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1975 (4) TMI 142
Issues:
1. Interpretation of Section 21(1)(a) and (h) of the Mysore Rent Control Act, 1961.
2. Reasonableness and bonafide requirement of premises by the landlord.
3. Comparative hardship between landlord and tenant.
4. Validity of notice terminating the tenancy.
5. Statutory tenancy and requirement of notice to quit.
Detailed Analysis:
1. The case involved the appellant, a tenant of suit premises in Hubli, whose tenancy was terminated by the landlord. The appellant resisted eviction under Section 21(1)(a) and (h) of the Mysore Rent Control Act, 1961. The Trial Court dismissed the application, but the District Judge allowed eviction. The High Court affirmed the decision, leading to the appeal.
2. The Trial Court found against the landlord on the bonafide requirement of premises and comparative hardship. It held that passing an eviction decree would cause greater hardship. Additionally, it deemed the notice invalid due to the nature of the lease. However, the District Judge reversed these findings, concluding in favor of the landlord. The High Court upheld this decision.
3. The appellant raised three points in support of the appeal, challenging the findings on the landlord's requirement, comparative hardship, and the validity of the notice. The respondent contended that no notice was required as the appellant was a statutory tenant.
4. The Court analyzed the lease agreement and the notice termination date. It found that the notice was invalid as it did not expire at the end of the tenancy month. The Court also clarified the monthly tenancy period based on the lease agreement's terms.
5. The Court rejected the argument that no notice was necessary for a statutory tenant. It emphasized the importance of a valid notice to quit for eviction. Citing relevant case law, the Court highlighted that a lease termination by efflux of time does not obviate the need for a notice to quit.
6. Ultimately, the Court allowed the appeal, setting aside the eviction decree. It concluded that the notice was invalid due to the incorrect termination date, and the appellant was not a statutory tenant. No costs were awarded in the circumstances of the case.
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1975 (4) TMI 141
Issues Involved:
1. Allegations of corrupt practices under Section 123(2), (3), and (3A) of the Representation of the People Act, 1951.
2. Technical objections regarding the affidavit and particulars in the election petition.
3. Admissibility of evidence, specifically tape recordings and transcripts.
4. Specific speeches made by the appellant and their compliance with Section 123.
5. Order for costs awarded by the High Court.
Detailed Analysis:
1. Allegations of Corrupt Practices:
The appellant was accused of committing corrupt practices as defined in Section 123(2), (3), and (3A) of the Representation of the People Act, 1951. The allegations included making speeches that induced voters to believe they would face divine displeasure if they voted for the rival candidate, Chagla, and promoting enmity between Muslims and Hindus based on religion.
2. Technical Objections:
The appellant's counsel argued that the allegations under Section 123(3) and 123(3A) were not supported by the required affidavit as per Section 83(1) of the Act. The Court noted that the High Court had recorded that the issue was given up by the appellant's counsel. Furthermore, the affidavit did not have any defect of form, and the objection based on the alleged want of particulars was not entertained as it was deemed to have been given up.
3. Admissibility of Evidence:
The evidence consisted of tape recordings, transcripts, shorthand notes, and witness statements. The High Court held that tape recordings were admissible as documents under Section 3 of the Evidence Act, provided the voice was identified, accuracy was proven, and relevance was established. The Court emphasized that tape recordings were reliable as they were prepared and preserved by an independent authority (the police), and their authenticity was not disputed by the appellant.
4. Specific Speeches:
- 27-2-1972 Speech: The appellant made statements implying that Chagla was not a true Muslim and urged voters to vote for him instead of Chagla. The High Court held this to be a violation of Section 123(3).
- 29-2-1972 Speech: The appellant threatened rebellion if Muslim personal law was amended and implied that Chagla supported such amendments. This was held to be a violation of Section 123(3A).
- 2-3-1972 Speech: The appellant attacked Chagla's faith and advocated for Muslim personal law, which was held to be a violation of Section 123(3) and 123(3A).
- 6-3-1972 Speech (Bara Imam Road): The appellant accused Chagla of playing with religious affairs and threatened rebellion against the government, violating Section 123(3) and 123(3A).
- 6-3-1972 Speech (Saifi Jubilee Street): The appellant attacked Chagla's family and religious practices, urging Muslims to unite against him. This was held to be a violation of Section 123(3).
- 6-3-1972 Speech (Chowki Mohalla Underia Street): The appellant attacked Chagla's religious faith and practices, urging voters to refrain from voting for him. This was held to be a violation of Section 123(3).
5. Order for Costs:
The High Court ordered the appellant to pay Rs. 12,000 to the petitioner and Rs. 3,000 to Chagla. The Supreme Court found the order for costs to be severe and set aside the Rs. 3,000 awarded to Chagla, reducing the costs awarded to the petitioner from Rs. 12,000 to Rs. 6,000. The appellant was also ordered to pay the costs of respondents 1 and 2 in the Supreme Court.
Conclusion:
The appeal was dismissed with modifications to the order for costs. The Supreme Court upheld the High Court's findings that the appellant had committed corrupt practices under Section 123(2), (3), and (3A) of the Representation of the People Act, 1951, through his speeches. The Court emphasized the importance of maintaining the spirit of secular democracy and preventing divisive appeals based on religion during elections.
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1975 (4) TMI 140
Issues: Attachment of bonus amounts under Section 60(1)(h) of the Civil Procedure Code (CPC) and determination of whether bonus constitutes wages exempt from attachment.
Analysis:
1. The case involves the attachment of bonus amounts due to the appellants by a decree holder. The appellant contended that the bonus amounts are not liable to attachment under Section 60(1)(h) of the CPC, which exempts wages of laborers from attachment. The court had to determine whether the bonus amounts qualified as wages under the law to be exempt from attachment.
2. The appellant argued that bonus payments are ex gratia and not part of regular wages, thus not subject to attachment. The court referred to precedents like A. Muniswamy v. T. Viswanatha and Ganapathia Pillai v. Swaminatha Pillai to establish that bonus could be considered part of wages under certain circumstances, especially if it is a method of payment conditional upon wages.
3. The court highlighted that the Payment of Bonus Act excludes bonus from the definition of wages for the Act's specific purposes but noted that bonus could still be considered wages under other laws, such as the Payment of Wages Act. The definition of wages in the Payment of Wages Act includes bonus as part of remuneration under certain conditions, indicating that bonus could be classified as wages.
4. Referring to the Supreme Court's interpretation in Purshottam v. V. B. Potdar, the court emphasized that bonus payments under awards or settlements could be deemed wages. The court noted that bonus, being an implied term of employment post the Payment of Bonus Act, could be considered remuneration and thus part of wages.
5. However, the court pointed out that the exemption from attachment under Section 60(1)(h) of the CPC applies only to laborers and domestic servants' wages. Therefore, to determine if the bonus amounts were exempt from attachment, it was crucial to establish whether the appellants qualified as laborers under the law, considering the nature of their work and skills required.
6. Consequently, the court set aside the lower appellate court's order and remanded the case to the executing court for fresh disposal. The parties were granted an opportunity to prove whether the appellants were laborers falling under Section 60(1)(h) of the CPC. The judgment allowed the appeal and directed each party to bear their respective costs.
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1975 (4) TMI 139
Issues Involved:
1. Whether the application filed on 1st April 1970 was within the prescribed period under Section 3 of the Maharashtra (Vidarbha Region) Agricultural Debtor's Relief Act, 1969.
2. Whether Section 5 of the Limitation Act applies to the proceedings under Section 3 of the Act.
Detailed Analysis:
1. Whether the application filed on 1st April 1970 was within the prescribed period under Section 3 of the Maharashtra (Vidarbha Region) Agricultural Debtor's Relief Act, 1969.
The core issue in this case was the interpretation of the phrase "before the 1st day of April 1970" as mentioned in Section 3 of the Act. The applicant-creditor filed an application on 1st April 1970, which was contested by the debtors on the grounds that it was barred by limitation since it was not filed "before" the specified date.
The court analyzed the legislative intent and the context in which the word "before" was used. It was noted that the original date specified was 1st October 1969, which was later extended to 1st April 1970 by an ordinance. The court emphasized that the legislation aimed to provide relief to agricultural debtors and should be interpreted in a manner that preserves the right to legal remedy rather than defeating it.
The court referred to the Supreme Court's observations in Sheikh Gulfan v. Sanat Kumar, which highlighted that words should be construed in the context of the statute's subject matter and objectives. The court concluded that the word "before" in Section 3 should be understood as "up to," meaning that an application could be filed on or before 1st April 1970.
The court also examined the Statement of Objects and Reasons appended to the original Bill and the amending Ordinance, which indicated that the intention was to extend the time for filing applications up to 1st April 1970. Therefore, it was held that the application filed on 1st April 1970 was within the prescribed period.
2. Whether Section 5 of the Limitation Act applies to the proceedings under Section 3 of the Act.
The debtors argued that the provisions of Section 5 of the Limitation Act, which allows for the condonation of delay, did not apply to the proceedings under Section 3 of the Act. They contended that the Act prescribed a specific date for filing applications, and any application filed after that date would result in the debt being extinguished as per Section 13 of the Act.
The court noted that since it had already concluded that the application filed on 1st April 1970 was within the prescribed period, it was unnecessary to decide whether Section 5 of the Limitation Act applied to these proceedings. The court's interpretation of the word "before" as "up to" rendered the question of condonation of delay moot.
Conclusion:
The court dismissed the revision application filed by the debtors, holding that the application filed on 1st April 1970 was within the prescribed period under Section 3 of the Act. The court did not find it necessary to address the applicability of Section 5 of the Limitation Act, as the application was deemed timely filed. The revision application was dismissed with no order as to costs.
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1975 (4) TMI 138
Issues Involved:
1. Constitutional validity of Section 29 of the State Financial Corporation Act, 1951.
2. Whether the Financial Corporation can resort to Section 29 after initiating proceedings under Section 31.
3. Whether the action taken under Section 29 violates principles of natural justice.
Detailed Analysis:
1. Constitutional Validity of Section 29 of the State Financial Corporation Act, 1951:
The petitioner contended that Section 29 of the Act is violative of Article 14 of the Constitution of India. The principal grounds of attack were that the special procedure under Section 29 is more drastic and prejudicial compared to Section 31, and there are no guidelines provided as to when the procedure under Section 29 can be resorted to, thereby permitting discrimination among industrial concerns.
The court analyzed the provisions of Sections 29 and 31 of the Act. It noted that Section 29 allows the Financial Corporation to take over the management of the defaulting industrial concern and sell the property without court intervention, whereas Section 31 involves court proceedings. The court held that the mere existence of two remedies, one more drastic than the other, does not by itself amount to an infringement of equality guaranteed under Article 14.
The court referred to several Supreme Court judgments, including State of West Bengal v. Anwar Ali Sarkar, Kathi Raning v. State of Saurashtra, Kedar Nath Bajoria v. State of West Bengal, Ram Krishna Dalmia v. Justice Tendolkar, and M. Chhagganlal v. Greater Bombay Municipality. It concluded that a statute providing for a more drastic procedure does not automatically violate Article 14 if there are guidelines or a clear legislative policy. The court found that the necessary guidance for the Financial Corporation can be inferred from the preamble, surrounding circumstances, and the provisions of the Act itself.
The court held that Section 29 is not violative of Article 14, as the statute provides sufficient guidance and the Financial Corporation is a responsible body expected to act in a realistic manner, keeping in view the interests of the Corporation, industry, commerce, and the general public.
2. Whether the Financial Corporation Can Resort to Section 29 After Initiating Proceedings Under Section 31:
The petitioner argued that the Financial Corporation, having initiated proceedings under Section 31, cannot have recourse to Section 29. The court held that since Section 29 is a valid provision of law, the Corporation has the choice to resort to either of the procedures. The court noted that the Corporation withdrew its application under Section 31 and proceeded under Section 29, which is not illegal. The court emphasized that the petitioner has no right to dictate the procedure the Corporation should follow, as long as the Corporation acts within the bounds of the law and does not act arbitrarily or maliciously.
3. Whether the Action Taken Under Section 29 Violates Principles of Natural Justice:
The petitioner contended that the action of the Financial Corporation under Section 29 violated principles of natural justice. The court held that the petitioner, who stepped into the shoes of the original borrower, was bound by the terms of the agreement, which included the powers and conditions under the State Financial Corporation Act. The court found that the petitioner was aware of the likelihood of the Corporation proceeding under Section 29, as indicated by the correspondence and advertisements calling for tenders.
The court referred to A.K. Kraipak v. Union of India and held that the concept of natural justice depends on the facts and circumstances of each case. The court concluded that the petitioner had knowledge of the proposed action and that the Corporation acted in good faith and did not act arbitrarily.
Conclusion:
The writ petition was dismissed. The court held that Section 29 of the State Financial Corporation Act, 1951, is not violative of Article 14 of the Constitution. The Financial Corporation's action under Section 29 was legal and valid, and it did not violate principles of natural justice. The petitioner's contention that the Corporation acted arbitrarily was rejected. The court awarded costs to the respondents.
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1975 (4) TMI 137
Issues Involved:
1. Compliance with statutory provisions and representation of classes.
2. Legal objections raised by the Central Government.
3. Jurisdictional issues related to the registered offices of transferor and transferee companies.
4. Determination of whether the transferor-company is a "banking company" under the Banking Regulation Act, 1949.
5. Reasonableness and fairness of the scheme from a business perspective.
6. Exchange ratio of shares and cash payment options for shareholders.
Detailed Analysis:
1. Compliance with Statutory Provisions and Representation of Classes:
The court examined whether the statutory provisions under sections 391 and 394 of the Companies Act, 1956, were complied with. It was found that the classes were fairly represented by those who attended the meeting, and the statutory majority acted bona fide. The scheme was deemed to be one that a reasonable businessman would approve.
2. Legal Objections Raised by the Central Government:
The Central Government contended that the scheme would affect the rights of the members and creditors of the transferee-company and involve a reorganization of its share capital. The court noted that the transferee-company must also seek approval under sections 391 and 394 of the Act from the appropriate court. The transferee-company had already initiated proceedings in the Bombay High Court. Therefore, the court held that the objection raised by the Central Government was unsustainable, as the sanction by this court would not make the scheme operative until the conditions laid down in the scheme were satisfied.
3. Jurisdictional Issues Related to the Registered Offices:
The court addressed the practical difficulties when the registered offices of the transferor and transferee companies are within different jurisdictions. It was observed that the High Court first moved for sanction would make a judicial order conditional upon the approval by the shareholders and creditors of the other company and the sanction by the High Court within whose jurisdiction the registered office of such other company is situated. The court decided to reserve the giving of directions under section 394(1) until after the proceedings initiated by the transferee-company in the Bombay High Court had successfully terminated.
4. Determination of Whether the Transferor-Company is a "Banking Company":
The court examined whether the transferor-company was a "banking company" under the Banking Regulation Act, 1949, requiring a certificate from the Reserve Bank under section 44B. It was found that the transferor-company had ceased to be a banking company since its entire undertaking was transferred to a new bank under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The court concluded that the transferor-company was not carrying on any business, much less banking business, and section 44B was not attracted.
5. Reasonableness and Fairness of the Scheme from a Business Perspective:
The court emphasized that due weight must be given to the fact that the scheme was approved by a statutory majority of members. It was noted that the court must scrutinize the scheme to ensure it is fair, reasonable, and workable. The court found that the scheme was reasonable and beneficial to the shareholders and the transferee-company, as it provided a better choice than winding up the company. The scheme was also approved by the members of the transferee-company and was deemed to facilitate the expansion program of the transferee-company.
6. Exchange Ratio of Shares and Cash Payment Options for Shareholders:
The ratio of exchange of shares and cash payment options was scrutinized. The court found that the exchange ratio was reasonable and fair, as the market value of the shares and debentures of the transferee-company was more than the market value of the shares of the transferor-company. The court was satisfied that the cash option figure was determined fairly, considering the break-up value of the shares and the potential tax implications. The court emphasized the need for sufficient material on record regarding the method and basis of valuation, especially in cases of serious contest.
Conclusion:
The court concluded that no ground existed to withhold sanction to the scheme of amalgamation. The transferor-company was directed to file a certified copy of the order with the Registrar of Companies, Gujarat, and move the court for suitable orders making provision for matters specified in section 394(1) within fifteen days of filing with the Registrar of Companies, Maharashtra. Liberty was reserved for the parties to apply for suitable orders and directions as contemplated by section 392 of the Act. The petitions were to stand over till the court was moved by a judge's summons or till further orders.
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1975 (4) TMI 136
Issues Involved:
1. Authority of a pleader to compromise a suit without the client's express consent.
2. Distinction between the powers of an advocate and a pleader.
3. Validity of a compromise decree when the client is absent but represented by an agent.
4. Implications of the Advocates Act, 1961 on the powers of pleaders and advocates.
5. Judicial precedents on the implied authority of legal practitioners to settle suits.
Issue-wise Detailed Analysis:
1. Authority of a Pleader to Compromise a Suit Without the Client's Express Consent:
The central issue revolves around whether a pleader has the implied power to compromise a suit on behalf of a client without explicit consent. The judgment emphasizes that a pleader, like an advocate, has the inherent authority to act in the best interest of the client, including compromising a suit, unless expressly restricted by the client. The court stated, "If a suitor countermands his pleader's authority to enter into a compromise or withholds, by express recital in the vakalat, the power to compromise the legal proceeding, the pleader cannot go against such advice and bind the principal, his client."
2. Distinction Between the Powers of an Advocate and a Pleader:
The judgment clarifies that there is no significant distinction between the powers of an advocate and a pleader in terms of acting on behalf of their clients. The court noted, "The broad conclusion, having due regard to the perspective we have set out right at the beginning, is that lawyers, be they Advocates, vakils, or pleaders, stand on the same footing in regard to their power to act on behalf of their clients." The court emphasized the egalitarian ethos injected by the Advocates Act, 1961, which promotes parity of powers between pleaders and advocates.
3. Validity of a Compromise Decree When the Client is Absent but Represented by an Agent:
The court examined the validity of a compromise decree when the client was absent but represented by an agent who consented to the compromise. The court found that the pleader acted with the knowledge and encouragement of the client. The court stated, "On the facts of the present case we have little doubt that the pleader has acted substantially with the knowledge of and encouraged by his client."
4. Implications of the Advocates Act, 1961 on the Powers of Pleaders and Advocates:
The court discussed the impact of the Advocates Act, 1961, which unified the legal profession in India and allowed various categories of legal practitioners to be enrolled as advocates. The court noted, "National integration at the lawyer's level was statutorily achieved by the Advocates Act, 1961 whereby the Indian Bar, with a classless orientation, came into existence permitting enrollment of various categories of legal practitioners like vakils and pleaders." The court emphasized that pleaders who did not elect to be enrolled as advocates continue to enjoy the same rights as they had before the Act came into force.
5. Judicial Precedents on the Implied Authority of Legal Practitioners to Settle Suits:
The judgment reviewed various judicial precedents on the implied authority of legal practitioners to settle suits. The court cited several cases, including Sourindra v. Heramba and Sourendra Nath v. Tarubala Dasi, to support the position that legal practitioners, whether advocates or pleaders, have the implied authority to compromise suits in the best interest of their clients. The court concluded, "The implied authority of counsel is not an appendage of office, a dignity added by the Courts to the status of barrister or advocate at law. It is implied in the interests of the client, to give the fullest beneficial effect to his employment of the advocate."
Conclusion:
The appeal was dismissed, with the court affirming that pleaders have the implied authority to compromise suits in the best interest of their clients, subject to acting in good faith and for the benefit of the client. The court emphasized the need for legal practitioners to consult their clients whenever possible and to act prudently. The court also highlighted the unification of the legal profession under the Advocates Act, 1961, which promotes equality among various categories of legal practitioners. The judgment concluded with the directive that parties bear their own costs in the court.
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1975 (4) TMI 135
Issues Involved:
1. Whether the assessee-company is liable to pay additional super-tax under Section 23A of the Income-tax Act, 1922.
2. The method of apportioning dividends between industrial and non-industrial profits.
3. The applicability of the statutory percentage to the profits of the two segments.
4. The scope and interpretation of Explanation 2 to Section 23A.
5. The extent of the company's liability for additional super-tax on undistributed profits.
Detailed Analysis:
1. Liability to Pay Additional Super-tax:
The primary issue was whether the assessee-company was liable to pay additional super-tax under Section 23A of the Income-tax Act, 1922. The company had a composite business involving both industrial and non-industrial activities. The Income-tax Officer had levied additional super-tax on the undistributed balance of the total income, arguing that the company had not distributed the statutory percentage of its profits as dividends. The Tribunal and the High Court had held that the company was not liable to pay additional super-tax on its industrial profits but was liable on its non-industrial profits.
2. Method of Apportioning Dividends:
The company contended that it had declared dividends equally from industrial and non-industrial profits. However, the Income-tax Officer apportioned the dividends in the same ratio as the profits of the two segments bore to the total profits. The Tribunal rejected both the company's and the Department's methods, eventually holding that the company must be deemed to have distributed dividends equal to 45% of its industrial profits. The Supreme Court held that the language of Explanation 2 required dividends to be "similarly apportioned" in the ratio of the respective profits of the two segments.
3. Applicability of Statutory Percentage:
The statutory percentage for industrial profits was 45%, and for non-industrial profits, it was 60%. The Supreme Court clarified that these percentages must be applied separately to the profits of the two segments as if those profits were the total income of the company in relation to each segment. The company's total distributable profits were Rs. 17,41,814, with industrial profits at Rs. 3,36,504 and non-industrial profits at Rs. 14,05,310. The company should have distributed Rs. 9,94,612 as dividends but only distributed Rs. 4,20,640.
4. Scope and Interpretation of Explanation 2:
Explanation 2 to Section 23A required that the statutory percentages be applied separately to the profits of the two segments and that dividends and taxes be "similarly apportioned." The Supreme Court rejected the respondent's contention that the company could freely apportion dividends. The Court emphasized that the apportionment must follow the ratio of the respective profits of the two segments.
5. Extent of Liability for Additional Super-tax:
The Supreme Court addressed whether the company was liable to pay additional super-tax on the undistributed balance of non-industrial profits only or on the entire undistributed balance of its distributable profits. The Court held that the additional super-tax must be levied on the entire undistributed balance of the net income of the company. The fiction created by Explanation 2 was limited to the purposes of determining the statutory percentage and did not extend to the imposition of the penalty.
The Supreme Court concluded that the High Court and the Tribunal erred in their interpretation. The company was liable to pay additional super-tax on the entire undistributed balance of its distributable profits. The appeal was allowed, and the order of the High Court was set aside.
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1975 (4) TMI 134
Issues:
1. Disputed questions of fact and limitation in a writ petition.
2. Condonation of delay in filing an appeal.
3. Merits of the controversy regarding possession of land and compensation.
4. Validity of a mandamus in the case.
5. Rights of the appellant under Section 299(1) of the Government of India Act, 1935.
Analysis:
1. The case involved disputed questions of fact and a dispute regarding limitation in a writ petition filed under Clause 10 of the Letters Patent. The appellant sought compensation for land acquired by the Punjab Government in 1935. The Collector's order stated that no acquisition order was available, and the appellant had been requesting compensation until 1971, leading to the writ petition. The Single Judge dismissed the petition citing disputed facts and suggested a regular suit for redress.
2. A preliminary objection was raised regarding the delay in filing the appeal. The appellant filed the appeal one day late due to a mistaken impression of the law by the counsel. The Court allowed the appeal, considering the delay caused by a bona fide mistake and condoned the delay, treating the appeal as filed within the limitation period.
3. The merits of the controversy revolved around possession of the land and compensation. The State admitted the land belonged to the appellant, was acquired, and no compensation was paid. The Court found no disputed facts requiring examination and held that no limitation applied to the writ petition seeking a mandamus to compel the authorities to perform their duty.
4. The Court emphasized the appellant's right to a mandamus, citing British jurisprudence that no executive action can deprive a citizen of property without legal support. The Court affirmed the appellant's entitlement to compensation or restoration of possession based on the law.
5. The appellant's rights under Section 299(1) of the Government of India Act, 1935, were highlighted, stating that no person shall be deprived of property except by authority of law. The Court directed the authorities to determine and pay compensation or restore possession of the land to the appellant, based on the lawful acquisition in 1935 or through fresh acquisition proceedings under the Land Acquisition Act, 1894.
In conclusion, the Court allowed the appeal, set aside the Single Judge's order, granted the writ petition, and issued a mandamus to determine and pay compensation or restore possession of the land to the appellant, emphasizing the appellant's legal rights and entitlement to compensation or possession based on the law.
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1975 (4) TMI 133
Issues Involved:
1. Whether a flat in a tenant co-partnership housing society under the Maharashtra Cooperative Societies Act, 1960, is liable to attachment and sale in execution of a decree against a member.
2. The applicability of Section 60 of the Civil Procedure Code to the attachment of such property.
3. The interpretation of relevant provisions of the Maharashtra Cooperative Societies Act, 1960, Rules, and Bye-laws of the Society concerning the transferability and attachability of the property.
Detailed Analysis:
1. Liability of Flat to Attachment and Sale:
The primary issue is whether a flat in a tenant co-partnership housing society under the Maharashtra Cooperative Societies Act, 1960, can be attached and sold in execution of a decree against a member. The appellant, a decree-holder, obtained a money decree against the respondent and attached flat No. 9 of Paresh Cooperative Housing Society Limited. The judgment-debtor's brother challenged the execution, claiming the flat belonged to him and the judgment-debtor's wife. However, the chamber summons was dismissed, and the judgment-debtor later filed a suit to set aside the decree, which is pending. The flat was auctioned but not yet confirmed. The judgment-debtor then filed another chamber summons, arguing that the flat was not liable to attachment and sale under Section 60 of the Civil Procedure Code. The City Civil Court dismissed the chamber summons, but the High Court allowed it, setting aside the attachment and sale. The appeal to the Supreme Court questions this decision.
2. Applicability of Section 60, Civil Procedure Code:
The respondent contended that under Section 60 of the Civil Procedure Code, he had no saleable interest in the flat, making it non-attachable. However, the Court noted that Section 60 reaches a benami holding, and the respondent's right to occupy the flat is considered his property. The Court emphasized that Section 60 is not exhaustive and includes any saleable property, whether held in the name of the judgment-debtor or by another person on his behalf. Thus, the right to occupy the flat is attachable and saleable.
3. Interpretation of Relevant Provisions:
The Court examined the Maharashtra Cooperative Societies Act, 1960, the Rules, and the Bye-laws of the Society. Section 29(2) of the Act allows the transfer of a member's share or interest in the property, subject to certain conditions. Section 31 prohibits the attachment or sale of a member's share or interest in the capital of a society but does not extend to the right to occupy a flat. Section 47(1)(b) recognizes the member's interest in the immovable property of the society. The Bye-laws also permit the transfer of shares and the right to occupy the flat, provided the transferee becomes a member of the society. The Court concluded that there is no absolute prohibition against transferring the right to occupy the flat or the shares, and the attachment and sale in execution of the decree are valid under the law.
Conclusion:
The Supreme Court held that the right to occupy a flat in a tenant co-partnership housing society is a species of property that is attachable and saleable in execution of a decree. The judgment of the High Court was set aside, and the judgment-debtor's chamber summons dated March 28, 1972, was dismissed. The appeal was allowed, with no order as to costs except that the court fees would be payable by the appellant. The Court appreciated the assistance rendered by the amicus curiae and the counsel for the appellant.
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1975 (4) TMI 132
Issues Involved:
1. Entitlement to bail under proviso (a) to section 167(2) of the New Code.
2. Applicability of the Old Code vs. New Code during pending investigations.
Summary:
1. Entitlement to Bail under Proviso (a) to Section 167(2) of the New Code:
The appellants were arrested in connection with offences u/s 147, 148, 307, 302, and 149 of the Indian Penal Code. They sought bail based on proviso (a) to section 167(2) of the Code of Criminal Procedure, 1973 (New Code), which mandates release on bail if the investigation is not completed within 60 days. The Sessions Judge and the Orissa High Court rejected their bail applications. The Supreme Court held that the appellants could not claim bail under the New Code as the investigation commenced before the New Code came into force.
2. Applicability of the Old Code vs. New Code during Pending Investigations:
The investigation began before the New Code's enforcement on April 1, 1974. Section 484(2)(a) of the New Code states that any investigation pending before its commencement shall be continued under the Old Code. The Supreme Court noted that under the Old Code, the Magistrate could remand an accused to custody during the investigation u/s 344, not u/s 167(2). The Court affirmed that the appellants' investigation should proceed under the Old Code, and they could not invoke proviso (a) to section 167(2) of the New Code for bail.
Conclusion:
The Supreme Court dismissed the appeal, holding that the appellants were not entitled to bail under the New Code's proviso (a) to section 167(2) since the investigation was governed by the Old Code.
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1975 (4) TMI 131
Issues Involved:
1. Whether there is any material for the Tribunal's finding that the appellants were being assessed on a cash basis in the prior years.
2. Whether the sum of Rs. 2,26,850 could be assessed for the assessment year 1942-43.
Issue-wise Detailed Analysis:
1. Material for Tribunal's Finding on Cash Basis Assessment:
The High Court unanimously held that there was no material for the Tribunal's finding that the firm was being assessed on a cash basis in previous years. The Tribunal had found inconsistencies in the assessments for 1942-43 and 1943-44, as the sum of Rs. 2,20,702 was assessed for 1943-44 despite not being drawn by the firm. The High Court, upon reviewing the matter, concluded that the firm was not assessed on a cash basis previously. The firm argued that the Tribunal's finding was a fact and should not have been interfered with by the High Court. However, the High Court determined that the question was one of law, as it related to the existence of material for the finding, and thus decided against the assessee. The High Court found no separate books of accounts maintained by the firm other than those of the company, where the remuneration and commission were recorded. The mere presence of cash credits and debits did not imply a cash basis of accounting. The High Court's conclusion on this issue was upheld.
2. Assessment of Rs. 2,26,850 for the Year 1942-43:
The firm earned a commission of Rs. 2,26,850 as managing agents of the company, which was debited as revenue expenditure in the company's books and credited to the firm's account. Despite the firm not drawing the amount and the directors passing a resolution to keep it in suspense, the High Court held that the income had accrued to the firm. The firm's argument that the income did not accrue due to the pending dispute and the suspension of payment was rejected. The High Court emphasized that the income had accrued as it was treated as a disbursement and appropriated to the firm's dues. The resolution of the directors did not alter the fact that the income had accrued. The High Court also referred to sections 10 and 12 of the Income-tax Act, which make profits and gains of business liable to tax, and section 13, which mandates computation based on the method of accounting regularly employed by the assessee. The High Court found evidence that the assessee followed the mercantile system of accounting, and the Income-tax Officer had the authority to compute profits accordingly.
Additional Cases Referenced:
- The case of St. Lucia Usines and Estates Company, Ltd. was distinguished as it related to the meaning of "income" under a different ordinance.
- Dewar v. Commissioners of Inland Revenue was distinguished as it dealt with interest on a legacy under the English Income Tax Act.
- Commissioner of Taxes v. The Melbourne Trust, Limited was distinguished as it concerned the timing of profit realization under a different statute.
Final Judgment:
The High Court accepted the view that the commission accrued on the same date as the profits of the company, rejecting the argument that the commission was merely a right to receive. The High Court did not address whether the managing agency was a business, noting that previous cases assumed it was so. The appeals were allowed, and the respondent was ordered to pay the costs of the Commissioner both in the Supreme Court and the High Court.
Conclusion:
The Supreme Court upheld the High Court's findings, allowing the appeals and confirming that the firm was not assessed on a cash basis in prior years and that the sum of Rs. 2,26,850 had accrued to the firm for the assessment year 1942-43.
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1975 (4) TMI 130
Whether the respondent is liable to pay enhanced fee brought about by amendment of the rules on April 25, 1964?
Held that:- The contention that the enhanced levy of licence fee cannot operate as from April 1, 1964 is to be negatived.
A fair reading of the rule giving full effect to the words used in Rule XXVI of the Excise rules and the explanation added to Rule IV (of the Foreign Liquor Rules already extracted) leave us in no doubt that the balance of stocks envisioned by the rules and subjected to enhancement or reduction of duty is such surplus stock as is held immediately before the expiry of the previous license. So construed, in this case the quantity held over on March 31, 1964 becomes liable to enhancement of license fee on April 1, 1964 and that is precisely what the Stats has claimed.
For, otherwise, some persons who by accident have huge stocks left over will not have to pay the enhanced rate of licence fee while others with 'virgin' licences for that year and begin with no stock-on-hand have to pay at a higher rate. Again, if only the respondent had surrendered his surplus stocks on 31-3-1964, as ordinarily he would have had to, had he not been permitted to retain that quantity in view of his getting a fresh licence for the same premises, he would have had to pay the enhanced rate for such left-over stock. Thus(the respondent) had to pay the higher fee on the balance of stock as on April 1, 1964. The High Court erred in its interpretation of the rules as applicable to the present situation. Appeal allowed
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1975 (4) TMI 129
Issues Involved:
1. Validity of the deletion of packing materials from the sales tax registration certificate.
2. Adequacy of the opportunity provided to the petitioner to contest the deletion.
3. Interpretation of section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi.
4. Relevance of instructions issued by the Commissioner of Sales Tax to the assessing authorities.
Issue-wise Detailed Analysis:
1. Validity of the Deletion of Packing Materials from the Sales Tax Registration Certificate:
The petitioner sought to quash the order of the Assistant Sales Tax Officer, which deleted certain packing materials from the registration certificate issued under section 7 of the Bengal Finance (Sales Tax) Act, 1941. The petitioner argued that these materials were essential for the packing and transportation of their fragile crockery products, and their cost was included in the manufacturing expenses and final sale price. The court noted that the registration certificate initially included packing materials, nails, and packing cases, which were added on 18th January 1962. However, the Assistant Sales Tax Officer's order did not provide reasons for the deletion, and the show cause notice only stated that these items were erroneously specified and were neither raw materials nor intended for resale. The court found that the deletion did not consider the crucial part of section 5(2)(a)(ii), which includes "containers or other materials for the packing of goods."
2. Adequacy of the Opportunity Provided to the Petitioner to Contest the Deletion:
The petitioner contended that they were not given a real opportunity to show cause against the deletion. The show cause notice and the subsequent deletion order were issued on the same date, and the petitioner's accountant received the notice while at the office for another matter. The court examined the cyclostyled forms of the show cause notice and deletion order, noting that the content of the forms contradicted the respondents' claim that the petitioner was given sufficient opportunity to present their case. The court rejected the respondents' assertion that the petitioner had appeared and made submissions, as evidenced by the identical language used in the forms, which indicated a lack of genuine consideration of the petitioner's objections.
3. Interpretation of Section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941:
The court analyzed the relevant provisions of the Act and the Delhi Rules framed thereunder. Section 5(2)(a)(ii) allows deductions for sales to a registered dealer of goods intended for resale or use as raw materials in manufacturing, including "containers and other materials for the packing of goods." The court noted that the registration certificate should specify the class or classes of goods for these purposes. The court agreed with the observations made in a previous case (Dabur (Dr. S.K. Burman) Pvt. Ltd. v. Commercial Tax Officer) that packing materials form an independent category necessary for the sale of manufactured goods. The court found that the deletion of packing materials from the registration certificate was inconsistent with the statutory provisions and the established practice of including packing costs in the manufacturing expenses.
4. Relevance of Instructions Issued by the Commissioner of Sales Tax:
The petitioner argued that the deletion was made pursuant to a policy decision and instructions issued by the Commissioner of Sales Tax, which interfered with the quasi-judicial functions of the assessing authorities. The court did not delve into this aspect, as the primary issue was the lack of a proper hearing and consideration of the petitioner's objections. However, the court acknowledged the petitioner's contention that such instructions could potentially undermine the independent exercise of quasi-judicial functions by the assessing authorities.
Conclusion:
The court quashed the show cause notice and the order of cancellation, directing that a fresh finding be given after issuing a new show cause notice, if necessary, and providing the petitioner with an adequate opportunity to present their case. The writ petition was accepted, and the petitioner was awarded costs. The judgment emphasized the need for proper procedural fairness and adherence to statutory provisions in the assessment and registration processes under the sales tax law.
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1975 (4) TMI 128
The High Court of Allahabad ruled that razors are not considered knives under Notification No. ST-911/X dated 31st March, 1956, and therefore their turnover is not tax exempt. The court based its decision on the distinction in common usage and commercial sense between knives and razors. The Judge (Revisions) had accepted the assessee's claim, but the High Court disagreed. No costs were awarded as the assessee did not appear in court.
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1975 (4) TMI 127
Issues:
1. Interpretation of item 70(a) of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959.
2. Whether the import of liquor from Sikkim falls under item 70(a) or item 70(b) of the Act.
3. Application of the treaty between the President of India and His Highness the Maharaja of Sikkim in determining the tax rate.
4. Whether the import of liquor from Sikkim is governed by the Indian Tariff Act or the Customs Act.
Analysis:
1. The judgment deals with the interpretation of item 70(a) of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. It specifies that for an import to fall under this item, three conditions must be cumulatively satisfied: the imported goods must be foreign liquor, imported from foreign countries, and dealt with under the Indian Tariff Act or other relevant laws.
2. The court analyzed whether the import of liquor from Sikkim by the petitioner met the criteria of item 70(a) or should be categorized under item 70(b) of the Act. It was established that the liquor imported from Sikkim was classified as Indian-made foreign liquor by the Sikkimese Government, and the petitioner had the necessary permits for import. The court concluded that the import did not meet the conditions of item 70(a) and should be taxed at the rate specified under item 70(b).
3. The judgment considered the application of the treaty between the President of India and His Highness the Maharaja of Sikkim in determining the tax rate for the imported liquor. The treaty exempted goods of Sikkimese origin from import duties when brought into India from Sikkim, supporting the argument that the import should not be taxed at the higher rate applicable to foreign liquors under item 70(a).
4. Lastly, the court examined whether the import of liquor from Sikkim was governed by the Indian Tariff Act or the Customs Act. It was noted that the permit granted by the Collector of Madras was under the Tamil Nadu Prohibition Act, not the Indian Tariff Act or the Customs Act. The court emphasized that the absence of a requirement for permits under those Acts indicated that the import did not fall under item 70(a) of the Act, leading to the decision to set aside the levy at the higher tax rate.
This detailed analysis of the judgment provides insights into the legal reasoning behind the decision and the considerations taken into account by the court in resolving the issues raised in the case.
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1975 (4) TMI 126
Issues:
1. Right of the assessee to claim exemption on the turnover of medicinal preparations containing alcohol under the Tamil Nadu General Sales Tax Act, 1959.
2. Claim of exclusion from taxable turnover of the sales tax paid in Maharashtra State on the purchase of tractors.
Analysis:
1. The first issue pertains to the right of the assessee to claim exemption on a turnover of Rs. 45,325.77 related to the sale of medicinal preparations containing alcohol under section 8 read with item 3 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959. The Appellate Assistant Commissioner initially rejected a portion of the claimed exemption due to lack of proof of excise duty payment on the specific sum. However, the Tribunal allowed the exemption after the assessee provided evidence of excise duty payment under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. The High Court, citing previous judgments, held that goods not excise duty paid in the state are not exempt under section 8, leading to the revision petition being allowed in favor of the revenue.
2. The second issue concerns the exclusion of the sales tax paid by the assessee in Maharashtra State on the purchase of tractors from the taxable turnover. The assessee sold tractors in Tamil Nadu after purchasing them in Maharashtra, adhering to the Price Control Order set by the Government of India. The assessing authority sought to include the sales tax paid to Maharashtra in the taxable turnover, but the Tribunal disagreed. The High Court upheld the Tribunal's decision, emphasizing that the sales tax was separately shown and not part of the sale price fixed under the Price Control Order. The Court highlighted that the dealer complied with the Order and charged the fixed price, indicating no intention to include the sales tax in the price of the tractors. Consequently, the revision was dismissed concerning this issue.
In conclusion, the High Court partly allowed the revision petition, setting aside the Tribunal's decision on the turnover related to medicinal preparations but confirming it on other aspects. The Court dismissed the revision in terms of the exclusion of sales tax paid in Maharashtra from the taxable turnover.
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1975 (4) TMI 125
Issues:
- Interpretation of exemption under section 8 of the Tamil Nadu General Sales Tax Act, 1959.
- Applicability of excise duty payment under different acts for claiming exemption.
- Consideration of countervailing duty under section 18-A of the Madras Prohibition Act, 1937 for exemption eligibility.
Interpretation of Exemption under Section 8:
The case involved disputes regarding the exemption claimed by a company under item 3 of Schedule III of the Act, which exempts goods from sales tax if duty is levied under the Madras Prohibition Act, 1937. The assessing officer rejected the claim citing non-payment of excise duty in Tamil Nadu. The Appellate Assistant Commissioner ruled that excise duty was paid on the entire quantity of goods, but the payment location was crucial. The Tribunal, invoking the General Clauses Act, held the payment in Calcutta was deemed as payment under the Madras Prohibition Act. However, the High Court disagreed, citing precedent (Orient Pharma Private Ltd. v. Government of Tamil Nadu) that duty under a different act does not warrant exemption under the Sales Tax Act.
Applicability of Excise Duty Payment for Exemption:
The High Court emphasized that duty payment under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 in Calcutta did not equate to payment under the Madras Prohibition Act for exemption eligibility. The respondents' claim of duty payment in West Bengal was deemed insufficient to support exemption under section 8 of the Act. The Court reiterated that duty payment location and the specific act under which duty is paid are crucial factors for exemption under the Sales Tax Act.
Consideration of Countervailing Duty under Section 18-A:
The respondents argued that countervailing duty under section 18-A of the Madras Prohibition Act should entitle them to exemption, even if not levied. However, the Court clarified that for countervailing duty to be relevant, a notification specifying the duty amount must be issued by the State Government. Since no such notification was presented, the Court ruled that the absence of a legal levy precluded the respondents from claiming exemption based on countervailing duty.
In conclusion, the High Court set aside the Tribunal's order, allowing the tax revision cases in favor of the State. The judgment highlighted the importance of duty payment location, the specific act under which duty is paid, and the necessity of legal levies for claiming exemptions under the Sales Tax Act.
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1975 (4) TMI 124
Issues Involved:
1. Exemption of goods from sales tax under Section 8 read with Item 3 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959.
2. Applicability of Section 55 of the Sales Tax Act for rectification of assessment orders.
3. Interpretation of Section 8 of the General Clauses Act, 1897, in relation to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, and the Madras Prohibition Act, 1937.
Detailed Analysis:
1. Exemption of Goods from Sales Tax:
The petitioners, manufacturers of various products including Woodward's Gripe Water, claimed exemption from sales tax under Section 8 read with Item 3 of the Third Schedule to the Tamil Nadu General Sales Tax Act, 1959. They argued that their products, containing alcohol, qualified as "liquor" under the Madras Prohibition Act, 1937, and were thus exempt from sales tax. The Tribunal initially assumed the goods were exempt and considered whether Section 55 applied for rectification. However, the Government Pleader contended that the goods were not exempt under the specified provisions, necessitating a detailed examination of the exemption claim.
2. Applicability of Section 55 for Rectification:
The Tribunal treated the petitioners' refund petitions as applications for rectification under Section 55 of the Sales Tax Act. It dismissed the petitions for the assessment years 1961-62 to 1963-64 as time-barred and rejected those for 1964-65 to 1966-67, stating there was no apparent error or mistake of law. The Court upheld this view, noting that since the goods were not exempt from sales tax, there was no basis for claiming an error or mistake of law in the original assessments.
3. Interpretation of Section 8 of the General Clauses Act:
The petitioners relied on Section 8 of the General Clauses Act, 1897, arguing that excise duty levied under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, should be deemed as levied under the repealed Section 18-A of the Madras Prohibition Act, 1937. The Court examined whether the reference to the Madras Prohibition Act in the Sales Tax Act could be construed as including the provisions of the repealed Section 18-A. It concluded that the reference in the Sales Tax Act was to the Madras Prohibition Act as it existed when the Sales Tax Act came into force, not as it was prior to the repeal. Therefore, the goods were not exempt from sales tax under the provisions cited by the petitioners.
Conclusion:
The Court dismissed the petitions, ruling that the medicinal and toilet preparations manufactured by the petitioners were not entitled to exemption under Section 8 of the Sales Tax Act. It affirmed that there was no error or mistake of law on the face of the record that could warrant rectification under Section 55. The judgment emphasized the need for specific legislative reference to exempt goods subject to excise duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, which was absent in the relevant period. The petitions were dismissed with costs.
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1975 (4) TMI 123
Issues Involved:
1. Validity of the notice dated 25th November 1966.
2. Limitation period for issuing the notice.
3. Retrospective application of the amendment to Section 11(2a) of the Bengal Finance (Sales Tax) Act, 1941.
4. Refund of the amount deposited as sales tax.
Issue-wise Detailed Analysis:
1. Validity of the Notice Dated 25th November 1966:
The petitioner, a building contractor registered under the Bengal Finance (Sales Tax) Act, 1941, challenged the notice dated 25th November 1966 issued by the Sales Tax Officer for producing relevant documents for a fresh assessment. The petitioner argued that the notice was issued beyond the permissible period and relied on the judgment of S.K. Kapur, J., which quashed the original assessment and did not provide any positive direction for a de novo assessment. The Court considered the observations made in the earlier judgment which allowed the respondents to make a fresh assessment "in accordance with law."
2. Limitation Period for Issuing the Notice:
The Court examined Section 11(2a) of the Act, which stipulates that no assessment shall be made after the expiry of four years from the end of the assessment year. The amendment to this section, effective from 1st October 1959, introduced a proviso that extended the limitation period when the assessment was made in consequence of an appellate or revisional order. The Sales Tax Officer contended that the notice was within limitation as it was issued within four years of the judgment dated 29th April 1966. However, the Court found that the amendment did not have retrospective effect to cover the period before its enactment.
3. Retrospective Application of the Amendment to Section 11(2a):
The Court referred to various precedents, including the Supreme Court's decisions in Jaipuria Brothers Limited v. State of U.P. and Sales Tax Officer, Circle I, Jabalpur v. Hanuman Prasad, which discussed the retrospective application of amendments to limitation periods. The Court concluded that the amendment to Section 11(2a) did not apply retrospectively to cover the period before its enactment on 1st October 1959. Therefore, the notice issued on 25th November 1966 was beyond the permissible period as the limitation had already expired on 31st March 1959.
4. Refund of the Amount Deposited as Sales Tax:
The petitioner sought a refund of Rs. 3,170.25 deposited as sales tax for the year in question. However, the petitioner's counsel did not press this relief during the hearing. Therefore, the Court did not address this issue in detail and did not grant any relief regarding the refund.
Conclusion:
The Court quashed the impugned notice dated 25th November 1966 as it was issued beyond the permissible limitation period. The amendment to Section 11(2a) of the Act did not have retrospective effect to cover the period before its enactment. The petition was allowed, and the notice was quashed without any order as to costs. The request for a refund of the deposited amount was not pressed by the petitioner and was not decided by the Court.
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