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1981 (11) TMI 200
1. ISSUES PRESENTED and CONSIDERED Several core legal questions were considered in this judgment: - Whether the reversion of Dr. Jiwan Lal and Dr. (Mrs.) Damyanti Kapur from their posts as Deputy Directors of Health Services was illegal and violated their conditions of service and constitutional provisions. - Whether the seniority list of specialists, as indicated in the Office Memo dated 2.11.1979, was correctly prepared, and whether Dr. R.M. Bali's seniority should be reassigned. - Whether the appointment of Dr. S.P. Kapoor as Director of Health Services was valid, considering the qualifications and seniority requirements. - Whether the Departmental Promotion Committee was properly constituted and whether it acted fairly in considering the annual confidential reports for promotions. - Whether the rotation of specialists and Grade I officers for the post of Director of Health Services was correctly initiated. 2. ISSUE-WISE DETAILED ANALYSIS Reversion of Dr. Jiwan Lal and Dr. (Mrs.) Damyanti Kapur: - The relevant legal framework includes the Himachal Pradesh Health Services Rules, 1974. The court considered whether the appointments of Dr. Jiwan Lal and Dr. (Mrs.) Damyanti Kapur were regular or ad hoc. The court found that their appointments were ad hoc and thus did not confer a right to the post or seniority. - The court reasoned that ad hoc appointments do not confer a right to hold the post permanently or claim seniority. - The evidence showed that their appointments were made on an ad hoc basis, and the court applied the law to affirm that they could not claim regular appointments or seniority based on such appointments. Seniority List and Appointment of Dr. R.M. Bali: - The legal framework involved the fixation of seniority under the Himachal Pradesh Health Service Rules. The court examined whether seniority should be based on entry into the Central Health Service or prior service in the Punjab Civil Medical Service. - The court interpreted the rules to determine that seniority should be based on the date of induction into the Central Health Service rather than prior service in the Punjab Civil Medical Service. - The court found that Dr. R.M. Bali was senior to Dr. S.P. Kapoor based on his earlier induction into the Central Health Service. - The court concluded that the seniority list should be modified to reflect this finding. Appointment of Dr. S.P. Kapoor as Director of Health Services: - The court examined whether Dr. S.P. Kapoor met the qualifications and seniority requirements for the post of Director of Health Services. - The court found that the appointment was made in haste and that the Departmental Promotion Committee should reconsider the appointments based on the revised seniority list. Constitution of the Departmental Promotion Committee: - The court examined whether the Departmental Promotion Committee was properly constituted and whether it acted fairly. - The court found that the committee was constituted in haste and that the process of selection and appointment was questionable. - The court concluded that the matter required reconsideration due to the rushed nature of the appointments. Rotation of Specialists and Grade I Officers: - The court considered whether the rotation for the post of Director of Health Services was correctly initiated. - The court found that the rules were silent on which category should start the rotation, and the government had discretion to start with specialists based on their length of qualifying service. - The court upheld the government's decision to start the rotation with specialists. 3. SIGNIFICANT HOLDINGS - The court held that ad hoc appointments do not confer a right to hold a post permanently or claim seniority. - The court established that seniority should be determined based on the date of induction into the Central Health Service, not prior service in the Punjab Civil Medical Service. - The court directed that the seniority list be modified to reflect the correct seniority of Dr. R.M. Bali over Dr. S.P. Kapoor. - The court found that the Departmental Promotion Committee's actions were questionable due to the haste in appointments and required reconsideration of the appointments. - The court upheld the government's decision to start the rotation with specialists for the post of Director of Health Services. Final Determinations: - The appeal of Dr. S.P. Kapoor was allowed, and the appeal of Dr. Jiwan Lal was dismissed. - The court directed that the relative seniority be fixed according to the principles established in the judgment and that the selection of Deputy Directors and Director of Health Services be reconsidered.
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1981 (11) TMI 199
Issues Involved:
1. Whether the Magistrate becomes functus officio after dropping proceedings under Section 145(5), Cr.P.C., and lacks jurisdiction to pass any order relating to the disposal of the property.
2. Whether a person who has unsuccessfully fought a criminal revision case before the Sessions Judge can maintain a revision petition before the High Court under Sections 397 and 399, Cr.P.C.
Detailed Analysis:
1. Jurisdiction of Magistrate After Dropping Proceedings:
The primary issue is whether the Magistrate becomes functus officio upon dropping proceedings under Section 145(5), Cr.P.C., and thus lacks the jurisdiction to pass any further orders regarding the disposal of attached property. The court reviewed various judicial opinions and precedents on this matter.
The preponderance of judicial authority supports the view that the Magistrate does not become functus officio after dropping proceedings under Section 145(5), Cr.P.C. The Magistrate retains the jurisdiction to make incidental or consequential orders to wind up the proceedings and restore possession of the attached property to the party from whom it was taken. The court cited multiple cases to support this view:
- Smt. Kaniz Fatima Bibi v. State of Uttar Pradesh: The Magistrate has inherent powers to restore the status quo ante and pass incidental orders even after dropping proceedings under Section 145, Cr.P.C.
- Ram Lal v. Mangu: The Magistrate can make incidental orders to restore possession to the party from whom it was taken at the time of attachment, provided there is clear material on record.
- State v. Sheoratan Singh: The Magistrate should restore the status quo ante when jurisdiction under Section 145 is found wanting, and if it is not possible, retain the property in court custody and direct parties to seek remedies in a civil court.
- Chowdaiah v. Venkataramanappa: The Magistrate has inherent powers to pass orders regarding the delivery of property under attachment after cancellation of proceedings under Section 145(5), Cr.P.C.
The court concluded that the Magistrate has the jurisdiction to make incidental orders by way of winding up the proceedings and restore possession of the attached property to the party from whom it was taken. However, the Magistrate cannot conduct an enquiry to determine who was in possession at the time of the preliminary order.
2. Maintainability of Revision Petition Before High Court:
The second issue is whether a person who has unsuccessfully fought a criminal revision case before the Sessions Judge can maintain a revision petition before the High Court under Sections 397 and 399, Cr.P.C. The court examined the relevant statutory provisions and judicial interpretations.
- Section 397(3), Cr.P.C.: If an application has been made by any person either to the High Court or to the Sessions Judge, no further application by the same person shall be entertained by the other of them.
- Section 399(3), Cr.P.C.: The decision of the Sessions Judge in relation to such person shall be final, and no further proceeding by way of revision at the instance of such person shall be entertained by the High Court or any other Court.
The court clarified that the bar under Section 397(3) applies only to the same person who has already approached the Sessions Judge. It does not apply to other parties or persons who have not moved the Sessions Judge. The court cited relevant case law to support this interpretation:
- Joseph Abraham v. Thankamma: The finality of the Sessions Judge's order is confined to the person at whose instance the petition is moved.
- Re Puritipati Jagga Reddy: The bar under Section 397(3) is limited to the same person who has already chosen to go either to the High Court or the Sessions Court seeking a remedy.
Therefore, the revision application by the A party respondent, who unsuccessfully contested the revision application filed by the B party respondents, is maintainable.
Conclusion:
Based on the analysis, the court held that the Magistrate does not become functus officio after dropping proceedings under Section 145(5), Cr.P.C., and retains jurisdiction to make incidental orders to restore possession of the attached property. Additionally, the revision petition by the A party respondent before the High Court is maintainable despite the earlier revision before the Sessions Judge by the B party respondents. Consequently, the revision petition is allowed, the order of the Additional Metropolitan Sessions Judge, Hyderabad, is set aside, and the order of the Special Executive Magistrate, Hyderabad, is restored.
Revision Allowed.
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1981 (11) TMI 198
Issues Involved:
1. Testamentary capacity of the testator.
2. Suspicious circumstances surrounding the execution of the will.
3. Validity of the will's execution and attestation.
4. Appellate court's interference with the trial court's judgment.
Issue-wise Detailed Analysis:
1. Testamentary Capacity of the Testator:
The defendants contended that the testator, Ranendra Chandra Bose, was not in a physical or mental condition to execute a will on November 8, 1952. They argued that he was in a semiconscious state and lacked the testamentary capacity. The trial court found doubts about the testator's mental condition on the date of the will's execution. However, the High Court held that there was no suspicious circumstance relating to the will and satisfactorily explained any little suspicion.
2. Suspicious Circumstances Surrounding the Execution of the Will:
The appellants argued that the propounders failed to explain suspicious circumstances surrounding the will's execution. The Supreme Court reiterated that the onus is on the propounder to explain suspicious circumstances to the court's satisfaction. The Court examined the eleven suspicious circumstances enumerated by the appellants, including the concealment of the testator's illness, failure to produce the draft, non-examination of certain witnesses, and the relationship of the attesting witnesses to the propounders. The Court found these circumstances to be self-explained and not suspicious. For instance, the failure to remember specific dates was attributed to the long lapse of time, and the non-production of the draft was not seen as indicative of foul play.
3. Validity of the Will's Execution and Attestation:
The trial court had found the signatures of the testator and attesting witnesses on the will to be genuine but dismissed the suit due to doubts about the testator's mental condition. The High Court reversed this decision, granting probate of the will. The Supreme Court upheld the High Court's judgment, noting that the trial court's doubts were unfounded and that the will's execution and attestation were valid. The propounders had satisfactorily explained the circumstances, and the will was found to be fair and natural.
4. Appellate Court's Interference with the Trial Court's Judgment:
The Supreme Court discussed the principles under which an appellate court can interfere with a trial court's judgment. It cited precedents that emphasize the appellate court's reluctance to differ from the trial judge's conclusions based on witness impressions. However, if the trial judge's findings are based on inferences from documents and circumstances, the appellate court has the right to review these inferences. The Supreme Court agreed with the High Court's decision to set aside the trial court's judgment, finding that the trial court was wrong in holding that the circumstances were suspicious.
Conclusion:
The Supreme Court dismissed the appeal, agreeing with the High Court's judgment that granted probate of the will. The Court found no suspicious circumstances surrounding the execution of the will and upheld its validity. The trial court's doubts were deemed unfounded, and the High Court's interference was justified. The appeal was dismissed with costs.
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1981 (11) TMI 197
The High Court of Allahabad set aside the decision of the Additional Sessions Judge to grant benefit under Section 4 of the U.P. First Offenders Probation Act to accused convicted under Sections 307 and 324 of the Indian Penal Code. The case is remanded back to the Additional Sessions Judge for suitable sentencing. The revision is allowed.
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1981 (11) TMI 196
Issues:
1. Claim by the plaintiff bank against the company in liquidation and guarantors.
2. Objection raised by guarantors regarding liability after claim admitted by Liquidator.
3. Interpretation of Sections 128, 133, and 137 of the Contract Act.
4. Analysis of precedents on the liability of sureties and guarantors.
5. Determination of plaintiff bank's right to proceed against guarantors.
Analysis:
The Punjab National Bank filed a suit against Mehra Brothers (Private) Ltd. and guarantors for the recovery of a loan amount. The claim against the company was as a principal debtor, and against the guarantors was for guaranteeing the repayment of the loan. The company was in liquidation, and the Official Liquidator was appointed to represent it. The Official Liquidator admitted a portion of the claim and made a payment towards the first dividend. The plaintiff bank intended to proceed against the guarantors for the remaining sum claimed. An objection was raised by the guarantors, arguing that the claim acceptance by the Liquidator discharged their liability. Reference was made to Sections 128, 133, and 137 of the Contract Act to support this argument.
The guarantors contended that the acceptance of the claim by the Liquidator varied the contract and discharged their liability. However, the plaintiff bank argued that the liability of the guarantors remains unaffected even if the principal debtor is not sued. Precedents were cited to establish that the surety's liability is co-extensive with that of the principal debtor, and immediate, not deferred. The plaintiff bank's right to proceed against the guarantors was upheld, emphasizing that the claim admission by the Liquidator did not absolve the guarantors' liability. The court concluded that the plaintiff bank was entitled to pursue the guarantors in the suit, rejecting the objection raised by the guarantors.
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1981 (11) TMI 195
Issues Involved:
1. Whether the arbitration agreements relied upon by the plaintiff are void on account of undue influence and misuse of fiduciary position or non-compliance with the provisions of the Companies Act.
2. Whether there is sufficient cause for refusing to make arbitration on account of the circumstance of the case including the allegation of the defendant that the claim is belated.
3. Is the main contract containing the arbitration clause without consideration and hence the arbitration clause cannot be acted upon.
4. Whether mere failure to pay the amount claimed amounts to a dispute which would attract the provisions of the Arbitration Act.
5. Whether the disputes raised do not fall within the arbitration clause.
6. Relief.
Detailed Analysis:
1. Limitation:
The official liquidator argued that the application was barred by limitation under Article 137 of the Limitation Act, 1963, which prescribes a three-year period from when the right to apply accrues. The contention was that the application should have been made within three years from June 16, 1967, but was filed on November 27, 1973. The court found this contention unsound, stating that the limitation period runs from when the "right to apply" accrues, which was when the company repudiated the firm's claim on April 29, 1971. Thus, the application was within the limitation period.
2. Validity of Contract:
The official liquidator claimed the agreement dated June 1, 1967, was void due to undue influence, misuse of fiduciary position, non-compliance with the Companies Act, and lack of consideration. The court noted that the board of directors had duly authorized the agreement, with Mehta Harnam Singh disclosing his interest and abstaining from voting, thus complying with Section 297 of the Companies Act. The court dismissed the plea of undue influence, misuse of fiduciary position, and fraud due to lack of particulars. The court also found that the firm had indeed injected Rs. 5,00,000 into the company, thus providing consideration. The argument that the contract required shareholder approval was dismissed, as neither the articles of the company nor statutory provisions required such approval.
3. Scope of Arbitration Clause:
The court examined whether the disputes fell within the arbitration clause, which stated that any dispute or difference regarding the terms of the agreement should be settled by arbitration. The court held that the disputes, including the claim for remuneration and the repudiation of the contract, were covered by the arbitration clause. The court found no sufficient cause to refuse arbitration, dismissing the plea of fraud due to lack of particulars.
4. Mere Failure to Pay:
The official liquidator argued that mere failure to pay did not constitute a dispute under the arbitration clause. The court disagreed, stating that the issue was not just non-payment but whether any amount was due to the firm, which was a substantial dispute suitable for arbitration.
5. Disputes Not Within Arbitration Clause:
The court found that the disputes, including the firm's entitlement to remuneration and the validity of the contract, were within the scope of the arbitration clause. The clause was broad enough to encompass disputes arising from the contract.
6. Relief:
The court ordered the agreement to be filed and referred the matter to arbitration. Mr. M. S. Joshi, a retired judge of the court, was appointed as the sole arbitrator. The fee was fixed at Rs. 4,000, to be shared equally by the petitioners and the official liquidator. The parties were directed to appear before the arbitrator on January 9, 1982.
Conclusion:
The court concluded that the application was within the limitation period, the contract was valid and enforceable, and the disputes were referable to arbitration. The matter was referred to arbitration, with Mr. M. S. Joshi appointed as the sole arbitrator.
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1981 (11) TMI 194
Issues Involved:
1. Liability of the petitioner to pay entry tax on sugar used for preparation of Bura.
2. Applicable rate of entry tax: 2% or 0.50%.
Issue-wise Detailed Analysis:
1. Liability of the Petitioner to Pay Entry Tax on Sugar Used for Preparation of Bura:
The primary question addressed in this petition is whether the petitioner is liable to pay entry tax on sugar used for the preparation of Bura. Entry tax is levied by the Madhya Pradesh Sthaniya Kshetra me Mal Ke Pravesh Par Kar Adhiniyam, 1976. The relevant periods of concern are from 11th November 1977 to 31st October 1978 and 18th January 1980 to 10th August 1980. Section 2(b) of the Act defines entry tax as "a tax on entry of goods into a local area for consumption, use or sale therein levied and payable in accordance with the provisions of the Act and includes composition money payable under section 7-A." Section 3 is the charging provision, and Section 4 deals with the rate of tax. The relevant entry in Schedule II is Entry No. II, which reads: "Sugar as defined in item No. I of the First Schedule to the Central Excises and Salt Act, 1944." The rate of tax mentioned against Entry No. 11 is 2%.
The petitioner describes the process of preparation of Bura from sugar, which involves dissolving sugar in water, boiling the mixture, adding chemicals and milk, removing impurities, and finally converting the solution into amorphous powder called Bura. The standards for cane sugar, refined sugar, and Bura as given in Appendix B to the Prevention of Food Adulteration Rules, 1955, are considered. Both cane sugar and Bura contain not less than 96.5% of sugar as sucrose, with the primary difference being that cane sugar is crystallized and Bura is amorphous.
2. Applicable Rate of Entry Tax: 2% or 0.50%:
The petitioner contends that since sugar is brought into the local area for the manufacture of Bura, the case falls within the proviso to Section 4, and he is liable to pay entry tax at the rate of 0.50%. Section 4(1) and clause (i) of the first proviso to that section state that the entry tax payable in respect of goods specified in Schedule II or Schedule III, which are consumed or used as raw material for the manufacture of other goods, shall be half per cent if the rate of tax specified in Schedule II or Schedule III exceeds half per cent.
The court examines whether the sugar used to make Bura undergoes such a transformation that it becomes a new and different article. The definition of "manufacture" as contained in Section 2(j) of the M.P. General Sales Tax Act includes any process of producing, collecting, extracting, preparing, or making any goods. However, for the concessional rate of tax to apply, it must be shown that the original article used as raw material has undergone a transformation resulting in a new and different article.
The court references several Supreme Court cases to illustrate the principle of transformation and manufacture, including cases where different commodities were held to be manufactured from raw materials. However, the court concludes that sugar retains a "continuing substantial identity" after being processed into Bura and does not become a different commercial commodity. This conclusion is supported by the consistent treatment of all forms of sugar as one category of goods by Parliament and the State Legislature in various legislations.
The court also refers to the judgment of the Delhi High Court in Mangoo Mai Ram Kishore and the decision of the Allahabad High Court in Commr. of Sales Tax v. Damodar Dass, which support the view that Bura is only a form of sugar and not a different commodity.
Conclusion:
The court concludes that the petitioner's case does not fall under the proviso to Section 4(1) of the Entry Tax Act. The sales tax authorities were correct in charging entry tax at the rate of 2% in accordance with Section 4(1) and Entry No. II in Schedule II. The petition is dismissed without any order as to costs, and the security amount is to be refunded to the petitioner.
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1981 (11) TMI 193
The High Court upheld the rejection of the applicant's books of accounts but set aside the enhancement of taxable turnover. The disclosed turnover of the applicant for the year in question is to be accepted. The parties are directed to bear their own costs. (Case: 1981 (11) TMI 193 - ALLAHABAD HIGH COURT)
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1981 (11) TMI 192
Constitutional validity of new Section 6-11 of the Karnataka Sales Tax Act, 1957, substituted by the Karnataka Sales Tax (Amendment) Act, 1981 - court-fee payable by each petitioner - petition in which thirteen petitioners had joined - Held that: - each of the petitioners in the present writ petition, has his own distinct and separate cause of action arising out of his liability to pay the tax individually under the impugned taxing provision. Since the present writ petition embraces more than one of such causes of action and separate relief's sought therein, namely, to restrain the respondents from enforcing the impugned taxing provision against each of the petitioners, are based on them (such causes of action), it (the present writ petition) is chargeable with the aggregate amount of the court-fees with which the petitions would be chargeable under the Act ' if separate writ petitions had been presented in respect of several causes of action, a required by sub-section (3) read with substitution (4) of Section 6 of the Act.
Under Clause (S) of Article I of Sch. II of the Karnataka Court-fees and Suits Valuation Act, 1958 read with sub-sees. (3) and (4) of Section 6 of that Act, each of the petitioners, in the present writ petition, is liable to pay thereon a separate court-fee of ₹ 100, as if he had presented a separate writ petition.
Appeal dismissed.
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1981 (11) TMI 191
Issues Involved:
1. Specific performance of contract
2. Allegation of fraud
3. Bona fide purchaser for value without notice
4. Procedural error in the appellate court
5. Evaluation of evidence
Detailed Analysis:
1. Specific Performance of Contract:
The plaintiffs filed a suit for specific performance, asserting that Said Mohammad, one of the defendants, was the Bhumidhar of certain plots and had agreed to sell the land to them for Rs. 4,000, receiving Rs. 2,000 as earnest money. However, Said Mohammad later sold the land to Chidda Khan for Rs. 5,000, despite the prior agreement with the plaintiffs. The trial court decreed in favor of the plaintiffs, but the appellate court reversed this decision, leading to the plaintiffs' appeal.
2. Allegation of Fraud:
Said Mohammad contested the suit, claiming his signatures on the agreement were obtained through fraud, stating they were taken on blank stamp papers. The appellate court accepted this plea without requiring detailed particulars of the alleged fraud, which was a procedural error. The plaintiffs argued that the lack of specific particulars of fraud in the written statement violated Rule 4 of Order 6 of the Civil Procedure Code (CPC), which mandates detailed particulars in cases of fraud.
3. Bona Fide Purchaser for Value Without Notice:
Chidda Khan contended he was a bona fide purchaser for value without notice of the prior agreement. The appellate court's finding that Chidda Khan was a bona fide purchaser was consequential on the acceptance of the fraud plea. The plaintiffs argued that if the fraud plea was invalidated, the finding regarding Chidda Khan's bona fide status should also be set aside.
4. Procedural Error in the Appellate Court:
The appellate court considered new facts regarding the stamp papers used for the agreement, which were not raised in the trial court. This included claims that the date on the stamps appeared altered and overwritten. The plaintiffs had no opportunity to counter these claims, which were raised for the first time on appeal. This violated Rule 4 of Order 6 of the CPC, which aims to prevent such surprises and ensure fair trial procedures.
5. Evaluation of Evidence:
The appellate court's evaluation of evidence was influenced by its acceptance of the alleged defects in the stamp papers, leading to a biased assessment of the plaintiffs' witnesses. The court dismissed the testimony of the scribe and attesting witness based on unreasonable grounds, such as the scribe's inability to recall the exact date and the attesting witness living six miles away. This assessment was deemed perverse and unreasonable.
Conclusion:
The High Court found that the appellate court erred in accepting the fraud plea without specific particulars and in considering new facts about the stamp papers without giving the plaintiffs a chance to respond. The court also found the appellate court's evaluation of evidence to be biased and unreasonable. Consequently, the High Court allowed the appeal, set aside the appellate court's decree, and restored the trial court's decree in favor of the plaintiffs, granting them costs throughout.
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1981 (11) TMI 190
Issues:
1. Suit for accounts and recovery of amount due to plaintiff.
2. Dispute over partnership dissolution and concealed profits.
3. Legal implications of concealed profits in relation to tax evasion and public policy.
Analysis:
1. The plaintiff filed a second appeal seeking recovery of an amount due to him from defendants in a suit for accounts. The trial court decreed the suit, but the lower appellate court dismissed it. The dispute arose from a partnership in a Kerana business where the plaintiff and another individual were initially given the business by defendants. The partnership dissolved in 1958, leading to disagreements and the filing of the suit for recovery.
2. The defense claimed that the partnership was dissolved by agreement, with accounting done, revealing stock, cash, and debts. The plaintiff was alleged to have voluntarily retired, promising to pay due amounts. A commissioner's inventory showed concealed profits. The trial court found the plaintiff entitled to a specific amount after adjustments, leading to the decree for recovery. The lower appellate court focused on the figure of concealed profits, determining only a portion reached one defendant, resulting in the dismissal of the suit.
3. The judgment highlighted the issue of concealed profits and its implications on tax evasion and public policy. The court expressed concern over aiding tax evasion by enforcing recovery of concealed profits. It emphasized that agreements involving evasion of taxes are void and unenforceable, as they go against public policy. The court concluded that agreements to conceal profits for tax evasion purposes are unlawful and cannot be enforced by the court. The appeal was dismissed, emphasizing the illegality of agreements aimed at evading taxes and the importance of upholding public policy.
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1981 (11) TMI 189
Issues: Appeal against preliminary decree, liability under mortgage deed, calculation of interest, authority to vary interest rate, payment of decretal dues in installments.
The judgment pertains to an appeal against a preliminary decree passed by the Civil Judge in favor of the respondent Bank. The defendants, a partnership firm and its partners, executed a registered simple mortgage deed in favor of the plaintiff Bank in 1969, obtaining a loan of Rs. 2,00,000. The suit was filed in 1979 claiming Rs. 3,79,199-50 with future interest at 16% per annum. The defendants raised several grounds in defense, and issues were framed accordingly. The trial Judge passed a preliminary decree directing the defendants to pay the amount with interest at 16% per annum by a specified date, failing which a decree for sale would be passed. The defendants appealed against this decree.
The first contention raised in the appeal was regarding the effect of a promissory note obtained by the plaintiff from the defendants in 1978. The appellant argued that the promissory note extinguished the earlier mortgage transaction. However, the Court held that the mere execution of a promissory note does not discharge the liability under a mortgage deed unless specifically accepted as such. Promissory notes are typically executed as additional security and acknowledgment of dues.
The next issue raised was regarding the calculation of interest. The appellant contended that the amount directed to be paid included interest, which was violative of the law. However, the Court found that as per the mortgage deed, the Bank was authorized to calculate interest at six monthly rests and treat unpaid interest as part of the principal, allowing for the charging of interest on the total amount due. This practice was upheld by previous judicial decisions.
Another argument was made regarding the Court's discretion to reduce interest from the date of the contract. The appellant claimed that the Court could vary the terms of the contract under Order 34, Rule 11(a)(i) of the Civil Procedure Code. However, the Court found no reason to alter the contractual rate of interest in this case, considering the nature of the parties involved and the commercial purpose of the loan.
Lastly, the defendants requested to pay the decretal dues in installments. After considering the circumstances, the Court permitted the defendants to pay the amount in installments, with a specific payment schedule and default clause. The appeal was dismissed with costs, and the defendants were directed to bear the costs of the appeal.
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1981 (11) TMI 188
Issues Involved:
1. Nature of custody that can be ordered by a Magistrate during the investigation of a serious offence.
2. Validity of the petition filed by an unauthorized person.
3. Interpretation of Section 167 of the Criminal Procedure Code (Cr.P.C.) regarding police and judicial custody.
4. The ability of a Magistrate to remand an accused to police custody after initially placing them in judicial custody.
5. Examination of relevant case law and precedents.
Issue-wise Detailed Analysis:
1. Nature of Custody During Investigation:
The primary issue in this case is the nature of custody that can be ordered by a Magistrate during the investigation of a serious offence. The court examined the provisions of the Constitution and the Criminal Procedure Code (Cr.P.C.) which protect individuals against unlawful arrest. Specifically, the court noted that under Article 22(2) of the Constitution and Section 56 of the Cr.P.C., an arrested person must be produced before a Magistrate within 24 hours. For non-bailable offences, if the police cannot complete the investigation within this period, the accused must be produced before a Magistrate for further orders.
2. Validity of the Petition Filed by an Unauthorized Person:
A preliminary objection was raised regarding the filing of the petition by Mr. I. U. Khan, who was not the Additional Public Prosecutor of Delhi. It was argued that the petition was filed without authorization from the Delhi Administration. The court noted that Mr. D. C. Mathur was subsequently appointed as Special Public Prosecutor for the case by a notification dated 22nd September 1981. The court overruled the objection, stating that any initial defect was remedied by the subsequent authorization, and the court had the inherent power to proceed with the petition.
3. Interpretation of Section 167 of the Cr.P.C.:
Section 167 of the Cr.P.C. deals with the powers of a Magistrate to authorize the detention of an accused in such custody as the Magistrate thinks fit for a term not exceeding fifteen days in total. The section allows the Magistrate to determine the type of custody (police or judicial) and to change it as necessary within the first fifteen days. The court emphasized that the purpose of this section is to facilitate investigation and protect the liberty of the accused by ensuring that detention is not solely at the discretion of the police but under judicial oversight.
4. Ability to Remand to Police Custody After Judicial Custody:
The respondents contended that once an accused is placed in judicial custody, they cannot be remanded to police custody. The court rejected this contention, stating that the Magistrate has the discretion to change the nature of the custody within the first fifteen days as required by the circumstances of the case. The court clarified that the Magistrate can order police custody after judicial custody if necessary for the investigation, provided it is within the initial fifteen-day period.
5. Examination of Relevant Case Law:
The court examined various judgments, including Gian Singh v. State (1981 Cri LJ 100) and Trilochan Singh v. State (1981 Cri LJ 1773), which suggested that once judicial custody is ordered, police custody cannot be subsequently ordered. The court disagreed with these judgments, stating that Section 167(2) allows for the alteration of custody type within the first fifteen days. The court also referred to the judgment in State v. Mehar Chand (1969) 5 DLT 179, which supported the view that the Magistrate can change the nature of custody during the investigation.
Conclusion:
The court concluded that the nature of custody can be altered from judicial custody to police custody and vice versa during the first fifteen days mentioned in Section 167(2) of the Cr.P.C. After this period, the accused can only be kept in judicial custody or any other custody as ordered by the Magistrate, but not in police custody. The petition was allowed, and the Magistrate was directed to pass appropriate orders as he would have on 4th September 1981, considering the unexpired period out of the initial fifteen days.
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1981 (11) TMI 187
Issues involved: Declaratory suit for title to a house property, validity of sale deed, applicability of res judicata, interpretation of section 92 of the Indian Evidence Act.
Validity of Sale Deed: The respondent alleged that a sale deed and rent note executed with the appellant were nominal and never intended to be acted upon, claiming ownership of the property. The trial court and High Court found the documents to be sham, setting aside lower court's decision that it was a mortgage. The High Court held that the decrees from Small Causes Court did not operate as res judicata, allowing the respondent to establish the true nature of the transaction.
Res Judicata: The appellant argued that the decrees from Small Causes Court, treating the respondent as a tenant, should preclude reevaluation of the sale transaction. The High Court held that the Small Causes Court lacked competency to decide title disputes, thus not meeting the conditions of res judicata under section 11 of the Code of Civil Procedure.
Interpretation of Section 92 of the Evidence Act: The appellant contended that section 92 barred the respondent from denying the sale deed's validity and introducing parole evidence. The Court clarified that section 92 applies only when parties rely on the document's terms, allowing oral evidence if the document was never intended to be acted upon. The respondent was permitted to present parole evidence, leading to a finding in her favor.
Conclusion: The appeal was dismissed, upholding the High Court's decision that the sale deed was nominal, the Small Causes Court decrees did not establish res judicata, and section 92 of the Evidence Act did not bar the respondent from presenting parole evidence.
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1981 (11) TMI 186
Issues Involved:
1. Seizure of wheat in transit and its legality under Art. 301 and Art. 19(1)(g) of the Constitution.
2. Validity of the Notification No. P-XXIX-Food-5-5(42)/80 dated April 21, 1981, under the Essential Commodities Act, 1955.
3. Restrictions on movement of wheat by traders on private accounts from Uttar Pradesh to other states and within Uttar Pradesh.
4. Allegations of wrongful seizure and deprivation of property without authority of law under Art. 300A of the Constitution.
5. Reasonableness and arbitrariness of the stock limits imposed on wholesale dealers and commission agents in Uttar Pradesh.
Issue-wise Detailed Analysis:
1. Seizure of Wheat in Transit and its Legality under Art. 301 and Art. 19(1)(g):
The Court examined whether the action of the Uttar Pradesh government in setting up check-posts and seizing wheat in transit was in violation of Art. 301 and Art. 19(1)(g). The Court held that the impugned tele printer message dated March 31, 1981, was an executive instruction for compliance with the two Control Orders and did not constitute a restriction on the freedom of trade, commerce, and intercourse. The Court emphasized that regulatory measures, such as setting up check-posts and requiring endorsements by Deputy Marketing Officers, were reasonable and necessary to prevent hoarding and ensure equitable distribution of wheat. The Court concluded that these measures were not arbitrary or excessive and were in the public interest.
2. Validity of Notification No. P-XXIX-Food-5-5(42)/80 Dated April 21, 1981:
The Court addressed the petitioners' challenge to the notification issued under the Essential Commodities Act, 1955, which amended the Uttar Pradesh Food grains (Procurement and Regulation of Trade) Order, 1978, by fixing stock limits for wholesale dealers, commission agents, and retailers. The Court upheld the notification, stating that the restriction on stock limits was a reasonable measure to curb speculative tendencies and ensure the availability of wheat at fair prices. The Court found that the stock limit of 250 quintals for wholesale dealers was not arbitrary or excessive and was necessary to prevent hoarding and black-marketing.
3. Restrictions on Movement of Wheat by Traders:
The Court examined the restrictions imposed by the impugned tele printer message on the movement of wheat by traders. The Court held that the requirement for endorsements by Deputy Marketing Officers and physical verification at check-posts were regulatory measures to prevent the outflow of wheat and ensure its availability within the state. The Court found these measures to be reasonable and necessary to achieve the objectives of the Essential Commodities Act and did not constitute a violation of the fundamental right to carry on trade or business or the freedom of trade, commerce, and intercourse.
4. Allegations of Wrongful Seizure and Deprivation of Property without Authority of Law:
The Court addressed the petitioners' claim that the seizure of wheat amounted to deprivation of property without authority of law under Art. 300A. The Court emphasized that the State Government could not deprive a person of property without the authority of law and that such power could only be exercised by a positive law. The Court noted that the seizure was for the purpose of confiscation under s. 6A of the Essential Commodities Act and that the petitioners were entitled to the sale proceeds if it was ultimately found that there was no contravention of an order issued under s. 3 of the Act. The Court concluded that the matter of wrongful seizure was a factual issue to be determined by the Additional District Magistrate (Civil Supplies), Agra.
5. Reasonableness and Arbitrariness of Stock Limits:
The Court addressed the petitioners' contention that the stock limits imposed by the notification were arbitrary and violated Art. 14 and Art. 19(1)(g). The Court found that the fixation of stock limits was a reasonable measure to prevent hoarding and ensure equitable distribution of wheat. The Court held that the stock limit of 250 quintals for wholesale dealers was not arbitrary or excessive and was necessary to achieve the objectives of the Essential Commodities Act. The Court also noted that the stock limits were designed to prevent speculative tendencies and ensure the availability of wheat at fair prices.
Conclusion:
The Court dismissed the writ petitions, holding that the measures taken by the State Government were reasonable and necessary to prevent hoarding and ensure equitable distribution of wheat. The Court found that the restrictions imposed by the impugned tele printer message and the notification were not arbitrary or excessive and did not violate the fundamental rights guaranteed under Art. 19(1)(g) and Art. 301. The Court emphasized that the matter of wrongful seizure was a factual issue to be determined by the Additional District Magistrate (Civil Supplies), Agra, and that the petitioners were entitled to the sale proceeds if no contravention of the Essential Commodities Act was found.
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1981 (11) TMI 185
Issues involved: Whether the lease was for manufacturing purposes and the validity of the notice served for termination of the lease.
Lease for manufacturing purposes:
The main issue in this case was whether the lease granted by the landlord to the appellant-tenant was for manufacturing purposes, which would require a six months notice for termination u/s 106 of the Transfer of Property Act. The appellant argued that the lease was indeed for manufacturing purposes as the tenant was running a flour mill on the land leased. The District Judge relied on receipts showing yearly rent payments, indicating a yearly lease rather than a monthly tenancy. The Supreme Court referred to previous judgments emphasizing that the term "manufacturing purposes" should be interpreted broadly to include any process transforming raw materials into a different product with a distinct name and use. In this case, wheat was transformed into flour through labor and machinery, satisfying the criteria for manufacturing purposes. Therefore, the lease was deemed to be for manufacturing purposes, making the one-month notice for termination invalid.
Validity of notice served:
The second issue was the validity of the notice served for termination of the lease. The High Court had upheld the termination, stating that the lease was not for manufacturing purposes and a one-month notice was sufficient. However, the Supreme Court found that the lease was indeed for manufacturing purposes, rendering the one-month notice invalid. The Court criticized the High Court for not adequately considering the legal aspects and rushing to conclusions without proper analysis. As the respondents did not contest the appeal, the Court allowed the appeal, set aside the High Court judgment, and dismissed the plaintiff's suit. The appellant was awarded costs in the lower courts, but no costs were awarded in the Supreme Court due to the absence of the respondents.
This summary highlights the key legal points and conclusions of the Supreme Court judgment regarding the lease for manufacturing purposes and the validity of the notice served for termination.
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1981 (11) TMI 184
Issues Involved:
1. Legality of the demand for property tax by the Special Area Development Authority.
2. Incorporation of Municipal Acts into the Act of 1973.
3. Procedure for imposing property tax.
4. Exemption from property tax for government-owned companies.
5. Conflict between State taxation and Union legislative powers.
6. Validity of the agreement waiving the power of taxation.
Analysis:
1. Legality of the Demand for Property Tax:
The primary issue was whether the Special Area Development Authority (SADA), Korba, had the authority to levy property tax on the appellant companies, Bharat Aluminium Company Ltd. and Western Coalfields Ltd. The companies argued against the legality of the property tax imposed by SADA.
2. Incorporation of Municipal Acts into the Act of 1973:
The appellants contended that SADA could only exercise the powers to levy property tax as they existed under the Madhya Pradesh Municipal Corporation Act, 1956, or the Madhya Pradesh Municipalities Act, 1961, as of February 27, 1976. They argued that any subsequent amendments to these Acts could not be applied. The Court held that Section 69(d) of the Act of 1973 did not incorporate specific provisions of the earlier Acts but referred to the powers of taxation as they existed at the time of exercising those powers. Thus, amendments made to the Municipal Acts after the enactment of Section 69(d) were applicable.
3. Procedure for Imposing Property Tax:
The appellants argued that SADA did not follow the procedure prescribed by Sections 129 and 133 of the Municipalities Act and the Municipal Corporation Act, respectively. The Court found that Sections 127A and 135 of the respective Acts created the liability to pay property tax by their own force, and no further procedure was necessary. The property tax was not imposed under Sections 127 or 132, so the procedures in Sections 129 and 133 did not apply.
4. Exemption from Property Tax for Government-Owned Companies:
The appellants claimed exemption under Article 285(1) of the Constitution and Sections 127A(2) and 136 of the Municipal Acts, arguing that the companies were wholly owned by the Government of India. The Court held that although the companies were government-owned, they had a separate legal personality distinct from the government. Therefore, the properties vested in the companies could not be considered as owned by the Government of India for tax exemption purposes.
5. Conflict between State Taxation and Union Legislative Powers:
The appellants argued that the property tax impeded the objectives of the Coal Mines Nationalisation Act, 1973, and conflicted with the Union's power to regulate and develop mines. The Court found no evidence that the property tax constituted an impediment to the Act's goals. The Act of 1973 aimed at municipal administration and development of special areas, not at regulating mines and minerals, which fell under different legislative entries.
6. Validity of the Agreement Waiving the Power of Taxation:
The appellants contended that an agreement with SADA waived the authority's power to levy taxes. The Court endorsed the High Court's reasoning that the agreement was beyond the Chairman's authority and only related to the waiver of octroi tax, not all taxes. Therefore, the agreement did not preclude SADA from imposing property tax.
Conclusion:
The Supreme Court dismissed the appeals, upholding the authority of the Special Area Development Authority, Korba, to levy property tax on the appellant companies. The Court found that the amendments to the Municipal Acts applied, the procedure for imposing property tax was correctly followed, and the companies were not exempt from the tax. The agreement waiving the power of taxation was invalid beyond the waiver of octroi tax. The appeals were dismissed with costs.
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1981 (11) TMI 183
Issues Involved:
1. Infringement of Fundamental Rights under Articles 25 and 26 of the Constitution.
2. Customary Rights of Shia Community over certain plots and structures.
3. Validity and Enforcement of Civil Court Decisions and Waqf Registrations.
4. Legality of Orders under Section 144 Cr.P.C.
5. Res Judicata and Principles Analogous to Res Judicata.
Detailed Analysis:
1. Infringement of Fundamental Rights under Articles 25 and 26 of the Constitution:
The petitioners, representing the Shia community of Mohalla Doshipura, Varanasi, claimed that their fundamental rights under Articles 25 and 26 were infringed by the respondents. They sought a declaration that nine plots of land and structures thereon belonged to the Shia Waqf and that the Shia community had the right to perform religious functions on these plots. They also sought a writ of mandamus to prevent respondents from prohibiting or restraining them from performing their religious practices.
2. Customary Rights of Shia Community over Certain Plots and Structures:
The Shia community claimed customary rights to perform religious rites on the nine plots and structures, which included a Mosque, Baradari, Zanana Imambara, Imam Chowk, and others. These rights were based on long-standing practices and previous judicial decisions. The petitioners detailed various religious activities performed during Moharram, asserting that these practices were integral to their faith and had been conducted on these plots from time immemorial.
3. Validity and Enforcement of Civil Court Decisions and Waqf Registrations:
The petitioners relied on previous civil court decisions and the registration of Shia Waqfs under the U.P. Muslim Waqfs Act, 1936, to assert their rights. Key decisions included:
- Suit No. 849 of 1878, which recognized the mosque on Plot No. 246 as a public mosque and affirmed certain rights of the Shias.
- Suit No. 424 of 1931, which declared that Plot No. 602/1133 was not a graveyard and restrained Sunni Muslims from using it as such.
- Suit No. 232 of 1934, which upheld the Shias' rights over the disputed plots and structures.
The Shia community also pointed to the registration of the plots as Shia Waqfs under the 1936 Act, which had become final and conclusive as no suit challenging the registration was filed within the prescribed time.
4. Legality of Orders under Section 144 Cr.P.C.:
The petitioners challenged the repeated use of Section 144 Cr.P.C. by the executive magistracy of Varanasi to restrict their religious practices. They argued that such orders were perverse and disregarded their established legal rights. The court examined whether orders under Section 144 Cr.P.C. were judicial or executive in nature and concluded that they were executive orders. The court emphasized that such orders should be issued in defense of legal rights rather than suppressing them and should target the wrongdoers rather than the lawful exercise of rights.
5. Res Judicata and Principles Analogous to Res Judicata:
The respondents contended that the writ petition was barred by res judicata or principles analogous to res judicata due to previous decisions by the Supreme Court and the Allahabad High Court. However, the court rejected this contention, noting that the earlier litigations were not fought in a representative capacity and did not adjudicate the rights on merits. Fresh material was also produced in the present case, which was not available in earlier proceedings.
Conclusion:
The court held that the Shia community had established their customary rights to perform religious rites on the disputed plots and structures. The court issued a permanent injunction restraining the Sunni community from interfering with these rights and directed the executive magistracy to issue orders under Section 144 Cr.P.C. in accordance with the principles and guidelines provided in the judgment. The writ petition was allowed, with each party bearing its own costs.
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1981 (11) TMI 181
Issues Involved:
1. Legality of the confiscation of gold.
2. Ownership and possession of the gold.
3. Compliance with the Gold (Control) Ordinance 1968 and subsequent laws.
4. Validity and implications of the will of Keshrimal.
5. Procedural fairness and adherence to natural justice principles.
Detailed Analysis:
1. Legality of the Confiscation of Gold:
The gold was seized on 9th July 1968 by Central Excise officers from a house in Kamptee. The petitioners sought to quash the confiscation and have the gold returned to them. The Collector of Central Excise ordered the gold to be confiscated and imposed a penalty on Ratanbai, who was found to have violated the Gold (Control) Ordinance 1968 by possessing the gold without a declaration. The Administrator and the Central Government upheld this decision. However, the High Court found that the confiscation was not valid under the amended Section 71 of the Gold (Control) Act, 1968, as the gold belonged to the grandsons of Keshrimal and the act or omission rendering it liable to confiscation was without their knowledge or connivance.
2. Ownership and Possession of the Gold:
The petitioners claimed ownership of the gold, asserting it was bequeathed to them by their grandfather, Keshrimal, in his will. The Collector found the will to be genuine but dismissed the story of the gold being discovered in Mandsaur in June 1968. The High Court confirmed that the grandsons became the owners of the gold upon Keshrimal's death and that Ratanbai had been in possession of the gold for at least 8 or 9 years before its seizure.
3. Compliance with the Gold (Control) Ordinance 1968 and Subsequent Laws:
The Defence of India (Amendment) Rules, 1963, required a declaration of possession of primary gold, which was not made by the petitioners or their guardian. The Defence of India (Fourth Amendment) Rules, 1966, banned private possession of primary gold after 1st September 1967. The Gold (Control) Ordinance 1968 and the Gold (Control) Act, 1968, continued this prohibition. The High Court found that the gold was liable to confiscation under these laws due to the lack of a declaration and the ban on possession of primary gold.
4. Validity and Implications of the Will of Keshrimal:
The will, dated 18th February 1952, was found to be genuine by the Collector, the Administrator, and the Central Government. The will directed that the gold and silver bequeathed by Keshrimal be given to his grandsons. The High Court held that the grandsons became the owners of the gold upon Keshrimal's death, and the failure to make a declaration or dispose of the gold was attributable to their guardian, Nemkumar, without the grandsons' knowledge or connivance.
5. Procedural Fairness and Adherence to Natural Justice Principles:
The High Court found that the petitioners, as the owners of the gold, were not given notice or an opportunity to be heard as required by Section 79 of the Gold (Control) Act, 1968. The lack of notice within six months of the seizure rendered the confiscation invalid, and the gold should have been returned to Ratanbai. The High Court also noted the retrospective effect of the amended Section 71, which required the confiscation to be set aside as it was contrary to the law.
Conclusion and Relief:
The High Court quashed the orders of the Collector, the Administrator, and the Central Government, confiscating the gold and imposing a penalty on Ratanbai. The gold was ordered to be returned to the petitioners, who were to nominate one of themselves to take delivery. The application to implead Nemkumar and Shantabai as co-petitioners was allowed, ensuring that the gold would be returned to the rightful owners. No order as to costs was made, considering the complexity of the legal issues involved.
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1981 (11) TMI 180
The Government of India considered a revision application regarding a warehoused tobacco consignment. The applicant's request for an extension was denied, leading to a demand for excise duty. However, as duty on unmanufactured tobacco was exempted, the government allowed the applicant's plea for nil rate of duty. The revision application was accepted.
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