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1988 (3) TMI 467
Issues:
Grant of bail based on medical grounds in a non-bailable offence
Analysis:
The judgment involves a case where the opposite party, along with others, was accused of serious offences under Sections 307/326 of the Indian Penal Code. The allegations stated that the accused attacked the victim with deadly weapons, resulting in severe injuries. The accused had previously applied for bail, which was rejected by the Sessions Judge and subsequently by a High Court judge. The opposite party then filed a fresh bail application citing health issues, supported by a medical report indicating ailments like spondylitis and ulcerative colitis. The report highlighted the need for specialized investigations and treatment not available in jail.
The court considered the grounds for bail based on sickness in non-bailable offences as per Section 437(1) proviso of the Criminal Procedure Code. It was emphasized that the sickness must be of such a nature that the accused cannot receive proper treatment unless released on bail. The judgment stressed that the legislative intent behind non-bailable offences should not lead to physical suffering for the accused, as they are presumed innocent until proven guilty. The court highlighted the responsibility of the state to ensure medical treatment for accused persons in custody and the need for courts to conduct thorough inquiries before granting bail based on medical grounds.
The court scrutinized the medical report provided by the accused, noting the lack of definitiveness in the diagnosis and treatment response. It raised concerns about the discrepancy between the ailments mentioned in the bail application and the medical report. The court criticized the lack of inquiry by the Sessions Judge into the treatment offered to the accused in custody and the failure to explore options for specialized treatment. It concluded that the bail granted to the opposite party was improper due to the absence of a judicial assessment of the medical situation.
The judgment allowed the opposite party to surrender after completing treatment for chicken-pox and directed the bailors to produce him upon surrender. It instructed the Additional Sessions Judge to reconsider a bail application based on sickness, taking into account the observations made in the judgment. Failure to surrender would result in steps for the opposite party's arrest. The court made the rule absolute, emphasizing the importance of a thorough judicial review before granting bail based on medical grounds in non-bailable offences.
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1988 (3) TMI 466
Issues Involved:
1. Whether the Tribunal could lawfully pass the operative order regarding the inclusion of Respondent No. 1 in the select list.
2. Whether the Selection Committee erred in considering adverse remarks against Respondent No. 1.
3. Whether the Tribunal could assume the role of the Selection Committee.
4. Whether the Selection Committee was required to record reasons for not selecting Respondent No. 1.
Issue-wise Detailed Analysis:
1. Whether the Tribunal could lawfully pass the operative order regarding the inclusion of Respondent No. 1 in the select list:
The Tribunal concluded that adverse remarks in the Confidential Character Rolls (C.C. Rolls) of Respondent No. 1 were not communicated to him until the date of the Selection Committee meeting. These remarks were subsequently expunged by the State Government. The Tribunal held that the non-selection of Respondent No. 1 was bad in law and directed that he should be deemed included in the select list and appointed to the Indian Police Service from the date his immediate junior, Shri Sardar Pradeep Kar, was appointed. However, the Supreme Court found that the Tribunal overstepped its jurisdiction by making such an order. The proper course was to direct the Selection Committee to reconsider the merits of Respondent No. 1 vis-a-vis his junior, without the adverse remarks.
2. Whether the Selection Committee erred in considering adverse remarks against Respondent No. 1:
The Supreme Court held that the Selection Committee erred by considering adverse remarks that were not communicated to Respondent No. 1 and were subsequently expunged. The legal effect of setting aside the adverse remarks was that they must be treated as non-existent in the eye of law. Therefore, the Selection Committee should not have taken these remarks into account.
3. Whether the Tribunal could assume the role of the Selection Committee:
The Supreme Court emphasized that the jurisdiction to make selections vested in the Selection Committee. The Tribunal could not substitute itself for the Selection Committee and make the selection as if it were exercising the Selection Committee's powers. The Tribunal's role was to ensure that the Selection Committee reconsidered the matter without the adverse remarks, not to make the selection itself.
4. Whether the Selection Committee was required to record reasons for not selecting Respondent No. 1:
The Tribunal declared that it was obligatory for the Selection Committee to record reasons for superseding senior officers. However, the Supreme Court clarified that the concept of supersession is relevant to promotions, not selections. The Selection Committee was making a selection, not a promotion, and therefore, it was not required to record reasons for not selecting a senior officer. This view was supported by the precedent set in Ram Das v. Union of India, where it was held that reasons need not be recorded for not selecting a person in the arena.
Conclusion:
The Supreme Court allowed the appeals and set aside the Tribunal's order to the extent that it directed the inclusion of Respondent No. 1 in the select list and his appointment from the date his junior was appointed. Instead, the Supreme Court directed the Selection Committee to reconsider the select list as if the adverse remarks did not exist and to decide whether Respondent No. 1 would have been selected based on the proper categorization of his C.C. Rolls. If upon reconsideration, Respondent No. 1's claim is accepted, he should be appointed with effect from the date he would have been selected in 1983, with all consequential benefits. The Selection Committee was directed to complete this exercise within two months. There was no order regarding costs.
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1988 (3) TMI 465
Issues:
1. Non-implementation of court orders regarding reinstatement and accommodation of petitioner No. 9.
2. Allegations of ill-treatment and change in behavior towards petitioners post-filing of writ petition.
3. Jurisdiction and control over the Pension Paying Office in Nepal.
4. Compliance and apologies by different respondents.
5. Delay in implementation of court orders and reasons provided.
6. Allegations of resentment and motive for delay.
7. Concerns regarding growing instances of non-compliance with court directions.
8. Acceptance of apologies and imposition of costs on respondent No. 6.
Analysis:
1. The judgment pertains to a writ petition filed by 40 employees seeking permanent status and benefits, specifically focusing on the reinstatement and accommodation of petitioner No. 9. Despite court orders for reinstatement, there were allegations of non-implementation, leading to contempt proceedings.
2. Post the filing of the writ petition, the behavior towards the petitioners reportedly changed, with allegations of ill-treatment by certain respondents. Separate affidavits were filed by the respondents in response to these allegations.
3. The establishment in question, the Pension Paying Office in Nepal, is under the control of the Indian Embassy, with the Officer-in-Charge overseeing operations. The jurisdictional hierarchy involves the Embassy, Defence Secretary, Ministry of External Affairs, and other officials based in Delhi.
4. Different respondents, including the Defence Secretary and Foreign Secretary, apologized for the delay in compliance, citing lack of personal impleadment initially. The Military and Air Attache also offered apologies and ensured compliance with court orders.
5. The Officer-in-Charge of the Pension Paying Office explained the delay in implementation, citing communication delays, administrative bottlenecks, and security concerns. The court acknowledged the reasons provided but highlighted the need for timely compliance.
6. Allegations of resentment and motive for delay were raised, hinting at a possible underlying cause for non-compliance. However, the court refrained from delving further into the matter due to subsequent compliance and apologies from all respondents.
7. The judgment expressed serious concern over the trend of non-compliance with court orders and emphasized the importance of upholding the Rule of Law. The court stressed the need for all parties to respect court decisions and avoid unnecessary confrontations.
8. Ultimately, the court accepted the apologies from the respondents, discharged the contempt notice, and directed respondent No. 6 to pay costs of the proceedings within a specified timeline as a form of penalty for the delay in compliance.
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1988 (3) TMI 464
Issues Involved:
1. Validity of the compromise agreement.
2. Legality of the penal clause in the compromise.
3. Extension of time for payment of the second installment.
4. Opportunity for the plaintiffs to contest the defendant's prayer.
Issue-wise Detailed Analysis:
1. Validity of the Compromise Agreement:
The appellants filed a suit for partition claiming a 1/3rd share in the properties. A preliminary decree was passed by the trial court, which was challenged by the defendant No. 9. The appeal was disposed of on a compromise, accepting the plaintiffs' claim to a 1/3rd share. The compromise stipulated that half of the plaintiffs' share would go to defendant No. 9 if he paid Rs. 40,000 by a specified date, failing which the trial court's decree would stand confirmed. The first installment was paid, but the second was not, leading to the plaintiffs depositing the first installment back to the court. Defendant No. 9 sought an extension for the second installment, which was allowed by the High Court but challenged in this appeal.
2. Legality of the Penal Clause in the Compromise:
The defendant No. 9's counsel argued that the clause dealing with the consequence of default in payment was penal and should be held illegal under Section 74 of the Indian Contract Act. The court rejected this argument, stating that the clause did not involve punishment but merely deprived the defendant of a special advantage due to default. The court emphasized that the compromise was essentially an agreement for the transfer of property at a specified price, and failure to pay within the stipulated time deprived the defendant of this benefit, not as a penalty but as a condition of the agreement.
3. Extension of Time for Payment of the Second Installment:
The High Court extended the period for payment of the second installment, which was challenged by the plaintiffs. The Supreme Court held that even if the court had the power to extend the time, it was not justified in this case due to the gross delay and the defendant's conduct. The court noted that such power should be exercised only in rare cases to prevent manifest injustice and not liberally. The court found that justice was in favor of the plaintiffs and against the contesting respondents, and the clause in question was not a forfeiture clause.
4. Opportunity for the Plaintiffs to Contest the Defendant's Prayer:
The plaintiffs argued that they were not given a reasonable opportunity to contest the defendant's application for an extension. The High Court had previously considered the plaintiffs' circumstances and allowed them to refund the first installment, effectively closing the matter. The Supreme Court agreed that the plaintiffs were not afforded a reasonable opportunity and that the counsel who represented them earlier did not continue to hold authority. However, the court decided not to remand the matter to the High Court, as it had considered all relevant materials and concluded in favor of the plaintiffs on merits.
Conclusion:
The Supreme Court set aside the High Court's order dated 31.8.1981, rejecting the application for an extension of time filed by defendant No. 9. The appeal was allowed with costs payable to the appellants by the contesting respondents.
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1988 (3) TMI 463
Issues:
1. Declaration of title to suit properties and injunction.
2. Validity of settlement deed and recovery of possession.
3. Challenge of decree by the appellant.
4. Proof of execution of the Will under Section 63(c) of the Succession Act.
Analysis:
Issue 1:
The first respondent filed a suit for a declaration of title to the suit properties and injunction against the appellant and other respondents, claiming ownership based on a settlement deed executed by her brother. The appellant resisted, asserting that the settlement deed was not valid and that certain properties were sold to other respondents, who claimed adverse possession.
Issue 2:
The trial court found the settlement deed valid and binding on the appellant, ruling in favor of the first respondent. The lower appellate court upheld this decision, leading to the appellant challenging the decree in a second appeal. The appellant contended that the transmission of title under a Will had not been proven, questioning the execution of the Will by the testator.
Issue 3:
The appellant's argument focused on the proof of execution of the Will under Section 63(c) of the Succession Act. The court examined the evidence of an attestor to determine if the requirements for valid execution were met, emphasizing the necessity of attestation by witnesses as per the law.
Issue 4:
The court analyzed the provisions of Section 63(c) of the Succession Act, which mandate attestation by witnesses and acknowledgment by the testator. The evidence of the attestor, P.W. 3, was crucial in establishing the due execution of the Will, as required by law. The court found that P.W. 3's testimony satisfactorily demonstrated the proper execution of the Will, leading to the dismissal of the second appeal and upholding the first respondent's title to the suit properties.
In conclusion, the judgment affirmed the validity of the settlement deed and the first respondent's title to the suit properties based on the proper execution of the Will. The court's detailed analysis of the evidence and legal provisions ensured a thorough examination of the crucial issue of proof of execution, resulting in the dismissal of the appellant's challenge and the maintenance of the lower courts' decisions.
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1988 (3) TMI 462
Issues:
1. Whether the offences under specific sections of the Indian Companies Act, 1956 are continuing offences.
2. Whether the complaints filed beyond the statutory period of limitation can be quashed.
Analysis:
1. The petitioners sought to quash complaints for various offences under the Indian Companies Act, 1956, arguing that they were filed after the expiration of the statutory limitation period. The main contention was whether the offences under Sections 159, 162, 166, 168, 220, and 210 of the Act are continuing offences. The respondent argued that these were continuing offences, and therefore, the petitions should be dismissed.
2. The Court analyzed the nature of the offences under Sections 159, 162, 166, 168, 220, and 210 of the Act. It referred to previous judgments and held that offences under Sections 159 and 220 are indeed continuing offences. The Court relied on the concept of continuous wrongs and observed that the failure to perform a duty continuously constitutes a continuing offence. Therefore, petitions to quash proceedings related to these sections were dismissed.
3. Regarding the offence under Section 166 read with Section 168 of the Act, the Court examined the requirement to hold an annual general meeting and the consequences of non-compliance. It concluded that the failure to hold an annual general meeting and comply with directions from the Central Government constituted a continuing offence. Thus, the petition to quash proceedings related to this section was dismissed.
4. The Court then analyzed the offence under Section 210 of the Act, which pertains to laying the balance sheet and profit and loss account at a general meeting. It determined that this offence is not a continuing offence as it occurs only when a meeting is held, and the documents are not placed. The Court highlighted the distinction between this offence and others under the Act, emphasizing that the liability arises only when specific conditions are met. Consequently, the petition to quash proceedings under Section 210 was allowed.
5. Based on the above analysis, the Court dismissed the petitions related to Sections 159, 162, 166, 168, and 220 of the Act as they were deemed continuing offences. However, the petition concerning Section 210 was allowed, and the proceedings under that section were quashed.
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1988 (3) TMI 461
Issues Involved:
1. Default in payment of rent.
2. Erection of a permanent structure without consent.
3. Unlawful sub-letting of the premises.
4. Requirement of the premises for personal use and occupation.
5. Greater hardship caused by eviction.
Detailed Analysis:
1. Default in Payment of Rent:
The Court below held that the original tenant, Khader Sheriff, did not pay the arrears of rent within two months of service of notice (Ex.P-4). However, the High Court found that the notice Ex.P-4 did not meet the requirements of Clause (a) of Section 21(1) of the Karnataka Rent Control Act, 1961. The notice was not signed by the Advocate or any of the landlords and did not specifically demand payment of arrears by each landlord according to their shares. Therefore, the order of eviction under Clause (a) was not sustainable due to the lack of proper notice.
2. Erection of a Permanent Structure Without Consent:
The Court below found that Khader Sheriff had erected permanent structures, including sinking a well, in violation of the lease terms. However, the High Court noted that the landlords' petition only mentioned the well as the permanent structure and did not provide evidence of any other permanent structures. The High Court concluded that digging a well does not constitute erecting a permanent structure as defined under the Act. Therefore, the order of eviction under Clause (c) was not sustainable.
3. Unlawful Sub-letting of the Premises:
The Court below held that part of the premises had been sub-let to D. Jayaram, and Khader Sheriff had transferred his leasehold rights to A.R. Sheriff and subsequently to Basha Baig. The High Court found that the landlords' petition did not specify which part of the premises was sub-let and did not provide sufficient evidence to support the claim. The High Court also noted that the sub-letting of sheds erected by the tenant on the leased open land does not attract the provisions of Clause (f). Therefore, the order of eviction under Clause (f) was not sustainable.
4. Requirement of the Premises for Personal Use and Occupation:
The Court below held that the premises were required by the landlords for personal use and occupation, including the construction of an industrial shed and residential houses. However, the High Court found that the landlords did not provide detailed pleadings about their plans, preparedness, or capacity to back up the proposed construction. The High Court emphasized the need for detailed pleadings to allow the tenant to meet the landlord's case and for the Court to form an opinion on the bona fides and reasonableness of the requirement. Therefore, the order of eviction under Clause (h) was not sustainable.
5. Greater Hardship Caused by Eviction:
The Court below considered the hardship to the tenant, who employed 40 workers, and granted four months to vacate the premises. However, since the High Court found the orders of eviction under Clauses (a), (c), (f), and (h) unsustainable, the issue of greater hardship did not alter the final decision.
Conclusion:
The High Court allowed the revision, setting aside the order of eviction on all grounds. The Court emphasized the importance of proper notice, detailed pleadings, and sufficient evidence to support claims for eviction under the Karnataka Rent Control Act, 1961.
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1988 (3) TMI 460
Issues:
Violation of Article 311(2) of the Constitution and principles of natural justice due to failure to supply a copy of the Enquiry Officer's report to the delinquent before the Disciplinary Authority makes a decision.
Analysis:
1. The central issue in this case is whether the failure to provide the delinquent with a copy of the Enquiry Officer's report before the Disciplinary Authority reaches a decision violates Article 311(2) of the Constitution and principles of natural justice. The Court highlighted the importance of this question, emphasizing that the delinquent must have the opportunity to address any critical material considered by the Disciplinary Authority. The Court differentiated between serving the report for anomalies and serving a second show cause notice for penalty considerations.
2. The Court explained that the Enquiry Officer's report is crucial as it forms the basis for the Disciplinary Authority's decision. Without access to this report, the delinquent is deprived of the opportunity to contest any errors or omissions in the report before being found guilty. The Court likened the situation to a partnership suit where parties are given the chance to respond to a commissioner's report before a final decision is made.
3. Referring to a past decision in Union of India v. H.C. Goel, the Court reiterated that the findings of the Enquiry Officer are not binding on the Disciplinary Authority, who must independently assess the evidence, including the Enquiry Officer's report. The Court emphasized that denying the delinquent access to this crucial material violates principles of natural justice and denies them a reasonable opportunity to defend themselves.
4. The Court rejected the argument that the amendment to Article 311(2) negated the need for providing the Enquiry Officer's report to the delinquent. It clarified that the amendment only pertained to notice regarding the proposed penalty, not the overall opportunity for the delinquent to address the findings against them. The Court emphasized that the Disciplinary Authority, not the Enquiry Officer, is the real authority determining guilt, making access to the report essential for a fair process.
5. Recognizing the significance of the issue affecting numerous employees, the Court decided to refer the matter to a larger bench for further consideration. The Court highlighted the potential consequences of delaying a decision, including prolonged legal proceedings, financial implications, and the impact on the concerned parties. The Court emphasized the need for a timely resolution by a larger bench to address the complex ramifications of the case.
6. The Court acknowledged the request to direct payment of arrears and salary continuation to the successful respondent but deferred this decision to the larger bench. The Court emphasized the need for the larger bench, under the Chief Justice's direction, to address all aspects of the case comprehensively and efficiently.
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1988 (3) TMI 459
Issues Involved:
1. Whether the plaintiff was a registered firm.
2. Whether the bill/invoice constituted a written contract under Order 37 of the Code of Civil Procedure (CPC).
3. Whether the defendants were entitled to unconditional leave to defend.
4. The effect of setting aside an order refusing unconditional leave to defend on the subsequent decree.
Detailed Analysis:
1. Whether the plaintiff was a registered firm:
The defendants disputed the plaintiff's status as a registered firm and questioned whether Babulal, who represented the plaintiff, was a partner. The court found that the plaintiff had disclosed the registration details in the original plaint, thus not raising a triable issue. The court concluded that the dispute over the plaintiff's status did not warrant unconditional leave to defend.
2. Whether the bill/invoice constituted a written contract under Order 37 of the CPC:
The defendants contended that the invoice was neither an order nor a contract and thus the suit was not maintainable as a summary suit under Order 37 of the CPC. The court examined the relevant part of Order 37, Rule 1(2), which allows summary suits for liquidated demands arising on a written contract. The court cited the case of T.A. Ruf and Company Ltd. v. Pauwels, explaining that a written contract does not necessarily need to be signed by both parties. Acceptance of goods delivered pursuant to an invoice can constitute a written contract. The court concluded that the demand for the price of goods received by the defendants arose from a written contract, thereby validating the summary suit.
3. Whether the defendants were entitled to unconditional leave to defend:
The defendants raised several defenses, including allegations of understatement of the bill to defraud the Revenue and claims of repayment. The court found the defendants' plea regarding repayment of Rs. 9,252.92 vague and unsupported by details. The court concluded that while the defendants might be entitled to conditional leave to defend, they were not entitled to unconditional leave. The court ordered that the defendants be granted leave to defend upon depositing Rs. 10,000 within one month.
4. The effect of setting aside an order refusing unconditional leave to defend on the subsequent decree:
The court discussed whether the revision petition had become infructuous since no appeal was filed against the decree passed after the defendants' application for unconditional leave was rejected. The court reviewed several precedents, including Siri Krishnan Bhardwaj v. Manohar Lal Gupta and Sundaram Chettiar v. P.A. Valli Ammal, which held that if the order refusing leave to defend is set aside, the subsequent decree must also fall. The court decided that the revision petition did not become infructuous and had to be decided on its merits.
Conclusion:
The court set aside the order of the III Assistant Judge rejecting the application for leave to defend. The defendants were granted conditional leave to defend the suit upon depositing Rs. 10,000 within one month. The revision petition was allowed to this extent, and the suit was restored to the trial court for disposal on merits. No order as to costs was made due to the absence of the plaintiff's representation.
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1988 (3) TMI 458
Issues:
1. Application for setting aside abatement and bringing legal representatives on record.
2. Condonation of delay in moving applications.
3. Ignorance of law as a ground for condoning delay.
4. Legal precedents and principles regarding ignorance of law.
5. Interpretation of rules for bringing legal representatives on record.
6. Consideration of delay in the interest of justice.
Analysis:
1. The plaintiff filed a suit for injunction, which was initially dismissed but decreed on appeal. Subsequently, the defendant-appellants filed a second appeal after the death of the plaintiff and one of the defendants. The defendant-appellant No. 2 moved applications to set aside abatement and bring legal representatives on record, which were opposed by the legal representatives of the deceased parties.
2. The defendant-appellant No. 2 claimed ignorance of the law regarding the requirement to bring legal representatives on record within a specified time, seeking condonation of delay based on this ground. The legal representatives did not contest this claim in their replies.
3. The defendant-appellant argued that being illiterate and unaware of the legal requirement should be a valid reason for condoning the delay. They also contended that the plaintiff's counsel failed to inform the court about the death of the plaintiff, which could have prompted timely action.
4. In response, the legal representatives argued that ignorance of the law cannot excuse delay, citing legal precedents and emphasizing that such ignorance does not constitute a sufficient cause under the relevant rules. They highlighted judgments that upheld the principle that ignorance of the law is not a valid excuse.
5. The central question revolved around whether ignorance of the law could serve as a valid ground for condoning the delay in bringing legal representatives on record within the prescribed time frame. Legal precedents and principles were cited to support the argument that ignorance of the law should not be accepted as a basis for condonation of delay.
6. The judgment considered the evolving legal perspective on the presumption of knowledge of the law, emphasizing that there is no universal presumption that every individual knows the law. The court referenced constitutional provisions and Supreme Court rulings to underscore the importance of applying the law to serve the ends of justice.
7. The court highlighted the legislative intent behind the provisions for bringing legal representatives on record within a specified time to ensure expeditious case disposal. It acknowledged the challenges faced by illiterate and disadvantaged litigants in meeting such legal requirements and stressed the need to balance technical considerations with the pursuit of substantial justice.
8. Ultimately, considering the circumstances, legal principles, and authoritative observations, the court allowed the applications to set aside the abatement, bring legal representatives on record, and directed the filing of an amended cause title within a specified timeframe. The judgment underscored the importance of interpreting procedural rules to advance justice rather than penalize parties for procedural lapses.
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1988 (3) TMI 457
Issues Involved:
1. Whether the service rule requiring 8 years of approved service as Section Officer for promotion to Grade I Post in Central Secretariat Service is arbitrary and contravenes Articles 14 and 16 of the Constitution of India.
Issue-Wise Detailed Analysis:
1. Arbitrariness and Contravention of Articles 14 and 16:
The appellants challenged the vires of the proviso to sub-rule 2 of Rule 12 of the Central Secretariat Service (C.S.S.) Rules, 1962, as amended by Notification No. 5/8/80-CS. I dated December 29, 1984. The appellants contended that the rule requiring 8 years of approved service as Section Officer for eligibility for promotion to Grade I Post in C.S.S. was arbitrary and violated Articles 14 and 16 of the Constitution of India. They argued that this condition had no nexus to suitability for promotion and unfairly excluded direct recruits from the zone of consideration while their juniors, i.e., promotee Section Officers, were eligible for promotion.
The appellants highlighted that prior to the 1978 amendment, direct recruits with 3-4 years of service had been promoted to Grade I and had performed their duties efficiently. They argued that the 1984 amendment, which increased the required service period to 8 years, was arbitrary and inequitable, lacking any rationale and working to the serious prejudice of direct recruits.
2. Validity of the Quota-Rota Rule:
The appellants referred to the Supreme Court's decision in H.V. Pardasani and Ors. v. Union of India and Ors., which upheld the validity of the quota-rota rule for determining seniority between direct recruits and promotees. They contended that the 1984 amendment to sub-rule 2 of Rule 12 was unjust and arbitrary as it excluded direct recruits from the zone of consideration for promotion, despite their seniority over promotees.
3. Competence of Rule-Making Authority:
The Court held that the rule-making authority is competent to frame rules laying down eligibility conditions for promotion to higher posts. The 1984 amendment, which required 8 years of approved service as Section Officer for eligibility for promotion to Grade I, was found to be neither arbitrary nor unreasonable. The Court emphasized that experience over a certain number of years in service is relevant for suitability for promotion, and the rule treated all Section Officers equally, without discrimination.
The Court noted that the rule prescribed an eligibility condition that applied uniformly to both direct recruits and promotees, and seniority alone did not entitle a public servant to promotion unless the eligibility condition was fulfilled. The Tribunal's findings that academic excellence alone is not sufficient for promotion and that experience gained in service is crucial were upheld.
Conclusion:
The Supreme Court affirmed the judgment and order of the Central Administrative Tribunal, holding that the third proviso to sub-rule 2 of Rule 12 of the Central Secretariat Service Rules, 1962, as amended by the 1984 Notification, was not ultra vires of Articles 14 and 16 of the Constitution. The appeals were dismissed without costs.
Appeals dismissed.
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1988 (3) TMI 456
Issues: Interpretation of exemption u/s 54(1) of the Income-tax Act, 1961 for capital gains on sale of residential property.
Summary:
The High Court of Andhra Pradesh considered a reference made by the Tribunal regarding the eligibility of an assessee for exemption u/s 54(1) of the Income-tax Act, 1961 for the assessment year 1976-77. The assessee sold a house property and claimed exemption by utilizing the proceeds to acquire another property for self-occupation. The dispute revolved around the timing of the purchase in relation to the date of possession and registration of the new property.
The assessee sold a property for &8377; 38,750 and entered into an agreement to purchase another property for &8377; 47,000, paying a substantial sum upfront. Although the sale deed was registered after one year from the sale of the original property, the assessee obtained possession of the new property within the stipulated one-year period. The Income Tax Officer (ITO) considered the registration date as crucial, denying the exemption, a decision upheld by the Appellate Authority but reversed by the Tribunal.
The High Court held that the critical factor was the actual possession and control of the property by the assessee within one year, not just the registration date. Despite the delay in registration, the assessee had acquired domain and control of the new property within the statutory period, fulfilling the conditions of section 54(1) for exemption. Therefore, the Court ruled in favor of the assessee, concluding that the new residential property was purchased within the required timeframe.
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1988 (3) TMI 455
Issues Involved:
1. Whether the Tribunal was correct in setting aside the order of the Commissioner under section 263 of the Income-tax Act, 1961.
2. Whether the Tribunal was correct in holding that the provisions of section 11 of the Act do not hinder the assessee as the funds were applied to charitable purposes.
3. Whether the Tribunal was correct in holding that the provisions of section 13(2)(h) of the Act were not applicable in this case.
4. Whether the Tribunal was correct in not considering the revenue's contention that the income of the trust was utilized for the benefit of prohibited categories under section 13(2)(h) read with section 13(3) and Explanation thereto.
Detailed Analysis:
1. Setting Aside the Commissioner's Order under Section 263:
The Tribunal set aside the Commissioner's order, which was based on two main aspects: (i) donations to other trusts did not amount to actual spending by the assessee, and (ii) the funds remained intact without being spent. The Tribunal referred to Board Circular F. No. 276/89-77-11 (AT), which clarified that the payment of a sum by one charitable trust to another amounts to utilization by the donor trust. The Tribunal concluded that the Commissioner was not justified in applying section 263 as the orders passed by the ITO were not erroneous or prejudicial to the interests of the revenue. Therefore, the Tribunal's decision to set aside the Commissioner's order was affirmed.
2. Application of Section 11:
The Tribunal held that the assessee-trust's donation to another charitable trust constituted an application of income for charitable purposes under section 11. The Tribunal noted that the Board Circular and judicial precedents support the view that donations to other charitable trusts are considered a proper application of income. The Tribunal also emphasized that the donor trust is not required to monitor the donee trust's use of the funds, as long as the donee trust is also a charitable entity. Therefore, the Tribunal's interpretation that section 11 was applicable was upheld.
3. Applicability of Section 13(2)(h):
The Tribunal found that section 13(2)(h) was not applicable as it pertains to investments in another concern, not loans or deposits. The Tribunal distinguished between investments and loans, noting that the assessee's transactions were loans and not investments. The Tribunal concluded that section 13(2)(h) did not apply to the assessee's deposits. This interpretation was supported by Board Circular No. 45, which clarified that section 13(2)(h) applies only to investments in the capital of a concern. Thus, the Tribunal's conclusion that section 13(2)(h) was not applicable was affirmed.
4. Non-Consideration of Revenue's Contention:
The Tribunal did not consider the revenue's contention that the income of the trust was utilized for the benefit of prohibited categories under section 13(2)(h) read with section 13(3) and Explanation thereto. The Tribunal noted that the Commissioner's order was based exclusively on section 13(2)(h), and it would not be proper to inquire into whether section 13(2)(a) should have been applied. The Tribunal's decision to not consider this contention was based on the scope of the Commissioner's original order.
Conclusion:
All four questions referred by the Tribunal were answered in the affirmative, against the revenue and in favor of the assessee. The Tribunal's findings were upheld, affirming the assessee's entitlement to exemption under section 11 and the non-applicability of section 13(2)(h). The reference was disposed of with no order as to costs.
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1988 (3) TMI 454
Issues Involved:
1. Delay in completion of the contract.
2. Entitlement to extra costs incurred.
3. Applicability of specific contract clauses.
4. Arbitration and validity of the award.
5. Interpretation of legal provisions and contract terms.
Summary:
1. Delay in Completion of the Contract:
The petitioner entered into a contract with the State of Madhya Pradesh on 31st March 1970 for construction work, which could not be completed within the stipulated time due to alleged delays by the State. The petitioner incurred unforeseen expenditure and sought compensation, which was refused by the Superintending Engineer.
2. Entitlement to Extra Costs Incurred:
The contractor claimed extra costs due to increased labor charges and material prices, as well as alterations and substitutions of works. The Superintending Engineer dismissed these claims, citing Clause 3.3.15, which barred compensation unless claims were submitted within one month of occurrence.
3. Applicability of Specific Contract Clauses:
The contract contained several clauses relevant to the dispute:
- Clause 3.3.15: Time limit for unforeseen claims.
- Clause 3.3.29: Finality of the Superintending Engineer's decision unless referred to arbitration within 28 days.
- Clause 3.3.32: Action where no specification exists.
- Clause 3.3.33: Definition of work.
- Clause 3.3.34: No claim for quantities entered in the tender or estimate.
4. Arbitration and Validity of the Award:
The petitioner invoked arbitration, and an award was made partly in favor of the petitioner. The District Judge made the award a rule of the Court, but the High Court remanded the matter for fresh decision. The District Judge set aside the award, and the High Court upheld this decision, leading to the present appeal.
5. Interpretation of Legal Provisions and Contract Terms:
The High Court considered whether the claims were barred by Clause 3.3.15 and whether the contract was rendered ineffective u/s 56 of the Contract Act due to abnormal rise in material and labor costs. The High Court found that:
- The contractor did incur extra costs but was not entitled to compensation for certain claims.
- The contract was not rendered ineffective by the rise in costs.
- The claims were not barred by time in terms of Clause 3.3.15.
- The arbitrator had misconducted himself by not addressing the State's objections.
The Supreme Court upheld the High Court's decision, emphasizing that the arbitrator must follow the law and cannot ignore contract terms. The petition for special leave to appeal was dismissed.
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1988 (3) TMI 453
Issues Involved:
1. Whether packaging of tea amounts to "manufacture" under the Central Excises and Salt Act, 1944.
2. Whether the levy of excise duty on packaged tea is valid.
3. Whether there is any inconsistency between Section 3 of the Central Excises and Salt Act, 1944, and the First Schedule of the Central Excise Tariff Act, 1985.
4. Whether the levy of excise duty on packaged tea amounts to double taxation.
5. Whether the definition of "manufacture" under Section 2(f) of the Central Excises and Salt Act, 1944, includes the packaging of tea.
6. Whether the inclusion of packaged tea in the First Schedule to the Central Excises and Salt Act, 1944, is valid and constitutional.
Detailed Analysis:
1. Whether packaging of tea amounts to "manufacture" under the Central Excises and Salt Act, 1944:
The court examined whether the process of packaging tea from bulk into smaller packets constitutes "manufacture" as defined under Section 2(f) of the Central Excises and Salt Act, 1944. The definition of "manufacture" includes any process incidental or ancillary to the completion of a manufactured product. The court noted that the packaging of tea involves specific treatment and handling, which requires labor, capital, power, and machinery. Therefore, the packaging process was deemed to be incidental or ancillary to the completion of the manufactured product, thus falling within the definition of "manufacture."
2. Whether the levy of excise duty on packaged tea is valid:
The court upheld the validity of the levy of excise duty on packaged tea. It was observed that the inclusion of packaged tea in the First Schedule to the Central Excises and Salt Act, 1944, indicates legislative intent to treat packaged tea as a distinct excisable item. The court found that the legislative intent must be honored, and the levy of excise duty on packaged tea is consistent with the statutory provisions.
3. Whether there is any inconsistency between Section 3 of the Central Excises and Salt Act, 1944, and the First Schedule of the Central Excise Tariff Act, 1985:
The court addressed the argument that there is an inconsistency between Section 3 of the Central Excises and Salt Act, 1944, which is the charging section, and the First Schedule of the Central Excise Tariff Act, 1985. It was held that the First Schedule and the items therein are part of the Act and have statutory force. The court emphasized that every effort should be made to harmonize the provisions and avoid any repugnancy. Consequently, the inclusion of packaged tea in the First Schedule is valid and consistent with Section 3 of the Act.
4. Whether the levy of excise duty on packaged tea amounts to double taxation:
The appellants argued that the levy of excise duty on packaged tea constitutes double taxation, as duty had already been paid on the bulk tea. The court rejected this argument, stating that there is no inherent illegality in the legislature's decision to impose duty on both bulk tea and packaged tea. It was noted that Article 265 of the Constitution does not prohibit double taxation, and the legislative intent to levy duty on packaged tea must be given effect.
5. Whether the definition of "manufacture" under Section 2(f) of the Central Excises and Salt Act, 1944, includes the packaging of tea:
The court examined the definition of "manufacture" under Section 2(f) of the Act, which includes any process incidental or ancillary to the completion of a manufactured product. The court found that the packaging of tea from bulk into smaller packets is a process incidental or ancillary to the completion of the manufactured product. Therefore, the packaging of tea falls within the definition of "manufacture" under the Act.
6. Whether the inclusion of packaged tea in the First Schedule to the Central Excises and Salt Act, 1944, is valid and constitutional:
The court upheld the inclusion of packaged tea in the First Schedule to the Central Excises and Salt Act, 1944, as valid and constitutional. It was observed that the legislative intent to treat packaged tea as a distinct excisable item is clear from its inclusion in the Schedule. The court emphasized that the Schedule is an integral part of the Act and must be read harmoniously with the statutory provisions.
Conclusion:
The court dismissed the appeals, upholding the levy of excise duty on packaged tea as valid and consistent with the statutory provisions. The packaging of tea was deemed to constitute "manufacture" under the Central Excises and Salt Act, 1944, and the inclusion of packaged tea in the First Schedule was found to be valid and constitutional. The court also rejected the argument of double taxation and emphasized the need to honor the legislative intent.
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1988 (3) TMI 452
Issues Involved:
1. Constitutional validity of Bihar Ordinances Nos. 15 of 1986 and 30 of 1986 and the Bihar Private Educational Institutions (Taking over) Act, 1987.
2. Legality of the termination of Dr. Jagadanand Jha's service as Registrar of Lalit Narayan Mishra Institute of Economic Development and Social Change.
Summary:
1. Constitutional Validity of the Act and Ordinances:
The Lalit Narayan Mishra Institute of Economic Development and Social Change, Patna, challenged the constitutional validity of Bihar Ordinances Nos. 15 of 1986 and 30 of 1986, replaced by the Bihar Private Educational Institutions (Taking over) Act, 1987. The petitioners argued that the Act violated Article 14 of the Constitution by singling out the Institute for nationalization without a reasonable basis. The Court held that the Act did not violate Article 14 as it aimed to nationalize private educational institutions in phases, starting with the Institute. The legislative decision to nationalize the Institute first was justified due to the State's significant financial and administrative involvement in the Institute since 1975. The Court rejected the argument that the Act violated Article 19(1)(c), stating that the right to form an association does not extend to the activities or objects of the association. The Act did not interfere with the Society's composition or its right to form an association. The Court also found that the Act fell within the legislative competence of the State Legislature under Entry 42 of List III, pertaining to the acquisition and requisition of property.
2. Legality of Termination of Dr. Jagadanand Jha's Service:
Dr. Jagadanand Jha's service as Registrar was terminated by an order dated April 21, 1986, under the provisions of the ordinance. The Court found that the termination was done in haste without properly applying the mind and without giving Dr. Jha a reasonable opportunity to be heard. The Court held that the principles of natural justice required that Dr. Jha be given an opportunity to make a representation before his services were terminated. Consequently, the Court quashed the termination order and allowed the writ petitions and civil appeal related to Dr. Jha's termination. The State Government was given the liberty to reconsider the termination after giving Dr. Jha a reasonable opportunity to be heard.
Conclusion:
The Court dismissed the writ petitions and civil appeal challenging the constitutional validity of the ordinances and the Act. However, it allowed the writ petitions and civil appeal related to the termination of Dr. Jagadanand Jha's service, quashing the termination order and directing the State Government to reconsider the matter after giving him a reasonable opportunity to make a representation. There was no order for costs in any of these matters.
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1988 (3) TMI 451
Issues Involved:
1. Whether the order rejecting the application for restoration of the appeal requires to be interfered with.
2. Whether the order dismissing the appeal is vitiated.
3. What final orders are required to be passed in the above petitions.
Issue-wise Detailed Analysis:
Issue 1: Whether the order rejecting the application for restoration of the appeal requires to be interfered with.
The appeal was initially dismissed for non-deposit of the penalty amount. The core question was whether restoring such an appeal would amount to reviewing the earlier order. The court observed that an order of dismissal for non-deposit of the penalty amount can hardly be regarded as a final order under Section 129-B(4) of the Customs Act, 1962. The Judicial Member rightly noted that the Tribunal has jurisdiction to entertain appeals rejected by the Collector (Appeals) on the ground of non-deposit of the penalty levied or duty demanded. The Tribunal can set aside its orders and restore the appeal if circumstances warrant such a course. The absence of a specific prohibition on restoring an appeal dismissed for non-deposit of the penalty amount implies that the Tribunal has the power to recall its earlier order if the ends of justice require it. The court emphasized that substantial justice should be preferred over technical considerations, as per the Supreme Court's observation in the case of Collector Land Acquisition, Anantnag v. Mst Katiji. The court concluded that the order rejecting the application for restoration of the appeal requires to be interfered with and set aside.
Issue 2: Whether the order dismissing the appeal is vitiated.
The appeal was dismissed on 20-12-85 due to the absence of the appellant and his Advocate, and no intimation of the deposit having been made. The court noted that the appeal dismissed was a composite appeal for setting aside both the penalty and the order of confiscation of the vessel. The Tribunal did not appreciate that the appeal was composite, involving both penalty and confiscation issues. The entire composite appeal could not have been dismissed merely on the ground of non-deposit of the penalty amount. This oversight by the Tribunal vitiated the order dismissing the appeal. Therefore, the court found that the order dismissing the appeal is vitiated on this ground as well.
Issue 3: What final orders are required to be passed in the above petitions.
The court considered subsequent circumstances since the order of dismissal. The petitioner had deposited Rs. 1 lac out of the Rs. 5 lacs penalty, paid the entire redemption fine of Rs. 1,75,000/-, and executed a guarantee bond for the remaining penalty amount. These subsequent actions by the petitioner were significant and could not be ignored. Consequently, the court set aside the order rejecting the restoration application and the order dismissing the appeal. The court directed the appeal to be restored to file and heard expeditiously on merits, with a preference for disposal by 31-5-1988. The Special Civil Applications were allowed to this extent, and the rules were made absolute accordingly, with no order as to costs.
Final Orders:
The court allowed both Special Civil Applications, set aside the order rejecting the restoration application and the order dismissing the appeal, and directed that the appeal be restored and heard expeditiously on merits. The appeal should be disposed of on merits preferably by 31-5-1988. There was no order as to costs.
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1988 (3) TMI 450
Issues Involved:
1. Rejection of account books.
2. Determination of turnover assessed.
3. Basis for additions to disclosed turnover.
Detailed Analysis:
1. Rejection of Account Books:
The account books of the assessee were rejected by the Assessing Authority on several grounds, including discrepancies between the turnover as per the account books and the returns filed, unaccounted hire charges, evasion of tax, unverifiable sales and purchases, and non-maintenance of stock registers as per Section 12(2) of the U.P. Sales Tax Act. The court noted that Section 12 of the Act mandates the maintenance of true and correct accounts by dealers, and for manufacturers, additional stock books for raw materials and production stages are required. The assessee, being a manufacturer of oil, failed to comply with these mandatory provisions. The learned counsel for the assessee did not dispute these findings. Consequently, the court upheld the rejection of the account books, stating that non-compliance with Section 12(2) justified the rejection, making it unnecessary to examine other grounds for rejection.
2. Determination of Turnover Assessed:
Upon rejection of the account books, the assessment was made on an estimated turnover. The assessee disputed the estimate, particularly concerning the sale of oil and the purchases of oil-seeds (Tilhan). The Sales Tax Officer based his estimate on the consumption of electricity, noting that the assessee's consumption of 10985 units was disproportionate to the oil produced. Using a benchmark of 30 units of electricity per quintal of oil, the Officer estimated the production at 366 quintals, significantly higher than the 226.83 quintals disclosed by the assessee. This led to an addition of Rs. 1,36,829.16 to the disclosed turnover, which was confirmed by the Tribunal. The turnover of Tilhan was similarly estimated at Rs. 2,50,000, later reduced to Rs. 2,00,000 by the Tribunal.
3. Basis for Additions to Disclosed Turnover:
The assessee challenged the additions on four grounds:
(a) High electricity consumption alone was not a legal basis for additions.
(b) The 30 units per quintal formula was not inflexible.
(c) The Tribunal did not fairly consider the assessee's case.
(d) The additions were not justified even by the Sales Tax Officer's reasoning.
The court cited precedents, noting that while high electricity consumption alone cannot justify rejecting account books, it becomes relevant once the books are found unreliable. The court criticized the Sales Tax Tribunal for confirming additions without detailed examination and noted that the Assessing Authority must consider various factors affecting oil yield and electricity consumption. The court found the addition of Rs. 1,37,000 disproportionate to the estimated production and lacking justification.
Conclusion:
The court concluded that both the addition to the disclosed production of oil and the turnover thereof could not be sustained. The matter was remanded to the Sales Tax Tribunal for fresh consideration of the production and turnover of oil, as well as the turnover of oil-seed purchases. The Tribunal was directed to restore the assessee's appeal to its original number and decide it afresh in light of the court's observations.
Final Judgment:
The revision was allowed in part, with no order as to costs. The Sales Tax Tribunal was instructed to reconsider the production of oil and turnover thereof, and the turnover of oil-seed purchases, in accordance with the court's observations and the law.
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1988 (3) TMI 449
Issues Involved:
1. Whether a landlord seeking eviction u/s 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, must prove bona fide requirement.
2. Interpretation of the term "claim" in section 10(3)(e) of the Act.
3. Correctness of previous High Court decisions on the matter.
Summary:
1. Bona Fide Requirement u/s 10(3)(a)(iii):
The primary issue was whether a landlord must establish bona fide requirement when seeking eviction under section 10(3)(a)(iii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. The Supreme Court held that a landlord must indeed prove that his requirement is bona fide. The Court emphasized that the Act aims to prevent unreasonable evictions and thus, the landlord's need must be genuine and not merely a desire.
2. Interpretation of "Claim" in Section 10(3)(e):
Section 10(3)(e) of the Act states that the Controller must be satisfied that the landlord's "claim" is bona fide. The Court interpreted "claim" to mean the landlord's requirement or deservedness. This implies that the landlord must establish that he genuinely needs the premises for his own use or for the use of any member of his family.
3. Correctness of Previous High Court Decisions:
The Supreme Court overruled the High Court decisions in M/s. Mahalakshmi Metal Industries v. K. Suseeladevi, M. Abdul Rahman v. S. Sadasivam, and A. Khan Mohammed v. P. Narayanan Nambiar & Others, which had held that bona fide requirement need not be proved under section 10(3)(a)(iii). The Supreme Court clarified that these decisions were incorrect and that the requirement of bona fides is essential.
Conclusion:
The Supreme Court set aside the High Court's judgment and remanded the case for fresh consideration in light of the requirement to establish bona fide need. The appeal was allowed with no order as to costs.
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1988 (3) TMI 448
Issues Involved:
1. Whether the transaction was really one of mortgage though apparently of sale in form.
2. Whether time was of the essence of the contract.
3. Whether it was the plaintiff who had committed breach by not being ready and willing to perform his part of the contract or whether it was the defendant who had committed a breach of contract.
Summary:
1. Whether the transaction was really one of mortgage though apparently of sale in form:
The Supreme Court concluded that the transaction in question was one of mortgage in essence and substance though it was clothed in the garb of a transaction of ostensible sale. The Court highlighted several factors: the identical sum of Rs. 7000/- for both the sale deed and the agreement to sell within 10 years, the long period of ten years for reconveyance, the plaintiff continuing in possession on payment of rent equivalent to 13.5% interest, and the property not being mutated to the defendant's name. The Court noted that the real intention of the parties was to create a mortgage, but as the plaintiff sought specific performance rather than redemption, it was unnecessary to delve further into this aspect.
2. Whether time was of the essence of the contract:
The Court observed that the defendant did not assert that time was of the essence of the contract in his written statement or evidence. The law is well-settled that in transactions of sale of immovable properties, time is not the essence of the contract. The Courts below erred in holding otherwise, contrary to the law declared by the Supreme Court in Govind Prasad Chaturvedi v. Hari Dutt Shastri. The Court emphasized that neither the terms of the agreement nor the conduct of the parties indicated that time was treated as essential.
3. Whether it was the plaintiff who had committed breach by not being ready and willing to perform his part of the contract or whether it was the defendant who had committed a breach of contract:
The Supreme Court found that the trial court erred in concluding that the plaintiff was not ready and willing to perform his part of the contract based on an adverse inference drawn from the non-production of a passbook, which was neither requested by the defendant nor ordered by the Court. The Court also noted that the defendant did not specifically deny receiving the notice and telegram sent by the plaintiff. The defendant's claim of being present at the Sub-Registrar's office on the stipulated date was inconsistent with his earlier stand of not receiving any notice. The evidence indicated that the defendant was not ready and willing to perform his part of the contract and had deliberately abstained from remaining present at the Sub-Registrar's office. The Court concluded that the plaintiff had done everything in his power to perform his part of the contract, and the defendant's refusal to comply constituted a breach.
Judgment:
The Supreme Court set aside the judgments of the trial court, the Lower Appellate Court, and the High Court, and decreed the suit in favor of the plaintiff. The plaintiff had already deposited Rs. 10,000/- in the Court, out of which Rs. 7000/- was to be paid to the defendant for executing the sale deed. The defendant was directed to execute the sale deed within six months, failing which an official of the court would execute it. The appeal was allowed, and there was no order regarding costs throughout.
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