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2014 (10) TMI 1086
Entitlement to recovery rights - breach of conditions of insurance policy when the driver possesses valid driving licence for driving light vehicle but fails to obtain endorsement for driving goods vehicle - HELD THAT:- In Annappa Irappa Nesaria [2008 (1) TMI 983 - SUPREME COURT], this Court referred to the provisions of Section 2(21) and (23) of the Motor Vehicles Act, 1988, which are definitions of 'light motor vehicle' and 'medium goods vehicle' respectively and the rules prescribing the forms for the licence, i.e. Rule 14 and Form No. 4. It was concluded that 'it is evident that "transport vehicle" has now been substituted for "medium goods vehicle" and "heavy goods vehicle". The light motor vehicle continued, at the relevant point of time to cover both "light passenger carriage vehicle" and "light goods carriage vehicle". A driver who had a valid licence to drive a light motor vehicle, therefore, was authorised to drive a light goods vehicle as well.'
In S. Iyyapan [2013 (7) TMI 1249 - SUPREME COURT], the question was whether the driver who had a licence to drive 'light motor vehicle' could drive 'light motor vehicle' used as a commercial vehicle, without obtaining endorsement to drive a commercial vehicle. It was held that in such a case, the Insurance Company could not disown its liability.
Conclusion - There was no breach of any condition of insurance policy, in the present case, entitling the Insurance Company to recovery rights.
The impugned order set aside - appeal allowed.
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2014 (10) TMI 1085
Dishonour of Cheque - insufficiency of funds - vicarious liability of Company Secretary and independent non-executive Directors - Section 141 of the NI Act - HELD THAT:- On perusal of proviso of Section 141 of the NI Act, it is manifestly clear that what is required is that the persons who are sought to be made vicariously liable for a criminal offence under Section 141 of the Act should be, at the time when the offence was committed, incharge of and responsible for the conduct of the business of the company - Section 141 of the Act is a penal provision creating vicarious liability and which as per settled law must be strictly construed. It is, therefore, not sufficient to make a bald cursory statement in a complaint and that the Director (arrayed as an accused) was incharge of and responsible for the conduct of the business of the company without anything more as to the role of the Director. The complainant should spell out as to how and in what manner the petitioner was incharge or was responsible to the accused company for the conduct of its business.
In a catena of decisions, it was held that for making Directors liable for the offences committed by the company under Section 141 of the Act, there must be specific averments against the Directors showing as to how and in what manner, the Directors were responsible for the conduct of the business of the company. The facts of every case have to be analyzed on the touchstone of the various judgments of the Supreme Court on the law on vicarious liability under Section 141 of the NI Act.
In the instant case, there is no specific allegation against the petitioners that they were responsible and incharge of day-today affairs of the business of the company and therefore, the petitioners are not covered under proviso to Section 141 of the NI Act.
Conclusion - For making Directors liable for the offenses committed by the company under Section 141 of the Act, there must be specific averments against the Directors showing as to how and in what manner, the Directors were responsible for the conduct of the business of the company.
The impugned order is set aside - petition disposed off.
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2014 (10) TMI 1084
Dishonour of cheque - liability of petitioners being former directors of a company u/s 138 of the Negotiable Instruments Act, 1881, for cheques issued after their resignation from the company had been accepted - HELD THAT:- The present petitioners had resigned on 10. 10. 2011 and their resignations have been accepted by a Resolution passed by the Board of Directors on 18. 11. 2011. The mere fact that Company Secretary has mentioned the date of meeting wrongly as 10. 10. 2011 instead of 18. 11. 2011, is no ground to say that a false record has been prepared. The Directors have resigned from the Directorship and their resignations have been accepted, therefore, they are not supposed to upload Form No. 32 etc. as per provisions of the Company Act. It is for the Company Secretary to upload the form and if the Company Secretary commits any mistake, the present petitioners are not responsible for that - when the cheques were issued by the Company on 21. 06. 2012, the present petitioners were not the Directors and they cannot be held liable if the cheques in question were bounced.
Conclusion - The present petitioners have already resigned and their resignations have already been accepted by the Board of Directors and at the time of issuance of cheques, they were not the Directors or dealing with the affairs of the Company, therefore, they are not liable for the bouncing of the cheques.
Petition allowed.
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2014 (10) TMI 1083
Non-prosecution of appeal by assessee - notice issued to the assessee by Registered Post on the address given by the assessee in Form No. 36 Column No. 10 but assessee nor it’s authorized representative appeared nor filed an application for adjournment - HELD THAT:- Keeping in view of the facts and circumstances we are of the view that no useful purpose would be served to issue notice again and again to the assessee on the same address. Therefore, we are of the view that assessee is not interested to prosecute the matter in dispute and the present appeal is dismissed as un-admitted in limine. Therefore, we dismiss the same for non-prosecution. Appeal filed by the assessee is dismissed for non prosecution.
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2014 (10) TMI 1082
Direction to respondent/Competition Commission of India to consider his candidature for engagement as an Expert in the field of law, by giving weightage to his qualifications and experience - HELD THAT:- It is a settled law that when an employer invites applications for appointment to a particular job, it is his prerogative to stipulate the educational qualifications and other criteria for selection to the post, including seeking documents to establish the work experience, etc., gained by a candidate.
If a candidate is called upon to submit certain documents to establish his educational qualifications and demonstrate his work experience, then an application devoid of the relevant details and lacking in the supporting documents would have to be treated as incomplete and be liable to be rejected at that stage. Admittedly, the petitioner herein had submitted his application without the supporting documents as prescribed by the respondent/CCI. In such circumstances, the respondent/CCI cannot be blamed for treating the petitioner’s application as incomplete in all respects and resultantly, refusing to shortlist him for the interview that was held in the first phase in June, 2012 and in the second phase in October, 2012.
This Court is of the opinion that the respondent/CCI was justified in declining to consider the petitioner’s application for engagement as an Expert in the field of Law. There was no material placed before the respondent/CCI to assess the petitioner’s expertise in the field of law so as to arrive at any reasonable conclusion. It is fallacious on the part of the petitioner to contend that the certificate of enrollment issued by the Bar Council of Delhi in the year 2006 was sufficient for the respondent/CCI to infer that he had been practicing as a lawyer in the courts ever since then.
Conclusion - The respondent/CCI cannot be faulted for declining to consider his application for appointment to the subject post, the same not being in order and not fulfilling the requirements stipulated in the notice dated 28.03.2012.
The present petition is dismissed as being devoid of merits.
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2014 (10) TMI 1081
Seeking a direction to respondent No.1-CCI to frame and decide the issue of jurisdiction prior to passing of orders on merits of the cases and deferring the matters until final adjudication by the Supreme Court - HELD THAT:- This Court is of the opinion that it would be futile to ask respondent no. 1-CCI to re-decide the issue of jurisdiction and that too as a preliminary issue! Consequently, no preliminary issues are warranted in the facts of the present cases.
Though this Court in proceedings under Article 226 has the jurisdiction to pass an order directing the respondent no. 1-CCI to hear and decide the preliminary issue of jurisdiction, yet it is of the opinion that a writ petition is not maintainable as a matter of right for seeking framing of a preliminary issue in any proceeding pending before a statutory or quasi- judicial body. It is pertinent to mention that Section 36 of the Act, 2002 gives power to respondent no.1-CCI to regulate its own procedure.
The present writ petitions and applications are dismissed.
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2014 (10) TMI 1080
Oppression and mismanagement - Appointment of Administrator and Committee of Management replacing the Board of Directors and issuing further directions for running of the company - Whether a case for interference with an equitable order passed by the Company Law Board is made out? - HELD THAT:- What appears from the material on record is that it is clear the promoters were running this business in a profitable manner. Now the respondents have invested up to 51% in the shareholding. Under the said agreement substantial portion of the amount is already paid and invested. A letter extracted in the impugned order shows the relationship between the CEO – the 3rd respondent – Managing Director and the Chairman of the Company is strained. The Chairman is from the group of promoters. Managing Director is from the group of investors.
The grievance of the petitioners is that the Managing Director is not consulting or taking the Chairman into confidence. The grievance of the CEO is that the Chairman is coming in the way of Managing and therefore, it is not possible to run the business in a peaceful manner. Though on the day the agreement was entered into there were 12 out lets. Subsequently another 12 outlet were added. Though there is no audit report by a statutory auditor as he could not be appointed because of difference of opinion between the petitioners and the respondents relating to audit report, yet according to him shows some of the out lets have been closed - in order to achieve the said object the order replacing the Board of Directors, is too harsh. After passing the said order liberty is given to the factions to appoint two members/groups in the committee of management. As a consequence equal opportunity is given to both the factions in the existing Board of Directors. There are no justification to appoint persons other than the persons who are already Directors in the interest of the two factions. In fact the Chairman belongs to one faction, the Managing Director belongs to another faction.
Now that this Court has already appointed a statutory auditor to audit the accounts for two years and interim orders are passed to protect the interest of both the persons, the order passed by the Board could be modified appointing the learned Judge as Administrator permitting him to participate in the Board meetings where both the sides are represented equally and to ensure that the affairs of the company are conducted in accordance with law and to assist them in case of any divergence of opinion. That would meet the ends of justice.
There are no justification to appoint Mr. M.R. Gopinath as the advisor. The order passed by the Board replacing the Board of Directors is hereby set aside. Learned administrator and the Directors, who are already on Board and who are running the administration could continue to run the business. Having regard to the nature of business itself between the parties, it is a fit case where the Company Law Board should take up the main matter out of turn and dispose of the petition itself expeditiously including the application filed invoking Section 8 of the Arbitration and Conciliation Act and pass appropriate orders at the earliest.
As the application under Section 8 of the Arbitration and Conciliation Act is already pending, it will be appropriate to decide the application as expeditiously as possible. If the application is to be allowed the entire petition would go out of jurisdiction of the Company Law Board. The said application is to be disposed of within a period three months from the date of communication of this order.
Application disposed off.
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2014 (10) TMI 1079
Collective investment scheme - violation of Section 12(1B) of the Securities and Exchange Board of India Act, 1992 and Regulation 5(1) read with Regulation 68(1), 68(2), 73 and 74 of the Securities and Exchange Board of India Collective Investment Scheme and Regulations, 1999 - as contended by the petitioner that he resigned from the company from the post of Director as early as on 18.11.1998 itself - Prosecution against director - whether any individual notice was issued to the petitioner to ascertain whether he was a Director of the first accused company during the relevant time, the learned counsel submitted that no such notice was issued?
HELD THAT:- It may be true that the first accused company had given information that the petitioner was also a Director of the company during the relevant time, but the respondent ought not have been satisfied with the said information, instead, the respondent ought to have verified with the Registrar of Companies before launching the prosecution. Thus, the respondent has failed to do so. The proceedings of the Assistant Registrar of Companies, which has been produced before this Court, shows that the petitioner was not a Director of the company with effect from 18.11.1998. Thus, it is crystal clear that the petitioner was not a Director of the first accused company during the relevant time in the year 1999, when the Regulation came into force and therefore, the prosecution of the petitioner is not sustainable.
This criminal original petition is allowed.
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2014 (10) TMI 1078
Deduction u/s 54F - Taxability of compensation received by the assessee from the developer under the head ‘capital gains - assessee has given his old flat and obtained compensation amount and new flat - agitating the taxing of the monitory value of the additional area of 210 sq. ft. under the head ‘capital gains’ - entitlement to deduction u/s 54F - HELD THAT:- The assessee along with other owners of the flat and the society has collectively handed over the land and flats for re-development, meaning thereby, the existing right of the assessee over his flat got extinguished and in lieu thereof the assessee has obtained a compensation of Rs. 11,00,000/- and a new flat having an area of 660 Sq.ft. Hence, in our view, the Ld CIT (A) was justified in holding that the impugned transaction is liable for Capital gains tax.
We are of the view that the value of new flat and the compensation received is to be considered as the sale consideration received on giving of old flat. Against the same, the assessee is entitled to deduct the indexed cost of acquisition of old flat and the indexed cost of improvement, if any, incurred in respect of that flat in order to arrive at the Capital gain. Since the new flat is obtained on transfer of old flat, the assessee’s claim for deduction u/s 54 of the Act is also justified, i.e., the assessee is entitled to avail deduction u/s 54 of the Act in respect of the cost of the new flat.
Accordingly, we modify the order passed by Ld CIT (A) and restore the matters to the file of the assessing officer with the direction to compute the capital gain in terms of the discussion made supra. Needless to mention, the assessee should be given necessary opportunity of being heard. Assessee appeal allowed.
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2014 (10) TMI 1077
PIL seeking a mandamus directing the CBI to register a case and to undertake investigation in accordance with law on the basis of the statements in a blog (website) about the continuation of an Additional Judge in Madras High Court - commission of various cognizable offences including the offences under the Prevention of Corruption Act, 1988 and Sections 217 and 218 of Indian Penal Code, 1872 (IPC) relating to screening of offenders - HELD THAT:- The validity of the permanent appointment of the Additional Judge of Madras High Court, whose extension of term as Additional Judge was referred to in the blog, was in fact considered by the Supreme Court in a Public Interest Litigation in SHANTI BHUSHAN VERSUS UNION OF INDIA [2008 (12) TMI 448 - SUPREME COURT]. The allegation was that the appointment was in violation of the law declared in SUPREME COURT ADVOCATES ON RECORD ASSOCIATION AND S.P. GUPTA VERSUS U.O.I. [1993 (10) TMI 352 - SUPREME COURT] that the opinion of the Chief Justice of India has to be formed collectively after taking into account the views of his senior colleagues who are required to be consulted by him for the formation of opinion. It was alleged by the petitioner therein that no such opinion was formed.
The controversy relating to the extension of the term of the said Additional Judge has already been set at rest. Moreover, the learned Judge had retired on attaining the age of superannuation on 02.07.2009 and he had also expired shortly thereafter. That being so, we are unable to understand as to how the matter involves public interest to direct an investigation by CBI at this stage, that too on the basis of the statements made on a blog.
Reference made to the well settled principle of law that the Courts should be fully satisfied that substantial public interest is involved before entertaining the petition filed as a PIL and that the Courts before entertaining the PIL should ensure that the same is aimed at redressal of genuine public harm or public injury. The petitioner should be in a position to demonstrate that he is moving the process of law for the benefit of unrepresented or under-represented strata of the society.
It is not required to entertain the writ petition and the same is accordingly dismissed.
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2014 (10) TMI 1076
Regularization of casual employees - petitioners were engaged on temporary basis and sought a relief to the effect that a direction be issued to the respondents to formulate a policy in regard to regularize service of the petitioners alongwith other similarly situated persons in view of the fact that large number of posts were falling vacant - tribunal observed that the petitioners failed to produce all the requisite informations/ details to satisfy their claim for regularization in service
HELD THAT:- Since the petitioners failed to establish any legal right to the effect that their appointment was in accordance with law, the learned tribunal has rightly rejected the application of the petitioners in view of the judgment rendered in the case of Secretary, State of Karanataka & others Vs. Uma Devi (supra).[2006 (4) TMI 456 - SUPREME COURT] which provided that the employees who had rendered services continuously for ten years without the cover of the court's order be regularized as the onetime measure. Petition dismissed.
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2014 (10) TMI 1075
Denial of Liability towards interest expenditure - HELD THAT:- Identical issue arose before the Bench for A.Y. 2000-01 and following the decision of the Tribunal in the case of M/s Eminent Holdings Pvt. Ltd. [2014 (7) TMI 2 - ITAT MUMBAI] wherein the decision of Hitesh S. Mehta [2013 (10) TMI 1065 - ITAT MUMBAI] was followed and finally the issue was set-aside to the file of the ld. CIT(A) for fresh adjudication with a direction to grant a reasonable opportunity of being heard on the issue and thus was allowed for statistical purposes. Following the reasoning, being identical facts/issue before us we remand this issue to the file of the ld. CIT(A) for fresh adjudication.
Calculation of book profit u/s 115JB - Since, we have remanded the aforesaid ground of not granting relief of liability towards interest expenditure claimed by the assessee to the file of the ld. CIT(A), therefore, the grievance of the assessee will depend upon the outcome of the decision to be taken with respect of aforesaid ground no. 4. Consequently, this ground is consequential to the above - this ground is allowed for statistical purposes.
Charging of interest u/s 234A, 234B and 234C - HELD THAT:- Agreed, levy of interest is mandatory and sometimes consequential depending upon the facts of each case. We note that identical issue arose before the Tribunal in the aforesaid cases therefore following the reasoning contained therein we direct the AO to recomputed the interest liability after reducing the amount of tax deductable at source. This ground is allowed for statistical purposes.
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2014 (10) TMI 1074
Direction to appellant to allow him to join duty as Professor (Management) - HELD THAT:- The conclusion is irresistible, that the principles laid down in SELVIN ABRAHAM VERSUS PUNJAB & SIND BANK [2013 (6) TMI 928 - KERALA HIGH COURT] are contrary, not only to the Full Bench judgment in NAIK NAKUL DEO SINGH VERSUS THE DEPUTY COMMANDANT, C.I.S.F. AND ORS. [1999 (8) TMI 1022 - KERALA HIGH COURT] but also to the Apex Court judgments referred to. As a result, Selvin Abraham does not laid down good law and therefore, is overruled.
There are no averment in the writ petitions where the petitioners have raised any plea as to how the Kerala High Court has territorial jurisdiction over the cause of action which led them to file the writ petitions. Instead, counsel wanted us to infer from the above pleading that an integral part the cause of action arose within the jurisdiction of this Court. However, if the facts which noticed above are evaluated in the light of the law laid down in Nakul Deo Singh and the Apex Court judgments, the only conclusion that is possible is that no part of the cause of action, much less any integral part of the cause of action, has arisen within the territorial jurisdiction of this Court justifying the entertainment of these writ petitions.
The Division Bench judgment in Selvin Abraham v. Punjab & Sind Bank is overruled - petition dismissed.
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2014 (10) TMI 1073
LTCG - Deduction u/s 54-F - exemption on capital gains on sale of flat on acquisition of two houses - HELD THAT:- Assessee fairly conceded that this issue is covered in favor of the Revenue by the decision of the Punjab and Haryana High Court in the case of Pawan Arya vs. CIT [2010 (12) TMI 44 - PUNJAB AND HARYANA HIGH COURT] stating as regards claim for exemption against acquisition of two houses u/s 54 of the Act, the same is not admissible in plain language of statute.
As in CIT vs. D. Ananda Basappa [2008 (10) TMI 99 - KARNATAKA HIGH COURT] referred to in the impugned order, exemption against purchase of two flats was allowed having regard to the finding that both the flats could be treated to be one house as both had been combined to make one residential unit. The said judgment, thus, proceeds on a different fact situation.
Status of assessee as 'HUF' instead of 'Individual' - ownership in land in question - During the assessment proceedings itself, assessee came to know about the correct legal position that the subject property belongs to the individual and not to HUF and made detailed submissions supported by evidences to establish that the impugned land was the property of the “individual” and not the property of HUF and capital gain tax liability can not be raised in its hands.
Following pleadings and evidences would establish that the land in question was the property of individual and not the property of HUF and thus, any capital gain arising on the transfer of such land would not be the income of the HUF.
As decided in Khimji Teju Kaya reported [1977 (11) TMI 26 - BOMBAY HIGH COURT] held that self acquired property of the father bequeated to Son by Will would constitute individual property and even if income from such property was shown in the return as HUF income, the income from that property is to be assessed in individual capacity.
We also find that Ld. Counsel of the assessee at the time of hearing has also filed the copy of income tax return of Sh. Sunny Choudhary, who is brother of the assessee and other co sharers which shows that the same was filed in the capacity of "individual". Thus we find that both the assessees come under the individual capacity instead of HUF category.
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2014 (10) TMI 1072
Brought forward depreciation - Disallowance made as unabsorbed depreciation can be carried forward only for eight assessment years - scope of Section 32 as amended by Finance Act 2001 - HELD THAT:- As respectfully following the decision of General Motors India (P.) Ltd [2012 (8) TMI 714 - GUJARAT HIGH COURT] hold that in the present case the unabsorbed depreciation is covered by the provisions of Section 32(2) of the Act, as amended by Finance Act, 2001 and is therefore available for carry forward and set off against the profits and gains of subsequent years. We, thus, allow this ground of the assessee.
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2014 (10) TMI 1071
Seeking execution of an ex parte Award - whether the Award dated 9.5.2005 was an Award/decree which was illegal, non est and void in law and therefore could not be executed inasmuch as effectively the Award was passed for enforcement of protection money amounts? - HELD THAT:- The executing court by reference to Sections 23 and 24 of the Indian Contract Act, 1872 has held the agreement to be illegal/non est/void by holding that really the agreement pertains to basically protection money being payable by the bus owners to the petitioner. The executing court has also observed that issues which are raised in the agreement effectively make the petitioner a super traffic police man under the Motor Vehicles Act, 1988 and which position is inconceivable in law.
Executing court has also referred to the judgment of the Supreme Court in the case of Jaipur Development Authority Vs. Radhey Shyam and others for holding that an illegal Award cannot be executed.
The contention urged on behalf of the counsel for the respondent agreed upon, that really the amount received under the Agreement dated 6.10.2004 was protection money being paid when the buses used to ply through 'area' under the 'control' of the petitioner. Surely, the petitioner is not a Traffic Inspector under the Motor Vehicles Act or any other designated authority under the Motor Vehicles Act and therefore if the petitioner is given money by each bus owner running buses on route no. 212 it can only be because either the petitioner was a 'saint' who was trusted by all the bus owners for disciplining the bus owners or actually the petitioner is a notorious person who was taking money in the guise of the Agreement dated 6.10.2004, and in my opinion, actually it is the latter which the petitioner is and with respect to which aspect one is left in doubt when one reads the clauses of the Agreement dated 6.10.2004 and the reasoning given by the executing court below.
The issues which have been raised and decided by the impugned judgment were therefore not decided by the court in which objections were filed under Section 34 of the Arbitration and Conciliation, 1996. An Award which is a nullity being against public policy can always be challenged even at the stage of execution inasmuch as, if we take a most extreme example that an Award is passed that 'A' will steal money for 'B' then surely 'B' cannot enforce the Award/decree stating that 'A' should give him particular amount of money which was to be stolen by 'B' for being given to 'A'.
There is no merit in the petition which is an abuse of the process of law and is therefore dismissed with costs of Rs.1,00,000/- to be deposited within a period of four weeks with the Prime Minister's National Relief Fund - It is clarified that in case the respondents have paid any amount to the petitioner pursuant to the illegal Award dated 09.2.2005, the respondents are entitled to restitution under Section 144 of Code of Civil Procedure, 1908 (CPC) and other powers of restitution provided in law alongwith the interest @ 12% per annum simple. The restitution proceedings can be initiated in the executing court itself by the respondents.
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2014 (10) TMI 1070
Maintainability of FIR - any prima facie case disclosed by the FIR and the materials collected during the course of investigation - applicability of ingredients of the offences under Sections 294A, 420, 120b, 467, 468 and 471 IPC - amount seized is accounted one representing part of the sale consideration for sale of the property belonging to A3 and the same is duly reflected in the income tax returns and is also duly accepted by the competent Income Tax authority.
HELD THAT:- The Hon'ble Apex Court in the decision DEVENDRA & ORS VERSUS STATE OF U.P. & ANR. [2009 (5) TMI 921 - SUPREME COURT] held that the High Court ordinarily would exercise its jurisdiction under Section 482 of the Code of Criminal Procedure if the allegations made in the first information report, even if given face value and taken to be correct in their entirety, do not make out any offence. When the allegations made in the first information report or the evidence collected during investigation do not satisfy the ingredients of an offence, the superior courts would not encourage harassment of a person in a criminal court for nothing. Only in this legal premises, the facts of the present case are to be gone into, to find out whether any ground is made out to quash the proceedings.
As far as the act of forgery of valuable security and the act of forgery for the purpose of cheating and using the forged document as genuine punishable under sections 467, 468 and 471 are concerned, what is the act of forgery and act of forgery of valuable security is defined under Sections 463 and 467 IPC. The reading of the relevant provisions of law would disclose that the same involves making of false document with illegal intention. Further, Section 468 IPC defines forgery for the purpose of cheating, as an act of forgery coupled with an intention that the document or electronic record forged shall be used for the purpose of cheating. That being so, the execution of any agreement between two persons in non judicial stamp paper even assuming by correcting the dates, will not amount to create a false document.
As a matter of fact, the mode of act of forgery is whether by correcting the dates or by creating non judicial stamp papers, is not mentioned in the alteration report. The case of the prosecution in this regard is that the sale agreement was created in the stamp papers, which were sold to public on 13.3.2012.
As far as the present case is concerned, the custody of unaccounted money is not specified to be an offence and the act of creating anti dated document by allegedly using forged non judicial stamp papers is also not specified as offence under the Code. When that being so, it cannot be assumed that the accused are punishable for the offences under sections 467, 468 and 471 IPC - it cannot be said that the parties have gained anything out of creating such document. If that is so, applying the views of the Hon'ble Apex court, no case for the act of forgery can be said to be made out against the accused in the present case.
Other section charged against the petitioners and others is the offence punishable under section 294A IPC. The accused are charged for the same, based on further confession statement of A1 dated 16.3.2012. A1 has in his further so called confession statement, allegedly admitted his keeping one office in his house at Chennai, wherein, 3000 expired lottery tickets were kept by him and the same were seized on being identified by A1. The learned senior counsel for the petitioners would seriously attack this part of the allegation to be highly improbable - This court finds greater force in the argument so advanced on the side of the accused.
This court is of the view that neither the case of the prosecution do disclose any of the ingredients of the offences charged against the accused nor the accused can be subjected to face the ordeal of trial by reason of improbable nature of prosecution case, as such, the FIR pending on the file of the respondent police is liable to be quashed in entirety against the petitioners herein as well as non petitioners.
Petition allowed.
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2014 (10) TMI 1069
Dishonor of Cheque - validity of legal notice - Security cheque - legally enforceable debt or not - Fine or compensation as per section 138 of NI Act - authority to institute the complaint - HELD THAT:- A bald suggestion was given to this witness that he was in fact not authorized to file the present complaint. However, these submissions do not detract from the veracity of the document which is the authorization dated 26.9.1995 (Ex. PW-3/A) which specifically states that PW-3 namely Deepak Rai Srivastava was authorized by the company through resolution circulated in the 136th Board Meeting held on 09.06.1992 (as referred in Ex PW3/B) to file the present complaint. The power of attorney Ex. PW-3/B executed by the company in March, 1999 authorized him to institute and pursue all cases on behalf of the complainant company. There is no attack on these documents; they are authentic and valid. The authorization letter (Ex. PW-3/A) validly authorized PW-3 to institute and pursue the complaint.
Section 142 of the Act provides that a complaint under Section 138 of the Act can be made by the payee or the holder in due course. This complaint has admittedly been filed in the name of, and on behalf of the company - In the case of Associated Cement Co. Ltd. Vs. Keshvanand [1997 (12) TMI 629 - SUPREME COURT], the Court had held that the complainant has to be a corporeal person who is capable of making a physical appearance in the Court. There may also be occasions that different persons would represent the company. It is open to the de jure complainant to seek permission of the Court for sending any other person to represent the company in the Court. In that case the Court had held that even presuming that initially there was no authority, still the company can at any stage rectify that defect.
Validity of the legal notice - HELD THAT:- No suggestion had been given to witness that the notice had not been received by the company or that they had not filed their reply Ex. PW-3/E. It was only in the statement of the petitioners under Section 313 Cr.P.C. that under legal advice a false defence has been sought to be set up that no such legal notice had been received by this Court. If this was the position, this fact should have been disputed by the petitioners right from the inception i.e. during the course of cross-examination of PW-3. No such defence having been propagated, it is a clear case where the defence has now been set up as an afterthought.
The complaint discloses the date of legal notice as 12.8.1996. The fact finding of the Court below i.e. the Court of the Magistrate has rightly noted that this can only be a typographical error as the date in Ex. PW-3/C is 16.8.1995. Reply to this legal notice Ex. PW-3/E had acknowledged the liability qua the complainant company and in part payment, sum of Rs. 5,00,000/- had been sent vide their communication dated 29.8.1995. This letter has also not been challenged in the cross-examination of PW-3 when he had proved this document - This Court also notes that it is an admitted fact that as per the complainant a common legal notice had been sent qua all the transactions between the parties; there were seven transactions and in the reply by the petitioner company on 29.8.1995 it had enclosed a cheque of a part payment of Rs. 5 lac. This argument has also dealt with by both the fact finding Courts below and had been answered in favour of the complainant.
Security Cheques or not - legal debt or liability by the petitioner to the complainant or not - HELD THAT:- In the instant case, since the payment was not made against all the supplied goods, the security cheques got converted into normal cheques against consideration of the goods supplied and therefore they were not to be considered as security cheques. This was explained in the complaint. PW-3 on oath has also reiterated this position. He deposed that after the supply of the goods, the accused had not given a separate cheque. The cheque in question was presented to the bank which was returned along with the returning memo after having been dishonoured for the reason "Exceeds Arrangement". Marks DA and DB which is a letter and fax message exchanged between the parties only sought expedition of the dispatch of the goods. Neither of these communications state that the goods had not been supplied by the complainant company and as such the payment was not due to the complainant company. The fact finding courts after the scrutiny of these documents had also noted that these documents had not been proved and could not really be read in evidence as they were only photocopies of the original; even otherwise they did not advance the version of the petitioners that the goods had not been supplied by the complainant company - The presumption under Section 118 of the N.I. Act did not stand rebutted. The cheque had been issued for valid legal consideration.
Fine or compensation as per section 138 of NI Act - HELD THAT:- Under sub-section 3, where a fine has not been imposed, the Court may order the payment of compensation. A reading of Section 357(4) Cr.P.C. makes it clear that under this sub-section an order of compensation can be passed by the appellate Court; the High Court or by the Court of Sessions in revision. The power of the Court to award compensation is not ancillary to other sentences but is in addition thereto. This power under this Section has a message i.e. a measure of responding properly to the crime as also reconciling the victim with the offender - An amount of 'compensation' can be directed to be recovered as a fine but a legal fiction is raised in relation to recovery of 'fine' and in that sense a 'fine' stands on a higher footing than the 'compensation' awarded by the Court. Although, after the amendment in the said Act (by the Amendment Act, 2002) a Magistrate of the first class can also impose a sentence of fine exceeding Rs. 5000/-.
The object of 'fine' and 'compensation' is the same i.e. to compensate the victim. The purpose of fine and compensation being the same; i.e. to assuage the grievance of the complainant, the sentence imposed by the Sessions Judge of a compensation of Rs. 50 lac (noting the cheque was to the tune of Rs. 1,19,80,800/-) suffers from no infirmity.
Petition dismissed.
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2014 (10) TMI 1068
Requirement of obtaining of licence under the relevant Licensing Order/s of the State Government or under the Karnataka Police Act, 1963 - HELD THAT:- Undisputedly, this writ petition is identical to CHELOORU MERCHANT AND OFFICIAL RECREATION VERSUS THE GOVERNMENT OF KARNATAKA HOME DEPARTMENT; THE COMMISSIONER OF POLICE, BANGALORRE; SUPERINTENDENT OF POLICE; DEPUTY SUPERINTENDENT OF POLICE; CIRCLE POLICE INSPECTOR; INSPECTOR OF POLICE CHICKABALLAPUR [2014 (10) TMI 1067 - KARNATAKA HIGH COURT] where it was held that Regulatory mechanism is required, to check the illegal activities, if any, in the club(s) / association(s), registered as a society, under the Karnataka Societies Registration Act. When the club/association allows its member(s) to play games with stakes or make any profit or gain out of such games, police has the authority to invoke the provisions of the Act.
The petitioner shall install within a period of six weeks, CC TV cameras, at all the places of access to its members and also at all the places, wherein game(s) is/are played by the members. The CC TV footage of at least prior 15 days’ period shall be made available by the petitioner, to the police, as and when called upon to do so.
Petition disposed off.
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2014 (10) TMI 1067
Seeking direction to respondents not to insist upon the obtaining of licence under the relevant Licensing Order/s of the State Government or under the Karnataka Police Act, 1963 - petitioner contended that only lawful activities are being carried on in the premises of the petitioner and that no game(s) of chance or event(s) of public amusement are being conducted in the petitioner’s premises - HELD THAT:- In RAMA RECREATION ASSOCIATION Vs. COMMISSIONER OF POLICE, [1993 (10) TMI 374 - KARNATAKA HIGH COURT], after referring to the definition of ‘place of public amusement’ and ‘place of pubic entertainment’ under Ss.2(14) & 2(15) of the Act, it was held that a Club is a place in which only its members are permitted to engage in any diversion or recreational activities etc. and such an association need not take out a licence under the Licensing Order.
There is no denial of the fact that there is mushroom growth of the societies like that of the petitioner and that the modus operandi is not what it appears to be on paper and bye-laws / memorandum of association etc. Regulatory mechanism is required, to check the illegal activities, if any, in the club(s) / association(s), registered as a society, under the Karnataka Societies Registration Act. When the club/association allows its member(s) to play games with stakes or make any profit or gain out of such games, police has the authority to invoke the provisions of the Act.
In DURGAPARAMESHWARI RECREATION ASSOCIATION Vs. GOVERNMENT OF KARNATAKA AND OTHERS, [2013 (3) TMI 872 - KARNATAKA HIGH COURT], it was held that the respondents should not interfere with lawful activities of the petitioner – club. However, it was made clear that the respondents are permitted to take action in accordance with law, in case, the petitioner indulges in any unlawful activity.
Thus, all the legal points raised by the learned advocates stand covered by the Orders / Judgments referred to hereinabove and hence, a further examination of the contentions is unnecessary.
The petitioner shall install within a period of six weeks, CC TV cameras, at all the places of access to its members and also at all the places, wherein game(s) is/are played by the members. The CC TV footage of at least prior 15 days’ period shall be made available by the petitioner to the police, as and when called upon to do so - petition disposed off.
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