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• 1994 (3) TMI 411
  
  The Supreme Court of India dismissed the Special Leave Petition after condoning the delay. (1994 (3) TMI 411 - SC Order)

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• 1994 (3) TMI 410
  
  Issues Involved:
  1. Levy of property tax/building tax under the Kerala Municipalities Act, 1960 and the Kerala Panchayats Act, 1960 on buildings belonging to the Food Corporation of India.
  2. Applicability of Article 285(1) of the Constitution of India, which exempts Union property from State taxation.
  
  Issue-wise Detailed Analysis:
  
  1. Levy of Property Tax/Building Tax:
  The petitioner, a body corporate under the Food Corporations Act, 1964, challenged the levy of property tax/building tax on its buildings by the Angamaly Municipality and Thikkedi Panchayat. The petitioner had paid property taxes up to the year 1990-91 but objected to the tax demand for 1991-92, arguing that the levy violated Article 285 of the Constitution of India.
  
  2. Applicability of Article 285(1):
  Article 285(1) of the Constitution reads: "The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or any authority within a State." The petitioner argued that it is a part of the Union Government and hence its properties should be exempt from state or municipal taxation.
  
  The respondent Municipality contended that the immunity under Article 285(1) is available only to property of the Union, not to its instrumentalities or entities with separate juristic personalities. The court examined the nature of the Food Corporation of India under the Food Corporations Act, 1964, noting that the Corporation is a body corporate with perpetual succession and a common seal, capable of acquiring, holding, and disposing of property independently of the Central Government.
  
  The court referred to various sections of the Act, including:
  - Section 3(2): Establishes the Corporation as a body corporate.
  - Section 5: Deals with the capital provided by the Central Government.
  - Section 6: Management on business principles.
  - Section 7: Constitution of the Board of Directors appointed by the Central Government.
  - Section 26: Requirement for the Corporation to submit annual activity and financial estimates to the Central Government.
  - Section 33: Application of surplus profits.
  - Section 42: Corporation deemed a company for Income Tax purposes.
  - Section 43: Provisions relating to the winding up of companies or corporations do not apply to the Corporation.
  
  The court highlighted that despite the Central Government's control and financing, the Corporation has a distinct legal personality, separate from the Union Government. The Supreme Court in State of Punjab v. Raja Ram and Western Coalfields Ltd. v. Special Area Development Authority had previously held that such corporations are not government departments and do not enjoy immunity under Article 285.
  
  The court also referred to similar decisions by the Orissa High Court in Western Coal Fields Ltd. v. Notified Area Council and Paradip Port Trust v. Notified Area Council, and the Delhi High Court in International Airport Authority of India v. Municipal Corporation, which held that properties of statutory corporations are not immune from state taxation.
  
  The court concluded that the Food Corporation of India, though a statutory corporation and an instrumentality of the State, is distinct from the Union Government. Its properties are owned and managed by itself, and it is liable for taxes, including Income Tax. Hence, the properties of the Corporation are not immune from tax under Article 285(1).
  
  Judgment:
  The court dismissed the writ petitions, ruling that the refusal to pay property/building tax by the Food Corporation of India was not warranted under Article 285(1) of the Constitution of India. The properties of the Corporation are subject to state taxation, and there will be no order as to costs.

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• 1994 (3) TMI 409
  
  Issues:
  1. Winding up petition under Sections 433 and 438 of the Companies Act.
  2. Allegations of mismanagement and oppression by majority shareholders.
  3. Dispute regarding the closure of the company's business.
  4. Contestation of winding up petition by the respondents.
  5. Admitted facts of the company not carrying on any business since 1988.
  6. Arguments regarding the revival of the company's business.
  7. Comparison with legal precedents regarding winding up orders.
  8. Consideration of the possibility of business revival.
  9. Decision on admitting the winding up petition.
  10. Contentions regarding business activities not provided for in the company's objects.
  11. Decision to admit the petition due to the stand-still of the company's business.
  
  Analysis:
  1. The petition sought winding up of the respondent-company under Sections 433 and 438 of the Companies Act, alleging mismanagement and oppression by majority shareholders. The petitioner, holding equity shares in the company, claimed that the company's business had ceased operations since 1988 due to misappropriation of funds by the directors.
  2. The company's history, share structure, and business activities were detailed, highlighting the petitioner's role in supervising operations despite residing in a different location. Allegations of mismanagement, pilfering of funds, and oppressive acts by majority shareholders were made, leading to the closure of the company's factory and loss of its substratum.
  3. The respondents contested the petition, accusing the petitioner of mismanagement and misappropriation of company funds. Legal actions were taken against the petitioner for selling company property fraudulently. The respondents argued against the winding up, citing ongoing legal proceedings and the petitioner's alleged misconduct.
  4. The court considered the company's inability to revive its business despite taking loans, emphasizing the necessity for a viable plan for business revival. Legal precedents were cited to support the decision, focusing on the company's prolonged inactivity and lack of future business prospects.
  5. The court acknowledged the deadlock among the company's shareholders, emphasizing the loss of mutual confidence and the familial nature of the company. The decision to admit the winding up petition was based on the prolonged stand-still of the company's business and the unlikelihood of revival.
  6. The court rejected the respondents' arguments regarding the petitioner's alleged misconduct and emphasized the importance of considering the company's current state and future prospects. The decision to admit the petition was made to further assess the possibility of business revival and the justifiability of winding up the company.

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• 1994 (3) TMI 408
  
  Issues Involved:
  1. Whether the interest amount of Rs. 36,066.70 is a revenue receipt.
  2. Whether the assessee was following the cash system of accounting after the termination of its business in 1974.
  3. Whether the assessee is entitled to claim deduction of the interest paid to the Federal Bank during the accounting periods relevant to earlier assessment years.
  4. Whether the assessee is entitled to claim deduction of the interest paid to the Federal Bank during the accounting period relevant to the assessment year 1979-80.
  
  Issue-wise Detailed Analysis:
  
  1. Interest Amount as Revenue Receipt:
  The Tribunal held that the interest amount of Rs. 36,066.70, awarded by the arbitrator for the period from June 1, 1974, to May 29, 1976, on the sum of Rs. 3,00,556 withheld by the public works department, is a revenue receipt. This decision was based on the precedent set in Rockwell Engineering Co. Ltd. v. CIT [1989] 180 ITR 277(Ker), where it was determined that interest awarded due to delayed payment under a contract constitutes a revenue receipt. The Supreme Court in CIT v. Govinda Choudhury and Sons [1993] 203 ITR 881(SC) also supported this view, stating that such interest partakes the same character as the original payment due under the contract. Therefore, the court affirmed that the interest amount is a revenue receipt liable to be taxed for the assessment year 1979-80.
  
  2. Cash System of Accounting:
  The Tribunal, along with the Income Tax Officer and the Appellate Assistant Commissioner, concluded that the assessee was following the cash system of accounting after the termination of its business in 1974. This finding was based on the records of the case and was accepted by the court in the absence of any contrary evidence. Consequently, the interest amount received during the accounting period relevant to the assessment year 1979-80 was assessable in that year. The court answered this question in the affirmative, against the assessee and in favor of the Revenue.
  
  3. Deduction of Interest Paid to Federal Bank (Previous Years):
  The assessee claimed deduction of the interest paid to the Federal Bank during previous accounting years from the amounts received under the arbitration award. The Tribunal did not allow this deduction, citing that the assessee was following the cash system of accounting after the business's termination. The court upheld this view, stating that under section 176(3A) of the Income Tax Act, any sum received after the discontinuance of a business is deemed to be the income of the recipient and charged to tax accordingly in the year of receipt. The court emphasized that only that portion of the receipt which would have been included in the total income of the person during the accounting year as computed in the manner laid down in the Act can be charged to tax. Therefore, the assessee is not entitled to claim deduction of the interest paid during previous assessment years. This question was answered in the affirmative, against the assessee and in favor of the Revenue.
  
  4. Deduction of Interest Paid to Federal Bank (Assessment Year 1979-80):
  The Department contended that no deduction should be allowed for the interest paid to the Federal Bank during the assessment year 1979-80. However, the court held that the interest paid during the accounting year in which the interest on delayed payment was received must be considered as expenditure for deriving the income from the business. Since the assessee was following the cash system of accounting, the interest paid to the bank during the accounting year must be deducted from the amount received. The court answered this question in the affirmative, against the Department and in favor of the assessee.
  
  Conclusion:
  The court upheld the Tribunal's decisions on all four questions, affirming that the interest amount is a revenue receipt, the assessee was following the cash system of accounting, deductions for interest paid in previous years are not allowable, and deductions for interest paid during the relevant assessment year are allowable.

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• 1994 (3) TMI 407
  
  Issues Involved:
  1. When and under what circumstances does the character of agricultural land change to non-agricultural land upon permission being granted by the Collector.
  2. Whether the bar of alienation under Section 43 of the Bombay Tenancy and Agricultural Lands Act and the requirements under Section 63 cease to be applicable upon such permission.
  3. Whether additional evidence (certified copy of the N.A. order) should be permitted at the stage of Second Appeal.
  
  Issue-Wise Detailed Analysis:
  
  1. Change of Character from Agricultural to Non-Agricultural Land:
  The central issue was determining the precise moment when agricultural land transforms into non-agricultural land upon the Collector granting permission for non-agricultural use. The judgment clarified that the mere granting of permission does not automatically alter the land's character. The alteration occurs only when the land is actually put to non-agricultural use, as per the conditions specified in the order. Specifically, Clause 2(iii) of the N.A. permission required the commencement of non-agricultural use within six months, failing which the permission would be deemed canceled. The court held that the transformation of the land's character happens from the date when the land is put to non-agricultural use, not from the date of the permission order.
  
  2. Applicability of Section 43 and Section 63 of the Bombay Tenancy and Agricultural Lands Act:
  The court examined whether the bar of alienation under Section 43 and the requirements under Section 63 ceased to apply once N.A. permission was granted. It was determined that since the land's character did not change merely upon the granting of permission, the provisions of Sections 43 and 63 continued to apply until the land was actually put to non-agricultural use. Hence, the sale of agricultural land to a non-agriculturist without the necessary permissions remained invalid. The court upheld the view that the sale deed executed on 20th March 1965 was invalid as the land had not been put to non-agricultural use by that date.
  
  3. Admission of Additional Evidence at the Second Appeal Stage:
  The appellants sought to introduce a certified copy of the N.A. order dated 9-10-1964 as additional evidence. The court noted that the production of this document was fundamental to the plaintiffs' case and should have been presented during the trial or appeal stages. Despite this, the court allowed the document to be taken on record due to its relevance in deciding the points of law. However, the court emphasized that normally, such additions should not be permitted at the Second Appeal stage. The court concluded that the document's late introduction did not alter the fact that the land's character had not changed because the conditions for non-agricultural use had not been met.
  
  Conclusion:
  The court dismissed the appeal, upholding the appellate court's decision that the sale deed dated 20th March 1965 was invalid due to the land's continued agricultural character. The court reiterated that the transformation of land from agricultural to non-agricultural requires actual commencement of non-agricultural use, not merely the granting of permission. Consequently, the provisions of Sections 43 and 63 of the Bombay Tenancy and Agricultural Lands Act remained applicable, and the sale to a non-agriculturist without the necessary permissions was invalid. The court also allowed the introduction of the certified copy of the N.A. order as part of the record but did not find it sufficient to change the outcome of the case.

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• 1994 (3) TMI 406
  
  Issues Involved:
  1. Maintainability of the suit in view of Section 27 of the Customs Act, 1962.
  2. Legality of the levy of cess.
  3. Reliefs to which the plaintiff is entitled.
  
  Issue-wise Detailed Analysis:
  
  1. Maintainability of the Suit in View of Section 27 of the Customs Act, 1962:
  
  The court examined whether the suit was maintainable given the provisions of Section 27 of the Customs Act, 1962, which stipulates a six-month limitation period for refund claims. The plaintiff argued that the excess duty was levied without jurisdiction, making Section 27 inapplicable. The court agreed, stating, "Section 27 is not a bar in filing the suit for refund if the claim of the plaintiff is based on statutory or fundamental rights arising independently of the Customs Act, 1962." The court emphasized that the Customs Act does not authorize the levy of export duty on "cess," and thus, the collection was without jurisdiction and authority of law. Citing precedents like *Patel India (Private) Ltd. v. Union of India*, the court held that the limitation period under Section 27 does not apply to duties levied without jurisdiction. Therefore, the suit was maintainable.
  
  2. Legality of the Levy of Cess:
  
  The court scrutinized whether the customs authorities had the jurisdiction to include the cess as part of the assessable value for export duty. The court noted, "The Customs Act does not authorize levy of export duty on 'cess' and, as such, the said collection of export duty on 'cess' is without jurisdiction and authority of law." The court referenced the Supreme Court's decision in *Union of India v. Bombay Tyre International Ltd.*, which clarified that "the expression 'value' in relation to any excisable goods does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods." Consequently, the court concluded that the levy of export duty on the cess was illegal and beyond the scope of the Customs Act, 1962.
  
  3. Reliefs to which the Plaintiff is Entitled:
  
  The court determined that the plaintiff was entitled to a refund of the excess duty paid. The judgment stated, "The plaintiff is entitled to the refund of the duty unlawfully collected." Additionally, the court addressed the issue of interest on the refunded amount, citing *Elpro International Ltd. v. Joint Secretary, Government of India*, where the Supreme Court awarded interest at the rate of 12% on wrongly collected duties. The court decreed, "There will be decree for interim interest and interest on judgment at the rate of 12%." Therefore, the plaintiff was awarded a decree for Rs. 1,05,745.25 along with interest at 12% per annum and costs.
  
  Conclusion:
  
  The court concluded that the suit was maintainable, the levy of cess was illegal, and the plaintiff was entitled to a refund of Rs. 1,05,745.25 with interest at the rate of 12% per annum. The judgment emphasized that duties collected without jurisdiction or in excess of authority must be refunded, and the limitations under Section 27 of the Customs Act do not apply to such cases.

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• 1994 (3) TMI 405
  
  Issues Involved:
  1. Authority of the Governor of Tamil Nadu.
  2. Allegations of mala fide actions by the Governor.
  3. Admissibility of newspaper reports as evidence.
  4. Immunity of the Governor under Article 361 of the Constitution of India.
  5. Locus standi of the petitioner.
  
  Detailed Analysis:
  
  1. Authority of the Governor of Tamil Nadu:
  The petitioner sought a writ of quo warranto questioning the authority under which the respondent held the office of the Governor of Tamil Nadu. The petitioner alleged that the Governor was delaying approvals and assents to laws passed by the Legislature, making speeches that created apprehensions about dismissing the Government, and acting with political bias towards the Congress-I party.
  
  2. Allegations of Mala Fide Actions by the Governor:
  The petitioner claimed that the Governor's actions and speeches indicated an intention to dismiss the Tamil Nadu Government, thus violating the oath taken under Article 159 of the Constitution of India. The petitioner argued that these actions were against the interests of Tamil Nadu and were influenced by Congress-I leaders.
  
  3. Admissibility of Newspaper Reports as Evidence:
  The court extensively discussed the admissibility of newspaper reports. It was established that news items are hearsay and secondary evidence, and no judicial notice can be taken of them unless proved by evidence. The court referred to the Supreme Court's decision in Laxmi Raj Shetty v. State of Tamil Nadu, which stated that newspaper reports by themselves are not evidence and must be proved by the reporter who heard the speech and sent the report.
  
  4. Immunity of the Governor under Article 361 of the Constitution of India:
  The court noted that Article 361(1) of the Constitution provides immunity to the Governor from being answerable to any court for the exercise and performance of his powers and duties. The court cited the Full Bench decision in K.A. Mathialagan v. The Governor, which held that even if the Governor's bona fides are questioned, he cannot be personally called to enter his defense. The court emphasized that this immunity applies even in cases of alleged mala fide actions.
  
  5. Locus Standi of the Petitioner:
  The petitioner claimed to be a social worker and argued that he had the locus standi to file the writ petition. The court referred to Hardwari Lal v. Bhajan Lal, which supported the petitioner's locus standi when the information conveyed by the Governor justly required court intervention to protect citizens' rights and liberties. However, the court found that the petitioner based his case solely on a newspaper report, which is inadmissible as evidence.
  
  Conclusion:
  The court dismissed the writ petition, emphasizing that the allegations against the Governor were based solely on inadmissible newspaper reports and lacked any other material evidence. The court reiterated the absolute immunity provided to the Governor under Article 361 of the Constitution, which applies even in cases of alleged mala fide actions. The petitioner failed to provide any substantial proof beyond the newspaper report, leading to the dismissal of the petition without any order as to costs.

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• 1994 (3) TMI 404
  
  Issues:
  Challenge to suspension order and disciplinary proceedings.
  
  Analysis:
  The writ petitioner challenged a suspension order and disciplinary proceedings in a petition under Article 226 of the Constitution of India. The petitioner, a Forest Officer, was accused of various misconducts including divulging official information, threatening individuals for personal gain, and misusing his authority. The charges against the petitioner included trespassing, leaking official information, accepting illegal gratification, and misusing power. The inquiry report found some charges proved, such as acting beyond jurisdiction and entering into the jurisdiction of others illegally. The proposed punishment by the District Council was to stop all future increments and bar the petitioner from promotions. The court examined the legality of the proposed punishment and held that withholding increments and promotions simultaneously is not permissible under the relevant rules. The court directed the District Council to place the matter before the Executive Committee for final orders within a specified time frame, ensuring compliance with the law. The petitioner was to be reinstated after the Executive Committee's decision. The petition was disposed of without any costs being awarded.

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• 1994 (3) TMI 403
  
  Issues:
  Eligibility of appellants for Modvat credit on Selenium drums and ASM Blades-280 used in the manufacture of Photocopiers during April 1986 to April 1987.
  
  Analysis:
  
  1. Inclusion of Items in Assessable Value:
  Initially, the appellants argued that Selenium drums and ASM Blades-280 were not part of the Photocopiers as they were imported separately. However, the Assistant Collector and the Collector (Appeals) determined that these items were to be included in the assessable value of the Photocopiers. The Modvat Scheme was introduced in March 1986, and the appellants filed a declaration in December 1986, after being directed by the Excise Department. Subsequently, they claimed Modvat credit on these items on 28-1-1988.
  
  2. Disallowance of Modvat Credit:
  A show cause notice was issued to the appellants proposing disallowance of Modvat credit based on a contravention of Rule 57G, which prohibits taking credit on inputs prior to February 1986. The Adjudicating authority disallowed the credit, stating that the Modvat declaration was filed after the prescribed date.
  
  3. Lower Appellate Authority's Decision:
  The lower Appellate Authority upheld the disallowance, citing that the goods were received by the appellants after the filing of the Modvat declaration, and the RG 23A register was maintained only from 28-1-1988 onwards.
  
  4. Appellants' Arguments:
  The appellants argued that they had filed a declaration in March 1986, or at least by December 1986, and had not contravened Rule 57G. They relied on precedents and the doctrine of impossibility, stating that they could not avail of Modvat credit until the valuation dispute was resolved.
  
  5. Department's Position:
  The Department contended that Rule 57G and Rule 57H must be read together. They argued that the appellants availed of credit beyond the prescribed period and cited a case to support the limitation on refunds.
  
  6. Tribunal's Decision:
  The Tribunal rejected the appellants' claim that the declaration was filed in March 1986, as the items were only deemed includible in the assessable value in March 1987. However, the Tribunal agreed with the appellants that they had not contravened Rule 57G. The Tribunal held that the appellants were entitled to Modvat credit on Selenium drums used in the Photocopiers manufactured during the specified period. The decision was based on precedents and the peculiar facts of the case.
  
  In conclusion, the Tribunal ruled in favor of the appellants, allowing them to claim Modvat credit on Selenium drums used in the manufacture of Photocopiers. The decision was based on the timing of the valuation dispute resolution and the eligibility criteria for Modvat credit as per the relevant rules and precedents.

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• 1994 (3) TMI 402
  
  Issues:
  - Plaintiff's claim for declaration of title and possession of suit land
  - Disputed possession of plot No. 731
  - Request for remand for appointment of Commissioner
  
  Analysis:
  1. The plaintiff filed a suit seeking declaration of title, confirmation of possession, or recovery of possession of 40 decimals of land in plot No. 731. The plaintiff claimed possession based on historical records and rent receipts, while the defendant disputed the plaintiff's possession and the relation of the disputed portion to plot 731.
  
  2. The trial court ruled in favor of the plaintiff, finding the disputed area to be part of plot 731 and confirming the plaintiff's possession. However, the lower appellate court overturned this decision, stating that the plaintiff failed to prove possession of the disputed portion. The plaintiff relied on records and rent receipts, but they did not conclusively establish possession of the disputed area.
  
  3. The plaintiff argued for a remand to appoint a Commissioner to ascertain the location of the disputed land. However, the court rejected this request, citing that the plaintiff previously opposed the defendant's application for a Commissioner during the trial. The court emphasized that a remand should not be granted due to negligence or default by a party, and parties should produce all evidence during the trial without expecting a second chance on appeal.
  
  4. The court upheld the decision of the lower appellate court, dismissing the plaintiff's appeal and ordering costs to be paid. The judgment highlighted the principle that cases should not be remanded solely because parties failed to present evidence effectively during the trial, emphasizing the importance of fair trial procedures and avoiding invitations to perjury.

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• 1994 (3) TMI 401
  
  Issues:
  1. Interpretation of Section 106 of the Kerala Land Reforms Act.
  2. Jurisdiction of the Land Tribunal vs. Civil Court in disputes regarding tenancy rights.
  3. Application of the principle of res judicata in successive legal proceedings.
  
  Analysis:
  
  Interpretation of Section 106 of the Kerala Land Reforms Act:
  The case involved a dispute over the applicability of Section 106 of the Kerala Land Reforms Act, which provides protection to lessees who have constructed buildings for commercial or industrial purposes before May 20, 1967. The appellant claimed fixity of tenancy under this section, asserting that the land was demised for a commercial purpose. The Court analyzed the provisions of Section 106 and the definition of terms like 'lessee' and 'building' provided in the Act to determine the scope of protection granted under this section.
  
  Jurisdiction of the Land Tribunal vs. Civil Court in disputes regarding tenancy rights:
  The key issue revolved around the jurisdictional conflict between the Land Tribunal and the Civil Court in adjudicating disputes related to tenancy rights under the Land Reforms Act. The appellant argued that the Land Tribunal should decide the issue of fixity of tenancy under Section 106, while the respondents contended that the Civil Court had jurisdiction. The Court examined the relevant provisions of the Land Reforms Act, particularly Section 125(3), which mandates the Civil Court to refer such questions to the Land Tribunal for decision.
  
  Application of the principle of res judicata in successive legal proceedings:
  The Court delved into the principle of res judicata in the context of the case, emphasizing that parties are expected to raise all relevant pleas available under the statute at the appropriate stage of legal proceedings. The appellant's failure to raise the plea of Section 106 in earlier proceedings before the Rent Controller was deemed a waiver of that right. The Court cited precedents and legal provisions to support its conclusion that the appellant's conduct amounted to an abuse of the legal process and that the principle of res judicata applied to prevent the raising of new pleas at a later stage.
  
  In conclusion, the Supreme Court upheld the decision of the High Court, ruling in favor of the respondents and dismissing the appeal. The Court found that the appellant's failure to raise the plea of Section 106 in earlier proceedings barred him from doing so in subsequent legal actions, highlighting the importance of raising all relevant pleas at the appropriate juncture to prevent prolonging legal proceedings and ensuring fairness and justice in the legal process.

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• 1994 (3) TMI 400
  
  Issues Involved:
  1. Legality of the order passed by the Additional Chief Metropolitan Magistrate (ACMM) regarding the disposal of Close-Up toothpaste.
  2. Jurisdiction of the ACMM under Section 451 of the Code of Criminal Procedure.
  3. Confiscation of goods under Section 119 of the Customs Act.
  4. Safeguarding the interests of the Customs Department and the respondent.
  
  Issue-wise Detailed Analysis:
  
  1. Legality of the Order Passed by the ACMM:
  The Department of Customs filed a petition under Section 482 of the Code of Criminal Procedure to set aside the order dated 23.2.1994 passed by the ACMM. The ACMM had dismissed the Customs Department's application to dispose of the Close-Up toothpaste and allowed the respondent's application for its release. The Customs Department argued that the Close-Up toothpaste was used to conceal smuggled goods and was seized under Section 110 of the Customs Act, making it liable for confiscation. The court examined whether there was any illegality in the ACMM's order, noting that the toothpaste was a perishable commodity requiring prompt disposal to prevent loss of value.
  
  2. Jurisdiction of the ACMM under Section 451 of the Code of Criminal Procedure:
  The Customs Department contended that the ACMM had no jurisdiction to pass the order as the goods were not produced before the court. The court disagreed, stating that the production of property before the trial court does not necessitate physical presence. It emphasized that the Close-Up toothpaste was case property and relevant to the smuggling charges, thus falling under the court's jurisdiction. The court upheld the ACMM's jurisdiction under Section 451 of the Code to pass the impugned order.
  
  3. Confiscation of Goods under Section 119 of the Customs Act:
  The court acknowledged that under Section 119 of the Customs Act, goods used to conceal smuggled items are liable to confiscation. Section 124 requires a show cause notice before confiscation, and proceedings must be initiated within six months of the seizure. The court noted that this period had not expired, and the Customs Department had sought court permission to dispose of the perishable toothpaste. The court found no illegality in the ACMM's order, as it safeguarded the department's interests through an indemnity bond and allowed for future compensation if confiscation was warranted.
  
  4. Safeguarding the Interests of the Customs Department and the Respondent:
  The court considered whether the conditions imposed by the ACMM were sufficient to protect the Customs Department's interests. The ACMM had directed the respondent to furnish an indemnity bond of Rs. 12 lakhs, covering the toothpaste's value, and to execute an undertaking to pay the amount if the goods were ultimately deemed confiscable. The court modified the ACMM's order to include retaining one carton of toothpaste for trial evidence, ensuring the department's interests were safeguarded while allowing the respondent to avoid irreparable loss.
  
  Conclusion:
  The petition was disposed of with the modification that the respondent must provide an undertaking for payment to the Customs Department if the goods are confiscated and retain one carton of toothpaste for trial evidence. The court upheld the ACMM's jurisdiction and found no illegality in the order, ensuring both parties' interests were protected.

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• 1994 (3) TMI 399
  
  The Kerala High Court upheld the assessment proceedings for the years 1982-83 and 1983-84, stating that they were completed within the time limit set by the legislature. The court also noted that the petitioner's claim of being a partner for only a few months in 1983 should be addressed to the appropriate authorities as a factual matter.

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• 1994 (3) TMI 398
  
  Issues Involved:
  1. Legality of the immediate effect of the notification declaring JEIH an unlawful association under the proviso to sub-section (3) of Section 3 of the Unlawful Activities (Prevention) Act, 1967.
  
  Detailed Analysis:
  
  1. Legality of the Immediate Effect of the Notification:
  
  The petitioner, the Secretary-General of Jamat-e-Islami Hind (JEIH), and the appellants, the Presidents of Bihar Zone and Patna Circle of JEIH, challenged the Central Government's notification dated 10-12-1992, which declared JEIH an unlawful association under Section 3(1) of the Unlawful Activities (Prevention) Act, 1967, and gave immediate effect to the notification under the proviso to sub-section (3) of Section 3.
  
  Provisions of the Act:
  - Section 3(1) empowers the Central Government to declare any association unlawful by notification in the Official Gazette.
  - Section 3(2) mandates that the notification specify the grounds and other necessary particulars.
  - The proviso to Section 3(3) allows the government to give immediate effect to the notification if it believes that circumstances necessitate such action, provided reasons are stated in writing.
  
  Notification Analysis:
  The notification cited the following reasons for declaring JEIH unlawful:
  - Statements by JEIH leaders advocating the separation of Kashmir from India.
  - JEIH questioning the sovereignty and territorial integrity of India.
  - Other undisclosed facts and materials considered against public interest.
  
  Court's Findings:
  - The notification did not provide additional reasons for the immediate effect, merely reiterating the grounds for declaring JEIH unlawful under Section 3(1).
  - The court emphasized that the Central Government must have distinct and additional facts justifying the need for immediate action, separate from those used for the declaration under Section 3(1).
  - The court noted that the reasons provided were either stale or did not justify the immediacy required by the proviso to Section 3(3).
  
  Legal Interpretation:
  - The court interpreted the term "to state" as requiring the reasons for immediate action to be explicitly communicated to the affected party, not merely recorded in government files.
  - The court referenced the case of C.B. Gautam v. Union of India, where it was held that reasons for an order must be communicated to the affected party to ensure transparency and fairness.
  
  Constitutional Considerations:
  - The court highlighted that Article 19(1)(c) of the Constitution guarantees the right to form associations, and any restriction on this right must be reasonable and justified under Article 19(4).
  - The immediate ban under the proviso to Section 3(3) effectively suspends this fundamental right, necessitating stringent justification by the government.
  
  Conclusion:
  The court concluded that the Central Government failed to justify the immediate ban on JEIH under the proviso to Section 3(3) of the Act. Consequently, the part of the notification giving immediate effect was struck down. The court expressed no opinion on the validity of the rest of the notification, which was subject to adjudication by the Tribunal.
  
  The decision of the High Court was set aside, and the writ petition and civil appeal were allowed with no order as to costs.

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• 1994 (3) TMI 397
  
  Issues:
  Petition for rectification of register of bond-holders under Section 111 of the Companies Act, 1956; Transfer of bonds involving multiple parties; Jurisdiction of Company Law Board vs. Special Court under Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992.
  
  Analysis:
  1. The petitioner, A.N.Z. Grindlays Bank, filed a petition seeking rectification of the register of bond-holders under Section 111 of the Companies Act, 1956. The bonds in question were originally purchased from Smt. Promod Gupta and Shri Sanjay Gupta, who failed to deliver all post-dated interest warrants to the petitioner upon sale of the bonds. Subsequent transfers of the bonds involved respondent No. 4 and respondent No. 5, leading to a complex chain of transactions. The petitioner sought rectification due to non-registration of the bonds by NHPC, including prayers against respondents Nos. 2 and 3 regarding interest warrants.
  
  2. Respondents Nos. 2 and 3 contended that the securities in question were tainted and fell under the jurisdiction of the custodian appointed under the Special Court Act. They argued that there was no cause of action against them as the bonds had been transferred. The Company Law Board acknowledged the mixed questions of law and facts in the case, including the separability of interest warrants from bond certificates and the Board's power under Section 111(6)(c) regarding interest warrants. The Board decided to hear the facts along with the law to determine the maintainability of the petition.
  
  3. Subsequently, the jurisdiction of the Company Law Board was challenged in light of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, Amendment Ordinance, 1994. The parties debated whether the proceedings should be transferred to the Special Court due to the involvement of a notified person, respondent No. 4. The Board considered the implications of the Ordinance and concluded that its jurisdiction was barred, and the proceedings stood transferred to the Special Court as per the provisions of the Ordinance.
  
  4. The Board noted that the main contention of respondents Nos. 2 and 3 regarding the maintainability of the petition had become irrelevant due to the Ordinance. The Board's original jurisdiction was found to be superseded by the provisions of the Ordinance, leading to the conclusion that the case could not proceed before the Company Law Board. The jurisdictional conflict between the Company Law Board and the Special Court was effectively resolved by the application of the Ordinance, transferring the matter to the Special Court.
  
  Conclusion:
  The judgment highlights the intricate legal issues surrounding the transfer of bonds, jurisdictional conflicts between the Company Law Board and the Special Court, and the impact of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, Amendment Ordinance, 1994 on the proceedings. The Board's decision to transfer the case to the Special Court demonstrates the adherence to legal provisions and the recognition of the limitations on its jurisdiction in matters falling under the purview of the Special Court Act.

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• 1994 (3) TMI 396
  
  Issues Involved:
  1. Validity of share transfers.
  2. Compliance with Articles of Association.
  3. Waiver and acquiescence.
  4. Discretionary nature of relief under Section 155 of the Companies Act.
  5. Suppression of material facts.
  
  Issue-wise Detailed Analysis:
  
  1. Validity of Share Transfers:
  The appellants challenged the transfer of shares on the grounds that the share transfer forms were stale, violating Sections 108 and 108(1A) of the Companies Act. They argued that the forms were more than two months old from the date of their presentation, making the transfers invalid. The respondents countered by claiming that the transfers were based on a second set of valid forms. The court upheld the respondents' contention, finding that the transfers were indeed registered on the basis of fresh forms, as supported by the affidavit of the company secretary.
  
  2. Compliance with Articles of Association:
  The appellants contended that the transfer of 1,318 shares violated Article 7 of the company's Articles of Association, which requires the board to offer shares to other shareholders before transferring to third parties. The court found that Articles 7 and 8 must be read together. Article 8 provides an exception for transfers among existing members, their spouses, children, or legal heirs, not requiring prior board sanction. The court concluded that the transfers in question, being among existing members, were governed by Article 8 and did not violate Article 7.
  
  3. Waiver and Acquiescence:
  The respondents argued that the appellants had waived their right to object by participating in meetings without raising any objections. The court noted that the appellants were present and participated in the board meetings on March 31, 1990, and April 14, 1990, as well as the extraordinary general meeting on April 4, 1990, and the annual general meeting on September 17, 1990. The court found that the appellants' conduct indicated acquiescence and waiver of their rights to object to the transfers.
  
  4. Discretionary Nature of Relief under Section 155 of the Companies Act:
  Section 155 provides discretionary and equitable relief for rectification of the register of members. The court emphasized that relief under this section is not granted ex debito justitiae and is subject to considerations like delay, laches, and acquiescence. The court referenced several precedents, including Benarsi Das Saraf v. Dalmia Dadri Cement Ltd., to support its view that the discretionary nature of Section 155 allows the court to refuse relief based on the petitioners' conduct.
  
  5. Suppression of Material Facts:
  The respondents contended that the appellants had suppressed material facts, including their participation in the relevant meetings. The court found merit in this argument, noting that the petition was silent about the appellants' involvement in the meetings and the transferees' participation in the general meetings. The court held that this suppression of material facts disentitled the appellants from claiming relief.
  
  Conclusion:
  The court dismissed the appeal, holding that the appellants had not made out a case for relief under Section 155 of the Companies Act. The court found that the appellants had acquiesced in the transfers, waived their rights to object, and suppressed material facts. The discretionary and equitable nature of Section 155 further justified the refusal of relief. The court left open other questions, including the mandatory nature of Section 108(1A) of the Companies Act, deeming it unnecessary to pronounce upon them in light of the findings.

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• 1994 (3) TMI 395
  
  Issues:
  1. Interpretation of power of attorney in relation to filing petitions under Section 397/398 of the Companies Act.
  2. Authority of a power of attorney holder to act on behalf of shareholders in filing petitions.
  3. Application of rules of construction for powers of attorney in determining the scope of authority.
  
  Analysis:
  1. The judgment involves two petitions filed under Section 397/398 alleging oppression and mismanagement in two companies by the power of attorney holder of the petitioners. The respondents raised a preliminary objection regarding the authority of the power of attorney holder to file the petitions. The power of attorney granted by the petitioners did not expressly authorize the holder to file such petitions, leading to a dispute over the interpretation of the power of attorney.
  
  2. The court referred to the decision of the Division Bench of the Bombay High Court in Killick Nixon Ltd. v. Bank of India, which emphasized that the power of attorney must expressly confer the right to file petitions under Section 397/398. The court highlighted the importance of specific authorization within the power of attorney for such actions. The judgment clarified that general clauses in a power of attorney do not automatically grant broad powers and must be interpreted in conjunction with specific provisions.
  
  3. The judgment also discussed the rules of construction for powers of attorney, emphasizing the need for strict interpretation and the relevance of recitals in cases of ambiguity. The court analyzed the specific clauses of the power of attorney in the present case and concluded that the general clause in Clause 19 did not expand the powers beyond the specific provisions listed in Clauses 1 to 18. The court cited the principle that general words following specific powers do not broaden the scope of authority unless necessary for the specified purpose.
  
  4. By applying the principles from Killick Nixon Ltd.'s case and Timblo Irmaos Ltd. v. Jorge Anibal Matos Sequeira, the court determined that the power of attorney holder did not have the authority to file the petitions on behalf of the shareholders. The judgment highlighted the importance of specific authorization within the power of attorney for undertaking legal actions on behalf of the principal. Consequently, the court dismissed the petitions as not maintainable due to the lack of explicit authorization in the power of attorney for filing such petitions.

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• 1994 (3) TMI 394
  
  Issues Involved:
  1. Whether there is an arbitration agreement between the parties.
  2. Whether the provisions of the Abridged Conditions of Supply and statutory provisions of Sections 21, 52 of the Indian Electricity Act, 1910, are applicable in the instant case.
  3. Whether the disconnection of electricity supply was wrongful and if damages can be claimed.
  4. Whether the dispute can be referred to arbitration under Condition No. 29 of the Abridged Conditions of Supply.
  
  Detailed Analysis:
  
  1. Arbitration Agreement Between the Parties:
  The primary issue was whether an arbitration agreement existed between the parties. The respondent relied on Condition No. 29 of the Abridged Conditions of Supply, which provides for arbitration in case of disputes. However, the appellant argued that this Condition must be read in conjunction with the relevant provisions of the Indian Electricity Act, 1910, specifically Sections 24(1), 26(6), and 52, which outline the circumstances under which disputes can be referred to arbitration.
  
  2. Applicability of Abridged Conditions of Supply and Statutory Provisions:
  The court examined whether the dispute could be determined by the provisions of the Abridged Conditions of Supply or statutory provisions of the Indian Electricity Act. It was noted that the Conditions are akin to subordinate legislation and cannot override the Act. The court emphasized that only those matters directed by the Act to be determined by arbitration could be subject to such proceedings. Sections 24(1), 26(6), and 52 of the Act were scrutinized, and it was concluded that these sections did not cover the dispute at hand.
  
  3. Wrongful Disconnection and Claim for Damages:
  The respondent claimed that the disconnection of electricity was wrongful and sought damages. The court acknowledged that while Section 24(1) allows the Board to recover charges through a suit, it does not preclude the consumer from seeking redressal through civil courts for wrongful disconnection. Thus, the remedy of approaching a civil court for damages was available to the respondent.
  
  4. Reference to Arbitration Under Condition No. 29:
  Condition No. 29 allows for arbitration in disputes related to the supply of electricity or interpretation of conditions or agreements. The court noted that the dispute related to the interpretation of an Undertaking and the wrongful disconnection of supply, which could fall under Condition No. 29. However, the court held that the provisions of the Act, being a special and later enactment, would override the general law of arbitration. Therefore, despite Condition No. 29, the dispute could not be referred to arbitration as it was not covered by the Act.
  
  Conclusion:
  The Supreme Court allowed the appeal, setting aside the High Court's judgment concerning issues 2 and 3. It held that the dispute could not be referred to arbitration under the Indian Electricity Act, 1910. The respondent was advised to approach the appropriate civil court for relief. No order was made as to costs.

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• 1994 (3) TMI 393
  
  Issues Involved:
  1. Validity of the alleged stay order by the Calcutta High Court.
  2. Jurisdiction of the Calcutta High Court over the detenu's residence in West Bengal.
  
  Detailed Analysis:
  
  Issue 1: Validity of the Alleged Stay Order by the Calcutta High Court
  
  The primary argument in the writ petition was based on an alleged stay order dated 13th November 1990 by the Calcutta High Court, restraining the State of Kerala from executing a detention order dated 28th February 1990. The detenu's counsel produced a purported certified copy of this stay order during the arguments, which had not been served on the State of Kerala or its officers in over three years.
  
  The court noted that various communications and affidavits from the detenu and his lawyers failed to provide a certified copy or even a case number for the alleged stay order. Despite repeated claims, only photocopies were presented, and the original order was never produced. The court expressed serious doubts about the genuineness of the certified copy due to the prolonged delay in its production and the lack of any formal notice or order from the Calcutta High Court.
  
  The court emphasized that such stay orders are rarely granted in COFEPOSA cases, citing several Supreme Court decisions that restrict the issuance of stay orders to exceptional circumstances. Given the absence of any part of the cause of action arising within the jurisdiction of the Calcutta High Court and the suspicious nature of the alleged certified copy, the court decided against the petitioner and directed an inquiry into the genuineness of the certified copy.
  
  Issue 2: Jurisdiction of the Calcutta High Court Over the Detenu's Residence in West Bengal
  
  The court examined whether the Calcutta High Court had jurisdiction to entertain the writ petition based on the detenu's claimed residence in West Bengal. The Constitution (15th Amendment) allows High Courts to entertain writ petitions against entities outside their jurisdiction if any part of the cause of action arises within their jurisdiction. However, the court held that mere residence of the petitioner without more does not confer jurisdiction.
  
  The court referenced several Supreme Court and High Court rulings which established that mere residence of the petitioner is insufficient to confer jurisdiction if the respondents are outside the court's jurisdiction. The court found no substantial evidence to support the detenu's claim of residence in West Bengal, noting that the detenu's affidavit and other documents were vague and lacked necessary details.
  
  The court further argued that allowing jurisdiction based solely on the detenu's claimed residence would lead to a situation where individuals could evade detention by claiming residence in other states, thereby compelling the State of Kerala to litigate in multiple jurisdictions. This would undermine the effectiveness of the Kerala High Court.
  
  The court concluded that the State of Kerala was not bound by the alleged stay order from the Calcutta High Court, as neither the original order nor any court notices had been served on the state in over three years. The court dismissed the writ petition but allowed the detenu to seek relief on other grounds not based on the alleged order of the Calcutta High Court. An inquiry into the genuineness of the certified copy was ordered to be conducted by the Crime Branch of the State of Kerala.

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• 1994 (3) TMI 392
  
  Issues involved: Interpretation of Section 21 of the Karnataka Rent Control Act, 1961 regarding eviction during contractual tenancy.
  
  Summary:
  The case involved a lease agreement for a cinema theatre construction, where the tenant defaulted in payment and faced eviction proceedings under Section 21 of the Act. The appellant argued that eviction under the Rent Control Act was not permissible during the contractual tenancy period. The respondent contended that the Act supersedes any contractual terms. The Supreme Court referred to precedents emphasizing the applicability of Rent Control Acts over contractual tenancies. The Court analyzed Section 21 of the Act and held that the non-obstante clause prevails over any contrary contract terms. The judgment highlighted the limited rights of landlords under Rent Control Acts and dismissed the appeal due to the tenant's failure to comply with court orders. The Court concluded that the Rent Control Act applies regardless of the contractual lease, affirming the eviction order.
  
  In conclusion, the Supreme Court clarified the application of Section 21 of the Karnataka Rent Control Act, emphasizing the Act's supremacy over contractual tenancies and upholding the eviction order due to the tenant's non-compliance with court directives.

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