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• 2003 (4) TMI 615
  
  ISSUES PRESENTED and CONSIDERED

  The primary issues considered by the Court were:

  • Whether an order can be quashed if it is not part of the record presented before the Court.
  • Whether a consequential order can be challenged without first challenging the basic order upon which it is predicated.

  ISSUE-WISE DETAILED ANALYSIS

  Issue 1: Whether an order can be quashed if it is not part of the record presented before the Court.

  Relevant legal framework and precedents: The Court referenced the precedent set in Surender Singh v. Central Government, which established that in the absence of the impugned order being on record, a High Court cannot quash such an order. The requirement is that a copy of the order must be produced before the Court to ascertain the reasons that led to its issuance.

  Court's interpretation and reasoning: The Court emphasized that without the impugned order being filed or placed on record, it is impossible to evaluate the rationale behind the authority's decision. This procedural requirement ensures that the Court can appropriately assess the validity and legality of the order in question.

  Key evidence and findings: The petitioner failed to provide the order dated 11.8.1999, which modified the upgradation of the school, nor was there any application to direct the respondents to supply this order. The absence of this crucial document meant that the Court could not consider quashing it.

  Conclusion: The petition was dismissed on the grounds of non-maintainability due to the absence of the impugned order on record.

  Issue 2: Whether a consequential order can be challenged without first challenging the basic order upon which it is predicated.

  Relevant legal framework and precedents: The Court cited C.P. Chitranjan Menon and Ors. v. A. Balakrishnan and Ors., which held that without challenging the basic order, a subsequent consequential order cannot be contested. This principle was further supported by Roshan Lal and Ors. v. International Airport Authority of India and Ors., where the Court noted that the validity of consequential orders could not be examined without first addressing the basic order.

  Court's interpretation and reasoning: The Court reasoned that the petitioner was under a legal obligation to challenge the basic order of modification of the upgradation before contesting the transfer of teachers, which was a consequential action stemming from the basic order.

  Key evidence and findings: The petitioner only challenged the transfer of teachers without addressing the modification order of the school's upgradation. This oversight rendered the petition non-maintainable, as the foundational challenge was absent.

  Conclusion: The Court concluded that without challenging the basic order, the petition regarding the consequential transfer order was not maintainable.

  SIGNIFICANT HOLDINGS

  The Court held that:

  • "In absence of order under challenge, the High Court could not quash the same. Normally whenever an order of the Government or some authority is impugned before the High Court under Article 226 of the Constitution, copy of the order must be produced before it."
  • Without challenging the basic order, a party cannot challenge a consequential order, as established in C.P. Chitranjan Menon and Roshan Lal.

  Core principles established:

  • The necessity of having the impugned order on record for judicial review.
  • The requirement to challenge the foundational order before contesting any consequential orders.

  Final determinations on each issue:

  • The petition was dismissed as not maintainable due to the absence of the impugned order on record and the failure to challenge the basic order of modification.
  • The interim order passed earlier by the Court was vacated.

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• 2003 (4) TMI 614
  
  Issues Involved:
  
  1. Infringement of Registered Design
  2. Ownership and Proprietorship of Design
  3. Prior Publication and Grounds for Cancellation
  4. Passing-Off and Misrepresentation
  
  Issue-wise Detailed Analysis:
  
  1. Infringement of Registered Design:
  The primary issue was whether the defendants infringed the plaintiff's registered design No. 174429 for a highlighter. The design, registered under the Designs Act, 1911, was characterized by its unique shape, configuration, and ornamental pattern. The court noted that the defendant's highlighter was similar in style and configuration, including the cap and bottom plug, which were judged solely by the eye to be indistinguishable from the plaintiff's design. Despite these similarities, the court had to consider the defendants' challenges to the plaintiff's entitlement to the design's proprietorship.
  
  2. Ownership and Proprietorship of Design:
  The defendants contested the plaintiff's ownership of the design, arguing that the proprietorship vested in another entity, A.W. Faber-Castell GmbH & Co., and had not been assigned to the plaintiffs. The court examined the chain of assignments and found that the design was originally owned by A.W. Faber-Castell Unternehmensverwaltung GmbH & Co. and was subsequently assigned to the plaintiffs. The court concluded that the plaintiffs were indeed the rightful owners and had a valid title to the registered design.
  
  3. Prior Publication and Grounds for Cancellation:
  The defendants argued that the design had been previously published in the USA and India, thus making it liable for cancellation under section 19 of the Designs Act, 2000. The court had to determine whether the cancellation should be governed by the old Designs Act, 1911, or the new Designs Act, 2000. The court concluded that the new Act applied, as it was Parliament's intention to govern matters of registration and cancellation under the new Act. The court found that the plaintiff's design was published in the USA and India before its registration, making it prima facie liable for cancellation. Consequently, the plaintiffs were not entitled to an injunction based on design infringement.
  
  4. Passing-Off and Misrepresentation:
  The plaintiffs claimed that the defendants were passing-off their goods as those of the plaintiffs, leveraging the trade mark "TEXTLINER" and the overall configuration, shape, design, colour scheme, and get-up of the product. The court noted the significant similarity between the products, including the text arrangement, colour scheme, and overall appearance, which could confuse the average consumer. Despite the descriptive nature of the word "TEXTLINER," the court found that the defendants' product was deceptively similar to the plaintiffs' product, leading to misrepresentation and potential damage to the plaintiffs' reputation and goodwill. The court concluded that this constituted passing-off and granted an injunction in favor of the plaintiffs.

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• 2003 (4) TMI 613
  
  Issues Involved:
  1. Maintainability of the suit by the Court Receiver for infringement of a registered trademark.
  2. Entitlement to an injunction against passing-off despite cessation of business.
  3. Deceptive similarity between the trademarks "Mastaan" and "Mastaan," and "Postman" and "Postiano."
  4. Vulnerability of the trademark registrations due to non-use.
  5. Balance of convenience and likelihood of damage to the plaintiff.
  
  Detailed Analysis:
  
  1. Maintainability of the Suit by the Court Receiver:
  The primary issue was whether the Court Receiver could maintain a suit for trademark infringement. The defendant argued that only the registered proprietor could file such a suit, citing Section 28 of the Trade and Merchandise Marks Act, 1958. However, the court held that a Receiver, appointed under Section 94 and Order 40 Rule 1 of the Code of Civil Procedure, 1908, has all the powers of the owner, including the power to bring suits for the protection of the property. The court emphasized that the Receiver stands in the shoes of the owner and is entitled to do all acts necessary for preserving and protecting the property, including trademarks.
  
  2. Entitlement to an Injunction Against Passing-Off:
  The court examined whether the plaintiff could seek an injunction against passing-off despite the cessation of business. It was noted that the partnership firm had a long-standing reputation for its trademarks "Mastaan" and "Postman," which had been used for decades. The court found that the goodwill associated with these trademarks persisted even after the dissolution of the firm, as per Sections 53 and 55 of the Indian Partnership Act, 1932. It was held that goodwill does not extinguish immediately upon cessation of business and can be protected in a passing-off action if it still exists.
  
  3. Deceptive Similarity:
  The court analyzed the trademarks "Mastaan" and "Mastaan," and "Postman" and "Postiano" for deceptive similarity. It was found that "Mastaan" and "Mastaan" had phonetic similarities and similar visual elements, leading to a likelihood of confusion. Similarly, "Postman" and "Postiano" were found to have visual and phonetic similarities that could deceive consumers. The court held that these similarities were sufficient to grant an injunction on the grounds of both passing-off and infringement.
  
  4. Vulnerability of Trademark Registrations:
  The defendant argued that the trademarks had become vulnerable due to non-use, as required by Section 24 of the Trade Marks Act. However, the court refused to consider the validity of the trademark registrations at this interlocutory stage, citing Section 31 of the Trade and Merchandise Marks Act, which provides that registration is prima facie evidence of validity. The court emphasized that while the marks remain registered, it is undesirable for others to imitate them.
  
  5. Balance of Convenience and Likelihood of Damage:
  The court considered the balance of convenience and the likelihood of damage to the plaintiff. It was noted that the plaintiff's trademarks had acquired significant reputation over 50 years, and their value would be diminished by the defendant's use of deceptively similar marks. The court held that the plaintiff was likely to suffer substantial damage and that the balance of convenience favored granting an injunction to protect the trademarks until they could be sold or assigned in the dissolution process.
  
  Conclusion:
  The court allowed the Notice of Motion, granting an injunction against the defendants from using the trademarks "Mastaan" and "Postiano," finding them deceptively similar to the plaintiff's trademarks "Mastaan" and "Postman." The court also stayed the order until a specified date, considering the plaintiff's current non-operation in business.

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• 2003 (4) TMI 612
  
  The appeal was filed against the order of penalty passed under FERA, 1973. The appellant was found guilty of contravening statutory provisions and imposed with a penalty of Rs. 6,00,000. The appellant challenged the findings, and the penalty was set aside as there was no convincing material to establish guilt. The appeal was allowed, and the impugned finding and penalty were set aside.

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• 2003 (4) TMI 611
  
  Issues Involved:
  1. Applicability of amended Section 115 of the Code of Civil Procedure, 1908 to pending revision petitions.
  2. Distinction between the right of appeal and the right of revision.
  3. Legislative intent and interpretation of statutory provisions.
  4. Impact of procedural amendments on vested rights.
  5. Scope of judicial review under Article 227 of the Constitution.
  
  Detailed Analysis:
  
  1. Applicability of amended Section 115 of the Code of Civil Procedure, 1908 to pending revision petitions:
  
  The primary issue was whether the amendments to Section 115 of the Code of Civil Procedure, 1908, introduced by the Amendment Act of 1999, applied to revision petitions that were already admitted before the amendment came into effect. The appellants argued that the amendments should not apply to pending petitions, citing Section 6 of the General Clauses Act, 1897, which generally saves pending proceedings from the effects of amendments. They contended that the pending proceedings were outside the effect of the amendment, even if there was no specific provision saving them, suggesting it was a case of casus omissus.
  
  The court, however, concluded that the legislative intent was clear in not saving pending proceedings under Section 32(2)(i) of the Amendment Act. The amendments to Section 115 were procedural, and no person has a vested right in a course of procedure. Therefore, the High Courts were correct in holding that the revisions were not maintainable under the amended provisions.
  
  2. Distinction between the right of appeal and the right of revision:
  
  The court emphasized the fundamental differences between the right of appeal and the right of revision. It stated that the right of appeal is a substantive right, whereas the right to file a revision under Section 115 is not. Section 115 is essentially a source of power for the High Court to supervise subordinate courts, not a substantive right for litigants to seek relief. The court highlighted that an appeal is a continuation of the original proceedings, whereas revision is a supervisory jurisdiction limited to jurisdictional errors and does not allow for a review of evidence.
  
  3. Legislative intent and interpretation of statutory provisions:
  
  The court stressed the importance of adhering to the plain and unambiguous language of statutes. It noted that the legislature's intent must be gathered from the language used, paying attention to what has been said and what has not been said. The court cannot read anything into a statutory provision that is not explicitly stated. The court also discussed the principles of casus omissus, stating that courts cannot supply omissions in legislation unless there is a clear necessity and reason within the statute itself.
  
  4. Impact of procedural amendments on vested rights:
  
  The court reiterated that procedural changes do not affect vested rights. It cited precedents to assert that no person has a vested right in a particular procedure, and parties must proceed according to the altered procedure unless otherwise stipulated. The court referenced Kolhapur Canesugar Works Ltd. v. Union of India, which held that if a statutory provision is unconditionally omitted without a saving clause, all actions must stop where the omission finds them.
  
  5. Scope of judicial review under Article 227 of the Constitution:
  
  The appellants sought the court's permission to challenge the orders under Section 227 of the Constitution if the revisions were held non-maintainable. The court clarified that no liberty is necessary for availing remedies under any statute. If the appellants choose to seek remedy under Article 227, it would be dealt with in accordance with the law.
  
  Conclusion:
  
  The appeals were dismissed, and the court upheld the High Courts' decisions that the revision applications were not maintainable under the amended Section 115 of the Code of Civil Procedure, 1908. The court emphasized the clear legislative intent, the procedural nature of the amendments, and the distinction between the right of appeal and the right of revision. The court also highlighted the principles of statutory interpretation and the limited scope of judicial intervention in legislative omissions.

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• 2003 (4) TMI 610
  
  Issues Involved:
  1. Contempt of Court for willful violation of court orders.
  2. Legality of hot mix plant operations in Delhi.
  3. Compliance with the Air (Prevention and Control of Pollution) Act, 1981.
  4. Validity of orders passed by the Delhi Pollution Control Committee (DPCC) and the Appellate Authority.
  5. Apology tendered by the respondent.
  
  Detailed Analysis:
  
  1. Contempt of Court for Willful Violation of Court Orders:
  A contempt petition was filed against the respondent for willful violation of various orders passed by the Supreme Court. The respondent was operating a hot mix plant in New Delhi, which was deemed hazardous by an Expert Committee of the Central Pollution Control Board (CPCB). The court had ordered the relocation of such plants outside Delhi by February 28, 1997. Despite these orders, the respondent continued to operate his plant, leading to the issuance of a show cause notice for contempt on November 25, 1999. The respondent's continued operation was in defiance of the court's orders, and his actions were deemed contumacious.
  
  2. Legality of Hot Mix Plant Operations in Delhi:
  The Expert Committee of CPCB categorized hot mix plants as hazardous industries due to their emissions, which include particulate matter, sulfur dioxide, and polyaromatic hydrocarbons, most of which are proven carcinogens. Based on this report, the Supreme Court directed the closure and relocation of 43 hot mix plants in Delhi by February 28, 1997. The respondent's plant was later included in this list, and an alternative site was allotted to him at Dadri. Despite these directives, the respondent continued to operate his plant in Delhi, violating the court's orders and the Master Plan 2001, which mandated the relocation of hazardous industries.
  
  3. Compliance with the Air (Prevention and Control of Pollution) Act, 1981:
  The respondent's continued operation of the hot mix plant in Delhi was in violation of the Air (Prevention and Control of Pollution) Act, 1981. The Delhi Pollution Control Committee (DPCC) issued directions under Section 31(A) of the Act to stop the operation of the plant. The respondent's plant was sealed on December 10, 1997, and his appeal against this order was dismissed by the Appellate Authority, Ministry of Environment and Forests, on March 20, 1998. The Appellate Authority upheld the categorization of hot mix plants as hazardous and directed the respondent to stop all operations in Delhi.
  
  4. Validity of Orders Passed by the DPCC and the Appellate Authority:
  The DPCC's order dated May 16, 1997, and the subsequent sealing order were challenged by the respondent but were upheld by the Appellate Authority. The Appellate Authority confirmed that the respondent's plant fell under the hazardous category and was required to be relocated outside Delhi. The respondent's contention that the Supreme Court's order did not apply to his plant was rejected, as the court had included his plant in its subsequent orders and allotted an alternative site for relocation.
  
  5. Apology Tendered by the Respondent:
  The respondent tendered an apology in his affidavit dated January 28, 2003, but the court found it to be insincere and belated. The apology was not accompanied by any remorse or contrition, and the respondent continued to defend his actions. The court emphasized that an apology is not a weapon of defense to purge the guilt of the contemner and must be sincere and timely. The court rejected the apology and held the respondent guilty of contempt of court.
  
  Conclusion:
  The court found the respondent guilty of contempt for willfully violating its orders and continuing to operate a hazardous hot mix plant in Delhi. The respondent's actions were in defiance of the court's directives and the Air (Prevention and Control of Pollution) Act, 1981. The court sentenced the respondent to one-week simple imprisonment and imposed a fine of Rs. one lakh, to be paid within two weeks. The court emphasized the need to send a strong signal to deter similar violations and protect public health and the environment.

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• 2003 (4) TMI 609
  
  Issues:
  1. Challenge to order taking cognizance of complaint under Section 138 of Negotiable Instruments Act.
  2. Dispute regarding dishonored cheques and freezing of bank accounts.
  3. Allegation of offense under Section 138 of the Act.
  4. Legal implications of a civil nature transaction and compliance with court orders.
  
  Analysis:
  1. The petitioner challenged the order of the Additional Chief Metropolitan Magistrate, Mumbai, taking cognizance of a complaint under Section 138 of the Negotiable Instruments Act. The respondent alleged that the petitioner dishonored several cheques, leading to the offense under Section 138 of the Act. The court issued process against the petitioner based on this complaint, prompting the challenge in the writ petition.
  
  2. The petitioner's defense revolved around the freezing of bank accounts and the seizure of assets due to a separate criminal case. The petitioner argued that the bank accounts being frozen prevented the honoring of the cheques. The legal counsel highlighted the memoranda issued by the bank regarding the dishonored cheques as evidence supporting the defense.
  
  3. The legal analysis delved into the provisions of Section 138 of the Act, emphasizing the conditions under which an offense is deemed to have been committed. The defense contended that the petitioner did not fulfill the criteria outlined in the section due to the frozen bank accounts, hence challenging the prosecution initiated by the Magistrate's order.
  
  4. The judgment addressed the aspect of a civil nature transaction between the parties, specifically concerning a court order directing the return of cheques and assets. It was noted that the Chief Metropolitan Magistrate had deemed the transaction as civil, and the order had not been challenged. The failure of the complainant to disclose the full history of the transaction and comply with court orders was highlighted as a critical factor in the legal proceedings.
  
  5. Ultimately, the court ruled in favor of the petitioner, quashing the order taking cognizance of the complaint and the subsequent prosecution. The judgment emphasized the importance of complying with court orders and acting in good faith in legal proceedings. The petitioner was relieved from appearing before the court, and the prosecution was effectively terminated.

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• 2003 (4) TMI 608
  
  Issues:
  Conviction under Section 21/23 of the Narcotic Drugs and Psychotropic Substances Act, compliance with search and seizure procedures under Section 42 and Section 50 of the Act, validity of recovery memo, presence of Superintendent of Customs during search, handling and storage of seized contraband, expert opinion on the nature of contraband recovered.
  
  Analysis:
  1. The prosecution alleged that the Appellant was caught with heroin hidden in his shoes. However, crucial procedural lapses were identified. The information received by the officers was not recorded in writing as required by Section 42(1) of the Act, as highlighted in the case of State of Punjab v. Balbir Singh. This failure to comply with mandatory requirements affects the prosecution's case and vitiates the trial.
  
  2. The prosecution failed to inform the Appellant of his right to have the search conducted before a Magistrate or a Gazetted Officer, as mandated by Section 50 of the Act. The absence of such information renders the recovery suspect, as established in the case law. The recovery memo did not indicate any offer to conduct the search before a higher authority, further undermining the legality of the seizure.
  
  3. The presence of the Superintendent of Customs during the search was disputed, with conflicting testimonies from witnesses. The lack of the Superintendent's signature on the seized contraband raised doubts about the authenticity of the search and subsequent proceedings. The failure to produce written orders or evidence of the Superintendent's involvement cast uncertainty on the entire process.
  
  4. Issues regarding the handling and storage of the seized contraband were raised. Witnesses admitted to inadequate documentation and storage practices, including the absence of receipts or registers to track the contraband's custody. The failure to properly identify and present the seized evidence in court undermined the prosecution's case.
  
  5. The expert opinion on the nature of the recovered substance was deemed insufficient. The Chemical Examiner's report lacked essential data and did not provide the necessary details to confirm the contraband's classification. Without clear information on the composition of the substance, it was challenging to establish the Appellant's guilt beyond a reasonable doubt.
  
  In conclusion, due to procedural irregularities, lack of compliance with statutory requirements, doubts regarding the search and seizure process, and inadequacies in handling and presenting evidence, the Court found the conviction and sentence of the Appellant unsustainable. Consequently, the appeal was allowed, the conviction was set aside, and the Appellant was ordered to be released from custody unless required in any other criminal case.

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• 2003 (4) TMI 607
  
  The Supreme Court dismissed the Special Leave Petition after condoning the delay. Petitioner represented by Mr. Soli J. Sorabjee, AG, Ms. Meenakshi Sakhardande, Adv., Mr. B.V. Balaram Das, Adv. [2003 (4) TMI 607 - SC]

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• 2003 (4) TMI 606
  
  Issues Involved:
  1. Exemption from property tax for a charitable organization.
  2. Applicability of the Punjab Municipal Act, 1911 versus the New Delhi Municipal Council (NDMC) Act, 1994.
  3. Interpretation of Sections 60, 61, and 62 of the NDMC Act.
  4. Grant of exemption for self-occupied versus rented portions of the property.
  5. Authority and discretion under the NDMC Act to grant exemptions.
  
  Issue-wise Detailed Analysis:
  
  1. Exemption from Property Tax for a Charitable Organization
  The appellant, a charitable organization, sought exemption from property tax for its building, arguing that the rent derived from the rented portions was utilized for charitable purposes. The appellant relied on the precedent set by the Supreme Court in Municipal Corporation of Delhi v. Children Book Trust, asserting that the entire building, including rented portions, should be exempt from property tax.
  
  2. Applicability of the Punjab Municipal Act, 1911 versus the NDMC Act, 1994
  Before 1994, property tax in Delhi was governed by the Punjab Municipal Act, 1911. The NDMC Act, 1994, replaced the Punjab Act for New Delhi. The appellant had previously been granted exemption under the Punjab Act for the self-occupied portion of the building, but no application for exemption was made for the years 1991-92 to 1993-94. The Assistant Secretary (Tax) examined the claim for exemption under both Acts and found that the exemption granted under the Punjab Act was limited to the self-occupied portion.
  
  3. Interpretation of Sections 60, 61, and 62 of the NDMC Act
  Section 62(1) of the NDMC Act exempts lands and buildings used exclusively for charitable purposes from property tax, provided the organization is supported by voluntary contributions and does not pay dividends or bonuses to its members. However, Section 62(2) specifies that if any portion of the property is rented out, it does not qualify for exemption. The court clarified that the statutory exemption under Section 62(1) is a matter of right for self-occupied portions used for charitable purposes, but not for rented portions.
  
  4. Grant of Exemption for Self-Occupied versus Rented Portions of the Property
  The Assistant Secretary granted exemption for the self-occupied portion of the building for the period 1991-92 to 2000-2001, provided the appellant continued to be supported by voluntary contributions and did not generate surpluses year after year. However, the claim for exemption for the rented portion was rejected, as the NDMC Act does not allow exemption for properties from which rent is derived, even if the income is used for charitable purposes.
  
  5. Authority and Discretion under the NDMC Act to Grant Exemptions
  The appellant argued that the power to grant exemption had not been properly exercised by the respondent under Section 124 read with Section 72(e) of the NDMC Act. The court held that Section 72(1)(e) allows the Chairperson to amend the assessment list to reflect exemptions but does not confer discretion to grant exemptions. Section 124 empowers the Council to exempt classes of persons or properties by resolution, not individual cases. The court dismissed the appellant's claim for statutory exemption for the rented portion but allowed the appellant to apply to the Council for exemption under Section 124.
  
  Conclusion:
  The court dismissed the appellant's appeal for statutory exemption under Section 62 of the NDMC Act for the rented portion of the building. However, it granted the appellant the liberty to apply to the Council for exemption under Section 124, which allows the Council to exempt classes of persons or properties. The Council must dispose of the appellant's representation after providing an opportunity to be heard. There was no order as to costs.

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• 2003 (4) TMI 605
  
  Issues Involved:
  1. Interpretation of Section 40 of the Gujarat Municipalities Act, 1963.
  2. Meaning of "detained in prison during trial" within the context of Section 40.
  3. Applicability of suspension provisions to the appellant.
  4. The distinction between different parts of Section 40(1) regarding various offences.
  5. Whether the suspension of the appellant was legally justified.
  6. The impact of the appellant's detention on his ability to discharge duties.
  7. The relevance of the appellant's detention period to the term "trial."
  8. The legislative intent behind Section 40 and its implications on public office holders.
  
  Detailed Analysis:
  
  1. Interpretation of Section 40 of the Gujarat Municipalities Act, 1963:
  The case primarily revolves around the interpretation of Section 40 of the Gujarat Municipalities Act, 1963, which provides for the suspension of a President or Vice-President of a municipality under certain conditions. The section is divided into two parts: the first part deals with suspension upon the initiation of criminal proceedings under specific statutes, while the second part addresses suspension when the office holder is "detained in a prison during trial under the provisions of any law."
  
  2. Meaning of "detained in prison during trial":
  The appellant contended that his suspension was invalid because his detention was not "during trial" as he was in judicial custody during the investigation phase, not after the commencement of the trial. The court had to determine whether "detained in prison during trial" included pre-trial detention. The judgment emphasized that the term "trial" should not be given a restricted meaning and should encompass detention at any stage of the criminal process to align with the legislative intent of maintaining public confidence in municipal offices.
  
  3. Applicability of suspension provisions to the appellant:
  The appellant was suspended from his position due to his detention in judicial custody for alleged offences under various sections of the Indian Penal Code, Arms Act, and Bombay Police Act. The court had to decide if this suspension was justified under Section 40 of the Act.
  
  4. The distinction between different parts of Section 40(1) regarding various offences:
  The judgment noted that the legislature used different terms for different offences, indicating different thresholds for suspension. For offences under the Prevention of Corruption Act and Bombay Prohibition Act, suspension could occur upon the institution of proceedings. For other offences, suspension required detention during trial.
  
  5. Whether the suspension of the appellant was legally justified:
  The court concluded that the suspension was justified as the term "trial" should be interpreted broadly to include the entire process of criminal proceedings, not just the period after charges are framed.
  
  6. The impact of the appellant's detention on his ability to discharge duties:
  The judgment highlighted that the purpose of Section 40 is to ensure the proper functioning of municipal offices by keeping individuals who are detained and unable to perform their duties away from office. This interpretation aims to maintain public confidence in the integrity of municipal governance.
  
  7. The relevance of the appellant's detention period to the term "trial":
  The court ruled that the term "trial" in Section 40 should be interpreted to include detention during any stage of the criminal process, including pre-trial detention. This broader interpretation aligns with the legislative intent to prevent individuals facing serious criminal charges from holding public office.
  
  8. The legislative intent behind Section 40 and its implications on public office holders:
  The judgment emphasized that the legislative intent of Section 40 is to ensure that only individuals with high integrity and no ongoing serious criminal proceedings hold public office. This interpretation is crucial to maintain public trust and the effective functioning of municipal bodies.
  
  Separate Judgments:
  S. Rajendra Babu, J.:
  Justice Rajendra Babu disagreed with the judgment of Justice S.B. Sinha, proposing a broader interpretation of "trial" to include pre-trial detention. He emphasized that the purpose of Section 40 is to maintain public confidence and ensure that individuals who are detained and unable to perform their duties are kept away from office.
  
  S.B. Sinha, J.:
  Justice S.B. Sinha provided a detailed analysis of the legislative intent and the need for a strict interpretation of the term "trial." He argued that the term should not include pre-trial detention, as the legislature clearly distinguished between different stages of criminal proceedings.
  
  A.R. Lakshmanan, J.:
  Justice Lakshmanan concurred with Justice Rajendra Babu, agreeing that the term "trial" should be interpreted broadly to include pre-trial detention. He emphasized the need for a purposive interpretation of Section 40 to keep criminal elements away from public office and maintain the integrity of municipal governance.
  
  Conclusion:
  The Supreme Court dismissed the appellant's petition, upholding the broader interpretation of "trial" to include pre-trial detention. This interpretation aligns with the legislative intent of Section 40 of the Gujarat Municipalities Act, ensuring that individuals facing serious criminal charges are suspended from public office to maintain public confidence and the effective functioning of municipal bodies.

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• 2003 (4) TMI 604
  
  The Gujarat High Court, in 2003, heard a case where a review application was withdrawn by the petitioning company. The court granted interim relief by staying the impugned order dated 14-03-2003. The case was presided over by Acting Chief Justice Mr. JN Bhatt and Justice K.A.Puj.

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• 2003 (4) TMI 603
  
  Issues:
  1. Allegation of dishonored cheque for insufficient funds.
  2. Dispute over whether the cheque was issued for a legally enforceable debt/liability.
  3. Examination of evidence regarding notice of demand and signature on the cheque.
  4. Burden of proof under Section 139 of the Negotiable Instruments Act.
  5. Interpretation of the purpose and application of Section 138 of the Act.
  6. Examination of defense regarding handwriting on the cheque.
  7. Imposition of sentence under Section 138.
  
  Analysis:
  
  1. The case revolves around a dispute where the complainant alleged that the accused owed a sum of money, leading to the issuance of a cheque that was later dishonored due to insufficient funds. The complainant filed a complaint under Section 138 of the Negotiable Instruments Act, with the accused denying the offense.
  
  2. The primary issue was whether the cheque was issued for a legally enforceable debt/liability. The accused contended that he was coerced into issuing the cheque, but the court found inconsistencies in the defense's version, concluding that the burden under Section 139 had not been discharged.
  
  3. The court examined the evidence related to the notice of demand and the signature on the cheque. It was established that a proper notice of demand was served, and the signature on the cheque was found to be genuine, supporting the complainant's case.
  
  4. The burden of proof under Section 139 of the Act was crucial, with the court emphasizing that the accused must rebut the presumption effectively. The court highlighted that any defense must meet the standard of preponderance of possibilities and probabilities, akin to civil proceedings.
  
  5. The judgment delved into the interpretation of Section 138, emphasizing the legislative intent to promote commercial morality and ensure the credibility of cheque transactions. The court rejected the accused's defense of handing over blank signed cheques, stating that such actions undermine the legislative goal of secure cheque transactions.
  
  6. An argument was raised regarding the handwriting on the cheque, contending that it absolved the accused from liability. However, the court dismissed this contention, asserting that the presumption under Section 139 applies to all cheques, regardless of the drawer's handwriting.
  
  7. Finally, the court imposed a sentence on the accused under Section 138, ordering imprisonment till rising of court and compensation to the complainant. The judgment highlighted the principles guiding the imposition of sentences in such cases, aiming to serve the interests of justice effectively.
  
  In conclusion, the judgment analyzed various legal aspects concerning dishonored cheques, burden of proof, legislative intent, and sentencing under Section 138 of the Negotiable Instruments Act, ultimately finding the accused guilty and setting aside the previous judgment of acquittal.

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• 2003 (4) TMI 602
  
  Issues Involved:
  
  1. Whether an application for anticipatory bail under Section 438 of the Code of Criminal Procedure is maintainable at the post-cognizance stage of a case instituted on a police report or complaint after the Court issued a process like a warrant of arrest for production of a person having committed a non-bailable offence.
  
  Issue-wise Detailed Analysis:
  
  1. Maintainability of Anticipatory Bail at Post-Cognizance Stage:
  
  The primary issue addressed by the Special Bench was whether an application for anticipatory bail under Section 438 of the Code of Criminal Procedure (CrPC) is maintainable after the court has taken cognizance of an offence and issued a process such as a warrant of arrest.
  
  Arguments and Precedents:
  
  - The court referred to previous judgments, including Sk. Alim v. State of West Bengal and Sri Pankaj Lochan Sahoo v. State, which held that anticipatory bail could be sought even after the submission of a charge-sheet or issuance of a warrant of arrest.
  
  - Contrarily, in Bimal Adak v. State, it was held that the right to anticipatory bail ends after the submission of a charge-sheet, relying on Salauddin Abdul Samad Sheikh v. State of Maharashtra.
  
  Legal Provisions and Interpretation:
  
  - Section 438 CrPC allows a person to seek anticipatory bail if they have reason to believe they may be arrested for a non-bailable offence. The court emphasized that the language of Section 438 is broad and unqualified, designed to secure personal freedom and the presumption of innocence.
  
  - The court noted that Section 438 does not explicitly restrict the stage at which anticipatory bail can be sought, and the legislative intent was to confer wide discretionary power to the High Court and Sessions Court.
  
  Submissions by Counsel:
  
  - Counsel for the petitioners argued that the question should be answered affirmatively, citing various case laws and the broad language of Section 438.
  
  - Counsel for the State contended that anticipatory bail should not be maintainable post-cognizance, arguing that once a court issues a process like a warrant of arrest, the stage for anticipatory bail has passed.
  
  Court's Analysis and Conclusion:
  
  - The court analyzed the structure of Chapter XXXIII of the CrPC, which deals with bail and bonds, noting that Sections 436, 437, 438, and 439 provide a comprehensive framework for granting bail at different stages.
  
  - The court observed that Section 438 does not preclude the filing of an application for anticipatory bail after the filing of a charge-sheet or issuance of a process under Sections 204 or 209.
  
  - The court emphasized that the power to grant anticipatory bail is discretionary and must be exercised judiciously, considering the facts of each case.
  
  - The court concluded that there is no bar to filing an application under Section 438 after the filing of a charge-sheet or issuance of a process in a complaint case. Such an application is maintainable even at the post-cognizance stage of a case instituted on a police report or complaint after the court issues a process like a warrant of arrest for production of a person having committed a non-bailable offence.
  
  Final Judgment:
  
  The Special Bench answered the question in the affirmative, holding that an application for anticipatory bail under Section 438 CrPC is maintainable at the post-cognizance stage. The pending applications were directed to be placed before the appropriate Benches for consideration in light of this judgment.

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• 2003 (4) TMI 601
  
  Issues:
  1. Allegation of clandestine removal of processed fabrics.
  2. Confiscation of dyed cotton fabrics.
  3. Reliability of private records and statements as evidence.
  4. Imposition of penalty and fine on goods lying in the factory.
  
  Issue 1: Allegation of Clandestine Removal of Processed Fabrics
  The Revenue appealed against the dropping of demands for duty on the allegation of clandestine removal of processed fabrics. The investigating authority relied on a statement and a private diary entry by Shri Sampath to book a recovery of duty. However, the Commissioner (Appeals) accepted the argument that the statement was coerced and resiled, and there was no corroborative evidence of manufacture and removal of goods. The Commissioner emphasized that the burden of proof lies with the Department in cases of clandestine removal. It was highlighted that without independent investigation and evidence, the charge of clandestine removal could not be established, citing various legal precedents. The Commissioner concluded that the duty demand was not proven beyond doubt, and hence, could not be demanded.
  
  Issue 2: Confiscation of Dyed Cotton Fabrics
  Regarding the confiscation of 2100 liters of dyed cotton fabrics seized within the factory premises, it was argued that there was no intention to evade duty as the goods were not cleared outside the factory. Citing previous Tribunal judgments, it was stated that if no clandestine removal was involved, confiscation and imposition of fines were not justified. The Commissioner agreed with this argument, emphasizing that if goods were within the factory premises and not attempted to be removed clandestinely, confiscation was not sustainable. As the charge of clandestine removal was not proven, the imposition of penalties was deemed unjustified.
  
  Issue 3: Reliability of Private Records and Statements as Evidence
  The Revenue contended that private production records and statements by Shri Sampath should be considered as evidence, as they were corroborated. They argued that the production details in the note books were related to the appellant's unit, making them crucial evidence to prove illicit transactions. It was emphasized that the Commissioner's dismissal of these records as rough note books was incorrect. However, the appellant argued that the statements were taken under coercion, and there was no corroboration with regard to the contents noted in the note book. They highlighted the lack of investigation into inputs purchased and final goods sold, as well as power consumption, to support the production claims. The Commissioner held that mere entries in the note book without corroborative evidence were insufficient to confirm the demands, citing various judgments supporting this stance.
  
  Issue 4: Imposition of Penalty and Fine on Goods Lying in the Factory
  The Revenue sought restoration of the confiscation and imposition of fines on goods lying in the factory. However, the appellant argued against this, stating that there was no evidence of clandestine removal or intention to evade duty. The Commissioner agreed with the appellant, citing judgments that goods within the factory premises could not be confiscated if not attempted to be removed clandestinely. The Commissioner also noted that the grounds for imposing penalties and fines on such goods were not in accordance with the law. The Commissioner's order was upheld, emphasizing the lack of merit in the Revenue's appeal.
  
  In conclusion, the Commissioner's order dropping the duty demands and dismissing the confiscation and imposition of fines on goods within the factory premises was upheld, emphasizing the importance of corroborative evidence and proper investigation in cases of clandestine removal.

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• 2003 (4) TMI 600
  
  Issues Involved:
  1. Extent and ambit of inherent powers of the High Court under Section 482 of the Code of Criminal Procedure.
  2. Powers of the High Court in exercise of jurisdiction under Articles 226 of the Constitution of India.
  3. Quashing of FIRs in matrimonial disputes under Sections 498A and 406 IPC.
  
  Detailed Analysis:
  
  1. Extent and Ambit of Inherent Powers of the High Court under Section 482 of the Code of Criminal Procedure:
  
  Section 482 of the Code of Criminal Procedure (CrPC) deals with the inherent powers of the High Court. These powers are in the nature of extraordinary powers available only where no express power is available to the High Court to do a particular thing and where the express power does not negate the existence of such inherent power. The exercise of these powers is necessary for giving effect to an order under the Code, for preventing abuse of the process of the court, or for otherwise securing the ends of justice.
  
  The judgment references several landmark cases to elucidate the scope and ambit of these powers:
  - Dr. Raghubir Saran v. State of Bihar (1964CriLJ1): The High Court has inherent power to make any order for the purpose of securing the ends of justice.
  - Emperor v. Sukh Dev (AIR 1930 Lah. 465): The authority of the Court exists for the advancement of justice, and if any attempt is made to abuse that authority, the Court must have the power to prevent that abuse.
  - State of U.P. v. Mohd. Naim ([1964]2SCR363): Section 482 CrPC confers no new jurisdiction or power on the High Court; it merely safeguards all existing inherent powers necessary to secure the ends of justice.
  - State of Karnataka v. L. Muniswamy & Ors. (1977CriLJ1125): The saving of the High Court's inherent power to prevent abuse of the process of the Court is designed to achieve a salutary public purpose, namely, that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution.
  
  The judgment emphasizes that the High Court has the widest jurisdiction to pass orders to secure the ends of justice, but this power must be exercised sparingly, carefully, and with caution.
  
  2. Powers of the High Court in Exercise of Jurisdiction under Articles 226 of the Constitution of India:
  
  Article 226 of the Constitution confers very wide discretionary powers on the High Courts to issue appropriate writs. These powers are meant for doing justice and correcting injustice. The judgment references several landmark cases to elucidate the scope and ambit of these powers:
  - M.P. Mittal v. State of Haryana ([1985]1SCR940): The discretionary remedies under Article 226 are for doing justice and correcting injustice.
  - Election Commission v. Saka Venkata Subba Rao ([1953]4SCR1144) and Rashid Ahmad v. Municipal Board, Rajrana ([1950]1SCR566): Articles 32 and 226 have been incorporated in the Constitution primarily to ensure effective means of enforcing constitutional rights, particularly fundamental rights.
  - T.C. Basappa v. T. Nagappa ([1955]1SCR250): The High Court can issue a writ in the nature of certiorari in all appropriate cases and in an appropriate manner, so long as it keeps the broad and fundamental principles that regulate the exercise of jurisdiction in the matter of granting such writs in English law.
  - Minerva Mills v. Union of India & Ors ([1981]1SCR206): The power of judicial review conferred by Articles 32 and 226 is part of the basic structure of the Constitution and cannot be abrogated without affecting the basic structure of the Constitution.
  
  The judgment underscores that the powers under Article 226 are extremely wide and cannot be taken away by any law, legislative enactment, or even by the amendment of the Constitution.
  
  3. Quashing of FIRs in Matrimonial Disputes under Sections 498A and 406 IPC:
  
  The judgment discusses the approach of the Court in relation to matrimonial disputes, particularly under Sections 498A and 406 IPC. It references several cases where the High Court has quashed FIRs in such disputes to prevent abuse of the process of the Court and to secure the ends of justice:
  - B.S. Joshi and Ors. vs. State of Haryana and Anr. (JT 2003 (3) 277): The Supreme Court held that the High Court in exercise of its inherent power can quash criminal proceedings or FIR or complaint, and Section 320 of the Code does not limit or affect the powers under Section 482 of the Code.
  - State of Haryana Vs. Bhajan Lal (1992CriLJ527): The Supreme Court laid down broad parameters or categories in which it would be permissible for the Court to quash the proceedings.
  
  The judgment concludes that the High Court has extremely wide powers under Article 226 of the Constitution and Section 482 of the CrPC to quash proceedings in matrimonial disputes to prevent abuse of the process of the Court and to secure the ends of justice. The powers of the learned Single Judges under Section 482 and Article 226 to quash the proceedings cannot be disputed or questioned, but those powers have to be exercised in consonance with the well-recognized principles laid down in a catena of cases by the Supreme Court.

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• 2003 (4) TMI 599
  
  Legal judgment by Supreme Court of India, 2003 (4) TMI 599 - SC Order, dismissed the appeal due to delay and on merits. Justices Mrs. Ruma Pal and Mr. B.N. Srikrishna presided over the case.

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• 2003 (4) TMI 598
  
  The High Court of Rajasthan dismissed the appeal regarding alleged suppressed sales by the assessee. The court noted that in the previous year, the assessee had maintained production accounts verified by authorities, but failed to do so in the current year. The court allowed the assessee to submit the production account for reevaluation.

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• 2003 (4) TMI 597
  
  Issues Involved:
  
  1. Rejection of claim under Section 54F of the Income-tax Act, 1961.
  2. Computation of undisclosed income under Chapter XIV-B of the Income-tax Act.
  3. Application of Chapter IV provisions in block assessment.
  4. Verification of the legitimacy of investments under Section 54F.
  
  Detailed Analysis:
  
  1. Rejection of claim under Section 54F of the Income-tax Act, 1961:
  
  The appellants contended that the Deputy Commissioner of Income Tax (DCIT) erred in rejecting their claims under Section 54F, amounting to Rs. 63,760, without considering the relevant provisions of the Income-tax Act. They argued that the DCIT should have computed the total income as per Chapter IV, which includes Section 54F, allowing deductions for long-term capital gains invested in residential properties.
  
  2. Computation of undisclosed income under Chapter XIV-B of the Income-tax Act:
  
  A search under Section 132(1) was conducted, revealing undisclosed shares. The Assessing Officer (AO) argued that the capital gains from these shares, which were not disclosed in the original returns, should be taxed at a flat rate of 60% without allowing deductions under Section 54F. The AO's stance was that the special procedure under Chapter XIV-B for search cases precludes such deductions.
  
  3. Application of Chapter IV provisions in block assessment:
  
  The appellants argued that the term "total income" in Section 158BB should be computed in accordance with Chapter IV, which includes Section 54F. They cited various case laws and statutory provisions to support their claim that deductions under Section 54F should be allowed when computing undisclosed income.
  
  4. Verification of the legitimacy of investments under Section 54F:
  
  The AO did not verify whether the investments claimed under Section 54F were legitimate. The appellants provided evidence of their investments in residential properties and argued that these should be considered for deductions. The Tribunal noted that the AO had not disputed the genuineness of the investments but had only objected to the utilization of undisclosed income for tax benefits.
  
  Tribunal's Findings:
  
  The Tribunal examined the language of Section 158BB and the amendments made by the Finance Act, 2002. It concluded that the total undisclosed income should be computed in accordance with the provisions of Chapter IV, including Section 54F, unless the deductions are found to be false. The Tribunal noted that the AO had not found the deductions under Section 54F to be false.
  
  The Tribunal also considered Section 158BH, which states that all other provisions of the Income-tax Act apply to assessments under Chapter XIV-B unless otherwise provided. This supported the view that deductions under Section 54F should be allowed when computing undisclosed income.
  
  Conclusion:
  
  The Tribunal allowed the appeals, directing the AO to verify the correctness of the claims under Section 54F. The matter was referred back to the AO to examine the nature of the investments and provide the appellants with an opportunity to furnish necessary details. The appeals were allowed with these directions.

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• 2003 (4) TMI 596
  
  Issues:
  Penalty under Section 4-B (5) of U. P. Sales Tax Act for purchasing raw materials at a concessional rate and transferring manufactured scrap to another branch.
  
  Analysis:
  The revision filed against the Tribunal's order related to the Assessment Year 1979-80. The applicant, involved in manufacturing free wheels, purchased raw materials in the form of iron and steel, using them in manufacturing free wheels and transferring the scrap to a Delhi Branch for sale. The Assessing Authority imposed a penalty of Rs. 35,000 under Section 4-B (5) for purchasing iron and steel at a concessional rate and transferring iron scrap, which was considered a violation of the Act.
  
  The Deputy Commissioner (Appeals) allowed the dealer's appeal, canceling the penalty, stating that the raw materials were used in manufacturing the notified goods as per the Recognition Certificate. The Commissioner of Sales Tax appealed to the Tribunal, which remanded the case back to the Assessing Authority for fresh orders under the appropriate section. The applicant then filed a revision before the High Court, challenging the Tribunal's order.
  
  The High Court observed that Section 4-B (5) applies when raw materials are purchased at a concessional rate but used for purposes other than specified in the Recognition Certificate. The Deputy Commissioner (Appeals) found no contravention of Section 4-B (5) as the raw materials were used as per the Recognition Certificate. The Tribunal, however, exceeded its jurisdiction by considering a breach of Section 4-B (6) and remanding the case, which was not the subject matter of appeal before it. The High Court cited a previous case to support this limitation on the Tribunal's jurisdiction.
  
  Regarding Section 4-B (6), the High Court doubted its applicability in this case, as the scrap transferred to Delhi was not considered disposed of otherwise than by sale or in the course of trade. Consequently, the High Court set aside the Tribunal's order and restored the order canceling the penalty under Section 4-B (5).
  
  In conclusion, the High Court allowed the revision, setting aside the Tribunal's order and restoring the order that canceled the penalty imposed under Section 4-B (5) for the applicant.

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