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• 1985 (3) TMI 318
  
  Issues Involved:
  
  1. Genuineness of documents dated 12th September 1979 and 24th December 1976.
  2. Question of limitation.
  3. Jurisdiction of the court.
  4. Right to unconditional leave to defend the suit.
  
  Issue-wise Detailed Analysis:
  
  1. Genuineness of Documents Dated 12th September 1979 and 24th December 1976:
  
  The plaintiff alleged that the defendant confirmed and unconditionally acknowledged a debt of Rs. 4,16,836.32p with agreed interest at 12% per annum through a writing dated 12th September 1979. Additionally, the plaintiff claimed that the defendant sent a promissory note for the same amount, which was misplaced. The defendant denied these claims, stating that he had no business transactions with the plaintiff in his personal capacity and disputed the validity and genuineness of the documents. The defendant also alleged that the plaintiff used a blank letterhead to create these documents. The court noted that the entire case of the plaintiff relied on the document dated 12th September 1979, and if this document was found to be invalid, the entire suit would fail.
  
  2. Question of Limitation:
  
  The question of limitation was directly linked to the genuineness of the document dated 12th September 1979. If the document was proven genuine, it would affect the limitation period for filing the suit. The court acknowledged that the issue of limitation was a triable issue that could not be decided summarily and required a full trial.
  
  3. Jurisdiction of the Court:
  
  The defendant did not reside in Calcutta, and the suit was instituted under clause 12 of the Letters Patent. The jurisdiction of the court depended on whether any part of the cause of action arose within its jurisdiction. The plaintiff alleged that the writing dated 12th September 1979 was issued and received in Calcutta, which was contested by the defendant. The court recognized that the question of jurisdiction was also a triable issue that needed to be resolved through a full trial.
  
  4. Right to Unconditional Leave to Defend the Suit:
  
  The defendant argued that multiple triable issues were raised, and he should be granted unconditional leave to defend the suit. The court referred to several precedents, including the principles laid down in the case of Sm. Kiranmoyee Dassi v. Dr. J. Chatterjee, which stated that if a defendant raises a triable issue or shows a state of facts that may lead to a defense at trial, they are entitled to unconditional leave to defend. The court concluded that the defense raised by the defendant was not wholly illusory, sham, or practically moonshine and that the defendant should be allowed to defend the suit unconditionally.
  
  Conclusion:
  
  The appeal was allowed, and the order under appeal was set aside. The defendant was given unconditional leave to defend the suit. The court emphasized that it had not expressed any opinion on the merits or the ultimate result of the suit. The defendant was directed to file the written statement within three weeks, and the suit was to be disposed of as expeditiously as possible. There was no order as to costs.

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• 1985 (3) TMI 317
  
  Issues:
  1. Jurisdiction of the Bombay High Court to entertain applications for anticipatory bail when the offences are committed outside the State of Maharashtra.
  2. Granting of anticipatory bail to the applicants in connection with criminal prosecutions for theft of electric energy and nonpayment of Provident Fund contributions.
  
  Analysis:
  1. The judgment dealt with the issue of jurisdiction of the Bombay High Court to entertain applications for anticipatory bail when the offences were committed outside Maharashtra. The Court referred to Section 438 of the Cr. P.C., stating that anticipatory bail can be sought when a person has reason to believe they may be arrested for a non-bailable offence. The Court held that if the arrest is likely to be within the jurisdiction of the Bombay High Court, the concerned person can apply for anticipatory bail. The Court cited precedents from other High Courts supporting this view, emphasizing that anticipatory bail is effective at the moment of arrest. Therefore, the Bombay High Court has jurisdiction to entertain such applications even if the offences were committed outside Maharashtra.
  
  2. The judgment also addressed the grant of anticipatory bail to the applicants in two separate cases. In the first case, involving theft of electric energy by a company in Haryana, the three directors, who were permanent residents of Bombay, sought anticipatory bail fearing arrest based on the FIR filed. In the second case, a director of a company in Gujarat facing prosecution for nonpayment of Provident Fund contributions also sought anticipatory bail as a permanent resident of Bombay. The Court acknowledged the difficulty in examining the detailed merits of the prosecutions, especially when they would be lodged in states outside Maharashtra. Considering this, the Court granted interim bail for a month to both applicants with the condition that the bail would stand vacated if certain conditions were not fulfilled by a specified date. The Court cited Supreme Court judgments emphasizing the discretion of the High Court to impose conditions while granting anticipatory bail.
  
  3. The judgment highlighted the importance of imposing conditions on anticipatory bail orders and the discretion of the Court in granting such relief. It referenced specific sections of the Cr. P.C. allowing the Court to include conditions in the bail order based on the facts of the case. The Court also cited the Supreme Court's stance on the necessity of imposing conditions while granting anticipatory bail. The judgment clarified that there are no inherent restrictions on anticipatory bail under Section 438, and the Court can exercise discretionary power to impose restrictions and conditions as deemed necessary based on the circumstances of each case.
  
  4. In conclusion, the Bombay High Court granted anticipatory bail to the applicants for a period of one month, allowing them time to seek appropriate orders from the courts where the cases were likely to be filed. The Court specified conditions for the bail, including the automatic vacation of bail if no orders were obtained by a certain date. The applicants were directed to execute personal recognizance bonds and sureties in case of arrest within the territory of Maharashtra. The judgment emphasized the discretionary power of the Court in granting anticipatory bail and the importance of imposing suitable conditions in such orders.

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• 1985 (3) TMI 316
  
  Issues:
  - Interpretation of lease agreement and license deed
  - Nature of relationship between parties
  - Maintainability of suit for mandatory injunction
  - Effect of subsequent property purchase by respondent
  - Applicability of East Punjab Rent Restrictions Act, 1949
  - Legal rights and obligations of licensor and licensee
  - Delay in filing suit and remedy sought
  
  Interpretation of lease agreement and license deed:
  The plaintiff, who became the sole owner of the property in 1967, had leased a plot of land to the defendant under a license deed for one year. The trial court initially found the defendant to be a sub-tenant and dismissed the suit. However, the Additional District Judge overturned this decision, concluding that the relationship between the parties was that of licensor and licensee, not landlord and tenant. The absence of rent mentioned in the documents and the revocation of the license supported this finding.
  
  Nature of relationship between parties:
  The dispute centered around whether the defendant was a sub-tenant or a licensee. The trial court's initial ruling favored the defendant, but the Additional District Judge determined that the plaintiff was the lessee and the defendant was a licensee. This distinction was crucial in deciding the maintainability of the suit for a mandatory injunction.
  
  Maintainability of suit for mandatory injunction:
  The plaintiff sought a mandatory injunction to evict the defendant from the premises. The trial court dismissed the suit, but the Additional District Judge allowed the appeal, holding that the suit was maintainable as the relationship between the parties was that of licensor and licensee. The court also found no undue delay in filing the suit, thereby granting the injunction.
  
  Effect of subsequent property purchase by respondent:
  The respondent later purchased the property from its original owner, leading to a contention that the appellant could not eject the respondent based on the sale deed. The High Court rejected this argument, emphasizing that the appellant's rights under the lease could not be interfered with by the sale and that the respondent, as a licensee, must surrender possession upon revocation of the license.
  
  Applicability of East Punjab Rent Restrictions Act, 1949:
  The appellant argued that the provisions of the East Punjab Rent Restrictions Act, 1949 protected his tenancy rights. However, the court held that even under the Act, the licensee must surrender possession upon revocation of the license, and the appellant could seek possession of the property.
  
  Legal rights and obligations of licensor and licensee:
  The court established that the respondent, as a licensee, had a duty to surrender possession upon termination of the license. Failure to do so entitled the licensor to seek recovery of possession. The court emphasized that the respondent could not set up title to the property during the subsistence of the license.
  
  Delay in filing suit and remedy sought:
  The court noted that there was no significant delay in filing the suit for a mandatory injunction. Emphasizing the need to avoid multiplicity of suits, the court held that the suit, though framed as a mandatory injunction, was essentially a claim for possession. The appellant was entitled to the relief sought, and the respondent was directed to deliver possession of the property.

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• 1985 (3) TMI 315
  
  Issues Involved:
  1. Legality of withholding refund without proper demand under Section 11A of the Central Excises and Salt Act, 1944.
  2. Relevance of Delhi High Court's judgment on the excisability of flush doors.
  3. Assessment and classification of flush doors under Item 16B and Item 68 of the Central Excise Tariff.
  4. Applicability of Section 11 of the Central Excises and Salt Act, 1944 for retaining sums payable to the government.
  5. Legal implications of self-assessment and procedural compliance under the Central Excise Rules, 1944.
  
  Detailed Analysis:
  
  1. Legality of Withholding Refund Without Proper Demand:
  The appellant argued that the withholding of part of the refund amount was illegal in the absence of a proper demand under Section 11A of the Act. The Tribunal noted that the appellant had paid duty under protest and filed claims for refund covering the period 21-7-73 to 31-5-80, and 1-6-80 to 31-5-81. The Assistant Collector had initially agreed that flush doors were assessable under Item 68 and asked the appellant to submit a detailed worksheet. The appellant complied, but the Department withheld part of the refund. The Tribunal concluded that no adjustment of duty under Item 68 was allowable in the absence of a legal assessment under that item.
  
  2. Relevance of Delhi High Court's Judgment:
  The appellant relied on the Delhi High Court's judgment in the case of "Wood Craft Products Ltd. v. The Superintendent (Technical), Customs and Central Excise and Ors." which held that flush doors are not excisable under Item 16B. The Tribunal agreed that the judgment was relevant and binding, rejecting the Department's argument that it was not applicable. The Tribunal emphasized that the judgment should be followed by authorities all over the country.
  
  3. Assessment and Classification of Flush Doors:
  The Tribunal examined the classification and assessment procedures under the Central Excise Rules. It noted that the appellant had filed classification lists under Item 16B, which were approved, and duties were paid under protest. The Delhi High Court and subsequently the Supreme Court held that flush doors are not assessable under Item 16B. The Tribunal found that the Assistant Collector's order to assess flush doors under Item 68 without following proper procedures was not justified. There was no legal levy under Item 68, and the Department's action to deduct amounts based on this item was not valid.
  
  4. Applicability of Section 11:
  The Tribunal analyzed Section 11, which allows the government to retain sums payable under the Act. However, it clarified that such sums must be legally payable and assessed. Since there was no legal assessment under Item 68, the amount withheld by the Department was not justifiable under Section 11. The Tribunal referred to various judgments, including the case of "Bharat Commerce of Industries v. Union of India," which held that without a proper notice or action under Rule 11 (corresponding to Section 11A), the Department could not retain sums based on an unassessed item.
  
  5. Legal Implications of Self-Assessment and Procedural Compliance:
  The Tribunal reviewed the self-assessment procedure under Chapter VIIA of the Central Excise Rules, 1944. It noted that the appellant had complied with the procedures for Item 16B but not for Item 68. The Tribunal emphasized that any assessment under Item 68 must follow proper procedures, including submission and approval of a classification list. Since the appellant's classification list for Item 68 was approved only on 29-8-81, effective from 16-4-81, the Tribunal held that deductions for the period after 16-4-81 were justifiable, but not for the period before that date.
  
  Conclusion:
  The Tribunal allowed the appeal in part, directing the Department to refund the amount withheld for the period up to 15-4-81, while upholding the deductions for the period from 16-4-81 to 7-8-81. The Assistant Collector was instructed to work out the amount due and make the refund within four months.

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• 1985 (3) TMI 314
  
  Issues Involved:
  1. Amenability of respondents to writ jurisdiction under Article 226 of the Constitution.
  2. Eligibility and merit-based admission of petitioners.
  3. Public duty and instrumentality of the State.
  
  Issue-wise Detailed Analysis:
  
  1. Amenability of respondents to writ jurisdiction under Article 226 of the Constitution:
  
  The principal issue was whether the respondents, specifically the Dean of the Institute, the Kasturba Health Society, and the Local Managing Committee, were amenable to writ jurisdiction under Article 226 of the Constitution. The court examined the material on record, including statements on oath, annual reports, and other documents, to determine the nature and function of the Institute and the Society. It was found that the Institute was established with significant involvement and financial assistance from the Central and State Governments, and it performed functions of public interest, particularly in the field of medical education and public health. The court held that the Local Managing Committee of an affiliated college under the Nagpur University Act is a "State" within the meaning of Article 12, and thus, appropriate writs could be issued against it. The court also noted that the Dean and the Society acted as statutory agents or instrumentalities of the State, making them amenable to writ jurisdiction.
  
  2. Eligibility and merit-based admission of petitioners:
  
  The petitioners, who were students of the Mahatma Gandhi Institute of Medical Sciences, had applied for admission to the Post-Graduate course based on their merit. They claimed that they were fully eligible and had higher marks than those who were selected for admission. Despite this, they were not granted admission. The only defense presented by the respondents was that the petition was not maintainable against them as they were not "State" within the meaning of Article 12. The court found no substantial defense against the petitioners' claim of higher merit and eligibility. It was noted that the respondents failed to justify the refusal of admission on merits.
  
  3. Public duty and instrumentality of the State:
  
  The court discussed the concept of "State" and its agency or instrumentality, referring to various Supreme Court judgments. It was emphasized that institutions engaged in matters of high public interest or performing public functions are considered government agencies. The court observed that the Institute, being involved in imparting higher medical education and regulated by several enactments, was performing a public duty. The Institute's functions were aligned with national goals related to education and public health, and it received substantial government aid. Therefore, the Institute and its managing bodies were considered instrumentalities of the State, performing public duties and thus, amenable to writ jurisdiction.
  
  Conclusion:
  
  The court concluded that the respondents, including the Dean, the Kasturba Health Society, and the Local Managing Committee, were amenable to writ jurisdiction under Article 226. The petitioners were entitled to admission based on their merit. The court directed the Dean to grant registration to the petitioners in their respective post-graduate courses for the current term, if necessary by creating supernumerary posts, without disturbing the registration of other students who had been wrongfully preferred. The petition was allowed, and the rule was made absolute in the specified terms, with no order as to costs.

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• 1985 (3) TMI 313
  
  Issues:
  1. Validity of jurisdiction based on the timing of notice issuance.
  2. Obligation to follow circular instructions issued by the Board.
  3. Legality of fair market value determination by the Tribunal and the Inspecting Assistant Commissioner.
  
  Issue 1: Validity of Jurisdiction
  
  The case involved appeals against an order by the Income Tax Appellate Tribunal reversing the Inspecting Assistant Commissioner's order for property acquisition under Chapter XX-A of the Income-tax Act, 1961. The main contention was the timing of notice issuance under section 269D of the Act. The Tribunal allowed an additional ground challenging the jurisdiction of the Inspecting Assistant Commissioner due to premature notice issuance. The High Court, citing a previous case, held that allowing the additional ground was an error of law, invalidating the Tribunal's decision and upholding the Inspecting Assistant Commissioner's order.
  
  Issue 2: Obligation to Follow Circular Instructions
  
  The parties disputed whether authorities under the Act were bound by circular instructions issued by the Central Board of Direct Taxes after the enactment of the Voluntary Disclosure of Income and Wealth Act, 1976. The circular specified conditions under which acquisition proceedings could be dropped. The High Court acknowledged the binding nature of the circular on all authorities under the Act. Considering the pending applications under the 1976 Act, the court set aside previous orders and directed the Inspecting Assistant Commissioner to await the Commissioner's decision before proceeding with the acquisition process.
  
  Issue 3: Legality of Fair Market Value Determination
  
  Regarding the determination of fair market value, the High Court emphasized the need to consider the Commissioner's decision and the applicability of the 1976 Act. The court held that any determination of fair market value should align with established principles. Consequently, the High Court set aside the findings of the Tribunal and the Inspecting Assistant Commissioner on this matter. The court allowed the appeals, remitted the cases to the Inspecting Assistant Commissioner, and directed a reassessment based on the Commissioner's decision and relevant legal provisions.
  
  In conclusion, the High Court addressed the issues of jurisdiction, compliance with circular instructions, and fair market value determination in a meticulous manner, ensuring that the legal principles and procedural requirements under the Income-tax Act were upheld.

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• 1985 (3) TMI 312
  
  Issues Involved:
  
  1. Agreement to purchase 4,200 old spindles.
  2. Delivery of goods.
  3. Payment of Rs. 10,000 by the defendant.
  4. Entitlement to recovery of Rs. 92,440.18.
  5. Entitlement to interest.
  6. Territorial jurisdiction.
  7. Defendant's entitlement to recovery of Rs. 10,000 with interest.
  8. Relief.
  
  Detailed Analysis:
  
  Issue 1: Agreement to Purchase 4,200 Old Spindles
  The plaintiff, a public limited company, decided to sell 4,200 spindles with motors and accessories for Rs. 1,02,440.18. The defendant agreed to purchase these spindles, making an initial payment of Rs. 10,000 and agreeing to pay the balance by 30th September, 1973. This agreement was documented in a letter dated 5th July, 1973 (Ex. P-4).
  
  Issue 2: Delivery of Goods
  The defendant denied the delivery of the spindles, stating that the transfer required permission from the Textile Commissioner, which was not obtained. However, the plaintiff contended that possession had already been delivered to the defendant, as mentioned in Ex. P-4.
  
  Issue 3: Payment of Rs. 10,000 by the Defendant
  The defendant sent a cheque for Rs. 10,000 towards part payment, as evidenced by Ex. P-2. The plaintiff raised a bill dated 5th July, 1973, in the name of M/s. Gupta Hosiery Mills, confirming this payment.
  
  Issue 4: Entitlement to Recovery of Rs. 92,440.18
  The plaintiff sought recovery of Rs. 92,440.18, being the balance of the agreed purchase price, along with interest. The defendant argued that the agreement was void as it contravened the Woollen Textiles (Production and Distribution) Control Order, 1962, which required prior permission from the Textile Commissioner for the sale of spindles.
  
  Issue 5: Entitlement to Interest
  The plaintiff claimed interest at the rate of 15% per annum from 1st October, 1973. However, the court found no evidence to support this claim.
  
  Issue 6: Territorial Jurisdiction
  The issue of territorial jurisdiction was not pressed by the defendant during the proceedings.
  
  Issue 7: Defendant's Entitlement to Recovery of Rs. 10,000 with Interest
  The defendant sought the recovery of Rs. 10,000 paid as an advance. The court held that since the agreement was void, the defendant's claim for refund was also not maintainable. The claim was not raised by way of any counter-claim.
  
  Issue 8: Relief
  The court concluded that the agreement was illegal and unenforceable due to the prohibition under the Woollen Textiles (Production and Distribution) Control Order, 1962. The court observed, "The prohibition against acquisition and sale of spindles is absolute in the absence of any permission from the Textile Commissioner." Therefore, the suit was dismissed, and both parties were left to bear their own costs, as they were in pari delicto (equally at fault).
  
  Conclusion:
  The court dismissed the suit, holding that the agreement was void and unenforceable due to the lack of required permission from the Textile Commissioner. Both parties were ordered to bear their own costs.

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• 1985 (3) TMI 311
  
  Issues Involved:
  
  1. Inter-se seniority between promotees, direct recruits, and recruits from limited competitive examinations.
  2. Validity and implementation of the quota-rota rule.
  3. Constitutionality of Rule 25(1)(ii) in relation to Rule 21 of the 1964 Rules.
  4. Adherence to and deviation from the prescribed quota.
  5. Impact of non-implementation of the quota rule on seniority.
  6. Validity of seniority lists dated June 25, 1979, and June 30, 1983.
  7. Power to relax quota rules under Rule 29(a).
  
  Detailed Analysis:
  
  1. Inter-se Seniority Between Promotees, Direct Recruits, and Recruits from Limited Competitive Examinations:
  
  The dispute revolves around the determination of inter-se seniority among promotees, direct recruits, and those recruited through limited competitive examinations in the Indian Foreign Service Branch 'B' (IFS 'B'). The service was constituted by a memorandum dated July 16, 1956, and governed by the Indian Foreign Service Branch 'B' (Recruitment, Cadre, Seniority, and Promotion) Rules, 1964 ('1964 Rules'). The petitioners, promoted between 1976-1979, challenged the seniority lists published on June 25, 1979, and June 30, 1983, arguing that they were unconstitutional and violated Articles 14 and 16 of the Constitution.
  
  2. Validity and Implementation of the Quota-Rota Rule:
  
  The seniority lists were drawn based on the quota-rota rule, which assigns seniority according to the quotas of substantive vacancies reserved for direct recruitment and appointments from the select list. The petitioners contended that this principle was unjust as it allowed later recruits to be placed over earlier promotees, leading to a violation of constitutionally guaranteed equality of opportunity.
  
  3. Constitutionality of Rule 25(1)(ii) in Relation to Rule 21 of the 1964 Rules:
  
  The petitioners argued that if Rule 25(1)(ii) is not harmoniously construed with Rule 21, it would be unconstitutional. Rule 21(4) states that persons promoted or recruited earlier shall be senior to those promoted or recruited later. The Court held that Rule 21(4) and Rule 25(1)(ii) can be harmoniously read, with Rule 21(4) applying to situations where recruitment or selection is at intervals, and Rule 25(1)(ii) applying when recruitment from all sources occurs almost simultaneously.
  
  4. Adherence to and Deviation from the Prescribed Quota:
  
  The Court noted that recruitment from three sources (direct recruitment, limited competitive examination, and promotion) was not done according to the prescribed quota. There was no direct recruitment in several years, and limited competitive examinations were not held consistently. This led to a large-scale departure from the quota rule, making it unjust to give effect to the rota rule of seniority.
  
  5. Impact of Non-Implementation of the Quota Rule on Seniority:
  
  The Court observed that the non-implementation of the quota rule for years led to disparities between similarly circumstanced individuals, denying them equal treatment. The seniority lists kept vacancies open for future recruits, allowing them to be placed over existing promotees, which was deemed unjust and inequitable.
  
  6. Validity of Seniority Lists Dated June 25, 1979, and June 30, 1983:
  
  The Court quashed the seniority lists dated June 25, 1979, and June 30, 1983, as they were drawn up in violation of Articles 14 and 16. The lists kept placements vacant for future recruits, leading to an inequitable situation where later recruits would be senior to those already in service.
  
  7. Power to Relax Quota Rules Under Rule 29(a):
  
  The Court held that the Government of India had the power to relax any of the provisions of the 1964 Rules under Rule 29(a). It inferred that the repeated departure from the quota rule was done in exercise of this power, making the promotions of the petitioners regular and legal. The Court also noted that failure to consult the Union Public Service Commission, as required by the proviso to Rule 29(a), would not invalidate the exercise of power.
  
  Conclusion:
  
  The writ petitions were allowed, and the impugned seniority lists were quashed. The Court directed the Government to draw up fresh seniority lists within three months, ensuring they align with the observations made in the judgment. All promotions granted since the filing of the petitions were subject to readjustment in accordance with the judgment.

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• 1985 (3) TMI 310
  
  Issues Involved:
  (i) Whether section 13(2) of the Act provides for payment of penalty or interest?
  (ii) Whether section 13(2) of the Act was violative of articles 14 and 19(1)(f) of the Constitution?
  (iii) Whether section 13(2A) of the Act suffers from the vice of excessive delegation and was violative of article 14 of the Constitution?
  (iv) If section 13(2A) of the Act was invalid, whether that invalidity by itself invalidates section 13(2) of the Act, on the grounds that it was not severable from the latter?
  
  Detailed Analysis:
  
  Re: Point No. I
  The primary contention was whether section 13(2) of the Karnataka Sales Tax Act, 1957, provides for the payment of penalty or interest. The petitioner argued that the plain language of section 13(2) does not support the interpretation that it provides for an automatic levy of interest, as previously held by the court in Volkart's case. The respondents maintained that the ruling in Volkart's case was correct and did not require reconsideration. The court reviewed the historical context and various interpretations of section 13(2), including decisions in Sha Jayantilal Khetsi v. Additional Commercial Tax Officer, Sterling Construction & Training Company v. Commercial Tax Officer, and Volkart's case. The court concluded that the term "penalty" in section 13(2) should be construed as "interest" and rejected the petitioner's contention for reconsideration.
  
  Re: Point No. II
  The petitioner challenged section 13(2) as violative of articles 14 and 19(1)(f) of the Constitution, arguing that it levied penalties automatically without an opportunity for hearing and ignored stay orders. The court noted that article 19(1)(f) had been deleted by the 44th Constitution Amendment Act and thus could not be a basis for the challenge. The court referenced previous rulings, including Mutha Manickchand's case and Khazan Chand v. State of Jammu and Kashmir, to conclude that section 13(2) did not violate article 14. The court reasoned that the provision uniformly applied to all defaulting assessees and the rates of interest were neither disproportionate nor arbitrary. The court also stated that stay orders only postponed liabilities and did not affect the validity of section 13(2).
  
  Re: Point No. III
  The petitioner challenged section 13(2A) of the Act, arguing that it conferred arbitrary and uncontrolled power on the executive government, violating article 14. The respondents countered that the provision did not suffer from excessive delegation. The court noted that section 13(2A) conferred a benefit on assessees, allowing them to seek remission of penalties, and such a beneficial provision could not be challenged by the beneficiary. The court also held that conferring power on the government, the highest executive authority, subject to rules laid before the legislature, did not constitute excessive delegation. The court referenced the Supreme Court ruling in Chinta Lingam v. Government of India to support its conclusion.
  
  Re: Point No. IV
  The petitioner argued that if section 13(2A) was struck down for excessive delegation, section 13(2) should also be invalidated as they were inseparable. The court, having found section 13(2A) valid, stated that this point did not survive for consideration. However, the court examined the principles of severability from Harakchand Ratanchand Banthia v. Union of India and concluded that section 13(2A) was independent and separable from section 13(2). Even if section 13(2A) were invalid, section 13(2) could still stand independently.
  
  Conclusion
  The court dismissed the writ petition, upholding the validity of sections 13(2) and 13(2A) of the Karnataka Sales Tax Act, 1957. The court also suggested that the legislature amend section 13 to replace the term "penalty" with "interest" to avoid future litigation. The petitioner was ordered to pay the costs of the respondents, set at Rs. 250.

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• 1985 (3) TMI 309
  
  Issues:
  The issues involved in this legal judgment include the dismissal of an employee from service following a criminal conviction, the application of the Probation of Offenders Act, and the fairness of the penalty imposed by the government.
  
  Issue 1: Dismissal from service following a criminal conviction:
  The appellant was retrenched by the Ministry of Rehabilitation in 1960 and subsequently convicted for breach of trust in 1962. Despite being released under the Probation of Offenders Act, he was summarily dismissed from service in 1964. Various legal proceedings ensued, culminating in an appeal before the Supreme Court.
  
  Issue 2: Application of the Probation of Offenders Act:
  The appellant contended that since he was released under the Probation of Offenders Act, the authorities were not justified in dismissing him from service. The High Court initially ruled in favor of the appellant, emphasizing the need to afford him a reasonable opportunity of being heard as required by Article 311(2) of the Constitution. However, the Supreme Court analyzed Section 12 of the Probation of Offenders Act and determined that the order of dismissal did not constitute a disqualification under the Act.
  
  Issue 3: Fairness of the penalty imposed:
  The Supreme Court acknowledged the tragic circumstances surrounding the appellant, including personal misfortunes that led to the criminal offense. Despite the conviction, the learned Magistrate had recommended the appellant be dealt with under the Probation of Offenders Act due to the compelling circumstances. The Court criticized the government's hasty dismissal of the appellant without considering a proportionate penalty, emphasizing the need for fairness and reasonableness in imposing penalties on government servants.
  
  Judgment Summary:
  The Supreme Court, while recognizing the tragic circumstances and the flaws in the government's actions, allowed the appeal. The Court set aside the previous judgments, directing the immediate reinstatement of the appellant in service with full back wages. The government was also instructed to pay the costs of the legal proceedings. Despite the delays and complexities of the case, the Court emphasized the importance of upholding justice and fairness in employment matters.

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• 1985 (3) TMI 308
  
  Issues Involved:
  1. Eligibility for All-India Tourist Permit
  2. Completeness of Applications
  3. Applicability of Orissa Tourist Vehicles Rules, 1967
  4. Interpretation of Section 63(7) of the Motor Vehicles Act, 1939
  
  Issue-Wise Detailed Analysis:
  
  1. Eligibility for All-India Tourist Permit:
  The High Court erred in holding that only the holder of an existing contract carriage permit was eligible to apply for an all-India tourist permit. The Supreme Court clarified that Section 63(7) of the Motor Vehicles Act, 1939, does not necessitate a pre-existing contract carriage permit for an all-India tourist permit. The Court emphasized that the concept of an all-India tourist permit was introduced to facilitate tourism and remove barriers to free movement across states. The provision allows the State Transport Authority to grant permits valid throughout India without requiring any prior endorsements.
  
  2. Completeness of Applications:
  The High Court also found fault with the applications submitted by the appellants, stating that some columns were left blank. The Supreme Court clarified that the forms prescribed in the advertisement issued by the State Transport Authority on June 24, 1974, included two forms: one for new applicants without an existing contract carriage permit and another for those seeking to convert an existing permit. The Court noted that the blanks in the applications were irrelevant for fresh applicants who did not have an existing permit to endorse.
  
  3. Applicability of Orissa Tourist Vehicles Rules, 1967:
  The High Court relied on sub-rules (2), (3), and (4) of Rule 3 of the Orissa Tourist Vehicles Rules, 1967, to conclude that a pre-existing contract carriage permit was necessary. The Supreme Court held that these rules were enacted before the introduction of the all-India tourist permit concept in 1970 and were not applicable. The rules catered to a situation where the area of operation of a permit could be enlarged by endorsements, a concept rendered obsolete by the introduction of Section 63(7).
  
  4. Interpretation of Section 63(7) of the Motor Vehicles Act, 1939:
  The Supreme Court emphasized that Section 63(7) allows the State Transport Authority to grant an all-India tourist permit without requiring endorsements from other authorities. The provision was introduced to promote tourism by enabling vehicles to operate across states without needing separate permits or endorsements. The Court rejected the High Court's interpretation that an all-India tourist permit could only be granted by endorsing an existing contract carriage permit.
  
  Conclusion:
  The Supreme Court quashed the High Court's judgment and restored the decision of the State Transport Authority granting all-India tourist permits to the appellants. The Court clarified that applicants for an all-India tourist permit do not need a pre-existing contract carriage permit, and the applications were complete and valid. The Orissa Tourist Vehicles Rules, 1967, were deemed inapplicable to the all-India tourist permit applications. The appeals were allowed, and the appellants were directed to apply for renewal if their original permits had expired.

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• 1985 (3) TMI 307
  
  Issues Involved:
  1. Determination of the rate of overtime allowance admissible to employees.
  2. Interpretation of Sec. 14 and Sec. 31 of The Tamil Nadu Shops and Establishments Act, 1947.
  
  Summary:
  
  Issue 1: Determination of the rate of overtime allowance admissible to employees

  The core question raised in these appeals by special leave is the rate of overtime allowance admissible to the employees of the appellants working in their establishments situated in Tamil Nadu. M/s Philips India Ltd. had an establishment in Tamil Nadu governed by The Tamil Nadu Shops and Establishments Act, 1947, and followed a practice where employees rendered service for 39 hours a week. The company introduced the rate of overtime payment at 1-1/2 times the ordinary wages for work done over 39 hours per week, subject to the condition that whenever the total working hours exceeded 8 hours per day or 48 hours per week, employees were entitled to overtime at twice the ordinary wages as mandated by Sec. 31 of the Act. Similarly, State Bank of India paid overtime allowance at the rate awarded by the National Industrial Tribunal (Desai Award), which fixed working hours at 36-1/2 per week and directed overtime allowance at 1-1/2 times the wages for every quarter of an hour of overtime work.

  Issue 2: Interpretation of Sec. 14 and Sec. 31 of The Tamil Nadu Shops and Establishments Act, 1947

  Employees of both establishments filed claim petitions under Sec. 33-C(2) of the Industrial Disputes Act, 1947, seeking computation of monetary benefits for overtime allowance for work done beyond the prescribed hours of work per week as provided in Sec. 31 of the Act. Both Labour Courts held that Sec. 14 of the Act does not prescribe the number of working hours per day but specifies the maximum number of working hours that can be introduced by an employer. The Labour Courts computed the monetary benefit by granting overtime allowance at double the ordinary wages.

  The High Court, upon interpreting the relevant provisions, held that once the employer prescribed daily working hours or total number of working hours per week less than permissible under Sec. 14, the rate of overtime allowance as prescribed in Sec. 31 would be applicable. The High Court discharged the rule and confirmed the orders made by both Labour Courts. The appeals questioned this interpretation.

  The Supreme Court examined the relevant statutory provisions and concluded that Sec. 14(1) prescribes a ceiling on working hours but does not mandate the employer to provide the maximum number of working hours. The employer can prescribe working hours less than the ceiling, and any work done in excess of the prescribed hours would constitute overtime work. The Court held that the statutory rate of overtime wages prescribed in Sec. 31 would apply only to work done in excess of the maximum hours of work permissible under the statute. The Court found that both employers had prescribed the rate of overtime wages at 1-1/2 times the ordinary wages for overtime work in excess of their prescribed hours of work and up to the maximum permissible under Sec. 14(1).

  The Supreme Court allowed the appeals, quashed the judgment of the High Court, and set aside the common orders of both Labour Courts. The applications made by the employees under Sec. 33-C(2) of the Industrial Disputes Act were dismissed. The appellants were directed to pay costs to the respondents in one set only.

  S.R. Appeal allowed.

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• 1985 (3) TMI 306
  
  Issues Involved:
  1. Maintainability of the writ petition.
  2. Jurisdiction of the Chief of the Army Staff to issue a show cause notice under Rule 14 after acquittal by a court-martial.
  3. Interpretation of relevant provisions of the Army Act and Army Rules.
  
  Summary:
  
  1. Maintainability of the Writ Petition:
  The Supreme Court addressed the preliminary objection raised by the Appellants regarding the writ petition's maintainability, arguing it was premature. The Court held that if the Chief of the Army Staff had no jurisdiction to issue the impugned show cause notice after the Respondent was found not guilty by the court-martial on revision, the Respondent would be exposed to the jeopardy of having his explanation and defense rejected, leading to his removal or dismissal from service. The Court concluded that the writ petition was maintainable since the threat of prejudicial action was wholly without jurisdiction.
  
  2. Jurisdiction of the Chief of the Army Staff to Issue Show Cause Notice:
  The core issue was whether the Chief of the Army Staff had the authority to issue a show cause notice u/s 14 of the Army Rules after the Respondent was acquitted by a court-martial. The Court examined the relevant provisions of the Army Act and Army Rules, particularly focusing on Section 19, Section 121, and Rule 14. It was argued that having been tried and acquitted by a court-martial, the Respondent could not be subjected to action under Rule 14. However, the Court noted that the general court-martial's finding on revision was not confirmed, rendering it invalid u/s 153. The Court concluded that in the absence of a confirmed finding, a fresh trial by another court-martial was not permissible, and thus, the Chief of the Army Staff could resort to Rule 14.
  
  3. Interpretation of Relevant Provisions:
  The Court analyzed the definitions of "inexpedient" and "impracticable" and concluded that in the given circumstances, ordering a fresh trial by a court-martial could be considered both inexpedient and impracticable. The Court held that the Chief of the Army Staff's action in issuing the show cause notice was neither without jurisdiction nor unwarranted in law. The judgment emphasized that the Chief of the Army Staff had the discretion to take action under Rule 14 when the court-martial's finding was not confirmed.
  
  Conclusion:
  The Supreme Court allowed the appeal, reversed the judgment of the Allahabad High Court, and dismissed the writ petition filed by the Respondent. The Court also suggested that the Chief of the Army Staff consider the Respondent's conduct and behavior over the intervening period before proceeding further in the matter. No order as to costs was made.

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• 1985 (3) TMI 305
  
  The Supreme Court dismissed a Special Leave Petition by the first accused in a criminal case, criticizing the High Court's misapplication of legal principles regarding the weight of evidence, including eyewitness testimony and confessions. The Court emphasized that a truthful eyewitness account can be sufficient for a conviction and that a confession, if corroborated, can also form the basis for a conviction. The High Court's view that a confession alone cannot prove guilt was deemed erroneous.

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• 1985 (3) TMI 304
  
  Issues involved:
  The judgment involves the interpretation of taxability of fees received for engineering and bid evaluation under section 9(1)(vii) of the Income-tax Act, 1961.
  
  Summary:
  The Appellate Tribunal ITAT DELHI considered a case where a non-resident company entered into a technical service agreement with a corporation for expertise and technical assistance in construction and assembly of factories. The company received fees for services rendered in India and the USA. The company claimed that the fee received for engineering and bid evaluation in the USA was exempt from income tax. However, the tax authorities treated the amount as taxable income. The key issue was whether the fee for engineering and bid evaluation is taxable under section 9(1)(vii) when read with Explanation 2.
  
  The company argued that 'construction' includes engineering and bid evaluation as a step-in-aid to construction. It contended that bid evaluation and engineering are part of the formulation process, which falls under the exclusion from taxable income as per Explanation 2 of section 9(1)(vii). The department disagreed and supported the tax authorities' decision.
  
  The Tribunal held in favor of the company, stating that under section 9(1)(vii) read with Explanation 2, any consideration for construction or assembling projects undertaken by an assessee is excluded from taxable income. Since the services provided were connected to the construction of factories and plants, the fee for engineering and bid evaluation was considered a step-in-aid for construction, making it non-taxable. Consequently, the amount in question was deleted from the computation, and the appeal was allowed.

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• 1985 (3) TMI 303
  
  Issues:
  Assessment of penalty under Section 15-A (1) (o) of the U. P. Sales Tax Act for importing goods without Forms 31, exercise of power under Section 10-B of the Act by Deputy Commissioner, interpretation of Section 28-A regarding penalty imposition, intention to cause loss to revenue or evade tax as a prerequisite for penalty imposition.
  
  Analysis:
  The judgment pertains to an assessee's revision under Section 11 (1) of the U. P. Sales Tax Act challenging the penalty imposed for importing goods without Forms 31. The assessee, a limited company, imported carbon black without requisite forms, leading to a penalty of &8377; 27,305. Initially, the assessing authority did not impose a penalty due to no mens rea element and proper entry in excise records. However, the Deputy Commissioner disagreed, imposing the penalty under Section 15-A (1) (o) and later rectifying it to &8377; 27,305. The Tribunal reduced the penalty but found the assessee guilty under Section 28-A. The assessee argued lack of material for Deputy Commissioner's action under Section 10-B and contended that penalty imposition was unjustified due to no intention to cause revenue loss or evade tax.
  
  The counsel for the assessee argued that the Tribunal's finding of no intention to cause revenue loss should negate penalty imposition. In contrast, the Standing Counsel for revenue asserted that any breach of Section 28-A rendered the assessee liable for penalty, emphasizing the legislative intent to prevent tax evasion through the provision. The Court held that mere breach of Section 28-A was insufficient for penalty imposition under Section 15-A (1) (o) without intent to cause revenue loss or tax evasion. Consequently, the revision was allowed, quashing the Tribunal's order without costs.

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• 1985 (3) TMI 302
  
  Issues Involved:
  1. Definition and interpretation of "adulterated" under Section 2(1)(f) of the Prevention of Food Adulteration Act, 1954.
  2. Whether the presence of worms in the food sample constitutes adulteration.
  3. Requirement of proof for unfitness for human consumption.
  
  Issue-wise Detailed Analysis:
  
  1. Definition and Interpretation of "Adulterated" under Section 2(1)(f) of the Prevention of Food Adulteration Act, 1954:
  The appeal concerns the interpretation of "adulterated" as defined in Section 2(1)(f) of the Prevention of Food Adulteration Act, 1954. The section states that an article of food shall be deemed to be adulterated if it consists wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or is insect-infested or is otherwise unfit for human consumption. The debate revolves around whether the term "insect-infested" includes the presence of worms and whether the phrase "or is otherwise unfit for human consumption" should be read conjunctively or disjunctively with the preceding terms.
  
  2. Whether the Presence of Worms in the Food Sample Constitutes Adulteration:
  The respondent was acquitted by the learned Metropolitan Magistrate, Delhi, on the grounds that the mere presence of nine living meal worms in the lal mirchi powder did not satisfy the definition of "adulterated" under the Act. The prosecution relied on the Public Analyst's report, which identified the presence of meal worms but did not classify the sample as insect-infested or unfit for human consumption. The Calcutta High Court's decision in M/s Narkeklange Roller Flour Mills v. The Corporation of Calcutta was cited, where it was held that worms and insects are not synonymous, and the presence of worms alone does not constitute adulteration unless it renders the food unfit for human consumption.
  
  3. Requirement of Proof for Unfitness for Human Consumption:
  The Supreme Court analyzed past judgments to determine whether mere infestation by worms or insects is sufficient to deem food adulterated or if additional proof of unfitness for human consumption is required. In Municipal Corporation of Delhi v. Kacheroo Mal, the court preferred a conjunctive reading, stating that proof of unfitness for human consumption is necessary. Conversely, in Municipal Corporation of Delhi v. Tek Chand Bhatia, the court held that the presence of filthy, putrid, or insect-infested substances alone is sufficient to classify the food as adulterated, without needing further proof of unfitness for human consumption.
  
  Conclusion:
  The Supreme Court upheld the acquittal, agreeing that the prosecution failed to prove that the lal mirchi powder was adulterated under Section 2(1)(f) of the Act. The Public Analyst's report did not state that the sample was insect-infested or unfit for human consumption. The court refrained from resolving the conflicting interpretations of Section 2(1)(f) due to the equal strength of the benches in the cited cases. The appeal was dismissed as the evidence was inadequate to overturn the acquittal.
  
  Judgment:
  The appeal by the Delhi Administration was dismissed, affirming the High Court's decision to uphold the acquittal of the respondent.

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• 1985 (3) TMI 301
  
  Issues Involved:
  1. Vires of Section 6-A of the Gujarat Entertainment Tax (Amendment) Act, 1984.
  2. Challenge to Rules 13 and 19 of the Gujarat Cinema (Regulation of Exhibition by Video) Rules, 1984.
  
  Detailed Analysis:
  
  1. Vires of Section 6-A of the Gujarat Entertainment Tax (Amendment) Act, 1984:
  
  The primary contention against Section 6-A was that it imposed a tax on the person providing entertainment, rather than on the person being entertained. This argument was dismissed based on the precedent set by the Supreme Court in Western India Theatres Ltd. v. Cantonment Board, Poona, which held that a tax on the giver of entertainment falls within the ambit of Entry 62 of List 2 of Schedule VII of the Constitution, which pertains to "taxes on luxuries including taxes on entertainments, amusements, betting and gambling."
  
  Further, the presumption in Section 6A(2) that proprietors provide a certain number of shows daily was contested. The court noted that presumptions are rebuttable and proprietors could inform the prescribed officer if fewer shows were held. However, the court found the provision for calculating tax based on the total number of seats available, rather than actual occupancy, to be illegal. This was because it did not account for unoccupied seats on certain days, making the tax on a notional basis rather than actual entertainment.
  
  The court referenced the Bombay High Court's judgment in Ramesh Waman Toke and Ors. v. State of Maharashtra, which criticized a similar tax structure for not considering actual entertainment provided. The judgment emphasized that the tax should be based on actual entertainment, not on the theoretical maximum capacity.
  
  Consequently, the court declared Section 6A ultra vires the Constitution as it levied tax on notional entertainment, which is beyond the legislative power conferred under Entry 62 of List II of Schedule VII of the Constitution.
  
  2. Challenge to Rules 13 and 19 of the Gujarat Cinema (Regulation of Exhibition by Video) Rules, 1984:
  
  Rule 13(1): The rule allowed the licensing authority to refuse a license if the video cinema was likely to cause obstruction, inconvenience, annoyance, risk, danger, or damage to residents or passersby. The court interpreted "in the vicinity of the cinema" to mean "in the vicinity of the video-cinema" and not any other cinema. This interpretation was agreed upon by the Government Pleader.
  
  Rule 13(2): This rule mandated a minimum distance of 150 meters between a video cinema and any existing permanent, semi-permanent, or touring cinema. The court found no rationale behind this provision, noting that in many cities, permanent cinemas exist in close proximity without legal issues. The court inferred that this rule imposed an unreasonable restriction on video cinemas to benefit permanent cinemas, thereby violating Article 14 of the Constitution of India.
  
  Rule 19(ii): This rule granted any Police Officer, authorized by the licensing authority, free access to the video cinema. The court clarified that such access should be for maintaining law and order, as conceded by the Government Pleader.
  
  Judgment:
  
  The court allowed all three petitions, declaring Section 6-A of the Gujarat Entertainments Tax (Amendment) Act, 1984, and Rule 13(2) of the Gujarat Cinemas (Regulation of Exhibition by Videos) Rules, 1984, as ultra vires the Constitution of India. The rule was made absolute with costs. The request for a certificate under Article 133 of the Constitution was rejected. The operation of the judgment was stayed for six weeks to allow the State of Gujarat to take appropriate legal recourse.

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• 1985 (3) TMI 300
  
  The appellant, a Village Accountant, was penalized by reducing him to a lower post of Daftarband-Attender after a disciplinary inquiry. The High Court held that this penalty was not justified as the appellant was directly recruited as a Village Accountant. The Court set aside the penalty and remitted the case back to the Deputy Commissioner for reconsideration of an appropriate punishment. The appeal was allowed, and the original penalty was quashed.

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• 1985 (3) TMI 299
  
  The High Court dismissed the appeal filed by the Director of Enforcement, ruling that only the Central Government had the authority to file the appeal. The decision was based on a previous case where a similar appeal was dismissed by the Madras High Court. The Court upheld the preliminary objection and stated that the appeal was not filed by the proper authority.

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