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• 2012 (12) TMI 1259
  
  The Kerala High Court, in the case cited as 2012 (12) TMI 1259, addressed an appeal concerning an interim attachment order issued by the Additional District Court under Section 9 of the Arbitration and Conciliation Act, 1996. The appellants contested the final order, arguing it was "illegal and not sustainable" due to its lack of reasoning, as it merely stated, "Attachment made absolute. Arbitration O.P. closed," without addressing the validity of the agreement or the liability under the arbitral agreement.The High Court found the impugned order to be a "non-speaking one" and therefore "unsustainable." The court acknowledged that the arbitration proceedings had been initiated, allowing for interim measures of protection under Section 17 of the Arbitration and Conciliation Act, 1996, which the arbitral tribunal could order, including requiring security.The High Court set aside the impugned order and directed that the appellants should not dispose of the attached property for 20 days. The court emphasized that it had not examined the merits of the contentions and allowed the respondent to seek interim relief from the arbitral tribunal. The appeal was disposed of with instructions to return the records to the lower court.

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• 2012 (12) TMI 1258
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal issues considered in this judgment are:

  • Whether the respondent company is liable to pay the outstanding amount claimed by the petitioner.
  • Whether the respondent company failed to return the hired computers and peripherals, and if so, whether this justifies the winding up of the respondent company.
  • Whether the proceedings for winding up the respondent company were appropriate given the existence of a bona fide dispute.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Liability for Outstanding Amount

  • Relevant legal framework and precedents: The court considered the statutory notice and the acknowledgment of invoices by the respondent.
  • Court's interpretation and reasoning: The court noted that the respondent acknowledged the invoices by affixing their seal and signature, indicating acceptance of the debt.
  • Key evidence and findings: The petitioner presented invoices (Annexure-E series) acknowledged by the respondent, and a statutory notice dated 15th July 2010 (Annexure-M) with acknowledgment.
  • Application of law to facts: The court found that the respondent admitted liability and failed to provide evidence of payment or return of goods.
  • Treatment of competing arguments: The respondent's claim of having returned the goods was unsupported by evidence, and their argument about sub-leasing was not substantiated.
  • Conclusions: The court concluded that the respondent was liable for the outstanding amount claimed by the petitioner.

  Issue 2: Failure to Return Hired Goods

  • Relevant legal framework and precedents: The court examined the terms of the hire agreement and the respondent's acknowledgment of receipt.
  • Court's interpretation and reasoning: The court noted that the respondent did not provide evidence of returning the laptops and peripherals.
  • Key evidence and findings: The petitioner provided evidence of the unreturned items and their value.
  • Application of law to facts: The court found that the respondent's failure to return the goods justified the petitioner's claim.
  • Treatment of competing arguments: The respondent's assertion of having returned the items was not supported by any material evidence.
  • Conclusions: The court held that the respondent's failure to return the goods supported the petitioner's case for winding up.

  Issue 3: Appropriateness of Winding Up Proceedings

  • Relevant legal framework and precedents: The court considered the appropriateness of winding up proceedings in the presence of a bona fide dispute.
  • Court's interpretation and reasoning: The court determined that the respondent's defense was not genuine and lacked seriousness.
  • Key evidence and findings: The appellate court's observation that the respondent admitted liability and sought time to repay was crucial.
  • Application of law to facts: The court found that the respondent's lack of response to the statutory notice and failure to appear in court indicated an absence of a bona fide dispute.
  • Treatment of competing arguments: The respondent's argument that the matter should be resolved through a civil suit was rejected due to the lack of a genuine dispute.
  • Conclusions: The court concluded that the winding up proceedings were appropriate given the circumstances.

  3. SIGNIFICANT HOLDINGS

  • Preserve verbatim quotes of crucial legal reasoning: The court noted, "at an undisputed point of time, the Managing Director of the appellant company has admitted the liability and sought for time to repay the money."
  • Core principles established: Acknowledgment of debt and failure to respond to statutory notices can justify winding up proceedings in the absence of a bona fide dispute.
  • Final determinations on each issue: The court allowed the company petition, ordered the winding up of the respondent company, and directed the Official Liquidator to take appropriate steps.

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• 2012 (12) TMI 1257
  

  Whether on facts, the Contractor has been able to establish that the arbitrator was biased against it ?

  Held that:- Appeal dismissed. Except raising the vague and general objections that the arbitrator was biased and had predisposition to decide against the Contractor, no materials, much less cogent materials, have been placed by the Contractor to show bias of the arbitrator. No sufficient reason appears on record as to why the arbitrator should not have proceeded with the arbitral proceedings. The test of reasonable apprehension of bias in the mind of a reasonable man is not satisfied in the factual situation

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• 2012 (12) TMI 1255
  

  1. ISSUES PRESENTED and CONSIDERED

  The legal judgment from the Calcutta High Court presents the following core legal questions:

  • Whether the petitioning creditor is entitled to claim unpaid monthly lease rentals at the enhanced rate of Rs. 30,000/- per month for the period from April 2011 to March 2012?
  • Whether the petitioning creditor can claim reimbursement for municipal rates and taxes from the company?
  • What are the legal consequences of the company's failure to effectively deny the increased rental charge and the alleged payments?

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Entitlement to Unpaid Monthly Lease Rentals

  • Relevant legal framework and precedents: The case revolves around the interpretation of lease agreements and the obligations of parties under such contracts. The legal framework includes principles of contract law, particularly concerning the agreement on rental payments and the consequences of non-payment.
  • Court's interpretation and reasoning: The court noted that the company did not effectively deny the petitioner's claim of the increased rental rate from Rs. 20,000/- to Rs. 30,000/- per month. The absence of denial in the company's reply to the statutory notice was interpreted as an acceptance of the increased rate.
  • Key evidence and findings: The petitioner provided evidence of the statutory notice indicating the increased rental rate and claimed that the company had not tendered payments for the period in question. The company failed to provide evidence of payments for ten out of the eleven months claimed.
  • Application of law to facts: Based on the evidence and the company's lack of effective denial, the court found in favor of the petitioner for the unpaid monthly charges.
  • Treatment of competing arguments: The company argued that it had made payments and forwarded a cheque for Rs. 22,000/-. However, the court found these arguments unconvincing due to the lack of supporting evidence and the petitioner's assertion that the cheque was not encashed.
  • Conclusions: The court admitted the petition for the principal sum of Rs. 3,30,000/- for unpaid monthly charges at the enhanced rate, subject to conditions regarding payment of interest and costs.

  Issue 2: Claim for Municipal Rates and Taxes

  • Relevant legal framework and precedents: The obligation to pay municipal rates and taxes typically depends on the terms of the lease agreement and the customary practice in the jurisdiction.
  • Court's interpretation and reasoning: The court observed that there was no cogent evidence of an agreement obligating the company to pay municipal rates and taxes. The petitioner's claim was based on usual practice rather than a specific contractual obligation.
  • Key evidence and findings: The petitioner relied on receipts from the Kolkata Municipal Corporation, but there was no evidence linking these payments to the company's bank accounts.
  • Application of law to facts: In the absence of evidence of an agreement or payments made by the company, the court could not accept the petitioner's claim for municipal rates and taxes.
  • Treatment of competing arguments: The company's denial of liability for municipal rates and taxes was supported by the lack of evidence from the petitioner.
  • Conclusions: The court relegated the petitioner's claim for municipal rates and taxes to a separate suit.

  3. SIGNIFICANT HOLDINGS

  • Preserve verbatim quotes of crucial legal reasoning: "In the absence of any denial by the company in its reply to the statutory notice that the monthly charges stood increased with effect from April, 2011, it is evident that the company accepted that the increase was as indicated by the petitioner."
  • Core principles established: The acceptance of increased rental charges can be inferred from the lack of denial in a statutory notice reply. Claims for additional charges like municipal rates require clear evidence of agreement or obligation.
  • Final determinations on each issue: The court admitted the claim for unpaid monthly lease rentals but relegated the claim for municipal rates and taxes to a separate suit.

  This judgment underscores the importance of clear agreements and the consequences of failing to effectively deny claims in legal proceedings. The court's decision reflects a careful analysis of the evidence and the obligations of parties under lease agreements.

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• 2012 (12) TMI 1254
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal questions considered in this judgment include:

  • Whether the dismissal of CP No.263 of 2009 for default was justified, and if the order should be recalled.
  • Whether the petitioner is entitled to the payment of outstanding invoices for goods supplied to the company.
  • Whether the company's defense regarding the alleged non-conformity of goods with the specified size in the purchase orders is valid.
  • Whether the petitioner is entitled to interest on the outstanding amount from the date of the statutory notice.
  • What are the consequences if the company fails to pay the outstanding amount within the stipulated time?

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Recall of Dismissal Order

  • Relevant legal framework and precedents: The court considered whether sufficient grounds were presented to justify recalling the dismissal order of CP No.263 of 2009.
  • Court's interpretation and reasoning: The court found that adequate reasons were provided for the absence of representation on the specified date, warranting the recall of the dismissal order.
  • Key evidence and findings: The absence of representation was adequately explained, leading to the decision to restore the case.
  • Conclusions: The order dated November 20, 2012, was recalled, and CP No.263 of 2009 was restored.

  Issue 2: Entitlement to Payment for Goods Supplied

  • Relevant legal framework and precedents: The court assessed the contractual obligations arising from the purchase orders and the acceptance of goods and invoices.
  • Court's interpretation and reasoning: The court noted that the company did not dispute the receipt of goods or the acceptance of invoices, thus establishing a prima facie case for the petitioner's claim.
  • Key evidence and findings: The petitioner supplied goods as per the purchase orders, and invoices were duly raised and accepted by the company.
  • Application of law to facts: The court applied principles of contract law, emphasizing the binding nature of accepted purchase orders and invoices.
  • Conclusions: The petitioner is entitled to the outstanding payment for the goods supplied.

  Issue 3: Validity of Company's Defense on Goods' Size

  • Relevant legal framework and precedents: The court examined the purchase orders and subsequent correspondence to determine the validity of the company's defense.
  • Court's interpretation and reasoning: The court found that the company's defense regarding the size of goods was not tenable, as the purchase orders specified a size range of 0-1 mm, which the petitioner adhered to.
  • Key evidence and findings: The company attempted to modify specifications post-delivery, which was not part of the original contractual terms.
  • Application of law to facts: The court highlighted the immutability of contract terms post-acceptance unless mutually agreed upon.
  • Treatment of competing arguments: The company's argument was dismissed as an attempt to evade payment obligations.
  • Conclusions: The company's defense was rejected, and the petitioner's claim was upheld.

  Issue 4: Entitlement to Interest from Statutory Notice Date

  • Relevant legal framework and precedents: The court considered the statutory notice date as the starting point for interest calculation.
  • Court's interpretation and reasoning: The court determined that interest should accrue from the date of the statutory notice, as the company failed to settle the outstanding amount.
  • Key evidence and findings: The statutory notice was issued on September 25, 2008, demanding payment of the outstanding amount.
  • Application of law to facts: The court applied the principle of interest on delayed payments from the notice date.
  • Conclusions: The petitioner is entitled to interest at 12% per annum from September 25, 2008.

  Issue 5: Consequences of Non-Payment by the Company

  • Relevant legal framework and precedents: The court outlined the procedural consequences of non-payment by the company.
  • Court's interpretation and reasoning: The court ordered that if the company fails to pay within a week, the petition will be advertised, signaling potential insolvency proceedings.
  • Conclusions: Non-payment will lead to public advertisement of the petition, with further court proceedings to follow.

  3. SIGNIFICANT HOLDINGS

  • Preserve verbatim quotes of crucial legal reasoning: "The company cannot demonstrate that it had, contemporaneously or otherwise, complained of the goods supplied by the petitioner not adhering to any of the specifications stipulated in the purchase orders."
  • Core principles established: The binding nature of accepted contractual terms and the entitlement to interest on delayed payments were reinforced.
  • Final determinations on each issue: The dismissal order was recalled, the petitioner's claim for outstanding payment was upheld, the company's defense was rejected, and interest was awarded from the statutory notice date. Non-payment consequences were clearly outlined.

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• 2012 (12) TMI 1253
  

  1. ISSUES PRESENTED and CONSIDERED

  The judgment primarily revolves around the following core legal questions:

  • Whether the trial court erred in its application of Order VII Rule 11 of the Code of Civil Procedure by not rejecting the plaint for lack of cause of action.
  • Whether Section 20A of the Securities and Exchange Board of India Act, 1992, bars the jurisdiction of civil courts in matters over which SEBI has authority.
  • Whether the plaintiff had a legitimate cause of action against the SEBI orders directed at the first defendant.
  • Whether the trial court failed to recognize the plaintiff's suit as a proxy action on behalf of the first defendant.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Application of Order VII Rule 11

  • Relevant Legal Framework and Precedents: Order VII Rule 11 of the Code of Civil Procedure allows for the rejection of a plaint if it does not disclose a cause of action. The court referenced the judgment in T. Arivandandam v. T.V. Satyapal, which emphasizes the need for courts to assess plaints meaningfully.
  • Court's Interpretation and Reasoning: The court criticized the trial judge for mechanically applying Order VII Rule 11 without a meaningful reading of the plaint, failing to discern the lack of a genuine cause of action.
  • Key Evidence and Findings: The plaint was deemed a model of deceit, with the plaintiff acting as a mouthpiece for the first defendant.
  • Application of Law to Facts: The court found that the plaint did not present a legitimate cause of action against SEBI's orders, which were not directed at the plaintiff.
  • Treatment of Competing Arguments: The court dismissed the notion that some reliefs in the plaint were not barred by law, emphasizing the need to reject the entire plaint for its lack of substance.
  • Conclusions: The court concluded that the trial court erred in not rejecting the plaint under Order VII Rule 11.

  Issue 2: Jurisdiction under Section 20A of the SEBI Act

  • Relevant Legal Framework and Precedents: Section 20A of the SEBI Act restricts civil court jurisdiction over matters where SEBI has authority.
  • Court's Interpretation and Reasoning: The court emphasized that SEBI's authority under Section 11(2)(c) includes regulating collective investment schemes, thereby barring civil court jurisdiction.
  • Key Evidence and Findings: The SEBI orders were directed at the first defendant, not the plaintiff, further invalidating the civil court's jurisdiction.
  • Application of Law to Facts: The court found that the suit was an attempt to bypass SEBI's authority, which is protected under Section 20A.
  • Treatment of Competing Arguments: The court dismissed arguments suggesting the civil court's jurisdiction, reinforcing SEBI's exclusive authority.
  • Conclusions: The civil court lacked jurisdiction to entertain the suit due to the statutory bar under Section 20A of the SEBI Act.

  Issue 3: Legitimacy of Plaintiff's Cause of Action

  • Relevant Legal Framework and Precedents: The court referenced the need for a genuine cause of action for a suit to proceed.
  • Court's Interpretation and Reasoning: The court identified the plaint as a vicarious complaint, with no direct cause of action for the plaintiff against SEBI.
  • Key Evidence and Findings: The plaintiff's claims were found to be a proxy for the first defendant's interests.
  • Application of Law to Facts: The court determined that the plaintiff had no standing to challenge SEBI's orders, which targeted the first defendant.
  • Treatment of Competing Arguments: The court rejected any argument suggesting the plaintiff's independent cause of action.
  • Conclusions: The plaintiff lacked a legitimate cause of action, warranting the rejection of the plaint.

  Issue 4: Recognition of Proxy Action

  • Relevant Legal Framework and Precedents: The court relied on principles discouraging proxy litigation.
  • Court's Interpretation and Reasoning: The court identified the suit as a proxy action by the first defendant, using the plaintiff as a front.
  • Key Evidence and Findings: The plaint's substance was geared towards negating SEBI's orders against the first defendant.
  • Application of Law to Facts: The court found the trial court failed to recognize the proxy nature of the suit.
  • Treatment of Competing Arguments: The court dismissed any arguments justifying the suit as independent of the first defendant's interests.
  • Conclusions: The suit was a misuse of judicial process, necessitating its rejection.

  3. SIGNIFICANT HOLDINGS

  • Preserve Verbatim Quotes of Crucial Legal Reasoning: "The judgment in T. Arivandandam's case commands a judge to guard against litigative acrobatics and to be alive to the possibility of clever drafting creating an illusion of a cause of action when there is none."
  • Core Principles Established: The judgment reinforces the principle that civil courts must meaningfully assess plaints to discern genuine causes of action and recognize statutory bars to jurisdiction.
  • Final Determinations on Each Issue: The court set aside the trial court's order, rejected the plaint under Order VII Rule 11, and imposed costs on the plaintiff for the misuse of judicial process.

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• 2012 (12) TMI 1252
  

  1. ISSUES PRESENTED and CONSIDERED

  The legal judgment primarily revolves around the following core legal questions:

  • Whether the election petition filed against the Appellant should be dismissed due to non-compliance with Section 81(3) of the Representation of the People Act, 1951, concerning the attestation of true copies of the petition.
  • Whether the failure to implead Vijay Goel, another candidate in the election, as a Respondent in the election petition constitutes a violation of Section 82(b) of the Act, rendering the petition defective.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Compliance with Section 81(3) of the Representation of the People Act, 1951

  • Relevant Legal Framework and Precedents: Section 81(3) requires that every election petition be accompanied by copies attested by the petitioner to be true copies. Failure to comply with this requirement mandates dismissal of the petition under Section 86. The Court referred to precedents like Manohar Joshi v. Nitin Bhaurao Patil to distinguish between defects in the original petition and copies served.
  • Court's Interpretation and Reasoning: The Court noted a distinction between defects in the original petition and the copies served. It emphasized that while non-compliance with Section 81(3) mandates dismissal, the same is not true for Section 83 defects.
  • Key Evidence and Findings: The Appellant alleged various deficiencies in the petition copies, such as missing signatures and illegible pages. However, the High Court did not clearly establish whether these deficiencies pertained to the original petition or the copies served.
  • Application of Law to Facts: The Supreme Court found that the High Court failed to factually verify the deficiencies and remanded the matter for reconsideration, emphasizing the need for a clear factual determination.
  • Treatment of Competing Arguments: The Appellant argued that the defects were fatal, while the Respondent contended that substantial compliance sufficed. The Court leaned towards ensuring procedural compliance but required factual clarity.
  • Conclusions: The Supreme Court remanded the issue to the High Court for proper factual determination regarding compliance with Section 81(3).

  Issue 2: Non-impleadment of Vijay Goel under Section 82(b)

  • Relevant Legal Framework and Precedents: Section 82(b) mandates that any candidate against whom corrupt practice allegations are made in the petition must be joined as a Respondent. The Court examined precedents like Sahodrabai Rai v. Ram Singh Aharwar and M. Karunanidhi v. H.V. Hande.
  • Court's Interpretation and Reasoning: The Court emphasized that allegations must be made in the election petition itself, not merely in annexures, to necessitate joining a candidate as a Respondent.
  • Key Evidence and Findings: The election petition did not contain allegations against Vijay Goel in its body; references were made only in annexures.
  • Application of Law to Facts: The Court concluded that since the election petition itself did not make allegations against Vijay Goel, he was not a necessary party under Section 82(b).
  • Treatment of Competing Arguments: The Appellant argued that annexures should be considered integral to the petition, while the Respondent maintained that only the petition's body is relevant for Section 82(b).
  • Conclusions: The Supreme Court held that Vijay Goel need not be impleaded, as the petition itself did not allege corrupt practices against him.

  3. SIGNIFICANT HOLDINGS

  • "The election petition cannot be dismissed on the ground that Vijay Goel is not made a party."
  • The Court emphasized the distinction between defects in the original petition and those in the copies served, remanding the matter for factual determination regarding Section 81(3) compliance.
  • The Court clarified that allegations of corrupt practice must be made in the petition itself to require impleading a candidate under Section 82(b).
  • The judgment underscores the principle that procedural requirements must be substantially complied with to maintain the validity of an election petition.
  • The decision reflects a balance between procedural rigor and substantive justice, ensuring that technicalities do not unduly obstruct the adjudication of election disputes.

  In conclusion, the Supreme Court remanded the issue of compliance with Section 81(3) to the High Court for further examination, while holding that the non-impleadment of Vijay Goel did not affect the validity of the election petition.

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• 2012 (12) TMI 1251
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal questions addressed in this judgment include:

  • Whether "chewing tobacco" is classified as a "food product" under the Food Safety and Standards Act, 2006 (FSS Act).
  • Whether the ban imposed by the Kerala Government on gutkha and panmasala containing tobacco or nicotine extends to chewing tobacco.
  • The applicability of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 (CTP Act) in regulating the manufacture and sale of chewing tobacco.
  • The legality of the Kerala Government's order under Regulation 2.3.4 of the Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011, in prohibiting the sale of chewing tobacco.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Classification of Chewing Tobacco as a Food Product

  • Legal Framework and Precedents: The FSS Act defines "food" broadly, including any substance intended for human consumption. Regulation 2.3.4 prohibits the use of tobacco and nicotine as ingredients in food products.
  • Court's Interpretation and Reasoning: The court examined whether chewing tobacco fits the definition of "food" under the FSS Act. It noted that while the FSS Act includes items intended for human consumption, tobacco is generally not consumed for nourishment or taste.
  • Key Evidence and Findings: The court considered the inclusive nature of the FSS Act's definition of food, but emphasized that tobacco, even with additives, is not typically consumed for nourishment.
  • Application of Law to Facts: The court concluded that chewing tobacco does not qualify as a food product under the FSS Act.
  • Treatment of Competing Arguments: The petitioners argued that chewing tobacco is distinct from gutkha and panmasala, while the respondents maintained it falls under the ban. The court sided with the petitioners.
  • Conclusions: Chewing tobacco is not a food product under the FSS Act, and thus, the ban in Regulation 2.3.4 does not apply.

  Issue 2: Applicability of the Ban on Chewing Tobacco

  • Legal Framework and Precedents: Regulation 2.3.4 of the FSS Act prohibits the use of tobacco in food products. The Kerala Government's order banned gutkha and panmasala containing tobacco or nicotine.
  • Court's Interpretation and Reasoning: The court analyzed whether the order extends to chewing tobacco. It noted that the order specifically targets gutkha and panmasala, not tobacco products generally.
  • Key Evidence and Findings: The court found that the order does not explicitly mention chewing tobacco, and its application to such products is not supported by the FSS Act.
  • Application of Law to Facts: The court determined that the ban does not apply to chewing tobacco.
  • Treatment of Competing Arguments: The respondents argued for a broad interpretation of the ban, while the petitioners contended it should be limited to explicitly mentioned products. The court agreed with the petitioners.
  • Conclusions: The ban does not extend to chewing tobacco, as it is not considered a food product under the relevant regulations.

  Issue 3: Regulation under the CTP Act

  • Legal Framework and Precedents: The CTP Act regulates the manufacture, sale, and distribution of tobacco products, including chewing tobacco.
  • Court's Interpretation and Reasoning: The court noted that the CTP Act governs tobacco products and does not classify them as food.
  • Key Evidence and Findings: The court observed that the CTP Act provides a distinct regulatory framework for tobacco products, separate from the FSS Act.
  • Application of Law to Facts: The court affirmed that chewing tobacco is subject to the CTP Act, not the FSS Act.
  • Treatment of Competing Arguments: The petitioners argued for the applicability of the CTP Act, while the respondents sought to apply the FSS Act. The court favored the petitioners' position.
  • Conclusions: Chewing tobacco is regulated under the CTP Act, and not subject to the FSS Act's food product regulations.

  3. SIGNIFICANT HOLDINGS

  • Preserve Verbatim Quotes: "Chewing tobacco or tobacco products are covered by the provisions of C.T.P. Act, and F.S.S. Act has no application to such products."
  • Core Principles Established: The court established that chewing tobacco is not a food product under the FSS Act and is instead governed by the CTP Act.
  • Final Determinations on Each Issue: The court concluded that the Kerala Government's ban on gutkha and panmasala does not extend to chewing tobacco, and the petitioners are entitled to transport and sell chewing tobacco in Kerala, subject to the CTP Act.

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• 2012 (12) TMI 1250
  
  Issues:
  Application for recalling winding-up order.
  
  Analysis:
  The judgment pertains to an application seeking to recall a winding-up order passed against a respondent-company. The applicant contended that the Director of the Company was unavailable for six months, resulting in non-receipt of court papers and inability to respond to notices. The applicant sought to recall the order based on the principle of "sufficient cause" for non-appearance, citing the G.P. SRIVASTAVA case. The respondent opposed the application, highlighting the repeated notices served on the company and the lack of justifiable reasons for non-appearance. The respondent argued that the discretionary power had been rightly exercised in passing the winding-up order, as per Section 443 of the Companies Act, 1956. The respondent also emphasized the need for a statutory appeal instead of a recall application, referencing relevant case laws such as T. NARAYANAN and OM PRAKASH JAISWAL.
  
  The court observed that the reasons presented by the applicant were not entirely convincing, especially regarding the Director's absence and failure to respond to notices. The court noted the respondent's disregard for court proceedings and emphasized the importance of respecting legal notices. Despite the shortcomings in the applicant's case, the court considered the aspect of complete justice, citing the G.P. SRIVASTAVA case's interpretation of "sufficient cause" for non-appearance. The court highlighted that non-appearance was not deemed mala fide or intentional, and the respondent's actions were not attributed as such. The court acknowledged the potential impact on employees and the company's growth, indicating a consideration beyond mere technicalities.
  
  Ultimately, the court decided to recall the winding-up order, acknowledging the applicant's plea for complete justice despite insufficient reasons. The court ordered the applicant to pay costs to the petitioner's counsel as compensation for the wasted court time. The decision to recall the order was based on the overarching principle of ensuring complete justice, balancing technicalities with equitable considerations in the context of the case.

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• 2012 (12) TMI 1249
  
  Issues Involved:
  
  1. Whether the respondent company is liable to be wound up under Section 433(e) of the Companies Act, 1956 due to its inability to pay debts.
  2. Whether the petition for winding up is barred by limitation.
  3. Whether the petition for winding up filed by an unregistered partnership firm is barred under Section 69 of the Partnership Act.
  
  Detailed Analysis:
  
  1. Liability for Winding Up under Section 433(e):
  
  The petitioner, a partnership firm engaged in fabrication and installation work, sought the winding up of the respondent company under Section 433(e) of the Companies Act, 1956, claiming the respondent's inability to pay debts. The petitioner completed the installation and commissioning work for the respondent's factory but alleged non-payment of dues amounting to Rs. 43,14,386/-, with interest at 18% per annum. The respondent contended that the petitioner failed to complete the work and supplied sub-standard materials, thus breaching the contract. However, the court found that the final invoice dated 30.10.1998 for Rs. 48,53,443.65 was accepted by the respondent and their consultants, and the last payment of Rs. 5,39,058/- was made on 16.04.1999. The respondent failed to rebut this evidence, leading to the presumption under Section 434(1)(a) that they neglected to pay the debt. Consequently, the respondent was deemed unable to pay its debts, warranting winding up under Section 433(e).
  
  2. Limitation of the Petition:
  
  The respondent argued that the petition was barred by limitation, as the petitioner waited over three years for payment. However, the court noted that the last payment was made on 16.04.1999, and the company petition was filed on 18.06.2001, which is within three years from the final invoice date of 30.10.1998. Therefore, the petition was not barred by limitation.
  
  3. Bar under Section 69 of the Partnership Act:
  
  The respondent contended that the petition was filed by an unregistered partnership firm, thus barred under Section 69 of the Partnership Act. The court examined whether a winding up petition is akin to a suit for enforcement of a right arising from a contract. It held that a winding up petition is not a "suit" within the meaning of Section 69(2) and is based on a statutory right under the Companies Act, not arising from a contract. The court also addressed the argument that a winding up petition falls under "other proceedings" in Section 69(3), concluding that it does not seek enforcement of a contractual right. Thus, the bar under Section 69 does not apply, and the petition is maintainable.
  
  Conclusion:
  
  The court ordered the winding up of the respondent company under Section 433(e) of the Companies Act, appointing the Official Liquidator attached to the High Court of Andhra Pradesh as the liquidator. The petitioner was directed to advertise the winding up order in specified newspapers.

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• 2012 (12) TMI 1248
  
  Issues Involved:
  
  1. Approval and sanction of the Scheme of Arrangement involving de-merger and transfer of undertakings.
  2. Dispensation of meetings for equity shareholders and creditors.
  3. Objections raised by the Regional Director regarding assets, liabilities, and accounting treatment.
  4. Legal precedents and compliance with the Companies Act, 1956, particularly Section 205.
  
  Issue-wise Detailed Analysis:
  
  1. Approval and Sanction of the Scheme of Arrangement:
  
  The petitions were filed by four group companies for sanctioning a Scheme of Arrangement involving de-merger and transfer of different undertakings. The companies involved are part of the same management group and are engaged in interconnected activities related to engineering products. The proposed scheme aims to segregate activities based on product lines to enhance operational efficiency and the ability to raise funds. The court was satisfied that the scheme was in the interest of shareholders, creditors, and public interest, thus deserving sanction.
  
  2. Dispensation of Meetings for Equity Shareholders and Creditors:
  
  The court dispensed with the meetings of equity shareholders for Prayas Engineering Limited and EMTICI Engineering Limited due to written consent from all shareholders. However, meetings for secured and unsecured creditors were convened and the scheme was unanimously approved. For Elecon Engineering Company Limited, a listed public company, meetings for equity shareholders, secured creditors, and unsecured creditors were held, with the scheme receiving requisite statutory majority approval. Elecon EPC Project Limited, being a wholly-owned subsidiary, had its equity shareholders' meeting dispensed with due to written consent.
  
  3. Objections Raised by the Regional Director:
  
  The Regional Director raised concerns regarding the details of assets and liabilities of the de-merged undertakings and the proposed accounting treatment under the scheme. The petitioner companies addressed these concerns by providing a broad picture of assets and liabilities and committing to furnish a schedule of fixed assets upon sanction. Regarding accounting treatment, the petitioner companies argued that the treatment of reserves as general reserves was authorized and not contradictory to Section 205 of the Companies Act. The court noted that similar objections had been settled in previous judgments, supporting the petitioners' stance.
  
  4. Legal Precedents and Compliance with the Companies Act, 1956:
  
  The court considered various judgments, including those from the Supreme Court and different High Courts, which supported the utilization of reserves arising from revaluation or amalgamation for issuing fully paid-up bonus shares. The court referenced decisions like Bhagwati Developers v. Peerless General Finance, which allowed capitalization of profits for issuing shares. The court concluded that the petitioners' proposed accounting treatment was compliant with legal standards and previous judicial decisions, thereby negating the Regional Director's objections.
  
  Conclusion:
  
  The court, after considering all affidavits, legal precedents, and submissions, concluded that the objections raised by the Regional Director did not hold. The scheme was found to be beneficial for the companies, their shareholders, and creditors, and was sanctioned. The petitions were disposed of, and costs were awarded to the Central Government's Standing Counsel.

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• 2012 (12) TMI 1247
  
  Issues:
  Estimation of commission income on cheque discounting, adequacy of evidence provided by the assessee, confirmation of additions made by the Assessing Officer, cross-examination of parties/reports, comparison with previous assessment years, applicability of commission rates, absence of material to support the claimed percentages.
  
  Analysis:
  The judgment pertains to three consecutive assessment years where the appellant, engaged in cheque discounting business, contested the additions made by the Assessing Officer towards suppressed commission income. The Assessing Officer estimated additional income based on average commission rates, which the appellant disputed, claiming lower percentages. The appellant argued that no evidence of extra income existed and questioned the basis for the Assessing Officer's calculations. The appellant also highlighted the lack of opportunity for cross-examination and reliance on market enquiries without proper substantiation.
  
  Upon appeal, the Commissioner of Income-tax (Appeals) upheld the Assessing Officer's additions, noting the appellant's failure to provide transaction-based workings to support claimed commission rates. The appellant further challenged the decision before the Tribunal, raising concerns about the absence of cross-examination and the correctness of the estimated commission rates. The appellant's reliance on a previous assessment order was countered by the Department, emphasizing the lack of current supporting evidence.
  
  After considering the submissions and evidence, the Tribunal found the appellant's arguments unsubstantiated, as no material was presented to validate the claimed commission rates. The Tribunal upheld the Commissioner's decision, stating that the appellant failed to make a compelling case. The Tribunal rejected the appellant's grounds of appeal, ultimately dismissing the appeals for all three years. The judgment emphasizes the importance of providing concrete evidence to support claims and the necessity of substantiating assertions in tax assessments.

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• 2012 (12) TMI 1246
  
  Issues Involved:
  Whether a review Departmental Promotion Committee (DPC) is required to be convened to consider a candidate for promotion when there has been an upgradation of his below-benchmark Annual Confidential Reports (ACRs) from the time he was first found unfit for promotion.
  
  Detailed Analysis:
  
  Issue 1: Requirement of Review DPC for Promotion Consideration
  The primary issue is whether a review DPC should be convened to reconsider the respondent's promotion after the upgradation of his below-benchmark ACRs. The Tribunal directed the petitioners to constitute a review DPC to consider the respondent's promotion to Deputy Secretary from the time he was first overlooked by his juniors.
  
  Issue 2: Pending Supreme Court Decision
  The petitioners argued that the issue of retrospective promotion consideration is pending before a Larger Bench of the Supreme Court in UOI v. A.K. Goel & Ors., SLP (C) No. 15770/2009, and thus, the Court should await the Supreme Court's decision. However, the Court noted that the pendency of a reference to a larger Bench does not mean that all other proceedings involving the same issue would remain stayed until a decision is rendered.
  
  Issue 3: Office Memorandum Interpretation
  Petitioners contended that the Office Memorandum No. 21011/1/2010 dated 13.04.2010 indicates that the upgradation of ACRs should only have prospective effect. However, the Court found that such an interpretation would defeat the purpose of the benefit intended to be given. The memorandum cannot be construed to mean that an employee would only be considered for future promotions after the upgradation of ACRs.
  
  Issue 4: Non-Communication of ACRs and Legal Precedents
  The Supreme Court in Dev Dutt vs. Union of India & Ors., (2008) 8 SCC 725, and Abhijit Ghosh Dastidar vs. Union of India & Ors., (2009) 16 SCC 146, held that non-communication of ACRs has civil consequences and is violative of Article 14 of the Constitution. The Court emphasized that all ACRs must be communicated to the public servant to allow for representations and potential upgradation, ensuring fairness and transparency in public administration.
  
  Issue 5: Tribunal's Rationale
  The Tribunal's decision was based on the principle that the respondent should benefit from the upgradation of his ACRs from the time they were first considered, not just for future DPCs. The Court agreed with this rationale, noting that the respondent was deprived of legitimate promotion for three years due to erroneous assessments, which were later corrected.
  
  Issue 6: Case Law Supporting Tribunal's Decision
  The Court referred to similar cases, such as Union of India and Ors. vs. Krishna Mohan Dixit and Ors. and Union of India and Ors vs. Haldhar Prasad, where it was held that review DPCs should be constituted if below-benchmark ACRs, which were not communicated, were later upgraded. The benefit of such upgradation should be retrospective, affecting the date of the initial promotion consideration.
  
  Conclusion:
  The Court found no reason to interfere with the Tribunal's decision, which correctly applied the law as enunciated by the Supreme Court. The petition was dismissed, affirming that a review DPC should be convened to consider the respondent's promotion retrospectively from the date his juniors were promoted, with all consequential benefits. The petitioners' arguments regarding the pending Supreme Court decision and the interpretation of the Office Memorandum were not sufficient to alter this outcome.

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• 2012 (12) TMI 1245
  
  Issues Involved:
  1. Whether the transactions involving possession certificates constitute 'Conveyance' under Section 20(2) of the Karnataka Stamp Act.
  2. Whether the limitation period prescribed under Section 46-A of the Karnataka Stamp Act is applicable.
  
  Issue-wise Detailed Analysis:
  
  1. Conveyance under Section 20(2) of the Karnataka Stamp Act:
  The core issue was whether the possession certificates issued by the Sri Chitrapur Co-operative Housing Society Limited and M/s. Dattaprasad Housing Co-operative Society to their members constitute 'Conveyance' as defined under Section 20(2) of the Karnataka Stamp Act, thereby attracting stamp duty.
  
  The court analyzed the nature of the transaction, the rights conferred by the possession certificates, and the relevant statutory definitions. It was observed that:
  - The Society leased land and constructed apartments, with ownership of the buildings vesting in the Society.
  - Members were issued share certificates, loan stock certificates, and possession certificates, which conferred rights of possession, transfer, and letting out of the flats.
  - The definition of 'Conveyance' under Section 2(d) includes every instrument by which property, whether movable or immovable, is transferred inter vivos.
  - The term 'immovable property' includes land, buildings, and benefits arising out of the land.
  
  The court concluded that the possession certificates, combined with the rights conferred by the bye-laws of the Society, amounted to a transfer of immovable property benefits, thus constituting 'Conveyance' under the Act. This interpretation was supported by the inclusive nature of the definition of 'immovable property' and 'Conveyance' under the Stamp Act. Consequently, the instruments were chargeable with stamp duty.
  
  2. Limitation Period under Section 46-A of the Karnataka Stamp Act:
  The second issue was whether the limitation period prescribed under Section 46-A for recovering stamp duty not levied or short levied applied to the proceedings initiated by the revenue authorities.
  
  The court examined:
  - The statutory framework for impounding instruments under Section 33, adjudicating duty under Section 37, and recovering duties and penalties under Section 46.
  - Section 46-A specifies a five-year limitation period for initiating proceedings to recover unpaid stamp duty, extendable to ten years in cases of fraud, collusion, or willful suppression of facts.
  
  In this case, the possession certificates were issued in 1987, and proceedings were initiated in 2004, well beyond the five-year limitation period. The court held that:
  - The limitation period under Section 46-A applied, and the proceedings initiated in 2004 were barred by limitation.
  - The authorities could not recover the stamp duty due to the expiration of the limitation period.
  
  Conclusion:
  The court affirmed the learned Single Judge's finding that the possession certificates constituted 'Conveyance' under the Stamp Act and were chargeable with stamp duty. However, it held that the proceedings to recover the stamp duty were barred by limitation under Section 46-A. The court allowed the appellants to voluntarily pay the requisite stamp duty and get the documents registered within six months from the date of adjudication by the authorities. The appeals were thus partly allowed, with each party bearing their own costs.

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• 2012 (12) TMI 1244
  
  Issues Involved:
  1. Breach of time schedule and irregularities in admissions.
  2. Failure of authorities to perform duties and obligations.
  3. Initiation of proceedings u/s Contempt of Courts Act, 1971.
  4. Examination of apology tendered by contemnors.
  5. Specific cases of contemnors and their defenses.
  
  Summary:
  
  Breach of Time Schedule and Irregularities in Admissions:
  The Supreme Court in disposing of Civil Appeal No. 4318 of 2012 noticed breaches in the time schedule and various irregularities by stakeholders, leading to admissions of less meritorious candidates over more deserving ones. The Court identified this as a case of favouritism and arbitrariness, demonstrating calculated tampering with the admission schedule, thus jeopardizing the careers of higher merit students.
  
  Failure of Authorities to Perform Duties and Obligations:
  The Court found that all relevant stakeholders failed to perform their duties in accordance with the law, leading to nepotism and manipulation in the admission process. The authorities' stands were at variance, and none admitted fault, necessitating the Court's intervention to ensure proper implementation of its judgments and the Medical Council of India regulations.
  
  Initiation of Proceedings u/s Contempt of Courts Act, 1971:
  The Court directed initiation of contempt proceedings against several officials, including the Additional Secretary, Ministry of Health & Family Welfare, and members of the Selection Committee, for failing to comply with the Court's orders and manipulating the admission process. Notices were issued to these individuals to show cause why they should not be punished.
  
  Examination of Apology Tendered by Contemnors:
  The Court examined whether the apologies tendered by the contemnors were bona fide. It emphasized that an apology must be sincere, demonstrate genuine regret, and not be a means to escape consequences. The Court held that the apology by Dr. S.L. Adile was not bona fide, given his wilful and intentional violation of the Court's orders, and thus, could not be accepted.
  
  Specific Cases of Contemnors and Their Defenses:
  - Dr. S.L. Adile: Admitted to manipulating the admission process to benefit his daughter, tendered an unconditional apology, but the Court found his actions wilful and prejudicial, thus rejecting his apology and imposing a fine of Rs. 2,000.
  - Contemnors (C) to (F): Members of the Selection Committee claimed they acted under the Dean's directions. The Court found their actions colluded with Dr. Adile's manipulations, thus holding them guilty and imposing a fine of Rs. 2,000 each.
  - Mr. Keshav Desiraju and Dr. Jagdish Prasad: Although not directly responsible for violating the Court's orders, they were found lacking in proper supervision. The Court issued a warning and directed them to ensure adherence to the Court's judgments in future.
  
  Conclusion:
  The contemnors were punished with fines and directed to ensure compliance with the Court's orders. The Court emphasized the importance of maintaining the rule of law and the integrity of the judicial process.

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• 2012 (12) TMI 1243
  
  Issues Involved:
  1. Whether the suit property is the self-acquired property of the appellant.
  2. Whether the property was purchased in the name of the appellant for the purpose of getting a quarry license from the Government.
  3. Whether there was a partnership agreement between the first respondent and the appellant entered into on 03.07.1997.
  4. Whether the plaintiff/first respondent is entitled to seek partition and consequently permanent injunction.
  
  Summary:
  
  Issue 1: Self-acquired Property
  The appellant contended that the suit properties are his self-acquired properties. The trial court, however, held that the properties were not exclusively owned by the appellant, as the first respondent had contributed towards their purchase. The High Court found no evidence to support the first respondent's claim of contribution and thus did not uphold the trial court's judgment on this issue.
  
  Issue 2: Purpose of Purchase
  The trial court concluded that the property was purchased in the appellant's name based on a partnership agreement to carry on a quarrying business. The High Court agreed that there was a partnership agreement but found no evidence of the first respondent's financial contribution towards the purchase of the property.
  
  Issue 3: Partnership Agreement
  The existence of a partnership agreement was confirmed by both the written statement and the evidence provided. The High Court acknowledged the partnership but noted that the first respondent failed to prove his financial contribution to the purchase of the property.
  
  Issue 4: Entitlement to Partition and Injunction
  The trial court granted the relief of partition based on the partnership agreement. However, the High Court found that the first respondent did not substantiate his claim of financial contribution towards the purchase of the property. Consequently, the High Court held that the suit for partition was misconceived and set aside the trial court's judgment on this issue.
  
  Additional Points:
  - The appellant's request to withdraw the suit with liberty to file a fresh suit was denied by the High Court, citing insufficient grounds and the absence of evidence supporting the first respondent's claims.
  - The High Court emphasized that the mere existence of a partnership did not entitle the first respondent to a division of the suit properties without proof of financial contribution.
  
  Conclusion:
  The High Court allowed the appeal in part, setting aside the trial court's judgment regarding the partition of the suit properties. The plaintiff/first respondent's claim for partition was deemed misconceived due to the lack of evidence supporting his financial contribution. The appeal was allowed in part, and the connected miscellaneous petitions were closed.

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• 2012 (12) TMI 1242
  
  Issues Involved:
  1. Legality and applicability of section 153A.
  2. Eligibility for deduction u/s 80IA.
  3. Treatment of liabilities written back u/s 41(1).
  
  Summary:
  
  Legality and Applicability of Section 153A:
  The assessee argued that the assessments u/s 153A were invalid as no incriminating material was found during the search. The Tribunal held that once a search is conducted, the AO is bound to issue notices u/s 153A, and the proceedings must be completed as per the law. The Tribunal sustained the CIT(A)'s decision, stating that the AO was correct in issuing notices u/s 153A even if no incriminating material was found, as the section begins with a non-obstante clause, overriding other provisions.
  
  Eligibility for Deduction u/s 80IA:
  The AO disallowed the deduction u/s 80IA, arguing that the assessee was a contractor and not a developer. The CIT(A) allowed the deduction, noting that the assessee was engaged in infrastructure development and met the conditions of section 80IA(4). The Tribunal upheld the CIT(A)'s decision, referencing various judgments, including Patel Engineering and ABG Heavy Industries, which clarified that a contractor can also be considered a developer if they undertake the development of infrastructure facilities. The Tribunal concluded that the assessee was eligible for the deduction as it fulfilled the necessary conditions.
  
  Treatment of Liabilities Written Back u/s 41(1):
  The AO rejected the assessee's claim to include the written-back liabilities for the deduction u/s 80IA. The CIT(A) accepted the assessee's method of bifurcating the written-back liabilities based on the proportion of turnover from 80IA and non-80IA projects. The Tribunal upheld the CIT(A)'s decision, stating that the bifurcation method was reasonable and that the written-back liabilities should be included in the business income for the deduction u/s 80IA.
  
  Conclusion:
  The appeals filed by the department and the cross objections filed by the assessee for the assessment years 2000-01 to 2004-05 were dismissed. The departmental appeal for the assessment year 2005-06 was also dismissed. The Tribunal confirmed that the assessments u/s 153A were valid, the assessee was eligible for the deduction u/s 80IA, and the written-back liabilities were correctly included for the deduction.

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• 2012 (12) TMI 1241
  
  Issues Involved:
  1. Entitlement to bail u/s 437 CrPC for a woman.
  2. Allegations of abetment to suicide u/s 306 IPC.
  3. Consideration of the petitioner's family circumstances.
  4. Role of the petitioner in the alleged conspiracy and forgery.
  5. Impact of the suicide notes and statements on bail decision.
  
  Summary:
  
  Entitlement to Bail u/s 437 CrPC for a Woman:
  The petitioner argued for bail based on the proviso to Section 437 CrPC, citing her status as a woman, her role as a single parent, and her ailing parents. The court noted that the proviso to Section 437 CrPC is not mandatory and emphasized that the nature and gravity of the offense, the potential for tampering with evidence, and the larger public interest must be considered. The court referenced *Chandrawati vs. State of U.P.* and *Pratapbhai Hamirbhai Solanki vs. State of Gujarat and Anr.*, underscoring that the seriousness of the offense and the potential for societal impact outweigh the procedural privilege of bail.
  
  Allegations of Abetment to Suicide u/s 306 IPC:
  The petitioner was implicated in the suicide of Geetika Sharma through two suicide notes and statements from witnesses. The court highlighted that the petitioner was accused of creating circumstances that led to the deceased's extreme step, supported by the contents of the suicide notes and the statements of the deceased's family members. The court referenced *Praveen Pradhan vs. State of Uttaranchal & Anr.*, noting that instigation can be inferred from circumstances even without direct evidence.
  
  Consideration of the Petitioner's Family Circumstances:
  While the petitioner argued her need to care for her daughter and parents, the court observed that these circumstances do not automatically entitle her to bail. The court cited *Kalyan Chandra Sarkar vs. Rajesh Ranjan*, stating that the period of incarceration alone does not justify bail if the offense's gravity is severe.
  
  Role of the Petitioner in the Alleged Conspiracy and Forgery:
  The court examined the petitioner's involvement in alleged forgery and conspiracy to harass the deceased, including creating a fake NOC and pressuring the deceased to return from Dubai. The court found that the petitioner's actions, as described in the statements and the suicide notes, indicated a significant role in the harassment that led to the deceased's suicide.
  
  Impact of the Suicide Notes and Statements on Bail Decision:
  The court considered the suicide notes and the statements of the deceased's family, which implicated the petitioner in continuous harassment and pressure on the deceased. The court concluded that these allegations, coupled with the petitioner's actions, were serious enough to deny bail.
  
  Conclusion:
  The court dismissed the bail application, emphasizing the severity of the allegations and the potential for the petitioner to tamper with evidence or influence witnesses. The decision was made with the understanding that the observations were for the purpose of the bail application and would not prejudice the trial's outcome.

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• 2012 (12) TMI 1240
  
  Issues Involved:
  1. Validity of reopening of assessments u/s 147 for assessment years 2004-05, 2005-06, and 2006-07.
  2. Eligibility of the assessee company to claim deduction u/s 80IA for assessment years 2004-05, 2005-06, 2006-07, and 2009-10.
  
  Summary:
  
  1. Validity of Reopening of Assessments u/s 147:
  The assessee challenged the reopening of assessments for the years 2004-05, 2005-06, and 2006-07, arguing that the original assessments u/s 143(3) were completed without any failure on their part to disclose material facts fully and truly. The assessee cited the Supreme Court's decision in CIT vs. Kelvinator of India Ltd., asserting that the reasons for reopening must be based on tangible material and not merely a change of opinion. The Revenue relied on judgments from the Allahabad High Court to justify the reopening based on excessive deductions granted u/s 80HHC. The Tribunal concluded that the reopening was not supported by any tangible material and was merely a change of opinion, thus holding that the income-escaping assessments completed u/s 147 for the three assessment years were bad in law and set aside those assessments.
  
  2. Eligibility for Deduction u/s 80IA:
  The assessee claimed deduction u/s 80IA for profits from its BOT project at Tuticorin Port, arguing that it met all conditions of section 80IA(4). The Assessing Officer initially denied the deduction, stating that the assessee was not a consortium of Indian companies and had not made sufficient investments. Upon review, the Tribunal found that the assessee, a company registered in India, owned the BOT project and had made significant investments. The Tribunal held that the assessee satisfied all conditions of section 80IA(4), including being a company registered in India and entering into a BOT agreement with the Tuticorin Port Trust. The Tribunal also noted the CBDT's earlier approval u/s 10(23G) supported the assessee's claim. Consequently, the Tribunal directed the Assessing Officer to redo the assessments, granting the deduction u/s 80IA for the relevant assessment years.
  
  Conclusion:
  The Tribunal allowed the appeals filed by the assessee, both on the question of reopening of assessments u/s 147 and on the eligibility for deduction u/s 80IA. The orders were pronounced on December 6, 2012, in Chennai.

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• 2012 (12) TMI 1239
  
  Issues Involved:
  1. Addition to the closing stock on account of unutilised Cenvat credit u/s 145A.
  2. Disallowance of royalty by treating it as capital expenditure.
  3. Disallowance of provision for old and obsolete stores.
  4. Transfer pricing adjustments in respect of royalty paid to the Associated Enterprise (AE).
  5. Not granting 5% benefit under the proviso of sec. 92C of the I.T. Act.
  
  Summary:
  
  1. Addition to the closing stock on account of unutilised Cenvat credit u/s 145A:
  The assessee challenged the addition of Rs. 4,00,47,285/- to the closing stock due to unutilised Cenvat credit u/s 145A. The Assessing Officer (AO) proposed this addition, and the Dispute Resolution Panel (DRP) concurred, directing adjustments to both opening and closing stocks. The Tribunal noted an apparent contradiction between the draft and final orders, with an unexplained addition of Rs. 59,81,648/- instead of a proposed decrease. The Tribunal set aside this issue to the AO for reconsideration, emphasizing the need to examine whether the inclusive method of accounting would result in a nil net effect.
  
  2. Disallowance of royalty by treating it as capital expenditure:
  The AO treated royalty payments for technical know-how as capital expenditure, disallowing Rs. 4,30,05,713/- after adjustments and allowing depreciation on it. The Tribunal referred to its earlier decision for AY 2005-06, where it was held that such payments were of a revenue nature and thus deductible. Following the principle of consistency and relevant case laws, the Tribunal upheld the assessee's claim, deleting the addition.
  
  3. Disallowance of provision for old and obsolete stores:
  The AO disallowed Rs. 35,50,000/- for old and obsolete stores, considering it a provision rather than a realized loss. The DRP directed the AO to account for the net realizable value. The Tribunal found discrepancies in the AO's calculations, noting that the AO incorrectly included resale value of plant and machinery. The Tribunal set aside the issue to the AO for proper examination and adjustment, considering the assessee's subsequent income from scrap sales.
  
  4. Transfer pricing adjustments in respect of royalty paid to the AE:
  The AO/TPO disallowed a 3% increase in royalty rate, making an adjustment of Rs. 1,99,13,521/-. The Tribunal noted that the Comparable Uncontrolled Price (CUP) method used by the assessee was inappropriate as it compared controlled transactions. The Tribunal directed the AO to determine the Arm's Length Price (ALP) using the most appropriate method, considering all relevant data. Additional evidence submitted by the assessee was also to be considered by the AO.
  
  5. Not granting 5% benefit under the proviso of sec. 92C of the I.T. Act:
  The assessee did not press this ground during the hearing, and it was dismissed as not pressed.
  
  Conclusion:
  The appeal was partly allowed and partly set aside for statistical purposes, with specific instructions for the AO to reconsider certain issues in accordance with the Tribunal's directions. The order was pronounced in the Open Court on 19th December 2012.

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