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1999 (3) TMI 680
ISSUES PRESENTED and CONSIDEREDThe judgment addresses several key legal issues: - Whether the Enforcement Directorate can investigate remittances made by Non-Resident Indians (NRIs) under the Immunities Act despite the decision of the Foreign Exchange Regulation Appellate Board (FERA Board).
- The interpretation of the provisions of the Immunities Act, particularly in relation to the definition of "remittance" and the scope of immunity provided under Section 3 of the Act.
- Whether the provisions of the Foreign Exchange Regulation Act (FERA) Sections 8 and 9 apply to the transactions in question, potentially excluding the applicability of the Immunities Act.
- The role of the Central Bureau of Investigation (CBI) and the Income Tax Department in investigating alleged violations of the FERA in the context of the Animal Husbandry Department scam.
ISSUE-WISE DETAILED ANALYSIS 1. Enforcement Directorate's Authority to Investigate Remittances The Court examined the Enforcement Directorate's claim that the FERA Board's decision hindered its ability to investigate remittances under the Immunities Act. The Directorate argued that the Board's interpretation of the Immunities Act was incorrect and sought the Court's interpretation to proceed with investigations. The Court clarified that it was not sitting in appeal over the FERA Board's decision. It emphasized that the Board's decision was specific to its facts, involving remittances from an NRE Account, which fell within the Immunities Act's definition. The Court noted that the facts in the current case were yet to be established. 2. Interpretation of the Immunities Act The Court analyzed the Immunities Act, particularly Section 2(b), which defines "remittance" as foreign exchange sent by a person outside India to a person in India. Section 3 provides immunity from disclosing the nature and source of such remittances and bars inquiries or investigations against recipients. The Court highlighted that to attract Section 3's immunity, the remittance must fall within Section 2(b)'s definition. If Indian rupees converted into foreign exchange are sent back to India, it may not qualify as a "remittance" under the Act, and the immunity may not apply. 3. Applicability of Sections 8 and 9 of FERA The Court considered Sections 8 and 9 of FERA, which impose restrictions on dealing in foreign exchange and payments to non-residents. It stated that any investigation to determine if a remittance qualifies under Section 2(b) of the Immunities Act must consider potential violations of these FERA provisions. The Court reasoned that Sections 8 and 9 of FERA are not rendered redundant by the Immunities Act. If a remittance involves a violation of these sections, it may not be protected as a "remittance" under the Immunities Act. 4. Role of CBI and Income Tax Department The Court noted that the CBI and Income Tax Department had conducted detailed investigations into the Animal Husbandry Department scam. It suggested that the materials collected by these agencies could serve as a basis for a preliminary inquiry by the Enforcement Directorate into potential FERA violations. The Court directed the Enforcement Directorate to proceed with inquiries based on these findings, clarifying that the FERA Board's decision did not prevent such investigations. SIGNIFICANT HOLDINGS The Court concluded that the Enforcement Directorate could proceed with investigations into remittances if they do not qualify as "remittances" under the Immunities Act. The Court held: "In a case falling under Section 2(b), no inquiry or investigation can be made against him but where the inquiry or investigation is proposed to be made on the point as to whether the amount received by him (recipient) is in fact 'remittance' within the meaning of Section 2(b), I do not think Section 3 would stand as a bar." The Court emphasized that the immunity provided by the Immunities Act does not apply if the remittance involves a violation of FERA provisions. It instructed the Enforcement Directorate to proceed with inquiries in accordance with the law. The judgment effectively clarifies the scope of the Immunities Act and its interaction with FERA, allowing investigations to proceed where the remittance does not meet the statutory definition under the Immunities Act.
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1999 (3) TMI 679
Issues Involved:
1. Legality of the block assessment order u/s 158BC.
2. Addition of Rs. 5,25,90,000 as unexplained investment.
3. Opportunity of hearing before approval u/s 158BG.
4. Ownership and possession of seized gold.
5. Unexplained investment in the renovation of house.
Summary:
1. Legality of the block assessment order u/s 158BC:
The appellant argued that the block assessment order dated 14-11-1996 is void and illegal as no opportunity of hearing was granted by the Commissioner before approving the assessment order. The Tribunal admitted these additional grounds as they pertain to legal issues not requiring fresh facts.
2. Addition of Rs. 5,25,90,000 as unexplained investment:
The assessing officer made an addition of Rs. 5,25,90,000 for unexplained investments in gold and house renovation. This included:
- Rs. 3,05,50,000 for gold brought by passengers at Delhi International Airport.
- Rs. 2,17,40,000 for gold brought by passengers in November.
- Rs. 3,00,000 for house renovation.
3. Opportunity of hearing before approval u/s 158BG:
The Tribunal held that the Commissioner's approval u/s 158BG is an administrative procedure intended to safeguard the assessee from excessive or arbitrary additions by the assessing officer. Therefore, there is no mandatory requirement for the Commissioner to grant an opportunity of being heard to the assessee before granting approval.
4. Ownership and possession of seized gold:
The Tribunal sustained the addition of Rs. 2,44,22,090 for the value of 49 kgs of gold seized from the appellant's possession in Room No. 206, Agarwal Hotel, Ahmedabad. The appellant failed to discharge the onus of proving that he was not the owner of the gold. The Tribunal rejected the appellant's claim of being merely a carrier and noted discrepancies in his statements.
5. Unexplained investment in the renovation of house:
The Tribunal deleted the addition of Rs. 3,00,000 towards unexplained investment in house renovation, considering it a pittance compared to the sustained addition of Rs. 2,44,22,090, and held that the investment is explained from the undisclosed income brought to tax.
Conclusion:
The Tribunal partly allowed the appeal, sustaining the addition of Rs. 2,44,22,090 and deleting the rest of the additions made by the assessing officer.
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1999 (3) TMI 677
Issues Involved:
1. Whether the appellant-Board acted illegally or contrary to law in introducing a pension scheme prospectively from 1.7.1986.
2. Whether employees who retired before 1.7.1986 can compel the appellant-Board to extend the benefit of the newly introduced pension scheme with retrospective effect.
Issue-wise Detailed Analysis:
1. Introduction of Pension Scheme Prospectively from 1.7.1986:
The appellant-Board was established on 1.7.1957 under Section 5 of the Indian Electricity (Supply) Act, 1948. Initially, employees were governed by the Contributory Provident Fund Scheme. On their retirement before 1.7.1986, these employees received all retiral benefits under the existing scheme. The pension scheme was introduced by the appellant-Board effective from 1.7.1986 after obtaining necessary exemptions from the Family Pension Scheme, 1971, and Employees Deposit Linked Insurance Scheme, 1976. The High Court's Division Bench ruled that the delay in introducing the pension scheme deprived the employees of its benefits, and thus, the scheme should be extended retrospectively. However, the Supreme Court noted that the law is well settled on this issue. The Court emphasized that a new pension scheme can only benefit retirees if it is expressly made retrospective. Otherwise, old retirees who were non-pensioners remain outside its scope. The Court referenced several judgments, including V. Kasturi v. Managing Director, State Bank of India, and Union of India v. Lieu (Mrs.) E. locals, which supported the prospective application of new pension schemes.
2. Retrospective Application of Pension Scheme:
The Supreme Court examined the facts and legal precedents to determine whether the employees who retired before 1.7.1986 could claim the benefits of the newly introduced pension scheme. The Court highlighted that the employees were not governed by a pension scheme but by the Contributory Provident Fund Scheme at the time of their retirement. They received all retiral benefits as per the rules then in force. The appellant-Board introduced the pension scheme from 1.7.1986 based on a Central Government notification and financial constraints. The Court noted that changing the effective date would require reopening past cases and seeking retrospective exemptions, leading to significant financial burdens. The Court referenced judgments such as Hari Ram Gupta v. State of U.P. and All India PNB Retired Officers Assn. v. Union of India, which distinguished between continuing schemes and new schemes and upheld the validity of prospective application based on financial constraints and logical nexus.
Conclusion:
The Supreme Court concluded that the appellant-Board did not act illegally or contrary to law by introducing the pension scheme prospectively from 1.7.1986. The employees who retired before this date could not compel the Board to extend the scheme retrospectively. The Court set aside the Division Bench's judgment and upheld the Single Judge's order dismissing the writ petitions. The appeals were allowed with no order as to costs.
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1999 (3) TMI 676
Issues:
1. Refund of Sales Tax under Andhra Pradesh General Sales Tax Act, 1957 for assessment years 1994-95 and 1995-96.
2. Refund of Central Sales Tax Act, 1956 for the same assessment years.
Issue 1: Refund of Sales Tax under Andhra Pradesh General Sales Tax Act, 1957 for assessment years 1994-95 and 1995-96.
The petitioner sought a writ for the refund of Sales Tax collected under the Andhra Pradesh General Sales Tax Act, 1957 for the years 1994-95 and 1995-96 on the sale of "poultry feed" manufactured with ingredients purchased from outside the State. The State had issued an exemption granting G.O. Ms. No. 1055, which the petitioner did not benefit from due to using ingredients from outside the State. Another manufacturer in a similar situation filed a writ petition and succeeded, prompting the present petitioner to claim a refund based on the judgment in that case. The court held that the petitioner could not seek a refund through a writ petition based on another manufacturer's success. The court emphasized the finality of assessments and the need to challenge assessments appropriately, rather than relying on judgments in other cases for refunds.
Issue 2: Refund of Central Sales Tax Act, 1956 for the same assessment years.
The petitioner also sought a refund of Central Sales Tax Act, 1956 for the same assessment years. The court reiterated that a petitioner cannot claim a refund based on another person's success in a writ petition. The court emphasized that each person must fight their own legal battles and cannot rely on judgments in other cases for refunds. The court dismissed the writ petitions as the assessments had become final in 1996 and 1997, emphasizing that the burden not being passed on to consumers did not strengthen the petitioner's case. The legal position stated in the Mafatlal Industries case was highlighted, emphasizing the sanctity of finality in legal proceedings and the need for each person to succeed or fail in their own proceedings.
In conclusion, the court dismissed both writ petitions, stating that the petitioners could not claim a refund based on the success of another person's case and emphasizing the importance of challenging assessments appropriately rather than seeking refunds through writ petitions based on other judgments.
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1999 (3) TMI 675
Issues:
1. Revision under Section 397 Cr.P.C against order summoning the applicant based on charge sheet.
2. Whether the order summoning the applicant was passed without proper application of mind.
3. Maintainability of the revision under Section 397 Cr.P.C.
4. Interpretation of Sections 203 and 204 Cr.P.C regarding the requirement of recording reasons for dismissing a complaint and issuing process.
Analysis:
1. The revision was filed against the order summoning the applicant based on a charge sheet for offenses under Sections 420, 467, and 468 IPC. The revisionist argued that the order lacked prima facie satisfaction of the Magistrate regarding the commission of the offense, a pre-condition for taking cognizance and issuing process.
2. The revisionist contended that the order was passed without proper application of mind to determine if there were sufficient grounds to proceed. Reference was made to Section 204 Cr.P.C, empowering the Magistrate to issue process if there are sufficient grounds for proceeding, emphasizing the need for the Magistrate to apply their mind before doing so.
3. The issue of maintainability of the revision under Section 397 Cr.P.C was raised. The revisionist cited a Division Bench case to support the argument that the order summoning the applicant was not interlocutory, making the revision maintainable. The court accepted this argument, allowing the revision to proceed.
4. The judgment delved into the interpretation of Sections 203 and 204 Cr.P.C concerning the recording of reasons for dismissing a complaint and issuing process. It was clarified that while Section 203 mandates recording reasons for dismissing a complaint, there is no such requirement under Section 204. Therefore, the order for issuing process without recording reasons was deemed legal, leading to the dismissal of the revision.
In conclusion, the court dismissed the revision, finding that the order summoning the applicant was not passed without proper application of mind and that the requirement to record reasons for dismissing a complaint did not apply to the issuance of process under Section 204 Cr.P.C.
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1999 (3) TMI 674
Issues:
1. Revision against order dated 9-2-99 passed by the 1st Additional Chief Judicial Magistrate, Meerut in Criminal Case No. 305 of 1999.
2. Application of mind by the Magistrate before passing the order.
3. Maintainability of the revision under Section 397 Cr.P.C.
4. Interpretation of Sections 203 and 204 Cr.P.C. regarding the recording of reasons for dismissal of complaint and issue of process.
Analysis:
1. The revision was filed against the order summoning the applicant based on a charge sheet for offences under Sections 420, 467, and 468 IPC. The revisionist argued that the order lacked the Magistrate's prima facie satisfaction of the commission of an offence before issuing process.
2. The issue of maintainability of the revision under Section 397 Cr.P.C. was raised. The revisionist cited a Division Bench case to support that the order of summoning is not interlocutory, making the revision maintainable. The Court agreed with this interpretation, allowing the revision to proceed.
3. Regarding the merits, the applicant's Counsel referenced Section 204 Cr.P.C., emphasizing the Magistrate's power to issue process if there are sufficient grounds for proceeding. The argument was that the order did not reflect the Magistrate's application of mind to determine the existence of sufficient grounds.
4. The judgment delved into the procedures for taking cognizance under Sections 190 and 204 Cr.P.C. It highlighted the three stages of a case: issue of process under Section 204, consideration under Section 239 before framing charges, and final judgment after recording all evidence. The Court clarified that detailed scrutiny of evidence is not required at all three stages, with different levels of consideration and reasoning expected.
5. The Court noted the distinction between Sections 203 and 204 Cr.P.C., emphasizing that while Section 203 mandates recording reasons for complaint dismissal, no such requirement exists under Section 204 for issuing process. Thus, the order for process issuance without recorded reasons was deemed legal, leading to the dismissal of the revision.
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1999 (3) TMI 673
Issues Involved:
1. Application of Section 5 of the Limitation Act, 1963 to proceedings under Section 8 of the West Bengal Land Reforms Act, 1955 (WBLRA).
2. Interpretation of the term "expressly excluded" in the context of Section 29(2) of the Limitation Act.
3. Nature of applications under Section 8 of the WBLRA-whether they are akin to suits or not.
Detailed Analysis:
1. Application of Section 5 of the Limitation Act, 1963 to Proceedings under Section 8 of the WBLRA:
The applicant's right of preemption under Section 8 of the WBLRA was rejected by the Munsiff on the grounds of being barred by limitation, with Section 5 of the Limitation Act deemed inapplicable. The conflict arose from two contrary decisions:
- Chandra Sekhar Sarkar v. Baidyanath Ghosh where Section 5 was held applicable.
- Minor Subir Ranjan Mandal v. Sitanath Mukherjee where it was held inapplicable.
Chatterjee J. in Minor Subir Ranjan Mandal distinguished Guha J.'s view in Chandra Sekhar Sarkar by referencing the Supreme Court's decision in Hukumdev Narayan Yadav v. Lalit Narayan Mishra, the scheme of the WBLRA, and Section 29(2) of the Limitation Act. Chatterjee J. concluded that an application under Section 8 should be treated as a plaint in a suit and thus, Section 5 would not apply.
2. Interpretation of "Expressly Excluded" in Section 29(2) of the Limitation Act:
Section 29(2) of the Limitation Act implies that the provisions of Sections 4 to 24 apply to special or local laws unless expressly excluded. Despite the word "expressly," the judicial interpretation has included exclusion by necessary implication. Chatterjee J. held that the absence of reference to Section 5 in Section 8, while it was included in other sections of the WBLRA, implied its exclusion by necessary implication. This was supported by the legislative history and the consistent judicial interpretation that Section 5 did not apply to preemption proceedings under Section 8 before the amendment.
3. Nature of Applications under Section 8 of the WBLRA:
The court examined whether applications under Section 8 should be treated as suits. The definition of "suit" in the Limitation Act and judicial interpretations suggest that a suit is an independent proceeding initiated for the final determination of issues. Applications under Section 8 initiate original proceedings before the Munsiff, culminating in an order akin to a decree. The court noted that the terminology used in the WBLRA and the Limitation Act should not define the nature of proceedings but rather the substantive rights involved.
The court concluded that applications under Section 8 are original and independent proceedings, similar to suits. This interpretation aligns with the broader judicial understanding that suits can be initiated by various forms, not just by filing a plaint.
Conclusion:
The court upheld Chatterjee J.'s view that Section 5 of the Limitation Act does not apply to proceedings under Section 8 of the WBLRA. The decision in Chandra Sekhar Sarkar v. Baidyanath Ghosh was found to be incorrect in law. The judgment emphasized the legislative intent and the need to interpret the provisions of the WBLRA and the Limitation Act in a manner consistent with the statutory scheme and judicial precedents.
Order:
The view that Section 5 of the Limitation Act does not apply to proceedings under Section 8 of the WBLRA is affirmed.
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1999 (3) TMI 672
Issues Involved:
1. Constitutional validity of policy decisions favoring public sector manufacturers for purchasing medicines.
2. Alleged creation of monopoly in violation of Articles 14 and 19(1)(g) of the Constitution.
3. Legitimacy of executive orders under Article 162 of the Constitution.
Issue-wise Detailed Analysis:
1. Constitutional Validity of Policy Decisions:
The petitioners challenged the policy decisions of the States of Punjab and Rajasthan, which directed that certain medicines used in government hospitals and dispensaries be purchased only from public sector manufacturers. The High Court of Punjab and Haryana quashed this policy, while the High Court of Rajasthan upheld it. The Supreme Court examined whether such policies violated constitutional provisions.
2. Alleged Creation of Monopoly in Violation of Articles 14 and 19(1)(g):
The appellants argued that the policies created a monopoly in favor of public sector undertakings, violating Articles 14 (equality before the law) and 19(1)(g) (freedom to practice any profession or to carry on any occupation, trade, or business). The Supreme Court disagreed, stating that the policies did not create a monopoly as they only directed the purchase of certain drugs from specified manufacturers, without precluding other manufacturers from selling their products to other customers. The Court noted that the demand for drugs in government hospitals and dispensaries is only a fraction of the total market demand. Therefore, the policy did not amount to a monopoly under Article 19(6).
3. Legitimacy of Executive Orders under Article 162:
The Supreme Court upheld the authority of the State to issue such policy directions under its executive power derived from Article 162 of the Constitution. The Court referenced previous judgments, including Rai Sahib Ram Jawaya Kapur v. State of Punjab and Naraindass Indurkhya v. State of M.P., which supported the view that executive orders can impose restrictions in the absence of specific legislation.
Judgment Analysis:
The Supreme Court supported the High Court of Rajasthan's decision, stating that the policy did not create a monopoly and was not arbitrary or discriminatory. The Court cited several precedents, including:
- Rai Sahib Ram Jawaya Kapur v. State of Punjab: No fundamental right guarantees the approval of specific products by the government.
- Naraindass Indurkhya v. State of M.P.: The State can restrict the sale of certain products through executive orders.
- Sarkari Sasta Anaj Vikreta Sangh v. State of M.P.: Preference to cooperative societies for fair price shops was upheld as reasonable classification.
- Hindustan Paper Corporation Ltd. v. Govt. of Kerala: Preference to government companies was not discriminatory.
- Krishna Kakkanth v. Govt. of Kerala: Public interest can justify preference to cooperative institutions or public sector undertakings.
The Supreme Court dismissed the appeals against the Rajasthan High Court's decision and allowed the appeals against the Punjab and Haryana High Court's decision, thereby upholding the policy decisions of both states. The Court concluded that the policies did not violate Articles 14, 19(1)(g), or 19(6) of the Constitution and were within the executive powers of the State.
Conclusion:
The Supreme Court held that the policy decisions directing the purchase of certain medicines from public sector undertakings did not create a monopoly, were not discriminatory, and were within the executive powers of the State. The appeals against the Rajasthan High Court's decision were dismissed, and the appeals against the Punjab and Haryana High Court's decision were allowed, thereby upholding the policy decisions of both states.
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1999 (3) TMI 671
Issues Involved:
1. Legislative Competence and Policy Decision of State Government.
2. Requirement of 'No Objection Certificate' (NOC) from the State Government.
3. Validity of Clauses (e) and (f) of Regulation 5 of the Central Regulations.
Issue-wise Detailed Analysis:
1. Legislative Competence and Policy Decision of State Government:
The court examined whether the State Government had the authority to frame policies regarding the establishment of teacher training institutions. It was established that with the Constitution (Forty-second Amendment) Act, 1976, legislative power in respect of "Education" is now conferred exclusively on the Parliament and concurrently on Parliament and State's Legislature in respect of certain matters. The court noted that the Parliament has legislative competence to make laws in relation to teacher education, and any State Law repugnant to the Central Act becomes void under Article 254 of the Constitution of India. The court held that the State Government's policy forbidding the establishment of new teacher training institutions was ultra vires its powers and thus a nullity. The State Government's selective relaxation of this policy for extraneous reasons further destroyed the policy decision.
2. Requirement of 'No Objection Certificate' (NOC) from the State Government:
The court scrutinized the requirement of obtaining a 'No Objection Certificate' (NOC) from the State Government as mandated by clauses (e) and (f) of Regulation 5 of the Central Regulations. It was observed that the Central Act did not assign any function to the State Government in relation to the grant of recognition to institutions intending to offer teacher education. The court found that the practice adopted by the National Council and the Regional Committee, which allowed the State Government to dictate the grant of recognition, was not supported by any statutory guidelines. The court highlighted that the State Government's refusal to grant NOC based on its policy was arbitrary and lacked statutory backing.
3. Validity of Clauses (e) and (f) of Regulation 5 of the Central Regulations:
The court examined whether the National Council for Teacher Education (NCTE) was within its statutory competence to prescribe obtaining an NOC from the State Government as a condition precedent for maintaining an application for recognition. It was determined that the National Council could only prescribe the form and manner of the application but not a substantive condition like obtaining an NOC, which effectively abdicated its statutory powers to the State Government. The court concluded that clauses (e) and (f) of Regulation 5 were ultra vires the powers of the National Council and thus struck them down.
Conclusion:
The court declared that the State Government's policy decision forbidding the establishment of teacher training institutions was ultra vires and nullified due to its infraction for extraneous reasons. Clauses (e) and (f) of Regulation 5 of the Central Regulations were also declared ultra vires the powers of the National Council. Consequently, the Regional Committee's decision to refuse recognition based on the non-grant of NOC by the State Government was held to be vitiated in law. The writ petition was allowed, directing the Regional Committee to reconsider the petitioner's application for recognition without insisting on obtaining an NOC from the State Government.
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1999 (3) TMI 670
Issues: Bail application under Sections 147, 148, 149, 302, 429/120-B, I.P.C. and Section 27 of the Indian Arms Act
Detailed Analysis:
1. The judgment involves the bail application of two accused-applicants, Yunis and Haroon, under various sections of the Indian Penal Code and the Arms Act.
2. The prosecution story, as per the FIR, describes the events leading to the death of Yakeenuddin Qureshi. The deceased and co-accused were involved in pending criminal cases, and on the day of the incident, the accused persons fired at the deceased resulting in his death. The FIR was lodged immediately after the occurrence.
3. Previous bail orders for other co-accused were discussed, highlighting instances where bail was granted or rejected based on different considerations by various judges. The argument for bail was based on the principle of parity, citing previous bail orders for co-accused individuals.
4. The judgment referred to previous court decisions emphasizing that bail decisions are based on the totality of facts and circumstances of each case. The principle of parity may be applied in granting bail to co-accused with similar circumstances but cannot be used to reject bail for another co-accused.
5. The judgment discussed the importance of reasons behind bail orders, stating that an order granting bail should consider all relevant factors and principles. It also highlighted that denial of bail to one accused should not automatically lead to the rejection of bail for another co-accused.
6. The judgment cited previous court decisions to support the argument that the law of parity can be applied in granting bail to co-accused individuals. It also differentiated between applying parity for granting bail versus rejecting bail applications.
7. The judgment concluded by granting bail to the accused-applicants, Yunis and Haroon, involved in the case, under specific sections of the Indian Penal Code and the Arms Act, upon furnishing a personal bond and sureties to the satisfaction of the Chief Judicial Magistrate concerned.
In summary, the judgment thoroughly analyzed the bail application of the accused-applicants, considering previous court decisions on parity and reasons behind bail orders, ultimately granting bail to Yunis and Haroon in the case.
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1999 (3) TMI 669
Issues Involved:
1. Whether the plaintiff can withdraw a suit at the appellate stage after a decree has been passed.
2. The impact of the plaintiff's withdrawal on the rights vested in the defendants under the decree.
3. The applicability of Order 23 Rule 1 and Rule 1-A of the Code of Civil Procedure (CPC) in the context of suit withdrawal at the appellate stage.
4. The rights of transferees-pendente-lite in the context of the suit withdrawal.
Issue-wise Detailed Analysis:
1. Withdrawal of Suit at the Appellate Stage:
The primary issue was whether the plaintiff could withdraw a suit at the appellate stage after a decree had been passed by the trial court. The court held that the plaintiff does not have an unqualified or unfettered right to withdraw the suit at the appellate stage. The withdrawal of a suit at this stage, if allowed, would have the effect of destroying or nullifying the decree, thereby affecting the rights of the parties vested under the decree. Therefore, such withdrawal cannot be allowed as a matter of course but only in rare circumstances where a strong case is made out.
2. Impact on Vested Rights:
The court emphasized that once a decree is passed, it conclusively determines the rights of the parties with respect to the matters in controversy. These rights become crystallized and vested. The withdrawal of a suit at the appellate stage would prejudice these vested rights. The court cited several precedents, including decisions from the Bombay, Madras, Allahabad, Andhra Pradesh, Rajasthan, and Punjab & Haryana High Courts, which consistently held that the plaintiff's right to withdraw the suit is not absolute and must be balanced against the rights accrued to the defendants under the decree.
3. Applicability of Order 23 Rule 1 and Rule 1-A CPC:
Order 23 Rule 1 CPC allows a plaintiff to withdraw a suit or abandon a part of the claim unconditionally. However, this right is not absolute, especially at the appellate stage where a decree has already been passed. The court highlighted that Rule 1-A, inserted by the Code of Civil Procedure (Amendment) Act, 1976, allows a defendant to apply to be transposed as a plaintiff if the original plaintiff withdraws the suit. This provision ensures that the rights of defendants are protected and that they can continue the litigation if they have a substantial question to be decided against other defendants.
4. Rights of Transferees-Pendente-Lite:
The court addressed the rights of the appellants, who were transferees-pendente-lite, having purchased the suit property from the plaintiff after a declaratory decree was passed in his favor. The appellants were impleaded as respondents in the appeal under Order 22 Rule 10 CPC. The court held that the appellants, being transferees of the property and having been impleaded as respondents, were virtually in the position of plaintiffs. Therefore, they had a vested right that could not be taken away by the plaintiff's withdrawal of the suit unconditionally. The court rejected the contention that the appellants obtained the sale-deed by fraud, as this was not the subject matter of the suit under appeal.
Conclusion:
The court concluded that the withdrawal of a suit at the appellate stage, which would have the effect of nullifying the decree and prejudicing the vested rights of the defendants, cannot be permitted unconditionally. The impugned judgment of the High Court, which allowed the withdrawal, was set aside. The application for withdrawal of the suit was rejected, and the appeals were remanded to the High Court for a decision on merit in accordance with law. The parties were directed to bear their own costs.
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1999 (3) TMI 668
Issues Involved:
1. Charges against the appellant and his son.
2. Prosecution's case and evidence.
3. Defense's version.
4. Trial court's judgment and reasoning.
5. High Court's judgment and reasoning.
6. Supreme Court's analysis and final decision.
Summary:
1. Charges against the appellant and his son:
The appellant and his son were charged u/s 449, 341, 324, and 302 read with Section 34 IPC for wrongful restraint, causing hurt with a stick, and the murder of Kesava Pillai by stabbing him on 17.4.1985.
2. Prosecution's case and evidence:
The prosecution alleged that the appellant had a strained relationship with the deceased due to a property dispute. On the night of the incident, a scuffle ensued between PW1 and the appellant, leading to the appellant and his son attacking PW1 and subsequently stabbing the deceased, Kesava Pillai. The prosecution presented 17 witnesses, including three eye witnesses (PWs 1-3), and medical evidence from doctors (PWs 8, 9, and 14).
3. Defense's version:
The defense claimed that the incident occurred due to a failed marriage proposal, leading to enmity. The appellant argued that the deceased attacked him first, and the injuries were accidental during a scuffle. The defense also suggested that the appellant's son was falsely implicated and that the prosecution's witnesses were not present at the scene.
4. Trial court's judgment and reasoning:
The Additional Sessions Judge acquitted both accused, finding the prosecution's evidence inconsistent and unreliable. The court noted discrepancies in the eye witnesses' testimonies and concluded that the prosecution failed to establish the charges beyond reasonable doubt.
5. High Court's judgment and reasoning:
The High Court upheld the acquittal of the appellant's son but reversed the acquittal of the appellant, convicting him u/s 302 and 324 IPC. The High Court re-appreciated the evidence and found the eye witnesses reliable, concluding that the appellant inflicted the fatal stab wound on the deceased.
6. Supreme Court's analysis and final decision:
The Supreme Court acknowledged the High Court's power to re-appreciate evidence in an appeal against acquittal. It found the trial court's reasons for acquittal unsound and supported the High Court's conviction of the appellant. However, the Supreme Court held that the appellant's act did not constitute murder u/s 302 IPC but rather culpable homicide not amounting to murder u/s 304 Part II IPC. The appellant's conviction was modified to u/s 304 Part II IPC, with a sentence of the period already undergone. The conviction u/s 324 IPC remained unaltered, but no separate sentence was awarded. The appellant's bail bond was discharged.
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1999 (3) TMI 667
Issues Involved:
1. Entitlement to tenancy rights.
2. Validity and precedence of the private sale by executors versus court sale.
3. Assent of executors and vesting of property in legatees.
Issue-wise Detailed Analysis:
1. Entitlement to Tenancy Rights:
In the appeal before the High Court, the first issue was whether the first defendant is entitled to the tenancy rights as pleaded by him. Both the trial court and the lower appellate court had held against the defendants on this matter. The High Court, after considering the materials on record, held that the document of mortgage, Ex. A-1, was in fact only a rental arrangement of the buildings. The transaction under the said document came within the purview of the Kerala Buildings (Lease and Rent Control) Act, thereby protecting the possession of the defendants under the said Act de hors the mortgage claim.
2. Validity and Precedence of the Private Sale by Executors versus Court Sale:
The second issue was whether the prior sale by the executors would prevail or whether the court sale would have preference over it. The High Court concluded that the private sale executed by the two executors on 10.1.1964 in favor of the fourth defendant would prevail over the court sale dated 27.7.1964 in favor of the plaintiff. The plaintiff's contention that the private sale was in violation of the court's order of attachment dated 24.11.1961 was rejected. The High Court held that the attachment did not bind the executors of the Will since at least one of them was not a party to the decree, and the decree was personal only against the younger Sadanandan. Under Section 60 of the C.P.C., there could be no attachment of properties belonging to persons other than the judgment debtor. The High Court also noted that attachment does not confer any title in favor of the person who gets the property attached. The High Court relied on Section 211(1) and Section 307(1) of the Indian Succession Act, which provide that an executor or administrator has the power to dispose of the property of the deceased vested in him.
3. Assent of Executors and Vesting of Property in Legatees:
The appellants argued that the elder Sadanandan's act of executing a possessory mortgage impliedly divested the interest of the executors in the property, making it available for attachment and court sale. The High Court rejected this argument, stating that under Section 211 of the Indian Succession Act, the property of the deceased testator vests in all the executors, and if there are more than one executor, all must act jointly. The act of a single executor cannot bind the estate of the deceased. The Court further noted that the Will was not probated at the time of the execution of Ex. A-1, and thus, the act of elder Sadanandan could not be construed as an implied assent under Sections 332 and 333 of the Act. Consequently, the sale made by the executors on 10.1.1964 was valid and not restricted by the attachment order of the executing court. The private sale was upheld, and the property was not available for court sale. Therefore, the appellants did not acquire any right, title, or interest in the suit property through the court sale.
Conclusion:
The Supreme Court affirmed the judgment and decree of the High Court, dismissing the appeal. The private sale executed by the executors was valid, and the court sale did not confer any rights to the appellants. The question of tenancy rights did not survive for consideration due to the findings on the validity of the private sale. The appeal was dismissed with no costs.
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1999 (3) TMI 666
Issues Involved:
1. Whether the writ petition filed by the appellant Corporation before the Orissa High Court was maintainable.
2. Whether the writ petition was barred by the principle of res judicata.
3. Whether the writ petition was barred by the principle of constructive res judicata.
4. Whether the writ petition was liable to be dismissed on the grounds of waiver, estoppel, and acquiescence, and also on the ground that it was barred by delay and laches.
5. Whether the order of the State of Orissa dated 29th June, 1997 was in conflict with the earlier order of the Central Government dated 17th August, 1995 as upheld by the Supreme Court in TISCO's case.
6. Whether the order of the State Government dated 29th June, 1997 is binding on the appellant as well as on the contesting respondents.
7. Whether it is a fit case for interference under Article 136 of the Constitution of India by the Supreme Court on the facts and circumstances of the case.
8. What final order should be issued?
Issue-Wise Detailed Analysis:
1. Maintainability of the Writ Petition:
The short question requiring a long answer in this appeal is whether the writ petition filed by the appellant Corporation before the Orissa High Court was maintainable. The High Court in the impugned judgment took the view that it was not maintainable being barred by the principle of res judicata.
2. Principle of Res Judicata:
The High Court dismissed the writ petition as barred by res judicata. The appellant's grievance against the impugned order of the Central Government dated 17th August, 1995 and against the report of the Sharma Committee as accepted by the said order of the Central Government proceeds in a narrow compass. The Supreme Court held that the controversy raised by the appellant in the present writ petition was not finally concluded by the Court in the earlier decision, and thus, the writ petition was not barred by res judicata.
3. Principle of Constructive Res Judicata:
The Court considered whether the judgment in TISCO's case operated as constructive res judicata against the appellant. It was held that the inter se dispute between the appellant and the other contesting respondents regarding the correct assessment of their respective requirements of chrome ore was not in the anvil of controversy between the contesting respondents in the earlier proceedings. Consequently, the principle of constructive res judicata was not attracted.
4. Waiver, Estoppel, and Acquiescence:
The appellant stood on the fence before the Supreme Court when the judgment was rendered in TISCO's case. By the time this Court heard the cases on 5th October, 1995 and reserved its judgment, the appellant had already got the assessment of its need decided by the Sharma Committee and accepted by the Central Government by its order dated 17th August, 1995. The appellant did not challenge the said order before this Court and invited the Court to accept the decision of the Central Government as a whole. Therefore, the appellant was held to have waived its grievance regarding the assessment of its need, and the writ petition was not maintainable on the grounds of waiver, estoppel, and acquiescence.
5. Conflict with Central Government's Order:
The State Government's order dated 29th June, 1997, which sliced down the claims of the four parties by 50%, was not challenged by the appellant or the contesting respondents. The Supreme Court held that the order of the State Government was not in conflict with the order of the Central Government dated 17th August, 1995.
6. Binding Nature of the State Government's Order:
The order of the State Government dated 29th June, 1997, which reserved 50% of the area for consideration of claims of other parties, was held to be binding on the appellant and the contesting respondents.
7. Interference under Article 136:
The Supreme Court held that it was not a fit case for interference under Article 136 of the Constitution of India. The appellant, by its own conduct, had disentitled itself from getting any fresh decision on the assessment of its need.
8. Final Order:
The appeal was dismissed. The State of Orissa was directed to carry out the remaining exercise pursuant to its order dated 29th June, 1997, and the Committee constituted by the State Government was to complete its exercise in connection with the remaining area. The grant of mining leases to the extent of 50% to the appellant and the contesting respondents as per the State Government's order dated 29th June, 1997, was to remain binding. Any additional leases granted by the State of Orissa to meet the remaining 50% of assessed needs would be subject to revisions by the aggrieved parties before the Central Government in accordance with law. There was no order as to costs.
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1999 (3) TMI 665
Issues Involved:
1. Whether the activities carried on by the appellants in photographic work constitute a "works contract" under the Kerala General Sales Tax Act.
2. Whether the processing of photographic prints constitutes a service contract or involves the sale of goods.
3. The applicability of the 46th Constitutional Amendment and its impact on the taxability of photographic activities.
4. The constitutionality of Clause (6) of the Table appended to Section 5C of the Act concerning photography as a deemed sale.
Issue-wise Detailed Analysis:
1. Whether the activities carried on by the appellants in photographic work constitute a "works contract" under the Kerala General Sales Tax Act:
The appellants argued that their photographic activities, including taking photographs, developing negatives, and printing photographs, did not constitute a "works contract" as defined in the Act. They contended that these activities were primarily service contracts involving skill and labor rather than the sale of goods. The court examined the three categories of activities carried on by photographers:
- Taking photographs, developing negatives, and supplying prints.
- Developing exposed films brought by customers and supplying prints.
- Taking positive prints from negatives brought by customers and supplying prints.
The court concluded that the first category did not involve a works contract as no goods were supplied by the customer, and the photographer's work was primarily based on skill and labor. However, the second and third categories involved processing goods (negatives) supplied by customers, thus constituting a works contract.
2. Whether the processing of photographic prints constitutes a service contract or involves the sale of goods:
The appellants contended that the processing of photographic prints was a service contract and did not involve the sale of goods. They relied on previous judgments, including the Supreme Court's decision in Assistant Sales Tax Officer v. B.C. Kame, which held that the occupation of a photographer was essentially one of skill and labor, and the supply of photographic prints did not constitute a sale of goods.
The court, however, distinguished between the different categories of photographic activities. It held that while the first category (taking photographs and supplying prints) was a service contract, the second and third categories (developing exposed films and supplying prints) involved the transfer of property in goods (photographic paper) and thus constituted a works contract subject to sales tax.
3. The applicability of the 46th Constitutional Amendment and its impact on the taxability of photographic activities:
The appellants argued that the 46th Constitutional Amendment, which introduced Clause 29A to Article 366 defining tax on the transfer of property in goods involved in the execution of works contracts, did not change the taxability of photographic activities. They contended that the amendment did not affect the nature of their work as a service contract.
The court referred to the Supreme Court's decisions in Builders Association of India v. Union of India and Gannon Dunkerley and Co. v. State of Rajasthan, which upheld the validity of the 46th Amendment and allowed states to impose tax on the transfer of property in goods involved in works contracts. The court concluded that the amendment was applicable, and the appellants' activities involving the transfer of property in goods (photographic paper) were taxable as works contracts.
4. The constitutionality of Clause (6) of the Table appended to Section 5C of the Act concerning photography as a deemed sale:
The appellants challenged the constitutionality of Clause (6) of the Table appended to Section 5C of the Act, which deemed photography as a works contract for tax purposes. They argued that this provision was ultra vires and void, as it did not properly interpret the definition of works contract and processing under the Act.
The court examined the legislative intent and the definition of works contract in the Act. It held that the provision was constitutional and valid, as it aligned with the 46th Constitutional Amendment and the Supreme Court's interpretation of works contracts. The court found that the activities of developing exposed films and printing photographs involved processing goods supplied by customers and constituted works contracts subject to sales tax.
Conclusion:
The court dismissed the writ appeals, holding that the appellants' activities of developing exposed films and printing photographs constituted works contracts subject to sales tax under the Kerala General Sales Tax Act. The court upheld the constitutionality of Clause (6) of the Table appended to Section 5C of the Act and concluded that the 46th Constitutional Amendment applied to the appellants' activities, making them liable for sales tax on the transfer of property in goods involved in the execution of works contracts.
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1999 (3) TMI 664
Issues Involved:
1. Rejection of the declared value of imported goods.
2. Enhancement of the value of imported goods without evidence.
3. Failure to disclose evidence to the importers.
4. Reliance on quotations or offers for sale to determine value.
5. Violation of principles of natural justice.
6. Acceptance of transaction value under Customs Valuation Rules, 1988.
Issue-wise Detailed Analysis:
1. Rejection of the declared value of imported goods:
The importers declared the value of Mulberry Raw Silk based on original invoices and contracts. The original authority rejected these declared values without providing any reasons and arbitrarily enhanced the value. The importers paid the enhanced value under protest and appealed to the Collector (Appeals), who set aside the original order and remanded the matter, directing the original authority to furnish all materials relied upon for enhancing the value.
2. Enhancement of the value of imported goods without evidence:
The Assistant Collector, upon remand, reiterated the same findings without discussing the points raised by the importers or considering the abundant documents and records. The original authority failed to furnish any material evidence required by the Commissioner (Appeals)'s order of remand. The enhancement was based on an undisclosed investigation and an order form from M/s. Jayanand (International) Bombay, which was not sufficient evidence to discharge the onus.
3. Failure to disclose evidence to the importers:
Despite the remand order, the department did not disclose any evidence for the enhancement of the transaction value. The Commissioner (Appeals) found that the lower authority did not possess any valid documents to substantiate the enhancement, making the enhancement arbitrary in nature. The importers had produced invoices and other documents supporting their declared value, which the lower authority failed to consider.
4. Reliance on quotations or offers for sale to determine value:
The original authority relied on an order form from M/s. Jayanand (International) Bombay, which was merely a quotation and not a transaction. The Commissioner (Appeals) noted that the order form could not be construed as a transaction, and the value indicated in the offer could not be treated as the transaction value under Valuation Rules, 1988. The lower authority's reliance on the order form was misleading and irrelevant to the present dispute.
5. Violation of principles of natural justice:
The department's failure to disclose evidence and the arbitrary enhancement of the value without valid documents constituted a violation of the principles of natural justice. The importers were not provided with the basis for the enhancement, and the department did not produce evidence of contemporaneous imports at higher prices.
6. Acceptance of transaction value under Customs Valuation Rules, 1988:
The Commissioner (Appeals) upheld the importers' contention that the declared value should be accepted in the absence of evidence to the contrary. The Commissioner relied on several case laws, including judgments from the Hon'ble Supreme Court, which established that the burden to prove under-valuation is on the department. The department must produce evidence of contemporaneous imports at higher prices to dispute the declared value. The Commissioner concluded that the invoice values produced by the importers should be accepted for assessment purposes, setting aside the lower authority's orders.
Conclusion:
The Tribunal found no infirmity or illegality in the Commissioner (Appeals)'s detailed and considered order. The department's grounds for appeal were based on misconceived and unsustainable arguments, lacking any supporting evidence. The Tribunal rejected the Revenue's appeals, affirming the acceptance of the transaction value declared by the importers. The order emphasized that mere quotations or offers for sale could not be the basis for enhancing the value, and the principles of natural justice must be upheld.
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1999 (3) TMI 663
Issues Involved:
1. Whether the petitioner (A3) could be held liable under Section 304-A IPC for the death of the patient.
2. Whether the other doctors (A1 and A2) involved in the operation were negligent and to what extent.
3. The legal standards required to establish criminal negligence under Section 304-A IPC.
4. The implications of the judgment on the medical profession and public perception.
Detailed Analysis:
Issue 1: Liability of Petitioner (A3) under Section 304-A IPC
The petitioner (A3) sought to quash the proceedings against him under Section 304-A IPC, arguing that he was not connected to the cause of death, which arose due to complications from spinal anesthesia administered by A1, the Anaesthetist. The court noted that Dr. Parthasarathy (A1) administered the anesthesia, and the cause of death was attributed to acute respiratory failure due to spinal anesthesia, as confirmed by medical opinions. The court concluded that the petitioner (A3) could not be charged with contributing to the patient's death, as there was no material evidence showing his negligence. Consequently, the proceedings against A3 were quashed.
Issue 2: Negligence of Other Doctors (A1 and A2)
The investigation revealed that Dr. Rajagopal (A2) and Dr. Prakash (A3) were responsible for the patient's medical treatment and preparation for surgery. The court observed that A1, the Anaesthetist, failed to check whether the patient could withstand the anesthesia, which led to the patient's death. The court found that while there was negligence on the part of all doctors involved, the degree of negligence varied. A1's negligence was directly linked to the cause of death, warranting the continuation of proceedings against him. However, A2's negligence, similar to A3's, did not amount to criminal negligence under Section 304-A IPC, leading to the quashing of proceedings against A2 as well.
Issue 3: Legal Standards for Criminal Negligence under Section 304-A IPC
The court emphasized that Section 304-A IPC requires the establishment of death caused by a rash or negligent act not amounting to culpable homicide. Criminal negligence necessitates a high degree of negligence, beyond mere carelessness or lack of care, which would be sufficient for civil liability. The court stated that the negligence must be such that it shows a disregard for life and safety, amounting to a crime against the State. The court found that A3's actions did not meet this high threshold of criminal negligence.
Issue 4: Implications on Medical Profession and Public Perception
The court acknowledged the fear among doctors regarding criminal prosecution, which could lead to reluctance in performing surgeries. It highlighted the importance of the medical profession's duty to humanity and the need for doctors to maintain the highest standards of care and skill. The court also noted that the public should not pursue prosecution against doctors in every case, as mutual trust is essential for effective medical care. The judgment aimed to balance the need for accountability with the need to support the medical profession in fulfilling its duties without undue fear of criminal liability.
Conclusion:
The court quashed the proceedings against A2 and A3, finding no sufficient evidence of criminal negligence. The trial against A1 was directed to continue, with the trial court instructed to independently evaluate the evidence presented. The judgment underscored the high standard required to establish criminal negligence under Section 304-A IPC and aimed to address the concerns of both the medical profession and the public regarding medical accountability and trust.
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1999 (3) TMI 662
Issues Involved:
1. Whether the Bar Council of India Training Rules, 1995, are ultra vires the rule-making power of the Bar Council of India under the Advocates Act, 1961.
2. Whether the impugned rules are arbitrary and unreasonable, violating Article 14 of the Constitution of India.
3. Whether the impugned rules apply retrospectively to individuals who obtained their law degrees prior to the rules coming into force.
4. What final order should be issued.
Issue-wise Detailed Analysis:
1. Ultra Vires Rule-Making Power:
The primary issue was whether the Bar Council of India (BCI) had the authority to frame the Bar Council of India Training Rules, 1995. The petitioners argued that the BCI lacked the power to impose pre-enrolment training and apprenticeship requirements. The court examined the statutory functions of the BCI under Section 7 of the Advocates Act, 1961, and concluded that these provisions did not authorize the BCI to prescribe such pre-conditions for enrolment. The court noted that Section 24(1)(d) of the Act, which previously allowed State Bar Councils to prescribe pre-enrolment training, was omitted in 1974. Consequently, the BCI could not derive its rule-making power from this provision. The court also held that Section 24(3)(d) was intended to make otherwise ineligible persons eligible for enrolment, not to impose additional restrictions on those already eligible under Section 24(1). Thus, the impugned rules were deemed ultra vires the rule-making power of the BCI.
2. Arbitrary and Unreasonable Rules:
The petitioners contended that even if the BCI had the authority to frame the impugned rules, they were arbitrary, unreasonable, and violated Article 14 of the Constitution. The court, having already found the rules ultra vires, did not find it necessary to address this issue in detail. However, it was implied that the rules, being beyond the statutory powers of the BCI, could not be justified on any grounds, including reasonableness.
3. Retrospective Application of Rules:
The court addressed whether the rules applied to individuals who obtained their law degrees before the rules came into force. The court clarified that the rules could not apply retrospectively to such individuals. The decision of the Punjab & Haryana High Court, which held that the rules were prospective and did not apply to a petitioner who obtained his law degree in 1981, was upheld. Consequently, the question of retrospective application became moot as the rules themselves were struck down.
4. Final Order:
The court allowed the writ petitions and struck down the impugned rules. The appeal by the Bar Council of Maharashtra & Goa was allowed, and the judgment of the Bombay High Court was set aside. The appeal by the BCI was dismissed. The court directed that the judgment would operate prospectively to avoid confusion and complications. It clarified that the judgment would not apply to those who had already completed their pre-enrolment training under the impugned rules. However, those applying for enrolment after the judgment would not have to undergo pre-enrolment training.
Additional Observations:
The court acknowledged the need for improving the standards of legal education and training for new entrants to the legal profession. It recommended that the BCI consider framing rules for in-practice training for newly enrolled advocates, which could be sustained under Section 49(1)(ah) of the Act. The court also suggested that appropriate statutory amendments be made to provide the BCI with the power to prescribe pre-enrolment training and apprenticeship.
Conclusion:
The Supreme Court struck down the Bar Council of India Training Rules, 1995, as ultra vires the rule-making power of the BCI. The judgment was to operate prospectively, ensuring that applicants who had already completed their pre-enrolment training would not be affected. The court recommended statutory amendments to empower the BCI to prescribe pre-enrolment training and suggested that the BCI consider in-practice training for newly enrolled advocates.
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1999 (3) TMI 661
The Supreme Court allowed the appeal in a case involving a dispute over payment for civil works. The appellant initially accepted a settlement amount but later claimed outstanding dues. The Court held that the matter should be referred to arbitration to determine the validity of the claim, setting aside the High Court's decision. The appeal was allowed with no costs.
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1999 (3) TMI 660
The High Court of Andhra Pradesh considered a case involving accounting practices and the inclusion of cash compensatory support in business profits. The Court directed a reference to be made to decide on the legality of the accounting system and the inclusion of cash compensatory support for business profit calculations.
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