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• 1991 (10) TMI 332
  
  1. ISSUES PRESENTED and CONSIDERED

  The core legal issue considered by the Court was whether the award made by the arbitrator contained a "clerical mistake or an error arising from an accidental slip or omission" under Section 15(c) of the Arbitration Act, warranting correction by the Court. Additionally, the Court considered whether the Petitioners could seek correction of the award after having previously conceded to a judgment and decree in terms of the award.

  2. ISSUE-WISE DETAILED ANALYSIS

  Relevant legal framework and precedents:

  The legal framework revolves around Section 15(c) of the Arbitration Act, which empowers the Court to correct an award if it contains a clerical mistake or an error arising from an accidental slip or omission. The interpretation of terms such as "clerical," "mistake," "error," "accidental," "slip," and "omission" are crucial in determining whether the correction sought falls within the purview of this section.

  Court's interpretation and reasoning:

  The Court provided a detailed interpretation of the terms used in Section 15(c). It emphasized that a "clerical" error is associated with office work, such as typing or copying, and involves unintentional deviations from accuracy. An "error" or "mistake" refers to an unintentional deviation or wrong action due to inadvertence or ignorance. The term "accidental" implies an event occurring by chance, without design or intent. A "slip" is an unintentional or trivial mistake, while "omission" refers to something neglected or left undone.

  Key evidence and findings:

  The Petitioners argued that the arbitrator awarded the amount of Rs. 46,649 twice, constituting a clerical mistake. The Court analyzed the arbitrator's award, particularly paragraphs 11.11 and 14.1 to 14.3, to determine the arbitrator's intent and actions. The arbitrator initially identified the Respondent's entitlement to Rs. 46,649 but chose to address this amount separately under claim No. V, where it was ultimately granted.

  Application of law to facts:

  The Court applied the definitions and interpretations of the terms in Section 15(c) to the facts of the case. It concluded that the arbitrator's actions were deliberate and intentional, not accidental or clerical. The arbitrator consciously postponed the grant of Rs. 46,649 to claim No. V, indicating no error or mistake as defined under Section 15(c).

  Treatment of competing arguments:

  The Petitioners' argument that the award contained a clerical mistake was rejected based on the Court's interpretation of the arbitrator's intent and actions. The Court emphasized the deliberate nature of the arbitrator's decision-making process, which negated the possibility of a clerical error or accidental slip.

  Conclusions:

  The Court concluded that the award did not contain any clerical mistake or error arising from an accidental slip or omission. The Petitioners failed to demonstrate the applicability of Section 15(c) to the award. Furthermore, the Petitioners' previous concession to a judgment and decree in terms of the award in O.P. No. 7 of 1989 precluded them from seeking a different outcome.

  3. SIGNIFICANT HOLDINGS

  Preserve verbatim quotes of crucial legal reasoning:

  The Court stated, "The error cannot be said to be of a clerical nature, for the simple reason that it relates to the contents of the award, the reasoning, deliberation and substance of the whole matter."

  Core principles established:

  The Court established that for an error to be corrected under Section 15(c) of the Arbitration Act, it must be clerical, accidental, or an omission in nature, not relating to the substance or merits of the award. Deliberate and intentional actions by the arbitrator do not fall within this scope.

  Final determinations on each issue:

  The Court dismissed the petitions, holding that the award did not contain any clerical mistake or accidental error as defined under Section 15(c) of the Arbitration Act. The Petitioners' concession to the judgment and decree in terms of the award further barred them from seeking a different outcome.

  ---

• 1991 (10) TMI 329
  
  Issues Involved:
  1. Contravention of Section 8(3) read with Section 8(4) of the Foreign Exchange Regulation Act, 1973.
  2. Contravention of Section 9(1)(c) of the Foreign Exchange Regulation Act, 1973.
  
  Issue-wise Detailed Analysis:
  
  1. Contravention of Section 8(3) read with Section 8(4) of the Foreign Exchange Regulation Act, 1973:
  
  The first issue pertains to the alleged failure of Asian Electronics Ltd. (AEL) to surrender foreign exchange of DM 52,000 to an authorized dealer in India within 30 days of realizing that the amount could not be utilized for its intended purpose. The foreign exchange was acquired for purchasing a Semi-automatic Ceramic Capacitor Plant, including an Internal and External Silvering Unit from a West German firm, Seiferth. The unit was not supplied, leading to the charge of contravention of Section 8(3) read with Section 8(4).
  
  The Adjudicating Officer (AO) found that AEL had indeed failed to use the foreign exchange for the intended purpose and had not surrendered it within the stipulated time. Despite the remittance of DM 50,055 received later, the AO imposed a penalty of Rs. 50,000 on AEL for this contravention.
  
  On appeal, it was argued that the litigation and subsequent remittance should mitigate the penalty. The Tribunal acknowledged the remittance as a mitigating factor but upheld the contravention of Section 8(3) read with Section 8(4), reducing the penalty from Rs. 50,000 to Rs. 25,000.
  
  2. Contravention of Section 9(1)(c) of the Foreign Exchange Regulation Act, 1973:
  
  The second issue involved the charge against AEL for allegedly acknowledging a debt of DM 11,598.40 to Seiferth without the general or special exemption of the RBI. This charge was based on an entry in the diary of the late P.A. Bhatt, a former Joint Managing Director of AEL, indicating "amount to be paid."
  
  The AO found that AEL had acknowledged the debt without the necessary exemption, thereby contravening Section 9(1)(c), and imposed a penalty of Rs. 50,000.
  
  On appeal, it was contended that the diary entry did not constitute an acknowledgment of debt on behalf of AEL, and there was no evidence of any right to receive payment being created in favor of the foreign supplier. The Tribunal agreed with this argument, noting that a mere acknowledgment of debt does not establish a contravention unless it results in the creation of a right to receive payment. Consequently, the Tribunal set aside the AO's finding and the penalty of Rs. 50,000 imposed on AEL for this charge.
  
  Conclusion:
  
  In summary, the Tribunal partially allowed the appeal. The penalty for the contravention of Section 8(3) read with Section 8(4) was reduced to Rs. 25,000, while the finding of contravention of Section 9(1)(c) and the corresponding penalty were set aside. The Tribunal directed that Rs. 25,000 be refunded to AEL within 45 days of the receipt of the order, considering the mitigating factors and lack of evidence for the second charge.

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• 1991 (10) TMI 328
  
  Issues Involved:
  1. Refusal of affiliation for the academic year 1991-92.
  2. Compliance with conditions for affiliation.
  3. Procedural requirements under Section 53 of the Karnataka State Universities Act, 1976.
  4. Role of the State Government in the affiliation process.
  
  Detailed Analysis:
  
  1. Refusal of Affiliation for the Academic Year 1991-92:
  The petitioners, a registered society and its affiliated Homeopathic College, sought a writ of mandamus to compel the respondents to grant affiliation for the academic year 1991-92. They also sought a writ of certiorari to quash the letter dated 15-4-1991 from the second respondent-University, which refused the continuation of affiliation for the Bachelor of Homeopathic Medicine and Surgery (B.H.M.S) course.
  
  The second respondent-University contended that the Local Inquiry Committee recommended not to continue the affiliation based on their inspection, and this recommendation was accepted by the Academic Council and the Syndicate. Consequently, the University issued the impugned letter directing the petitioners not to make admissions for the year 1991-92.
  
  2. Compliance with Conditions for Affiliation:
  The petitioners argued that the College had adhered to the conditions imposed by the University when affiliation was initially granted for the academic year 1989-90. They claimed to have appointed sufficient full-time teachers, secured land for construction, and made provision for a development fund. They contended that any deficiencies pointed out by the University had been addressed, and any remaining issues would be resolved within a reasonable time.
  
  The University, however, maintained that the College had failed to comply with several conditions imposed for the continuation of affiliation, as highlighted in the Local Inquiry Committee's report. The University argued that the power to grant or refuse affiliation lies within its authority under the proviso to Sub-section (9) of Section 53 of the Act.
  
  3. Procedural Requirements under Section 53 of the Karnataka State Universities Act, 1976:
  The petitioners contended that the University's refusal to continue affiliation without referring the matter to the State Government violated Section 53 of the Act. They argued that the University was required to submit the application and proceedings to the State Government for approval before making a final decision.
  
  The Court agreed with the petitioners, noting that Section 53(5) of the Act mandates the University to submit the application and all related proceedings to the State Government, which then makes recommendations for the grant or refusal of affiliation. The Court found that the University's refusal to continue affiliation without involving the State Government was in violation of this statutory requirement.
  
  4. Role of the State Government in the Affiliation Process:
  The Court emphasized that the State Government has a significant role in the affiliation process as per Section 53(5) of the Act. The Court held that the University could not unilaterally refuse affiliation without submitting the relevant documents and proceedings to the State Government for its recommendations.
  
  The Court referred to the decision in INDIAN MEDICAL ASSOCIATION v. STATE OF KARNATAKA, which clarified that Section 53 covers all types of affiliations, including those seeking continuation for a further period. The Court also noted that the proviso to Sub-section (9) of Section 53 should not be interpreted to give the University the power to refuse affiliation without State Government involvement, as this would undermine the statutory scheme and the State Government's role.
  
  Conclusion:
  The Court quashed the impugned letter dated 15-4-1991 and directed the University to submit the application and proceedings to the State Government within two weeks. The State Government was then required to take action as per Section 53(5) of the Act within 45 days. The writ petition was allowed, and no costs were awarded.

  ---

• 1991 (10) TMI 327
  
  Issues: Revision against order of Sub-Divisional Judicial Magistrate directing examination of important witnesses and documents in a forgery case.
  
  Analysis:
  1. The petitioner challenged an order of the Sub-Divisional Judicial Magistrate directing the examination of the Collector, Investigating Officer, and Handwriting Expert after closure of prosecution evidence in a forgery case. The petitioner was charge-sheeted for offences under Sections 465/471, I.P.C. related to appearing in an interview for a lecturer position with an allegedly forged 'interview card'. The Magistrate's order aimed at ensuring a just decision by examining crucial witnesses and documents. The petitioner contended that examining prosecution witnesses after closing evidence and before recording the accused's statement could prejudice the case, citing legal precedents. The State argued that the Magistrate had the jurisdiction to pass such an order, relying on relevant case laws.
  
  2. The High Court analyzed the legal position on the issue, citing precedents like Jamatraj Kewalji Govani and Krupasindhu Pothal cases. The Court emphasized that Section 311 of the Cr.P.C. confers wide powers on the Court to examine any witness as a Court witness at any stage of the trial if it deems necessary for a just decision. The Court highlighted that summoning witnesses to fill evidentiary gaps is permissible if essential for a fair trial. The Court also noted that the Magistrate has a duty to ensure all necessary witnesses are examined for a just decision, even if the prosecution fails to produce them.
  
  3. The Court found that the Magistrate did not err in passing the impugned order, especially in a forgery case where document examination is crucial. Since the accused's statement was not recorded at the time, the Court ruled out any prejudice to the petitioner. Despite the case's delay, the Court dismissed the revision, affirming the lower court's order. The Court directed the trial court to expedite the proceedings and dispose of the case within six months, emphasizing the importance of timely justice delivery in such matters.

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• 1991 (10) TMI 326
  
  Issues Involved:
  1. Reservation for Scheduled Castes and Scheduled Tribes in promotions.
  2. Validity of administrative instructions versus statutory rules.
  3. Compliance with Article 148(5) of the Constitution.
  
  Detailed Analysis:
  
  1. Reservation for Scheduled Castes and Scheduled Tribes in Promotions:
  
  The primary issue was whether the Comptroller and Auditor General of India (CAG) could enforce a circular dated January 25, 1973, which mandated reservations for Scheduled Castes (SC) and Scheduled Tribes (ST) in promotions to the post of Accounts Officers. The petitioners, who were senior to the respondents belonging to SC/ST, challenged the circular on the grounds that the relevant statutory rules did not provide for such reservations. The High Court had ruled that the circular could not be enforced as it was not part of the statutory rules.
  
  2. Validity of Administrative Instructions Versus Statutory Rules:
  
  The High Court held that the administrative instructions contained in the circular could not supplement or alter the statutory rules, which were silent on the subject of reservations. The rules, known as the "Indian Audit & Accounts Department (Administrative Officers, Assistant Accounts Officers and Assistant Audit Officers) Recruitment Rules, 1963," did not include provisions for reservations for SC/ST in promotions. The High Court relied on precedents from the Madras High Court and the Orissa High Court to support its decision that administrative instructions could not override statutory rules.
  
  3. Compliance with Article 148(5) of the Constitution:
  
  The High Court also examined whether the circular was issued in compliance with Article 148(5) of the Constitution, which requires rules affecting service conditions to be made by the President after consultation with the CAG. The High Court concluded that the circular did not meet this requirement, as it was not issued in the name of the President and lacked evidence of being based on a decision by the President.
  
  Supreme Court's Judgment:
  
  The Supreme Court overturned the High Court's decision, addressing each issue as follows:
  
  1. Reservation for SC/ST in Promotions:
  The Supreme Court held that the rules were silent on the subject of reservations and thus could be supplemented by administrative instructions. The Court cited precedents where similar circulars issued by the Railway Board were upheld to implement the Central Government's reservation policy.
  
  2. Validity of Administrative Instructions:
  The Supreme Court stated that administrative orders could be issued to supplement statutory rules, provided they did not contravene them. The circular in question was deemed to be in line with the declared policy of reservation and thus valid.
  
  3. Compliance with Article 148(5):
  The Supreme Court acknowledged that while the circular should ideally have been issued in the name of the President, the lack of this formality did not invalidate it. There was proper consultation between the Government and the CAG, and the circular was in accordance with the Government's policy on reservations. Therefore, the circular was held to be valid and enforceable.
  
  Conclusion:
  
  The Supreme Court set aside the High Court's judgment, allowing the appeal and upholding the validity of the impugned circular. The authorities were directed to consider the reservations while making promotions under the existing rules. No order as to costs was made.
  
  This comprehensive analysis preserves the legal terminology and significant phrases from the original text while providing a detailed understanding of the judgment.

  ---

• 1991 (10) TMI 325
  
  Issues:
  1. Whether the Tribunal should refer a common question of law to the High Court under section 256(2) of the Income-tax Act, 1961.
  
  Analysis:
  The judgment pertains to three applications under section 256(2) of the Income-tax Act, 1961 seeking a direction to the Tribunal to refer a common question of law to the High Court. The applications relate to assessment years 1978-79, 1979-80, and 1980-81. The primary issue is whether a statable question of law arises from the Tribunal's orders, specifically regarding the correctness of confirming the order of the AAC canceling penalties under section 271(1)(c). The Tribunal found no conscious concealment, fraud, or neglect on the part of the appellants, leading to the conclusion that no question of law arises from the factual findings. The Court emphasized that it cannot disturb findings of fact unless expressly challenged in the application under section 256(1).
  
  Furthermore, the judgment discusses the limitations on the Court's power under section 256(2) to direct a reference to the Tribunal. Citing precedents, including CIT v. Scindia Steam Navigation Co. Ltd. and India Cements Ltd. v. CIT, the Court highlighted that the High Court must accept the Tribunal's findings of fact unless expressly challenged in the initial application under section 256(1). The Court clarified that it cannot raise new questions of law not raised in the application under section 256(1) as it only exercises advisory jurisdiction.
  
  Ultimately, the Court dismissed all three applications with costs, emphasizing that on the facts found by the Tribunal, no question of law arises. The judgment underscores the importance of adhering to the prescribed procedures and limitations when seeking references under the Income-tax Act, maintaining the integrity of the appellate process and the distinction between factual findings and legal questions.

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• 1991 (10) TMI 324
  
  Issues Involved:
  1. Violation of rules of natural justice and Punjab Civil Services (Punishment & Appeal) Rules, 1970.
  2. Predetermined mindset in conducting the enquiry.
  3. Incommensurate punishment of dismissal.
  
  Detailed Analysis:
  
  1. Violation of rules of natural justice and Punjab Civil Services (Punishment & Appeal) Rules, 1970:
  - Non-supply of Preliminary Enquiry Report: The petitioner argued that the preliminary enquiry report, which was relied upon by the prosecution, was not supplied to him. The court found considerable force in this argument, noting that the non-supply of the report prejudiced the petitioner's defense. The court cited a precedent where non-supply of such a report was deemed a violation of natural justice.
  
  - Examination of Unlisted Witnesses: The enquiry officer examined witnesses not cited in the list of witnesses, violating Rule 8(3) & (4) of the Punishment and Appeal Rules. This rule mandates that the list of witnesses and documents be supplied to the delinquent officer to prevent surprises and ensure a fair defense. The court found this to have prejudiced the petitioner.
  
  - Reliance on Statements Not Examined or Supplied: Statements of witnesses recorded during the preliminary enquiry were relied upon without examining those witnesses or providing copies of their statements to the petitioner. The court held that relying on such statements without giving the petitioner an opportunity to cross-examine the witnesses violated natural justice principles.
  
  - Assistance of Government Employee: The petitioner was not informed that he could have the assistance of another government employee during the enquiry, violating Rule 8(8) of the Punishment & Appeal Rules. The court cited a Supreme Court judgment affirming that it is mandatory to inform the delinquent officer of this right.
  
  - Hearing by Disciplinary Authority: The petitioner was heard by the Director, Food & Supplies, rather than the Secretary to the Government, Punjab, Food & Supplies Department, who was the actual Disciplinary Authority. The court held that the hearing by the correct authority is crucial for ensuring that the delinquent officer can argue against the enquiry report effectively.
  
  2. Predetermined mindset in conducting the enquiry:
  - Prejudgment in Charge-Sheet: The court found that the language used in the charge-sheet indicated that the petitioner's guilt had already been determined. Phrases like "proved as a careless and irresponsible officer" and "it is proved that he is careless, irresponsible and not trustworthy" suggested a predetermined mindset. The court cited several precedents emphasizing that justice must not only be done but must also be seen to be done, and found that the enquiry officer could not have maintained an open mind under these circumstances.
  
  3. Incommensurate punishment of dismissal:
  - Quantum of Punishment: The court did not delve into the question of whether the punishment of dismissal was commensurate with the charge, given that the enquiry proceedings were already found to be vitiated on other grounds.
  
  Conclusion:
  The writ petition was allowed, and the order dated 2.5.1991 dismissing the petitioner from service was quashed. The petitioner was ordered to be reinstated with all consequential benefits from the date of the dismissal order. There was no order as to costs.

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• 1991 (10) TMI 323
  
  Issues Involved:
  1. Lapse of Motion upon Dissolution of Lok Sabha
  2. Justiciability of the Removal Process
  3. Constitutionality of the Judges (Inquiry) Act, 1968
  4. Requirement of Natural Justice
  5. Judicial Remedy for Judicial Misconduct
  6. Mala Fides of the Speaker
  7. Locus Standi of Petitioners
  8. Effectiveness of Court's Writ
  
  Summary:
  
  1. Lapse of Motion upon Dissolution of Lok Sabha:
  The Court examined whether a motion for the removal of a Judge lapses upon the dissolution of the House of Parliament. It was held that the motion does not lapse and remains pending. The Court stated, "The effect of these provisions is that the motion shall be kept pending till the committee submits its report and if the committee finds the Judge guilty, the motion shall be taken up for consideration."
  
  2. Justiciability of the Removal Process:
  The Court discussed whether the process for the removal of a Judge is justiciable. It concluded that the constitutional process for removal of a Judge up to the point of admission of the motion and constitution of the Committee are not strictly proceedings in the Houses of Parliament and are thus subject to judicial review. The Court stated, "The constitutional process for removal of a Judge up to the point of admission of the motion, constitution of the Committee and the recording of findings by the Committee are not, strictly, proceedings in the Houses of Parliament."
  
  3. Constitutionality of the Judges (Inquiry) Act, 1968:
  The Court held that the Judges (Inquiry) Act, 1968 is constitutional and intra vires. It stated, "The provisions of the Judges (Inquiry) Act, 1968 are not unconstitutional as abridging the powers and privileges of the House."
  
  4. Requirement of Natural Justice:
  It was argued that the Speaker should have given the Judge an opportunity to be heard before admitting the motion. The Court held that at the stage when the Speaker admits the motion, the Judge is not entitled to such notice as a matter of right, stating, "The scheme of the statute and rules made thereunder by necessary implication, exclude such a right."
  
  5. Judicial Remedy for Judicial Misconduct:
  The Court rejected the argument that the judiciary itself has the jurisdiction to restrain a Judge from exercising judicial functions pending inquiry. It emphasized that the constitutional scheme does not permit such an interim direction, stating, "The relief of a direction to restrain the Judge from discharging judicial functions cannot be granted."
  
  6. Mala Fides of the Speaker:
  The Court found no merit in the allegations of mala fides against the Speaker, stating, "A case of mala fides cannot be made out merely on the ground of political affiliation of the Speaker either."
  
  7. Locus Standi of Petitioners:
  The Court upheld the locus standi of the petitioners, including the Supreme Court Bar Association and the Sub-Committee on Judicial Accountability, stating, "The present matter is of such nature and the constitutional issues of such nature and importance that it cannot be said that members of the Bar, and particularly the Supreme Court Bar Association have no locus standi in the matter."
  
  8. Effectiveness of Court's Writ:
  The Court declared the correct constitutional position without issuing specific writs, emphasizing that the decision of the House on whether the motion has lapsed is binding, stating, "Having regard to the nature of the subject matter and the purpose it is ultimately intended to serve all that is necessary is to declare the legal and constitutional position and leave the different organs of the State to consider matters falling within the orbit of their respective jurisdiction and powers."
  
  Separate Judgment by L.M. Sharma, J.:
  Justice L.M. Sharma dissented, holding that the writ petitions should be dismissed and that the courts have no jurisdiction in the matter. He emphasized that the constitutional scheme vests the power of removal of a Judge exclusively in the Parliament and not in the judiciary. He stated, "The courts including the Supreme Court do not have any jurisdiction to pass any order in relation to a proceeding for removal of a Judge of the superior courts."
  
  Conclusion:
  The Court disposed of Writ Petition Nos. 491 and 541 of 1991 by declaring the appropriate legal positions and dismissed Writ Petition Nos. 542 and 560 of 1991. The Transfer Petition No. 278 of 1991 was allowed, and the transferred writ petition was also dismissed.

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• 1991 (10) TMI 322
  
  Issues Involved:
  
  1. Non-registration of sale-deeds due to insufficient stamp duty.
  2. Classification and valuation of land for stamp duty purposes.
  3. Application and interpretation of Section 47-A of the Indian Stamp Act.
  4. Requirement for an enquiry under Rule 3(3) of the A.P. Stamp (Prevention of Undervaluation of Instruments) Rules, 1975.
  5. Validity of the basic value register as a guideline for valuation.
  
  Detailed Analysis:
  
  1. Non-registration of sale-deeds due to insufficient stamp duty:
  
  The petitioners challenged the Sub-Registrar's refusal to register sale-deeds dated 1-8-1991, executed in their favor, citing insufficient stamp duty. The Sub-Registrar, acting on instructions, insisted on a valuation of Rs. 120 per square yard, treating the land as house sites, contrary to the sale price of Rs. 65,000 per acre stated in the documents.
  
  2. Classification and valuation of land for stamp duty purposes:
  
  The petitioners argued that the land, classified as dry land in revenue records and used for agricultural purposes, should not be valued as house sites. The land was far from residential areas and reserved for conservation use by the Hyderabad Urban Development Authority. The Sub-Registrar, however, relied on the basic value register, which listed the land as house sites with a value of Rs. 120 per square yard.
  
  3. Application and interpretation of Section 47-A of the Indian Stamp Act:
  
  Section 47-A allows the registering officer to refer documents to the Collector if the market value appears under-stated. The petitioners contended that the Sub-Registrar did not exercise independent discretion and failed to conduct an enquiry to ascertain the land's true nature and value, as mandated by Section 47-A.
  
  4. Requirement for an enquiry under Rule 3(3) of the A.P. Stamp (Prevention of Undervaluation of Instruments) Rules, 1975:
  
  The court emphasized that the Sub-Registrar must conduct an enquiry under Rule 3(3) to form a reasonable belief about the land's valuation before referring the matter to the Collector. The enquiry involves gathering information from parties and examining public records. The court rejected the Government Pleader's argument that such an enquiry is discretionary, stating it is mandatory to ensure a fair assessment of the land's value.
  
  5. Validity of the basic value register as a guideline for valuation:
  
  The court referred to the judgment in Sagar Cements Ltd. v. State of A.P., where it was held that the basic value register, lacking statutory sanction, should not bind the registering officer. It can serve as a guideline but should not replace independent discretion. The Sub-Registrar's reliance solely on the basic value register without conducting an enquiry was deemed improper.
  
  Conclusion:
  
  The court declared the Sub-Registrar's action illegal and directed him to reconsider the valuation after conducting an enquiry under Rule 3(3). Only if, after such an enquiry, the Sub-Registrar reasonably believes the documents are undervalued, should he refer the matter to the Collector. The previous reference made by the Sub-Registrar was declared illegal, and the writ petitions were disposed of accordingly. No costs were awarded, and an advocate's fee of Rs. 100 was set for each petition.

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• 1991 (10) TMI 321
  
  Issues Involved:
  1. Whether the plaint discloses any cause of action.
  2. Whether the suit is barred by law.
  3. Whether the court has jurisdiction to try and entertain the suit.
  4. Whether the order of the learned District Judge was vitiated by illegality.
  
  Detailed Analysis:
  
  1. Whether the plaint discloses any cause of action:
  The core issue was whether the plaint disclosed a cause of action. The plaintiffs alleged deceit, passing off, unfair trade practice, violation of government guidelines, public nuisance, and wrongful acts. The court scrutinized these allegations in detail.
  
  - Deceit: The court noted that for an action of deceit, the plaintiff must allege and prove false representation, fraudulent intent, inducement, reliance, and damage. The court found the allegations in the plaint to be inferential and contradicted by the inscriptions on the cigarette packets, which clearly indicated that the products were made in India by ITC. The court concluded that the plaint did not disclose a cause of action for deceit as the plaintiffs failed to show they acted on the alleged misrepresentation and suffered damage.
  
  - Passing Off: The court explained that passing off protects a trader's proprietary right in his goodwill or business from being misled by another's goods. It emphasized that this remedy is not available to consumers. The court concluded that the plaintiffs had no cause for a passing off action as they were consumers, not traders.
  
  - Unfair Trade Practice: The court noted that the Monopolies and Restrictive Trade Practices Act, 1969, provides a specific remedy for unfair trade practices, which must be pursued through the appropriate commission, not a civil court. Thus, the court held that the civil court lacked jurisdiction to entertain this claim.
  
  - Violation of Government Guidelines: The court found that the guidelines cited by the plaintiffs did not create any legal rights or obligations and thus did not constitute a cause of action.
  
  - Public Nuisance and Wrongful Acts: The court held that the allegations did not constitute public nuisance or wrongful acts as defined under the law. Smoking, though injurious to health, is not prohibited, and thus the use of the brand name did not amount to a public nuisance or wrongful act.
  
  2. Whether the suit is barred by law:
  The court did not need to address this issue in detail as it had already concluded that the plaint did not disclose any cause of action. However, it noted that the suit was not maintainable under the Monopolies and Restrictive Trade Practices Act and the guidelines for industrial policy.
  
  3. Whether the court has jurisdiction to try and entertain the suit:
  The court noted that the issue of territorial jurisdiction was a mixed question of fact and law, which could only be decided after evidence. However, since the plaint did not disclose any cause of action, this issue became moot.
  
  4. Whether the order of the learned District Judge was vitiated by illegality:
  The court found that the learned District Judge had not considered the relevant law and arguments advanced by ITC. The judgment did not specify how the plaint disclosed a cause of action and relied on material outside the plaint. The court concluded that the learned District Judge acted illegally in rejecting the application under Order VII Rule 11.
  
  Conclusion:
  The court allowed the revision, set aside the impugned order, and rejected the plaint under Order VII Rule 11 of the Code of Civil Procedure. It made no order as to costs, considering the potential burden of recovery expenses on the winning party.

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• 1991 (10) TMI 320
  
  Issues:
  1. Interpretation of Order 6 Rule 17 of the Code of Civil Procedure in relation to Order 7 Rule 11.
  
  Analysis:
  1. The judgment revolves around the question of whether Order 6 Rule 17 is restricted or controlled by Order 7 Rule 11. The plaintiff sought to amend the plaint to claim license fee post-revocation, which the defendant argued disclosed no cause of action. The defendant contended that Order 7 Rule 11 should lead to the rejection of the plaint without amendment, citing previous court judgments in support.
  
  2. The court rejected the defendant's argument, emphasizing the court's duty to deliver substantial justice through amendments. Quoting Bowmen, L.J. in Cropper v. Smith, the court highlighted that courts exist to decide rights, not punish for mistakes, and amendments are essential to determine the real controversy between parties. The court stressed the importance of allowing amendments to avoid injustice and ensure the real matter in controversy is addressed.
  
  3. The judgment further discussed the necessity of extending the principles of Order 6 Rule 17 in the interest of justice. It questioned the need to reject a plaint under Order 7 Rule 11 when amendments could rectify the defect and prevent delays and additional costs associated with filing a fresh suit. Procedural laws are meant to facilitate justice, and the court cited precedents from Bombay and Jammu & Kashmir High Courts, along with the Supreme Court, supporting the view that amendments should be allowed to cure defective pleadings.
  
  4. The court rejected the notion that Order 6 Rule 17 should be ousted by Order 7 Rule 11, as it believed such an approach would hinder justice rather than promote it. The judgment emphasized the importance of not obstructing the course of justice and allowing amendments to rectify defects in pleadings to serve the interests of justice.
  
  5. Lastly, the court clarified that Order 6 Rule 17 is not restricted or controlled by Order 7 Rule 11, affirming the importance of allowing amendments to ensure justice is served effectively. The judgment concluded by distinguishing previous court judgments as being confined to their specific facts and not setting a broader precedent for disallowing amendments.

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• 1991 (10) TMI 319
  
  Issues Involved:
  1. Validity of the nomination and election of respondent No. 8 as the President of the Multi-State Co-operative Society under Section 37 of the Multi-State Co-operative Societies Act, 1984.
  2. Availability and adequacy of alternative remedies under Section 40 of the Multi-State Co-operative Societies Act, 1984.
  3. Maintainability of the writ petition against the Cooperative Bank and the Returning Officer.
  4. Interpretation of Section 37 of the Multi-State Co-operative Societies Act, 1984.
  
  Issue-wise Detailed Analysis:
  
  1. Validity of the Nomination and Election of Respondent No. 8:
  The petitioners challenged the acceptance of the nomination of respondent No. 8 for the post of President of the Development Co-operative Bank Limited, a Multi-State Co-operative Society, under Section 37 of the Multi-State Co-operative Societies Act, 1984. Section 37 stipulates that no person shall be eligible to hold the office of a president after holding it for two consecutive terms. The explanation to Section 37 clarifies that if a person was holding the office at the commencement of the Act and is re-elected, it will be considered as one term. Respondent No. 8 was holding office at the commencement of the Act and was subsequently re-elected, thus making him ineligible for another term in April 1989.
  
  2. Availability and Adequacy of Alternative Remedies under Section 40:
  The respondents argued that the writ petition was not maintainable due to the availability of an alternative remedy under Section 40 of the Multi-State Co-operative Societies Act, 1984. Section 40 allows the Central Registrar to remove a member from office if they refuse to vacate under certain disqualifications. However, the court held that Section 40 does not provide a suitable forum for adjudicating disputes related to election validity, which is specifically governed by Section 74. Since Section 74 was stayed, the court found that Section 40 did not offer an adequate alternative remedy.
  
  3. Maintainability of the Writ Petition:
  The respondents contended that the writ petition was not maintainable against the Cooperative Bank and the Returning Officer as they are not 'State' under Article 12 of the Constitution. The court, however, held that a writ is maintainable to enforce statutory duties imposed by the Act. The court cited the Supreme Court's observation that a mandamus can be issued to compel a society or its officials to carry out statutory duties.
  
  4. Interpretation of Section 37:
  The court interpreted Section 37 and its explanation, stating that the section prevents a person from holding the office of president for more than two consecutive terms. The explanation includes terms held at the commencement of the Act, regardless of whether the office was held by nomination or election. The court rejected the argument that the explanation applies only to elected terms, emphasizing that the purpose of Section 37 is to limit the tenure of office to prevent prolonged control by a single individual.
  
  Conclusion:
  The court concluded that respondent No. 8's election as president in April 1989 was in violation of Section 37 of the Multi-State Co-operative Societies Act, 1984. The writ petition was found to be maintainable, and the court set aside the nomination and election of respondent No. 8. The application for leave to appeal to the Supreme Court was rejected, and the operation of the order was stayed for eight weeks.
  
  Order:
  The order passed by respondent No. 7 declaring respondent No. 8 as validly nominated and his subsequent election as president was set aside. The rule was made absolute with costs. The application for leave to appeal to the Supreme Court was rejected, and the operation of the order was stayed for eight weeks.

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• 1991 (10) TMI 318
  
  Issues:
  - Interpretation of Sec. 14(1)(b) of the Delhi Rent Control Act, 1958
  - Subletting of demised premises
  - Application of Sec. 18 of the Evidence Act
  - Admissibility of evidence in a subletting case
  - Reappraisal of evidence by the High Court
  - Exclusive possession of the tenant
  
  Interpretation of Sec. 14(1)(b) of the Delhi Rent Control Act, 1958:
  The appellant landlord filed for ejectment under Sec. 14(1)(b) of the Act, alleging subletting by the tenant. The lower courts found that the tenant was in exclusive possession. The High Court dismissed the petition for ejectment based on this finding, leading to the appeal before the Supreme Court.
  
  Subletting of demised premises:
  The Rent Controller and Tribunal found that the tenant sublet the premises to his brother, ordering ejectment. However, the High Court disagreed, stating that the tenant was in exclusive possession and did not sublet. The Supreme Court analyzed the evidence and concluded that the admission by the brother claiming exclusive possession did not bind the tenant, as he was not a party to that admission.
  
  Application of Sec. 18 of the Evidence Act:
  The appellant argued that Sec. 18 of the Evidence Act should bind the tenant based on the brother's admission. The Supreme Court clarified that for an admission to be binding, the person making the statement must have a proprietary or pecuniary interest in the subject matter. As the tenant was not part of the admission, it was deemed inadmissible and did not prove subletting.
  
  Admissibility of evidence in a subletting case:
  The Court emphasized that evidence of subletting must be based on admissible facts. In this case, the High Court rightly held that the finding of subletting was flawed as it relied on inadmissible evidence. The Court upheld the High Court's decision to reexamine and reject the oral evidence presented.
  
  Reappraisal of evidence by the High Court:
  The High Court's reevaluation of the evidence was deemed appropriate by the Supreme Court. The Court found no error in the High Court's decision to disbelieve the oral evidence and dismiss the claim of subletting based on inadmissible evidence.
  
  Exclusive possession of the tenant:
  The appellant's argument that the tenant's other business activities implied non-exclusive possession was rejected. The Court held that having other business interests does not negate the tenant's exclusive possession of the demised premises. Consequently, the appeal was dismissed without costs, affirming the High Court's decision.

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• 1991 (10) TMI 317
  
  The petitioner's grievance was that authorities had no jurisdiction to seize their truck under the U.P. Sales Tax Act. The court agreed, stating the truck is liable to be released immediately. The court did not address the seizure of goods, as the petitioner has an alternative remedy through an appeal. The petition was allowed in part, directing the immediate release of the truck.

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• 1991 (10) TMI 316
  
  The petitioner's truck was seized by the Sales Tax Officer, but the court directed the immediate release of the truck. The seizure of goods was not challenged. The petitioner can pursue a remedy for the seized goods under the U.P. Sales Tax Act.

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• 1991 (10) TMI 315
  
  Issues:
  1. Exigibility to capital gains in the sale of old worn out rubber trees by the assessee for the assessment year 1978-79.
  2. Determination of whether the income derived from the sale of standing rubber trees is agricultural or non-agricultural income taxable under the IT Act.
  3. Justification of the rate fixed per tree for the sale of rubber trees.
  4. Applicability of previous court decisions to the current case.
  5. Determination of when the sale of rubber trees was completed.
  
  Analysis:
  The case involved a plantation company, the petitioner, owning a rubber estate, assessed for income tax, against the Revenue for the assessment year 1978-79. The main issue was the capital gains arising from the sale of old worn out rubber trees by the assessee. Initially, the Income Tax Officer (ITO) fixed the capital gain at Rs. 15,000 for the sale of 6,500 trees. The Commissioner of Income Tax (Appeals) (CIT (A)) held that there was no capital gain or loss. However, the Tribunal determined a capital gain of at least Rs. 15 per tree, resulting in a total sum of Rs. 2,27,500 for the assessment year. The Tribunal remitted the matter back to the CIT for enhancement notice, which was not done, leading to the filing of an application under section 256(1) of the IT Act to refer questions of law to the High Court.
  
  The Tribunal dismissed the petition, and the petitioner filed an Original Petition (O.P.) seeking reference of questions of law to the High Court. However, the High Court found that the questions formulated were not referable questions of law. The Court noted that the issues raised were either concluded by previous court decisions or were questions of fact. For instance, question (a) was concluded by a previous decision of the Court, while question (b) was deemed a pure question of fact. The Court also highlighted that questions (c) and (d) did not arise for consideration based on the facts of the case. Regarding question (e) on when the sale was completed, the Court emphasized that it depended on the intention of the parties, which was not evident from the materials before them.
  
  In conclusion, the High Court dismissed the Original Petition, stating that the questions raised were either not referable questions of law or were already addressed by previous court decisions. The Court emphasized the importance of formulating specific and referable questions under the IT Act for consideration.

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• 1991 (10) TMI 314
  
  Issues Involved:
  1. Appointment of Court Receiver
  2. Nature of Lease Agreement
  3. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985
  4. Ownership and Possession of Equipment
  5. Embedding of Machinery to Earth
  6. Payment of Royalty
  
  Detailed Analysis:
  
  1. Appointment of Court Receiver:
  The plaintiff sought the appointment of the Court Receiver, High Court, Bombay, as the receiver of the suit equipment with all powers under Order XI, Rule 1 of the Code of Civil Procedure. The defendant resisted this application on several grounds. The court noted that the plaintiff had made a strong prima facie case for the appointment of a receiver. The court held that it was just and convenient to appoint the Court Receiver as the receiver of the suit equipment, excluding the power of sale, and directed the Court Receiver to appoint the defendant as his agent to use the machinery on payment of monthly royalty.
  
  2. Nature of Lease Agreement:
  The court examined the lease agreement dated 28th April 1986, which stipulated that the plaintiff was the sole owner of the suit equipment and that the defendant had no title thereto. The agreement provided that the plaintiff could terminate the lease and take back possession of the equipment if the defendant defaulted on rental payments. The court held that the lease agreement was a contract of hiring, not a hire purchase or loan finance agreement. The court referenced the Supreme Court's judgment in D.V. Corporation v. State of Bihar and Halsbury's Laws of England to support its conclusion that the transaction was a lease of movables, with the plaintiff retaining ownership.
  
  3. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985:
  The defendant argued that Section 22(1) of the 1985 Act imposed an absolute bar on the appointment of a receiver without the consent of the Board. The court held that Section 22(1) applied only to properties owned by the sick industrial company or in which the company had a proprietary interest. Since the suit equipment was owned by the plaintiff and the lease had been lawfully terminated, the court concluded that Section 22(1) did not bar the appointment of a receiver in this case.
  
  4. Ownership and Possession of Equipment:
  The court held that the plaintiff was the sole and exclusive owner of the suit equipment throughout the lease period. The defendant's contractual right to use the equipment was lawfully terminated due to non-payment of rentals. The court rejected the defendant's claim that the suit machinery was the property of the defendant industrial company, noting that this plea appeared to be an afterthought.
  
  5. Embedding of Machinery to Earth:
  The defendant contended that the suit machinery had become immovable property after being embedded to the earth. The court held that the nature of the transaction must be decided based on the contract between the parties at the time of the transaction. The court concluded that the embedding was temporary and for the benefit of the machinery, not a permanent addition to the immovable property. The court referenced the judgment of the High Court of Madras in Subramanian Firm v. Chidamabaram to support its conclusion.
  
  6. Payment of Royalty:
  The court directed the defendant to pay monthly royalty to the Court Receiver as follows:
  - Rs. 25,000 per month from 1st November 1991 to 30th April 1992
  - Rs. 50,000 per month from May 1992 to February 1993
  After February 1993, the parties could apply to the court for further directions regarding the continuation or discharge of the receiver and the terms of the agency agreement.
  
  Conclusion:
  The court disposed of the notice of motion, appointing the Court Receiver as the receiver of the suit equipment and directing the defendant to pay monthly royalty. The court clarified that this order would not prevent the Board from performing its statutory functions under the 1985 Act and expedited the issue of a certified copy of the judgment.

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• 1991 (10) TMI 313
  
  Issues Involved: Interpretation of the second proviso to sub-section (3) of Section 14 of the Himachal Pradesh Urban Rent Control Act, 1987 in relation to possession given to competent authority under the Himachal Pradesh Requisition and Acquisition of Immovable Property Act, 1972.
  
  Judgment Summary:
  
  The Supreme Court considered the question of law regarding the interpretation of the second proviso to sub-section (3) of Section 14 of the Himachal Pradesh Urban Rent Control Act, 1987 in a case where possession was given to a competent authority under the Himachal Pradesh Requisition and Acquisition of Immovable Property Act, 1972. The Court analyzed whether such possession constituted vacation without sufficient cause under the Rent Control Act.
  
  The Court examined the meaning of "vacate such building without sufficient cause" in the context of the second proviso. It was determined that vacating a building under a requisition order by the competent authority does not amount to vacation without sufficient cause, as the landlord is compelled to vacate under legal constraint.
  
  The Court emphasized that the sufficiency of cause under the Rent Control Act should not be influenced by the validity or invalidity of an order under the Requisition Act. The reasons for vacating a building under different circumstances should be considered independently.
  
  Furthermore, the Court held that the Rent Control authorities cannot assess the merit of an order under the Requisition Act, and therefore, such an order should not be a determining factor in concluding that a building was vacated without sufficient cause.
  
  Additionally, the Court addressed the requirement for the landlord to occupy the building and found that the appellant had a genuine need to occupy the premises, as he had no other building in the urban area and had vacated his previous building for sufficient reasons. Therefore, the appellant was entitled to seek eviction of the tenant.
  
  In conclusion, the Court allowed the appeal, set aside the orders of the lower courts, and directed the appellant to approach the Rent Control authorities for appropriate directions. Each party was ordered to bear their own costs.

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• 1991 (10) TMI 312
  
  Issues Involved:
  1. Refusal of registration of transfer of shares.
  2. Compliance with Section 22A of the Securities Contracts (Regulation) Act, 1956.
  3. Validity of Article 47A of the Articles of Association.
  4. Timeliness of the reference filed by the company.
  5. Constitutional validity of Section 22A of the SCR Act.
  6. Binding nature of Articles of Association.
  
  Detailed Analysis:
  
  1. Refusal of Registration of Transfer of Shares:
  The company refused the registration of transfer of shares on the grounds that accepting an application for transfer of less than 50 equity shares was not in the interest of the company. The board concluded that the cost of servicing such shareholders would exceed the dividend payable and create odd lots, which are less marketable. The board also noted that the Government and stock exchanges prescribed a minimum lot of 50 equity shares, and thus, the balance of convenience favored the company.
  
  2. Compliance with Section 22A of the Securities Contracts (Regulation) Act, 1956:
  Respondent No. 1 argued that the company filed the reference beyond the prescribed two-month period under Section 22A(4) of the SCR Act, rendering the petition time-barred. The respondent also contended that the transfer of securities was not in contravention of any law and that the company's amended Article 47A was void ab initio as it did not have prior approval from the stock exchange.
  
  3. Validity of Article 47A of the Articles of Association:
  The company's Article 47A prohibited the transfer of less than 50 equity shares, except under certain conditions. The respondent argued that the articles of association cannot override the provisions of Section 22A of the SCR Act, which provides for free transferability and registration of listed securities.
  
  4. Timeliness of the Reference Filed by the Company:
  The company lodged the securities on February 1, 1989, and returned them on February 24, 1989, citing Article 47A. The securities were re-lodged on March 11, 1989, and the board meeting was held on April 14, 1989. The reference was filed on May 15, 1989. The respondent argued that this was beyond the two-month period prescribed by Section 22A(4) of the SCR Act.
  
  5. Constitutional Validity of Section 22A of the SCR Act:
  The company's counsel mentioned that the constitutional validity of Section 22A of the SCR Act was challenged in a separate writ petition. However, the bench decided to proceed with the matter as there was no provision to stay the proceedings pending the outcome of the writ petition.
  
  6. Binding Nature of Articles of Association:
  The company argued that the articles of association, being a contract between the company and its members, are binding and have the force of law under Article 13(3)(a) of the Constitution of India. However, the bench held that any provision in the articles that is contrary to statutory provisions is invalid ab initio. The articles of association are essential for internal management but do not have the force of law if they contravene statutory provisions.
  
  Judgment:
  The bench concluded that the articles of association cannot override the statutory provisions of Section 22A of the SCR Act, which ensures free transferability and registration of listed securities. The company's refusal to register the transfer of shares based on Article 47A was deemed contrary to the provisions of the SCR Act. Consequently, the bench directed the company to register the transfer of shares within ten days from the receipt of the order.
  
  Order:
  The transfer of shares involved in the four references shall be registered by Kinetic Engineering Limited within ten days from the date of receipt of this order. No orders as to costs.

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• 1991 (10) TMI 311
  
  Issues:
  Validity of detention order due to delay in disposal of representation
  
  Analysis:
  The detenue filed a petition challenging the validity of the detention order under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The detenue argued that there was undue delay in disposing of the representation, which violated Article 22(5) of the Constitution. The counter by respondent 1 acknowledged the delay in receiving comments from the Sponsoring Authority, attributing it to postal transmission. However, the delay remained unexplained, with no affidavit filed by the Sponsoring Authority to clarify the situation.
  
  The Court examined the explanations provided by respondent 1 and found them unsatisfactory. The delay of nearly 28 days in obtaining comments from the Sponsoring Authority was deemed unjustified. The Court rejected the argument that postal transmission caused the delay, as the explanation was not supported by evidence or affidavits. The Court also distinguished previous cases cited by respondent 1, emphasizing that those decisions were not applicable to the current situation due to differences in facts and delays involved.
  
  Citing previous judgments, the Court highlighted the importance of expeditiously considering and disposing of representations under Article 22(5) of the Constitution. The Court referred to cases where unexplained delays in forwarding comments had led to the quashing of detention orders. In the present case, the Court concluded that the undue and unexplained delay in disposing of the detenue's representation rendered the detention order invalid.
  
  As a result, the Court set aside the impugned detention order and directed the detenue to be released immediately unless there were other valid reasons for detention. The writ petition filed by the detenue was allowed, ruling in favor of the petitioner due to the unjustified delay in handling the representation.

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