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1981 (4) TMI 284
The High Court of Calcutta quashed a prosecution against directors for advancing a loan without Central Government approval, ruling that the prosecution was barred by limitation as the offense was complete when the loan was advanced. The court held that the complainant could not extend the period of limitation based on delays in obtaining sanction or issuing show cause notices. The application was successful, and the prosecution was quashed.
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1981 (4) TMI 283
Issues Involved:
1. Acquittal under Section 302/149 and Section 148 of the Indian Penal Code.
2. Right of private defence.
3. Evaluation of evidence and witness credibility.
4. Sentencing.
Detailed Analysis:
1. Acquittal under Section 302/149 and Section 148 of the Indian Penal Code:
The appeal was directed against the acquittal of the respondents by the Allahabad High Court, which had overturned the trial court's conviction under Sections 302/149 and 148 of the Indian Penal Code (IPC). The trial court had convicted the respondents for the murder of four individuals and causing serious injury to another, while the High Court acquitted them citing the right of private defence.
2. Right of Private Defence:
The High Court acquitted the respondents on the grounds that they acted in the exercise of the right of private defence. The High Court believed that the altercation occurred in the field of the accused and that the prosecution party attempted to remove paddy, leading to the respondents firing in self-defence. However, the Supreme Court found this reasoning flawed, noting that the High Court overlooked significant evidence indicating that the altercation took place in the field of the widows, as supported by the Investigating Officer's findings of bullets, pellets, empty cartridges, blood stains, and other articles at the scene.
3. Evaluation of Evidence and Witness Credibility:
The Supreme Court scrutinized the High Court's evaluation of the evidence and witness credibility. The High Court disbelieved key prosecution witnesses (P.W. 1 and P.W. 2) based on speculative reasoning and disjointed statements. The Supreme Court found that the High Court ignored crucial facts and failed to appreciate the consistent and corroborative testimonies of P.W. 1 and P.W. 2. The trial court had found these witnesses credible, and their evidence was supported by physical evidence at the scene.
The Supreme Court also addressed the injuries on the accused, which the High Court used to doubt the prosecution's case. The Supreme Court noted that the injuries were mostly superficial and were explained by the prosecution as resulting from the deceased defending themselves with lathis.
4. Sentencing:
The Supreme Court reinstated the convictions under Section 302/149 IPC, sentencing the respondents to life imprisonment. It also convicted Barrakkey alias Krishan Kumar under Section 148 IPC, sentencing him to rigorous imprisonment for two years, and Parag and Ambika under Section 147 IPC, sentencing them to rigorous imprisonment for one year each. The court decided against imposing the death penalty on Sahai, despite the brutal nature of the murders, due to the prolonged litigation and the time elapsed since the occurrence.
Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's acquittal, and reinstated the trial court's convictions with modified sentences. The bail of the respondents was cancelled, and the Sessions Judge was directed to issue warrants for their custody to serve the sentences imposed.
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1981 (4) TMI 282
Issues: Appeal u/s 19(1)(b) of Contempt of Courts Act 1971 against judgment of High Court of Himachal Pradesh sentencing appellant to imprisonment and fine.
Summary:
1. The appellant, an Advocate, threw a shoe at the Judge during a court proceeding, leading to a contempt case. The incident occurred when the Judge dismissed a petition due to non-payment of process fee by the petitioner, represented by the appellant. The appellant claimed his action was due to the Judge's provocative language.
2. The High Court found the appellant's version to be false and held him guilty of contempt. The appellant, through his counsels, expressed remorse and offered unconditional apologies to the courts. The counsels pleaded for a lenient view considering the appellant's repentance.
3. The Supreme Court condemned the appellant's behavior as unbecoming of a practicing lawyer, emphasizing the need to uphold respect for authority. Despite the appellant's apologies and expressions of regret, the Court reduced the sentence from six months to one month, increased the fine, and directed the fine to be paid to a Legal Aid Society in Himachal Pradesh.
4. The Court highlighted the importance of maintaining decorum and respect between the legal profession and the judiciary, emphasizing that such incidents undermine the justice system. The Court also addressed the appellant's counsel's argument in the High Court, cautioning against trivializing serious misconduct in the legal profession.
5. The judgment serves as a reminder of the integral relationship between the Bar and the Bench in administering justice and the necessity of upholding professional ethics and decorum to ensure the survival of democracy and the justice system.
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1981 (4) TMI 281
Issues:
1. Appeal against acquittal under Section 406 of the Indian Penal Code.
2. Interpretation of Sections 468 and 469 of the Criminal Procedure Code.
3. Application of limitation period in criminal prosecutions.
4. Impact of limitation on fairness of trial and prevention of abuse of court process.
Analysis:
The appeal before the Supreme Court was against the acquittal of the respondent under Section 406 of the Indian Penal Code by the Punjab and Haryana High Court. The respondent was initially convicted by the trial court for misappropriating funds but was later acquitted by the High Court on the grounds of limitation under Sections 468 and 469 of the CrPC. The High Court held that the prosecution was time-barred as the offence was said to have been committed in August 1972, and the audit report revealing the embezzlement was dated January 1973, exceeding the limitation period. The Supreme Court agreed with this interpretation, emphasizing the importance of adhering to the statutory limitation periods to prevent delayed and potentially unfair prosecutions.
The relevant provisions of the CrPC, specifically Section 468(2)(c) and Section 469(1)(a) and (b), were analyzed by the Supreme Court. Section 468(2)(c) prescribes a three-year limitation period for offences punishable with imprisonment between one to three years. Section 469 deals with the starting point of the limitation period, either from the date of the offence or from when the offence is known to the aggrieved party or police. In this case, the Court found that even if the offence was deemed to be known to the authorities in January 1973, the prosecution would still be time-barred under Section 469(b) due to the delay in filing the charge.
The Court underscored the rationale behind limitation periods in criminal prosecutions, highlighting the need to prevent delayed and potentially prejudicial prosecutions. By enforcing these limitations, the Court emphasized the protection of the accused's rights and the integrity of the legal process. The judgment emphasized that adherence to statutory limitations is crucial to maintaining the fairness of trials, as guaranteed under Article 21 of the Constitution of India. The Court reiterated that any prosecution, whether by the State or a private complainant, must comply with the statutory provisions on limitation to avoid the risk of the case being dismissed on procedural grounds.
Ultimately, the Supreme Court upheld the decision of the Punjab and Haryana High Court regarding the applicability of Section 468 of the CrPC and dismissed the appeal. The respondent was discharged from bail bonds, and the conviction and sentence were deemed non-existent due to the prosecution being time-barred. The Court cited previous decisions supporting the interpretation of limitation provisions, emphasizing the importance of upholding statutory limitations in criminal prosecutions to ensure a fair and timely legal process.
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1981 (4) TMI 280
Issues:
1. Interpretation of Section 256(2) of the Income-tax Act of 1961 regarding the direction to the Appellate Tribunal.
2. Validity of penalty imposition under Section 271(1)(1) of the Act for delayed submission of returns.
3. Consideration of reasons for delayed filing of returns and its impact on penalty imposition.
4. Examination of the practice of issuing unsigned and unsealed documents by the Income-tax Department.
Analysis:
Issue 1: Interpretation of Section 256(2) of the Income-tax Act
The Assessee filed applications under Section 256(2) seeking a direction to the Appellate Tribunal to state a case and refer specific legal questions to the Court. The questions pertained to the legality of ignoring irregularities in the order-sheet and the Tribunal's decision-making process. The Court assessed the relevance of the questions raised and concluded that they were factual in nature, thus rejecting the applications.
Issue 2: Validity of penalty imposition for delayed submission of returns
The case involved penalties imposed under Section 271(1)(1) of the Act due to delayed filing of returns for assessment years 1968-69 and 1969-70. The Appellate Assistant Commissioner initially allowed the Assessee's appeals, but the Tribunal overturned this decision, reinstating the penalties. The Tribunal considered the Assessee's reasons for the delay, such as fear of heavy tax demands leading to business collapse, and found them insufficient to justify the delay. The Tribunal concluded that penalties were rightly imposed, emphasizing the Assessee's habitual conduct of non-compliance.
Issue 3: Impact of reasons for delayed filing on penalty imposition
The Assessee contended that the penalty imposition was invalid due to discrepancies in the order dates and the timeline of explanations provided. The Court examined the original records and found that while there was some confusion in the order dates, the material did not conclusively indicate an error in the penalty imposition process. The Court emphasized the importance of maintaining proper order-sheets and criticized the practice of issuing unsigned and unsealed documents by the Income-tax Department.
Issue 4: Examination of the practice of issuing unsigned and unsealed documents
The Court expressed disapproval of the Income-tax Department's practice of issuing orders without proper signatures and seals. Highlighting the significance of official documents in tax proceedings, the Court urged the Commissioner of Income-tax to address these deficiencies and ensure compliance with standard requirements in issuing orders to Assessees. The Court emphasized the need for proper documentation in tax matters to uphold transparency and procedural integrity.
In conclusion, the Court rejected the Assessee's applications under Section 256(2) and upheld the penalties imposed for delayed filing of returns, emphasizing the importance of adherence to procedural norms and the significance of factual considerations in tax penalty assessments.
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1981 (4) TMI 279
Issues Involved:
1. Whether gratuity should be included in the limit of admissible deduction for remuneration of a director under section 40A(5).
2. Whether the limit for remuneration should be applied under section 40A(5) or section 40(c).
3. Whether the Commissioner (Appeals) was justified in deleting the disallowance of Rs. 38,693.
4. Whether gifts and presentations aggregating Rs. 54,760 should be allowed as deductions.
5. Whether the disallowance of Rs. 10,690 on account of rent for a flat hired by the company was justified.
Detailed Analysis:
1. Inclusion of Gratuity in Remuneration Limit:
The primary issue is whether gratuity should be included in the limit of admissible deduction for the remuneration of a director under section 40A(5). The Tribunal held that gratuity is a part of remuneration. The term "remuneration" includes every type of recompense such as salary, bonus, commission, and gratuity. It was emphasized that gratuity is a payment made to an employee for services rendered and is not gratuitous. Therefore, gratuity should be included in the calculation of the remuneration limit under section 40A(5).
2. Applicable Section for Remuneration Limit:
The Tribunal discussed whether the limit for remuneration should be applied under section 40A(5) or section 40(c). It was held that for a director who is also an employee, the provisions of section 40(c) read with the first proviso to section 40A(5) would apply, not the limit prescribed by section 40A(5)(c). This conclusion was based on the Special Bench order in Geoffrey Manners & Co. Ltd. v. ITO, which established that the provisions of section 40(c) govern the remuneration of a director-employee.
3. Deletion of Disallowance of Rs. 38,693:
The Commissioner (Appeals) had deleted the disallowance of Rs. 38,693, which was contested by the department. The Tribunal concluded that the Commissioner (Appeals) was not justified in deleting this sum. The objection of the department to the exclusion of gratuity was accepted, and the ground raised in the assessee's cross-objection was rejected. As a result, the disallowance of Rs. 38,693 was reinstated.
4. Gifts and Presentations Deduction:
The department objected to the finding of the Commissioner (Appeals) that the ITO was not justified in disallowing gifts and presentations aggregating Rs. 54,760. The Commissioner (Appeals) had allowed a deduction of Rs. 25,000, thus restricting the disallowance to Rs. 29,760. The Tribunal found that the Commissioner (Appeals) acted reasonably in restricting the disallowance based on the nature of the expenditure and the past record. Therefore, the department's objection was rejected.
5. Disallowance of Rent for Flat:
The department objected to the deletion of the disallowance of Rs. 10,690 on account of rent for a flat hired by the company. The flat was used to accommodate business customers after the directors vacated it. The Tribunal found no merit in the department's contention that the flat was in the nature of a guest-house, as this required further investigation. The objection was rejected, and the deletion of the disallowance was upheld.
Conclusion:
The appeal and the cross-objection were partly allowed. The Tribunal appreciated the competent assistance provided by the representatives and counsel in resolving the complex issues involved in interpreting section 40(c).
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1981 (4) TMI 278
The Supreme Court of India in 1981 (4) TMI 278 ruled that detenus must be set at liberty as the documents supporting the grounds of detention were not provided to them. The judgment was delivered by O. Chinnappa Reddy, A.P. Sen, and Baharul Islam, JJ.
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1981 (4) TMI 277
Issues:
1. Appeal against acquittal of two respondents by Rajasthan High Court.
2. Identification of the culprits in a murder case.
3. Reliability of eyewitness testimony.
4. Evaluation of discrepancies in witness statements.
5. Judicial interference in findings of facts.
Analysis:
1. The case involved an appeal by the State of Rajasthan against the acquittal of two respondents by the Rajasthan High Court in a murder case. The respondents, convicted under various sections of the Penal Code, were accused of causing the death of the deceased in a land dispute-related incident.
2. The key issue was the identification of the culprits responsible for the murder. The prosecution's case relied on the testimony of the deceased's wife, the sole eyewitness to the incident. The Supreme Court analyzed the evidence presented and concluded that it was respondent Kalki who delivered the fatal blow with an axe, while respondent Amara facilitated the murder with a weapon, both acting with a common intention.
3. The reliability of the eyewitness testimony, provided by the deceased's wife, was crucial in establishing the guilt of the respondents. The High Court had raised concerns about her being a "highly interested witness" due to her relationship with the deceased. However, the Supreme Court clarified that being related to the deceased did not automatically make her an interested witness, as she had no personal benefit in the outcome of the case.
4. The evaluation of discrepancies in the witness statements was another significant aspect of the judgment. The High Court had pointed out minor discrepancies in the eyewitness account, but the Supreme Court deemed them insignificant and natural, attributing them to normal errors of observation and memory, rather than intentional falsehood.
5. The judgment also addressed the judicial interference in findings of facts. While the Supreme Court generally refrains from overturning factual findings by lower courts, it emphasized that it would intervene if the conclusions were bordering on perversity and led to a miscarriage of justice. In this case, the Court found the acquittal of the respondents to be a grave miscarriage of justice and thus set aside the High Court's order, convicting both respondents and sentencing them to imprisonment for life.
In conclusion, the Supreme Court allowed the appeal, overturned the acquittal, and convicted the respondents based on the established guilt beyond reasonable doubt, highlighting the importance of eyewitness testimony and the need to prevent miscarriages of justice.
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1981 (4) TMI 276
The Supreme Court found that the appellants were not given a proper opportunity to defend themselves before their licenses were cancelled. Additional material not provided to them was relied upon at the appellate stage. The Court set aside the orders and directed the respondent to proceed afresh, giving the appellants a proper opportunity and following principles of natural justice.
Citation: 1981 (4) TMI 276 - Supreme Court
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1981 (4) TMI 275
Issues Involved:
1. Default in payment of rent.
2. Personal requirement for eviction.
3. Subsequent partition decree affecting the landlord's interest.
Issue-wise Detailed Analysis:
1. Default in Payment of Rent:
The respondents claimed eviction under section 11(1)(d) of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947, alleging that the appellant defaulted in paying rent for September, October, and November 1972. The appellant contested this, asserting that the rent had been paid but no receipt was provided, forcing him to send rent via Money Order from December 1972 onwards. The trial court found against the appellant on this issue, concluding there was a default in payment of rent for the specified period. Both the first appellate court and the High Court upheld this finding, with the High Court noting that the appellant did not challenge this finding before it.
2. Personal Requirement for Eviction:
The respondents also sought eviction under section 11(1)(c) of the Rent Act, claiming the shop was needed in good faith for respondent 1, a qualified medical practitioner, to open a clinic. The appellant countered that the property belonged to a firm and could not be claimed for individual use by any partner. The trial court ruled in favor of the respondents, finding that the personal requirement was genuine. The first appellate court and the High Court upheld this decision. However, the Supreme Court criticized the lower courts' approach, emphasizing that the landlord must prove a continuous need for the premises throughout the proceedings and must have a subsisting interest in the property.
3. Subsequent Partition Decree Affecting the Landlord's Interest:
During the appeal, the appellant filed an application under Order 41, Rule 27 of the Code of Civil Procedure, presenting a partition decree from Suit No. 4 of 1974, which allotted the suit shop to one Pyarelal, not a party to the proceedings. The first appellate court acknowledged this but dismissed its relevance, stating the partition occurred after the suit was filed. The High Court dismissed the appellant's contention on technical grounds, noting the absence of a proper application under Order 41, Rule 27. The Supreme Court found this approach erroneous, emphasizing that subsequent events impacting the landlord's interest must be considered. The Court noted that the landlord's interest must subsist throughout the proceedings, and the partition decree indicated that the respondents no longer had a subsisting interest in the property.
Conclusion:
The Supreme Court allowed the appeal, set aside the judgments of the High Court and the first appellate court, and remanded the case to the first appellate court. The appellate court was directed to consider the additional evidence regarding the partition decree and determine:
1. Whether the partition decree transferred the suit shop to Pyarelal exclusively.
2. If so, whether the respondents could maintain the action and were entitled to evict the appellant on the grounds of personal requirement and/or default in payment of rent.
The first appellate court was instructed to grant the application under Order 41, Rule 27, take the certified copy of the partition decree on record, allow the parties to lead additional evidence, and decide the issues accordingly. The Supreme Court highlighted the importance of considering subsequent events that affect the landlord's interest and ensuring that the landlord has a continuous and subsisting interest in the property throughout the proceedings. The appeal was allowed with no order as to costs.
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1981 (4) TMI 274
Issues Involved:
1. Legality of the termination of the appellant's services.
2. Whether the termination constituted "retrenchment" under Section 2(oo) of the Industrial Dispute Act, 1947.
3. Compliance with Section 25F of the Industrial Dispute Act, 1947.
4. Eligibility of the appellant to claim retrenchment compensation.
5. Appropriate relief for the appellant.
Issue-wise Detailed Analysis:
1. Legality of the Termination of the Appellant's Services:
The appellant was employed as a Salesman at the respondent's Delhi Sales Depot and his services were terminated by a letter dated October 12, 1974, effective from October 19, 1974. The Labour Court initially directed reinstatement with full back wages but later set aside the ex-parte award and allowed the respondent to participate. The Labour Court held that the termination was in accordance with the standing orders as the appellant was on probation and found unsuitable. The Supreme Court found that the Labour Court overlooked the fact that the appointment letter did not mention probation and the respondent failed to prove any rules mandating probation. Thus, the appellant was either a temporary or permanent employee but not on probation at the time of termination.
2. Whether the Termination Constituted "Retrenchment" under Section 2(oo) of the Industrial Dispute Act, 1947:
The Supreme Court held that the termination did not fall within any of the excepted categories under Section 2(oo) of the Act. The termination was not a punishment, voluntary retirement, retirement on superannuation, or due to ill-health. Therefore, it constituted "retrenchment" as defined in the Act.
3. Compliance with Section 25F of the Industrial Dispute Act, 1947:
Section 25F mandates that no workman employed in any industry who has been in continuous service for not less than one year shall be retrenched without one month's notice or wages in lieu of notice, retrenchment compensation, and notice to the appropriate government. The Supreme Court noted that the respondent did not comply with these prerequisites, rendering the termination ab initio void and inoperative.
4. Eligibility of the Appellant to Claim Retrenchment Compensation:
The appellant was employed from December 8, 1973, to October 19, 1974. Under Section 25B(2) of the Act, a workman is deemed to be in continuous service for one year if he has worked for not less than 240 days in the preceding 12 months. The appellant satisfied this condition, making him eligible to claim retrenchment compensation.
5. Appropriate Relief for the Appellant:
The Supreme Court rejected the respondent's plea to award compensation instead of reinstatement. It held that since the termination was ab initio void, the appellant continues to be in service with all consequential benefits, including full back wages. The case was remitted to the Labour Court to make an appropriate award in light of the Supreme Court's findings. The respondent was also directed to pay the appellant's costs quantified at Rs. 2000 within four weeks.
Conclusion:
The Supreme Court allowed the appeal, set aside the Labour Court's award, and declared the termination of the appellant's service as ab initio void and inoperative. The appellant was deemed to continue in service with full back wages and other benefits. The case was remitted to the Labour Court for an appropriate award, and the respondent was ordered to pay the appellant's costs.
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1981 (4) TMI 273
Issues involved: Interpretation of the finality of an order made by the Chief Settlement Commissioner in a civil proceeding.
Summary:
The single Judge referred a question regarding the finality of an order made by the Chief Settlement Commissioner to the Division Bench. The Division Bench held that the order was not final and binding in the civil proceeding, allowing the Civil Court to determine encroachment on the property. However, the Division Bench erred in not sending the matter back to the single Judge after deciding the question of law. The Supreme Court allowed the appeal, set aside the Division Bench's order, and directed the single Judge to dispose of the Second Appeal in accordance with the law, without being influenced by the Division Bench's observations on merits. The single Judge was instructed to consider whether any portion of the property conveyed to the appellant was illegally in the possession of the respondents. No costs were awarded for the appeal.
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1981 (4) TMI 272
Issues Involved:
1. Personal requirement of the landlord for starting a business.
2. Availability of suitable alternative accommodation for the landlord.
3. Dilapidated condition of the building and necessity for reconstruction.
4. Tenant's right to re-occupation under Section 18 of the Madhya Pradesh Accommodation Control Act, 1961.
5. Consideration of subsequent events in eviction proceedings.
Issue-wise Detailed Analysis:
1. Personal Requirement of the Landlord for Starting a Business:
The landlord sought eviction under Section 12(1)(f) of the Madhya Pradesh Accommodation Control Act, 1961, claiming he intended to start a medicine shop and had no other suitable accommodation. The trial court found that the landlord required the premises for his business and had no other suitable accommodation. This finding was upheld by the District Court, which noted that the landlord was a student who might start a business after completing his education. However, the High Court failed to consider that the landlord had obtained possession of another part of the building from firm Goraldas Parmanand, which could be used for the same purpose.
2. Availability of Suitable Alternative Accommodation for the Landlord:
The landlord admitted in the plaint that he had obtained a decree for eviction against firm Goraldas Parmanand, which occupied a major portion of the building. The tenant argued that this portion was sufficient for the landlord's business needs. The High Court rejected the tenant's application to amend the written statement to include this fact, citing delay and laches. However, the Supreme Court held that the landlord must prove he has no other reasonably suitable non-residential accommodation. The landlord's possession of a significant portion of the building (18' x 90' plus 7' x 68') was sufficient for starting his business, making the eviction of the tenant unnecessary.
3. Dilapidated Condition of the Building and Necessity for Reconstruction:
The landlord also sought eviction under Section 12(1)(h) of the Act, claiming the building was in a dilapidated condition and required reconstruction. The trial court and the District Court found that the building needed reconstruction and that the landlord had sufficient funds for it. The Supreme Court respected this finding but noted that the landlord's composite requirement (for both business and residence) was not justified since he already had enough space for his business.
4. Tenant's Right to Re-occupation under Section 18:
Section 18 of the Act provides that a tenant evicted for reconstruction has the right to re-occupation. The courts below denied this right to the tenant, citing the landlord's composite requirement. The Supreme Court held that since the landlord was not entitled to possession for his residence and had sufficient space for his business, the composite requirement disappeared. The case was remanded to the first appellate court to determine if the landlord was interested in reconstructing the portion occupied by the tenant and to give appropriate directions under Section 18.
5. Consideration of Subsequent Events in Eviction Proceedings:
The Supreme Court emphasized that in eviction proceedings, the landlord's requirement must exist not only at the time of filing the suit but also at the time of the final decree. The High Court erred in not considering the subsequent event of the landlord obtaining possession of the premises from firm Goraldas Parmanand. The Supreme Court cited its earlier decision in Pasupuleti Venkateswarlu v. The Motor and General Traders, affirming that courts must take cognizance of subsequent events to ensure justice.
Conclusion:
The Supreme Court allowed the appeal, set aside the eviction decree, and remanded the case to the first appellate court to:
1. Determine if the landlord is interested in reconstructing the portion occupied by the tenant.
2. Ascertain if the landlord can reconstruct the building without requiring the tenant to vacate.
3. Provide appropriate directions under Section 18 if the landlord's reconstruction interest is established.
The appeal was allowed with no order as to costs.
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1981 (4) TMI 271
Issues Involved:
1. Validity of judgments pronounced by an Additional Sessions Judge whose appointment was later declared invalid.
2. Application of the de facto doctrine to judgments rendered by judges with invalid appointments.
3. Impact of invalid judicial appointments on the rights of the appellants under Art. 21 of the Constitution.
Summary:
1. Validity of Judgments Pronounced by an Invalidly Appointed Judge:
The primary issue was the effect of the Supreme Court's declaration that the appointment of an Additional Sessions Judge was invalid on judgments pronounced by the judge prior to such declaration. The appellants argued that the judgments rendered by the judges were void as they were never duly appointed as District Judges. The High Court overruled this point, holding that the judgments were valid and could not be questioned in collateral proceedings.
2. Application of the De Facto Doctrine:
The court examined the de facto doctrine, which is a doctrine of necessity and public policy. It was established that "the acts of the officers de facto performed by them within the scope of their assumed official authority, in the interest of the public or third persons and not for their own benefit, are generally as valid and binding, as if they were the acts of officers de jure." The doctrine is aimed at preventing public and private mischief and protecting public and private interests. The court cited various precedents, including Pulin Behari v. King Emperor and Norton v. Shelby County, to support the validity of acts performed by de facto officers.
3. Impact on Rights Under Art. 21 of the Constitution:
The appellants argued that their Fundamental Right under Art. 21 of the Constitution was violated as their liberty was being taken away otherwise than in accordance with the procedure established by law. The court disagreed, stating that the de facto doctrine saves the acts of judges whose appointments were later invalidated. The court emphasized that the doctrine is not a stranger to the Constitution or legislative enactments, citing Art. 71(2) of the Constitution and Sec. 107(2) of the Representation of the People Act 1951.
Conclusion:
The court concluded that the judgments pronounced by the judges, who were not mere usurpers but held office under colour of lawful authority, were valid. The de facto doctrine applied, and the judgments could not be questioned in collateral proceedings. The appeals were dismissed, and the court found no reason to interfere with the concurrent findings of fact arrived at by the lower courts.
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1981 (4) TMI 270
Issues:
- Whether the donations made to the assessee-Trust were intended to form part of the corpus of the Trust.
- Whether the donations were made with a specific direction to form part of the corpus under section 12 of the Income Tax Act, 1961.
- Reliability of the affidavit filed by the counsel for the assessee at the appellate stage.
- Sufficiency of evidence to prove that the donations were intended to form part of the corpus of the Trust.
Analysis:
1. The appeals by the Revenue pertain to the assessment years 1973-74 and 1974-75 concerning the donations made to the assessee-Trust. The Trust Deed was executed by settlors who allocated funds for the corpus of the Trust. The donations in question were made by various entities, and the issue revolved around whether these donations were meant to be part of the Trust's corpus as per section 12 of the IT Act, 1961.
2. The Revenue contended that the donations lacked a specific direction to form part of the corpus, based on a statement by the counsel for the assessee. However, the counsel later filed an affidavit stating that his earlier statement was made without proper consultation and instruction from the assessee. The Tribunal found this affidavit to be a reliable piece of evidence as the counsel was not cross-examined by the ITO, leading to the conclusion that the donations were indeed intended for the corpus of the Trust.
3. The evidence on record, including letters from the donating entities and a resolution by the trustees, supported the assertion that the donations were meant for the Trust's corpus. The partners of the donating firm were also the settlors and trustees of the Trust, further reinforcing the intent behind the donations. The Tribunal emphasized that the Revenue's argument regarding the timing of evidence submission was not valid, as the assessee was not given an opportunity earlier in the process. Therefore, the Tribunal upheld the AAC's decision that the donations were specifically directed to form part of the corpus under section 12 of the IT Act, 1961.
4. Ultimately, the Tribunal dismissed the appeals by the Revenue, affirming that the donations were rightfully excluded from the income of the assessee-Trust. The decision was based on the sufficiency of evidence and the interpretation of the specific direction requirement under section 12.
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1981 (4) TMI 269
Issues involved: Violation of constitutional safeguard u/s Article 22(5) of the Constitution due to delayed supply of crucial documents to detenu.
Summary:
In a writ of habeas corpus, the detenu was arrested on Nov. 29, 1980, and served with grounds of detention on Dec. 1, 1980. A representation was sent by the detenu on Dec. 30, 1980, which was rejected by the Government on Jan. 6, 1981. The detenu requested further documents on Jan. 5, 1981, which were supplied to him. The pivotal ground for detention was the allegation of smuggling silver out of India to foreign countries. However, the documents supporting this allegation were not provided to the detenu along with the grounds of detention, but much later on Jan. 5, 1981. The detaining authority argued that some documents were supplied along with the grounds, but the detenu demanded the rest. The Court held that the delayed supply of crucial documents violated the constitutional safeguard u/s Article 22(5) of the Constitution, which requires the detaining authority to provide all relied upon documents simultaneously with the grounds of detention. As the detenu was handicapped in making an effective representation without these vital documents, the continued order of detention was deemed void. Consequently, the petition was allowed, and the detenu was directed to be released immediately.
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1981 (4) TMI 268
Issues Involved:
1. Entitlement of the nominee to the insurance policy money.
2. Role and rights of the nominee under Section 39 of the Insurance Act, 1938.
3. Applicability of Section 6 of the Married Women's Property Act, 1874.
4. Interpretation and implications of Section 60(1)(kb) of the Code of Civil Procedure.
Detailed Analysis:
1. Entitlement of the Nominee to the Insurance Policy Money:
The primary issue was whether Dwarka Dass Sehgal, as the nominee, was entitled to receive the policy money absolutely or merely held it in trust for the legal heirs of the deceased, Sudarshan Kumar Sehgal. The learned Sub-Judge initially dismissed the suit, holding that Dwarka Dass, being the nominee, was entitled to receive the amount in his own right absolutely and was neither a trustee nor an agent of the legal heirs. This judgment was challenged, leading to the present appeal.
2. Role and Rights of the Nominee under Section 39 of the Insurance Act, 1938:
The court examined various precedents and statutory provisions to determine the role and rights of a nominee. It was noted that Section 39 of the Act allows the policyholder to nominate a person to receive the policy money upon their death. The court observed that the prevailing view in numerous cases was that a nominee is merely a person who receives the payment on behalf of the heirs of the assured. However, the court found merit in the argument that a departure from this view was justified.
The court highlighted the comprehensive provisions of Section 39, which state that the policy money shall be paid to the nominee if available, and only to the heirs if no nominee is available. The court rejected the notion that the nominee acts merely as a collection agent for the heirs, emphasizing that the nominee has a statutory right to the policy money.
3. Applicability of Section 6 of the Married Women's Property Act, 1874:
Section 6 of the Married Women's Property Act, 1874, was discussed, which provides that a policy of insurance effected by a married man on his own life for the benefit of his wife or children shall be deemed to be a trust for their benefit. The court noted that Section 39 of the Insurance Act does not apply to policies under Section 6 of the Married Women's Property Act, except where the nomination purports to be under Section 39. The court found no indication that the nominee in the first category (insurance on one's own life) would be a mere collection agency.
4. Interpretation and Implications of Section 60(1)(kb) of the Code of Civil Procedure:
Section 60(1)(kb) of the Code of Civil Procedure provides that all moneys payable under a policy of insurance on the life of the judgment-debtor are not liable to attachment or sale in execution of a decree. The court observed that the policy money is not available to the creditors of the assured, reinforcing the statutory protection afforded to the nominee.
Conclusion:
The court concluded that the nominee takes the money by way of statutory testamentary disposition and is not a trustee or agent of the heirs or successors of the assured. The insurance money is not available to any creditor. The appeal was dismissed, affirming that Dwarka Dass Sehgal, as the nominee, was entitled to the policy money absolutely.
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1981 (4) TMI 267
Issues Involved:
1. Whether the phenolic moulding powder manufactured by the petitioners is entitled to claim exemption from payment of excise duty as provided by Notification dated June 1, 1971.
2. Whether the phenolic moulding powder is synthetic resin manufactured by reacting any of the phenols with an aldehyde or is only a plastic material.
3. Whether the phenolic moulding powder is chemically modified phenolic resin.
4. Whether the petitioners are entitled to a refund of the excise duty paid.
Detailed Analysis:
1. Exemption from Excise Duty:
The primary issue was whether the phenolic moulding powder manufactured by the petitioners qualifies for exemption from excise duty under the Notification dated June 1, 1971. The Notification exempts "phenolic resins" from excise duty, defining them as synthetic resins manufactured by reacting any of the phenols with an aldehyde, including chemically modified phenolic resins but excluding blends with other artificial or synthetic resins.
2. Nature of Phenolic Moulding Powder:
The court examined whether the phenolic moulding powder is a synthetic resin or a plastic material. The petitioners argued that the phenolic moulding powder is a form of phenolic resin, while the respondents contended it is a plastic material. The court referred to various definitions and expert testimonies, including standard works and dictionaries, to determine that the phenolic moulding powder retains the characteristics of phenolic resin and does not become a plastic material merely by the addition of fillers and other ingredients.
3. Chemically Modified Phenolic Resin:
The court also considered whether the phenolic moulding powder is a chemically modified phenolic resin. The petitioners presented evidence, including expert opinions and scientific reports, to support their claim that the phenolic moulding powder is chemically modified. The respondents argued it is only physically modified. The court found that the manufacturing process involves chemical reactions, and the product is indeed a chemically modified phenolic resin. The court also noted that the Notification's definition of "phenolic resins" includes both chemically and physically modified resins, thereby supporting the petitioners' claim for exemption.
4. Refund of Excise Duty:
The petitioners sought a refund of the excise duty paid from June 1, 1971, to August 24, 1974. The respondents argued that the refund claims should be subject to the limitation period specified in Rule 11 of the Central Excise Rules, 1944. The court held that the excess duty recovered was illegal and unauthorized, and the petitioners were entitled to a refund for the period three years preceding the discovery of the mistake, i.e., from August 23, 1971, onwards. The court directed the respondents to compute and refund the excess amount within three months.
Conclusion:
The court ruled in favor of the petitioners, holding that the phenolic moulding powder is entitled to the exemption under the Notification dated June 1, 1971, as it qualifies as a chemically modified phenolic resin. The court quashed the order dated December 23, 1974, by the Assistant Collector and directed the respondents to levy excise duty under the Notification until February 26, 1980, and to refund the excess duty paid from August 23, 1971, onwards.
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1981 (4) TMI 266
The Central Board of Excise and Customs ruled in favor of M/s Ananda Bazar Patrika Ltd. in Appeal No. Nil. The lenses imported were considered components of a camera, not independent equipment, leading to the setting aside of confiscation orders and refund of the fine paid.
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1981 (4) TMI 265
Title: Collector of Central Excise (Appeals), Bombay - 1981 (4) TMI 265
Summary: The appellants manufacture 'ETHYL CHLORIDE' using 'ALUMINIUM CHLORIDE', 'DICHLOROETHANE', and 'STEAM'. Their request for duty set-off was initially rejected, but the Collector (Appeals) allowed the appeal, stating that duty set-off is permissible as long as the goods are used in the manufacture of the finished product, irrespective of whether they constitute a component part of the finished product. The appeal was allowed.
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