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1994 (4) TMI 406
Issues:
Challenge to Arbitration Award under Indian Telegraph Act, 1885 - Appointment of Arbitrator by M.T.N.L. instead of Central Government - Legality of Arbitrator's Appointment - Ultra vires of Section 7-B of the Act - Quashing of Arbitrator's Appointment and Award - Direction to Central Government for Appointment of Arbitrator - Stay on Recovery of Disputed Amount.
Analysis:
The judgment pertains to a challenge against an Arbitration Award dated 13-2-1993 under the Indian Telegraph Act, 1885. The petitioner contested the appointment of the arbitrator by respondent No. 1 (M.T.N.L.) under Section 7-B of the Act, arguing that the arbitrator should have been appointed by the Central Government. The primary grounds of challenge included the legality of the arbitrator's appointment and the constitutionality of Section 7-B. The court opined that while deciding the constitutionality issue was unnecessary, the arbitrator must be appointed by the Central Government as per Section 7-B, not by the M.T.N.L. itself.
The court highlighted Section 7-B of the Act, emphasizing that disputes between a subscriber and the telegraph authority regarding telephone bill payments must be referred to an arbitrator appointed by the Central Government. Since the arbitrator in this case was not appointed by the Central Government, the appointment was deemed void ab initio, rendering the award unsustainable. The respondent failed to prove that the arbitrator was appointed by the Central Government, leading to the setting aside of the appointment and the award.
Referring to a Supreme Court judgment, the court acknowledged the potential prejudice caused by reopening settled cases due to arbitrators' improper appointments. However, the court clarified that it was solely addressing pending matters and had no intention to disturb previously settled cases. Consequently, the court quashed the appointment of the arbitrator and the award, directing the Central Government to appoint an arbitrator to resolve the dispute lawfully. Additionally, the respondent was instructed not to recover any disputed amount or disconnect the telephone connection pending the arbitrator's adjudication.
In conclusion, the writ petition was disposed of, granting costs to the petitioner. The judgment emphasized the importance of proper arbitrator appointments under Section 7-B of the Act and the need for Central Government involvement in such appointments to ensure the legality and validity of arbitration proceedings.
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1994 (4) TMI 405
Issues:
Challenge to order setting aside Magisterial Custody Remand and bail order.
Analysis:
The judgment involves a challenge to an order setting aside Magisterial Custody Remand and bail granted to the accused. The complainant alleged offenses under sections 420, 468, 471, and 477A of the Indian Penal Code against the accused, who was the proprietor of a company. The accused was arrested, and the Magistrate granted Magisterial Custody Remand for a fortnight and subsequently granted bail on the same day upon a bail petition. The State challenged these orders in Criminal Revision No. 103/94, leading to the Additional Sessions Judge setting aside the bail and remanding the accused to police custody.
The first issue raised was the maintainability of the revision petition before the Sessions Court under section 397(2) of the Criminal Procedure Code. The defense argued that the revision was barred as it was against an interlocutory order of granting bail. Citing precedents, the court held that orders of bail are interlocutory in nature and thus not subject to revision under section 397(2), Cr. P.C. Since the State did not seek cancellation of bail before the Magistrate or Sessions Court, the revision was deemed unmaintainable.
The second issue pertained to the cancellation of bail and remanding the accused to police custody under section 439(2) of the Cr. P.C. The court emphasized that for bail cancellation, there must be overwhelming evidence of interference with justice or tampering with witnesses. Relying on previous judgments, the court highlighted the necessity of supervening circumstances to justify bail cancellation. In this case, the State failed to establish any such circumstances, and the accused had complied with bail conditions. As a result, the court found no grounds for bail cancellation and reinstated the original bail order.
In conclusion, the court allowed the Criminal Revision Application, quashed the impugned order of the Additional Sessions Judge, and restored the bail order granted by the Magistrate. The judgment reaffirmed the importance of adhering to legal principles and evidentiary requirements for bail cancellation, emphasizing the need for supervening circumstances to justify such actions.
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1994 (4) TMI 404
Issues Involved:
1. Quashing of the plaint and all proceedings in original suit No. 230 of 94.
2. Quashing of orders dated 4-4-94 and 5-4-94 by the IIIrd Addl. Civil Judge, Agra.
3. Restraining the IIIrd Addl. Civil Judge, Agra from further proceedings in original suit No. 230 of 94.
4. Impleadment of Sri Moti Lal Jain as a party in the suit.
5. Interim injunction granted to Sri Kamal Kumar Jain.
Detailed Analysis:
Issue 1: Quashing of the plaint and all proceedings in original suit No. 230 of 94
The petitioners sought a writ of certiorari to quash the plaint and proceedings in original suit No. 230 of 94. The court held that the petitioners have an alternative remedy under Order 7, Rules 10 and 11 of the Code of Civil Procedure. Therefore, the prayer for quashing the plaint and proceedings was rejected.
Issue 2: Quashing of orders dated 4-4-94 and 5-4-94 by the IIIrd Addl. Civil Judge, Agra
The court quashed the orders dated 4-4-94 and 5-4-94 passed by the IIIrd Addl. Civil Judge, Agra. The order dated 4-4-94 granted an interim injunction to Sri Kamal Kumar Jain, and the order dated 5-4-94 rejected the application for impleadment by Sri Moti Lal Jain. The court found that these orders were passed without giving an opportunity to Sri Moti Lal Jain to be heard, which was a violation of natural justice.
Issue 3: Restraining the IIIrd Addl. Civil Judge, Agra from further proceedings in original suit No. 230 of 94
The court transferred the proceedings of original suit No. 230 of 94 from the IIIrd Addl. Civil Judge, Agra to the court of the District Judge, Agra. The District Judge was directed to transfer the case to another court of competent jurisdiction, other than Sri Chandra Bhan, IIIrd Addl. Civil Judge, Agra.
Issue 4: Impleadment of Sri Moti Lal Jain as a party in the suit
The court allowed the application for impleadment of Sri Moti Lal Jain as a defendant in the suit. The court emphasized that the presence of Sri Moti Lal Jain was necessary to decide the real matter in dispute, i.e., who was the rightful manager of the institution. The court criticized the IIIrd Addl. Civil Judge for rejecting the application for impleadment and highlighted that the provisions of Order 1 Rule 10(2) of the Code of Civil Procedure are very wide, allowing the court to add a necessary party at any stage of the proceedings.
Issue 5: Interim injunction granted to Sri Kamal Kumar Jain
The court directed that after the impleadment of Sri Moti Lal Jain as a defendant, he should be given an opportunity to file objections against the interim injunction application and also a written statement against the plaint. The application for interim injunction would be reconsidered afresh by the learned Civil Judge to whom the case is transferred. Until the final disposal of the injunction application, Sri Moti Lal Jain shall continue to function as the Manager of the Committee of Management of Sri Ratan Muni Jain Inter College, Loha Mandi, Agra, and nobody shall be allowed to disturb his functioning as such.
Conclusion:
The court partly allowed the petition. It quashed the orders dated 4-4-94 and 5-4-94, allowed the impleadment of Sri Moti Lal Jain as a defendant, and transferred the proceedings to another competent court. The court emphasized the necessity of giving Sri Moti Lal Jain an opportunity to be heard and directed that he should continue to function as the manager until the interim injunction application is reconsidered.
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1994 (4) TMI 403
Issues Involved:
1. Applicability of the scheme framed in J.P. Unni Krishnan v. State of Andhra Pradesh.
2. Applicability of Rules and Orders made by State Governments based on the said decision.
3. Determination of "minority" status and "minority educational institution" status.
4. Interim order governing admissions to professional courses in minority educational institutions.
5. Categorization of writ petitions based on the nature of minority educational institutions.
6. Specific directions for institutions in Writ Petitions Nos. 284, 482, and 598 of 1993.
7. Admission guidelines for the academic session commencing in 1994.
Issue-Wise Detailed Analysis:
1. Applicability of the scheme framed in J.P. Unni Krishnan v. State of Andhra Pradesh:
The petitioners questioned the applicability of the scheme framed by the Supreme Court in the case of J.P. Unni Krishnan v. State of Andhra Pradesh. The Court referred three questions for consideration by a larger Bench to ascertain the claims of being a "minority" and "minority educational institution." The importance of these questions warranted issuing notice to the Attorney General of India and the Advocates General for the States.
2. Applicability of Rules and Orders made by State Governments based on the said decision:
The petitioners also challenged the applicability of the Rules and Orders made by several State Governments based on the decision in J.P. Unni Krishnan. The Court found it necessary to pass an interim order governing admission to professional courses in minority educational institutions for the next academic session.
3. Determination of "minority" status and "minority educational institution" status:
The Court acknowledged that the claim of being a "minority" and a "minority educational institution" could not be pronounced upon without first understanding what these expressions signify. The Court emphasized the need for verification by the Government to determine the minority status of the institutions.
4. Interim order governing admissions to professional courses in minority educational institutions:
An interim order was issued for the last academic session (1993-94), allowing 50% of the total intake to be filled by candidates selected by State Government agencies based on a competitive examination/test. The remaining 50% could be regulated by the petitioners to admit candidates from the particular religious or linguistic minority, provided the selection was based on merit.
5. Categorization of writ petitions based on the nature of minority educational institutions:
The Constitution Bench categorized the writ petitions into five categories: unaided minority educational institutions, minority educational institutions receiving State funds, institutions with unclear funding status, non-minority institutions challenging Unni Krishnan's applicability, and petitions not falling into any of the above categories. The interim order dated May 14, 1993, applied to categories (1), (2), and (3) with modifications.
6. Specific directions for institutions in Writ Petitions Nos. 284, 482, and 598 of 1993:
For Writ Petitions Nos. 284 and 482 of 1993, the Court permitted admissions based on entrance tests conducted by the petitioners, with full particulars of admitted students to be furnished to competent authorities for verification. For Writ Petition No. 598 of 1993, the Court directed that admissions be made in accordance with the agreement with the Government of Kerala, emphasizing merit as the guiding principle.
7. Admission guidelines for the academic session commencing in 1994:
The Court directed that admissions for the academic session commencing in 1994 follow the guidelines from the previous year, with specific provisions for institutions in Kerala governed by agreements with the Government. The permissible limit for non-resident Indians and foreign students was set at 5% of the total intake, with admissions based on merit.
Conclusion:
The matters were listed for hearing on July 20, 1994, with notice issued to the Attorney General of India and the Advocates General for the States. Written submissions were to be submitted by July 13, 1994.
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1994 (4) TMI 402
Issues Involved:
1. Territorial jurisdiction of the court to try the suit.
2. Nature and scope of the transaction between the parties and the legal consequences.
3. Determination of who committed breach of obligations under the transaction.
4. Whether the defendants can forfeit or withhold Rs. 40,000 paid by the plaintiff.
5. Whether the findings of the trial court warrant interference.
6. Whether the judgment and decree of the trial court deserve to be set aside, altered, or modified.
Detailed Analysis:
1. Territorial Jurisdiction of the Court to Try the Suit:
The court analyzed whether the trial court had jurisdiction based on where the contract was made and performed. The plaintiff, a resident of Nirmal, paid Rs. 40,000 via demand drafts drawn at the State Bank of Hyderabad, Nirmal. The machinery was to be delivered and erected at Manchiryal, Adilabad district. The court held that the situs of the contract for jurisdiction purposes was correctly determined by the trial court as Adilabad, based on the place of payment and intended delivery. The court referenced Section 20(c) of the Code of Civil Procedure and the Supreme Court's decision in A.B.C. Laminart Pvt. Ltd v. A.P. Agencies, Salem, which outlines various connecting factors for determining jurisdiction.
2. Nature and Scope of Transaction Between the Parties and Legal Consequences:
The transaction was for the sale of machinery to establish a Khandasari Sugar Factory, with a total cost of Rs. 2,34,715. The plaintiff paid Rs. 40,000 as part of the 25% advance, but the balance of Rs. 18,000 was not paid. The court found that the transaction was an agreement to sell future goods, not a concluded contract, as the machinery was not yet manufactured or in a deliverable state. The court referenced Section 4 of the Sale of Goods Act, 1930, distinguishing between a contract of sale and an agreement to sell.
3. Determination of Who Committed Breach of Obligations Under the Transaction:
The court found that the plaintiff did not commit a breach of contract as there was no concluded contract. The plaintiff's inability to establish the sugar factory and subsequent request for a refund did not constitute a breach. The defendants' claim that they had started manufacturing the machinery was not substantiated with credible evidence. The court held that the plaintiff's action to seek a refund was justified due to the failure of the contingent event (establishment of the sugar factory).
4. Whether the Defendants Can Forfeit or Withhold Rs. 40,000 Paid by the Plaintiff:
The court held that the defendants could not forfeit the Rs. 40,000 as there was no concluded contract and no breach by the plaintiff. The court emphasized that there was no stipulation for forfeiture in the proposed contract documents (Exs.A-5 and A-6). The court referenced the Supreme Court's decision in Maula Bux v. Union of India, which distinguishes between earnest money and part payment of the purchase price. The court concluded that the Rs. 40,000 was part of the purchase price and could not be forfeited.
5. Whether the Findings of the Trial Court Warrant Interference:
The court affirmed the trial court's findings that the plaintiff was entitled to a refund of Rs. 40,000. The trial court's conclusions were supported by the evidence and legal principles. The court found no reason to interfere with the trial court's judgment and decree.
6. Whether the Judgment and Decree of the Trial Court Deserve to Be Set Aside, Altered, or Modified:
The court upheld the trial court's judgment and decree, confirming that the plaintiff was entitled to recover Rs. 40,000 from the defendants. The court dismissed the defendants' appeal and awarded costs to the plaintiff.
Conclusion:
The appeal was dismissed, and the trial court's judgment and decree were affirmed. The plaintiff was entitled to recover Rs. 40,000 from the defendants, with costs awarded in favor of the plaintiff. The court found no merit in the defendants' claims and upheld the trial court's findings on all issues.
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1994 (4) TMI 401
Issues Involved:
1. Inclusion of fertilizer subsidy in taxable turnover under the Kerala General Sales Tax Act, 1963 (KGST Act).
2. Validity of assessments levying tax on subsidy amounts.
3. Applicability of Andhra Pradesh High Court decisions on similar matters.
4. Definition and treatment of subsidies in the context of sales tax.
Issue-wise Detailed Analysis:
1. Inclusion of Fertilizer Subsidy in Taxable Turnover:
The primary issue in these writ petitions is whether the fertilizer subsidy received by the petitioners should be included in their taxable turnover under the KGST Act. The petitioners, manufacturers, and sellers of fertilizers, argue that the subsidy received from the Central Government should not be considered part of their taxable turnover.
2. Validity of Assessments Levying Tax on Subsidy Amounts:
The petitioners challenge the assessments on the grounds that the subsidy amount cannot form part of their taxable turnover. They reference a decision by the Andhra Pradesh High Court, which held that such subsidies were not taxable. The assessing authority, however, included the subsidy in the taxable turnover, leading to the current dispute.
3. Applicability of Andhra Pradesh High Court Decisions:
The petitioners support their submissions with decisions from the Andhra Pradesh High Court, specifically in Fertiliser Corporation of India Ltd. v. Commercial Tax Officer and Coromandel Fertilisers Ltd. v. Commercial Tax Officer. These cases concluded that subsidies received from the Central Government were not related to any single sale transaction and thus could not be treated as part of the taxable turnover. The Kerala High Court agrees with these decisions, noting that the subsidy was not paid as consideration for any sale of fertilizer but was a grant to ensure a reasonable return on investment and facilitate the healthy development of the fertilizer industry.
4. Definition and Treatment of Subsidies:
The judgment delves into the definition of "subsidy" from various dictionaries and legal sources. A subsidy is described as a grant by the government to an enterprise for public benefit, often to keep commodity prices down. The court emphasizes that the subsidy received by the petitioners is not related to any particular sale transaction but is instead a grant to ensure fair returns and the healthy growth of the fertilizer industry. Therefore, the subsidy cannot be considered part of the sale price or turnover.
Conclusion:
The court concludes that the subsidy received by the petitioners from the Fertiliser Price Fund Account is not part of the taxable turnover under the KGST Act. The assessments imposing tax on the subsidy amounts are deemed illegal and unsustainable. Consequently, the court quashes the relevant assessment orders to the extent they levy tax on the subsidy amounts and directs the Appellate Assistant Commissioners to dispose of any remaining points in the appeals according to law. The writ petitions are allowed with no order as to costs.
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1994 (4) TMI 400
Issues:
1. Contempt of court for non-implementation of an interim order granting promotion.
2. Applicability of rules for promotion and authority to accord promotion.
Analysis:
Contempt of Court:
The respondent, a Lecturer in a medical college, sought ad hoc promotion to Associate Professor, claiming denial despite requisite experience and the exclusion of foreign assignment period from teaching experience calculation. The High Court issued an interim order for promotion, leading to contempt proceedings when not implemented. The appellant argued that the promotion was subject to Public Service Commission or Departmental Promotion Committee decisions, and the respondent lacked qualifications. The court directed non-bailable warrants and disallowed the Government advocate to defend the appellant. The appellant expressed genuine difficulties in implementing the order, emphasizing the promotion's violation of rules and the Service Commission's exclusive authority. The Supreme Court considered the impracticality of enforcing an impossible order and criticized the appellant's conduct while allowing the appeals and urging an unconditional apology.
Promotion Rules and Authority:
The appellant contested the interim promotion order's correctness, highlighting the respondent's potential undue advantage and the mandatory qualifications for the post. The appellant emphasized the necessity of compliance with rules and the exclusive authority of the Service Commission for promotions. The Supreme Court acknowledged the appellant's genuine implementation challenges, cautioning against enforcing unfeasible orders through contempt proceedings. The court stressed the importance of respecting judicial authority while advising prompt appellate procedures for grievances. The judgment allowed the appeals, emphasizing the need for the main writ petition's merit-based disposal to determine the respondent's eligibility for promotion to Associate Professor.
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1994 (4) TMI 399
The Supreme Court dismissed the Special Leave Petition (S.L.P.) as the High Court had remanded the matter to the Assistant Collector for a fresh decision in accordance with the law. The petitioners can challenge the final decision after remand if aggrieved. The Court did not go into the merits of the points raised in the S.L.P. and left them open for future decision.
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1994 (4) TMI 398
Issues:
1. Validity of the complaint under section 138 of the Negotiable Instruments Act.
2. Interpretation of the proviso to section 138 and section 142 of the Act.
Detailed Analysis:
The judgment by the High Court of Madras involved a petition filed under section 482 of the Criminal Procedure Code to quash a complaint in C.C. No. 15 of 1993. The complaint was made against the petitioner for an offense under section 138 of the Negotiable Instruments Act. The complaint alleged that the accused issued a cheque that was dishonored twice, and the complainant demanded repayment. The accused failed to make the payment, leading to the complaint being filed. The main argument raised was regarding the timing of the complaint in relation to the statutory notice sent to the accused.
The petitioner's counsel argued that the complaint was invalid as it was made within fifteen days of the statutory notice, which rendered it liable to be quashed. The court analyzed the relevant provisions of the Act, specifically clause (c) of the proviso to section 138 and clause (b) of section 142. It was noted that the cause of action for a complaint under section 138 arises only after fifteen days from the date of the statutory notice. Since the complaint was filed before the expiry of the fifteen days, it was considered premature and, therefore, invalid.
The court emphasized that as per the provisions of the Act, the cause of action for a complaint under section 138 arises only after the expiration of fifteen days from the date of the statutory notice. Since the complaint was filed before this period, it was deemed premature and, therefore, not maintainable. Consequently, the petition was allowed, and all further proceedings in C.C. No. 15 of 1993 were quashed by the Chief Judicial Magistrate in Krishnagiri.
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1994 (4) TMI 397
Issues Involved:
1. Whether the award made by private arbitrators is compulsorily registrable under Section 17 of the Registration Act, 1908.
2. The effect of non-registration of the award under Section 49 of the Registration Act, 1908.
3. Whether the award creates any right, title, or interest in immovable property.
Issue-wise Detailed Analysis:
1. Whether the award made by private arbitrators is compulsorily registrable under Section 17 of the Registration Act, 1908:
The courts below found that the appellant's title is founded upon the award to acquire title to or to divest the title of Kartar Lal; it is compulsorily registrable under Section 17 of the Registration Act, 1908. Section 17(1)(b) of the Registration Act mandates that non-testamentary instruments which purport or operate to create, declare, assign, limit, or extinguish any right, title, or interest in immovable property must be registered. The award made by a private arbitrator is considered a non-testamentary instrument under Section 17(1)(b). The Supreme Court in Satish Kumar v. Surinder Kumar held that an award affecting partition of immovable property requires registration under Section 17(1)(b). Therefore, the award in question is a non-testamentary instrument that required registration.
2. The effect of non-registration of the award under Section 49 of the Registration Act, 1908:
Section 49 declares that no document required to be registered under Section 17 shall affect any immovable property comprised therein or be received as evidence of any transaction affecting such property unless it has been registered. The Supreme Court in Lachhman Dass v. Ram Lal emphasized that the purpose of registration is to ensure that every person dealing with the property can rely on the register as a complete account of all transactions affecting the title. The non-registration of the award renders it inadmissible in evidence as a source of title under Section 49. This principle was reiterated in Ratan Lal Sharma v. Purshottam Harit and Lachhman Dass case, where the title was founded on the award.
3. Whether the award creates any right, title, or interest in immovable property:
The crucial question is what the award purports to do. The arbitrators' award declared that Kartar Lal is a benamidar and that the appellant had contributed half the consideration of the sale price, making him the owner of half the house from the date of purchase. The contention that the award creates right, title, and interest in favor of the appellant and extinguishes that of Kartar Lal is supported by the fact that the sale certificate was in accordance with the law. The appellant's foundation of title is based on the award, and its non-registration renders it inadmissible as evidence of title. The Supreme Court in Uttam Singh Duggal v. Union of India held that all claims subject to arbitration merge in the award, and after the award is pronounced, rights and liabilities can only be determined based on the award. In Champalal v. Samarath Bai, it was held that an unregistered award cannot be taken into evidence to affect immovable property under Section 17. However, in Addanki Narayanappa v. Bhaskara Krishtappa, it was held that a document of dissolution recording the end of a partnership does not convey immovable property and does not require registration under Section 17(1)(b). Similarly, in CIT v. Juggilal Kamalapat, a deed of relinquishment of a partner's interest in partnership assets, including immovable property, was valid without registration.
In conclusion, the award in favor of the appellant creates a right, title, and interest in half share of the house, but its non-registration under Section 17 of the Registration Act renders it inadmissible as evidence of title under Section 49. Therefore, the appellant's claim as the owner of the half share in the property is negated due to the award's non-registration.
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1994 (4) TMI 396
Issues Involved:
1. Whether the amount claimed by the petitioner is admittedly due or bona fide disputed.
2. Justification of deductions claimed by the respondent company.
3. Whether the winding-up petition is a suitable remedy for resolving the payment dispute.
Detailed Analysis:
1. Whether the amount claimed by the petitioner is admittedly due or bona fide disputed:
The court examined whether the claimed amount by the petitioner was genuinely due or if the respondent company had legitimate grounds for disputing it. The petitioner claimed an outstanding amount of Rs. 52,80,413 under two contracts related to detailed engineering, consultancy services, and supply of equipment for a Bar and Section Rolling Mill Complex. The company, however, contended that they had already made excess payments and raised counterclaims for various deficiencies and delays in the petitioner's performance.
2. Justification of deductions claimed by the respondent company:
The court scrutinized each deduction claimed by the respondent company to determine their validity:
(i) Cost of modification made by SSL as agreed by TDL in the Minutes of Meeting held on 11-5-1990:
The company deducted Rs. 13 lacs for modifications of the cooling bed, which was agreed upon in a meeting on May 11, 1990. The petitioner had acknowledged this deduction in a letter dated January 6, 1991. The court found this deduction justified based on the petitioner's admission.
(ii) Cost of Motor, Gear Box of under-rated capacity which are to be changed:
A sum of Rs. 18 lacs was withheld for the cost of an under-rated motor and gearbox. The company argued that the motor supplied could not handle the required load, causing operational issues. The court noted that meetings held on February 5-6, 1990, and May 11, 1990, confirmed the motor's inadequacy, and the petitioner had acknowledged this issue. Therefore, this deduction was deemed justified.
(iii) & (iv) Cost of Rolls of Wrong Specifications and Improper requirement of Cables:
The company sought to deduct Rs. 3.50 lacs and Rs. 1.15 lacs for these items. However, the respondent's counsel did not contest these deductions seriously, and even if credited to the petitioner, it wouldn't affect the excess payment claim by the company. Thus, these deductions were not pivotal to the decision.
(v) Liquidated damages for delay in supply of equipment:
The company withheld Rs. 21.34 lacs as liquidated damages for delays in equipment supply, as per Clause 7 of the second contract. The petitioner acknowledged some delays but attributed them to factors beyond their control. The court concluded that determining responsibility for the delays required a proper trial, and thus, the company's withholding of this amount was justified until resolved in a civil court.
3. Whether the winding-up petition is a suitable remedy for resolving the payment dispute:
The court emphasized that winding-up proceedings are not intended as an alternative to debt recovery through ordinary legal channels. Given the bona fide disputes over the claimed amounts and the existence of counterclaims, the court found the winding-up petition inappropriate. The petitioner had already initiated a civil suit for the recovery of the claimed amount, which was deemed the proper forum for resolving the disputes.
Conclusion:
The court dismissed the winding-up petition, concluding that the amount claimed by the petitioner was bona fide disputed. The petitioner was directed to pursue their claims through the pending civil suit. The court also clarified that its observations were solely for disposing of the present petition and would not influence the civil suit's outcome. The petition was dismissed with costs assessed at Rs. 5,000.
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1994 (4) TMI 395
The High Court of Bombay addressed multiple questions under the IT Act, 1961:
1. The Tribunal should consider gross asset value for relief under s. 80J.
2. A sum of Rs. 3,34,369 was not assessable as accrued income.
3. Surtax liability of Rs. 4,63,075 was not an allowable business expenditure.
4. Additional grounds of appeal on capital computation under s. 80J were not admitted.
The Court ruled in favor of the Revenue for questions 1 and 3, and in favor of the assessee for question 2. Question 4 was not answered as it was deemed academic. The reference was disposed of with no costs.
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1994 (4) TMI 394
Issues Involved:
1. Validity of Tamil Nadu's prohibition on the sale of lottery tickets from other States.
2. Definition and characteristics of a lottery "organised" by a State.
3. Impact of the prohibition on the economic resources of smaller States like Sikkim.
4. Applicability of the prohibition to other States' lotteries.
5. Constitutional validity of Bihar's ban on lottery tickets.
Summary:
1. Validity of Tamil Nadu's Prohibition:
The executive order GOMs No. 1101 dated 6-10-1989 by Tamil Nadu prohibits the sale of lottery tickets from other States. The order allows only lotteries organised by the Government of Tamil Nadu, the Government of India, or other State Governments, while prohibiting private lotteries.
2. Definition and Characteristics of a Lottery "Organised" by a State:
The Court examined whether the lottery claimed to be organised by the State of Sikkim meets the criteria of a State-organised lottery. Essential characteristics include:
- Tickets printed by or at the instance of the State Government.
- State itself selling the tickets, possibly through agents.
- Sale proceeds credited to the State funds.
- Draws conducted by the State.
- Unclaimed prize money reverting to the State.
The concept of "royalty" paid by an agent is inconsistent with the principal-agent relationship, indicating enfranchisement rather than agency.
3. Impact on Smaller States like Sikkim:
The State of Sikkim argued that prohibiting the sale of its lottery tickets in Tamil Nadu would severely impact its economic resources. However, the Court held that the State has the power to regulate the sale of lottery tickets not organised by the Union or other States. Sikkim can evolve an acceptable scheme and seek protection of its rights through the court.
4. Applicability to Other States' Lotteries:
The schemes of lotteries from Mizoram, Nagaland, Arunachal Pradesh, Goa, and Kerala are similar to Sikkim's. All interim and interlocutory orders of stay in favor of these States are vacated, with the stay continuing till 5-5-1994 for already sold tickets. The Court prima facie found that Mizoram's lottery scheme does not meet the required criteria and dismissed the stay application.
5. Constitutional Validity of Bihar's Ban:
The Bihar Ban on Lottery Ordinance, 1993, prohibits the sale of lottery tickets in the State. The High Court recognized the distinction between lotteries "organised" by the State and those merely authorised by it. The State of Bihar appealed, and the Supreme Court stayed the High Court's judgment pending final disposal. Respondents can apply to the State Government to determine if their lotteries are "organised" by the State, with the State making a speaking order based on the criteria indicated in the Tamil Nadu matter.
The stay on the High Court's judgment will operate from 12-5-1994, and no tickets for draws after 11-5-1994 shall be sold from 12-5-1994 onwards, except as permitted by the Finance Secretary.
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1994 (4) TMI 393
Issues:
1. Dismissal of criminal appeal for want of prosecution due to lawyers' strike.
2. Judicial restraint and impartiality of the High Court judge.
3. Impact of personal prejudice on judicial decision-making.
Analysis:
1. The appellants were convicted and sentenced under Sections 147 and 307 of the Indian Penal Code. The appeal against the conviction was dismissed by the High Court for want of prosecution due to lawyers' strike. The appellant argued that the Court should have focused on the absence of appellant's counsel rather than the reasons for the strike. The Supreme Court criticized the High Court for dismissing the appeal without proper justification and reinstated the appeal for a hearing on merits.
2. The High Court's observations regarding the lawyers' strike and their demands for the transfer of the Chief Justice were deemed unwarranted by the Supreme Court. The Court emphasized the importance of judicial restraint and impartiality, stating that judges should not let personal prejudices influence their decisions. The Supreme Court highlighted the need for judges to maintain mental equipoise and not allow personal biases to affect their judgment, citing relevant legal principles and precedents.
3. The Supreme Court emphasized that a closed mind and prejudice are detrimental to fair hearing and independent judgment. Judges must adhere to relevant legal rules and maintain impartiality in decision-making. The Court criticized the High Court judge for expressing bias against the advocates and their opinions regarding the Chief Justice. The Supreme Court set aside the High Court's judgment and directed the restoration of the appeal for a fair hearing on merits, emphasizing the importance of judicial integrity and impartiality in the legal process.
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1994 (4) TMI 392
Issues Involved:
1. Temporary Injunction under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure.
2. Infringement of Registered Trade Mark.
3. Passing Off.
4. Applicability of the Trade and Merchandise Marks Act, 1958 (TMM Act) vs. the Press and Registration of Books Act, 1867 (PRB Act).
5. Balance of Convenience and Comparative Hardship.
6. Conflict between Special and General Legislation.
7. Freedom of Press.
Detailed Analysis:
1. Temporary Injunction under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure:
The appeal is confined to the order on I.A.No. I, dated 2-3-1984, passed by the 17th Additional City Civil Judge, Bangalore, which granted a temporary injunction restraining the appellant from using the trade mark "Financial Times." The trial court found that the first respondent made out a prima facie case for the grant of a temporary injunction.
2. Infringement of Registered Trade Mark:
The first respondent, Financial Times Ltd., claimed relief for the infringement of its registered trade mark "Financial Times" (No. 468937) under the TMM Act. The appellant argued that the PRB Act, being a special Act, should take precedence over the TMM Act, and therefore, the TMM Act is not applicable.
3. Passing Off:
The first respondent alleged that the appellant and the second respondent were passing off their publication as that of the first respondent by using the title "Financial Times" and adopting similar styles and colors. The trial court granted an injunction based on these allegations.
4. Applicability of the TMM Act vs. the PRB Act:
The appellant contended that the PRB Act is a special Act for the regulation of printing presses and newspapers, and thus, the TMM Act should not apply. The court noted that the PRB Act regulates the right to publish a newspaper in India and that registration under the TMM Act merely supplements this right.
5. Balance of Convenience and Comparative Hardship:
The appellant argued that the injunction caused greater hardship by stopping the publication, affecting employees and distributors. The court found that the balance of convenience and comparative hardship favored the appellant, as the first respondent's circulation in India was limited to 231 copies per day, and there was no significant deception between the two newspapers.
6. Conflict between Special and General Legislation:
The court emphasized the need for harmonious construction between the PRB Act and the TMM Act. It concluded that the PRB Act, being a special Act, should take precedence, and a trade mark registration under the TMM Act cannot independently grant the right to publish a newspaper without registration under the PRB Act.
7. Freedom of Press:
The appellant argued that the injunction infringed upon the freedom of the press guaranteed under the Constitution of India. The court agreed that the large circulation of the appellant's newspaper provided employment and that the hardship caused to the appellant was greater than that to the first respondent.
Conclusion:
The court set aside the trial court's order granting the temporary injunction, finding that the first respondent had not made out a prima facie case for such relief. The court emphasized that the PRB Act takes precedence over the TMM Act in matters of newspaper publication and that the balance of convenience and comparative hardship favored the appellant. The application for intervention by the State of Karnataka was also rejected. The appeal was allowed, and the parties were ordered to bear their own costs.
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1994 (4) TMI 391
Issues Involved:
1. Entitlement to drawback at 6% of FOB.
2. Rejection of request for conversion of DEEC shipping bill into a Drawback shipping bill.
3. Alleged misdeclaration of the constituent yarn content.
4. Procedural compliance under Rule 11 of the Customs and Central Excise Duty Drawback Rules, 1971.
5. Applicability of Rule 14 of the Customs and Central Excise Duty Drawback Rules, 1991.
6. Amendment of shipping bill under Section 149 of the Customs Act.
7. Procedural lapse and substantial compliance.
Detailed Analysis:
1. Entitlement to Drawback at 6% of FOB:
The appellants argued that they were entitled to a normal drawback at the rate of 6% of FOB as no Advance licence was granted. The Ministry's letter dated 3-3-1992, which rejected the conversion request, did not provide reasons for the rejection. The impugned order was vague and defective, violating the principle of Audi Alteram Partem. The court observed that the goods exported were covered by the description under Sr. No. 27.04 of the Drawback Schedule, entitling the appellants to a 6% drawback.
2. Rejection of Request for Conversion of DEEC Shipping Bill into a Drawback Shipping Bill:
The appellants contended that they never requested the conversion of a DEEC shipping bill into a Drawback shipping bill, and therefore, the rejection of such a request was unfounded. The court noted that the DEEC licence was not granted, and thus, the goods were not covered by the note to Serial No. 2704. Consequently, the goods were eligible for the drawback as per the description under Sr. No. 27.04.
3. Alleged Misdeclaration of the Constituent Yarn Content:
The department alleged misdeclaration regarding the use of polyester filament yarn. However, the court found that since the DEEC licence was not granted, the note to Serial No. 2704 was not applicable. The goods were made wholly or mainly from cotton knitted yarn and viscose yarn, thus meeting the description under Sr. No. 2704. The court ruled that the alleged misdeclaration was imaginary and not relevant to the case.
4. Procedural Compliance under Rule 11 of the Customs and Central Excise Duty Drawback Rules, 1971:
The appellants argued that they had complied with the procedural requirements by providing necessary particulars on the shipping bills. The court held that Rule 11 was procedural and did not prescribe that a discrepancy in the declaration would disallow the drawback. The court emphasized that substantial compliance with the rule was sufficient, and the statutory right to drawback could not be denied due to procedural lapses.
5. Applicability of Rule 14 of the Customs and Central Excise Duty Drawback Rules, 1991:
The appellants contended that Rule 14 was wrongfully invoked as the payment of drawback was neither erroneous nor excessive. The court agreed, stating that the appellants were entitled to the drawback as per the statutory provisions, and Rule 14 was not applicable in this case.
6. Amendment of Shipping Bill under Section 149 of the Customs Act:
The appellants argued that the Asstt. Collector had the power to amend the shipping bill under Section 149 of the Customs Act. The court noted that the documentary evidence supporting the amendment was in existence at the time of export, and the amendment was procedural. Therefore, the Asstt. Collector could have carried out the amendment.
7. Procedural Lapse and Substantial Compliance:
The court emphasized the principle of substantial compliance, stating that procedural lapses should not deny the statutory right to drawback. The goods were covered by the description under Sr. No. 2704, and the DEEC was not granted, making the note to Serial No. 2704 inapplicable. The court ruled that the appellants were entitled to the drawback at the rate of 6% and allowed the appeal.
Conclusion:
The appeal was allowed, and the appellants were granted a drawback at the rate of 6% of FOB. The court emphasized that procedural lapses should not deny the statutory right to drawback, and substantial compliance with the rules was sufficient. The alleged misdeclaration was deemed irrelevant, and the appellants' entitlement to drawback was upheld.
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1994 (4) TMI 390
Issues involved:
The judgment involves the conviction of the appellant under Section 302 IPC for the murders of four family members and under Section 307 IPC for attempting to murder another family member. The issues include the prosecution's case, evidence presented, motive, mental state of the accused, and the sentencing considerations.
Prosecution Case:
The prosecution detailed the events leading to the murders, citing disputes between the deceased and the accused over a shop opening. The accused suspected poisoning by the deceased and attacked the family members, resulting in deaths and injuries. Medical evidence supported the prosecution's case.
Witness Testimonies:
Witness testimonies, particularly that of PW 2, were crucial in establishing the events of the attack. Despite some witnesses turning hostile, PW 2's account was accepted by both trial and appellate courts. The accused denied the charges, claiming false implication.
Motive and Mental State:
The motive behind the murders was attributed to the accused's mental disturbance and suspicion of being poisoned. The accused's belief that his life was in danger due to the deceased's actions was a significant factor considered in determining the sentence.
Sentencing Considerations:
The courts below considered the brutality of the murders, sparing of no family member, and the accused's mental state in awarding the death sentence. However, the Supreme Court reviewed the evidence and reduced the sentence to life imprisonment, emphasizing the accused's disturbed mental condition and lack of direct evidence linking him to all the murders.
Compensation and Final Decision:
The Supreme Court ordered the appellant to pay compensation to the victim's family under Section 357(3) CrPC, highlighting the importance of providing support to the victim. The judgment confirmed the conviction under Section 302 IPC with a reduced sentence to life imprisonment and upheld the seven years' RI sentence under Section 307 IPC, to run concurrently.
The judgment balances the severity of the crimes with considerations of mental state, motive, and victim support, ultimately modifying the original sentence while upholding the convictions.
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1994 (4) TMI 389
Issues:
1. Whether the expenditure incurred for repairs and replacement of plant and machinery is revenue or capital in nature?
2. Whether the change in the method of stock valuation from 'since realisable value' to 'estimated cost' is valid?
Analysis:
Issue 1:
The first two questions in the reference pertain to the expenditure of Rs. 1,77,708 incurred by the assessee for the replacement of parts in a machine used for business purposes. The Assessing Officer initially treated the expenditure as capital in nature. However, the Commissioner (Appeals) and the Tribunal held that the expenditure was revenue in nature based on relevant evidence and past precedents. The Tribunal compared this case to a previous judgment involving the replacement of a truck engine, where it was held that such replacement expenses are revenue in nature as they maintain existing assets without creating new benefits. The Court agreed with this reasoning, emphasizing that the expenditure was solely for the replacement of existing parts for business purposes, leading to the conclusion that it was revenue expenditure.
Issue 2:
The last two questions revolve around the change in the method of stock valuation by the assessee from 'since realisable value' to 'estimated cost'. The Assessing Officer disapproved of this change, alleging that it was intended to reduce taxable profits. However, the Commissioner (Appeals) and the Tribunal supported the assessee's decision, noting that the new method of valuation was consistent with recognized practices and had been followed consistently. The Court acknowledged that stock valuation can be done using different methods and found no malice in the assessee's change to the 'estimated cost' basis. As long as the new method is consistently applied, the change is deemed valid. Therefore, the Court upheld the Tribunal's decision, concluding that the change in the method of stock valuation was not arbitrary or perverse, and ruled in favor of the assessee on this issue.
In conclusion, the High Court of Calcutta upheld the Tribunal's decisions on both issues, affirming that the expenditure for repairs and replacement of plant and machinery was revenue in nature and that the change in the method of stock valuation was valid.
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1994 (4) TMI 388
... ...
... ... ..... JJ. ORDER Appeal dismissed.
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1994 (4) TMI 387
Issues Involved:
1. Whether tenants are entitled to be heard by the concerned authority while deciding a dispute of title between persons claiming to be owners and the Gram Panchayat under Section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948.
2. The locus standi of tenants to file writ petitions challenging the Director's order under Section 42 of the Act.
3. The interpretation and scope of Section 42 of the Act, particularly the proviso requiring notice and opportunity to be heard to "interested parties."
Comprehensive, Issue-wise Detailed Analysis:
1. Entitlement of Tenants to be Heard:
The primary issue in these appeals is whether tenants, who are cultivating the land as lessees under the Gram Panchayat, are entitled to be heard by the concerned authority while deciding a dispute of title under Section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948. The appellants claimed to be tenants of the Gram Panchayat and argued that they should have been given an opportunity to be heard before any adverse order was passed affecting their tenancy rights. The Supreme Court noted that the proviso to Section 42 of the Act mandates that notice to "interested parties" and an opportunity to be heard are conditions precedent to the passing of an order under Section 42. The Court emphasized that the test for determining whether a person is an "interested party" is whether they are likely to be affected by the decision or the result of the proceedings. The Court concluded that tenants, being in possession of the land and having an interest in it, fall within the category of "interested parties," and therefore, they are entitled to be heard.
2. Locus Standi of Tenants to File Writ Petitions:
The appellants filed writ petitions before the High Court challenging the Director's order under Section 42 of the Act, arguing that they had the locus standi to do so as they were tenants of the Gram Panchayat. The High Court dismissed the writ petitions, holding that the appellants did not have the locus standi to file the writ petitions, relying on two earlier decisions. However, the Supreme Court disagreed with the High Court's view and held that the appellants, being tenants and having an interest in the disputed land, had the locus standi to challenge the Director's order. The Court observed that the general issues in law regarding the locus standi of a tenant to participate in a dispute regarding title between two rival claimants would not arise in a case covered by Section 42 of the Act, given the nature of the rights created under the Act in favor of tenants.
3. Interpretation and Scope of Section 42 of the Act:
The Act provides for the compulsory consolidation of agricultural holdings and the prevention of fragmentation of agricultural holdings in Punjab. Section 42 empowers the State Government to call for proceedings at any time to satisfy itself as to the legality or propriety of any order passed or scheme prepared or re-partition made by any officer under the Act. The proviso to Section 42 stipulates that no order or scheme or re-partition shall be varied or reversed without giving the parties interested notice to appear and an opportunity to be heard. The Supreme Court emphasized that this proviso embodies a fundamental canon of natural justice, founded on the maxim that no one should be condemned unheard. The Court referred to several precedents, including "Paras Ram v. State of Punjab" and "Gram Panchayat of Village Serohi Behali and Ors. v. Har Lal and Ors.," which interpreted the words "parties interested" to include tenants and other persons in possession of the land whose rights would be affected by the adjudication under Section 42. The Court concluded that the appellants, being tenants, were "interested parties" within the meaning of the proviso to Section 42, and therefore, the Director's order passed without notice to them was invalid.
Conclusion:
The Supreme Court set aside the impugned orders passed by the Director and the judgments of the High Court, remanding the matters to the Director for fresh disposal after hearing the appellants and other necessary parties. The Court directed the Director to consider whether the appellants were still in possession of the land as tenants and how their rights could be protected even if the title to the land was decided in favor of the respondents-shareholders. The appeals were allowed, with no order as to costs.
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