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• 1981 (12) TMI 185
  
  The judgment revolves around a suit filed under Order 37 of the Civil Procedure Code (CPC) by the plaintiff for the recovery of a sum of money from the defendant, the Food Corporation of India. The primary issues considered by the court include the applicability of Order 37 CPC to the suit, the timeliness of the defendant's application under Section 34 of the Arbitration Act, and the interpretation of what constitutes a "debt" under the relevant legal framework.

  1. ISSUES PRESENTED and CONSIDERED

  The core legal questions considered were:

  • Whether the suit for recovery of the price of goods falls within the ambit of Order 37 CPC as a suit for enforcing payment of a debt.
  • Whether the application under Section 34 of the Arbitration Act was filed within the permissible time frame and whether the delay in filing could be condoned.
  • What constitutes a "debt" under Order 37 CPC and whether the claim in question qualifies as such.
  • Whether the special procedure under Order 37 CPC and the Original Side Rules of the Delhi High Court precludes the filing of an application under Section 34 of the Arbitration Act after the prescribed period.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Applicability of Order 37 CPC

  The court examined whether the suit for the recovery of the price of goods could be construed as a suit for enforcing payment of a debt under Order 37 CPC. The relevant legal framework included the amended clause (b) of sub-rule (2) of Rule 1 of Order 37 CPC, which covers suits for recovery of a debt arising from a written contract. The court referred to precedents such as M/s. Print Pack Machinery Ltd. v. M/s. Jay Kay Paper Congeters and Sushila Mehta v. Shri Bansi Lal Arora & another to support its interpretation that the suit falls within the ambit of Order 37 CPC.

  In its reasoning, the court held that the price of goods constitutes an ascertained amount payable under an unqualified present liability, thereby qualifying as a debt. The court rejected the defendant's argument that the absence of a contractual stipulation for interest precludes the suit from being covered by Order 37 CPC.

  Issue 2: Timeliness of Application under Section 34 of the Arbitration Act

  The court considered whether the application under Section 34 of the Arbitration Act was timely and whether the delay could be condoned. The relevant legal framework involved Rule 3 of Order 37 CPC and the Original Side Rules, which prescribe a timeline for defendants to seek leave to defend. The court also considered precedents such as Pench Valley Coal Co. Ltd. v. The Indian Cable Co. Ltd. and Tekchand Madan v. M/s. Shyam Kamal Agencies.

  The court reasoned that while Order 37 CPC and the Original Side Rules prescribe specific timelines, these do not preclude the filing of an application under Section 34 of the Arbitration Act as long as a decree has not been passed. The court emphasized that the special law of arbitration should prevail over the general procedural rules.

  Issue 3: Definition of "Debt"

  The court analyzed the definition of "debt" under Order 37 CPC, relying on precedents such as Webb v. Stenton and Commissioner of Wealth Tax v. Pierce Leslie & Co. Ltd. The court identified the essential requisites of a debt as an ascertained or readily calculable amount, an absolute unqualified liability, and an obligation that has accrued and subsists. The court concluded that the claim in question meets these criteria and thus qualifies as a debt.

  3. SIGNIFICANT HOLDINGS

  The court made several significant holdings:

  • The suit for the recovery of the price of goods qualifies as a suit for enforcing payment of a debt under Order 37 CPC.
  • The application under Section 34 of the Arbitration Act can be filed as long as a decree has not been passed, and the delay in filing can be condoned if satisfactorily explained.
  • The definition of "debt" under Order 37 CPC includes the claim in question, as it is an ascertained amount payable under an unqualified present liability.
  • The procedural rules under Order 37 CPC and the Original Side Rules do not preclude the filing of an application under Section 34 of the Arbitration Act.

  The court ultimately set aside the order and decree under appeal, directing that the application under Section 34 of the Arbitration Act be decided on its merits by the learned single judge.

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• 1981 (12) TMI 184
  
  Issues:
  - Limitation period for filing a probate application under Article 137 of the Limitation Act 1963.
  - Interpretation of the term "application" under Article 137.
  - Determining the starting point for computing the limitation period for a probate application.
  
  Analysis:
  
  The judgment in question involves a probate proceeding concerning the grant of probate of a will. The objector, who is the petitioner, raised an objection that the probate application was time-barred under Article 137 of the Limitation Act 1963, as it was filed beyond the prescribed three-year period. The District Judge, relying on a decision of the Calcutta High Court, rejected this plea, leading the objector to appeal to the High Court.
  
  Article 137 of the new Limitation Act is compared to its predecessor, Article 181, to highlight significant modifications in language and classification. The court notes that Article 137, as a residuary article, governs "other applications," indicating a broader scope beyond applications under the Code of Civil Procedure. The judgment discusses the evolution of the definition of "application" in the context of special laws, emphasizing the intention to include petitions under various statutes.
  
  Referring to the Supreme Court's decision in Kerala S. E. Board v. T. P. Kunhaliumma, the High Court acknowledges a shift in the interpretation of Article 137 to encompass applications beyond the Civil Procedure Code. However, the crucial issue addressed is the determination of the starting point for computing the limitation period for a probate application. The court rejects the argument that the starting date should be the death of the testator, asserting that the right to apply for probate accrues continuously as long as the will remains unprobated. This interpretation aligns with the view that there is no specific limitation period for probate applications.
  
  Ultimately, the High Court rules that probate applications are not governed by any specific article of the Limitation Act. The application in question is dismissed, with each party bearing their own costs. This decision underscores the continuous accrual of the right to apply for probate and clarifies the non-applicability of a specific limitation period in such cases.

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• 1981 (12) TMI 183
  
  Issues:
  1. Validity of detention under the National Security Act, 1980.
  2. Grounds of detention being vague and lacking in particulars.
  3. Delay in considering the representation made by the petitioner.
  
  Analysis:
  1. The petitioner challenged the validity of his detention under the National Security Act, 1980, by the District Magistrate, Moradabad, citing the necessity to prevent him from acting prejudicial to public order. The detention was based on two incidents - communal riots in August 1980 and incitement to violence in July 1981. The grounds of detention detailed the petitioner's involvement in these incidents, aiming to prevent communal violence in Moradabad City.
  
  2. The petitioner's counsel contended that the grounds of detention were vague and lacked specifics, challenging the subjective satisfaction of the detaining authority. However, the Supreme Court held that the grounds provided adequate particulars to form the basis of detention. The incidents, though a year apart, demonstrated the petitioner's propensity for inciting communal violence, justifying the detention to maintain public order. The Court emphasized that prior conduct is relevant in assessing future behavior, and the incidents were proximate in time, directly linked to public order concerns.
  
  3. The second contention raised was the undue delay in the State Government's consideration of the petitioner's representation. The timeline of events showed that the representation was promptly forwarded and diligently processed at various levels, culminating in the Chief Minister's rejection on the 24th day. The Court found no unexplained delay in the State Government's review of the representation, thereby dismissing the petitioner's claim of prolonged detention without due consideration.
  
  In conclusion, the Supreme Court dismissed the writ petition, upholding the validity of the detention under the National Security Act, 1980, based on specific grounds related to the petitioner's involvement in inciting communal violence. The Court also ruled out any undue delay in the State Government's assessment of the petitioner's representation, affirming the lawfulness of the detention.

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• 1981 (12) TMI 182
  
  Issues Involved:
  1. Validity of the order of discharge by the Magistrate.
  2. Whether the Sessions Judge's order quashing the discharge was justified.
  3. Interpretation of Sections 202, 204, 209, 244, 245, 323, and 378 of the Criminal Procedure Code (Cr.P.C.).
  4. Distinction between discharge and acquittal.
  5. Role of the Magistrate in cases triable exclusively by the Court of Session.
  
  Detailed Analysis:
  
  1. Validity of the Order of Discharge by the Magistrate:
  The revisionists contended that the discharge order passed by the Munsif Magistrate was valid under Section 245(2) Cr.P.C. as the Magistrate was competent to try the case as a warrant case. They argued that the Magistrate had properly recorded evidence under Section 244 Cr.P.C. and that there was no occasion for committal to the Court of Session. However, the court found that the Magistrate had no power to discharge the accused if the evidence disclosed an offence exclusively triable by the Court of Session. The Magistrate's order was beyond his jurisdiction and usurped the jurisdiction of the Court of Session.
  
  2. Whether the Sessions Judge's Order Quashing the Discharge was Justified:
  The Sessions Judge's order quashing the discharge was challenged on the grounds that it undid the effect of an earlier order by a court of co-ordinate jurisdiction. The court, however, held that the order of the Sessions Judge was revisable and that the Sessions Judge was within his rights to quash the discharge order. The Sessions Judge's decision was based on the assessment of evidence which indicated that the offence was exclusively triable by the Court of Session.
  
  3. Interpretation of Relevant Sections of Cr.P.C.:
  - Section 202(2): The Magistrate must record evidence of all witnesses in cases triable exclusively by the Court of Session.
  - Section 204: The Magistrate has to form an opinion on whether there is a prima facie case against the accused while issuing process.
  - Section 209: The Magistrate is required to commit the case to the Court of Session if it is exclusively triable by that court, without conducting an inquiry or verifying facts.
  - Section 244 and 245(2): These sections pertain to the recording of evidence and discharge of the accused in warrant cases.
  - Section 323: Allows the Magistrate to commit the case to the Court of Session at any stage of the proceedings if it appears that the case should be tried by the Court of Session.
  - Section 378: Deals with appeals in cases of acquittals, not discharges. The distinction between discharge and acquittal is crucial as discharge does not bar retrial, unlike acquittal.
  
  4. Distinction Between Discharge and Acquittal:
  The court emphasized the well-established distinction between discharge and acquittal. Discharge occurs before the framing of charges and does not bar retrial, whereas acquittal occurs after the framing of charges and bars retrial under Section 300 Cr.P.C. The remedy against an order of discharge is revision, not appeal, which was correctly sought in this case.
  
  5. Role of the Magistrate in Cases Triable Exclusively by the Court of Session:
  The court clarified that the Magistrate's role in such cases is limited. The Magistrate must commit the case to the Court of Session without conducting an in-depth inquiry or verifying facts, as per Section 209 Cr.P.C. The Magistrate's function is to ascertain whether the case, as disclosed by the police report, is triable exclusively by the Court of Session. The Magistrate's power to discharge the accused in such cases has been eliminated under the new Code.
  
  Conclusion:
  The High Court upheld the Sessions Judge's order quashing the discharge and directed the Magistrate to proceed in accordance with the law. The revision was dismissed as devoid of force, and the stay order was vacated. The case was sent back to the concerned court for quick dispatch.

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• 1981 (12) TMI 181
  
  Issues Involved:
  1. Whether the mortgage had come to an end as alleged and whether the plaintiff was entitled to recover.
  2. Adverse possession and limitation.
  3. Liability to pay mesne profits and its exemption under the Kerala Debt Relief Act, 17 of 1977.
  
  Issue-wise Detailed Analysis:
  
  1. Whether the mortgage had come to an end as alleged and whether the plaintiff was entitled to recover:
  The court held in favor of the plaintiff on this issue. The suit was based on the premise that the mortgage had ended when Parameswaran Nair acquired the C Schedule rights along with the obligation to discharge the mortgage. The trial court observed that a mortgagee was bound to deliver up the property after satisfaction of the mortgage debt, as his position was "that of a trustee for the owner." Therefore, a decree was passed for recovery of the A Schedule property with mesne profits from the date of deposit of value of improvements.
  
  2. Adverse possession and limitation:
  On this issue, the court found that Parameswaran Nair's possession was permissive and not adverse to the owners of the A Schedule properties. The trial court's observation was that the possession of Parameswaran Nair, and the defendants under him, after Ext. D-2, was in trust for the owner of the equity of redemption.
  
  3. Liability to pay mesne profits and its exemption under the Kerala Debt Relief Act, 17 of 1977:
  The court below held that the observation in the judgment that Parameswaran Nair and his successors were holding the properties in trust for the owners of the equity of redemption was conclusive. Therefore, the defendants were bound to account for the mesne profits, and their failure to do so amounted to a breach of trust, taking the liability out of the definition in Section 2(3) of the Act. Consequently, the revision petitioner was held ineligible to claim the benefit of Act 17/77.
  
  However, the approach made by the court below was not satisfactory. The trial court's observation about Parameswaran Nair holding the property in trust was related to the issue of adverse possession and not mesne profits. The question of mesne profits was separately considered and decided under issue No. (8).
  
  The court then examined whether a person continuing to occupy property after the extinguishment of the mortgage and being held liable for mesne profits constitutes a liability arising out of breach of trust. The court analyzed various legal definitions and precedents, concluding that a mortgagee is not a trustee for all purposes but may hold a fiduciary character in certain respects.
  
  The court referred to several decisions to illustrate that a mortgagee in possession has obligations similar to those of a trustee, but these obligations do not make the mortgagee a trustee in every circumstance. For example, the court noted that a mortgagee must manage the property prudently and keep accounts, similar to a trustee's duties. However, these instances are insufficient to conclude that a mortgagee is a trustee for all purposes.
  
  The court also discussed the legal definitions of "trust" and "breach of trust," emphasizing that a mortgagee who has been paid off has no legal estate, interest, or ownership in the property to which an obligation could be annexed for the benefit of the mortgagor.
  
  The court concluded that the liability in this case is not excluded by Section 2(3)(c) of Act 17/77, as the term "trust" should be understood in its legal sense, not its popular sense. Therefore, the order impugned was set aside, and the matter was remitted back to the court below to consider whether the petitioner is a "debtor" entitled to the protection of Section 3 of the Act.
  
  Conclusion:
  The court set aside the lower court's order and remitted the matter back for reconsideration on whether the petitioner is a "debtor" entitled to the protection of the Kerala Debt Relief Act, 17 of 1977. No costs were awarded.

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• 1981 (12) TMI 180
  
  Issues Involved:
  1. Whether any amount of property tax is in dispute in this appeal and if it must be deposited before the appeal can be heard or determined.
  2. The interpretation and application of Section 170(b) of the Act concerning the deposit of property tax amount in dispute before hearing the appeal.
  
  Issue-wise Detailed Analysis:
  
  1. Whether any amount of property tax is in dispute in this appeal and if it must be deposited before the appeal can be heard or determined:
  
  The first issue revolves around the determination of whether there is any amount of property tax in dispute that needs to be deposited by the appellant before the appeal can be heard or determined. The rateable value of the premises was initially fixed at Rs. 37,800.00, which was later increased to Rs. 88,500.00 due to additional construction. Subsequently, the Corporation issued a notice to the landlord to further increase the rateable value to Rs. 1,29,650.00, which was later revised to Rs. 1,16,550.00 after hearing objections. The landlord appealed under Section 169 of the Act without depositing any tax amount as required under Section 170(b).
  
  The court clarified that an appeal under Section 169 can be filed against both levy and assessment. The argument that no tax becomes due until an actual bill or levy is raised was found to be misconceived. The court affirmed that under Bye-law 9(5), property tax becomes due on the day the amendment is formally made in the assessment list. Thus, the amount in dispute was the difference between the original rateable value and the increased rateable value. The first part of the question was answered affirmatively, confirming that there is an amount of property tax in dispute in this appeal.
  
  2. The interpretation and application of Section 170(b) of the Act concerning the deposit of property tax amount in dispute before hearing the appeal:
  
  For the second issue, the court examined relevant sections closely. Section 170(b) stipulates that no appeal shall be heard or determined unless the amount in dispute is deposited by the appellant. The court highlighted that the right of appeal is a statutory right, and Section 170 imposes limitations on the District Court's power to hear and determine the appeal, requiring the disputed amount to be deposited.
  
  The court discussed the applicability of the Civil Procedure Code, particularly Order 41, Rule 5, which allows the appellate court to direct the deposit of the decretal amount or security in lieu of the deposit in money decrees. The court noted that the Corporation has effective and summary powers for the realization of tax dues, making the security question less relevant in this context.
  
  The court scrutinized Section 170(b) to determine whether the entire tax amount, the admitted amount, or the disputed amount should be deposited. It concluded that the literal interpretation of "the amount in dispute in the appeal" would mean the difference between the original and increased rateable values. However, this interpretation could lead to absurd results, defeating the objective of securing funds for the Corporation's administration.
  
  To resolve this, the court referred to Section 457, which prescribes that the procedure for appeals should follow the Civil Procedure Code as far as applicable. The District Court, in its discretion, can direct the appropriate sum to be deposited before hearing the appeal, balancing the interests of the assessed and the Corporation.
  
  The court also referenced a similar view taken by the Andhra Pradesh High Court, which held that the provisions of Order 41, Rule 5, Civil Procedure Code, apply to appeals questioning the enhancement of property tax, allowing for the stay of recovery of the tax.
  
  The court emphasized the importance of municipal corporations in managing civic obligations and the need for substantial financial resources. It recognized the limited taxation resources and the significant role of property tax in the Corporation's finances. The court concluded that the District Judge has the discretion to direct the deposit of an admitted amount, disputed amount, or a part of the total tax amount, with or without conditions, before the appeal can be heard or determined.
  
  Conclusion:
  
  The court answered the first part of the question affirmatively, confirming that there is an amount of property tax in dispute in this appeal. For the second part, it concluded that the appeal under Section 169 cannot be heard or determined unless the amount, as directed by the District Judge, is deposited by the appellant. The District Judge has the discretion to direct the deposit of an admitted amount, disputed amount, or a part of the total tax amount, with or without conditions.

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• 1981 (12) TMI 179
  
  Issues Involved:
  1. Legality of the petitioner's detention and remand to judicial custody.
  2. Allegations of torture, duress, and infringement of constitutional rights.
  3. Applicability of Section 167 of the Cr.P.C. to Enforcement Officers.
  4. Power of the Magistrate to remand under the Foreign Exchange Regulation Act, 1973, and the Customs Act, 1962.
  
  Detailed Analysis:
  
  1. Legality of the Petitioner's Detention and Remand to Judicial Custody:
  The petitioner was arrested by the Enforcement Directorate for contravening Section 8(1) of the Foreign Exchange Regulation Act, 1973, after being deported from the UK for carrying unauthorized currency. He was remanded to judicial custody by the Additional Chief Metropolitan Magistrate and subsequent bail applications were rejected. The petitioner contended that he was not an accused person until a complaint was filed, and therefore, could not be remanded to judicial custody. The Court examined the applicability of Section 167 of the Cr.P.C. and concluded that it does not apply to Enforcement Officers. The Court noted that the statutory power transforming an Enforcement Officer into an officer-in-charge of a police station is restricted and transitory, only for the purpose of granting or refusing bail. Consequently, the Magistrate could not rely on Section 167 of the Cr.P.C. for remand.
  
  2. Allegations of Torture, Duress, and Infringement of Constitutional Rights:
  The petitioner claimed that he was manhandled, his statements were recorded under torture and duress, and his Advocate was denied access. He argued that the procedures followed violated Articles 20(3) and 21 of the Constitution. The Court did not delve deeply into these allegations as the primary focus was on the legality of the detention and remand process.
  
  3. Applicability of Section 167 of the Cr.P.C. to Enforcement Officers:
  The Court discussed the applicability of Section 167 of the Cr.P.C., which deals with the power of an officer-in-charge of a police station to detain an accused. The Court referred to the Supreme Court's judgment in Illias v. The Collector of Customs, which clarified that the powers of an Enforcement Officer to arrest and release on bail do not extend to all powers of a police officer. The Court held that Section 167(2) of the Cr.P.C. does not apply to arrests made by Enforcement Officers under the Foreign Exchange Regulation Act, 1973.
  
  4. Power of the Magistrate to Remand under the Foreign Exchange Regulation Act, 1973, and the Customs Act, 1962:
  The Court analyzed the provisions of Section 104 of the Customs Act, 1962, and Section 35 of the Foreign Exchange Regulation Act, 1973, which are similar in granting arrest powers to specially authorized officers. However, these Acts do not specify the Magistrate's actions post-arrest. The Court noted that the remand power under Section 309 of the Cr.P.C. could only be exercised after the Magistrate takes cognizance of an offense, which was not possible in this case due to Section 61 of the Foreign Exchange Regulation Act, 1973, barring cognizance without a written complaint by the Director of Enforcement. The Court concluded that there was no provision allowing the remand under the current legal framework, resulting in the petitioner's detention being without authority of law.
  
  Conclusion:
  The Court identified a legislative lacuna in the remand provisions for cases under the Customs Act and the Foreign Exchange Regulation Act. The petition for habeas corpus was granted, and the petitioner was ordered to be released forthwith. The Court emphasized that the lacuna must be addressed by the Legislature, not the Judiciary.
  
  Judgment:
  Petition allowed.

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• 1981 (12) TMI 178
  
  Issues Involved:
  1. Exemption from tax under the Kerala Motor Vehicles Taxation Act, 1976.
  2. Validity and effective date of the Kerala Motor Vehicles Taxation Rules, 1975.
  3. Interpretation of Section 5 of the Kerala Motor Vehicles Taxation Act, 1976.
  4. Requirement of prior intimation for tax exemption.
  5. Constitutional validity of Section 5 regarding arbitrary discrimination.
  6. Necessity of publication for the validity of subordinate legislation.
  
  Detailed Analysis:
  
  1. Exemption from Tax Under the Kerala Motor Vehicles Taxation Act, 1976
  The petitions involved vehicles that were not used during specific periods, and the petitioners sought exemption from tax under the Kerala Motor Vehicles Taxation Act, 1976. The court examined whether the petitioners complied with the requirement of prior intimation for claiming tax exemption.
  
  2. Validity and Effective Date of the Kerala Motor Vehicles Taxation Rules, 1975
  The court noted that the Kerala Motor Vehicles Taxation Rules, 1975, were published in the Kerala Gazette on 29-9-1975 but were released to the public on 14-10-1975. The court held that the rules could only be effective from the date they were made available to the public, i.e., 14-10-1975. This was supported by the decision in G. Narayana Reddy v. State of Andhra Pradesh, which stated that a notification is effective from the date it is released to the public.
  
  3. Interpretation of Section 5 of the Kerala Motor Vehicles Taxation Act, 1976
  Section 5 of the Act requires prior intimation for claiming tax exemption. The court observed that the wording of Section 5 could lead to arbitrary discrimination, as it only allowed exemption for the first month, the first and second months, or the whole quarter. However, the learned Advocate General conceded that exemption could be claimed for any month or months of a quarter, thus avoiding constitutional issues.
  
  4. Requirement of Prior Intimation for Tax Exemption
  The court held that the statutory rule-making authority had relaxed the stringent provision of prior intimation in Section 5 by allowing intimation within one week from the commencement of the period for which exemption is claimed. Therefore, the petitioners' intimation given within a week of the effective date of the rules (14-10-1975) was sufficient for claiming exemption.
  
  5. Constitutional Validity of Section 5 Regarding Arbitrary Discrimination
  The court noted that the wording of Section 5 could lead to unconstitutional results due to arbitrary discrimination. However, the concession made by the learned Advocate General that exemption could be claimed for any month or months of a quarter resolved this issue, making it unnecessary to consider the constitutional validity of Section 5.
  
  6. Necessity of Publication for the Validity of Subordinate Legislation
  The court emphasized the necessity of adequate publication for the validity of subordinate legislation. It referred to decisions by the Supreme Court, including Harla v. State of Rajasthan and State of Kerala v. P. J. Joseph, which held that laws must be promulgated or published to be operative. The court overruled the decision in Kochusara v. Gracy C. T., which held that mere making of subordinate legislation is sufficient for its validity.
  
  Conclusion
  The court allowed the writ petitions, quashing the demands for vehicle tax for the period 1-10-1975 to 31-12-1975, as the applications for exemption were within time. The necessity of publication for the validity of subordinate legislation was reaffirmed, and the interpretation of Section 5 was clarified to allow exemptions for any month or months of a quarter.
  
  Separate Judgment:
  George Abraham Vadakkel, J. agreed with the decision but based his reasoning on the principles stated in Cherian Thomas v. Regional Transport Officer, emphasizing substantial compliance with Section 5(1) of the Act. He also acknowledged the necessity of publication for the rules to come into force but refrained from expressing an opinion on the larger question of when subordinate legislation becomes effective.

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• 1981 (12) TMI 177
  
  Issues Involved:
  1. Legality of the petitioner's detention and remand to judicial custody.
  2. Allegations of manhandling and improper recording of statements.
  3. Applicability of Section 167 of the Criminal Procedure Code (CrPC) to the Enforcement Officer.
  4. Interpretation of Sections 104 of the Customs Act, 1962 and 35 of the Foreign Exchange Regulation Act, 1973.
  5. Legislative lacuna in the Criminal Procedure Code regarding remand powers.
  
  Detailed Analysis:
  
  1. Legality of the Petitioner's Detention and Remand to Judicial Custody:
  The petitioner was arrested and produced before the Additional Chief Metropolitan Magistrate, New Delhi, for an offence under the Foreign Exchange Regulation Act, 1973. The petitioner's bail applications were rejected, and he was remanded to judicial custody. The petitioner contended that he was not an accused until a complaint was filed and, therefore, could not be remanded to judicial custody. The court examined the applicability of Section 167 of the CrPC, which deals with the power of an officer-in-charge of a police station to seek remand when the investigation cannot be completed within 24 hours. The court held that the Enforcement Officer could not be treated as a police officer for the purposes of Section 167, as per the Supreme Court's interpretation in Illias v. The Collector of Customs, Madras. Consequently, the remand to judicial custody was deemed unlawful.
  
  2. Allegations of Manhandling and Improper Recording of Statements:
  The petitioner claimed that he was manhandled by the Enforcement Directorate and that his statements were recorded under torture, duress, and mal-treatment, in violation of Articles 20(3) and 21 of the Constitution. However, this issue was not the primary focus of the court's judgment, which centered on the legality of the detention and remand procedures.
  
  3. Applicability of Section 167 of the Criminal Procedure Code to the Enforcement Officer:
  The court addressed whether Section 167 of the CrPC could be applied to the Enforcement Officer. It was concluded that the Enforcement Officer could not be treated as a police officer within the meaning of Section 167. The statutory power of the Enforcement Officer to act as an officer-in-charge of a police station is limited to the purpose of granting or refusing bail, not for seeking remand under Section 167. This interpretation was consistent with the Supreme Court's ruling in Illias v. The Collector of Customs, Madras.
  
  4. Interpretation of Sections 104 of the Customs Act, 1962 and 35 of the Foreign Exchange Regulation Act, 1973:
  The court examined the provisions of Section 104 of the Customs Act, 1962, and Section 35 of the Foreign Exchange Regulation Act, 1973, which are practically identical. Both sections empower specially authorized officers to arrest individuals believed to be guilty of an offence and to take them to a Magistrate without unnecessary delay. The court noted that neither Act specifies what the Magistrate should do after the arrested person is produced before him. The court concluded that the statutory framework does not provide for remand to judicial custody under these provisions.
  
  5. Legislative Lacuna in the Criminal Procedure Code Regarding Remand Powers:
  The court identified a legislative lacuna in the CrPC, as the power to remand an accused person to custody is not explicitly provided for in cases arising under the Customs Act or the Foreign Exchange Regulation Act. The court noted that the power to remand under Section 309 of the CrPC is only available after the Magistrate takes cognizance of an offence, which is barred by Section 61 of the Foreign Exchange Regulation Act, 1973, unless a complaint is made by the Director of Enforcement or a specially authorized officer. The court emphasized that this lacuna needs to be addressed by the Legislature.
  
  Conclusion:
  The court concluded that the remand to judicial custody was not valid and that the petitioner was being detained without authority of law. The court granted the writ of habeas corpus and ordered the petitioner's immediate release. The court highlighted the need for legislative action to address the identified lacuna in the CrPC regarding remand powers in cases under the Customs Act and the Foreign Exchange Regulation Act.

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• 1981 (12) TMI 176
  
  Issues:
  Recall of judgment based on misplaced memos of appearance and non-deliberate absence of counsel.
  
  Analysis:
  The judgment in question involves an application for recalling a judgment and order dated 6-11-1981 passed in a criminal appeal. The appellants sought to recall the judgment due to the non-deliberate absence of their counsel, despite having filed memos of appearance. The counsel highlighted that the memos were not placed on record, leading to the misunderstanding regarding representation. The counsel argued that had the memos been noticed, the hearing would have been adjourned. The absence of the counsel was deemed unintentional, and the facts presented by the counsel were verified by the court.
  
  The main legal issue revolved around the applicability of Section 362 of the Criminal Procedure Code (CrPC) concerning the recall of a judgment. Section 362 prohibits a court from altering or reviewing a judgment once signed, except for correcting clerical or arithmetical errors. The court analyzed the language and scope of Section 362, emphasizing that it applies to all courts, including the High Court. The court referred to a Supreme Court decision that highlighted the restrictions imposed by Section 362 on altering or reviewing judgments.
  
  The court further examined the absence of any provision in the CrPC or other laws empowering the High Court to recall or set aside a judgment in such circumstances. The court dismissed the argument that recall of a judgment does not constitute an alteration or review, stating that such an interpretation would circumvent the clear prohibition of Section 362. Additionally, the court clarified that the inherent powers of the High Court under Section 482 of the CrPC cannot be invoked to review a judgment when Section 362 applies.
  
  The court also referred to previous Supreme Court decisions that upheld the restrictions imposed by Section 362 and Section 482 of the CrPC. The court emphasized that the present case did not fall under the category of correcting clerical or arithmetical errors, which are the only grounds for altering a judgment under Section 362.
  
  Ultimately, the court concluded that based on the legal provisions and precedents, the judgment and order dated 6-11-1981 could not be recalled or set aside by the court, even in the exercise of its inherent jurisdiction. The application for the recall of the judgment was dismissed, affirming the prohibition under Section 362 of the CrPC.

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• 1981 (12) TMI 175
  
  Issues Involved:
  1. Right to redeem the mortgaged property.
  2. Relinquishment of rights by the mortgagor's heirs.
  3. Suit barred by limitation and estoppel.
  4. Indivisibility of the mortgage.
  5. Abatement of the suit due to non-substitution of deceased defendant's heirs.
  6. Expenditure incurred on repairs by the mortgagee.
  
  Detailed Analysis:
  
  1. Right to Redeem the Mortgaged Property:
  The primary issue was whether the plaintiff had the right to redeem the mortgaged property. The trial court initially dismissed the suit, holding that the plaintiff had no right to redeem as he had not proved the purchase of the property benami in the name of Shantilal. However, the Assistant Judge on appeal found that the plaintiff had indeed purchased the equity of redemption benami and was entitled to redeem the property. This finding was upheld by the Division Bench of the High Court, which decreed the suit for redemption.
  
  2. Relinquishment of Rights by the Mortgagor's Heirs:
  The defendant argued that the plaintiff's predecessors, including Chimanrai, his widow Chhotiba, and his daughter Taralaxmibai, had relinquished their rights in the property, thereby estopping the plaintiff from claiming redemption. The trial court and the Joint Civil Judge, Jr. Division, initially found that the heirs had relinquished their rights. However, the Assistant Judge on appeal found that the endorsements made by the heirs did not amount to relinquishment of their rights. The Division Bench of the High Court agreed, holding that the endorsements were mere admissions and did not constitute estoppel.
  
  3. Suit Barred by Limitation and Estoppel:
  The defendant contended that the suit was barred by limitation and estoppel. The trial court and the Joint Civil Judge, Jr. Division, initially agreed. However, the Assistant Judge and the Division Bench of the High Court found that the suit was within the limitation period and not barred by estoppel. The Division Bench specifically noted that estoppel deals with questions of fact and not rights, and that none of the conditions for estoppel under Section 115 of the Evidence Act were satisfied.
  
  4. Indivisibility of the Mortgage:
  The defendant argued that the mortgage could not be split and must be treated as one indivisible security. The Division Bench of the High Court, however, held that the suit could proceed against the surviving defendant No. 1, as the plaintiff was prepared to pay the entire mortgage amount. The court referred to Section 60 of the Transfer of Property Act and Order 34, Rule 1 of the CPC, which allow for such a situation.
  
  5. Abatement of the Suit Due to Non-Substitution of Deceased Defendant's Heirs:
  During the pendency of the appeal, defendant No. 2 died, and his heirs were not brought on record. The District Judge held that the appeal abated only as against defendant No. 2 and could proceed against defendant No. 1. The Division Bench of the High Court upheld this view, stating that the suit against the surviving defendant No. 1 was maintainable despite the abatement.
  
  6. Expenditure Incurred on Repairs by the Mortgagee:
  The defendant claimed that substantial amounts were spent on repairs and sought reimbursement. The trial court found that the defendant had spent Rs. 3374-2-0 on repairs. The Assistant Judge on appeal held that the plaintiff was entitled to redeem the property on payment of Rs. 4724-2-0, which included the mortgage money and the expenditure on repairs. The Division Bench of the High Court upheld this finding.
  
  Conclusion:
  The Supreme Court upheld the judgment of the Division Bench of the High Court, dismissing the appeal and confirming the plaintiff's right to redeem the mortgaged property. The court found no merit in the contentions regarding estoppel, indivisibility of the mortgage, and abatement of the suit. The appeal was dismissed with costs.

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• 1981 (12) TMI 174
  
  Issues Involved:
  1. Doctrine of Notice
  2. Notice to Official Liquidator under Section 531(A) of the Companies Act
  3. Recognition of assignment of decree
  4. Jurisdiction and procedural requirements under Order 21, Rule 16 of the CPC
  
  Detailed Analysis:
  
  1. Doctrine of Notice:
  The primary issue in this Civil Revision Petition revolves around the "Doctrine of Notice." The question is whether the notice of rights and claims of a defunct company, now under liquidation, should be given to the company's director or the Official Liquidator. The court held that the Official Liquidator, who took control on 22nd April 1976, must be given notice under Section 531(A) of the Companies Act, which aligns with Sections 320 and 321 of the Indian Companies Act of 1948. The court emphasized that the Official Liquidator has supervisory and scrutinizing powers over the company's transactions, including assignments made before the winding-up order.
  
  2. Notice to Official Liquidator under Section 531(A) of the Companies Act:
  The court underscored the necessity of notifying the Official Liquidator about the assignment of the decree. The court stated, "when once the order for winding up has been made... it is well established position of law that from the date of the order of the winding up the activities of the company... are subject to the supervision of the Official Liquidator." The court rejected the argument that notice to the Official Liquidator was unnecessary because the assignment occurred two years before the liquidator's appointment. The court concluded that the Official Liquidator must be informed to scrutinize the assignment's validity.
  
  3. Recognition of Assignment of Decree:
  The court addressed the procedural aspect of recognizing the assignment of the decree. The lower court had previously recognized the assignment without notifying the Official Liquidator, leading to the current revision petition. The court found that the assignment must be scrutinized by the Official Liquidator, who should be notified to ensure the transaction's legality and to protect the interests of the company's shareholders.
  
  4. Jurisdiction and Procedural Requirements under Order 21, Rule 16 of the CPC:
  The court examined the procedural requirements under Order 21, Rule 16 of the CPC, which mandates notice to the transferor and judgment-debtor before executing a decree by an assignee. The court cited several precedents, including Dhanai Ram v. Sri Ram and Sarifa Khatun v. Asimannessa Bibi, emphasizing that the absence of necessary notice invalidates the execution proceedings. The court concluded that the Official Liquidator must be notified to assume jurisdiction properly and ensure that the execution proceedings are valid.
  
  Conclusion:
  The court allowed the Civil Revision Petition, remitting the matter back to the lower court for reconsideration in light of the observations made. The court ordered that both parties be given an opportunity to present evidence, both oral and documentary. The court emphasized that notice must be given to the Official Liquidator to ensure the assignment's legality and protect the company's shareholders' interests. The court concluded with no order as to costs.

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• 1981 (12) TMI 173
  
  Issues Involved:
  1. Constitutional validity of the second proviso to sub-cl. (1) of cl. 11 of the Punjab Foodgrains Dealers Licensing and Price Control Order, 1978.
  2. Legality and propriety of the action of the licensing authorities in suspending the licences held by the petitioners.
  3. Allegations of mala fide and motivated actions by the licensing authorities.
  
  Summary:
  
  Issue 1: Constitutional Validity
  The petitioners challenged the constitutional validity of the second proviso to sub-cl. (1) of cl. 11 of the Punjab Foodgrains Dealers Licensing and Price Control Order, 1978, as inserted by the Punjab Foodgrains Dealers Licensing and Price Control (First Amendment) Order, 1980, on the grounds that it violated Arts. 14 and 19 (1) (g) of the Constitution. The Court held that the second proviso to sub-cl. (1) of cl. 11 of the Order does not confer unguided, uncontrolled, and arbitrary power to suspend a licence. The power of suspension is a necessary concomitant of the power to grant a licence and is a measure of social control in the interests of the community. The Court found that the proviso satisfies the test of reasonableness and strikes a proper balance between the freedom of trade or business guaranteed under Art. 19 (1) (g) and the social control permitted by cl. (6) of Art. 19 of the Constitution. Therefore, it does not suffer from the vice of arbitrariness and is not violative of Art. 14.
  
  Issue 2: Legality and Propriety of Suspension
  The petitioners argued that the suspension of their licences was not for any breach of the licence conditions but was motivated by extraneous considerations. The Court noted that the power of suspension conferred by the second proviso to sub-cl. (1) of cl. 11 of the Order is by way of an interim measure, pending the holding of an inquiry as to whether there is any breach which must result in cancellation of the licence. The Court found that the power of suspension is not exercisable unless there is a breach, and the breach is of such a nature that it must entail cancellation of the licence. The Court held that the orders of suspension in these cases were for breaches of conditions Nos. 4, 8, and 10 of the licence, and the question of whether the petitioners committed the breaches is a matter for inquiry by the licensing authorities under sub-cl. (1) of cl. 11 of the Order.
  
  Issue 3: Allegations of Mala Fide Actions
  The petitioners alleged that the suspension of their licences was mala fide and motivated, aimed at preventing them from exporting wheat from the State of Punjab to other States. The Court found that the allegations in the petitions were not supported by affidavits as required by law and lacked sufficient particulars to constitute an averment of mala fides. The Court held that the burden of establishing mala fides lies heavily on the person who alleges it, and the petitioners failed to establish the charge of bad faith or bias. The Court concluded that the impugned orders of suspension were justified and not motivated by improper motives.
  
  Conclusion:
  The petitions were dismissed with costs, and the Court upheld the constitutional validity of the second proviso to sub-cl. (1) of cl. 11 of the Order, as well as the legality and propriety of the suspension orders issued by the licensing authorities.

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• 1981 (12) TMI 172
  
  Issues:
  Scope of order 41, rule 22 and order 41, rule 33 of the Code of Civil Procedure.
  
  Analysis:
  The judgment by the Supreme Court involved eight appeals raising a common question of law regarding the scope of order 41, rule 22 and order 41, rule 33 of the Code of Civil Procedure. The court decided to dispose of these appeals by a common judgment due to the similarity in the questions raised. The specific facts of one civil appeal were referred to, where the appellant was a land holder under the Bihar Land Reforms Act. The Collector initially allotted twelve units to the appellant, who then appealed before the Commissioner. The State of Bihar did not appeal the Collector's decision. The Commissioner, however, set aside the Collector's finding regarding the units allotted to the appellant, leading to further legal challenges. The High Court upheld the Commissioner's decision based on order 41, rule 22, which was the main contention raised by the appellants in the various appeals.
  
  The main contention raised by the appellants was that the Commissioner was not justified in reversing the finding in favor of the appellants without any appeal or cross-objection filed by the State of Bihar. The court analyzed the provisions of order 41, rule 22, which allows a respondent to support the decree but not challenge it without filing a cross-objection. Since the State of Bihar did not file any appeal or cross-objection, the court held that the Commissioner could not have set aside the finding in favor of the appellant based on this rule alone. The court also examined order 41, rule 33 of the Code of Civil Procedure, which empowers the Appellate Court to pass any decree necessary for complete justice between the parties, even if they have not filed an appeal or objection.
  
  The court discussed previous judgments to interpret the scope and application of order 41, rule 33. It emphasized that this rule should be applied with discretion to avoid contradictory decisions and to ensure justice between the parties. The court highlighted that the power under this rule should be exercised carefully, especially when interfering with final decrees without appeals or cross-objections. In the present case, the court found that the Commissioner and the High Court erred in reversing the finding regarding the allotment of units without any appeal by the State of Bihar. The court concluded that the Commissioner and the High Court's decisions were incorrect, and the appeals were allowed. The order of the High Court and the Commissioner were set aside concerning the finding of the Collector in favor of the appellants, while the remand order remained intact for other points. Each party was directed to bear their own costs.
  
  In summary, the Supreme Court's judgment clarified the application of order 41, rule 22 and order 41, rule 33 of the Code of Civil Procedure in the context of appeals related to land holdings under the Bihar Land Reforms Act. The court emphasized the importance of following procedural rules and ensuring justice between the parties, especially when interfering with final decrees without proper appeals or objections.

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• 1981 (12) TMI 171
  
  Issues Involved:
  1. Validity of the Life Insurance Corporation (Amendment) Act, 1981.
  2. Validity of the Life Insurance Corporation (Amendment) Ordinance, 1981.
  3. Validity of the Life Insurance Corporation of India Class III and Class IV Employees (Bonus and Dearness Allowance) Rules, 1981.
  4. Violation of Articles 14, 19(1)(g), and 21 of the Constitution.
  5. Excessive delegation of legislative functions.
  6. Retrospective operation of rules and nullification of court orders.
  
  Detailed Analysis:
  
  1. Validity of the Life Insurance Corporation (Amendment) Act, 1981:
  The Act was challenged on the grounds that it violated Articles 14, 19(1)(g), and 21 of the Constitution. The Court found that the claim based on the 1974 settlements is not a fundamental right enforceable under Article 19(1)(g) and that the argument under Article 21 was also untenable. The Court held that the Act did not infringe Article 14 as the petitioners failed to establish that the employees of the Life Insurance Corporation (LIC) were similarly circumstanced to those in other public sector undertakings. The Court also rejected the argument of excessive delegation, stating that the legislative policy was sufficiently clear and provided guidance to the rule-making authority.
  
  2. Validity of the Life Insurance Corporation (Amendment) Ordinance, 1981:
  The Ordinance, which preceded the Act, was replaced by the Act. The Court examined the changes introduced by the Ordinance, including the insertion of new sub-clauses and sub-sections in Section 48 of the principal Act. The Court found that the provisions introduced by the Ordinance were similar to those in the Amendment Act and upheld their validity for the same reasons.
  
  3. Validity of the Life Insurance Corporation of India Class III and Class IV Employees (Bonus and Dearness Allowance) Rules, 1981:
  The Rules were challenged for being retrospective and nullifying the effect of a writ issued by the Supreme Court in D.J. Bahadur's case. The Court held that while the Rules could operate prospectively from their date of publication (February 2, 1981), they could not nullify the effect of the writ issued in D.J. Bahadur's case, which directed the LIC to give effect to the terms of the 1974 settlements relating to bonus until superseded by a fresh settlement, an industrial award, or relevant legislation.
  
  4. Violation of Articles 14, 19(1)(g), and 21 of the Constitution:
  The Court found no substance in the challenges based on Articles 19(1)(g) and 21. Regarding Article 14, the Court held that the petitioners failed to demonstrate hostile discrimination, and the material provided by the Union of India and LIC, though not conclusive, suggested that the remuneration of LIC employees was higher than that of similarly situated employees in other public sector undertakings.
  
  5. Excessive Delegation of Legislative Functions:
  The Court rejected the argument of excessive delegation, stating that the Amendment Act laid down a clear legislative policy to guide the rule-making authority. The Court referred to previous decisions, including Harishankar Bagla's case, to support its conclusion that the delegation was within permissible limits and that the Act did not abdicate legislative authority.
  
  6. Retrospective Operation of Rules and Nullification of Court Orders:
  The Court held that Rule 3 of the 1981 Rules, which sought to supersede the terms of the 1974 settlements relating to bonus with retrospective effect, could not nullify the effect of the writ issued in D.J. Bahadur's case. The Court emphasized that the writ issued by the Supreme Court must be obeyed and that the retrospective operation of the Rules could not override the judicial mandate.
  
  Conclusion:
  The Court allowed the petitions to the extent that the 1981 Rules could only operate prospectively from February 2, 1981, and could not nullify the effect of the writ issued in D.J. Bahadur's case. The Court made no order as to costs.

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• 1981 (12) TMI 170
  
  Issues Involved:
  1. Validity of Government Resolution dated March 22, 1968.
  2. Delay and laches in filing the writ petition.
  3. Principles for fixing seniority in the BRO.
  4. Equating posts of Supply Inspectors and Clerks.
  5. Provisions of Rule 4 and Rule 7 of the Government Resolution.
  6. Preparation and validity of seniority lists dated November 18, 1975, and November 27, 1975.
  
  Issue-wise Detailed Analysis:
  
  1. Validity of Government Resolution dated March 22, 1968:
  The petitioners challenged the legality and validity of the Government Resolution dated March 22, 1968, which laid down the principles for determining the inter se seniority of personnel appointed in the BRO. The Supreme Court concluded that the principles enunciated in the Resolution were reasonable, just, and equitable, and thus, not violative of Articles 14 and 16 of the Constitution. The Court emphasized that the BRO was a newly constituted organization with personnel drawn from different sources, necessitating the formulation of fair principles for seniority determination.
  
  2. Delay and laches in filing the writ petition:
  The respondents raised a preliminary objection regarding the delay and laches in filing the writ petition, arguing that the challenge was highly belated. The Supreme Court upheld this objection, noting that the petitioners had ample opportunity to challenge the Resolution and the seniority lists but failed to do so within a reasonable time. The Court highlighted that the petitioners were aware of the seniority principles since the provisional gradation list was published on May 28, 1971, yet they approached the court only in 1976, which was deemed inordinate delay.
  
  3. Principles for fixing seniority in the BRO:
  The Supreme Court found the principles laid down in the Government Resolution for fixing seniority in the BRO to be reasonable and justified. It was noted that the BRO's staff was drawn from four different sources, including the CFD personnel, deputationists from other departments, and direct recruits. The Court held that the equation of posts and the seniority determination principles were necessary for the integration of personnel from diverse sources and were not arbitrary or discriminatory.
  
  4. Equating posts of Supply Inspectors and Clerks:
  The Court rejected the contention that equating the posts of Supply Inspectors in the CFD with Clerks from other departments was discriminatory. It was noted that the Supply Inspectors were temporary appointees, while the Clerks were regular appointees through the Public Service Commission. The Court found the equation reasonable, given the nature of duties and the precarious status of the Supply Inspectors' appointments.
  
  5. Provisions of Rule 4 and Rule 7 of the Government Resolution:
  The Supreme Court upheld the validity of clauses (a) and (c) of Rule 4 and the proviso to Rule 7 of the Government Resolution. The Court disagreed with the High Court's view that these provisions were violative of Articles 14 and 16. It was held that the principles for determining seniority, including the deduction of two years from the length of continuous service for certain categories, were reasonable and justified in the context of integrating personnel from different sources.
  
  6. Preparation and validity of seniority lists dated November 18, 1975, and November 27, 1975:
  The Supreme Court found substance in the petitioners' grievance that the seniority lists were not prepared in strict accordance with the principles laid down in the Government Resolution. It was noted that some juniors in the CFD were ranked above the petitioners in the BRO, and some Clerks were shown as seniors to the petitioners despite their subsequent promotions. The Court directed the State of Maharashtra and the Controller of Rationing to revise the seniority lists and refix the rankings in accordance with the legal principles explained in the judgment.
  
  Conclusion:
  The appeal was allowed, and the judgments of the High Court were set aside. The writ petition was allowed to the limited extent of directing the revision of the seniority lists, and it was dismissed in other respects. The parties were ordered to bear their respective costs.

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• 1981 (12) TMI 169
  
  Issues Involved:
  
  1. Whether the defendant Bank was a purchaser of the bills or merely a collecting agent.
  2. Whether the defendant Bank was justified in reversing the credit entry without returning the documents.
  3. Whether the plaintiff company gave specific instructions for the collection of bills through a particular agency.
  4. Whether the necessary parties were included in the suit.
  
  Issue-wise Detailed Analysis:
  
  1. Whether the defendant Bank was a purchaser of the bills or merely a collecting agent:
  
  The primary contention was whether the Bank, by accepting the relevant documents with endorsement in its favor and discounting the same by crediting the price to the plaintiff's account immediately, became a purchaser for value or was merely a collecting agent. The court referred to the Supreme Court judgment in Morvi Mercantile Bank Ltd. v. Union of India, AIR 1965 SC 1954, which established that transport receipts are documents of title to goods and their transfer for consideration constitutes constructive delivery of goods. The court further analyzed banking practices, distinguishing between "Bills for collection" and "Bills discounted." The evidence presented showed that the defendant Bank credited the plaintiff's account immediately upon receiving the documents, indicating that the Bank was a purchaser of the bills and not merely a collecting agent.
  
  2. Whether the defendant Bank was justified in reversing the credit entry without returning the documents:
  
  The plaintiff argued that the Bank had no right to reverse the credit entry unless the relevant documents or the goods covered by them were returned. The court agreed with this contention, noting that the Bank, having discounted the bills and credited the amount to the plaintiff's account, assumed the responsibility of collecting the amount from the drawee. If the drawee refused or the documents were dishonored, the Bank was required to return the documents to the drawer and collect the value either in cash or by debiting the same amount in the plaintiff's account. The Bank's action of reversing the credit entry without returning the documents was deemed unjustified.
  
  3. Whether the plaintiff company gave specific instructions for the collection of bills through a particular agency:
  
  The defendant Bank claimed that the plaintiff instructed it to send the bills and documents for collection through Canara Banking Corporation, Semapur. However, the court found the evidence regarding these instructions unsatisfactory and inconsistent. The application form (Ex. P-9) had a blank space for noting the agency, which was left vacant by the plaintiff. The court concluded that the Bank adopted its own mode and choice of agency, sending the documents through the post office by registered post, which were delivered to a wrong and unknown person who committed fraud. Thus, the plaintiff did not give specific instructions for the collection through a particular agency.
  
  4. Whether the necessary parties were included in the suit:
  
  The defendant Bank argued that Om Prakash, his Munim Mahadeo, Premchand, and the Ministry of Post and Telegraph Department were necessary parties to the suit. The trial court had earlier held that no other party or persons except the defendant Bank were necessary parties. The appellate court upheld this decision, finding no merit in the defendant's contention.
  
  Conclusion:
  
  The court dismissed the appeal, affirming the trial court's judgment that the defendant Bank was the purchaser of the bills and liable for the amount to the plaintiff. The Bank's reversal of the credit entry without returning the documents was unjustified, and the plaintiff did not give specific instructions for collection through a particular agency. The necessary parties were correctly included in the suit. The appeal was dismissed with costs, and counsel's fee was set at Rs. 600, if certified.

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• 1981 (12) TMI 168
  
  Issues Involved:
  1. Jurisdiction of the Revenue Divisional Officer (RDO) to pass a composite order.
  2. Discretion of the RDO to grant and extend time for payment of arrears.
  3. Compliance with statutory obligations under the Tamil Nadu Cultivating Tenants Protection Act, 1955.
  4. Procedural requirements for eviction orders.
  
  Detailed Analysis:
  
  1. Jurisdiction of the Revenue Divisional Officer (RDO) to Pass a Composite Order:
  The central issue was whether the RDO erred in passing a composite order that determined the arrears of rent and simultaneously directed eviction upon failure to pay within a specified time. The judgment clarified that the RDO does not have the jurisdiction to pass such composite orders. The correct procedure, as per Section 3(4)(b) of the Act, involves first determining the arrears and granting time to the tenant to pay. Only upon failure to pay within the granted time and after further proceedings, can an eviction order be passed. The Court emphasized that the statute grants a locus poenitentiae (opportunity to repent) to the tenant, and the RDO must follow a two-stage process: first, fixing the arrears and granting time, and second, ordering eviction if the tenant fails to comply.
  
  2. Discretion of the RDO to Grant and Extend Time for Payment of Arrears:
  The judgment examined whether the RDO has discretion to grant and extend time for payment of arrears. It was concluded that the RDO is statutorily obligated to grant time to the tenant to pay the arrears, considering the relative circumstances of both the landlord and the tenant. This discretion must be exercised judicially, based on objective facts. The judgment highlighted that the RDO must evaluate circumstances such as the landlord's need for rent and the tenant's financial capacity. The RDO retains the jurisdiction to extend the time initially fixed, and passing a composite order that denies this jurisdiction is improper.
  
  3. Compliance with Statutory Obligations under the Tamil Nadu Cultivating Tenants Protection Act, 1955:
  The Act aims to protect cultivating tenants from eviction and ensure security of tenure. The judgment stressed that the provisions of the Act should be construed to advance its objective. The RDO's role is judicial, and the proceedings must be conducted with due process, including granting time for payment of arrears and considering extensions if necessary. The judgment criticized the High Court for its contradictory stance and affirmed that the RDO must follow the statutory procedure without passing conditional eviction orders.
  
  4. Procedural Requirements for Eviction Orders:
  The Court outlined the procedural requirements for eviction under the Act. The RDO must first determine the arrears and grant time for payment. If the tenant fails to pay within the granted time, further proceedings must be conducted to consider any requests for extension before ordering eviction. The judgment emphasized that the RDO's order must be a speaking order, reflecting the inquiry into the relative circumstances of the landlord and tenant. The High Court's failure to adhere to this procedure was noted, and the Supreme Court set aside the eviction orders, recognizing that the tenants had complied with the High Court's conditional stay orders.
  
  Separate Judgments:
  Koshal, J.:
  Koshal, J. concurred with the main judgment but added that the RDO cannot pass a conditional order of eviction to take effect on a future default. He emphasized that the RDO's orders were without jurisdiction and that the tenants had complied with the High Court's orders, making it unnecessary to remit the case back to the RDO. Koshal, J. disagreed with the view that it is obligatory for the RDO to grant time to the tenant in all cases, arguing that the RDO has discretion in this matter.
  
  Misra, J.:
  Misra, J. agreed with Koshal, J., affirming the decision to allow the appeals and set aside the eviction orders without remanding the cases to the RDO.
  
  Conclusion:
  The Supreme Court allowed the appeals, set aside the eviction orders, and held that the tenants were entitled to protection under the Act. The judgment clarified the procedural requirements for eviction and the RDO's jurisdiction, emphasizing the need for judicial discretion and adherence to statutory obligations.

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• 1981 (12) TMI 167
  
  Issues:
  Interpretation of the term "iron scrap" under the Central Sales Tax Act. Applicability of the notification levying tax on declared goods. Classification of tin scrap for tax purposes.
  
  Analysis:
  The judgment in question pertains to the interpretation of the term "iron scrap" under the Central Sales Tax Act. The Sales Tax Tribunal had previously ruled that scrap purchased from outside and sold in the State fell under the category of 'iron scrap' as per the Act. The Tribunal's reasoning was based on the understanding that 'scrap' in the sub-clause encompassed scraps of all items listed in subsequent entries, including tin plates which were considered to be iron sheets with a coating of tin. However, the High Court delved into the definition of 'scrap,' emphasizing its connotation of waste or useless material, distinct from other terms like defectives or rejects. The court rejected the argument that tin scrap could be classified under a different clause, highlighting the exhaustive nature of the list provided in the Act.
  
  Furthermore, the judgment addressed the applicability of a notification levying tax on declared goods, specifically tin scrap in this case. The court noted that if tin scrap were to be considered a declared good, it would be taxable at a rate of four percent as per the relevant notification. However, the primary issue at hand was whether tin scrap could be equated with iron scrap under the Act, a question that needed clarification before determining its tax status. The court emphasized the distinction between iron and tin as commodities, highlighting their differences in commercial and popular contexts, which made it challenging to categorize tin scrap under the broader term of iron scrap.
  
  In conclusion, the High Court allowed the revision, setting aside the Tribunal's decision and ruling that tin scrap did not fall under the definition of iron scrap as specified in the Central Sales Tax Act. The court directed the Tribunal to assess the applicability of a specific notification that could potentially govern the tax treatment of tin scrap. The judgment clarified the distinct classification of tin scrap and emphasized the importance of precise interpretation within the framework of tax laws to avoid ambiguity and ensure accurate taxation.

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• 1981 (12) TMI 166
  
  Issues Involved:
  1. Ordinance-making power of the President.
  2. Constitutionality of the National Security Act, 1980.
  3. Implementation of the 44th Constitution Amendment Act.
  4. Vagueness of the provisions of the National Security Act.
  5. Procedural fairness before the Advisory Boards.
  6. Conditions of detention under the National Security Act.
  
  Issue-wise Detailed Analysis:
  
  1. Ordinance-making power of the President:
  The petitioners challenged the President's power to issue an ordinance depriving any person of life or liberty, arguing that:
  - The power to issue an ordinance is an executive power, not a legislative power.
  - Ordinance is not 'law' because it is not made by an agency created by the Constitution for making laws.
  - Article 21 of the Constitution implies that a person can be deprived of life or liberty only according to the procedure established by law, and an ordinance does not qualify as 'law' within this context.
  The Court rejected these arguments, holding that the power to issue an ordinance is indeed a legislative power and that an ordinance has the same force and effect as an Act of Parliament. The Court emphasized that the ordinance-making power is necessary for urgent situations and is subject to the same constraints as laws made by Parliament.
  
  2. Constitutionality of the National Security Act, 1980:
  The petitioners argued that the National Security Act (NSA) is unconstitutional as it excessively interferes with personal liberty and violates Articles 14, 19, and 21 of the Constitution. The Court, however, upheld the NSA, stating that preventive detention is permissible under the Indian Constitution, provided it meets the requirements of Articles 14, 19, 21, and 22. The Court referred to past judgments, including Haradhan Saha and Khudiram, which upheld similar preventive detention laws.
  
  3. Implementation of the 44th Constitution Amendment Act:
  The petitioners contended that the Central Government was under an obligation to bring section 3 of the 44th Amendment into force within a reasonable time. The Court acknowledged the delay but refrained from issuing a mandamus to compel the Government to act, emphasizing that the discretion to bring the amendment into force lies with the Central Government. The Court expressed hope that the Government would act without further delay.
  
  4. Vagueness of the provisions of the National Security Act:
  The petitioners argued that terms such as 'defense of India,' 'security of India,' and 'security of the State' in the NSA are vague and give the executive uncontrolled discretion. The Court acknowledged the inherent difficulty in defining such terms with precision but held that they are not unconstitutionally vague. However, the Court found the term "acting in any manner prejudicial to the maintenance of supplies and services essential to the community" to be vague and capable of abuse. The Court directed that no person could be detained under this clause unless the essential supplies and services are clearly defined by law.
  
  5. Procedural fairness before the Advisory Boards:
  The petitioners argued that the procedure before the Advisory Boards was unfair and did not provide the detenu with adequate means to defend themselves. The Court held that:
  - The detenu does not have the right to legal representation before the Advisory Board, as per Article 22(3)(b) of the Constitution.
  - The detenu does not have the right to cross-examine witnesses.
  - The detenu is entitled to present evidence in rebuttal.
  The Court emphasized that the procedure must be fair, just, and reasonable but recognized the limitations imposed by the Constitution itself.
  
  6. Conditions of detention under the National Security Act:
  The petitioners raised concerns about the harsh conditions of detention. The Court directed that:
  - Detenus should be kept in detention near their place of residence to facilitate visits from family and access to personal amenities.
  - Detenus must be informed of their detention and location immediately.
  - Detenus should have access to reading and writing materials and be allowed to wear their own clothes and eat their own food.
  - Detenus should be segregated from convicts and housed in separate facilities.
  
  Separate Judgments:
  - Justice Gupta dissented on two points: the failure of the Central Government to bring section 3 of the 44th Amendment into force and whether an ordinance is 'law' within the meaning of Article 21.
  - Justice Tulzapurkar agreed with Justice Gupta on the implementation of section 3 of the 44th Amendment but otherwise concurred with the Chief Justice's judgment.

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