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1992 (7) TMI 359
Issues Involved:
1. Non-realization of export proceeds under GRI Form Nos. DEL-A. 6055139/A. 416575, DEL-B. 140499, B. 140500, DEL-B. 788364, and B. 788366. 2. Alleged contravention of Section 18(2) and Section 18(3) of the Foreign Exchange Regulation Act, 1973. 3. Adequacy of steps taken by the appellant to realize export proceeds. 4. Validity of the penalty imposed by the Adjudicating Officer.
Issue-wise Detailed Analysis:
1. Non-realization of Export Proceeds:
- GRI Form Nos. DEL-A. 6055139/A. 416575: The adjudication order initially found a delay in the realization of Rs. 6,860. However, evidence showed that the amount was paid by 1978, and thus, the charge of non-realization was not established.
- GRI Form Nos. DEL-B. 140499 and B. 140500: The appellant exported goods worth Rs. 1,03,900 but failed to repatriate the proceeds within the prescribed period. The appellant's claim that the buyer faced financial difficulties was not substantiated with timely actions or requests for extension from the RBI. The delay in efforts to recover the amount led to the confirmation of the contravention.
- GRI Form Nos. DEL-B. 788364 and B. 788366: The appellant exported goods worth Rs. 5,31,020 to a German buyer who later went into liquidation. The appellant did not take timely steps to recover the proceeds or seek RBI's extension. The failure to initiate legal action or approach the Indian Embassy further supported the finding of contravention.
2. Contravention of Section 18(2) and Section 18(3):
The appellant was found to have contravened Section 18(2) and Section 18(3) of the Foreign Exchange Regulation Act, 1973, due to the failure to realize export proceeds within the prescribed time or obtain necessary extensions from the RBI. The Board emphasized that merely informing the RBI or writing letters without taking concrete steps does not fulfill the requirement of taking "all reasonable steps."
3. Adequacy of Steps Taken by the Appellant:
The Board evaluated the appellant's actions against the standard of "reasonable steps," which include timely efforts to recover export proceeds and seeking RBI's permission for extensions. The appellant's delayed actions, lack of legal proceedings, and insufficient engagement with authorities like the RBI and Indian Embassy were deemed inadequate.
4. Validity of the Penalty:
The initial penalty of Rs. 5,50,000 was imposed for the contraventions. However, given that the charge related to GRI Form Nos. DEL-A. 6055139/A. 416575 was not established, the Board reduced the penalty to Rs. 5,45,000. The reduction acknowledged the partial compliance by the appellant but upheld the penalty for the remaining contraventions.
Conclusion:
The appeal was dismissed, confirming the findings of contravention for GRI Form Nos. DEL-B. 140499, B. 140500, DEL-B. 788364, and B. 788366. The penalty was reduced to Rs. 5,45,000, reflecting the partial success of the appellant in disproving one of the charges. The judgment underscores the importance of timely and proactive measures in compliance with foreign exchange regulations.
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1992 (7) TMI 358
Issues: Violation of provisions of section 8(1) of the Foreign Exchange Regulation Act, 1973.
Detailed Analysis:
Issue 1: Violation of Section 8(1) of the Act The appellant was penalized for contravening section 8(1) of the Foreign Exchange Regulation Act, 1973. The appellant was found carrying gold and foreign exchange without proper authorization. The appellant claimed innocence, stating that the recovered gold did not belong to him and that his confessional statement was obtained under duress. The appellant argued that the case against him was fabricated. However, the Adjudicating Officer found the appellant guilty based on the evidence presented.
Issue 2: Voluntariness of Confessional Statement The appellant retracted his confessional statement, alleging coercion. The appellant's counsel argued that a retracted statement should not be relied upon unless corroborated. The respondent contended that the appellant's statements, when read together, indicated voluntariness. The Tribunal noted that a retracted statement can still be valid if proven voluntary and true, as established in previous legal precedents.
Issue 3: Circumstantial Evidence and Corroboration The Tribunal considered circumstantial evidence, such as the location of the seized gold, the appellant's travel details, and the recovery of gold from his person and seat. The Tribunal found the appellant's denial regarding the ownership of the gold beneath his seat unconvincing. The Tribunal emphasized that the burden of proof lay with the appellant, and mere conjectures could not undermine the evidence against him.
Issue 4: Quantum of Penalty The Tribunal assessed the quantum of penalty imposed on the appellant. While acknowledging that the foreign exchange equivalent to Rs. 53,000 was recovered in the form of seized gold, it noted a direct loss of foreign exchange due to the appellant's spending in Dubai. The Tribunal deemed the original penalty of Rs. 44,000 excessive and reduced it to Rs. 8,500, considering the circumstances of the case.
In conclusion, the Tribunal upheld the finding of contravention of section 8(1) of the Act against the appellant but reduced the penalty to Rs. 8,500. The appeal was dismissed, subject to the modified penalty amount.
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1992 (7) TMI 357
Issues: 1. Contravention of provisions of section 8(1) and section 8(2) of the Foreign Exchange Regulation Act. 2. Whether the appellant acquired foreign exchange in contravention of the Act. 3. Whether the appellant contravened section 8(2) of the Act. 4. Opportunity for cross-examination of witnesses during adjudication proceedings. 5. Imposition of penalties and leniency considerations.
Analysis: 1. The appellant was charged with contravention of section 8(1) and section 8(2) of the Foreign Exchange Regulation Act. The charges included acquiring foreign exchange without surrendering it within the stipulated time and purchasing foreign exchange without RBI permission. The appellant contested the charges, claiming the confessional statement was obtained under threat and retracted the same day. The appellant also argued against the lack of opportunity for cross-examination and the clubbing of two charges in one notice.
2. In the case of SCN-I, the appellant received US $3,768 as a gift from his brother in Saudi Arabia, which he failed to surrender within the prescribed time. The appellant contended that receiving the gift did not amount to contravention of section 8(1). However, the Tribunal found that the receipt of foreign exchange as a gift falls under 'otherwise acquiring' foreign exchange as per the Act. The appellant failed to surrender the amount within the specified time, leading to the imposition of a penalty.
3. Regarding SCN-II, the appellant admitted to purchasing US $4,000 without RBI permission and at unauthorized rates. The confessional statements and evidence supported the charge of contravening section 8(1) but lacked clarity on contravening section 8(2) due to the absence of information on authorized conversion rates. The Tribunal upheld the contravention of section 8(1) but set aside the charge under section 8(2).
4. The appellant raised concerns about the lack of opportunity for cross-examination during the adjudication proceedings. However, the Tribunal found no substance in this claim as the appellant was given a chance for a personal hearing, and no request for cross-examination was made during the hearing.
5. The Tribunal considered the penalties imposed and the appellant's plea for leniency due to economic and physical hardships. While affirming the penalties for contraventions under section 8(1), the Tribunal reduced the total penalty amount due to the charge under section 8(2 not being established. The Tribunal concluded that the penalties were proportionate and the Adjudicating Officer had already taken a lenient view, thus dismissing further leniency requests.
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1992 (7) TMI 356
Issues: Legality of order directing transfer from judicial custody to police custody under Terrorists and Disruptive Activities (Prevention) Act, 1987.
Analysis: The judgment pertains to a petition under Article 32 of the Constitution of India challenging the order directing the transfer of the accused from judicial custody to police custody for investigation under the Terrorists and Disruptive Activities (Prevention) Act, 1987. The Designated Court had issued the order within the permissible 60-day period as provided under the Act. The petitioner contended that the grounds for seeking police custody were vague and time had lapsed, rendering any discovery meaningless. Concerns were also raised regarding the safety of the accused in police custody.
The court considered the provisions of Section 167(2) of the Criminal Procedure Code, 1973, which allows for the transfer of custody within 15 days, extended to 60 days under the Act. It emphasized the necessity of sufficient grounds for such a change in custody. In this case, considering the nature of the offense and the stage of investigation, the court found that grounds for police custody existed. The court addressed the safety concerns by obtaining assurances from the Investigating Officer regarding the physical well-being of the accused and prohibiting illegal interrogation methods. Additionally, the counsel for the accused was granted the right to visit the place of detention twice a day and report any maltreatment to the District Medical Officer for immediate action.
Consequently, the court dismissed the writ petition, reinstated the Designated Court's order, and imposed conditions to safeguard the accused's well-being during the period of police custody. The accused was to be transferred to police custody for three days, after which he would be returned to judicial custody. The judgment upheld the legality of the order for transfer to police custody under the specified conditions.
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1992 (7) TMI 355
Issues Involved: 1. Validity of the selection process for the post of Professor of Medicine. 2. Impact of interim stay orders on the appointment process. 3. Regularisation of ad hoc promotions under the 1988 Rules. 4. Determination of seniority between the Appellant and Respondents Nos. 4 and 5. 5. Effect of the Gandhi Memorial and Associated Hospitals (Taking Over) Act, 1983 on the appointments. 6. Interpretation of Rule 20(1) of the Uttar Pradesh State Colleges Medical Teachers Service Rules, 1990.
Detailed Analysis:
1. Validity of the Selection Process for the Post of Professor of Medicine: The selection process for the post of Professor of Medicine at King George Medical College, Lucknow, was initiated in December 1984 to fill a vacancy for the year 1982-83. The Appellant and Respondents Nos. 4 and 5 were among the applicants. Interviews were conducted on 24th February 1986, resulting in Dr. S.S. Aggarwal being placed first and the Appellant second on the select list. Respondents Nos. 4 and 5 were not selected.
2. Impact of Interim Stay Orders on the Appointment Process: Respondents Nos. 4 and 5 filed Writ Petition No. 1545 of 1986 challenging the selection list, resulting in an interim stay order from the High Court, which prevented the appointment of Dr. Aggarwal or the Appellant. Consequently, Dr. Bhatia was appointed to the post in October 1986 under the promotees quota, as the vacancy could not be filled by a direct recruit due to the stay order.
3. Regularisation of Ad Hoc Promotions under the 1988 Rules: Respondents Nos. 4 and 5 sought regularisation of their ad hoc appointments under the U.P. Regularisation of Ad hoc Promotions (on the posts within the purview of the PSC) Rules, 1988, through Writ Petition No. 8424 of 1989. The High Court ordered that their regularisation be considered by the State Government, and any appointment made pursuant to the 1986 selection would be provisional. Their promotions were regularised in the vacancies of 1983-84 and 1986-87 before the Appellant's appointment in October 1989.
4. Determination of Seniority Between the Appellant and Respondents Nos. 4 and 5: The central issue was whether the regularisation of Respondents Nos. 4 and 5 entitled them to seniority over the Appellant. The High Court ruled that since the Appellant's appointment order dated 31st October 1989 did not specify a back date, his seniority would be counted from the date of actual appointment. However, the Supreme Court held that the Appellant's appointment related to the 1982-83 vacancy and that the interim stay order had unjustly delayed his appointment. The Court concluded that Respondents Nos. 4 and 5 could not take advantage of their own wrong in obtaining the stay order and blocking the Appellant's appointment.
5. Effect of the Gandhi Memorial and Associated Hospitals (Taking Over) Act, 1983 on the Appointments: The King George Medical College was taken over by the State Government under the Gandhi Memorial and Associated Hospitals (Taking Over) Act, 1983. Sections 5 and 6 of the Act were declared ultra vires Articles 14 and 300A of the Constitution by the High Court. Although the State Government initially filed a Special Leave Petition against this decision, it later withdrew the petition and accepted the High Court's judgment. The Supreme Court noted that the seniority determination should proceed as if the Act and the Rules made thereunder had no effect.
6. Interpretation of Rule 20(1) of the Uttar Pradesh State Colleges Medical Teachers Service Rules, 1990: Rule 20(1) governs the determination of seniority based on the date of substantive appointment. The High Court interpreted the rule to mean that the Appellant's seniority should be counted from 31st October 1989. However, the Supreme Court clarified that the Appellant's appointment was for the 1982-83 vacancy and that the omission of this detail in the appointment order was a clerical error. The Court directed the University to fix the Appellant's seniority between the actual date of Dr. Bhatia's appointment and the regularisation of Respondents Nos. 4 and 5.
Conclusion: The Supreme Court allowed the appeal, set aside the High Court's order, and directed the University to determine the Appellant's seniority based on the date he could have been appointed to the 1982-83 vacancy had there been no stay order. The Appellant's seniority must be fixed between Dr. Bhatia's appointment and the regularisation of Respondents Nos. 4 and 5. There was no order as to costs.
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1992 (7) TMI 354
Issues: Failure of the assessee to appear at the hearing and prepare necessary documents for the reference under Section 44(1) of M.P. General Sales Tax Act, 1958.
Analysis: The judgment by the High Court of Madhya Pradesh deals with a reference made under Section 44(1) of the M.P. General Sales Tax Act, 1958. The Tribunal had referred questions of law to the High Court for its opinion, but the assessee failed to appear at the hearing and neglected to prepare the required paper-books for the reference. The Court noted that the obligation to decide the question of law is dependent on the hearing being enabled, which is the responsibility of the party at whose instance the reference was made. The Court cited Section 256 of the Income Tax Act, 1961, and a relevant judgment from the Calcutta High Court to support its decision that if the party causing the reference fails to appear, there is no obligation on the Court to answer the questions of law referred.
The Court emphasized that the party causing the reference must actively participate in the process, as seen in previous judgments from the Madhya Pradesh High Court and other High Courts. The Court highlighted that if both parties are not interested in the reference being answered, the High Court can decline to answer the questions referred. In a case from the Bombay High Court, it was established that the High Court's jurisdiction is advisory, and if the party causing the reference is not interested in the proceedings, there is no need for the Court to decide the questions of law academically.
Based on the precedents and legal principles discussed, the High Court of Madhya Pradesh concluded that if the party at whose instance the reference is made fails to appear at the hearing or take steps for the preparation of necessary documents, the Court is not obligated to answer the reference. Therefore, the Court refused to answer the reference in this case and imposed costs on the assessee for the department.
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1992 (7) TMI 353
Issues: 1. Quashing of criminal proceeding under Section 482, Cr. P.C. based on a complaint filed under Section 56(1)(i) of the Foreign Exchange Regulation Act, 1973 (FERA). 2. Interpretation of liability of a Director for the offenses committed by a Company under Section 68 of FERA. 3. Comparison with previous judgments regarding quashing of criminal proceedings based on departmental findings. 4. Determining the applicability of quashing the criminal proceeding based on the absence of a positive finding by the Appellate Board.
Analysis:
1. The petitioner sought to quash the criminal proceeding initiated under FERA based on a complaint filed by the Deputy Director of Enforcement Directorate. The petitioner contended that the Appellate Board's decision exonerating him from penalties imposed by the adjudicating officer should render the criminal proceeding untenable.
2. The Appellate Board set aside the adjudicating officer's decision as it found that merely being a Director of a Company does not ipso facto make one liable for the Company's offenses under Section 68 of FERA. The Director must be in charge and responsible for the business conduct or consent to the offense for liability to apply. The absence of a specific finding on the petitioner's liability led the Appellate Board to exonerate him, highlighting the necessity of factual establishment of liability.
3. Comparisons were drawn with past judgments where departmental findings influenced the quashing of criminal proceedings. However, the court noted that in those cases, positive findings of fact were crucial in determining the legality of the prosecution. In the present case, the absence of a positive finding did not automatically warrant quashing the criminal proceeding.
4. The court emphasized that the specific averment in the complaint regarding the Directors' responsibility for the Company's conduct prima facie attracted Section 68 of FERA. The absence of a positive finding on this matter did not conclusively impact the criminal proceeding's validity. The court held that the issue of liability under Section 68 remained open for trial, and the absence of a positive finding did not justify quashing the criminal proceeding.
In conclusion, the court dismissed the application for quashing the criminal proceeding, emphasizing the need for factual establishment of liability under FERA's provisions and the importance of trial to determine the veracity of the allegations made in the complaint.
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1992 (7) TMI 352
Issues Involved: 1. Jurisdiction of the High Court under Article 226 of the Constitution. 2. Equivalence of pay scales between Rajasthan Higher Judicial Service (RHJS) and Rajasthan Judicial Service (RJS). 3. Validity of directions issued by the learned Single Judge regarding pay scales. 4. Comparison of duties and responsibilities between RHJS and RJS officers. 5. Applicability of Article 14 and 16 of the Constitution in the context of pay scales. 6. Role of Pay Commissions and expert bodies in determining pay scales. 7. Issuance of writ of mandamus for legislative actions. 8. Impact of financial implications on judicial decisions regarding pay scales.
Detailed Analysis:
1. Jurisdiction of the High Court under Article 226 of the Constitution: The appellant contended that the learned Single Judge transgressed the powers conferred upon the High Court under Article 226 of the Constitution by issuing directions to the Executive. It was argued that the High Court cannot legislate or issue directions to the Executive to enact specific rules. The judgment cited Supreme Court decisions in *Mallikarjuna Rao v. State of A.P.* and *State of Jammu & Kashmir v. A.R. Zakki*, emphasizing that a writ of mandamus cannot be issued to the legislature to enact a particular legislation or to the Executive to make rules.
2. Equivalence of pay scales between Rajasthan Higher Judicial Service (RHJS) and Rajasthan Judicial Service (RJS): The appellant argued that the pay scales granted to RHJS officers were governed by the Rajasthan Civil Services (Revised Pay Scales) Rules, 1989, and that the learned Single Judge's directions were arbitrary and unreasonable. The RHJS officers contended that their duties and responsibilities were more arduous and involved greater responsibilities than those of RJS officers, and hence, they deserved higher pay scales.
3. Validity of directions issued by the learned Single Judge regarding pay scales: The learned Single Judge directed the grant of specific pay scales to RHJS officers, which the appellant contended was beyond the jurisdiction of the Court. The judgment clarified that the directions did not involve creating new pay scales but rather correcting the unjust and arbitrary state action of equating RHJS officers with RJS officers. The Court held that the grant of similar pay scales to RHJS (Ordinary scale) and RJS (Supertime scale) officers was unjust and arbitrary, and thus, the pay scale of Rs. 4500-5700 granted to the ordinary scale RHJS officers was quashed.
4. Comparison of duties and responsibilities between RHJS and RJS officers: The judgment detailed the comparative duties and responsibilities of RHJS and RJS officers, noting that RHJS officers have broader jurisdiction and greater responsibilities. The Court emphasized that RHJS is a superior service to RJS, and historically, RHJS officers were granted higher pay scales than RJS officers. The Court found that treating RHJS officers as equals to RJS officers violated Article 14 of the Constitution.
5. Applicability of Article 14 and 16 of the Constitution in the context of pay scales: The Court reiterated that Article 14 is violated when unequals are treated as equals, and vice versa. The principle of "equal pay for equal work" was emphasized, and the Court held that RHJS officers, being in a superior service, deserved higher pay scales than RJS officers. The judgment referenced Supreme Court decisions supporting this principle, including *Mohd. Usman v. State of A.P.* and *Randhir Singh v. Union of India*.
6. Role of Pay Commissions and expert bodies in determining pay scales: The appellant argued that the findings of expert bodies like Pay Commissions should not be interfered with by the Court. The judgment acknowledged this but noted that the Pay Commission's recommendations were not followed in granting pay scales to RHJS officers. The Court held that when state action is arbitrary and unjust, the Court has the right to interfere.
7. Issuance of writ of mandamus for legislative actions: The Court clarified that it did not issue a mandamus to legislate new rules but rather corrected the arbitrary state action by directing the grant of existing pay scales. The judgment referenced decisions where courts issued directions affecting service conditions, such as *Purshottam Lal v. Union of India* and *Teerth Narain Mallick v. State of Bihar*.
8. Impact of financial implications on judicial decisions regarding pay scales: The judgment noted that financial implications cannot justify the violation of constitutional provisions. The Court held that considerations of financial implications must be relegated to the background when Article 14 is violated. The principle of "higher pay for higher work" was upheld, and the Court directed the grant of appropriate pay scales to RHJS officers.
Conclusion: The appeal was allowed in part. The Court upheld the first two directions of the learned Single Judge regarding the grant of pay scales to RHJS officers but set aside the third direction concerning the grant of supertime scale to seven RHJS officers. The Court emphasized the superiority of RHJS over RJS and directed the State Government to grant appropriate pay scales to RHJS officers, ensuring compliance with Article 14 of the Constitution.
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1992 (7) TMI 351
Issues Involved: 1. Whether the partition decree dated 9.11.1989 was obtained by collusion and fraud. 2. Whether the property in question was a Joint Hindu Family (HUF) property. 3. Whether a son can claim partition of HUF property during the lifetime of his father. 4. The plaintiff's right to challenge the partition decree. 5. The applicability of Section 281 of the Income Tax Act.
Issue-wise Detailed Analysis:
1. Whether the partition decree dated 9.11.1989 was obtained by collusion and fraud: The plaintiff alleged that the partition decree dated 9.11.1989 was obtained through collusion and fraud to create a ground for eviction under Section 14-C of the Delhi Rent Control Act. The plaintiff argued that the decree was null and void, as it was a result of a fraudulent scheme designed by defendant No. 3 and his family to evict the plaintiff from the premises. However, the defendants denied these allegations, asserting that the property was indeed HUF property and the partition was genuine. The court noted that there was no prima facie evidence of fraud or collusion in obtaining the partition decree. The assessment orders from the Income Tax Authorities indicated that the property was assessed as HUF property, supporting the defendants' claim.
2. Whether the property in question was a Joint Hindu Family (HUF) property: The plaintiff contended that the property was not purchased from the funds of the HUF, but was the personal property of defendant No. 3. However, the defendants provided evidence, including assessment orders from the Income Tax Authorities, showing that the property was assessed as HUF property. The court found that there was sufficient material on record to infer that the property was indeed HUF property, managed under the name "M/s Dev Raj Bajaj and Sons."
3. Whether a son can claim partition of HUF property during the lifetime of his father: The plaintiff argued that a son could not claim partition of HUF property during the lifetime of his father. However, the court referred to a Division Bench judgment in Nanak Chand and others v. Chander Kishore, AIR 1982 Delhi 520, which held that in Delhi, a son can ask for partition of HUF property during his father's lifetime. The court also cited the Supreme Court judgment in Puttangamma v. M.S. Ranganna, AIR 1968 Supreme Court 1018, which stated that a member of a Joint Hindu Family can bring about separation in status by a definite, unequivocal, and unilateral declaration of intention to separate.
4. The plaintiff's right to challenge the partition decree: The plaintiff claimed the right to challenge the partition decree on the grounds of fraud and collusion. The court acknowledged that under Section 44 of the Evidence Act, any party to a suit may show that a judgment, order, or decree was obtained by fraud or collusion. The court concluded that if a tenant can challenge a partition decree in eviction proceedings, they can also challenge it through a separate suit. However, the court found no prima facie case of fraud or collusion in the partition decree and thus dismissed the plaintiff's application.
5. The applicability of Section 281 of the Income Tax Act: The plaintiff argued that the suit was not maintainable due to the bar contained in Section 281 of the Income Tax Act. However, the court did not find this argument persuasive. The defendants contended that the property was acquired from the funds of the ancestral property and was HUF property, which was supported by the assessment orders from the Income Tax Authorities.
Conclusion: The court dismissed the plaintiff's application, finding no prima facie evidence of fraud or collusion in the partition decree. The court held that the property was HUF property and that a son could claim partition during the lifetime of his father. The plaintiff's right to challenge the decree was acknowledged, but the court found no merit in the allegations of fraud or collusion. The balance of convenience was not in favor of the plaintiff, and the proceedings initiated by defendant No. 3 to enforce his legal rights were deemed legitimate.
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1992 (7) TMI 350
Issues Involved: 1. Application for anticipatory bail u/s 438 of the Code of Criminal Procedure, 1973. 2. Alleged violations under the Foreign Exchange Regulation Act, 1973 (FERA). 3. Custodial interrogation and its necessity. 4. Public interest vs. individual liberty.
Summary:
1. Application for Anticipatory Bail u/s 438 of the Code of Criminal Procedure, 1973: The petitioner sought anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973, following his arrest by the CBI on 4-6-1992 in connection with a major financial scam. The petitioner argued that his detention could not be continued indefinitely as it would amount to punishment before the alleged offences were established.
2. Alleged Violations under the Foreign Exchange Regulation Act, 1973 (FERA): During a search of Niranjan Shah's premises on 31st May 1992, the Income Tax Department discovered documents indicating violations under FERA. The Enforcement Directorate's investigation revealed that the petitioner and his brothers were involved in foreign exchange transactions. Statements from the petitioner's brothers were recorded under Section 40 of FERA, but they denied any involvement. The Enforcement Directorate sought to interrogate the petitioner regarding these violations.
3. Custodial Interrogation and its Necessity: The Enforcement Directorate argued that custodial interrogation was necessary to extract relevant information and confront the petitioner with evidence. They contended that interrogation while the petitioner was on bail would be ineffective as he could prepare answers and receive advice from his advisers. The court acknowledged the need for custodial interrogation to effectively investigate the complex web of offences under FERA.
4. Public Interest vs. Individual Liberty: The court weighed the petitioner's liberty against the public interest in investigating and prosecuting economic offences. It noted that the petitioner had been in custody since 4-6-1992 and that some information related to FERA violations had emerged from the CBI interrogation. Despite the petitioner's willingness to undergo interrogation while on bail, the court emphasized the importance of custodial interrogation for a thorough investigation.
Conclusion: The court rejected the petitioner's application for anticipatory bail, emphasizing the need for effective custodial interrogation by the Enforcement Directorate to investigate the alleged FERA violations. The application was dismissed in the interest of public justice and the thorough investigation of economic offences.
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1992 (7) TMI 349
Issues Involved: 1. Maintainability of the petitions under Article 227 of the Constitution. 2. Jurisdiction and error in the Settlement Commission's summary rejection of applications under Section 245D(1) of the Income-tax Act, 1961. 3. Complexity of investigation and the Commission's reasoning for rejection. 4. Specific case of Kanubhai P. Patel, individual.
Issue-wise Detailed Analysis:
1. Maintainability of the petitions under Article 227 of the Constitution: The respondents raised a preliminary objection against the maintainability of the petitions, arguing that the decision of the Settlement Commission, being a Tribunal, cannot be challenged under Article 227. They cited Section 245-I of the Income-tax Act and the availability of an appeal by special leave under Article 136 of the Constitution. The court rejected this objection, clarifying that Section 245-I's conclusiveness applies only to orders under Section 245D(4) and not to orders under Section 245D(1). Furthermore, the court held that constitutional remedies under Article 227 are not barred by statutory provisions and that the Supreme Court has not excluded the jurisdiction of the High Court under Article 227 in such cases.
2. Jurisdiction and error in the Settlement Commission's summary rejection of applications under Section 245D(1) of the Income-tax Act, 1961: The court examined the Settlement Commission's summary rejection of the applications for settlement. The Commission's reasoning was that the applicants had switched their stand regarding their status, indicating a lack of sanctity about their claims. The Commission also agreed with the Department's view that the association of persons was an invention to escape penalties and prosecution. The court found this reasoning flawed, noting that even if the association of persons was an afterthought, it should not have impacted the maintainability of the applications by the six firms, which were legitimate assessees. The court held that the Commission committed a patent error of law and jurisdiction by summarily rejecting the applications based on this reasoning.
3. Complexity of investigation and the Commission's reasoning for rejection: The Commission concluded that there was no complexity of investigation involved in these cases and that they did not deserve to be admitted. The court found this conclusion directly linked to the erroneous main conclusion regarding the association of persons. The Commission failed to provide specific reasons for its view on the complexity of the investigation, leading the court to determine that the Commission's decision was based on a misconception of the legal and factual position.
4. Specific case of Kanubhai P. Patel, individual: The court noted that the Commission had not provided any reasoning for the summary rejection of Kanubhai P. Patel's individual application. This lack of reasoning further demonstrated the Commission's error in summarily rejecting the applications without proper consideration.
Conclusion: The court allowed the petitions, quashed the Settlement Commission's orders, and directed the Commission to proceed beyond the stage of Section 245D(1) and treat the applications as admitted for settlement. The Commission was instructed to deal with the applications in accordance with law and pass appropriate orders on the merits as per Section 245D(4). The rules issued in the petitions were made absolute to the extent specified, with no order as to costs.
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1992 (7) TMI 348
Issues Involved: 1. Delay in passing the detention order. 2. Delay in disposing of the representation made under Article 22 of the Constitution.
Issue-wise Detailed Analysis:
1. Delay in Passing the Detention Order: The petitioner challenged the detention order dated 5th June 1991, arguing that there was a long delay in passing the order, which caused the link between the detention and the prejudicial activities to snap. The petitioner was initially arrested on 17th April 1990, and the detention order was passed after approximately 14 months. The detaining authority attempted to explain the delay by stating that additional information was requested from the sponsoring authority multiple times, which was only provided in May 1991. However, the court found this explanation unsatisfactory, noting that there was no material on record to show when the proposal was received or what actions were taken between June 1990 and May 1991. The court emphasized that the delay was unexplained and showed a lack of satisfaction by the detaining authority. Citing precedents, the court concluded that the unexplained delay vitiated the detention order, as the live link between the incident and the purpose of preventive detention had snapped.
2. Delay in Disposing of the Representation under Article 22: The petitioner also argued that his representation seeking copies of documents relied upon by the respondents was not disposed of expeditiously. The representation was made on 30th July 1991, but the respondent claimed it was received on 1st August 1991 and comments were sought from the sponsoring authority on the same day. The comments were received on 20th August 1991, resulting in an unexplained delay of 17 days. The court held that the delay in disposing of the representation was against the well-settled principle of law that such representations must be handled expeditiously. The court found that the respondent's failure to provide a satisfactory explanation for the delay deprived the petitioner of a reasonable opportunity to defend his case. The court emphasized that it was the responsibility of the respondent to expedite the process and that the petitioner should not suffer due to the sponsoring authority's delay.
Conclusion: The court accepted the petition, set aside the detention order, and made the rule absolute. The petitioner was ordered to be released if not required in any other case. The court highlighted the importance of timely actions by the authorities and the need for satisfactory explanations for any delays to uphold the principles of justice and individual liberty.
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1992 (7) TMI 347
Issues Involved: 1. Legitimacy of the gold acquisition claims by the assessee. 2. Validity of the assessments under the Amnesty Scheme. 3. Jurisdiction of the Commissioner of Income Tax (CIT) under section 263 of the IT Act and section 25(2) of the WT Act. 4. Applicability of CBDT circulars and their binding effect on the assessments.
Detailed Analysis:
1. Legitimacy of the Gold Acquisition Claims by the Assessee: The primary issue was whether the assessee's claim of possessing gold ornaments since 1971 was legitimate. The Department contended that the gold was purchased much later and the returns for assessment years 1976-77 to 1978-79 were filed to falsely claim possession of the gold in earlier years. The CIT concluded that the gold was not available with the assessee in 1971 and that the declarations were made to regularize subsequent acquisitions. The CIT's order emphasized that the year of possession was yet to be established and that the ornaments might not belong to the assessee but to someone else, thus causing prejudice to the Revenue.
2. Validity of the Assessments under the Amnesty Scheme: The assessee argued that the returns were filed under the Amnesty Scheme, which assured that no proof of acquisition was required and no subsequent enquiries would follow. The assessments were completed under sections 143(1) of the IT Act and 16(1) of the WT Act. The assessee relied on various CBDT circulars, particularly Circular No. 451, which stated that once the terms of the Amnesty Scheme were fulfilled, no roving enquiries could be made. The Tribunal found that the CIT's orders were based on assumptions and lacked material evidence, thus violating the assurances provided under the Amnesty Scheme.
3. Jurisdiction of the CIT under Section 263 of the IT Act and Section 25(2) of the WT Act: The CIT issued notices under section 263 of the IT Act and section 25(2) of the WT Act, asking the assessee to show cause why the assessments should not be modified. The CIT held that the acceptance of the returns without verification was prejudicial to the Revenue's interest. However, the Tribunal noted that the CIT's orders were stereotype and based on conjectures. The Tribunal referenced the decision in Anurag Agarwal vs. ITO, which held that the CIT could not take action under section 263 for assessments completed under the Amnesty Scheme. The Tribunal concluded that the CIT acted beyond his jurisdiction as his orders were not based on any material evidence.
4. Applicability of CBDT Circulars and Their Binding Effect on the Assessments: The assessee argued that the CBDT circulars issued under section 119 of the IT Act were binding on the Assessing Officer and the CIT. These circulars assured that no enquiries would follow the disclosures made under the Amnesty Scheme. The Tribunal agreed, citing the Gujarat High Court's decision in Rajan Ramkrishna vs. CWT, which held that circulars are binding even if they deviate from the legal position. The Tribunal also referenced the letter from Member (Investigation), Shri S.K. Roy, which stated that roving enquiries were contrary to the spirit of the Amnesty Scheme. The Tribunal concluded that the CIT's orders violated the directives of the CBDT circulars and were thus invalid.
Conclusion: The Tribunal allowed the appeals, holding that the CIT's orders under section 263 of the IT Act and section 25(2) of the WT Act were not based on any material evidence and violated the assurances provided under the Amnesty Scheme. The assessments completed under sections 143(1) of the IT Act and 16(1) of the WT Act were upheld as valid.
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1992 (7) TMI 346
Issues: 1. Interpretation of Section 14 of the Karnataka Town and Country Planning Act, 1961 regarding the requirement of a fresh commencement certificate for altered use of a building. 2. Validity of the resolution passed by the Town Planning Authority allowing the alteration of building use without a new commencement certificate. 3. Consideration of material change in building use under the Act.
Analysis:
1. The case involved a dispute where the respondent had obtained permission to construct a shop building but later converted it into a restaurant and lodging house without prior approval. The petitioner challenged this alteration, arguing that a fresh commencement certificate was necessary for any change in building use. The respondent contended that the original permission for a commercial building covered the subsequent alterations within the commercial use without requiring a new commencement certificate.
2. The petitioner contested the resolution of the Town Planning Authority, which allowed the respondent to convert the ground floor into a restaurant and office space without additional parking provisions, leading to potential issues of sanitation and drainage. The petitioner argued that such deviations from the approved plan were unauthorized and rendered the resolution invalid.
3. The Court analyzed the provisions of the Karnataka Town and Country Planning Act, noting that Section 14 required any change in land use or building development to have the Planning Authority's permission. The Act defined "development" as any material change in a building or land use, necessitating compliance with the outline development plan. The Court considered whether the respondent's alterations constituted a material change, emphasizing that the purpose of the Act was to regulate orderly city growth and building use under specified categories.
4. The judgment clarified that once a building is permitted for construction under a specific category (residential, commercial, or industrial), the purpose cannot be altered, even if the building is utilized for different activities within the same category. The Court highlighted that the Act's restrictions should be strictly interpreted to balance public interest with private property rights, and any material change must involve a shift between major categories, not minor alterations within the same category.
5. In conclusion, the Court dismissed the petition, ruling that the respondent's alterations fell within the commercial use permitted by the original commencement certificate. The judgment emphasized that the Act's focus was on regulating land use categories for orderly city development, and deviations within the same category did not necessitate a new commencement certificate.
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1992 (7) TMI 345
Issues: Challenge to the constitutional validity of the Special Court (Trial of Offences relating to Transactions in Securities) Ordinance, 1992 and the Notification dated 8th June, 1992 under Section 3(2) of the Ordinance.
Analysis:
1. The petitioner challenged the classification of offences under the Special Court Ordinance as arbitrary and without rational basis. The respondent justified the classification based on the need to address illegal transactions in securities involving public funds. The Court found the classification reasonable due to the extraordinary circumstances necessitating the Ordinance.
2. The petitioner objected to the wide powers granted to the Custodian under Section 3 to attach property without a hearing or reasoned order, alleging a violation of natural justice and the Rule of Law. The Court explained that Section 3(4) allows the Special Court to direct the Custodian on property attachment, providing a check on arbitrary exercise of powers.
3. The petitioner argued that the lack of provision for de-notifying a person or raising the attachment is a flaw. However, the Court clarified that Section 11 of the Ordinance grants the Special Court independent power over property disposal, ensuring fairness and addressing liabilities.
4. Concerns were raised about the broad wording of Section 3, potentially leading to the notification of innocent parties. The Court emphasized the Ordinance's aim to track property acquired through illegal means, even in third-party possession, to safeguard public funds. The petitioner's objection was dismissed.
5. The petitioner contended that the attachment of property may not correlate with the ultimate liability of the person. The Court explained that Section 9 regulates property attachment to prevent misappropriation and provides recourse for aggrieved parties to seek relief from the Special Court.
6. The Court noted that the Special Court must follow Criminal Procedure Code during trials but can apply relevant laws to other matters. While acknowledging the need for clearer provisions, the Court found Section 3(4) sufficient to ensure a fair hearing and redressal of grievances before the Special Court.
7. Ultimately, the Court dismissed the petition, finding no grounds to intervene under Article 226, thereby upholding the validity of the Special Court Ordinance and the related Notification.
This detailed analysis covers the challenges raised by the petitioner regarding the constitutional validity of the Special Court Ordinance, property attachment provisions, classification of offences, and the role of the Special Court in addressing grievances and ensuring fairness within the legal framework.
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1992 (7) TMI 344
Issues Involved: 1. Authority to Compulsorily Retire 2. Necessity of Central Government Approval 3. Applicability of Regulation 30(3) and F.R. 56(j) 4. Applicability of Premature Retirement to Tenure Post 5. Legality of the Resolution to Compulsorily Retire 6. Consideration of Relevant Material for Compulsory Retirement 7. Allegations of Mala Fides and Arbitrary Exercise of Power 8. Continuation in the Post of Professor of Ophthalmology
Detailed Analysis:
1. Authority to Compulsorily Retire: The High Court examined who had the authority to compulsorily retire the petitioner. It concluded that the appointing authority had the right to retire the petitioner under Regulation 30(3) of the AIIMS Regulations, 1958.
2. Necessity of Central Government Approval: The High Court addressed whether prior approval from the Central Government was necessary to compulsorily retire the Director. It determined that such approval was not required under the existing regulations.
3. Applicability of Regulation 30(3) and F.R. 56(j): The High Court considered whether the Director could be compulsorily retired under Regulation 30(3) or alternatively under Fundamental Rule (F.R.) 56(j). It found that both provisions allowed for the premature retirement of the Director in the public interest after attaining the age of 55 years.
4. Applicability of Premature Retirement to Tenure Post: The High Court rejected the appellant's contention that the concept of premature retirement was alien to a tenure post. It reasoned that the appointment order, which stated a tenure of five years or till the age of 62 years, inherently included the concept of superannuation.
5. Legality of the Resolution to Compulsorily Retire: The High Court reviewed the resolution passed by the Institute-Body on November 24, 1980, and found it to be legally and properly moved.
6. Consideration of Relevant Material for Compulsory Retirement: The High Court examined whether the decision to compulsorily retire the petitioner was based on relevant material. It concluded that the decision was made after considering all relevant factors.
7. Allegations of Mala Fides and Arbitrary Exercise of Power: The High Court rejected the appellant's allegations of mala fides and arbitrary exercise of power, finding no evidence to support these claims.
8. Continuation in the Post of Professor of Ophthalmology: The High Court did not specifically address whether the petitioner could continue as a Professor of Ophthalmology after being retired from the post of Director.
Supreme Court Judgment:
The Supreme Court disagreed with the High Court's reasoning, emphasizing that the post of Director of AIIMS is a tenure post filled by direct recruitment. It held that the concept of superannuation or premature retirement does not apply to a tenure post. The Court stated, "The appointment of the appellant was on a Five Years Tenure but it could be curtailed in the event of his attaining the age of 62 years before completing the said tenure."
The Supreme Court quashed the resolution of the Institute-Body dated November 24, 1980, and the consequent order retiring the appellant. Since the appellant had already attained the age of 62 years, reinstatement was not possible. However, the Court directed that the appellant be paid his salary (less non-practising allowance) for the period from December 1, 1981, to January 21, 1984, with 12% interest on the arrears. The costs were quantified at Rs. 10,000/-.
Conclusion:
The Supreme Court set aside the High Court's judgment, allowing the appellant's writ petition and quashing the premature retirement order. The appellant was entitled to salary arrears and interest, but reinstatement was not feasible due to age constraints.
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1992 (7) TMI 343
Issues Involved: 1. Infringement of registered trademarks. 2. Passing off. 3. Validity of assignment of trademarks. 4. Delay in seeking injunction. 5. Balance of convenience. 6. Bona fide use of a name under Section 34 of the Trade and Merchandise Marks Act, 1958. 7. Authority to file the suit.
Issue-wise Detailed Analysis:
1. Infringement of Registered Trademarks: The plaintiffs claimed that the first defendants infringed their registered trademarks by using the word "Bedrock" in their corporate name and on their goods. The court noted that the plaintiffs were the registered proprietors of the trademarks containing "Bedrock," and the first defendants' use of the same word in their corporate name constituted prima facie infringement. The court referred to Section 28 of the Trade and Merchandise Marks Act, 1958, which confers exclusive rights to the registered proprietors to use their trademarks and seek relief against infringement. The court found no material evidence that the first defendants were manufacturing goods in competition with the plaintiffs but noted the affidavit by Santosh Kumar, a Director of the first defendants, stating that they would not manufacture goods bearing the "Bedrock" trademark. However, the use of "Bedrock" in the corporate name itself was deemed an infringement.
2. Passing Off: The plaintiffs argued that the use of "Bedrock" by the first defendants amounted to passing off their business as that of the plaintiffs. The court referred to the principle that passing off occurs when the defendant's conduct misleads the public into believing that their business is associated with the plaintiff's business. Given the identical nature of the business, the overlapping trade channels, and the family background, the court found a high likelihood of confusion or deception. The court also considered the Diwali Greeting Card sent by the first defendants, which suggested an association with the plaintiffs' business, further supporting the passing off claim.
3. Validity of Assignment of Trademarks: The first defendants contended that the plaintiffs had no title to the "Bedrock" trademark as the assignment was invalid. The court rejected this argument, stating that the registered trademarks belonged exclusively to the plaintiffs, who were the registered proprietors. The court emphasized the principle established in Salomon v. Salomon that a company is distinct from its members, and the plaintiffs' corporate status could not be disregarded to treat them as a partnership for the purpose of trademark ownership.
4. Delay in Seeking Injunction: The first defendants argued that the plaintiffs delayed seeking an injunction, which should disentitle them to relief. The court found no unreasonable delay, noting that the plaintiffs took action promptly upon learning about the first defendants' use of "Bedrock." The court cited precedents indicating that delay alone is not fatal in cases of strong evidence of infringement or passing off.
5. Balance of Convenience: The first defendants contended that the balance of convenience favored refusing the injunction. The court disagreed, stating that the balance of convenience is relevant only in unusual circumstances and not when the plaintiff is the registered proprietor of a trademark. The court found no such unusual circumstances in this case and held that the plaintiffs were entitled to protection of their registered trademarks.
6. Bona Fide Use of a Name under Section 34: The first defendants claimed protection under Section 34 of the Trade and Merchandise Marks Act, which allows bona fide use of one's own name. The court rejected this defense, finding that the adoption of "Bedrock" by the first defendants was not bona fide or honest. The court pointed to the misleading Diwali Greeting Card and the lack of transparency in the application to the Registrar of Companies as evidence of dishonest intent to cash in on the plaintiffs' goodwill.
7. Authority to File the Suit: The first defendants challenged the authority of the person who signed and declared the plaint on behalf of the plaintiffs. The court found that the Power of Attorney granted to Arun Kumar Poddar was sufficient to confer the authority to file the suit, and there was no evidence that the Power of Attorney had been revoked.
Conclusion: The court held that the first defendants' use of "Bedrock" in their corporate name and on their goods constituted both infringement of the plaintiffs' registered trademarks and passing off. The plaintiffs were granted interim relief, restraining the first defendants from using "Bedrock" as part of their corporate name and from infringing the plaintiffs' trademarks. The injunction on the corporate name was suspended for eight weeks to allow the first defendants to change their name. The court rejected the first defendants' application for a stay of the injunction pending appeal.
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1992 (7) TMI 342
The Supreme Court allowed the appeal, stating that the affidavit for winding-up application was not defective. The Division Bench's decision was set aside, and the Company Appeal will be revived for disposal on merits. No costs were awarded. (Case citation: 1992 (7) TMI 342 - SC)
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1992 (7) TMI 341
Issues Involved: 1. Criminal Conspiracy 2. Identification of Accused 3. Evidence of Handwriting Expert 4. Section 313 of CrPC 5. Conviction and Sentencing
Summary:
1. Criminal Conspiracy: The prosecution alleged that a conspiracy was hatched to assassinate General Vaidya post his retirement, involving several accused including absconding ones. The prosecution's evidence included hiring a flat in Pune, purchasing a motorbike, and various activities suggesting a conspiracy. However, the court found the evidence insufficient to establish a criminal conspiracy beyond reasonable doubt, particularly due to the lack of direct evidence and unreliable identification of the accused.
2. Identification of Accused: The prosecution relied on eyewitnesses, including the securityman, General Vaidya's wife, and a cyclist, to identify the assailants. The securityman identified accused No.1 in a test identification parade. However, the court found discrepancies in the testimonies and the identification process, particularly concerning accused No.5, whose identification through photographs was rejected by the trial judge.
3. Evidence of Handwriting Expert: The prosecution presented the opinion of a handwriting expert to link the accused to various documents. The court scrutinized the expert's opinion and found it unreliable due to potential bias and lack of corroboration. The evidence was deemed insufficient to establish the identity of the accused through handwriting analysis.
4. Section 313 of CrPC: Both accused Nos.1 and 5 made admissions in their statements recorded u/s 313 of CrPC, confessing to their involvement in the murder of General Vaidya. The court held that such admissions could be considered in the trial, and their statements were unequivocal and unambiguous, thus forming a valid basis for conviction.
5. Conviction and Sentencing: The trial court convicted accused Nos.1 and 5 for the murder of General Vaidya and sentenced them to death, finding the case fell within the "rarest of rare" category. The court confirmed the convictions and sentences, dismissing the state's appeal against the acquittal of other accused persons. The court also addressed the procedural aspect of sentencing, ensuring compliance with section 235(2) of the CrPC, and found no prejudice to the accused.
Conclusion: The Supreme Court confirmed the death sentences of accused Nos.1 and 5 for the murder of General Vaidya, finding their admissions under section 313 of CrPC sufficient for conviction. The court dismissed the state's appeal against the acquittal of other accused and directed the State of Maharashtra to compensate the amicus curiae for their services.
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1992 (7) TMI 340
Issues Involved: 1. Validity of relinquishment or forfeiture of a right accrued under Rule 51A of Chapter XIV-A of the Kerala Education Rules (K.E.R.) without following the procedure under Note 2 to Rule 51A.
Detailed Analysis:
Issue 1: Validity of Relinquishment or Forfeiture under Rule 51A without Following Note 2 Procedure
Background: The appeals concern the preferential right to appointment under Rule 51A of Chapter XIV-A of the K.E.R. The key contention is whether relinquishment letters, allegedly signed by teachers, can be considered valid if the procedure outlined in Note 2 to Rule 51A was not followed.
Facts of the Case: - The writ petitioner was initially appointed as a Lower Grade Hindi Teacher in a temporary vacancy and later in a leave vacancy, both appointments being approved. - When a subsequent vacancy arose, the manager did not appoint anyone, and later appointed the fifth respondent in another temporary vacancy. - The petitioner claimed her rights under Rule 51A were overlooked, as she was not notified as required by Note 2 to Rule 51A. - Her representation was initially rejected by the Assistant Educational Officer on grounds of relinquishment and over-age. - The Director of Public Instruction later allowed her revision, stating the relinquishment letters had no legal effect without following Note 2. - The Government, however, rejected her claim, considering the relinquishment voluntary.
Legal Analysis: - Rule 51A and Note 2: Rule 51A provides a preferential right to appointment for teachers who had previously worked in a school. Note 2 mandates a specific procedure for relinquishment, requiring the manager to issue an appointment order by registered post with a 14-day notice and a subsequent 7-day notice if there is no response. - Public Policy: Rule 51A and Note 2 are based on public policy to prevent malpractices by school managers, ensuring fair employment practices. The Supreme Court in Central Inland Water Transport Corporation Ltd. v. Brojo Math Ganguly emphasized that public policy aims to prevent practices injurious to public good. - Mandatory Procedure: The court held that the procedure in Note 2 is mandatory. Relinquishment letters, even if voluntarily executed, cannot result in forfeiture of the preferential right unless the procedure is strictly followed. This principle aligns with the Supreme Court's stance in cases like Ramachandra v. Govind, where statutory procedures for surrendering rights were deemed mandatory. - Precedents: The court referenced several precedents, including Pathumma v. State of Kerala, which held that no teacher could forfeit their right under Rule 51A without following the prescribed procedure. The decisions in Punnen v. Vasudeva Kurup and Muralidar v. State of U.P. further support the view that rights under statutory provisions cannot be relinquished outside the prescribed procedures.
Conclusion: The court concluded that the relinquishment letters, even if voluntarily signed, do not result in forfeiture of the preferential right under Rule 51A unless the procedure in Note 2 is followed. The judgment of the learned Single Judge was upheld, confirming that the writ petitioner had a preferential right to appointment in the permanent vacancy that arose on 31st March 1990. The appeals were dismissed, reinforcing the mandatory nature of the procedure under Note 2 to Rule 51A and its basis in public policy.
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