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1990 (5) TMI 250
Issues Involved:
1. Applicability of Article 137 of the Limitation Act, 1963 to proceedings for grant of probate or letters of administration.
2. Legislative history concerning limitation for applications.
3. Judicial interpretations of Article 137 and its predecessors.
4. Supreme Court's stance on the applicability of Article 137 to applications under special laws.
5. Definition and scope of "application" and "applicant" under the Limitation Act, 1963.
6. Nature of proceedings for grant of probate or letters of administration.
7. Recurring right to apply and its impact on limitation.
Issue-wise Detailed Analysis:
1. Applicability of Article 137 of the Limitation Act, 1963 to proceedings for grant of probate or letters of administration:
The central question addressed is whether Article 137 of the Limitation Act, 1963 applies to proceedings for the grant of probate or letters of administration. Article 137 specifies a three-year limitation period for "any other application for which no period of limitation is provided elsewhere in the Division," starting when the right to apply accrues. The Court concluded that Article 137 does not apply to such proceedings, as these do not constitute "applications" within the meaning of the Article.
2. Legislative history concerning limitation for applications:
The judgment traces the legislative history of limitation statutes, starting with Act XIV of 1859, which did not initially provide for limitations on applications. Subsequent Acts, such as Act IX of 1871 and Act XV of 1877, introduced limitations for certain applications, but courts historically interpreted these limitations narrowly, often restricting them to applications under the Code of Civil Procedure.
3. Judicial interpretations of Article 137 and its predecessors:
Historical judicial interpretations, such as those in Ishan Chunder Roy (1881), Bai Manek Bai (1883), and Janaki v. Kasavalu (1885), consistently held that residuary articles like Article 178 of the 1877 Act did not apply to applications for probate or letters of administration. These interpretations relied on the principle of ejusdem generis, limiting the scope of such articles to applications under the Civil Procedure Code.
4. Supreme Court's stance on the applicability of Article 137 to applications under special laws:
The judgment references the Supreme Court decision in Kerala State Electricity Board v. T. P. Kunhaliumma, which broadened the interpretation of Article 137 to include applications under special laws, not just the Civil Procedure Code. However, the Court noted that this decision did not specifically address whether proceedings for probate or letters of administration fall under Article 137.
5. Definition and scope of "application" and "applicant" under the Limitation Act, 1963:
The definitions of "applicant" and "application" in Sections 2(a) and 2(b) of the Limitation Act, 1963, are inclusive and cover petitions and persons deriving rights through the applicant. However, the Court emphasized that these definitions alone are insufficient to determine whether proceedings for probate or letters of administration qualify as "applications" under Article 137.
6. Nature of proceedings for grant of probate or letters of administration:
The Court highlighted that proceedings for probate or letters of administration are not actions to settle or secure rights but rather seek the Court's recognition to perform a duty imposed by a will. This duty is moral rather than legal, as there is no compulsion to file for probate or letters of administration. Consequently, such proceedings do not fit the legal definition of an "application" under Article 137.
7. Recurring right to apply and its impact on limitation:
The Court acknowledged the argument that the right to apply for probate or letters of administration is a recurring one, making it inappropriate to impose a limitation period under Article 137. This view aligns with previous judgments, such as Ramanand Thakur and Vasudev Daulatram Sadarangani, which recognized the recurring nature of the right to apply.
Conclusion:
The Court held that Article 137 of the Limitation Act, 1963, does not apply to proceedings for the grant of probate or letters of administration, with or without the will annexed. However, it noted that delays in such proceedings could raise suspicions about the genuineness of the will, which is a matter for the Court to consider on a case-by-case basis. The matters were remitted to the single Judge for further proceedings on merits.
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1990 (5) TMI 249
Issues Involved:
1. Existence of an Arbitration Clause
2. Grant of Ex Parte Temporary Injunction
3. Invocation and Honoring of Bank Guarantees
4. Prima Facie Case, Balance of Convenience, and Irreparable Injury
5. Nature of Bank Guarantees (Unconditional vs. Conditional)
6. Fraud or Special Equity in Favor of the Plaintiff
Issue-wise Detailed Analysis:
1. Existence of an Arbitration Clause:
The appellant argued that the lower court ignored the arbitration clause in the contract, which could lead to an application under Section 34 of the Arbitration Act. However, the court referenced the Supreme Court's decision in Food Corporation of India v. Yadav Engineer and Contractor, stating that contesting interlocutory orders or filing applications for setting aside ex parte interim injunctions does not disentitle a party from claiming a stay under Section 34.
2. Grant of Ex Parte Temporary Injunction:
The appellant contended that the trial court granted an ex parte temporary injunction without examining the case on the touchstone of prima facie case, balance of convenience, and irreparable injury. The lower court had observed that if the guarantee is invoked, the plaintiff would suffer irreparable loss. However, the court did not discuss settled principles of law regarding the interference in the invocation of bank guarantees.
3. Invocation and Honoring of Bank Guarantees:
The appellant argued that the bank guarantees were unconditional and should be honored on demand. The court cited several cases, including U.P. Co-operative Federation Ltd. v. Singh Consultants and Engineers (P.) Ltd. and United Commercial Bank v. Bank of India, establishing that courts should not interfere with the enforcement of bank guarantees unless there is fraud or apprehension of irretrievable injustice.
4. Prima Facie Case, Balance of Convenience, and Irreparable Injury:
The appellant argued that the lower court did not properly assess the prima facie case, balance of convenience, and irreparable injury. The court noted that the principles of non-interference are based on ensuring that the fabric of trading operations is not jeopardized. The court found that there was no prima facie case of fraud or special equity made out by the plaintiff.
5. Nature of Bank Guarantees (Unconditional vs. Conditional):
The court examined the unconditional nature of the bank guarantees, noting that the bank must pay on demand without any demur. The guarantees were found to be unconditional, as evidenced by specific clauses stating that payment must be made on demand by the beneficiary.
6. Fraud or Special Equity in Favor of the Plaintiff:
The court found no evidence of fraud or special equity in favor of the plaintiff. The plaintiff's contention that the earnest money clause had been modified was not supported by the correspondence between the parties. The court concluded that the employer had not accepted the modification of the clause, and the bank guarantees remained enforceable as per their original terms.
Conclusion:
The appeal was partly allowed. The order of injunction restraining the enforcement of bank guarantee No. 4 of 1989 was set aside, while the injunction against bank guarantee No. 10 of 1989 remained in place. The court emphasized the principles of non-interference in the enforcement of unconditional bank guarantees to maintain trust in commercial operations. No costs were awarded for the appeal.
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1990 (5) TMI 248
Issues:
Challenge to the constitutional validity of the Punjab Ice Price Control Act, 1968 and the order fixing ice prices by the District Magistrate.
Analysis:
The petitioner challenged the Act and the order fixing ice prices, claiming they were illegal, unreasonable, and violated Articles 14 and 19(1)(g) of the Constitution. The petitioner argued that the District Magistrate fixed prices arbitrarily without proper guidelines, impacting the petitioner's business rights. The petitioner provided representations and notifications to support the cost increase in manufacturing ice, emphasizing the need for fair pricing.
The State defended the Act and the price-fixing order, stating that the Act aimed to prevent exploitation of consumers by unscrupulous dealers during the summer season. The State argued that the Act provided guidance to the District Magistrate to fix fair prices by considering manufacturing costs and allowing reasonable profits for dealers. The State highlighted the importance of preventing profiteering in the ice industry.
The Court acknowledged the lack of specific guidelines in the Act for price fixation by the District Magistrate, raising concerns about potential misuse of discretionary powers. However, considering the Act's objectives and Section 3's language, the Court held that prices must be determined based on manufacturing costs and reasonable profit margins for dealers. The Court referred to a Delhi High Court decision emphasizing the importance of considering various factors in fixing prices to prevent arbitrary decisions.
The Court interpreted the term "fair price" in the Act as a price set after considering all relevant factors related to ice prices and ensuring reasonable profits for dealers. The Court found that the Act did not violate constitutional provisions. Regarding the specific price-fixing notification by the District Magistrate, the Court deemed it arbitrary and unreasonable, violating the petitioner's business rights under Article 19(1)(g) and Article 14. The Court declared the notification illegal, ultra vires, and null and void, directing the District Magistrate to fix prices based on specified principles.
In conclusion, the Court allowed the writ petition, invalidating the District Magistrate's price-fixing order and providing guidelines for future price determinations. The Court stayed the operation of the judgment for two weeks to allow the District Magistrate to comply with the principles outlined in the judgment and consider representations from ice manufacturers.
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1990 (5) TMI 247
Issues:
1. Rectifiability of mistakes apparent from the records under s. 154 of the IT Act, 1961.
2. Consideration of assessability of amounts recorded in accounts via tax credit certificate under s. 154.
3. Justification of setting aside orders of ITOs and AAC.
Analysis:
Issue 1:
The Tribunal referred questions regarding the rectifiability of mistakes under s. 154. The assessee claimed rectification due to an oversight in not claiming excise duty as a deduction. The ITO rejected the application, stating the claim was not raised during assessment or appellate proceedings. The AAC upheld the rejection, linking it to tax credit certificate adjustments. The Tribunal found the mistake apparent, directing the ITO to allow excise liability deductions for all years.
Issue 2:
The Tribunal also considered the assessability of amounts related to tax credit certificates. The AAC linked the rectification to exemption under s. 10(28), requiring verification of details. The Tribunal, citing the Volkart Brothers case, directed the ITO to consider the assessability of amounts recorded in accounts via tax credit certificates while allowing excise liability deductions.
Issue 3:
The High Court analyzed whether the mistakes were apparent on the face of the records. The Court noted the audited accounts formed part of the assessment records and rejected the argument that the ITO committed a mistake by relying on erroneous audited accounts. It concluded that there was no glaring mistake apparent from the assessment order, ruling in favor of the Revenue on all three questions.
The judgment emphasizes the distinction between mistakes apparent from records and errors arising from the assessee's own oversight. It highlights the importance of proper documentation and the need for clear justifications in seeking rectifications under s. 154. The decision underscores the significance of accurate accounting practices and the limitations of rectification provisions under the IT Act, 1961.
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1990 (5) TMI 246
Issues Involved:
1. Maintainability of the petition under Article 32 of the Constitution.
2. Jurisdiction of the Supreme Court in inter-State water disputes.
3. Obligation of the Central Government under Section 4 of the Inter-State Water Disputes Act, 1956.
Detailed Analysis:
1. Maintainability of the Petition under Article 32 of the Constitution:
The petition was filed by a society representing agriculturists of Tamil Nadu, seeking a direction to the Union of India to refer the Cauvery water dispute to a tribunal and to restrain Karnataka from constructing dams and reservoirs. The State of Karnataka opposed the maintainability of the petition, arguing that the society was not entitled to file such a petition. However, the State of Tamil Nadu supported the petition, effectively joining the dispute. The Court observed that dismissing the petition on technical grounds would be unfair and unjust, given the support from Tamil Nadu and the prolonged nature of the dispute. Thus, the Court treated the petition as if Tamil Nadu were the petitioner, despite not formally transposing the parties.
2. Jurisdiction of the Supreme Court in Inter-State Water Disputes:
The Court acknowledged that the Cauvery is an inter-State river under Article 262 of the Constitution. Section 11 of the Inter-State Water Disputes Act, 1956, bars the jurisdiction of all courts, including the Supreme Court, from adjudicating disputes referable to a tribunal under Section 3 of the Act. Therefore, the Court held that it had no jurisdiction to enter upon the factual aspects of the dispute. However, it retained jurisdiction to consider the claim for referring the dispute to a tribunal under Section 3 of the Act.
3. Obligation of the Central Government under Section 4 of the Inter-State Water Disputes Act, 1956:
Section 4 of the Act mandates the Central Government to constitute a Water Disputes Tribunal if it is of the opinion that the dispute cannot be settled by negotiations. The Court noted that the dispute had been pending for over 20 years, with multiple unsuccessful attempts at negotiation, including 26 sittings involving the Chief Ministers of Karnataka and Tamil Nadu. The Court observed that the Central Government had ample opportunity to resolve the dispute but failed to do so. Given the prolonged nature of the dispute and the failure of negotiations, the Court concluded that the Central Government must be deemed to hold the opinion that the dispute cannot be settled by negotiation. Consequently, the Court directed the Central Government to constitute a tribunal within one month to adjudicate the dispute, emphasizing the need for prompt action to prevent further escalation and bitterness among the States involved.
Conclusion:
The Supreme Court allowed the writ petition, directing the Central Government to notify the constitution of an appropriate tribunal for adjudicating the Cauvery water dispute within one month. The Court emphasized the mandatory nature of the Central Government's obligation under Section 4 of the Inter-State Water Disputes Act, 1956, to constitute a tribunal when negotiations fail to resolve the dispute. There was no order as to costs.
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1990 (5) TMI 245
Issues Involved:
1. Validity of the impugned notifications and notices.
2. Compliance with the publication requirements under Section 3(1) of the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966.
3. Principle of res judicata.
4. Allegations of fraudulent representations by government officials.
5. Laches and delay in filing the writ petitions.
Issue-wise Detailed Analysis:
1. Validity of the Impugned Notifications and Notices:
The petitioners, traders in jaggery, sought to quash the impugned notifications and notices issued under the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966. They contended that the notifications and notices were contrary to law due to non-compliance with the procedural requirements laid down in the Act. Specifically, they argued that the notification declaring the intention to regulate the marketing of jaggery was not published in Kannada as mandated by Section 3(1) of the Act. The court found that the impugned notifications and demand notices were issued without proper compliance with the statutory requirements, rendering them invalid.
2. Compliance with the Publication Requirements under Section 3(1):
The court examined whether the notification of intention under Section 3(1) of the Act was published in Kannada in a newspaper circulating in the concerned area. The court found that the notification was not published in Kannada, as required by the Act. The State Government and the Agricultural Produce Market Committee (A.P.M.C.) initially claimed that the notification was published in Kannada, but later admitted that only a Press Note in English was issued in the Deccan Herald. The court held that the publication in Kannada was mandatory and not directory, and the failure to publish the notification in Kannada vitiated the impugned notifications.
3. Principle of Res Judicata:
The respondents contended that the writ petitions were barred by the principle of res judicata, as similar notifications had been upheld in earlier writ petitions. However, the court found that the petitioners in the present cases were not parties to the earlier writ petitions. Moreover, the earlier decisions were based on false affidavits submitted by the respondents, which misled the court into believing that the notification was published in Kannada. Therefore, the principle of res judicata did not apply.
4. Allegations of Fraudulent Representations by Government Officials:
The court was shocked and surprised by the false statements made by government officials in affidavits submitted in the earlier writ petitions. The officials falsely claimed that the notification was published in Kannada, which was later proven to be untrue. The court condemned the fraudulent representations and emphasized the duty of government officials to tell the truth. The court directed the State Government to take appropriate action against the officials who swore to false affidavits.
5. Laches and Delay in Filing the Writ Petitions:
The respondents argued that the writ petitions should be dismissed for laches, as the petitioners had delayed in approaching the court. However, the court found that the demand notices questioned in the present writ petitions emanated from a notification issued on 3-9-1987, and the process was incomplete due to non-compliance with Sections 7 and 8 of the Act. The court held that the petitioners had a continuing cause of action and that there was no undue delay in filing the writ petitions.
Conclusion:
The court allowed the writ petitions and quashed the impugned notifications and demand notices. The court directed the authorities to follow the procedure prescribed under the Act for establishing a market and to demand market fees only after the establishment of the market. The court also directed the State Government to take appropriate action against the officials who submitted false affidavits. The petitions were allowed without any order as to costs.
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1990 (5) TMI 244
Issues Involved:
1. Whether the Tribunal was correct in holding that the loss of Rs. 2,42,245 was a capital loss and could not be claimed as a business loss by the assessee.
2. Whether the Tribunal was justified in holding that the assessee was entitled to claim the loss in respect of burglary during the relevant accounting year.
Detailed Analysis:
Issue 1: Capital Loss vs. Business Loss
The Tribunal concluded that the loss of Rs. 2,42,245 related to the theft of fixed assets should be considered as a capital loss and not a business loss. The Tribunal noted that the nature of the assets did not change merely because the assessee claimed the loss from the insurance company and showed the claim as part of its assets. Even if the insurance company had paid for the loss, the assessee would have purchased the requisite moulds, adding to the invested capital on which depreciation could be claimed. The Tribunal emphasized that the cause of the loss was the theft, not the rejection of the insurance claim, and thus, the loss remained a capital loss.
Issue 2: Entitlement to Claim Loss for Burglary
The Tribunal held that the assessee was entitled to claim the loss of Rs. 3,94,415 for the stocks stolen from the factory during the relevant accounting year. The Tribunal referenced several case laws, including M.P. Venkatachalapathy Iyer & Anr. vs. CIT, where it was held that a loss should be claimed in the year when it becomes actual and certain. The Tribunal found that the loss was crystallized in the relevant accounting year when the insurance claim was finalized, and the irrecoverable amount was claimed as a business loss.
Additional Considerations:
- Section 32(1)(iii) of the IT Act: The assessee argued that even in the case of capital assets, where such assets were sold, discarded, demolished, or destroyed, the loss could be claimed as a business loss. However, the Tribunal clarified that depreciation is allowed only on capital assets, and a total loss of a capital asset must be treated as a capital loss.
- Section 28 of the IT Act: The assessee contended that the profits and gains of business or profession should be taxed on the basis of commercial principles. The Tribunal maintained that even on commercial principles, a loss of capital assets would still be treated as a capital loss.
Tribunal's Decision:
The Tribunal remanded the case back to the CIT(A) to decide afresh on the merits of the assessee's claim. The Tribunal found that the loss took place during the accounting year relevant to the assessment year 1971-72 but was not claimed as a business loss because the current assets included the insurance claim amount. The insurance company rejected a substantial part of the claim, leading the assessee to claim the irrecoverable amount as a business loss in the relevant year.
Court's Conclusion:
The High Court upheld the Tribunal's decision. The first question was answered in the affirmative and in favor of the Revenue, confirming that the loss of Rs. 2,42,245 was a capital loss. The second question was also answered in the affirmative and in favor of the assessee, allowing the claim for the burglary loss during the relevant accounting year. The Court noted that the Tribunal had left undecided whether the burglary actually took place and referred the matter back to the CIT(A) for a fresh decision.
Separate Judgments:
- S.C. Sen, J.: Delivered the main judgment.
- B.P. Banerjee, J.: Agreed with the judgment.
Costs:
There will be no order as to costs.
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1990 (5) TMI 243
The High Court of Calcutta ruled in favor of the assessee, allowing the expenditure of Rs. 78,000 for converting oil-firing equipment to coal-firing as revenue expenditure under section 37(1) of the Income-tax Act, 1961. The Tribunal's decision was upheld as the conversion was for better operation of the machine and did not involve creating new plant or machinery. The question of law was answered in favor of the assessee, with no order as to costs.
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1990 (5) TMI 242
The High Court of Calcutta addressed questions regarding the deduction of deferred rebates and unabsorbed losses for a non-resident shipping company. The Tribunal's decisions were upheld in favor of the Revenue based on previous court decisions. The judgment was delivered by B.P. Banerjee and S.C. Sen, JJ.
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1990 (5) TMI 241
Issues Involved:
1. Appointment of a provisional liquidator.
2. Maintainability of the main company petition.
3. Amendment of the company petition.
4. Bona fide claim of dispute regarding payment.
Summary:
Appointment of a Provisional Liquidator:
Tube filed CA No. 606 of 1989 for the appointment of a provisional liquidator, which was allowed on 12-9-1989, appointing the official liquidator of the Court. Rim challenged this in OSA No. 301 of 1989, and the Division Bench granted a conditional stay on 5-10-1989, which Rim failed to comply with, resulting in the vacation of the interim stay.
Maintainability of the Main Company Petition:
Rim argued against the maintainability of the main company petition, which was filed u/s 433(e) and (f) of the Companies Act, 1956. The Court noted that the petition was primarily based on Rim's alleged inability to pay its debts to Tube, invoking the presumption u/s 434(1). However, the Court found that Rim had raised a bona fide dispute regarding the amount due, which required reconciliation of accounts.
Amendment of the Company Petition:
Tube sought to amend the company petition by adding paragraphs about Rim's admission of liability and other factual situations for winding up under the just and equitable clause u/s 433(f). The Court dismissed this amendment application, stating that it was filed due to oversight and would cause prejudice to Rim by changing the entire complexion of the proceedings.
Bona Fide Claim of Dispute Regarding Payment:
The Court found that Rim had consistently disputed the amount claimed by Tube, including payments made, defective goods, and the agreed interest rate. The correspondence between the parties indicated a bona fide dispute. The Court referred to principles established in previous cases, stating that if there is a dispute regarding the principal sum, a winding-up petition is not maintainable, and such disputes should be resolved in Civil Court.
Conclusion:
The Court dismissed Company Petition No. 64 of 1988 due to the existence of a bona fide dispute regarding the amount due. Consequently, CA No. 244 of 1990 was allowed, setting aside the order appointing the provisional liquidator. CA Nos. 1077 of 1989 and 258 of 1990 were also dismissed. No order as to costs was made.
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1990 (5) TMI 240
Issues Involved:
1. Staleness of the detention order.
2. Delay in passing the detention order.
3. Non-issuance of preventive detention against a similarly involved individual.
4. Non-supply of relevant documents affecting the right to effective representation.
5. Delay in arresting the detenu and serving the detention order.
6. Delay in disposing of the representation made by the detenu.
Summary of Judgment:
1. Staleness of the Detention Order:
The petitioner argued that the detention order dated December 20, 1989, was based on an incident from July 19, 1989, making it stale. The Court rejected this argument, stating that the statements recorded u/s 108 of the Customs Act clearly implicated the petitioner in the transportation of narcotic drugs. The Court found no merit in the claim of non-application of mind by the detaining authority.
2. Delay in Passing the Detention Order:
The petitioner contended that the delay of five months in passing the detention order rendered it illegal. The Court held that the delay was justified as the Customs Department needed time to receive and consider the chemical examination reports of the seized narcotic drugs. The detention order was passed with promptitude considering all relevant facts.
3. Non-Issuance of Preventive Detention Against Similarly Involved Individual:
The petitioner argued that no preventive detention order was passed against C.P. Reddy, who was similarly involved. The Court did not find this argument persuasive, as the detaining authority had sufficient grounds to detain the petitioner based on the evidence available.
4. Non-Supply of Relevant Documents:
The petitioner claimed that the non-supply of the bail application and the order rejecting it affected his right to effective representation u/s Article 22(5) of the Constitution. The Court found this ground untenable, as the rejection of the bail application was not considered by the detaining authority in the grounds of detention.
5. Delay in Arresting the Detenu and Serving the Detention Order:
The petitioner argued that the delay in arresting him and serving the detention order indicated a lack of genuine apprehension. The Court noted that the petitioner had absconded and evaded arrest, which explained the delay. The Court cited precedents to support that such delay does not vitiate the detention order if adequately explained.
6. Delay in Disposing of the Representation:
The petitioner contended that the delay of one month in disposing of his representation made his continued detention illegal. The Court found that the representation was processed promptly and rejected after due consideration. The counter-affidavit filed by the Under Secretary was deemed sufficient to explain the delay.
Conclusion:
The writ petition was dismissed, and the detention order was upheld as valid and in accordance with the law. The Court found no merit in any of the grounds of challenge raised by the petitioner.
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1990 (5) TMI 238
Issues Involved:
1. Authority of the receiver to create tenancies.
2. Validity of tenancies created by the receiver.
3. Applicability of the West Bengal Premises Tenancy Act.
4. Violation of injunction order by the receiver.
5. Impact of surrendering part of the leased property on the remaining tenancy.
6. Rights of tenants under the West Bengal Premises Tenancy Act.
Detailed Analysis:
1. Authority of the Receiver to Create Tenancies:
The appellant contended that the receiver had no right or authority to create any lease or tenancy for a term exceeding three years without the leave of the court, as per Chapter 21 Rule 5(a) of the Original Side Rules of the Calcutta High Court. The receiver's creation of a monthly tenancy was argued to be illegal, violating the injunction order passed by Justice A.N. Sen, which restrained the tenants from selling or transferring any of the properties in Schedule 'A'. The court held that the receiver has only the powers expressly granted by the court and any act beyond this authority, such as creating a new tenancy, would be invalid.
2. Validity of Tenancies Created by the Receiver:
The court examined whether the receiver's actions in creating tenancies for Tatas and Grindlays were valid. It was held that the receiver's act of leasing Flats Nos. 1 and 2 to Tatas constituted creating a new tenancy, which was beyond his authority and violated the injunction order. Conversely, the continuation of Grindlays' tenancy for Flats Nos. 3 and 4 was not considered a new tenancy but an extension of the existing one, thus not violating the injunction order.
3. Applicability of the West Bengal Premises Tenancy Act:
The court considered whether the tenancies created by the receiver were protected under the West Bengal Premises Tenancy Act. It was determined that Grindlays, as an existing tenant, was protected under the Act. However, Tatas, being inducted as a new tenant in violation of the court's order, could not claim protection under the Act.
4. Violation of Injunction Order by the Receiver:
The court found that the receiver's creation of a new tenancy for Tatas violated the injunction order issued by Justice A.N. Sen, which prohibited the transfer of any properties in Schedule 'A'. This violation rendered the tenancy created for Tatas invalid and subject to cancellation.
5. Impact of Surrendering Part of the Leased Property on the Remaining Tenancy:
The court analyzed whether the surrender of Flats Nos. 1 and 2 by Grindlays affected their tenancy for Flats Nos. 3 and 4. Citing legal precedents, the court concluded that the partial surrender did not amount to an implied surrender of the entire tenancy. Therefore, Grindlays' tenancy for Flats Nos. 3 and 4 remained valid and was not considered a new tenancy.
6. Rights of Tenants under the West Bengal Premises Tenancy Act:
The court held that Grindlays, as an existing tenant, was entitled to protection under the West Bengal Premises Tenancy Act. However, Tatas, being a new tenant inducted in violation of the court's order, could not invoke the provisions of the Act for protection. Consequently, Tatas was liable to be evicted.
Conclusion:
The appeal was dismissed against Grindlays, affirming their tenancy and protection under the West Bengal Premises Tenancy Act. Conversely, the appeal was allowed against Tatas, invalidating their tenancy and ordering their eviction due to the violation of the court's injunction order. Each party was directed to bear its own costs.
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1990 (5) TMI 237
Issues Involved:
1. Filing of counter affidavit by an inappropriate authority.
2. Delay in the consideration of the detenu's representation.
Issue-wise Detailed Analysis:
1. Filing of Counter Affidavit by an Inappropriate Authority:
The judgment emphasizes the necessity for the detaining authority to file the counter affidavit in response to a Rule Nisi, as established in previous cases such as *The State of Bombay v. Purushottam Jog Naik* and *Ranjit Dam v. State of West Bengal*. It is not a rigid rule but a preferred practice to ensure that the affidavit is sworn by someone with personal knowledge of the case. The Court condemned the practice of allowing police officers, who have no personal connection or knowledge of the proceedings, to swear counter and reply affidavits. In this case, the Deputy Superintendent of Police, who had no involvement in the detention order or its processing, filed the affidavits, which the Court found unacceptable and rejected them.
2. Delay in the Consideration of the Detenu's Representation:
The detenu's representation was delayed by 27 days, which the detaining authority attempted to justify through the Deputy Superintendent of Police's affidavit. The Court found this explanation insufficient, particularly noting an unexplained delay of 7 days by the Assistant Secretary. The Court reiterated the constitutional mandate under Article 22(5) of the Constitution of India, which requires the detaining authority to consider and dispose of the detenu's representation with reasonable dispatch. The unexplained delay constituted a breach of this constitutional obligation, rendering the detention order invalid.
Conclusion:
The Supreme Court set aside the impugned order of detention due to the inappropriate filing of the counter affidavit and the unexplained delay in considering the detenu's representation. The appeal was allowed, and the detenu was directed to be released immediately.
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1990 (5) TMI 236
Issues:
1. Evading entertainment tax by organizing fraudulent events.
2. Challenge of tax assessment notices before the High Court.
3. High Court's decision on the legality of tax assessment and refund demand.
4. Analysis of the fraudulent scheme and legal implications.
5. Supreme Court's decision and reasoning.
Analysis:
1. The case involved the fraudulent organization of events to evade entertainment tax. The respondents orchestrated performances under the guise of promoting savings, collecting money from attendees without issuing membership cards or returning fees. This scheme defrauded both the public and the State Government of tax revenue.
2. The District Excise Officer issued tax assessment notices to the respondents after detecting the fraudulent activities. The High Court, however, deemed the tax assessment arbitrary, citing reasons like the non-sale of invitation cards and incorrect division of the subscription fee. The High Court quashed the notices and ordered a refund of a partial payment made by the respondents.
3. The Supreme Court criticized the High Court's judgment, highlighting the crucial point that the respondents collected money from attendees without providing any tangible benefits or future performances as promised. The so-called "Nav Nirman Group" lacked legal existence, and the scheme was designed solely to collect money and evade entertainment duty.
4. The fraudulent scheme's rules and regulations revealed its true nature as a profit-driven business venture aimed at tax evasion. The receipts and invitation cards served as tickets for a single show, subjecting them to entertainment duty. The Supreme Court rejected the High Court's reasoning on the membership subscription and upheld the validity of the tax assessment notices.
5. Ultimately, the Supreme Court allowed the appeal, overturning the High Court's decision and emphasizing the fraudulent nature of the scheme. The respondents' actions were deemed a deliberate attempt to evade tax obligations, leading to the dismissal of the High Court's judgment and upholding the tax assessment notices.
This comprehensive analysis outlines the deceptive practices employed to evade tax, the legal proceedings before the High Court, the Supreme Court's critical evaluation of the scheme, and the final decision to uphold the tax assessment notices.
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1990 (5) TMI 235
Issues Involved:
1. Entitlement to Scheduled Tribe status in a migrated state.
2. Interpretation of Articles 341 and 342 of the Constitution.
3. Impact of migration on Scheduled Tribe benefits.
4. Consideration of domicile requirements.
5. Legislative recommendations for migrated Scheduled Castes and Scheduled Tribes.
Summary:
Entitlement to Scheduled Tribe Status in a Migrated State:
The petitioner, born in Andhra Pradesh and belonging to the Gouda community recognized as a Scheduled Tribe in Andhra Pradesh, sought admission to medical colleges in Maharashtra under the Scheduled Tribe quota. Despite securing higher marks than other admitted Scheduled Tribe candidates, the petitioner was denied admission because he was not recognized as a Scheduled Tribe in Maharashtra.
Interpretation of Articles 341 and 342 of the Constitution:
The Court examined Articles 341 and 342, which specify that the President may declare certain tribes as Scheduled Tribes in relation to a particular state. The term "in relation to that State" implies that Scheduled Tribe status is specific to the state of origin and does not extend to other states upon migration.
Impact of Migration on Scheduled Tribe Benefits:
The Court held that a person recognized as a Scheduled Tribe in one state does not retain that status upon migrating to another state. This interpretation ensures that the benefits and reservations intended for the disadvantaged communities in a particular state are not diluted by migrants from other states.
Consideration of Domicile Requirements:
Although the petitioner had a domicile certificate indicating over 10 years of residence in Maharashtra, the issue of domicile was not raised in this writ petition. The Court focused on the interpretation of Article 342 and did not consider the domicile requirement in this context.
Legislative Recommendations for Migrated Scheduled Castes and Scheduled Tribes:
The Court suggested that appropriate legislation should be considered to address the educational and other benefits for Scheduled Castes and Scheduled Tribes who migrate due to employment or other involuntary reasons. This would ensure that their educational prospects are not jeopardized while balancing the rights of the local disadvantaged communities.
Conclusion:
The petitioner was not entitled to admission in Maharashtra's medical colleges based on his Scheduled Tribe status from Andhra Pradesh. However, considering the petitioner's educational progress, the Court directed the authorities to determine if he genuinely belongs to the Gouda community and if any facility for admission or continuance of study could be provided without affecting the rights of Maharashtra's Scheduled Tribes. The authorities were instructed to consider this matter expeditiously, keeping in mind the justice of the situation. The writ petition was disposed of with no order as to costs.
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1990 (5) TMI 234
Issues Involved:
1. Whether ONGC is a public utility undertaking.
2. Basis for fixation of gas prices by ONGC.
3. ONGC's obligation to supply gas post-expiry of contracts.
4. Validity of ONGC's minimum off-take guarantee clause.
Summary:
1. Whether ONGC is a Public Utility Undertaking:
The High Court held that ONGC is a public utility undertaking with a duty to supply gas to anyone requiring it, subject to availability. However, the Supreme Court disagreed, stating that ONGC has not held itself out or been obliged by law to provide gas supply to the public in general. The Court noted that ONGC's primary activity is exploration and prospecting for petroleum, and it supplies gas to certain selected contractees, not to the public at large.
2. Basis for Fixation of Gas Prices by ONGC:
The High Court ruled that ONGC, being a State instrumentality, must act reasonably in price fixation, suggesting methods like cost plus basis. The Supreme Court, however, held that ONGC is not bound to adopt only the cost plus basis but can use other recognized methods like the thermal equivalence basis. The Court emphasized that ONGC's price fixation based on the thermal equivalence of alternative fuels is a recognized and rational method, especially given the capital-intensive nature of oil exploration and the need for ONGC to build up a surplus for future requirements.
3. ONGC's Obligation to Supply Gas Post-Expiry of Contracts:
The High Court directed ONGC to continue supplying gas to the respondents at an interim price until a reasonable price is fixed. The Supreme Court found this direction inappropriate, stating that ONGC is not obliged to continue supply without a contract and that the prices demanded by ONGC are neither unreasonable nor capricious. The Court upheld ONGC's right to fix prices and supply gas based on contracts.
4. Validity of ONGC's Minimum Off-Take Guarantee Clause:
The High Court upheld ONGC's minimum off-take guarantee clause of 90%. The Supreme Court agreed with this conclusion, referencing the rationale provided in the decision of Amalgamated Electricity Co. Ltd. v. Jalgaon Borough Municipality.
Conclusion:
The Supreme Court allowed the appeals, upholding the prices charged by ONGC for the supply of gas to various respondents. The Court made no order regarding costs and stated that ONGC is at liberty to recover outstanding charges from the respondents. The judgment clarified that ONGC's price fixation based on the thermal equivalence of alternative fuels is reasonable and that ONGC is not a public utility undertaking obliged to supply gas to the public at large.
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1990 (5) TMI 233
Issues Involved:
1. Whether the Collector has the power under Section 6E of the Essential Commodities Act, 1955, to release goods seized under Section 3 during the pendency of proceedings before the Special Court.
Issue-wise Detailed Analysis:
Issue 1: Power of the Collector under Section 6E of the Essential Commodities Act, 1955
Facts:
The petitioner, engaged in mustard oil manufacturing, had his factory raided by the District Enforcement Branch, resulting in the seizure of mustard seeds and mustard oil for purported license infractions and violations under Section 3 of the Essential Commodities Act, 1955. The seized goods were reported to the Collector under Section 6A for initiating confiscation proceedings. The petitioner applied for the release of the seized commodities under Section 6E, and the Additional Collector dropped the confiscation proceedings and ordered the release of the goods. The State Government's revision petition was allowed by the High Court, which held that the Collector had no power to release the goods under Section 6A read with Section 6E.
Arguments:
The petitioner argued that upon dropping the confiscation proceedings, the Collector was obliged to release the goods under Section 6E, as the jurisdiction of the Court to make orders regarding the possession, delivery, disposal, release, or distribution of such essential commodities is barred by Section 6E. Conversely, the Additional Solicitor General contended that the power to release under Section 6E refers to third parties, not the party from whom the goods were seized, and that releasing the goods to the petitioner would defeat the Act's purpose.
Legal Provisions and Interpretation:
The Essential Commodities Act, 1955, aims to regulate the production, supply, and distribution of essential commodities in the public interest. Section 3 empowers the Central Government to regulate essential commodities, and Section 6A allows the Collector to confiscate seized commodities. Section 6E, inserted by Act No. 42 of 1986, bars courts from making orders regarding the possession, delivery, disposal, release, or distribution of seized commodities, conferring exclusive jurisdiction on the Collector or State Government under Section 6C.
Judgment:
The Supreme Court analyzed the scheme of the Act and concluded that the power of confiscation under Section 6A does not include the power of release. The words "pending confiscation" in Section 6E indicate that the Collector's power to release is limited to maintaining public interest by ensuring the steady supply of essential commodities and preventing artificial shortages. The term "release" in Section 6E does not imply "return" to the owner or the person from whom the goods were seized. The Act's objective is to prevent hoarding and ensure equitable distribution at fair prices. Therefore, the Collector cannot release the seized goods to the petitioner as it would defeat the Act's purpose.
Conclusion:
The Supreme Court upheld the High Court's decision, affirming that the Collector does not have the power to release seized goods to the owner or the person from whom they were seized under Section 6E of the Essential Commodities Act, 1955. The appeal was dismissed with costs.
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1990 (5) TMI 232
Issues Involved:
1. Interpretation of Section 14 of the West Bengal Premises Tenancy Act, 1956.
2. Social obligation of law courts.
3. Employment implications for employees of the company in liquidation.
Issue-wise Detailed Analysis:
1. Interpretation of Section 14 of the West Bengal Premises Tenancy Act, 1956:
The primary contention revolves around whether the purchaser of the company in liquidation can utilize the registered office without the landlord's consent, as stipulated by Section 14 of the West Bengal Premises Tenancy Act, 1956. The landlord argued that the purchaser cannot acquire any title over the tenanted portion without their approval, thereby necessitating the official liquidator to hand over peaceful possession of the premises to the landlord.
Section 14 creates an embargo on transferring tenancy without the landlord's consent. However, the court interpreted that the section should be read in conjunction with other statutory provisions to ascertain the legislative intent. The statute aims to prevent unethical conduct by tenants that might deprive landlords of their rights. The court concluded that involuntary acts, such as liquidation and subsequent auction sale of the company's assets, do not fall under the purview of Section 14, which primarily addresses voluntary and deliberate acts of tenancy transfer.
2. Social Obligation of Law Courts:
The judgment emphasized the evolving nature of law, stressing that rigid interpretation contrary to societal needs could lead to social catastrophe. The court underscored its social obligation to interpret laws in a manner that serves social purposes and justice. The court referenced Roscoe Pound's philosophy, highlighting that law must be flexible and adapt to societal changes.
In this context, the court considered the broader social implications of its decision, particularly the potential loss of employment for 45 employees if the application for disclaimer was granted. The court argued that law courts must rise to the occasion and interpret laws to maintain social stability and justice, rather than adhering strictly to rigid legal formulas.
3. Employment Implications for Employees of the Company in Liquidation:
The court noted that the sale of the company's assets was confirmed on the condition that it would continue as a going concern, thus preserving employment opportunities. The purchaser had already entered into a memorandum of understanding with the factory employees, ensuring their continued employment.
The court faced a dilemma: whether to prioritize strict legal interpretation, potentially resulting in job losses for 45 employees, or to fulfill its social obligation by allowing the purchaser to use the registered office, thereby securing employment for these individuals. The court decided in favor of the latter, emphasizing that the interests of the employees and their families should take precedence over the landlord's technical rights under Section 14.
Conclusion:
The application for disclaimer was dismissed, with the court directing the purchaser to continue paying the monthly rent as last paid. The landlord was granted liberty to lodge claims for any arrears with the official liquidator. The court's decision was driven by a commitment to social justice and the need to adapt legal interpretations to serve the evolving needs of society.
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1990 (5) TMI 231
Issues:
1. Assessability of sale proceeds of import entitlements as business income.
2. Allowability of weighted deduction on export promotion expenses.
3. Admissibility of claim for interest payable under the Deferred Payment Scheme.
4. Admissibility of depreciation on a diesel generating set.
Analysis:
Issue 1:
The Tribunal referred whether the sale proceeds of import entitlements amounting to Rs. 2,25,335 were assessable as business income. The Court relied on a previous decision and concluded in favor of the revenue.
Issue 2:
Regarding the weighted deduction under section 35B of the Income-tax Act on export promotion expenses, the Court referred to previous judgments. It held that the export inspection charges and bank charges for negotiation of export bills were not eligible for weighted deduction.
Issue 3:
The Tribunal questioned the admissibility of the claim for interest payable under the Deferred Payment Scheme. The assessee chose not to press this question, and therefore, the Court declined to answer it.
Issue 4:
The final issue was the admissibility of depreciation amounting to Rs. 18,324 on a diesel generating set. The Tribunal considered the facts from a previous year's case and observed that due to a lockout, the assessee could not actively use the generating set. However, the Court noted that passive user of an asset is sufficient for depreciation allowance. It determined that the claim should be allowed as the generating set was still being used in the business of leasing out generating sets.
In conclusion, the Court answered the questions as follows:
- Issue 1: Answered in favor of the revenue.
- Issue 2: Subpart (a) answered in favor of the assessee, and subpart (b) in favor of the revenue.
- Issue 3: Answer declined.
- Issue 4: Answered in favor of the assessee. No order was given regarding costs. The judgment was agreed upon by another judge. The decision was partly in favor of the revenue.
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1990 (5) TMI 230
Issues Involved:
The appeal challenges the correctness of the judgment made by the High Court of Delhi in a Criminal Writ Petition regarding the order of detention u/s 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The main contention raised is the inordinate delay in considering and disposing of the detenu's representation, alleging violation of Article 22(5) of the Constitution of India.
Delay in Considering Representation:
The appellant contended that there was an unexplained delay in processing his representation, which was forwarded to the sponsoring authority on 25.8.1989 but comments were received only on 11.9.1989. This delay was deemed significant as both the detaining and sponsoring authorities were located in Delhi. The appellant argued that such delay violated the detenu's constitutional right under Article 22(5) and cited relevant case law to support his claim.
Legal Precedents and Constitutional Obligations:
The Court referred to various decisions emphasizing the importance of promptly considering and disposing of a detenu's representation to safeguard personal liberty. It was highlighted that any delay in this process must be explained satisfactorily by the authorities. The Court reiterated that the gravity of allegations in the detention order cannot justify overlooking procedural delays, emphasizing the fundamental right to personal liberty under the Constitution.
Decision and Ruling:
In light of the appellant's argument and the legal precedents cited, the Court found the unexplained delay in processing the detenu's representation to be a violation of Article 22(5) of the Constitution. Consequently, the Court allowed the appeal, set aside the High Court's order, and directed the detenu to be released unless detained for another valid reason. The judgment underscored the paramount importance of adhering to constitutional obligations and procedural safeguards in cases of preventive detention.
Conclusion:
The Court's ruling emphasized the need for authorities to promptly address detenus' representations to uphold constitutional rights and prevent arbitrary deprivation of personal liberty. The judgment serves as a reminder of the critical role of procedural fairness and timely review in safeguarding individual freedoms within the framework of preventive detention laws.
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