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1998 (4) TMI 581
Issues Involved:
1. Purpose and scope of the Sick Industrial Companies (Special Provisions) Act, 1985.
2. Interpretation and application of Section 22 of the Act regarding suspension of legal proceedings.
3. The factual context of the company's financial status and proceedings before the Board for Industrial and Financial Reconstruction (BIFR).
4. The applicability of Section 22 to post-scheme transactions and claims.
5. Legal precedents and their relevance to the case.
Detailed Analysis:
Purpose and Scope of the Sick Industrial Companies (Special Provisions) Act, 1985
The judgment begins by highlighting the dismal industrial climate of the early eighties, which prompted the Central Government to enact the Sick Industrial Companies (Special Provisions) Act, 1985. The Act aimed to "revive and rehabilitate potentially viable but sick industrial companies as quickly as possible" and to ensure "full utilization of productive industrial assets and maximum protection of employment." The Act's preamble emphasizes the need for "timely detection of sick and potentially sick companies," "speedy determination by a Board of Experts," and "expeditious enforcement of measures."
Interpretation and Application of Section 22 of the Act
Section 22 of the Act provides for the suspension of legal proceedings, contracts, etc., when an inquiry under Section 16 is pending, a scheme under Section 17 is under preparation or consideration, or a sanctioned scheme is under implementation. The section aims to prevent any proceedings for the winding up of the industrial company or for execution, distress, or the appointment of a receiver without the consent of the Board or Appellate Authority. The judgment clarifies that this creates a "total ban as regards enforcement of any decree or even initiation of a civil suit for recovery of money or enforcement of any security" against the industrial undertaking.
Factual Context of the Company's Financial Status and Proceedings Before BIFR
The company in question, M/s. Safe Pack Polymers Limited, was declared a sick industrial unit and referred to BIFR in December 1994. Due to the company's failure to present a revival proposal, IFCI was appointed as the operating agency to prepare a draft rehabilitation scheme. The company's accumulated losses as of 31-3-1995 were Rs. 934.49 lakhs, making its net worth negative. The draft rehabilitation scheme was approved and sanctioned in February 1996.
Applicability of Section 22 to Post-Scheme Transactions and Claims
The petitioner supplied goods and materials to the company between February and May 1996, after the scheme was sanctioned. The judgment references the Supreme Court's decision in Dy. Commercial Tax Officer v. Corromandal Pharmaceuticals, which held that Section 22's embargo should not cover post-scheme transactions. The Court emphasized that the bar under Section 22 should be "restrictive in nature" and apply only to the state of affairs up to the date of the scheme's presentation or its approval by BIFR. The Court noted that the petitioner's claims, arising from transactions after the scheme's sanction, were not considered by BIFR and thus should not fall under the purview of Section 22.
Legal Precedents and Their Relevance
The judgment also cites decisions from the Delhi High Court and Andhra Pradesh High Court. In Sirmor Sudburg Auto v. Kuldip Singh Lamba, the Delhi High Court held that mere pendency of an inquiry before BIFR does not suffice for a stay of legal proceedings under Section 22. Similarly, in Prahami Press v. Vinedale Distilleries Ltd., the Andhra Pradesh High Court allowed a company petition, stating that debts incurred after the scheme's framing do not require BIFR's permission for legal action. The judgment concurs with these precedents, asserting that Section 22 does not apply to the petitioner's post-scheme claims.
Conclusion
The judgment concludes that the order of the learned single judge cannot be sustained. The appeal is allowed, and the order of the learned single judge is set aside, with no order as to costs. The Court reiterates that Section 22's provisions do not cover the petitioner's claims arising from transactions that occurred after the scheme's sanction, thus allowing legal proceedings to continue.
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1998 (4) TMI 580
Issues Involved:
1. Entitlement of Project Casual Labour to have their service period counted for pension and retiral benefits.
2. Definition and categorization of Casual Labour in the Indian Railway Establishment Manual.
3. Grant of temporary status to Project Casual Labour.
4. Discrimination claims under Article 14 of the Constitution.
5. Application of the principle laid down in D.S. Nakara v. Union of India.
Issue-wise Detailed Analysis:
1. Entitlement of Project Casual Labour to have their service period counted for pension and retiral benefits:
The primary issue in these appeals was whether employees initially engaged as Project Casual Labour by the Railway Administration and later absorbed in regular temporary/permanent posts are entitled to have their service period as Project Casual Labour counted for pension and other retiral benefits. The Railway Board's order dated October 14, 1980, excluded Project Casual Labour from counting their service period for pensionary benefits because there was no provision for granting temporary status to them. The Supreme Court emphasized that Project Casual Labour could not claim temporary status prior to 1.1.1981 and thus could not have their service period counted for retiral benefits.
2. Definition and categorization of Casual Labour in the Indian Railway Establishment Manual:
The Manual defined 'Casual Labour' as labour whose employment is seasonal, intermittent, sporadic, or short-term. Casual Labour was categorized into three types: Open Casual Labour, Project Casual Labour, and Seasonal Labour. Open Casual Labour could attain temporary status after 120 days of continuous service, but Project Casual Labour did not have such provisions until a scheme was framed during the pendency of writ petitions before the Supreme Court.
3. Grant of temporary status to Project Casual Labour:
A scheme was framed by the Railway Ministry, making provision for granting temporary status to Project Casual Labour upon completing 360 days of continuous service. This scheme was approved by the Supreme Court in Inder Pal Yadav and Ors. v. Union of India and Ors., with modifications. Temporary status was conferred on Project Casual Labour from specified dates, and their temporary service was counted for pension and other retiral benefits only after attaining temporary status as per the scheme.
4. Discrimination claims under Article 14 of the Constitution:
The respondents contended that denying pensionary benefits to Project Casual Labour who were regularized before 1.1.1981, while granting such benefits to those regularized after, amounted to illegal discrimination under Article 14. The Tribunal initially accepted this contention, but the Supreme Court held that the principle laid down in D.S. Nakara v. Union of India does not apply here as it pertains to existing benefits among similar employees and not to new benefits conferred from a specific date.
5. Application of the principle laid down in D.S. Nakara v. Union of India:
The Tribunal's reliance on D.S. Nakara was found erroneous. The Supreme Court clarified that the principle from D.S. Nakara applies to discrimination in existing benefits among similar employees, not to new benefits conferred from a specific date. The benefit of counting service prior to regular employment as qualifying service was a new benefit granted to Project Casual Labour under the scheme approved in Inder Pal Yadav. Therefore, the exclusion of service rendered before 1.1.1981 was not discriminatory.
Conclusion:
The Supreme Court allowed the appeals filed by the Railway Administration and set aside the Tribunal's judgments that had granted pensionary benefits to Project Casual Labour for service periods prior to 1.1.1981. The appeals filed by the employees were dismissed, affirming that Project Casual Labour could not count their service period for retiral benefits before attaining temporary status as per the scheme approved in Inder Pal Yadav.
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1998 (4) TMI 579
Issues Involved:
1. Applicability of TADA to the incident.
2. Validity of the investigation under TADA.
3. Validity of the sanction under Section 20A(2) of TADA.
4. Reliability of prosecution witnesses.
Detailed Analysis:
1. Applicability of TADA to the Incident:
The court examined whether the activities could be classified as "terrorist activities" under TADA. The expression "terrorist act" is defined in Section 3(1) of TADA, and the court referenced the case of *Hitendra Vishnu Thakur v. State of Maharashtra* to outline that terrorism involves violence that produces prolonged psychological effects on society. The court concluded that the ghastly act of setting fire to a Chawl occupied by Hindus during communal riots, resulting in multiple deaths, had far-reaching consequences and disturbed the societal harmony, thereby falling within the ambit of TADA.
2. Validity of the Investigation under TADA:
The defense argued that the investigation was invalid as the approval for applying TADA was not given by the District Superintendent of Police, as required under Section 20A(1). The court noted that Section 20A(1) was introduced after the incident date, making it inapplicable. Additionally, the Commissioner of Police, Greater Bombay, had accorded approval on January 27, 1993, based on a report dated January 13, 1993. The court found no infirmity in the investigation process and rejected the defense's contention.
3. Validity of the Sanction under Section 20A(2) of TADA:
The defense challenged the validity of the sanction, arguing it was granted without proper application of mind. The court examined the sanction order and the evidence of the Commissioner of Police, who testified that he reviewed the investigation records and was satisfied before granting the sanction. The court held that the sanction was valid, as the Commissioner had applied his mind to the relevant materials. Therefore, the court found no illegality in taking cognizance and trying the accused under TADA.
4. Reliability of Prosecution Witnesses:
The court scrutinized the testimonies of the six key eyewitnesses (PWs 1, 2, 3, 4, 9, and 10) and found significant inconsistencies, contradictions, and improbabilities in their statements. The court noted the delay in examining the witnesses and the fact that some witnesses had seen the accused in police custody before identifying them in court. The court emphasized that the credibility of witnesses must be measured with the same yardstick, whether under TADA or normal criminal law, and found the witnesses to be wholly unreliable. The court concluded that the prosecution failed to establish the guilt of the accused beyond a reasonable doubt based on such unreliable evidence.
Conclusion:
The court set aside the conviction and sentence passed by the Designated Court under TADA and various sections of the IPC. The appellants were ordered to be released forthwith unless required in any other case.
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1998 (4) TMI 578
Issues Involved:
1. Validity of the conviction based on the dying declaration (Exh. 2).
2. Inconsistency between two dying declarations (Exh. 5/4 and Exh. 2).
3. Admissibility and probative value of the dying declaration.
4. Corroboration of the dying declaration with circumstantial evidence.
5. Conduct and omissions of investigating officers affecting the case.
Detailed Analysis:
1. Validity of the Conviction Based on the Dying Declaration (Exh. 2):
The main issue was whether the courts were justified in convicting the appellant based on the dying declaration (Exh. 2) of the deceased. The Supreme Court emphasized that a dying declaration is admissible under Section 32 of the Evidence Act and is substantive evidence. The Court noted that the dying declaration does not require corroboration to form the basis of a conviction. The Court found that the dying declaration (Exh. 2), recorded by the II Class Judicial Magistrate, was reliable and true, and thus upheld the conviction.
2. Inconsistency Between Two Dying Declarations (Exh. 5/4 and Exh. 2):
The appellant contended that there were two dying declarations, Exh. 5/4 and Exh. 2, which were inconsistent. The Court found that the original of Exh. 5/4 was not on record, and the ASI who recorded it was not examined. Therefore, Exh. 5/4 was deemed inadmissible. Consequently, Exh. 2 remained the sole dying declaration and was rightly relied upon for convicting the appellant.
3. Admissibility and Probative Value of the Dying Declaration:
The Court discussed the legal principles surrounding the admissibility and probative value of dying declarations. It noted that while dying declarations are a form of hearsay, they are an exception to the rule against hearsay evidence. The Court referred to previous judgments, including Khushal Rao v. State of Bombay and State (Delhi Administration) v. Laxman Kumar, to highlight that a dying declaration, even if not in question-answer form or lacking a doctor's certification, can still be reliable if the recorder has satisfied themselves about the declarant's mental fitness.
4. Corroboration of the Dying Declaration with Circumstantial Evidence:
Although corroboration of a dying declaration is not necessary, the Court found that there was sufficient circumstantial evidence to support Exh. 2. This included the presence of kerosene smell in the room, the postmortem report indicating burn injuries and kerosene smell on the scalp, and the behavior of the appellant, such as delaying to open the locked house. These circumstances corroborated the dying declaration that the appellant had set his wife on fire.
5. Conduct and Omissions of Investigating Officers Affecting the Case:
The Court criticized the investigating officers for creating confusion by bringing in Exh. 5/4 and GD Entry 517, and for their omissions which seemed to favor the appellant. The Court stressed that such acts or omissions should not benefit the accused, as it would perpetuate the mischief and deny justice. The prosecution's case should be examined without being influenced by the contaminated conduct of the officials.
Conclusion:
The Supreme Court upheld the conviction of the appellant based on the dying declaration (Exh. 2) and dismissed the appeal. The appellant, who was on bail, was ordered to surrender to serve out the sentence imposed upon him.
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1998 (4) TMI 577
Issues Involved:
1. Contravention of regulations 6 and 9 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1994.
2. Applicability of the Takeover Regulations to unregistered shares.
3. Adequacy of the penalty imposed by the Adjudicating Officer.
Issue-wise Detailed Analysis:
1. Contravention of Regulations 6 and 9 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1994:
The appellant, Shri Sharad Doshi, was penalized for violating regulations 6 and 9 of the SEBI Takeover Regulations, 1994, by acquiring shares of M/s Ancient Traders Ltd. (ATL) without making the requisite disclosures and public announcements. Regulation 6 mandates that an acquirer holding more than 5% of shares must disclose their aggregate holding to the stock exchange within four days of acquisition. The appellant failed to make this disclosure. Regulation 9(1) requires an acquirer holding more than 10% of voting rights to make a public announcement to acquire shares from other shareholders. The appellant did not comply with this requirement either, despite acquiring a substantial number of shares, raising his holding to about 78.22% of ATL's capital.
2. Applicability of the Takeover Regulations to Unregistered Shares:
The appellant argued that the shares acquired were not registered in his name and hence did not carry voting rights, which should exempt them from the Takeover Regulations. However, the tribunal found this argument legally untenable. The tribunal noted that the acquisition of shares, regardless of their registration status, triggered the Takeover Regulations. The appellant's contention that the transaction was conditional and subject to SEBI's approval was also dismissed, as the Takeover Regulations do not exempt such 'adhoc' acquisitions. The tribunal emphasized that the obligation to comply with the regulations is cast on the acquirer and that the time limit for public announcements is related to the finalization of negotiations or agreements, not the registration of shares.
3. Adequacy of the Penalty Imposed by the Adjudicating Officer:
The appellant contended that the non-compliance was a technical lapse and the penalty of one lakh rupees was disproportionate. The tribunal rejected this argument, stating that non-compliance cannot be considered a mere technical lapse given the stringent penal consequences provided under the SEBI Act. The tribunal upheld the Adjudicating Officer's decision, noting that the penalty was reasonable and within the statutory limit of five lakh rupees. The tribunal found that the Adjudicating Officer had taken into account the nature of the offense, various factors, and the provisions of Section 15J of the SEBI Act while determining the penalty.
Conclusion:
The tribunal dismissed the appeal, affirming the penalty imposed for the contravention of regulations 6 and 9 of the SEBI Takeover Regulations. The tribunal concluded that the appellant's arguments lacked legal support and that the penalty was justified given the gravity of the offense and the need to ensure compliance with the regulations to protect investor interests.
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1998 (4) TMI 576
Issues Involved:
1. Applicability of Section 197 of the Code of Criminal Procedure (CrPC) for prosecuting officers of public sector undertakings or government companies.
2. Interpretation of 'public servant' under Section 21 of the Indian Penal Code (IPC) in relation to officers of public sector undertakings and government companies.
3. Whether officers of public sector undertakings and government companies, being 'State' under Article 12 of the Constitution, are entitled to protection under Section 197 of the CrPC.
Issue-wise Detailed Analysis:
1. Applicability of Section 197 CrPC:
The primary question was whether the provisions of Section 197 of the CrPC, which require prior sanction for prosecuting certain public servants, apply to officers of public sector undertakings or government companies. Section 197 stipulates that no court shall take cognizance of an offence alleged to have been committed by a public servant while acting or purporting to act in the discharge of his official duty without prior sanction from the government.
2. Interpretation of 'Public Servant' under IPC:
The court examined the definition of 'public servant' under Section 21 of the IPC. Clauses 9 and 12 of Section 21 IPC were particularly relevant. Clause 9 includes officers whose duty involves handling government property or interests, while Clause 12 includes persons in the service or pay of the government, local authorities, or corporations established by government acts.
3. Officers of Public Sector Undertakings and Government Companies as 'State':
The court analyzed whether officers of public sector undertakings and government companies, which are considered 'State' under Article 12 of the Constitution due to deep and pervasive government control, should be treated as public servants for the purpose of Section 197 CrPC. The argument was that these officers should enjoy the same protection as government servants to avoid vexatious prosecution and to ensure they can perform their duties without fear.
Detailed Analysis:
1. Applicability of Section 197 CrPC:
The court noted that Section 197 CrPC aims to protect public servants from frivolous and vexatious prosecutions for actions taken in the discharge of their official duties. The requirement of prior sanction is intended to secure the opinion of a superior authority on the desirability of prosecuting a public servant. This protection extends to public servants both during and after their tenure in office.
2. Interpretation of 'Public Servant' under IPC:
The court referred to Section 2(Y) of the CrPC, which states that terms not defined in the CrPC but defined in the IPC shall have the same meaning. Section 21 IPC defines 'public servant' and includes officers of local authorities and corporations established by government acts. However, the court emphasized that the protection under Section 197 CrPC is not automatically available to all public servants unless they meet the specific conditions outlined in the section.
3. Officers of Public Sector Undertakings and Government Companies as 'State':
The court acknowledged that public sector undertakings and government companies, due to deep and pervasive government control, are considered 'State' under Article 12 of the Constitution. However, it concluded that these entities, being juridical persons with separate legal identities, cannot be equated with government departments for all purposes. The court cited previous decisions, such as Ajay Hasia v. Khalid Mujib Sehravadi, which recognized the distinct legal status of such entities despite their government control.
The court also referred to decisions like Dr. S. L. Agarwal v. Hindustan Steel Ltd., which held that employees of government-owned companies are not holders of civil posts under the Union and thus not entitled to protections under Article 311 of the Constitution. Similarly, in Praga Tools Corporation v. C. V. Imanual, the court held that a corporation, even if government-controlled, has a separate legal existence and cannot be treated as a government department.
Conclusion:
The court concluded that the protection under Section 197 CrPC does not extend to officers of public sector undertakings or government companies, even if these entities are considered 'State' under Article 12 of the Constitution. The court emphasized that any liberal interpretation to include such officers within the ambit of Section 197 would amount to judicial legislation, which is not permissible. The appeals were disposed of accordingly, with the court leaving open the possibility for the concerned accused to challenge the validity of the criminal proceedings on other grounds.
Final Judgment:
The protection by way of sanction under Section 197 of the CrPC is not applicable to officers of government companies or public undertakings, even when such entities are 'State' within the meaning of Article 12 of the Constitution. The court did not address other grounds challenging the maintainability of the criminal proceedings, leaving those questions open for consideration by the appropriate authority.
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1998 (4) TMI 575
Issues Involved:
1. Maintainability of Writ Application due to the existence of an alternative remedy of appeal.
2. Validity of Sub-section (3) of Section 45 of the Bihar Finance Act, 1981 requiring a deposit of 20% of the assessed tax before admitting an appeal.
Detailed Analysis:
1. Maintainability of Writ Application:
The petitioner challenged the assessment orders for the financial year 1995-96 under the Bihar Finance Act, 1981, and the Central Sales Tax Act, 1956. The petitioner also sought to quash the demand notices issued pursuant to these assessment orders. The learned Senior Counsel (S.C.) for the respondents raised a preliminary objection regarding the maintainability of the writ application, arguing that an alternative remedy of appeal was available under Section 45 of the Act. The petitioner countered this by asserting that the assessment orders were arbitrary and that Section 45(3) of the Act barred the admission of an appeal unless 20% of the assessed tax was paid.
The court held that the existence of an efficacious and adequate remedy of appeal precluded the maintainability of the writ application. The court cited the Supreme Court's ruling in Assistant Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd., which emphasized that Article 226 of the Constitution should not be used to circumvent statutory procedures unless extraordinary situations justified such recourse.
2. Validity of Sub-section (3) of Section 45 of the Bihar Finance Act, 1981:
The petitioner argued that the requirement to deposit 20% of the assessed tax before admitting an appeal was an onerous condition that effectively nullified the right of appeal, thereby violating Article 14 of the Constitution. The petitioner also contended that this provision was discriminatory, as other states allowed appellate authorities the discretion to waive or modify such preconditions.
The court examined the statutory provision in question, noting that Section 45(3) stipulated that no appeal shall be admitted unless the dealer objecting to the order of assessment paid 20% of the tax assessed or the full amount of admitted tax, whichever was greater. The court referred to a recent division bench ruling in Tinplate Company of India Ltd. v. State of Bihar, which upheld the validity of Section 45(3) by emphasizing that the right of appeal is a statutory right and can be regulated by imposing conditions.
The court also referred to the Supreme Court's decision in Anant Mills Co. Ltd. v. State of Gujarat, which upheld the imposition of conditions on the right of appeal, asserting that such conditions were valid as long as they regulated the exercise of the right and did not make it illusory.
The court rejected the petitioner's reliance on the Gauhati High Court's decision in Monoranjan Chakraborty v. State of Tripura, which had declared a similar provision requiring a 50% deposit of the assessed tax as ultra vires. The court distinguished the present case by noting that the Bihar Finance Act required only a 20% deposit, which was not exorbitant or unreasonable. The court agreed with the Madhya Pradesh High Court's decision in Lachhmandas v. State of M.P., which upheld a similar provision under the Madhya Pradesh General Sales Tax Act.
The court concluded that the absence of a provision allowing the appellate authority to waive or modify the precondition of deposit did not render Section 45(3) ultra vires. Each state has its own legislative framework and considerations, and the differences in statutory provisions among states do not inherently make them discriminatory.
Conclusion:
The court upheld the validity of Sub-section (3) of Section 45 of the Bihar Finance Act, 1981, and dismissed the writ application on the grounds of the availability of an alternative remedy. The petitioner was advised to pursue the statutory appeal process. No costs were awarded.
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1998 (4) TMI 574
Issues Involved:
1. Enforceability of the bank guarantee.
2. Allegations of fraud by the defendant.
3. Irretrievable injustice to the plaintiff.
4. Compliance with the terms of the bank guarantee.
Issue-Wise Detailed Analysis:
1. Enforceability of the Bank Guarantee:
The plaintiff sought a declaration that the bank guarantee dated 6 December 1996 is not enforceable and requested a permanent injunction to prevent defendant no.2 from invoking it. The plaintiff argued that the bank guarantee for Rs. 20 lakhs was provided for mobilization advance, which was utilized for procuring materials worth over Rs. 24 lakhs. The defendant no.2 opposed the suit, claiming that the bank guarantee was unconditional and could be invoked irrespective of any disputes. The court noted that the bank guarantee was an absolute one and could be invoked by the beneficiary as per its terms.
2. Allegations of Fraud by the Defendant:
The plaintiff alleged that defendant no.2 committed fraud by not intending to hand over the site and making false representations about the site's readiness. The plaintiff argued that the defendant's actions, including the oral termination of the contract, were fraudulent. The court considered the correspondence between the parties, which indicated that the defendant failed to make the site available and delayed the completion of civil work, supporting the plaintiff's claim of fraudulent misrepresentation.
3. Irretrievable Injustice to the Plaintiff:
The plaintiff contended that allowing the encashment of the bank guarantee would cause irretrievable injustice, especially given the defendant's poor financial state and heavy debt. The court found that the plaintiff had established special equities in its favor, as it had spent more than Rs. 24 lakhs on procuring materials for the job. The court concluded that if the injunction was not granted, the plaintiff would suffer irretrievable injustice.
4. Compliance with the Terms of the Bank Guarantee:
The court examined the terms of the bank guarantee, which required the bank to pay the amount on demand from the employer, stating that the amount was due under the agreement. The court noted that the invocation of the bank guarantee by defendant no.2 did not comply with its terms, as it did not state that the plaintiff had not utilized the mobilization advance or indicate the amount of loss suffered. This non-compliance with the terms of the bank guarantee supported the plaintiff's case for restraining the encashment.
Conclusion:
The court allowed the plaintiff's application for an interim injunction, confirming the order dated 19 August 1997, which restrained defendant no.1 from encashing the bank guarantee. The court found that the plaintiff had successfully demonstrated special circumstances justifying interference and that allowing the encashment would result in irretrievable injustice. The court directed that the material procured by the plaintiff be preserved and the bank guarantee be kept alive until the disposal of the suit. The court's view was tentative and limited to the decision on the application, without expressing an opinion on the merits of the case.
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1998 (4) TMI 573
Issues Involved:
1. Interpretation of Section 167(5) of the Code of Criminal Procedure as amended by the State of West Bengal.
2. Competence of the Magistrate to pass an order under Section 167(5) despite the ouster of his jurisdiction to try the offence.
3. Extension of time for investigation beyond the prescribed period.
4. Consequences of failure to complete investigation within the stipulated period.
5. Jurisdiction to take cognizance of the offence under Section 7(1)(a)(ii) of the Essential Commodities Act, 1955, in light of Section 468 of the Code of Criminal Procedure.
Issue-wise Detailed Analysis:
1. Interpretation of Section 167(5) of the Code of Criminal Procedure as amended by the State of West Bengal:
The judgment revolves around the interpretation of Section 167(5) of the Code of Criminal Procedure, which fixes a time schedule for various stages of criminal proceedings, including the production of the accused before the Magistrate, detention, and completion of investigation. The West Bengal Legislative Assembly amended sub-section (5) and sub-section (6) of Section 167, fixing different time periods for different types of cases and providing the Magistrate with the authority to stop further investigation and discharge the accused if the investigation is not completed within the specified periods unless special reasons justify the continuation.
2. Competence of the Magistrate to pass an order under Section 167(5) despite the ouster of his jurisdiction to try the offence:
In the case of the appellant involved in an offence under Section 409 of the Indian Penal Code, the Magistrate initially dismissed the application for discharge, stating that only the Special Judge under the West Bengal Criminal Law Amendment (Special Court Act 1949) could pass such an order. However, the High Court held that the Additional Chief Judicial Magistrate was competent to pass the order under Section 167(5) despite the ouster of his jurisdiction to try the offence.
3. Extension of time for investigation beyond the prescribed period:
The judgment addresses whether time for investigation could be extended without the Investigating Officer moving for such an extension before the expiry of the period. The Court clarified that the two-year period for completing the investigation must be reckoned from the date the accused surrendered in court. It was emphasized that the order to stop further investigation and discharge the accused is not automatic and that the Magistrate has the power to refrain from stopping the investigation if it is in the interest of justice and there are special reasons to do so.
4. Consequences of failure to complete investigation within the stipulated period:
The Court held that the time schedule in Section 167(5) should not be treated with rigidity, and it is not mandatory for the Magistrate to discharge the accused immediately upon the expiry of the period. The Magistrate must consider whether further investigation is necessary for the interest of criminal justice and look into the progress of the investigation before deciding to stop it and discharge the accused.
5. Jurisdiction to take cognizance of the offence under Section 7(1)(a)(ii) of the Essential Commodities Act, 1955, in light of Section 468 of the Code of Criminal Procedure:
In the case involving an offence under Section 7(1)(a)(ii) of the Essential Commodities Act, 1955, the Court addressed the contention that the court had no jurisdiction to take cognizance of the offence due to the bar contained in Section 468 of the Code. The High Court's assumption that the offence was punishable with imprisonment not exceeding two years was erroneous. The Court clarified that the offence under Section 7(1)(a)(ii) is punishable with imprisonment up to seven years, and thus, the bar of limitation under Section 468 does not apply. The proviso to clause (f) in Section 12-AA(1) of the E.C. Act limits the jurisdiction of the Special Court in awarding sentences but does not alter the extent of punishment prescribed for the offence.
Conclusion:
The Supreme Court dismissed both appeals, upholding the interpretation that the time schedule in Section 167(5) is flexible and not mandatory for automatic discharge of the accused. The Magistrate must consider the necessity of further investigation in the interest of justice. The Court also clarified that the offence under Section 7(1)(a)(ii) of the E.C. Act is punishable up to seven years, and the bar of limitation under Section 468 of the Code does not apply.
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1998 (4) TMI 572
Issues Involved:
1. Genuineness of the Will executed by Velugondaiah.
2. Validity of attestation by witnesses.
3. Compliance with the Indian Succession Act and Indian Evidence Act.
Issue-wise Detailed Analysis:
1. Genuineness of the Will Executed by Velugondaiah:
The appellant claimed that Velugondaiah executed a Will on 2.7.45 bequeathing his properties in a particular manner. The genuineness of the Will was challenged by the respondent and Punnamma. The Subordinate Judge and the District Judge both held that the Will was proved by the appellant to be true and valid. However, the High Court, upon reviewing the evidence, held that the Will was not proved as required by law and allowed the second appeals, setting aside the judgments and decrees passed by the lower courts.
2. Validity of Attestation by Witnesses:
The Will purported to have been attested by five persons, but only two had signed, while the other three had not affixed their thumb impressions or made any mark. One of the three, Kondaiah, was examined as DW 2. He admitted that he had not affixed his thumb impression or made any mark on the Will. The High Court held that he was not an attestor in the eye of law and his evidence could not prove the Will. The court emphasized that for valid attestation, the witness must sign or affix a mark themselves, and cannot delegate this to another person.
3. Compliance with the Indian Succession Act and Indian Evidence Act:
Section 68 of the Indian Evidence Act requires the calling of at least one attesting witness to prove the execution of a Will. Section 63 of the Indian Succession Act prescribes that the Will must be attested by two or more witnesses, each of whom must sign the Will in the presence of the testator. The court noted that while the testator may direct another person to sign on their behalf, this provision does not extend to attestors. The court concluded that the attesting witness must either sign or affix their thumb impression themselves, and cannot delegate this function to another.
Conclusion:
The Supreme Court upheld the High Court's decision, agreeing that the Will was not proved as required by law. The court reiterated that for valid attestation under Section 63 of the Indian Succession Act, it is necessary for the attesting witness to sign or affix their thumb impression themselves. The appeal was dismissed, and each party was directed to bear their respective costs.
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1998 (4) TMI 571
Issues Involved:
1. Validity of the issuance of duplicate shares.
2. Compliance with the Articles of Association and the Companies Act.
3. Allegations of public defamation and denial of rights.
4. Preliminary objections regarding previous litigations and delay in filing the petition.
Detailed Analysis:
1. Validity of the Issuance of Duplicate Shares:
The petitioner argued that the issuance of 200 duplicate shares by the respondents was done through clever manipulation and was in violation of the Articles of Association and the Companies Act. The petitioner claimed that a valid sale notice in writing was necessary for the transfer or issuance of duplicate shares, which was not provided. The respondents, however, contended that the duplicate shares were issued in accordance with Articles 42 and 35 of the Articles of Association and that the petitioner had been called upon to deliver the original share certificates, which he failed to do. Consequently, the board decided to issue duplicate shares and publish a notice in the newspapers.
2. Compliance with the Articles of Association and the Companies Act:
The petitioner emphasized that the transfer of shares must comply with Section 108 of the Companies Act, which mandates an instrument of transfer duly stamped, executed by the transferor and transferee, and delivered to the company along with share certificates. The respondents argued that as a private company, the Articles of Association allowed restrictions on the transfer of shares, and under Section 111(13) of the Act, these restrictions were valid irrespective of Section 108. They also highlighted that Article 37 contained a deeming provision allowing the company to appoint a director as an agent to execute the transfer if the member failed to do so.
3. Allegations of Public Defamation and Denial of Rights:
The petitioner claimed that the public notice issued by the company in 1980 caused public defamation and resulted in the denial of his rights and employment opportunities. He argued that the notice falsely stated that his shares were forfeited, which was incorrect as they were fully paid. The respondents did not specifically address this allegation but maintained that their actions were in compliance with the Articles of Association and the Companies Act.
4. Preliminary Objections Regarding Previous Litigations and Delay in Filing the Petition:
The respondents raised several preliminary objections, including:
- The petitioner had pursued multiple legal proceedings over the years without disclosing them in the current petition, violating the Company Law Board Regulations, 1991.
- The petition was barred by waiver, acquiescence, estoppel, and res judicata due to the previous litigations.
- The petitioner was guilty of laches and delays, having filed the petition nearly 20 years after the impugned shares were transferred.
The petitioner attempted to justify the delay by stating that he was approaching various authorities for inspection and investigation and that some petitions were dismissed due to lack of jurisdiction. However, the tribunal found these explanations unsatisfactory and noted that the petitioner failed to provide sufficient evidence that previous cases were dismissed without considering the merits. The tribunal concluded that the petitioner had engaged in "forum shopping" and had not come with clean hands, warranting the dismissal of the petition.
Conclusion:
The tribunal dismissed the petition on the grounds of the petitioner's failure to disclose previous litigations, the inordinate delay in filing the petition, and the lack of satisfactory explanation for the delay. The tribunal did not delve into the merits of the case due to these preliminary objections. No order as to costs was made.
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1998 (4) TMI 570
Issues Involved:
1. Limitation
2. Non-joinder of necessary parties
3. Vicarious liability of defendants
4. Cause of action against defendants
5. Negligence and loss/damage due to negligence
6. Information about cancer cure and preventive treatment
7. Illness due to second radiation
8. Premature conclusion of cancer recurrence
9. Radiation given without confirming recurrence
10. Multiple illnesses due to second radiation
11. Breach of duty and negligence by defendant No. 3
12. Injury due to second radiation
13. Link between injury/damage and negligence
14. Medical expenses due to negligence
15. Daily treatment expenses
16. Entitlement to recover damages
17. Mental and physical pain due to negligence
18. Urgent surgery abroad and its costs
19. Claim for damages
20. Reliefs as prayed
Detailed Analysis:
Issue No. 1: Limitation
The suit is barred by limitation. The plaintiff's alleged injury occurred in December 1986, and he had knowledge of it. The limitation period of three years ended in December 1989. The suit filed in 1991 is beyond the prescribed period.
Issue No. 2: Non-joinder of Necessary Parties
The suit is bad for non-joinder of necessary parties. The plaintiff failed to join all trustees of Bombay Hospital Trust and Tata Memorial Hospital, despite being informed of the trustees' names. This procedural lapse is significant.
Issue No. 3: Vicarious Liability
This issue was withdrawn by consent.
Issue No. 4: Cause of Action Against Defendants
The plaint does not disclose a cause of action against defendant Nos. 1 and 2. There is no connection shown between them and the alleged acts of negligence by defendant No. 3.
Issues Nos. 5, 6, 8, 9, 11, and 12: Negligence and Loss/Damage Due to Negligence
The plaintiff failed to prove negligence on the part of the defendants. The evidence shows that the second course of radiation was necessary and administered according to accepted medical practice. The claim that the second dose of radiation was given without confirming recurrence is not substantiated. Expert witnesses supported the treatment given by Dr. Kulkarni.
Issues Nos. 7 and 10: Illness Due to Second Radiation
The plaintiff did not prove that his illnesses were due to the second radiation. The ailments occurred long after the radiation, and there was treatment from other doctors in between. No causal connection was established.
Issue No. 13: Link Between Injury/Damage and Negligence
This issue does not survive as Issue No. 12 was answered in the negative.
Issues Nos. 14, 15, 16, 17, and 19: Medical Expenses and Damages
The plaintiff failed to provide documentary evidence to support his claims for medical expenses and damages. The claims appear inflated and unsupported by any substantial proof.
Issue No. 18: Urgent Surgery Abroad and Its Costs
The plaintiff's claim for urgent surgery abroad costing &8377; 10 lakhs is not substantiated. Expert witnesses stated that the required surgery could be performed in India.
Issue No. 19A: Reliefs as Prayed
The plaintiff is not entitled to the reliefs prayed for. The suit is dismissed.
Conclusion:
The suit is dismissed with each party bearing its own costs. The plaintiff failed to prove negligence on the part of the defendants, and no causal connection was established between his ailments and the second radiation treatment. The claims for damages and medical expenses were unsupported by evidence.
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1998 (4) TMI 569
Issues Involved:
1. Whether the insertion of a date on an undated cheque amounts to material alteration under Section 87 of the Negotiable Instruments Act, 1881.
2. Whether the cheque was issued without consideration and merely as security for a loan transaction.
3. Whether the presumption under Section 118 of the Negotiable Instruments Act applies and if it was rebutted by the defendant.
Issue-wise Detailed Analysis:
1. Insertion of Date on an Undated Cheque:
The primary issue was whether adding a date to an undated cheque constitutes a material alteration under Section 87 of the Negotiable Instruments Act, 1881. The court noted that the defendant admitted to issuing the cheque but claimed that the plaintiff inserted the date without his consent, which he argued amounted to material alteration. The court examined the definition of "material alteration" and concluded that while alteration of the date might generally affect the instrument, the holder of an undated cheque has implied authority to insert the date. Therefore, inserting the date does not constitute material alteration rendering the cheque void, especially when the cheque is otherwise complete and valid in all respects.
2. Issuance of Cheque Without Consideration:
The defendant contended that the cheque was issued without consideration, merely as security for a loan transaction related to toddy shops business. The court emphasized that under Section 118 of the Negotiable Instruments Act, there is a presumption that every negotiable instrument was made or drawn for consideration. The burden of proof lies on the defendant to show that the cheque was not supported by consideration. The defendant's evidence, including his own testimony and documents (Exhibits B-1 to B-6), was deemed insufficient to rebut this presumption. The court held that mere existence of transactions between the parties did not prove the cheque lacked consideration.
3. Presumption Under Section 118 of the Negotiable Instruments Act:
The court reiterated that once the execution of the cheque is admitted, the presumptions under Section 118 of the Act apply until the contrary is proved. The initial burden is on the plaintiff to prove the issuance of the cheque, which shifts to the defendant to show it was not supported by valid consideration. The court found that the defendant failed to discharge this burden. The court also highlighted that the cheque was complete in all respects except for the date, and the insertion of the date by the payee, who is the holder in due course, did not amount to material alteration. The court referred to the implied authority of the payee to insert the date, and the presumption under Section 118(b) that a negotiable instrument bearing a date was made or drawn on such date.
Conclusion:
The court concluded that inserting a date on an undated cheque does not amount to material alteration under Section 87 of the Negotiable Instruments Act, 1881, as the holder in due course has implied authority to do so. The defendant failed to rebut the presumption under Section 118 of the Act that the cheque was supported by consideration. Consequently, the appeal was dismissed, and the judgment of the learned single judge was upheld.
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1998 (4) TMI 568
Issues:
1. Interpretation of provisions regarding set off of losses against profits under the Income Tax Act.
2. Application of special tax rates under section 115A for income by way of fees for technical services.
3. Consideration of double taxation avoidance agreements in assessing tax liability.
Issue 1: Interpretation of provisions regarding set off of losses against profits under the Income Tax Act
The appellant, a foreign company, argued that the loss from one contract should be set off against the profit from another contract under the same head of income. The Assessing Officer (AO) applied a 40% tax rate on the profit without considering the loss. The CIT (A) upheld this decision, stating that special rates under section 115A should be charged on gross income without allowing deductions. The appellant contended that section 70 allows for set off of losses against profits, and there are no words in section 115A excluding the application of other provisions. The appellant relied on Supreme Court decisions to support this argument.
Issue 2: Application of special tax rates under section 115A for income by way of fees for technical services
The Departmental Representative argued that section 115A applies regardless of income classification into different heads, and importing provisions like section 70 would be inappropriate. The Tribunal noted that section 115A prescribes special tax rates for specific income types, but the total income should be computed under the IT Act provisions. The Tribunal emphasized that section 70, allowing set off of losses against profits, is crucial in determining the total income for tax calculation.
Issue 3: Consideration of double taxation avoidance agreements in assessing tax liability
The appellant invoked section 90(2) to argue that provisions more beneficial to the assessee should apply, suggesting that section 70 should be considered for calculating tax liability. However, the Tribunal focused on interpreting the IT Act provisions, specifically section 115A, and concluded that the loss from one contract should be set off against the profit from another before applying the special tax rates. The Tribunal allowed the appeal, emphasizing the importance of considering all relevant provisions for accurate tax computation.
In conclusion, the Tribunal held that the provisions of section 115A should be applied only after adjusting the loss from one contract against the profit from another contract under the same head of income. The Tribunal's decision allowed the appellant's appeal based on the interpretation of the Income Tax Act provisions regarding set off of losses against profits.
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1998 (4) TMI 567
Issues Involved:
1. Jurisdiction of the Bombay High Court.
2. Nature of limitation actions in admiralty law.
3. Validity of anti-suit injunctions.
4. Contempt proceedings against the appellant.
5. Orders for security deposits.
Detailed Analysis:
1. Jurisdiction of the Bombay High Court:
The primary issue was whether the Bombay High Court had jurisdiction to entertain the admiralty suits filed by SNP and Kara Mara. The court examined the nature of limitation actions, which are personal rights of the vessel owner to limit liability and are typically defensive actions against claims in admiralty. Since the claims were filed by foreigners against foreign vessels, and no claims were filed in India, the Bombay High Court lacked jurisdiction. The court emphasized that for jurisdiction to be established, the claimants must either reside within the jurisdiction, carry on business within it, or have submitted to the jurisdiction, none of which applied here.
2. Nature of Limitation Actions in Admiralty Law:
The court explained that limitation actions are designed to protect shipowners from large claims exceeding the value of the ship and cargo. These actions are personal rights of the owner and are not directed against the vessel itself. The Merchant Shipping Act, 1958, and the Brussels Convention of 1957 were referenced to highlight that limitation actions could be filed in any court having jurisdiction over liability claims, including the owner's domicile court.
3. Validity of Anti-Suit Injunctions:
The Bombay High Court had issued anti-suit injunctions to restrain WTCC from proceeding with claims in the U.S. courts. However, the Supreme Court found that the Bombay High Court should not have entertained the suits in the first place due to lack of jurisdiction. The court noted that the presence of the vessel in Bombay was a deliberate attempt at forum shopping, and thus, the anti-suit injunctions were invalid.
4. Contempt Proceedings Against the Appellant:
The appellant's conduct in the proceedings before the Bombay High Court was criticized. The court noted that disobeying court orders amounts to contempt. However, given the finding that the High Court lacked jurisdiction, the contempt proceedings became irrelevant. The Supreme Court acknowledged the appellant's questionable conduct but deemed it unnecessary to further examine it.
5. Orders for Security Deposits:
The High Court had directed WTCC to deposit US $12.3 million to secure compliance with its orders. This was based on justified apprehensions about the appellant's past conduct. However, since the High Court lacked jurisdiction, this order also became purposeless. The Supreme Court set aside the order but clarified that respondents could pursue appropriate proceedings against New Castle or the appellant concerning the escrowed funds.
Conclusion:
The Supreme Court allowed the appeals, setting aside the orders of the Bombay High Court due to lack of jurisdiction. The court emphasized the importance of proper jurisdiction in admiralty actions and the personal nature of limitation actions. All appeals were allowed without any order as to costs, considering the appellant's conduct and the overall circumstances.
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1998 (4) TMI 566
Issues Involved:
1. Jurisdiction of the civil court.
2. Validity of Clause 39 of the Terms and Conditions of Supply.
3. Whether Clause 39 is ultra vires the Supply Act and the Electricity Act.
4. Whether Clause 39 violates Article 14 of the Constitution of India.
Summary:
I. Jurisdiction of the Civil Court:
The trial court held that it had jurisdiction to try the suit but dismissed the appellant's contentions. The Division Bench of the Andhra Pradesh High Court upheld this decision, affirming that the civil court had jurisdiction to entertain the suit and consider the validity of the orders passed by the Board against the consumers.
II. Validity of Clause 39 of the Terms and Conditions of Supply:
The Supreme Court held that the Terms and Conditions of Supply, including Clause 39, are statutory in character and not purely contractual. The Court referenced Section 49 of the Electricity (Supply) Act, 1948, which empowers the Board to supply electricity on "such terms and conditions as it thinks fit." The Court found that Clause 39 does not violate any provisions of the Supply Act or the Constitution.
III. Whether Clause 39 is Ultra Vires the Supply Act and the Electricity Act:
The Court rejected the contention that Clause 39 is ultra vires the provisions of the Supply Act. The Court stated that the Board's power to impose terms and conditions is subject only to the provisions of the Act, and Clause 39 does not contravene any such provisions. The Court also held that the provisions in Clause 39 do not conflict with the Electricity Act, as the Electrical Inspector's jurisdiction does not cover fraudulent malpractice or pilferage.
IV. Whether Clause 39 Violates Article 14 of the Constitution of India:
The Court dismissed the argument that Clause 39 is violative of Article 14. It held that immediate disconnection of supply on suspicion of malpractice is not unreasonable and does not violate principles of natural justice. The Court referenced prior judgments that upheld similar conditions and procedures, affirming that the Terms and Conditions of Supply are not arbitrary or unreasonable.
Conclusion:
The Supreme Court upheld the judgment and decree of the High Court in C.C.C.A.No. 38 of 1982, dismissing Civil Appeal No. 2558 of 1988. The Court allowed Civil Appeal Nos. 7139 to 7144 of 1997, setting aside the judgment of the Full Bench of the High Court. The Writ Petitions and Writ Appeals were directed to be disposed of by the High Court in light of this judgment.
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1998 (4) TMI 565
The Supreme Court of India dismissed the appeals citing the decision in Collector of Central Excise v. Ram Body Builders (1997). (1998 (4) TMI 565 - SC)
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1998 (4) TMI 564
The petitioner appealed against tax assessment, which was partially allowed by the Commissioner. The Assessing Officer sought rectification but did not allow depreciation. The High Court directed the petitioner to submit tax calculations and pay the due amount based on the appellate order. The court quashed the orders for tax attachment.
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1998 (4) TMI 563
Issues Involved:
1. Whether the proceedings u/s 50A of the Bombay Public Trusts Act, 1950 would abate for the non-substitution of a deceased applicant.
2. Whether the Charity Commissioner has the power to grant a belated substitution application.
3. Applicability of Civil Procedure Code to proceedings u/s 50A of the Bombay Public Trusts Act, 1950.
Summary of Judgment:
Issue 1: Abatement of Proceedings
The Supreme Court examined whether the proceedings u/s 50A of the Bombay Public Trusts Act, 1950 would abate due to the non-substitution of a deceased applicant. The Court held that the concept of abatement under Section 50A would never arise, especially when the Charity Commissioner has the power to initiate proceedings suo motu. The Court emphasized that the procedural law is subservient to substantive law and should aid justice rather than defeat it. Therefore, non-substitution or delayed substitution of a deceased person would make no difference, and the proceedings cannot culminate or be defeated on the principle of abatement as provided in the Civil Procedure Code.
Issue 2: Power to Grant Belated Substitution
The Court affirmed that the Charity Commissioner has the power to grant a belated substitution application. The Court noted that the Charity Commissioner is empowered to frame, amalgamate, or modify a scheme for the proper management of a public trust. The proceedings initiated in accordance with Section 50A cannot be considered improper or illegal due to delayed substitution. The Charity Commissioner's discretion in allowing the substitution of the deceased applicant's son and the impleadment of another set of two persons was upheld as legal and appropriate.
Issue 3: Applicability of Civil Procedure Code
The Court addressed whether the Civil Procedure Code applies to proceedings u/s 50A of the Bombay Public Trusts Act, 1950. The Court found that Rule 7 of the Bombay Public Trust Rules, 1951, and Section 6 of the Presidency Small Cause Courts Act, 1882, do not mandate the application of the Civil Procedure Code to such proceedings. Rule 7 merely deals with the manner of inquiries and does not affect the initiation of proceedings or the powers of the Charity Commissioner. The Court concluded that the argument for applying the Civil Procedure Code to proceedings before the Charity Commissioner is without foundation and thus rejected it.
Conclusion:
The Supreme Court held that the proceedings u/s 50A of the Bombay Public Trusts Act, 1950, would not abate due to non-substitution of a deceased applicant, and the Charity Commissioner has the power to grant belated substitution applications. The Civil Procedure Code does not apply to proceedings u/s 50A. Consequently, the appeal was dismissed with costs on the parties.
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1998 (4) TMI 562
The Supreme Court dismissed the appeal in a case where the same question had been considered earlier in Civil Appeals Nos. 3678-79/90. No costs were awarded. (1998 (4) TMI 562 - SC)
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