was a misleading designation that infringed on the plaintiffs' exclusive rights. The court upheld the trial court's finding of trade mark infringement and granted an injunction to restrain the defendants from using the name "Ellora."
3. Enquiry into Accounts of Profits:
The plaintiffs sought an enquiry into the profits earned by the defendants from the alleged infringement. The court, however, denied this relief for several reasons. Firstly, the plaintiffs had not manufactured time-pieces themselves, limiting the scope of the infringement. Secondly, the defendants' time-pieces were sold under a different mark, "Gargon," which was distinctly printed on the products. Thirdly, the principle of ordering an account of profits is based on the theory that the defendant acted as an agent of the plaintiff, which was not applicable here as the plaintiffs were not in the business of manufacturing time-pieces. Lastly, the court found no reasonable prospect that the enquiry would yield a positive result. Therefore, the court dismissed the claim for an enquiry into profits.
Conclusion:
The court dismissed the defendants' appeal and upheld the trial court's decree for a permanent injunction against the defendants for trade mark infringement. The cross-objections filed by the plaintiffs were allowed to the extent that the defendants were also found guilty of passing off. However, the claim for an enquiry into accounts of profits was dismissed. The court ordered the defendants to deliver up the offending materials for destruction and to pay the costs of the suit and appeal.
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1979 (10) TMI 228
Issues Involved:
1. Whether the unauthorized carrying of a passenger in a goods truck by its driver can be deemed to be in the course of the employment of the owner of the truck, thus making the owner vicariously liable.
2. Whether the accident occurred due to the negligence and carelessness of the driver.
3. The liability of the insurance company since the deceased was traveling in a public carrier.
4. The competency of the petitioners to bring the claim application.
5. The quantum of compensation to be awarded.
Issue-wise Detailed Analysis:
1. Unauthorized Passenger and Vicarious Liability:
The primary issue was whether the unauthorized carrying of a passenger in a goods truck by its driver, in contravention of Rule 4.60 of the Punjab Motor Vehicles Rules, 1940, could be deemed to be in the course of the driver's employment, thus making the owner vicariously liable. The court found that there was no evidence that the truck owners had authorized or acquiesced in the carriage of the deceased, Pritam Singh. The unauthorized act of carrying a passenger was in direct contravention of Rule 4.60 and was thus an offense under the Motor Vehicles Act, 1939. The court concluded that the driver, Karnail Singh, was not acting in the course of his employment when he carried the deceased. Therefore, the owners could not be held vicariously liable for the driver's tortious act.
2. Negligence and Carelessness of the Driver:
The Tribunal and the learned Single Judge both found that the accident was caused due to the negligence and carelessness of the driver, Karnail Singh. This finding was not seriously challenged before the High Court, and the court affirmed this conclusion.
3. Liability of the Insurance Company:
The insurance company contended that their policy did not cover the liability of a passenger in a goods vehicle, as per Section 95 of the Motor Vehicles Act. The Tribunal accepted this argument, and the insurance company was not held liable to pay any compensation. This finding was also not contested further.
4. Competency of the Petitioners:
The Tribunal initially held that the petitioners were not competent to bring the claim application. However, the learned Single Judge reversed this finding, holding that the petitioners were indeed competent to file the claim. The High Court affirmed the Single Judge's conclusion on this issue.
5. Quantum of Compensation:
The Tribunal had denied compensation to the petitioners, but the learned Single Judge assessed the compensation at Rs. 19,200/-. The High Court upheld this assessment but modified the judgment to allow interest on the compensation from the date the claim petition was presented, agreeing with the settled view that interest should normally be allowed from the date of application unless there are reasons to hold otherwise.
Conclusion:
The High Court allowed the appeal of the truck owners, setting aside the judgment of the learned Single Judge that had saddled them with liability. The court found no reason to disturb the judgment regarding the liability of the driver, Karnail Singh. The appeal by the claimants for enhancement of compensation was dismissed, but the court modified the judgment to allow interest from the date of the claim petition. Each party was ordered to bear their own costs.
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1979 (10) TMI 227
Issues Involved:
1. Applicability of Order 2 Rule 2 of the CPC.
2. Doctrine of Constructive Res Judicata.
3. Constitutionality of Section 25B of the Delhi Rent Control Act under Article 14 of the Constitution.
Issue-wise Detailed Analysis:
1. Applicability of Order 2 Rule 2 of the CPC:
The appellant argued that the second application by the plaintiff to amend her plaint by re-inserting the relief under Section 14(1)(e) of the Delhi Rent Control Act was barred by the principles of Order 2 Rule 2 of the CPC. Order 2 Rule 2 CPC mandates that every suit must include the whole of the claim arising from the cause of action, and if a plaintiff omits or relinquishes any part of his claim, he cannot later sue for the omitted or relinquished part. However, the court clarified that this provision applies only when a plaintiff omits to sue a portion of the cause of action on which the suit is based. It does not apply when the plaintiff bases the suit on separate and distinct causes of action and chooses to relinquish one. Therefore, the second amendment application was not barred by the principles of Order 2 Rule 2 CPC.
2. Doctrine of Constructive Res Judicata:
The appellant contended that the second application for amendment was barred by the doctrine of constructive res judicata. The court held that constructive res judicata requires a formal adjudication between the parties after a full hearing. Since the defendant was not in the picture when the plaintiff relinquished her first cause of action, there was no formal adjudication between the parties. Therefore, the doctrine of constructive res judicata did not apply to this case. The second amendment application was made in the same proceedings on a cause of action that the plaintiff was allowed to insert with the court's permission, and neither res judicata nor Order 2 Rule 2 were raised before the Rent Controller.
3. Constitutionality of Section 25B of the Delhi Rent Control Act under Article 14 of the Constitution:
The appellant argued that Section 25B, which lays down the procedure for disposing of applications filed by landlords under Sections 14A and 14(1)(e), was violative of Article 14 of the Constitution. The court emphasized that Article 14 forbids hostile discrimination but permits reasonable classification. The classification must have a clear nexus with the objective to be achieved. The court found that the classification made by Section 25B was reasonable and not arbitrary. Section 25B was designed to provide a quick and expeditious relief to landlords requiring premises for bona fide necessity, thus creating a special category for such landlords. This classification was deemed reasonable and in public interest, aimed at preventing delays in obtaining relief.
The court also noted that the procedure under Section 25B included safeguards for tenants, such as the requirement for the tenant to file an affidavit disclosing grounds to contest the eviction and the Controller's power to grant leave to contest if the tenant's affidavit disclosed facts that would disentitle the landlord from obtaining an eviction order. The absence of an appeal or second appeal was justified by the provision allowing the High Court to review the Controller's order to ensure it was according to law.
The court concluded that Section 25B did not violate Article 14 and was constitutionally valid. The appeal was dismissed, with the tenant given time until 31-5-1980 to hand over possession, provided he filed an undertaking to the court and continued to pay compensation equivalent to the rent.
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1979 (10) TMI 226
Issues Involved:
1. Validity of the Bombay Sugarcane Cess Act, 1948 and the Sugarcane Cess (Validation) Act, 1961
2. Legislative Competence of State and Central Acts
3. Retrospective Validation by Parliament
4. Article 265 of the Constitution of India
5. Discrimination and Article 14 of the Constitution of India
6. Liability of Managing Agents vs. Owners
Issue-wise Detailed Analysis:
1. Validity of the Bombay Sugarcane Cess Act, 1948 and the Sugarcane Cess (Validation) Act, 1961:
The appellants, registered co-operative societies, challenged the judgment of the High Court of Bombay which dismissed their petitions against the levy and demand of cess imposed under the Bombay Sugarcane Cess Act, 1948, supplemented by the Sugarcane Cess (Validation) Act, 1961. The Supreme Court examined the relevant provisions of the Bombay Act, including definitions and the mechanism for cess imposition, assessment, and collection.
2. Legislative Competence of State and Central Acts:
The constitutional validity of similar state acts, such as the U.P. Sugarcane Cess Act, was previously struck down by the Supreme Court in the Diamond Sugar Mills case due to lack of legislative competence. The term "local area" was interpreted to mean an area administered by a local body, not the premises of a factory. To address this, Parliament enacted the Central Act to validate cess imposed by state enactments retrospectively. The Supreme Court upheld this approach, citing previous judgments in Jaora Sugar Mills and Bhopal Sugar Industries, which clarified that Parliament's enactment was within its competence under Entry 97 in List I of the Seventh Schedule to the Constitution.
3. Retrospective Validation by Parliament:
The appellants argued that the Central Act could not retrospectively validate assessments made under invalid state statutes. The Supreme Court rejected this argument, affirming that Parliament had the authority to enact laws with retrospective effect, thereby converting the character of collections made under state statutes to those made under its own statute. The Court emphasized that the Central Act did not merely validate past actions but re-enacted the provisions of the state acts, making them operative as Parliamentary enactments.
4. Article 265 of the Constitution of India:
The appellants contended that the cess imposition violated Article 265, which mandates that no tax shall be levied or collected except by authority of law. The Supreme Court dismissed this contention, asserting that Parliament had full legislative competence to enact the Central Act under Entry 97 in List I, thereby providing the necessary authority of law.
5. Discrimination and Article 14 of the Constitution of India:
Mr. Patel, representing some appellants, argued that Section 4 of the Bombay Act was discriminatory and violated Article 14 of the Constitution. However, this point was not raised before the High Court nor laid in the pleadings. Consequently, the Supreme Court did not entertain this argument at the appellate stage.
6. Liability of Managing Agents vs. Owners:
Mr. Patel also argued that under the proviso to clause (4) of Section 2 of the Bombay Act, managing agents, not the owners, should be liable for the cess. The Supreme Court found this argument unsubstantiated since no managing agent was involved in the appeals. Additionally, the Court clarified that the definition of "occupier" did not limit the liability to pay cess to the occupier alone; owners could also be held liable as indicated by other provisions in the Act.
Conclusion:
All five appeals were dismissed with costs, affirming the validity of the cess imposition under the Central Act and the Bombay Act as incorporated into it. The Supreme Court upheld the legislative competence of Parliament to enact retrospective laws validating the cess and rejected all contentions raised by the appellants.
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1979 (10) TMI 225
Issues Involved:
1. Whether the suit for ejectment abated due to the Tamil Nadu Buildings (Lease and Rent Control) Amendment Act, 1964.
2. Whether the original defendant, after the termination of the tenancy, was a trespasser.
3. Whether the premises in question was a "building" under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960.
4. Whether the legal representatives of the original defendant were entitled to statutory tenant protection.
5. Whether the decree passed by the trial court and affirmed by the Division Bench was sustainable.
Detailed Analysis:
1. Abatement of the Suit:
The primary issue was whether the suit for ejectment abated due to the Tamil Nadu Buildings (Lease and Rent Control) Amendment Act, 1964. The court held that the suit abated on June 10, 1964, due to Section 3 of the Amending Act. This section directed that every proceeding in respect of any non-residential building pending before any court on the date of the publication of the Amending Act should abate if the building was previously exempt under clause (iii) of section 30 of the principal Act. The court concluded that the suit in question was indeed instituted on the ground that the building was exempt from the principal Act, and thus, it abated.
2. Status of the Original Defendant:
The court examined whether the original defendant, after the termination of the tenancy, was a trespasser. The Division Bench had erroneously held that the original defendant was a trespasser. The Supreme Court clarified that the original defendant became a statutory tenant due to the abatement of the suit under the Amending Act. Therefore, he could not be evicted except in accordance with the provisions of the principal Act.
3. Definition of "Building":
The court addressed whether the premises in question qualified as a "building" under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. The Division Bench had held that the building was not a "building" within the meaning of section 2(2) of the principal Act because it was neither "let" nor "to be let" on June 10, 1964. The Supreme Court disagreed, stating that a building which was the subject of a terminated lease and continued to be occupied by the tenant still qualified as a "building" under the Act. The definition of "tenant" in section 2(8) supported this view, as it included persons continuing in possession after the termination of tenancy.
4. Protection of Legal Representatives:
The court evaluated whether the legal representatives of the original defendant were entitled to statutory tenant protection. The trial court and the Division Bench had treated the suit as a fresh one against the legal representatives after the death of the original defendant. The Supreme Court found this approach incorrect, as the suit had already abated on June 10, 1964. Consequently, the legal representatives could not be treated as new defendants in a fresh suit. The court held that the legal representatives were entitled to the same statutory protection as the original defendant.
5. Sustainability of the Decree:
Finally, the court assessed the sustainability of the decree passed by the trial court and affirmed by the Division Bench. The Supreme Court concluded that the entire proceedings, including the amendment of the plaint and the addition of new parties, were without jurisdiction since the suit had abated on June 10, 1964. The court emphasized that parties could not confer jurisdiction on the court by consent or acquiescence when the law had taken it away. Therefore, the decree passed by the trial court and affirmed by the Division Bench was unsustainable.
Conclusion:
The Supreme Court allowed the appeal, set aside the decrees passed by the trial court and the Division Bench, and disposed of the suit as having abated on June 10, 1964. The findings on issues relating to the claim of the plaintiff to get possession of the property from the legal representatives of the original defendant were set aside, with liberty reserved to the parties to agitate these questions in appropriate proceedings. The parties were directed to bear their own costs throughout.
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1979 (10) TMI 224
Issues Involved:
1. Interpretation of "Unit" under the U.P. Sugarcane (Purchase Tax) Act, 1971.
2. Tax liability based on the number of crushers actually worked.
3. Validity of the notice and appellate order.
4. Liability to pay commission under Section 18 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953.
Detailed Analysis:
1. Interpretation of "Unit" under the U.P. Sugarcane (Purchase Tax) Act, 1971:
The core issue revolves around whether a "Unit" as defined in Section 2(c) of the Act is synonymous with individual "crushers" or if it refers to the entire setup. The court concluded that a "Unit" is an undivided whole, and the crushers are mere components. The definition in Section 2(c) and the provisions of Section 3 and Rule 13-A consistently use the term "Unit" and not "crusher," indicating the legislative intent to treat the unit as a single entity. The court emphasized that the "Unit" continues to be engaged in the manufacture or production of khandsari sugar as long as any crusher is operational, thus maintaining its status as a "Unit."
2. Tax Liability Based on the Number of Crushers Actually Worked:
The petitioner argued that tax liability should be based on the actual number of crushers operational during different periods, irrespective of the option exercised under the proviso to Section 3(1)(b). The court rejected this contention, stating that once the option is exercised, it is irrevocable for the entire assessment year. The assumed purchase is a substitute for actual purchase, and the tax liability is determined by the crushing capacity and other relevant factors of the entire unit, not individual crushers. The court highlighted that the Act and the Rules do not provide for intermittent closures or exemptions based on non-operational crushers.
3. Validity of the Notice and Appellate Order:
The petitioner challenged the notice dated 12th May 1975 and the appellate order dated 7th February 1979. The court found no merit in the petitioner's arguments. The notice was issued because the petitioner failed to deposit the tax due and obtain a clearance certificate before the closure of the unit, as required by the Act and Rules. The appellate authority correctly dismissed the appeal on merits, holding that the petitioner's liability was based on the entire unit, irrespective of the operational status of individual crushers.
4. Liability to Pay Commission under Section 18 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953:
The petitioner contended that it was not liable to pay the commission of Rs. 5004.51 as claimed in the notice. The court noted that the notice did not indicate that the commission was computed based on assumed sugarcane purchases. There was no evidence in the writ petition to suggest that the commission was not based on actual sugarcane purchases. The court also observed that the petitioner did not challenge the commission liability during the appeal. The court concluded that the petitioner is not entitled to any relief regarding the commission at this stage, as the notice merely provided an opportunity to dispute the liability and show cause.
Conclusion:
The court dismissed the petition with costs to the respondents, affirming the tax liability based on the entire unit and upholding the validity of the notice and appellate order. The interim order, if any, was vacated.
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1979 (10) TMI 223
Issues involved:
The judgment involves the interpretation of Rule 22 of the Prevention of Food Adulteration Act, specifically regarding the minimum quantity of sample required for analysis, and the legal consequences of the quantity falling below the prescribed limit.
Details of the Judgment:
Issue 1: Interpretation of Rule 22 and acquittal based on quantity of sample sent for analysis
The respondents were initially convicted under Section 16(1)(a)(i) of the Prevention of Food Adulteration Act for selling confectionary drops containing coal tar dye. The High Court, however, acquitted them based on the quantity of the sample sent for analysis being below the required 500 gms as per Rule 22. The High Court's decision was influenced by a previous ruling which was later overruled by a larger bench, clarifying that Rule 22 was directory and not mandatory. The Supreme Court held that the acquittal based on the quantity of the sample was legally erroneous in light of the latest decision.
Issue 2: Legal consequences of overruled decision and imposition of sentence
The respondents argued that the previous decision should be upheld under Article 141 of the Constitution, but the Supreme Court clarified that when a previous decision is overruled, it no longer holds legal weight. The Court emphasized that the judgment of the High Court was vitiated by a clear error of law and could not be sustained. The Court then considered the appropriate sentence, taking into account the time elapsed since the initial prosecution. Despite one respondent having a previous conviction, the Court decided not to consider it in the sentencing and convicted the respondents under Section 16(1)(a)(i) of the Act, imposing a fine of &8377; 2,000 each, with a default sentence of 6 months' rigorous imprisonment.
Conclusion:
The Supreme Court overturned the High Court's acquittal of the respondents, emphasizing the legal error in the interpretation of Rule 22. The Court imposed a fine on the respondents under the relevant section of the Prevention of Food Adulteration Act, considering the circumstances and time elapsed since the initial prosecution.
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1979 (10) TMI 222
Issues involved: Appeal against the judgment and order of the High Court of Punjab & Haryana refusing to quash an order u/s 33-C(2) of the Industrial Disputes Act, 1947 for payment of gratuity to the respondents u/s the Payment of Gratuity Act, 1972.
Issue 1 - Applicability of Payment of Gratuity Act, 1972:
The State of Punjab contended that the Payment of Gratuity Act, 1972 cannot be invoked by the respondents as the Project does not fall within the scope of Section 1(3) of that Act. The Labour Court held that the Project is an establishment within the meaning of the Payment of Wages Act, and thus, the Payment of Gratuity Act applies to it. The Supreme Court agreed, stating that the Payment of Gratuity Act applies to establishments involved in construction, development, maintenance, or operations related to various activities, including electricity generation.
Issue 2 - Entitlement to Gratuity on Retrenchment:
The appellant argued that retrenchment does not fall within section 4(1) of the Payment of Gratuity Act, which specifies when gratuity is payable. The Court interpreted the definition of "retirement" under the Act broadly, stating that any termination of service, including retrenchment, falls within the scope of section 4(1) entitling employees to gratuity.
Issue 3 - Jurisdiction under Industrial Disputes Act:
The appellant contended that the employee respondents should have applied under the provisions of the Payment of Gratuity Act instead of u/s 33-C(2) of the Industrial Disputes Act. The Court held that the Payment of Gratuity Act is a self-contained code for gratuity payment, and proceedings must be taken under that Act. Therefore, the Labour Court had no jurisdiction to entertain the applications filed u/s 33-C(2) of the Industrial Disputes Act.
The appeal was allowed, quashing the Labour Court's order, and the appellant was directed to pay the employee respondents their costs and the due amounts under the Payment of Gratuity Act within one month.
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1979 (10) TMI 221
Issues involved: Detention under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, consideration of representation by detaining authority, legality of continued detention, compliance with constitutional safeguards under Article 22(5) of the Constitution.
In this case, a writ petition was filed seeking to quash the detention of a detenu under an order issued u/s 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act. The detenu's representation was forwarded to the Advisory Board before being considered by the detaining authority, the Chief Secretary. The detenu contended that the continuous detention was illegal on the grounds that the detaining authority should have considered the representation before sending it to the Advisory Board, and that the representation should have been considered and rejected by the Chief Secretary himself, not by the Administrator. The detenu argued that this failure to strictly comply with constitutional safeguards resulted in his continued illegal detention.
The Supreme Court held that the detenu's continued detention was liable to be quashed because the detaining authority, the Chief Secretary, did not reject the representation himself but submitted it to the Administrator who ultimately rejected it. This process did not comply with the requirements under Article 22(5) of the Constitution and the COFEPOSA. The Court noted that the Chief Secretary only considered the representation and made an endorsement for rejection, but the final decision was made by the Administrator. As a result, the constitutional safeguard under Article 22(5) was not strictly observed, rendering the detention illegal. The Court quashed the detention order and directed the detenu's immediate release.
No costs were awarded in this case.
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1979 (10) TMI 220
Issues Involved:
1. Prosecution of Sales Manager for Adulterated Food Sale.
2. Prosecution of Company Officers Not Nominated u/s 17(2) of the Prevention of Food Adulteration Act, 1954.
Summary:
Issue 1: Prosecution of Sales Manager for Adulterated Food Sale
In this appeal, the Supreme Court addressed whether a sales manager at a branch can be prosecuted for selling adulterated food when the manufacturer, a company, has nominated a person responsible under sub-so (2) of s. 17 of the Prevention of Food Adulteration Act, 1954. The facts reveal that on August 31, 1976, a sample of 'Postman' brand refined groundnut oil was found adulterated. The Metropolitan Magistrate initially found a prima facie case against the manufacturers, distributors, and retailer but dismissed the complaint against the sales managers, I.K. Nangia and Y.P. Bhasin, stating they were not concerned with the manufacture but only with the sale. The Supreme Court held that the order of the Metropolitan Magistrate was unwarranted and that there was sufficient ground for proceeding against the sales managers, as they were in charge of and responsible for the conduct of the business at the Delhi branch.
Issue 2: Prosecution of Company Officers Not Nominated u/s 17(2)
The second issue was whether, after the introduction of the new s.17 by Act 34 of 1976, it is permissible to prosecute any other officer of the company not nominated under s.17(2) unless there is an allegation of consent, connivance, or neglect. The Court clarified that the individual liability of the sales manager is distinct from the corporate liability of the manufacturer. The company and its nominated person under s.17(2) can be prosecuted, and notwithstanding such nomination, other officers can also be prosecuted under s.17(4) if it is proved that the offence was committed with their consent, connivance, or neglect. The Court rejected the argument that only the nominated person could be prosecuted and emphasized the duty of companies to nominate different persons for different branches to comply with s.17(2).
Conclusion:
The Supreme Court set aside the order of the Metropolitan Magistrate and directed the issuance of summons to the respondents, including the sales managers, to proceed with the trial according to law. The appeal was allowed.
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1979 (10) TMI 219
Issues Involved:
1. What is mala fides in the province of exercise of power?
2. Is the acquisition proceeding in the instant case bad for bad faith?
3. Where, in the setting of Sec. 17 of the Act, do we draw the legal line between legitimate emergency power and illegitimate 'emergency excess'?
4. On the facts, here, do we bastardize or legitimize the State action under challenge?
Summary:
1. What is mala fides in the province of exercise of power?
The Court defined mala fides as bad faith that invalidates the exercise of power, often overlapping with motives, passions, and satisfactions. It is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal. If the true object is to reach an end different from the one for which the power is entrusted, influenced by extraneous considerations, the court calls it a colourable exercise and is undeceived by illusion.
2. Is the acquisition proceeding in the instant case bad for bad faith?
The High Court twice condemned the State's action in a case of land acquisition as mala fide. The factual matrix revealed that the acquisition was driven by personal vendetta, particularly by Respondent 22, a former minister. The High Court's decision was based on the admitted mala fides of the State, and the Supreme Court endorsed this view. The Court noted that the acquisition proceedings were a misuse of power to satisfy the personal ends of Respondent 22.
3. Where, in the setting of Sec. 17 of the Act, do we draw the legal line between legitimate emergency power and illegitimate 'emergency excess'?
The Court emphasized that compulsory taking of a man's property is a serious matter, and hearing him before depriving him is both reasonable and preemptive of arbitrariness. Denial of this administrative fairness is constitutional anathema except for good reasons. The Court found that the invocation of emergency powers u/s 17 of the Land Acquisition Act in this case was a travesty, as the process had been pending for years and suddenly invoked emergency powers without a statutory enquiry.
4. On the facts, here, do we bastardize or legitimize the State action under challenge?
The Court concluded that the acquisition was driven by political vendetta and personal influence, particularly by Respondent 22. The High Court's findings of mala fides were based on substantial evidence, and the Supreme Court found no reason to overturn these findings. The Court dismissed the State's petition for special leave to appeal, stating that no ground to grant leave had been made out.
Conclusion:
The Supreme Court dismissed the State's petition, agreeing with the High Court's findings of mala fides in the land acquisition proceedings. The Court emphasized the misuse of power for personal vendetta and the improper invocation of emergency powers u/s 17 of the Land Acquisition Act. The petition was dismissed, affirming the High Court's decision to strike down the acquisition.
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1979 (10) TMI 218
Issues Involved:
1. Interpretation of "adulterated" u/s 2(i)(f) of the Prevention of Food Adulteration Act, 1954.
2. Protection under s. 19(2) of the Act for the respondent.
Summary:
Issue 1: Interpretation of "adulterated" u/s 2(i)(f)
The Supreme Court addressed whether the term "adulterated" as defined in s. 2(i)(f) of the Prevention of Food Adulteration Act, 1954, includes insect-infested food without further proof of unfitness for human consumption. The Delhi High Court had acquitted the respondent, holding that insect infestation alone was insufficient to deem food "adulterated" unless it was also proven to be "otherwise unfit for human consumption." The Supreme Court disagreed, stating that the words "or is otherwise unfit for human consumption" are disjunctive and form a separate category. Therefore, mere proof of insect infestation is sufficient to classify food as "adulterated." The Court clarified that the interpretation in Dhanraj v. Municipal Corporation of Delhi and Municipal Corporation of Delhi v. Kacheroo Mal was incorrect and should be confined to their specific facts. The Supreme Court emphasized that the presence of insects in food like cashew nuts, even without further evidence of harm, meets the definition of "adulterated."
Issue 2: Protection under s. 19(2)
The respondent claimed protection under s. 19(2) of the Act, arguing that the cashew nuts were purchased in sealed tins from a supplier with a warranty. The Supreme Court found no evidence of a written warranty in the prescribed form or any label guaranteeing purity. The invoice Ext. DW 3/A did not constitute a warranty. The Court noted that the Prevention of Food Adulteration Rules, 1955, particularly r. 12A, require a specific form of warranty, which was absent in this case. Consequently, the respondent was not protected under s. 19(2).
Conclusion:
The Supreme Court allowed the appeal, set aside the acquittal, and convicted the respondent under s. 16(1)(a) read with s. 7(1) of the Prevention of Food Adulteration Act, 1954. Considering mitigating factors, including the respondent's age and the time elapsed since the offence, the Court refrained from imposing a substantive sentence of imprisonment and instead imposed a fine of Rs. 2000, with a default sentence of three months rigorous imprisonment.
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1979 (10) TMI 217
Issues Involved:
1. Jurisdiction and procedural compliance under s. 482 and s. 397 of the Criminal Procedure Code.
2. Relevance and probative value of a certificate issued by the Board of Censors under the Cinematograph Act in a trial for offences under ss. 292 and 293 of the Indian Penal Code.
Summary:
Issue 1: Jurisdiction and Procedural Compliance
The High Court dismissed the petition for special leave due to procedural non-compliance, specifically the failure to file a copy of the trial court's order as required by a High Court rule, despite the original order being present in the records. The Supreme Court highlighted that the inherent power of the High Court u/s 482 of the Criminal Procedure Code is not repelled by the revisional power u/s 397. The Court emphasized that procedural technicalities should not overshadow substantive justice. The Supreme Court concluded that the High Court should not have dismissed the petition merely because a copy of the order was not produced, especially when the original was available. The case was remitted back to the High Court for fresh disposal.
Issue 2: Relevance and Probative Value of Censor Board Certificate
The Supreme Court addressed the argument that a certificate issued by the Board of Censors under the Cinematograph Act should bar further challenge under the Penal Code. The Court held that while the certificate is relevant and carries significant weight, it is not conclusive. The criminal court retains the jurisdiction to examine whether the film breaches public morals or decency as per ss. 292 and 293 of the Indian Penal Code. The Court underscored that the statutory certificate is not an irrebuttable defense but a rebuttable presumption that can be negated by positive evidence.
Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's order, and directed the High Court to dispose of the petition on the merits expeditiously. The Court also provided guidelines on the interaction between the Cinematograph Act and the Penal Code, emphasizing the need for a balanced approach in evaluating the probative value of the Censor Board's certificate.
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