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1985 (7) TMI 385
Issues:
1. Interpretation of the term "public servant" under Section 21 of the Indian Penal Code.
2. Whether a Municipal Councillor qualifies as a "public servant" for the purpose of prosecution under the Prevention of Corruption Act.
3. Validity of sanction obtained for prosecuting a Municipal Councillor.
Analysis:
The judgment in question involved an appeal arising from a conviction under Section 161 of the Indian Penal Code and the Prevention of Corruption Act. The primary issue revolved around whether a Municipal Councillor could be considered a "public servant" within the meaning of Section 21 of the IPC. The appellant contended that as a Municipal Councillor was not a public servant, he could not be prosecuted under the Act even with the requisite sanction. The High Court had upheld the conviction, asserting that a Municipal Councillor indeed falls under the definition of a public servant. The Supreme Court, however, delved into the historical evolution of Section 21 and referenced a previous judgment to conclude that a Municipal Councillor does not qualify as a public servant. The Court emphasized that a public servant must be appointed by the government or a semi-governmental body and must receive salary from the same, which does not align with the role of a Municipal Councillor who is elected by the people and operates independently of governmental authority.
The Court highlighted that the concept of a public servant differs significantly from that of a Municipal Councillor, emphasizing that a public servant must adhere to government regulations and directives, unlike a Municipal Councillor who functions autonomously. The Court's analysis underscored that receiving an allowance or honorarium does not transform the status of a Municipal Councillor into that of a public servant. By referencing a landmark judgment, the Court established that historical evolution supports the exclusion of a Municipal Councillor from the definition of a public servant under Section 21 of the IPC. Consequently, the Court ruled that the appellant, not meeting the criteria of a public servant, could not be prosecuted under the Act, rendering the sanction for prosecution irrelevant to the issue at hand.
In conclusion, the Supreme Court allowed the appeal, overturned the conviction and sentence of the appellant, and acquitted him of all charges. The appellant, who was on bail, was directed to be discharged from the bail-bond, and any fine paid was ordered to be refunded. The judgment provided a comprehensive analysis of the term "public servant" and clarified the distinction between a Municipal Councillor and a public servant, setting a precedent for future interpretations of similar legal issues.
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1985 (7) TMI 384
Issues Involved:
1. Right to legal representation during preliminary investigation.
2. Confidentiality of the investigation process.
3. Applicability of the Advocates Act, 1961.
Issue-wise Detailed Analysis:
1. Right to Legal Representation During Preliminary Investigation:
The primary issue is whether the petitioners are entitled to have their advocate present during their interrogation by the Assistant Conservator of Forests. The petitioners argue that the presence of their lawyer is essential to prevent coercion and harassment. They rely on Article 22(1) of the Constitution, which states, "No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice." They also invoke Article 20(3), which protects against self-incrimination.
The petitioners cite the Supreme Court case of Nandini Satpathy v. Dani, where it was observed, "The right to consult an advocate of his choice shall not be denied to any person who is arrested. This does not mean that persons who are not under arrest or custody can be denied that right." The Court emphasized that the presence of a lawyer ensures the observance of the right against self-incrimination and prevents coercion.
However, the judgment also notes that the Supreme Court did not mandate the presence of a lawyer during interrogation but suggested it as a prudent measure. The Court stated, "We do not lay down that the Police must secure the services of a lawyer... if an accused person expresses the wish to have his lawyer by his side when his examination goes on, this facility shall not be denied."
2. Confidentiality of the Investigation Process:
The respondent opposes the petitioners' request on the grounds that the investigation should remain confidential until a charge-sheet is filed. This is supported by the judgment in Muthuswami In re, which held, "The entire scheme of the Act is that the investigation into an offence should necessarily be kept confidential and that copies to the accused could be furnished only after the charge-sheet is filed."
The Court recognizes the necessity of keeping the investigation confidential to prevent hampering its progress. Thus, revealing details of the investigation before filing the charge-sheet is considered detrimental to the process.
3. Applicability of the Advocates Act, 1961:
The petitioners' counsel argues that advocates have a customary right to represent clients during bail applications and other proceedings before police officers. However, Section 30 of the Advocates Act, 1961, specifies the rights of advocates to practice before courts, tribunals, and other authorities legally authorized to take evidence. The Court clarifies that an investigating officer is not a forum before which an advocate has a right of audience under the Advocates Act.
The judgment refers to the Supreme Court's caution against the "police station lawyer" system, which is seen as an abuse that breeds other vices. The Court concludes that while the investigating officer is not bound to grant the request for a lawyer's presence, allowing it could prevent adverse criticism of any confessions made during interrogation.
Conclusion:
The Court ultimately decides that the investigating officer is at liberty to decide whether to permit the presence of a lawyer during the petitioners' interrogation. The Court cannot issue a directive in this regard but suggests that the presence of a lawyer may avoid adverse criticism of any confessions obtained. The petition is dismissed with these observations.
Judgment Delivered:
The petition is dismissed, and the investigating officer is given the discretion to decide on the presence of a lawyer during interrogation, keeping in mind the potential benefits of avoiding adverse criticism of confessions.
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1985 (7) TMI 383
The Supreme Court granted Special Leave, remanding the case to the High Court due to contradictory judgments. Status quo to be maintained in both cases. Respondents can seek further relief from the High Court. (Case Citation: 1985 (7) TMI 383 - Supreme Court)
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1985 (7) TMI 382
Issues:
1. Whether a ripened coconut is considered a "fresh fruit" or a "vegetable" for the purpose of exemption from sales tax under a specific notification.
Analysis:
1. The main issue in this case revolves around determining whether a ripened coconut qualifies as a "fresh fruit" or a "vegetable" under a sales tax exemption notification. The High Court held that a ripened coconut does not fall under either category, making it liable for sales tax. The appellant challenged this decision, leading to the current appeal.
2. The Supreme Court applied the principle of interpreting statutory terms based on their popular meaning rather than scientific definitions. While a coconut may botanically be considered a fruit, it must be a "fresh fruit" to qualify for exemption. Similarly, being available in a vegetable market does not automatically classify a coconut as a vegetable. The Court emphasized that household items like fresh fruits and vegetables should be understood in the context of everyday use, where a coconut does not fit the common understanding of these terms.
3. The Court rejected the appellant's reliance on legislative history, stating that previous notifications did not exempt coconuts from sales tax. The amendment under the Tamil Nadu Act of 1970, which brought coconuts under single-point taxation, was deemed irrelevant to the current case. Therefore, the Court affirmed the High Court's decision that the appellant's coconut sales turnover was not exempt from sales tax.
4. Justice Sabyasachi Mukherjee, concurring with the decision, highlighted the importance of evidence in claiming exemptions. While agreeing with the conclusion that a ripened coconut does not qualify as a "fresh fruit," Justice Mukherjee expressed uncertainty regarding its classification as a "vegetable." He emphasized the need for evidence to support claims of exemption and noted the variation in food habits across different regions.
5. Justice Mukherjee stressed the importance of providing the assessee with an opportunity to present evidence to support their claim for exemption. In this case, the appellant failed to provide such evidence, leading to the dismissal of the appeals. While acknowledging the subjective nature of classifying a ripened coconut as a vegetable, Justice Mukherjee agreed with the overall decision to uphold the sales tax liability on coconut sales.
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1985 (7) TMI 381
Issues Involved:
1. Competence of the Special Judge to take cognizance of the offence on a complaint filed by the Drugs Inspector.
2. Interpretation of Section 11 of the Essential Commodities Act, 1955.
3. Effect of the Essential Commodities (Special Provision) Act, 1981 on Section 11 of the Principal Act.
4. Applicability of Section 12-AA(1)(e) of the Amending Act.
5. Judicial precedents related to the interpretation of Section 12-AA(1)(e) and Section 11.
Analysis:
1. Competence of the Special Judge to Take Cognizance:
The petitioners, accused in S.T.6 of 1985, sought to quash the proceedings on the grounds that the Special Judge was not competent to take cognizance of the offence based on a complaint filed by the Drugs Inspector. The court analyzed whether the Special Judge could proceed with the case under the Drugs (Prices Control) Order, 1979, read with Sections 3 and 7(1)(a)(ii) of the Essential Commodities Act, 1955.
2. Interpretation of Section 11 of the Essential Commodities Act, 1955:
Section 11 of the Essential Commodities Act, 1955, stipulates that no court shall take cognizance of any offence except on a report in writing by a public servant as defined in Section 21 of the I.P.C. The court noted that this provision was intended as a safeguard against harassment by interested persons, such as rival businessmen filing false complaints.
3. Effect of the Essential Commodities (Special Provision) Act, 1981:
The Amending Act of 1981 introduced several changes, including the establishment of Special Courts with exclusive jurisdiction and the amendment of Section 12-AA(1)(e), which allows Special Courts to take cognizance of offences on a police report without the accused being committed for trial. The petitioners argued that this provision impliedly repealed Section 11 of the Principal Act during the temporary period of the Amending Act.
4. Applicability of Section 12-AA(1)(e):
The court examined whether Section 12-AA(1)(e) barred cognizance by any method other than a police report. The court concluded that Section 11 and Section 12-AA(1)(e) were not mutually exclusive or conflicting. Section 12-AA(1)(e) clarified that Special Courts could take cognizance on a police report without committal, but did not exclude other methods of taking cognizance provided in Section 11.
5. Judicial Precedents:
The petitioners cited decisions from the Calcutta High Court (In Re: Satish Chandra De, 1984 Cri LJ 1532) and the Rajasthan High Court (Ram Prasad Sharma & Sons v. State of Rajasthan, 1985 Cri LJ 442), which held that cognizance could only be taken on a police report during the subsistence of the Amending Act. However, the court found these decisions unpersuasive and contrary to the principles laid down by the Supreme Court in A.R. Antulay v. R.S. Nayak, which emphasized that multiple methods of taking cognizance are permissible under criminal jurisprudence.
The court also referred to Division Bench decisions of the Patna High Court (Nawal Kishore v. State of Bihar, 1985 Cri LJ 254 and Manu Lal Sah v. State of Bihar, 1985 Cri LJ 260), which supported the view that Special Courts could take cognizance on a complaint by a public servant under Section 11.
Conclusion:
The court held that Section 11 of the Essential Commodities Act, 1955, was not impliedly repealed by Section 12-AA(1)(e) of the Amending Act. The Special Judge was competent to take cognizance based on a complaint filed by a public servant, including the Drugs Inspector. The petition to quash the proceedings was dismissed, affirming that the Special Judge could proceed with the case as per the provisions of the Essential Commodities Act and the Amending Act.
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1985 (7) TMI 380
Issues:
1. Addition of cash hundi loans under section 69D
2. Set off unabsorbed depreciation due to change in shareholding
Analysis:
Issue 1: Addition of cash hundi loans under section 69D
The case involved the repayment of cash hundi loans by the assessee, leading to an addition of &8377; 20,000 to the total income under section 69D. The Tribunal was presented with arguments challenging the addition, emphasizing the genuineness of the loans and repayments. The counsel highlighted specific circumstances, such as repayment to a bank and an agitation in the assessee's bank forcing cash payment. Reference was made to a previous Tribunal decision supporting the assessee's case. The Department, on the other hand, relied on the absence of account payee cheques for the transactions and the assessee's history of hundi dealings. The Vice President analyzed the provisions of section 69D, emphasizing that the section should not be used to tax loans as income merely due to the absence of account payee cheques. The Tribunal found the loans to be genuine based on available confirmations and details, leading to the deletion of the addition and interest on the borrowal.
Issue 2: Set off unabsorbed depreciation due to change in shareholding
The second ground of appeal challenged the ITO's decision not to set off unabsorbed depreciation due to a change in shareholding as per section 79(a). The assessee contended that the shareholding change was not aimed at tax evasion. After hearing both parties, the Tribunal upheld the orders of the authorities below on this point, indicating that the decision not to set off the unabsorbed loss was appropriate in the given circumstances. As a result, the appeal was partly allowed, with the Tribunal ruling in favor of the assessee on the first issue but upholding the authorities' decision on the second issue.
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1985 (7) TMI 379
Issues Involved:
1. Interpretation of Articles 22 and 141 of the Constitution.
2. Interpretation of Section 12(1) of the National Security Act, 1980.
3. Breach of Constitutional mandates under Articles 14 and 22.
4. The role of legal practitioners and advisors before the Advisory Board.
5. Mechanical application of mind by the State Government in confirming detention orders.
Issue-wise Detailed Analysis:
1. Interpretation of Articles 22 and 141 of the Constitution:
The judgment addresses the constitutional mandates of Articles 22 and 141. Article 22(5) grants the detenu the right to make an effective representation against the order of preventive detention. The Court emphasized that this representation must be considered fairly, justly, and with utmost expedition at both the Government and Advisory Board levels. The Court cited several precedents, including Rattan Singh and A.K. Roy, to underline the judiciary's role in safeguarding these rights against abuse.
2. Interpretation of Section 12(1) of the National Security Act, 1980:
Section 12(1) allows the appropriate Government to confirm a detention order and continue the detention for such period as it thinks fit, upon receiving the Advisory Board's report. The Court held that this power must be exercised with due consideration of relevant circumstances and not mechanically. The decision in A.K. Roy was pivotal, emphasizing that the confirmation of detention must not partake the character of punitive detention and must be based on necessity and relevant circumstances at the time of confirmation.
3. Breach of Constitutional Mandates under Articles 14 and 22:
The Court found a breach of Articles 14 and 22 in both cases. The detaining authority was allowed to be represented by legally qualified persons (Assistant Public Prosecutors), while the detenus were not given a similar opportunity. This unequal treatment was deemed a violation of Article 14, which ensures equality before the law. The Court also held that denying the detenus the right to be represented by a legal practitioner or advisor before the Advisory Board violated Article 22(5), which mandates a reasonable opportunity to make an effective representation.
4. The Role of Legal Practitioners and Advisors before the Advisory Board:
The Court reiterated the principle from A.K. Roy that if the detaining authority or Government is represented by a legal practitioner or advisor before the Advisory Board, the detenu must also be allowed similar representation. The appearance of Assistant Public Prosecutors before the Board without allowing the detenus similar representation was held to be unconstitutional. The Court clarified that Section 11(1) of the Act, which allows the Board to call for information from any person, does not confer a right on the detaining authority or Government to be represented before the Board unless it is in relation to information called by the Board.
5. Mechanical Application of Mind by the State Government in Confirming Detention Orders:
The Court found that the State Government mechanically confirmed the detention orders for the maximum period of twelve months without considering relevant circumstances or the necessity of such extended detention. The records showed a lack of application of mind, with notations merely approving the maximum period without any substantive reasoning. This mechanical exercise of power was deemed unconstitutional and void.
Conclusion:
The petitions were allowed, and the continued detention of the petitioners was declared unconstitutional and void. The Court directed that the petitioners be set at liberty forthwith if not required in connection with any other case. The judgment underscores the importance of adhering to constitutional safeguards and ensuring that preventive detention does not become punitive.
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1985 (7) TMI 378
Issues Involved:
1. Whether the accused committed an offence u/s 630 of the Companies Act.
2. Whether the accused committed an offence u/s 406 IPC.
3. Whether the framing of charge u/s 403 IPC was justified.
Summary:
Issue 1: Offence u/s 630 of the Companies Act
The complainant company alleged that the accused wrongfully retained possession of a furnished flat after his employment ended, thus committing an offence u/s 630 of the Companies Act. The Magistrate concluded that the cognizance of the offence was barred by limitation. The High Court held that Sections 630 applies only to existing officers and employees of a company, not former employees. The court emphasized that the language of the section and the legislative intent did not support its application to past employees. Therefore, the Magistrate was correct in not framing a charge u/s 630.
Issue 2: Offence u/s 406 IPC
The essence of an offence u/s 406 IPC is entrustment. The court found no evidence or allegations in the complaint or witness depositions indicating that any property was entrusted to the accused. The court noted that the accused's possession of the flat and furniture was a condition of his service, and failure to return them constituted a breach of contract, not a criminal offence. Thus, the Magistrate was justified in not framing a charge u/s 406 IPC.
Issue 3: Framing of Charge u/s 403 IPC
The Magistrate framed a charge u/s 403 IPC, but the High Court identified a defect in the charge as it did not specify the property allegedly misappropriated. The court noted that the accused's continued possession of the flat and furniture did not amount to dishonest misappropriation or conversion to his own use. The court also clarified that immovable property cannot be subject to an offence u/s 403 IPC. Consequently, the High Court concluded that there were no materials for framing a charge u/s 403 IPC and the accused should have been discharged.
Conclusion:
The revision application by the complainant (Criminal Revision No. 222 of 1985) was dismissed, and the revision application by the accused (Criminal Revision No. 448 of 1985) was allowed, resulting in the discharge of the accused.
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1985 (7) TMI 377
Issues Involved:
1. Validity of the Urban Land (Ceiling and Regulation) Act, 1976.
2. Definition of 'family' under Section 2(f).
3. Validity of Section 23 regarding the disposal of excess vacant land.
4. Validity of Section 11(6) regarding the maximum amount payable.
5. Validity of Section 27(1) regarding restrictions on transfer of urban property.
Detailed Analysis:
1. Validity of the Urban Land (Ceiling and Regulation) Act, 1976:
The petitioners challenged the Act's validity, arguing it violated fundamental rights under Articles 14, 19, and 31, and did not further the Directive Principles of State Policy under Article 39(b) and (c). The Act was included in the Ninth Schedule by the Constitution (Fortieth Amendment) Act, 1976, which provides certain protections under Articles 31B and 31C. The Court held that the Act, except for specific provisions, was valid and aimed to prevent the concentration of urban land in a few hands and ensure equitable distribution.
2. Definition of 'family' under Section 2(f):
The definition of 'family' in Section 2(f) was challenged for being artificial and excluding major children and joint Hindu families. The Court found that the definition, which includes only the individual, spouse, and unmarried minor children, did not necessarily lead to concentration of wealth and was not arbitrary. The Court upheld the definition, stating it was consistent with contemporary urban lifestyles and did not violate Article 14.
3. Validity of Section 23 regarding the disposal of excess vacant land:
Section 23 was contested on the grounds that it allowed the State to allot excess land for private purposes, contradicting the public purpose requirement under Article 31(2). The Court found that the wide definition of 'industry' in Section 23(b) and the priorities for land disposal did not align with the Directive Principles under Article 39(b) and (c). The Court struck down subsections (1), (2), and (3) of Section 23 and the opening words of Section 23(4), holding them unconstitutional for permitting acquisition for private purposes.
4. Validity of Section 11(6) regarding the maximum amount payable:
Section 11(6), which capped the amount payable for excess land at Rs. 2 lakhs, was challenged as arbitrary and confiscatory. The Court held that the amount was not illusory and the provision was not confiscatory. The amount fixed by the legislature was considered a fair and just recompense, and the Court upheld Section 11(6) as valid.
5. Validity of Section 27(1) regarding restrictions on transfer of urban property:
Section 27(1) imposed restrictions on transferring urban property, requiring prior permission from the competent authority. The Court found this provision arbitrary and violative of Article 14, as it conferred uncontrolled power on the authority without guidelines. The restriction on transferring property within the ceiling limits was deemed unreasonable. The Court struck down Section 27(1) to the extent it imposed such restrictions.
Conclusion:
The Supreme Court upheld the Urban Land (Ceiling and Regulation) Act, 1976, except for specific provisions. The definition of 'family' under Section 2(f) and the maximum amount payable under Section 11(6) were upheld. However, subsections (1), (2), and (3) of Section 23, the opening words of Section 23(4), and Section 27(1) were struck down as unconstitutional. The Act was found to align with the Directive Principles of State Policy, except for the invalidated sections.
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1985 (7) TMI 376
Issues Involved:
1. Right of Redemption
2. Extinguishment of Right to Redeem
3. Application of Section 90 of the Indian Trusts Act, 1882
4. Grant of Occupancy Rights
5. Non-impleadment of Necessary Parties
Detailed Analysis:
1. Right of Redemption:
The core issue revolves around the plaintiffs' right to redeem the mortgage. The plaintiffs, who were permanent Mirasi tenants, mortgaged their share in certain lands to the defendants for a loan of Rs. 1,000. The mortgage was for five years, and the mortgagees were entitled to appropriate the income from the mortgaged property towards interest. The plaintiffs initiated a suit for redemption after an unsuccessful attempt to redeem the mortgage under Section 83 of the Transfer of Property Act, 1882.
2. Extinguishment of Right to Redeem:
The defendants argued that the right of the mortgagors to redeem the mortgage had become extinguished because the mortgaged lands had been granted to the defendants by the Government after the abolition of the Watans. The trial court dismissed the suit, but the appellate court reversed the decision, directing the plaintiffs to pay the mortgage amount along with an additional sum equivalent to half of the occupancy price paid by the defendants.
3. Application of Section 90 of the Indian Trusts Act, 1882:
The Supreme Court analyzed the applicability of Section 90 of the Indian Trusts Act, 1882, which states that if a mortgagee gains an advantage by availing himself of his position, he must hold that advantage for the benefit of the mortgagor. The Court concluded that the mortgagees (defendants) gained the occupancy rights by availing themselves of their position as mortgagees, which was in derogation of the plaintiffs' rights. Therefore, the defendants are obligated to hold the acquired rights for the benefit of the plaintiffs, subject to repayment of expenses incurred in securing the grant.
4. Grant of Occupancy Rights:
The lands in question were Paragana Watan Inam lands, and after the abolition of the Watans under the Bombay Paragana and Kulkarni Watans (Abolition) Act, 1950, the lands were to be regranted to the holders of the watan upon payment of the occupancy price. The defendants secured the grant of occupancy rights by representing themselves as permanent Mirasi tenants, although they were only mortgagees. The Court held that the defendants could not have secured the grant without being in possession of the lands due to the mortgage, and thus, they must surrender the advantage gained to the plaintiffs.
5. Non-impleadment of Necessary Parties:
The appellants contended that no relief could be granted to the plaintiffs because Pandu Krishna, another grantee, had not been impleaded. The Court rejected this argument, noting that the grant by the Prant Officer was made in specific shares, and the case concerned only the half share granted to the mortgagees. The non-impleadment of Pandu Krishna did not affect the plaintiffs' right to redeem their mortgaged share.
Conclusion:
The Supreme Court affirmed the judgment of the first appellate court, holding that the defendants must surrender the occupancy rights gained to the plaintiffs, subject to the repayment of expenses incurred. The appeal was dismissed with costs, upholding the plaintiffs' right to redeem the mortgage.
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1985 (7) TMI 375
Issues:
Validity of the appointment of the General Manager of Haryana Roadways as an officer entitled to exercise the powers of a Deputy Superintendent of Police under the Motor Vehicles Act, 1939.
Analysis:
The judgment delivered by the Supreme Court dealt with the validity of the appointment of the General Manager of Haryana Roadways as an officer who can exercise the powers of a Deputy Superintendent of Police under the Motor Vehicles Act, 1939. The State Government of Haryana, through a Notification dated March 16, 1973, empowered the General Manager to exercise these powers. The Court considered whether this appointment was valid or not. The appellant and petitioners contended that this appointment was violative of Article 19(1)(g) of the Constitution and contrary to the object and spirit of the Act. They argued that the General Manager, being responsible for the management of Haryana Roadways and in competition with private operators, could not impartially enforce the law. The Court emphasized that the powers of inspection, search, seizure, and detention under the Act were serious restrictions on the fundamental right of motor vehicle operators, and should be entrusted to a person expected to exercise them fairly. The Court found that the General Manager's dual role created a conflict of interest, potentially leading to biased enforcement and unfair treatment of private operators.
The Court highlighted that the General Manager's appointment as an officer with police powers imposed unreasonable restrictions on the fundamental rights of private motor vehicle operators. The Court reasoned that the General Manager's direct involvement in the operation of motor vehicles and his competing interests made him unfit to impartially enforce the law. The Court emphasized the importance of fair enforcement for the general public interest and noted that the appointment of the General Manager did not serve this purpose. The Court drew a parallel with a case from the High Court of Allahabad, where a similar appointment was held to be void. Ultimately, the Court allowed the appeal and writ petitions, holding the impugned Notification invalid and quashing it. The judgment concluded by stating that there would be no order as to costs.
In conclusion, the Supreme Court's judgment focused on the conflict of interest arising from the appointment of the General Manager of Haryana Roadways as an officer with powers of a Deputy Superintendent of Police under the Motor Vehicles Act, 1939. The Court found this appointment to be violative of fundamental rights and not in the interest of the general public. The decision emphasized the need for impartial enforcement and fair treatment of private motor vehicle operators, leading to the invalidation of the appointment through the quashing of the Notification.
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1985 (7) TMI 374
The Supreme Court dismissed the appeal against the acquittal of the respondent in a murder case due to insufficient evidence and upheld the decision of the Sessions Judge and High Court. The appellant's application for leave to appeal was declined, and the bail bond of the respondent was cancelled.
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1985 (7) TMI 373
Issues Involved:
1. Repugnancy between the Administration of Evacuee Property Act, 1950 and the Punjab Village Common Lands (Regulation) Act, 1953.
2. Vesting of rights in Shamlat-deh lands.
3. Applicability of Article 254 of the Constitution.
4. President's assent under Article 31-A and its implications.
5. The impact of agrarian reform legislation on evacuee property.
Summary:
1. Repugnancy between the Administration of Evacuee Property Act, 1950 and the Punjab Village Common Lands (Regulation) Act, 1953:
The Supreme Court addressed the repugnancy between the Central Act of 1950 and the Punjab Act of 1953. The Central Act vested evacuee property in the Custodian, while the Punjab Act vested Shamlat-deh lands in the Panchayats. The Court noted a direct conflict between Section 8(2) of the Central Act and Section 3 of the Punjab Act, leading to the Custodian being divested of the Shamlat-deh lands.
2. Vesting of rights in Shamlat-deh lands:
The Court observed that prior to the partition, Shamlat-deh lands were owned by village proprietors in proportion to their other land holdings. Post-partition, the interest of Muslim proprietors who migrated to Pakistan vested in the Custodian under the Central Act. However, the Punjab Act of 1953 extinguished all private interests in Shamlat-deh lands and vested them in the Panchayats.
3. Applicability of Article 254 of the Constitution:
The Court analyzed Article 254, which deals with inconsistencies between Central and State laws. It concluded that the Central Act of 1950 prevails over the Punjab Act of 1953 due to repugnancy, as the latter was not reserved for the President's assent for this specific conflict.
4. President's assent under Article 31-A and its implications:
The Punjab Act of 1953 received the President's assent for purposes of agrarian reform under Article 31-A, not for resolving repugnancy under Article 254(2). The Court held that the President's assent for agrarian reform does not extend to resolving repugnancy with the Central Act.
5. The impact of agrarian reform legislation on evacuee property:
The Court upheld that the Punjab Act of 1953, being a measure of agrarian reform, falls under Entry No. 18 of the State List and is protected under Article 31-A. The Court emphasized that the Punjab Act aimed at rural development and equitable distribution of land, thus prevailing over the Central Act within the State.
Conclusion:
The Supreme Court set aside the judgment of the High Court, allowing the appeal and holding that the Punjab Act of 1953 prevails over the Central Act of 1950 within the State of Punjab concerning Shamlat-deh lands. The Court recognized the agrarian reform nature of the Punjab Act, which aligns with rural welfare and community benefit.
Separate Judgment by Chinnappa Reddy, J.:
Justice Chinnappa Reddy concurred with the Chief Justice's conclusion, reiterating that the President's assent under Article 31-A does not automatically transform into assent under Article 254(2). He emphasized that the real issue is the effect of the Punjab Act on the Central Act, noting that the Punjab Act aimed at agrarian reform and did not conflict with the Central Act's administration of evacuee property.
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1985 (7) TMI 372
Issues Involved:
1. Jurisdiction of the IAC to change the head of income under Section 144B.
2. Treatment of Rs. 1,40,000 as income from the evaluation of technical know-how.
3. Treatment of Rs. 42,071 as income under Section 41(2).
4. Adoption of ALV of the SO property at Rs. 9,000 instead of Rs. 6,000 declared by the assessee.
Issue-wise Detailed Analysis:
1. Jurisdiction of the IAC to Change the Head of Income under Section 144B:
The assessee contended that the IAC had no jurisdiction to change the head of income under which Rs. 1,40,000 was brought to tax while issuing directions under Section 144B. The IAC had directed the ITO to treat Rs. 1,40,000 as a revenue receipt, which the assessee argued was beyond the IAC's power under Section 144B. The Tribunal agreed with the assessee, stating that Section 144B proceedings are meant to minimize litigation and not to enhance the assessment or change the head of income. The Tribunal cited the Calcutta High Court's decision in Bengal Assam Investors Ltd. vs. CIT, which held that enhancement of an assessment as a result of directions issued by the IAC under Section 144B on items not covered by a draft assessment order is invalid. The Tribunal concluded that the IAC's directions under Section 144B were invalid and bad in law, and thus, the addition of Rs. 1,40,000 could not be sustained.
2. Treatment of Rs. 1,40,000 as Income from the Evaluation of Technical Know-How:
The assessee argued that the Rs. 1,40,000 received for technical know-how was a capital receipt and not taxable as revenue. The ITO had initially treated it as a capital asset but later, under the IAC's direction, it was treated as a revenue receipt. The Tribunal found that technical know-how is a capital asset and since the assessee had not paid anything to acquire it, the provisions of Section 45 could not be attracted, referencing the Supreme Court's decision in CIT vs. B.C. Srinivasa Setty. The Tribunal agreed with the assessee that the technical know-how was similar to goodwill, which was self-generated and not subject to capital gains tax. Therefore, the Rs. 1,40,000 was deleted from the total income of the assessee.
3. Treatment of Rs. 42,071 as Income under Section 41(2):
The assessee reiterated the submissions made before the IT authorities regarding the treatment of Rs. 42,071 as income under Section 41(2). The Tribunal, upon due consideration of the rival submissions and the material on record, found no infirmity in the order of the CIT (A) on this point and upheld it.
4. Adoption of ALV of the SO Property at Rs. 9,000 Instead of Rs. 6,000 Declared by the Assessee:
At the hearing, the assessee's counsel stated that he would not press the determination of the ALV at Rs. 9,000 by the IT authorities. Consequently, the Tribunal upheld the order of the CIT (A) on this point.
Conclusion:
The appeal was partly allowed. The Tribunal held that the IAC had no jurisdiction to change the head of income or enhance the assessment under Section 144B, and thus, the addition of Rs. 1,40,000 was deleted. The Tribunal upheld the CIT (A)'s orders regarding the treatment of Rs. 42,071 under Section 41(2) and the adoption of the ALV of the SO property at Rs. 9,000.
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1985 (7) TMI 371
Issues Involved:
1. Interpretation of Articles 309, 310, and 311 of the Constitution of India.
2. Application of the second proviso to Article 311(2).
3. Validity of dismissals and removals without inquiry under the second proviso to Article 311(2).
4. Impact of the pleasure doctrine on the tenure of civil servants.
5. Relationship between Article 14 and Article 311.
6. Validity of service rules vis-Ã -vis the second proviso to Article 311(2).
7. Judicial review of decisions made under the second proviso to Article 311(2).
Summary:
1. Interpretation of Articles 309, 310, and 311 of the Constitution of India:
The judgment addresses the interpretation of Articles 309, 310, and 311, particularly focusing on the second proviso to Article 311(2) after its amendment by the Constitution (Forty-second Amendment) Act, 1976. Article 311 provides safeguards for civil servants, including protection against dismissal, removal, or reduction in rank without an inquiry, except in specific cases outlined in the second proviso.
2. Application of the second proviso to Article 311(2):
The second proviso to Article 311(2) allows for the dismissal, removal, or reduction in rank of a civil servant without an inquiry in three cases: (a) conviction on a criminal charge, (b) impracticability of holding an inquiry, and (c) expediency in the interest of the security of the State. The judgment emphasizes that these exceptions must be narrowly construed and applied strictly.
3. Validity of dismissals and removals without inquiry under the second proviso to Article 311(2):
The Court held that dismissals and removals without inquiry under the second proviso to Article 311(2) are valid if the conditions specified in the proviso are met. The disciplinary authority must record reasons in writing for dispensing with the inquiry, and these reasons must be relevant and sufficient to justify the action.
4. Impact of the pleasure doctrine on the tenure of civil servants:
The pleasure doctrine, as embodied in Article 310(1), means that civil servants hold office at the pleasure of the President or the Governor. However, this doctrine is subject to the express provisions of the Constitution, including Article 311, which provides safeguards against arbitrary dismissal, removal, or reduction in rank.
5. Relationship between Article 14 and Article 311:
The judgment clarifies that Article 14, which guarantees equality before the law, does not override the specific provisions of Article 311. The principles of natural justice, including the audi alteram partem rule, are inherent in Article 14 but are expressly excluded by the second proviso to Article 311(2) in the specified cases.
6. Validity of service rules vis-Ã -vis the second proviso to Article 311(2):
Service rules made under Article 309 must conform to the provisions of the Constitution, including Article 311. Rules that provide for dismissal, removal, or reduction in rank without inquiry must align with the exceptions in the second proviso to Article 311(2). Any rule that restricts the exclusionary effect of the second proviso would be unconstitutional.
7. Judicial review of decisions made under the second proviso to Article 311(2):
The Court retains the power of judicial review to ensure that the conditions for applying the second proviso to Article 311(2) are met. The decision of the disciplinary authority to dispense with the inquiry is subject to review to check for relevance, sufficiency, and absence of mala fides. The Court will not interfere if two views are possible and the decision is reasonable.
Final Orders:
1. Civil Appeal No. 6814 of 1983 is allowed, reversing the High Court's decision.
2. Writ Petitions Nos. 1953, 7393, 1392, and 2022 of 1981 are dismissed.
3. Other writ petitions and transferred cases are dismissed, while Civil Appeals Nos. 3484 and 3512 of 1982 are allowed.
4. All interim orders are vacated, and no costs are awarded.
5. Pending matters involving the interpretation of the second proviso to Article 311(2) are disposed of in accordance with this judgment.
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1985 (7) TMI 370
Issues Involved:
1. Right to Livelihood u/s Article 21 of the Constitution.
2. Right to Reside and Settle u/s Article 19(1)(e) of the Constitution.
3. Validity of Sections 312, 313, and 314 of the Bombay Municipal Corporation Act, 1888.
4. Procedural Fairness and Natural Justice in Eviction Processes.
5. Government's Obligations towards Slum and Pavement Dwellers.
Summary of Judgment:
1. Right to Livelihood u/s Article 21 of the Constitution:
The Supreme Court recognized that the right to life guaranteed by Article 21 includes the right to livelihood. The Court stated, "If the right to livelihood is not treated as a part of the constitutional right to life, the easiest way of depriving a person of his right to life would be to deprive him of his means of livelihood."
2. Right to Reside and Settle u/s Article 19(1)(e) of the Constitution:
The petitioners' contention that they have a right to reside and settle in any part of the country, including pavements and slums, was examined. The Court held that no one has the right to encroach upon public property for private use without authorization. The right to reside and settle does not confer a license to trespass upon public property.
3. Validity of Sections 312, 313, and 314 of the Bombay Municipal Corporation Act, 1888:
The Court upheld the validity of Sections 312, 313, and 314 of the Bombay Municipal Corporation Act. It stated that these provisions are conceived in public interest to keep pavements and public streets free from encroachments. The Court emphasized that the procedure prescribed by Section 314, which allows removal of encroachments without notice, is not unreasonable, unfair, or unjust in the circumstances of the case.
4. Procedural Fairness and Natural Justice in Eviction Processes:
The Court acknowledged that procedural fairness is essential and that the principles of natural justice must be observed. However, it also recognized that in cases of urgency, the Commissioner has the discretion to remove encroachments without prior notice. The Court stated, "The decision to dispense with notice cannot be founded upon a presumed impregnability of the proposed action."
5. Government's Obligations towards Slum and Pavement Dwellers:
The Court referred to the assurances given by the State Government in its pleadings. It directed that pavement dwellers who were censused in 1976 should be given alternate pitches at Malavani or other convenient places. Slum dwellers who were given identity cards and whose dwellings were numbered in the 1976 census must be provided alternate sites for resettlement. The Court also emphasized the need for the Government to pursue housing schemes and programs earnestly.
Conclusion:
The Supreme Court held that no person has the right to encroach upon public property, and the provisions of the Bombay Municipal Corporation Act are valid. The Court directed that pavement and slum dwellers should not be evicted until one month after the end of the current monsoon season (October 31, 1985) and that the Government must provide alternate accommodation to eligible dwellers as per the 1976 census. The writ petitions were disposed of accordingly, with no order as to costs.
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1985 (7) TMI 369
Issues:
1. Allegation of manufacturing and selling Bidis outside the factory without paying excise duty.
2. Questions of law raised regarding natural justice, evidence of benamidars, and evasion of excise duty.
3. Opportunity for cross-examination during investigation proceedings.
4. Reference application based on facts without any legal point.
Analysis:
1. The Tribunal found the appellants guilty of manufacturing Bidis outside their factory and selling them under their brand name without paying excise duty. The department provided sufficient evidence connecting the appellants to the manufacturing and sale of bidis, leading to confiscation of the bidis and imposition of penalties for violating Central Excise Rules.
2. The applicants raised questions of law related to natural justice, evidence of benamidars, and evasion of excise duty. However, the Tribunal determined that the impugned order was based on factual evidence and did not involve any legal points. The Supreme Court precedent highlighted that for a reference to be made, there must be a question of law, which was not the case here.
3. The applicants argued that denial of the opportunity to cross-examine the witnesses during investigation proceedings amounted to a miscarriage of justice. However, the Tribunal noted that this argument was not raised during the main appeal arguments and was not considered in the judgment. Citing a Supreme Court ruling, the Tribunal emphasized that a question of law not raised before and considered by the Tribunal cannot be deemed to arise out of its order.
4. Ultimately, the Tribunal rejected the reference application as it concluded that no question of law emerged from its order. The reference application was deemed not maintainable due to its basis on facts without any legal points. The Tribunal emphasized the importance of distinguishing between questions of law and factual disputes in seeking references to higher courts.
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1985 (7) TMI 368
Issues:
1. Interpretation of Rule 56C(2) and exemption Notification No. 118/75-C.E. for duty-free use of re-made bushings.
2. Applicability of rule 56C and Notification No. 118/75-C.E. in parallel.
3. Whether re-making of bushings constitutes repair or manufacture.
4. Condonation of delay in filing appeal.
Analysis:
1. The case involved a dispute regarding the entitlement of the respondents to use re-made bushings in their factory free of duty under Rule 56C(2) or exemption Notification No. 118/75-C.E. The respondents claimed exemption under the notification, but the Asstt. Collector rejected their claim. The Collector (Appeals) allowed their claim, leading to the department's appeal. The Tribunal analyzed that the respondents dismantled old bushings, re-melted metal parts at a secondary manufacturer, and then fabricated them into new bushings. The Tribunal held that the respondents were entitled to remove platinum sheets for captive use free of duty under Rule 56C(2)(c) and could avail of the exemption under the notification for assessing the final bushings.
2. The department argued that rule 56C and the notification were mutually exclusive, and the respondents could not avail of both. However, the Tribunal found no bar in the provisions preventing the respondents from utilizing both statutory provisions. The Tribunal clarified that the respondents could choose to avail of either or both provisions as they were independent and statutory in nature.
3. The respondents contended that re-making the bushings constituted repair and not manufacture. They argued that the re-made bushings were not distinct goods and cited High Court authorities to support that repair did not amount to manufacture. However, the Tribunal noted that the respondents had not raised this plea earlier, and the lower authorities had not examined it. The Tribunal found that the re-making process involved significant fabrication work, leading to the creation of new bushings, and upheld the Collector (Appeals)'s finding that the re-made bushings were excisable goods.
4. The Tribunal addressed a preliminary objection raised by the respondents regarding the delay in filing the appeal. Upon examination of the original record, it was found that the appeal was filed within the stipulated time, and the objection was withdrawn. The Tribunal proceeded with the appeal and ultimately upheld the Collector (Appeals)'s decision, rejecting the department's appeal.
In conclusion, the Tribunal ruled in favor of the respondents, allowing them to use re-made bushings duty-free under Rule 56C(2)(c) and avail of the exemption under Notification No. 118/75-C.E. The Tribunal emphasized the independence of the statutory provisions, rejected the department's objections, and upheld the decision of the Collector (Appeals).
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1985 (7) TMI 367
Issues:
1. Whether the refund claim filed by the appellants has been rightly rejected by the lower authorities.
Analysis:
The appellants, manufacturers of rough die cast rotor cages, contended that these cages were not liable to pay excise duty as they were semi-finished articles. The dispute arose when the Department demanded duty, which the appellants paid under protest. An order in March 1975 by the Collector of Central Excise, Bombay, upheld the appellants' contention that no excise duty was payable on the goods in question. The appellants then claimed a refund of the duty paid from 1972 to 1975 based on this order.
The Assistant Collector rejected the refund claim, stating that since the customers of the appellants had availed proforma credit equal to the duty paid, the claim was not entertainable. The Appellate Collector upheld this decision partially, allowing a refund only for the amount not covered by proforma credit. The appellants argued that they should receive a full refund as they had paid the duty under protest and the Collector's order confirmed no duty was payable. They also cited a Supreme Court judgment on refund of duty collected without legal authority.
The Tribunal found that the appellants had paid the duty under protest and were entitled to a refund as per the Collector's order. The lower authorities' view that proforma credit availed by customers negated the refund claim was deemed unsustainable. The Tribunal noted that Rule 56A allowed for adjustment or recovery of erroneously allowed credits, which the excise authorities failed to consider before denying the refund.
The Tribunal held that the appellants were entitled to the refund as the concept of refund applies to amounts not payable for any reason. The Tribunal disagreed with the Appellate Collector's interpretation of Rule 56A, stating that the variation in duty demand due to an adjudication order qualified for a refund. Therefore, the Tribunal set aside the rejection of the refund claim and allowed the appeal with consequential relief for the appellants.
In a contra opinion, one Member of the Tribunal argued that the refund should only be granted for money paid in excess and not recovered through credits. This Member contended that since the excess amount had been returned through credits, no further refund was warranted. Ultimately, the majority decision set aside the Appellate Collector's order and allowed the appeal in favor of the appellants.
In conclusion, the Tribunal ruled in favor of the appellants, emphasizing their right to a refund of the duty paid under protest based on the Collector's order and the provisions of Rule 56A. The decision highlighted the principle of refunding amounts not legally due and the failure of the excise authorities to consider the adjustment or recovery of credits before denying the refund claim.
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1985 (7) TMI 366
Issues:
1. Whether office files with tags and clips with the brand and description printed on the front page are liable to duty under Item 68.
2. Whether the appellants are entitled to exemption from excise duty under Notification No. 55/75-C.E., dated 1st March, 1975.
Analysis:
Issue 1:
The dispute revolves around whether office files with printed brand and description fall under the purview of the printing industry. The appellants argue that the printing process is integral to the manufacturing process, making the files eligible for exemption. However, the department contends that the printing is not essential for the files to be fully operative and useful, therefore not qualifying as products of the printing industry. Various judicial decisions are cited to support both arguments, emphasizing the significance of printing as the culminating process for a product to be considered part of the printing industry. The department asserts that the files in question do not meet this criterion and should not be exempted.
Issue 2:
The appellants raise procedural objections, claiming that the lack of a detailed order from the assessing authority resulted in a miscarriage of justice. They argue that the absence of a show cause notice violates principles of natural justice. However, the department argues that the issuance of a show cause notice was not necessary as the case involved seeking exemption under a notification. The Appellate Collector had provided a full opportunity for hearing and examination of samples, ensuring no miscarriage of justice occurred. The department further asserts that the appellants cannot introduce a new argument at this stage regarding the manufacturing process of the files.
In conclusion, the Tribunal upholds the department's position, ruling that the office files with printed brand and description do not qualify as products of the printing industry under Notification No. 55/75-C.E., dated 1st March, 1975. The decision is supported by various precedents and the interpretation that printing must be the culminating process for a product to be considered part of the printing industry. The Tribunal dismisses the appeal, affirming the findings of the lower authorities and denying the appellants' claim for exemption from excise duty.
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