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• 2003 (7) TMI 757
  
  1. ISSUES PRESENTED and CONSIDERED

  The core legal issues considered in this judgment include:

  • The validity of the order dated 22-6-1994 by the Joint Collector directing the re-writing of records to reflect the status prior to the entries made in favor of decree holders in O.S. No. 3 of 1970.
  • Whether the Joint Collector had jurisdiction to revise or review his own previous order dated 19-5-1982 under Section 9 of the Andhra Pradesh Rights in Land and Pattadar Pass Books Act, 1971 (ROR Act).
  • The implications of alleged fraud on the validity of the orders and entries in the revenue records.
  • Whether the learned Single Judge erred in declaring that the Government had no title to the lands in question.
  • The scope of revisional powers under Section 9 of the ROR Act and whether they include the power to recall previous orders.
  • The appropriateness of addressing title disputes in proceedings under Article 226 of the Constitution of India.

  2. ISSUE-WISE DETAILED ANALYSIS

  Validity of the Joint Collector's Order Dated 22-6-1994

  The Court analyzed whether the Joint Collector's order to revert the entries in the revenue records was valid. The Court found that the Joint Collector lacked jurisdiction to revise his own previous order under Section 9 of the ROR Act, which only allows for the revision of orders from subordinate authorities. The Court concluded that the order dated 22-6-1994 was void and without jurisdiction.

  Jurisdiction and Revisional Powers under the ROR Act

  The Court examined the scope of the revisional powers under Section 9 of the ROR Act, determining that these powers do not extend to revising or reviewing the Collector's own orders. The Court emphasized that the Collector's jurisdiction is limited to reviewing the orders of subordinate authorities and does not include the power to review or recall its own decisions unless fraud is involved.

  Fraud and Its Implications

  The Court considered the allegations of fraud and their impact on the validity of the orders. It highlighted that while fraud can render an order void, the Joint Collector did not base his decision on any findings of fraud. The Court noted that fraud allegations require a detailed inquiry, which was not conducted in this case. The Court left open the possibility for the Joint Collector to initiate fresh proceedings to investigate the allegations of fraud.

  Title Disputes and Article 226 Proceedings

  The Court addressed the issue of whether title disputes could be resolved in proceedings under Article 226 of the Constitution. It concluded that such proceedings are not suitable for resolving intricate property disputes and that a regular suit is the appropriate remedy for such issues. The Court criticized the learned Single Judge's decision to declare the Government's lack of title to the lands, stating that such a declaration was beyond the scope of Article 226 proceedings.

  3. SIGNIFICANT HOLDINGS

  Preservation of Verbatim Quotes and Core Principles

  • "The Joint Collector has no jurisdiction to revise his own order in exercise of revisional power conferred under Section 9 of ROR Act."
  • "Fraud unravels everything."
  • "The remedy under Article 226 of the Constitution of India, which is a summary in nature, is not available for such purposes."

  Final Determinations on Each Issue

  • The order dated 22-6-1994 by the Joint Collector was declared void and without jurisdiction.
  • The learned Single Judge's declaration that the Government had no title to the lands was set aside.
  • The Joint Collector was granted the liberty to initiate fresh proceedings to investigate allegations of fraud, with proper notice to all parties involved.
  • The Court emphasized that entries in the revenue records do not confer title and that title disputes should be resolved through regular suits.
  • The Court directed that no alienation or encumbrance of the lands should occur during the pendency of any proceedings initiated by the Joint Collector.

  The judgment concluded by modifying the learned Single Judge's decision and allowing the Joint Collector to conduct a detailed inquiry into the allegations of fraud, ensuring that all parties are given an opportunity to present their case.

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• 2003 (7) TMI 756
  
  Issues:
  1. Whether the High Court was justified in reversing the award of the Industrial Court and directing reinstatement of 72 workers under Article 226/227 of the Constitution of India.
  2. Whether the persons whose engagement was terminated were employees within the meaning of Section 3(5) of the Act read with Section 2(s) of the Industrial Disputes Act.
  3. Whether the High Court exceeded its jurisdiction under Article 226/227 by appreciating evidence and forming its view on crucial factual aspects.
  
  Analysis:
  
  Issue 1:
  The case involved complaints filed under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act. The Industrial Court initially upheld the Management's claim that the terminated individuals were trainees, not workmen. However, the High Court intervened, concluding that the individuals were workmen, not trainees, and their termination was an unfair labor practice. The High Court directed reinstatement without backwages, citing the due procedure not being followed by the Management.
  
  Issue 2:
  The core question was whether the terminated individuals were employees as per the relevant legal definitions. The Industrial Court found them to be trainees, while the High Court disagreed, deeming them as workmen. The Industrial Court's decision was based on the absence of appointment letters and the timing of trainee designation by the Management. The High Court found the Industrial Court's conclusions perverse and not based on the evidence, emphasizing the failure to consider crucial evidence like witness admissions.
  
  Issue 3:
  The appellant argued that the High Court overstepped its jurisdiction by reevaluating evidence and factual aspects. However, the Supreme Court upheld the High Court's decision, stating that the High Court correctly identified the illegality in the Industrial Court's award. The Supreme Court criticized the Industrial Court for not considering crucial evidence, such as witness statements indicating the individuals were engaged in production activities. The Supreme Court affirmed the High Court's decision of unfair labor practices by the Management and the need for reinstatement.
  
  In conclusion, the Supreme Court dismissed the appeal, finding no legal infirmity in the High Court's order. The judgment emphasized the importance of considering all evidence and upholding fair labor practices in employment disputes.

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• 2003 (7) TMI 755
  

  Search and seizure - Undisclosed income of the appellant firm – additions - we are of the considered view that the mandatory requirement of affording opportunity to the appellant firm to adduce evidence in support of the return and explain the disclosures made in the statement of its partner recorded on September 23, 1993, has not been complied with. - The matter is remitted to the Assessing Officer for fresh assessment of the taxable income and the tax liability of the appellant firm for the assessment years 1992-93 and 1993-94 by strictly following the procedure prescribed for assessment under section 143(3) of the Act. The finding of the learned Tribunal that the statements of the appellant partner were made suo motu and there had been no inducement, threat or coercion at the time of making the disclosures under section 132(4) of the Act is, however, affirmed

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• 2003 (7) TMI 752
  
  Issues:
  Allowance of carried forward capital loss under section 80 for assessment year 1998-99 based on the revised return filed by the assessee within the prescribed time under section 139(5).
  
  Analysis:
  
  1. Issue of Carried Forward Capital Loss:
  The case revolves around the dispute regarding the allowance of carried forward capital loss of Rs. 9,96,122 for the assessment year 1998-99. The assessee initially filed a return of income under section 139(1) on time, declaring a profit. Subsequently, a revised return was filed within the prescribed time under section 139(5), showing a loss. The Assessing Officer denied the carry forward of the loss, citing non-compliance with section 80 due to the revised return not being filed within the time allowed under section 139(1).
  
  2. CIT(A) Decision and Legal Interpretation:
  Upon appeal, the CIT(A) referred to relevant sections like 139(1), 139(3), 139(5), and section 80, and analyzed the case law. The CIT(A) held that the revised return effectively replaced the original return and should be treated as such. Relying on the decisions of the Allahabad High Court in cases like Niranjan Lal Ram Chandra v. CIT and Dhampur Sugar Mills Ltd. v. CIT, the CIT(A) concluded that the conditions for carrying forward the loss were met in this case.
  
  3. Judgment and Legal Precedents:
  The Tribunal upheld the CIT(A)'s decision, emphasizing that if a revised return is filed within the prescribed time under section 139(5), it should be considered as a substitute for the original return filed under section 139(1). The Tribunal also highlighted the importance of allowing the benefit of carry forward of loss when a mistake is detected in the original return. Citing the decisions of the Allahabad High Court, the Tribunal dismissed the revenue's appeal, stating that there was no justification to interfere with the CIT(A)'s order.
  
  4. Conclusion:
  The Tribunal's judgment clarifies the legal position regarding the filing of revised returns and the allowance of carried forward losses under section 80. It emphasizes the significance of timely filing and correction of returns, ensuring that taxpayers are not unduly penalized for rectifying errors in their initial submissions. The decision provides a clear interpretation of the relevant provisions and sets a precedent based on established case law, promoting consistency and fairness in tax assessments.

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• 2003 (7) TMI 751
  
  Issues Involved:
  1. Whether the suit notice and the suit are bad for want of identification of the property.
  2. Whether the plaintiff is entitled to get a decree for eviction.
  
  Issue-wise Detailed Analysis:
  
  1. Identification of the Property:
  The court addressed the defendants' objection regarding the identification of the property in the suit notice and plaint. The defendants argued that the plaintiff had not properly described the respective portions occupied by the defendants. However, the court noted that the property was described as "shop portion in premises bearing Door No. 37 (Old No. 100), Godown Street, Madras-1." It was established that no separate numbers were assigned to the 17 tenants, and all were identified by their names and occupation of a portion. The court found that there was no difficulty in identifying the premises occupied by the tenants, as no objection was raised at the stage of notice, in the written statement, or in the grounds of appeal. The court concluded that the description was sufficient to identify the property under Order VII, Rule 3 of the Code of Civil Procedure, and rejected the defendants' contention.
  
  2. Entitlement to Decree for Eviction:
  The court examined whether the plaintiff, Haji Essa Abba Sait Endowments, a public charitable trust, was entitled to a decree for eviction. The trust sought to evict the defendants to demolish the existing dilapidated building and construct a new one to generate higher rental income, which was necessary to fulfill the trust's charitable objectives. The court noted that the building was over 100 years old, the rent collected was meager, and the trust needed more income to perform its activities. The court found the plaintiff's intention to put the property to better use reasonable and acceptable. The trust was exempted from the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, by a Government Order, which was upheld by the Supreme Court in S. Kandasamy Chettiar v. State of Tamil Nadu. The court confirmed the trial court's judgment directing the defendants to vacate the premises and hand over vacant possession to the plaintiff.
  
  Conclusion:
  The court dismissed the appeals filed by the defendants, confirming the judgment and decree of the trial court directing the defendants to vacate the shop portions and hand over vacant possession. The appeals filed by the plaintiff for damages were also dismissed, as the claim for damages was not substantiated by evidence. The court closed the connected Civil Miscellaneous Petitions (C.M.Ps.).

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• 2003 (7) TMI 750
  
  Issues:
  Revenue's appeal against the Sales Tax Appellate Tribunal's order denying exemption on goods purchased from outside the State for works contract.
  
  Analysis:
  The Revenue filed three T.R.Cs. challenging the Sales Tax Appellate Tribunal's order regarding the assessment years 1990-91, 1988-89, and 1989-90. The Tribunal found that goods purchased from outside the State for works contracts with South Central Railway and Military Engineering Services were used in Andhra Pradesh. The Revenue argued that there was no clear finding that the goods were solely used for the contractual obligations. The Tribunal held that the transactions were inter-state sales, not in-transit, and thus not subject to state tax under the A.P. General Sales Tax Act.
  
  The Court noted that the goods purchased were for completing works contracts with the mentioned entities and were utilized in Andhra Pradesh. Referring to the Builders Association of India case, the Court highlighted that inter-state sales are not taxable by individual states. As the Tribunal categorically found the sales to be inter-state and not in-transit, the Court upheld the Tribunal's decision, dismissing the T.R.Cs without costs.

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• 2003 (7) TMI 749
  
  Issues Involved:
  1. Whether the petitioner is an "industrial concern" under Section 2(e) of the Research and Development Cess Act, 1986.
  2. Whether the petitioner imported "technology" as defined under Section 2(h) of the Cess Act.
  3. Validity of the levy and collection of cess under the Cess Act on the payments made by the petitioner.
  4. Whether Section 2(h) of the Act is ultra vires Articles 14 and 19(1)(g) of the Constitution.
  5. Whether Rule 3 of the rules under the Cess Act is ultra vires the Act.
  6. Whether the petitioner is liable to pay interest on delayed payment of cess.
  
  Issue-wise Detailed Analysis:
  
  1. Whether the petitioner is an "industrial concern" under Section 2(e) of the Research and Development Cess Act, 1986:
  The petitioner argued that it is not an industrial concern within the meaning of Section 2(e) of the Cess Act read with Section 2(e) of the Industrial Development Bank of India Act (IDBI Act). However, the court found that the petitioner is indeed an industrial concern as it entered into a foreign collaboration agreement involving the import of technology, which was approved by the Central Government. This conclusion was supported by the counter affidavit and the collaboration agreement dated 22.11.1988.
  
  2. Whether the petitioner imported "technology" as defined under Section 2(h) of the Cess Act:
  The petitioner contended that there was no import of technology and that the contract was essentially a civil contract. The court rejected this argument, stating that the collaboration agreement with Heit-Kampt and Balcke-Durr involved the import of technology necessary for executing the contract awarded by NTPC. The court emphasized that the technology was not available in India and was imported from Germany by the petitioner.
  
  3. Validity of the levy and collection of cess under the Cess Act on the payments made by the petitioner:
  The court upheld the levy and collection of cess under the Cess Act, stating that the petitioner, being an industrial concern that imported technology, is liable to pay the cess as per Section 3(2) of the Act. The court dismissed the petition, finding no merit in the petitioner's arguments.
  
  4. Whether Section 2(h) of the Act is ultra vires Articles 14 and 19(1)(g) of the Constitution:
  The court did not find any grounds to declare Section 2(h) of the Act as ultra vires Articles 14 and 19(1)(g) of the Constitution. The petitioner's arguments in this regard were not substantiated, and the court did not address this issue in detail.
  
  5. Whether Rule 3 of the rules under the Cess Act is ultra vires the Act:
  The court did not find Rule 3 of the rules under the Cess Act to be ultra vires the Act. The petitioner's arguments were not convincing, and the court upheld the validity of the rule.
  
  6. Whether the petitioner is liable to pay interest on delayed payment of cess:
  The court discussed the misconception about interest, stating that interest is not a penalty but the normal accretion on capital. However, the court acknowledged the Supreme Court's decision in Indian Carbon Ltd. v. State of Assam, which held that interest on delayed payment of tax can only be charged if the statute provides for it. Since the Cess Act does not have a provision for interest on delayed payment, the court could not direct the realization of interest. Instead, the court recommended that the respondent consider imposing a penalty under Section 9(2) of the Act.
  
  Conclusion:
  The court dismissed the writ petition, upholding the levy and collection of cess under the Cess Act. The petitioner was found to be an industrial concern that imported technology and was liable to pay the cess. The court also recommended that the Central and State Governments consider amending taxing statutes to provide for interest on delayed payments.

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• 2003 (7) TMI 748
  
  The Delhi High Court ruled that the property inherited by the assessed from his father was to be treated as his personal property, not belonging to the Hindu Undivided Family. The decision was based on a previous case and the question was answered in favor of the revenue.

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• 2003 (7) TMI 747
  
  Issues:
  Challenge to recovery of penalty under Bihar Motor Vehicles Taxation Act for sales tax allegedly due from dealers of two wheelers in Jharkhand.
  
  Analysis:
  1. The petitioners, dealers in two wheelers, challenged notices for recovery of sales tax and penalty under the Bihar Motor Vehicles Taxation Act. The challenge was focused on the penalty aspect as their tax liability was established by a previous judgment. The Commercial Taxes Department claimed the dealers were liable for tax and penalty under Section 6 of the Taxation Act since the Act's inception. The petitioners argued that two wheelers they dealt with should not be considered motor vehicles under the Act, but the Court rejected this argument, citing the definition of motor vehicles in the Motor Vehicles Act adopted by the Taxation Act.
  
  2. The Telco v. State of Bihar case upheld the validity of the Taxation Act and clarified that tax under Section 6 applied to dealers of two and three-wheelers. Another judgment, Telco v. State of Jharkhand, rejected challenges to the Taxation Act's validity and upheld the demand for tax, allowing dealers to show cause against penalty imposition. The Court emphasized that the liability to penalty was justified under Section 23 of the Taxation Act and Rule 4 of the Taxation Rules, which mandated penalties for delayed tax payments.
  
  3. Rule 4 of the Bihar Motor Vehicles Taxation Rules specified penalties for late tax payments, and its validity was upheld in Lal Mohan Singh v. State of Bihar. The Court highlighted that Section 23 of the Taxation Act, along with Rule 4, mandated penalties for delayed tax payments without granting discretion to the taxing authority. The Court drew parallels with a Supreme Court decision to affirm that prescribed penalties were non-negotiable under the Act.
  
  4. Despite previous opportunities for dealers to contest penalty imposition, the Court emphasized that the statutory provisions mandated penalties for delayed tax payments. The Court rejected claims of discretionary penalty reduction and upheld the demand for penalties as per the prescribed rates under the Taxation Act and Rules. The Court dismissed the writ petitions without costs, finding no merit in the challenges raised by the dealers of two wheelers in Jharkhand under the Bihar Motor Vehicles Taxation Act.

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• 2003 (7) TMI 746
  
  Issues Involved:
  1. Jurisdiction of Civil Court to entertain the suit.
  2. Whether the judgment in Writ Petition No. 1065 of 1966 operates as res judicata.
  3. Validity of the order passed by the Board of Revenue and the High Court in WP No. 1065 of 1966.
  
  Detailed Analysis:
  
  Issue No. 1: Jurisdiction of Civil Court to entertain the suit
  The Supreme Court in *State of Tamil Nadu v. Rama Linga* held that a civil suit is maintainable even if there is a statutory prohibition, provided there is no adequate remedy available within the statute. The Andhra Pradesh High Court in *Kosuru Venkata Krishnaiah and Ors. v. Molakala Sidda Reddy and Ors.* reiterated that the jurisdiction of the civil court is not ousted by the Estate Abolition Act. Thus, the civil court has jurisdiction to entertain the suit challenging the order passed under Section 11 of the Estate Abolition Act.
  
  Issue No. 2: Whether the judgment in Writ Petition No. 1065 of 1966 operates as res judicata
  The High Court in the writ petition did not conclusively determine the extent of land for which the patta should be granted but rather upheld the Board of Revenue's order based on the parties' agreement for relaying boundaries. The Supreme Court in *Mangu Ram and Ors. v. M. Venkataraman and Ors.* clarified that a High Court's decision in a writ petition does not operate as res judicata in a subsequent civil suit unless the High Court had exclusive jurisdiction over the matter. The Andhra Pradesh High Court in *Mangu Ramdas v. Madurai Venkataratnam and Ors.* also held that the plea of res judicata must be based on the statutory authority's order under the special enactment. Therefore, the judgment in WP No. 1065 of 1966 does not operate as res judicata.
  
  Issue No. 3: Validity of the order passed by the Board of Revenue and the High Court in WP No. 1065 of 1966
  The Board of Revenue's order, which localized the land and partially granted patta, was based on a report by the Assistant Director of Survey and Land Records. The civil court noted discrepancies in the survey records and the Assistant Director's report, which led to the conclusion that the northern portion of RS No. 461 is communal poramboke land. The court observed that the revenue authorities granted patta for only 194.96 acres, ignoring the Board's direction to grant patta for 436 acres. The court emphasized the need for accurate identification of the land covered by patta No. 98 and whether it extends beyond RS No. 461.
  
  The court directed the trial court to conduct an enquiry and submit a report on:
  1. Whether the land covered by patta No. 98 is situated only in Sy. No. 461 or extends to other survey numbers.
  2. Whether the northern portion of Sy. No. 461 is recorded as communal or village poramboke.
  3. The total extent of land in Sy. No. 461 maintaining the boundaries fixed in the 1912 survey.
  4. Whether patta No. 98 can be co-related to Sy. No. 461 only.
  
  The trial court was instructed to submit its report within three months, and the final orders regarding the extent of land for which the plaintiff is entitled to patta will be passed after receipt of the report.
  
  Conclusion:
  The appeal was allowed to the extent indicated, setting aside the judgment and decree of the District Judge, Visakhapatnam. The trial court was directed to conduct an enquiry and submit a report on the specified issues. The final orders regarding the extent of land for which the plaintiff is entitled to patta will be passed after receiving the trial court's report.

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• 2003 (7) TMI 745
  
  Issues Involved:
  1. Legally enforceable debt.
  2. Validity of a blank cheque under Section 138 of the Negotiable Instruments Act, 1881.
  3. Material alteration of the cheque.
  4. Rebuttable presumption under Section 139 of the Act.
  5. Applicability of Section 138 to post-dated cheques.
  
  Issue-wise Detailed Analysis:
  
  1. Legally Enforceable Debt:
  The appellant contended that the blank cheque was issued for a legally enforceable debt. Section 138 of the Negotiable Instruments Act mandates that the cheque must be issued for the discharge of any debt or other liability.
  
  2. Validity of a Blank Cheque under Section 138:
  Section 138 of the Act is invoked when a cheque drawn on an account maintained by the drawer is returned unpaid due to insufficient funds or exceeds the arrangement with the bank. The court examined whether a blank cheque, later filled in by the appellant, constitutes a valid cheque under Sections 5 and 6 of the Act. A cheque must be a bill of exchange containing an unconditional order to pay a certain sum of money. The court concluded that a blank cheque does not meet this definition, as it lacks a specified amount at the time of issuance.
  
  3. Material Alteration of the Cheque:
  The accused argued that filling in the amount and date on the blank cheque constituted a material alteration. Section 87 of the Act states that any material alteration of a negotiable instrument renders it void unless consented to by the parties involved. The court found that the act of the complainant in filling up the amount and date without the accused's consent amounted to a material alteration, rendering the cheque invalid.
  
  4. Rebuttable Presumption under Section 139:
  Section 139 of the Act provides a rebuttable presumption that the cheque was issued for the discharge of a debt or liability. The court noted that while a presumption can be drawn when a blank cheque is issued, it is rebuttable. The accused successfully rebutted this presumption by demonstrating that he did not consent to the filling in of the cheque's amount and date.
  
  5. Applicability of Section 138 to Post-dated Cheques:
  The court referred to the Supreme Court's decision in Ashok Yeshwant Badave v. Surendra Madhavrao Nighojakar, which clarified that a post-dated cheque becomes a cheque on the date shown and remains a bill of exchange until then. The court further referenced its own decision in Taher N. Khambat v. Vinayak Enterprises, emphasizing that the purpose of Section 138 is to curb the practice of issuing cheques without sufficient funds and that obtaining blank cheques for future use does not align with this legislative intent.
  
  Conclusion:
  The court concluded that the cheque in question did not constitute a valid cheque or bill of exchange at the time of issuance due to the lack of a specified amount. The act of filling in the amount and date without the accused's consent was a material alteration, invalidating the cheque. Consequently, the requirements of Section 138 were not met, and the accused could not be held liable under this provision. The judgment of the lower court acquitting the accused was upheld, and the criminal appeal was dismissed.

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• 2003 (7) TMI 744
  

  Validity of the investigation conducted by CBI without reporting to CVC - allegations of failure of the CBI to investigate freely and fairly commission of offences by persons holding high offices - Power of the Government under Section 4 of Delhi Special Police Establishment Act ("DSPE Act") - HELD THAT:- On account of the fact that CVC Bill could not be passed by the Rajya Sabha, the functioning of the CVC was being regulated by the Government Resolution dated 4.4.1999 and this nowhere provided for taking any concurrence or approval from the CVC before filing of the charge sheet. The CVC having filed an affidavit stating that investigation report had been submitted to it by the CBI and that it had no role in the filing of the charge-sheet and the conduct of the cases, the plea raised by the accused fell to the ground and the petition filed by him ought to have been dismissed straight away. The High Court committed serious error in not giving due consideration to the counter affidavits filed by the CBI and CVC and especially to the fact that on account of non-passing of the CVC Bill by the Rajya Sabha and lapsing of the Ordinance, the duties and functions of the CVC are to be performed in accordance with the Government of India Resolution dated 5.4.1999, which nowhere provided for taking any kind of a concurrence or approval from the CVC before submission of the charge sheet.

  As discussed earlier there is no requirement of any sanction by the CVC either under any statute or even under the directions of Vineet Narain and, therefore, the ratio of this case can have no application at all. In para 34 of the judgment the High court has placed reliance on Prabhu Dayal Deorah v. District Magistrate 1974 [1973 (10) TMI 56 - SUPREME COURT], wherein the detention order passed under Maintenance of Internal Security Act was set aside on the finding that one of the grounds communicated to detenu was vague. We fail to understand how the principle laid down in a case where challenge is made to preventive detention can have any application whatsoever to the case in hand.

  With respect we find the High Court judgment to be quite confusing and self contradictory. In para 18(c) it is observed that "there is no requirement to seek clearance before charge sheets are filed" and in para 19 it is said that "the only requirement in this regard is of reporting and the role of the CVC on this would be to give its comments in its annual report." In para 20 it is said that "the direct power of review granted to the CVC is only of pending applications for sanction" and "the CVC is not cast with the role of reviewing as such the steps taken in the course of investigation and thereafter." In para 21 it is said that "the duty to report of the steps taken in the course of investigation is not and cannot be equated with the duty to obtain prior approval or consent of any other authority to these steps." Again in para 24 it is said that "the contention of the petitioner that a breach of these directions would render the action of the CBI void since the directions are to be rigidly complied with is equally misconceived." It is further said that "even the rigid compliance with these directions cannot go beyond the CVC over-viewing CBI's working and the CBI's reporting to the CVC."

  The High Court having arriving at the aforesaid findings, the only result which could logically follow was to dismiss the petition. There was absolutely no occasion for allowing the same and quashing the cognizance and further proceedings in the case.

  In view of the discussion made above the appeals are allowed and the judgment and order dated 10.6.2002 of the High Court is set aside. The learned Special Judge shall proceed with the trial of the case. While framing the charge he shall carefully scrutinise the material on record and other circumstances of the case in accordance with law.

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• 2003 (7) TMI 743
  
  Issues Involved:
  1. Addition to the valuation of closing stock.
  2. Exclusion of contract receipts from income.
  3. Depreciation on expenditure.
  4. Disallowance of expenditure on repairs at employees' residence.
  5. Disallowance of deduction for interest accrued but not due.
  6. Disallowance of interest on excess levy sugar price.
  7. Disallowance of provision for bad and doubtful debts.
  8. Disallowance of entertainment expenditure.
  
  Issue-Wise Detailed Analysis:
  
  1. Addition to the valuation of closing stock:
  The assessee changed the method of valuing closing stock from averaging the cost of levy and free sale sugar to valuing them independently at the lower of cost or realizable value. The AO noted that this change resulted in a lower valuation of closing stock by Rs. 1,68,71,980, thereby reducing the profit. The AO and CIT(A) both found this change not bona fide, as the method was reverted in subsequent years. The Tribunal upheld this view, emphasizing the need for consistency and bona fide changes in accounting methods, referencing judgments such as ITO vs. Food Specialties and Harinagar Sugar Mills Ltd. vs. CIT.
  
  2. Exclusion of contract receipts from income:
  This ground was not pressed by the assessee and was therefore rejected.
  
  3. Depreciation on expenditure:
  The AO allowed only 10% depreciation on certain expenditures, treating them as part of furniture and fixtures instead of temporary structures eligible for 100% depreciation. The CIT(A) and Tribunal upheld this, stating that the nature of the material (aluminum structures) indicated a longer life span, thus not qualifying as temporary erection. The Tribunal also noted that the assessee's new claim for treating these expenditures as current repairs was not raised earlier and required proper verification.
  
  4. Disallowance of expenditure on repairs at employees' residence:
  The AO disallowed Rs. 9,100 spent on repairs at the residence of the Vice President, treating it as non-business expenditure. The CIT(A) and Tribunal upheld this disallowance, as the assessee failed to prove that the expenditure was incurred as per the terms of employment or in the regular course of business.
  
  5. Disallowance of deduction for interest accrued but not due:
  The AO disallowed Rs. 21,15,615 claimed as interest on a Sugar Development Fund loan, stating that the interest accrued only from 18.11.96. The CIT(A) and Tribunal upheld this, referencing Section 43B(d) which mandates that interest is only deductible when actually paid. The Tribunal also rejected the alternative plea to restrict the disallowance to Rs. 9 lakh.
  
  6. Disallowance of interest on excess levy sugar price:
  The AO disallowed Rs. 15,54,540 claimed as interest payable on excess levy sugar price, stating that the liability was contingent and not crystallized. The CIT(A) and Tribunal upheld this, noting that the liability was under dispute and not finalized by the Supreme Court. The Tribunal emphasized that contractual liabilities disputed in court cannot be claimed until crystallized.
  
  7. Disallowance of provision for bad and doubtful debts:
  This ground was not pressed by the assessee and was therefore dismissed.
  
  8. Disallowance of entertainment expenditure:
  The AO estimated disallowance under Section 37(2A) at Rs. 14,80,175 against Rs. 12,76,373 surrendered by the assessee. The CIT(A) directed the AO to exclude 35% of such expenditure on account of employees' participation. The Tribunal upheld this, finding no infirmity in the CIT(A)'s directions.
  
  Conclusion:
  The Tribunal dismissed the appeal, confirming the CIT(A)'s orders on all grounds, emphasizing the need for consistency and bona fide changes in accounting methods, and upholding disallowances where the assessee failed to substantiate its claims.

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• 2003 (7) TMI 742
  
  Issues:
  Revision petitions challenging orders under Section 138 of the Negotiable Instrument Act for dishonored cheques due to death of drawer and legal notice timing.
  
  Analysis:
  1. Common Question of Law: Both revision petitions involve a common question of law regarding the legality of orders passed by the Magistrate under Section 138 of the Negotiable Instrument Act for dishonored cheques. The accused, who is the revision petitioner, challenges the legality and propriety of the orders.
  
  2. Contentions of Revision Petitioner: The revision petitioner's counsel argued that the legal notice was issued after the prescribed 15 days and that the legal heirs of the deceased drawer cannot be punished under Section 138. Citing a relevant case law, the counsel sought the revision petitions to be allowed.
  
  3. Contentions of Respondent: The respondent's counsel contended that the Magistrate's orders were legal and proper, emphasizing that cognizance was taken after due consideration. They argued that legal representatives can be brought into such proceedings and prayed for dismissal of the revision petitions.
  
  4. Court's Examination: The Court examined the material on record, which included dishonored cheques, legal notices, and complaints. It noted that the legal notice was not issued within the stipulated time and considered the issue of legal representatives being accused in such cases due to the death of the drawer.
  
  5. Interpretation of Statutory Provisions: The Court delved into the legislative intent behind the Negotiable Instruments Act and the absence of provisions for prosecuting legal heirs in case of dishonored cheques. It analyzed relevant sections of the Criminal Procedure Code and highlighted the need for statutory clarity in such situations.
  
  6. Judicial Interpretation: Referring to established legal principles, the Court emphasized the duty of judicature to interpret laws in line with legislative intent. It concluded that no proceedings could be initiated against legal heirs for an offense under Section 138 of the Act in case of the drawer's death.
  
  7. Decision: Considering the statutory silence on prosecuting legal heirs in such cases and the misinterpretation by the Magistrate, the Court allowed the revision petitions. It set aside the impugned orders and quashed the proceedings against the revision petitioner in both cases to prevent a miscarriage of justice.

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• 2003 (7) TMI 741
  
  Issues:
  1. Entitlement to regularization and equal pay for daily wage helpers in Haryana Roadways.
  2. Application of the principle of "equal pay for equal work" in determining the salary of daily wage workers.
  3. Interpretation of previous judgments regarding equal pay for equal work principle.
  4. Comparison of work done by different employees in different organizations.
  
  Analysis:
  1. The case involved thirty-five helpers appointed on daily wages in Haryana Roadways seeking regularization and equal pay as regular employees. They claimed entitlement based on the principle of "equal pay for equal work." The High Court directed payment of minimum pay with dearness allowance to the helpers, considering their service duration and nature of work similar to regular employees.
  
  2. The principle of "equal pay for equal work" was contested, with the State of Haryana arguing against the High Court's decision, citing previous legal precedents. The Court acknowledged the challenges in applying this principle, emphasizing the need to consider factors like responsibility, reliability, and confidentiality in determining pay differentiation among employees with similar roles.
  
  3. Previous judgments such as State of U.P. v. J.P. Chaurasia and Harbans Lal v. State of Himachal Pradesh highlighted that the principle of "equal pay for equal work" is not mechanically applicable in all cases. The Court stressed the importance of evaluating various dimensions of a job beyond mere physical activity, requiring expert judgment for fair assessment.
  
  4. The Court referred to Jasmer Singh's case, emphasizing that daily wage workers cannot be equated with regular employees in terms of qualifications, selection process, and service conditions. It was clarified that daily wage workers are entitled to minimum wages prescribed for their category, not the minimum pay scale of regular employees, unless the employer decides otherwise.
  
  5. Ultimately, the Court set aside the High Court's judgment, directing the State to ensure payment of minimum wages to the daily wage helpers. The decision highlighted the need for clear evidence of equivalence and discrimination before claiming equal rights, emphasizing that the concept of "equal pay for equal work" requires substantial identity between employee groups claiming identical pay scales.

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• 2003 (7) TMI 740
  
  Issues Involved:
  1. Title to the suit property.
  2. Benami transaction claim.
  3. Joint family property claim.
  4. Adverse possession claim.
  5. Compliance with Order 41 Rule 31 C.P.C. by the lower appellate court.
  
  Issue-Wise Detailed Analysis:
  
  1. Title to the Suit Property:
  The plaintiff claimed title to the suit property through a release deed and inheritance from his grandmother, Ganapathi Ammal. The contesting defendants argued that the property was ancestral and had been in their possession since 1918. The trial court ruled in favor of the plaintiff, but the first appellate court overturned this decision, stating that neither party had satisfactorily proven their case.
  
  2. Benami Transaction Claim:
  The defendants contended that the property was purchased in Ganapathi Ammal's name by Neerathalinga Achari as a benami transaction to protect it from potential claims. The court noted that under the Benami Transactions (Prohibition) Act, 1988, such a plea is prohibited. Therefore, the court concluded that Ganapathi Ammal was the absolute owner of the property from 13.12.1918.
  
  3. Joint Family Property Claim:
  The defendants argued that the property, though purchased in Ganapathi Ammal's name, was treated as joint family property. The court referred to the Supreme Court's ruling in Pushpa Devi v. Commissioner of Income Tax, which states that a Hindu female cannot blend her separate property with joint family property. Thus, the court rejected the defendants' claim that the property lost its character as Ganapathi Ammal's self-acquisition.
  
  4. Adverse Possession Claim:
  The defendants claimed they had perfected title to the property through adverse possession, having been in continuous, open, and hostile possession for over 45 years. The court examined evidence, including tax payments and possession records, and found that the defendants had indeed been in possession since at least 1947. The court concluded that the defendants had acquired title by adverse possession, extinguishing any title the plaintiff might have had.
  
  5. Compliance with Order 41 Rule 31 C.P.C.:
  The plaintiff argued that the first appellate court failed to comply with Order 41 Rule 31 C.P.C., which requires the judgment to state points for determination, decisions thereon, and reasons for the decisions. The court agreed that the first appellate court did not follow these mandatory provisions, but noted that this alone does not automatically restore the trial court's decree. The court reassessed the evidence and upheld the trial court's findings on adverse possession.
  
  Conclusion:
  The High Court dismissed the appeal, affirming that the contesting defendants had perfected title to the suit property through adverse possession. The court directed the parties to bear their respective costs throughout.

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• 2003 (7) TMI 739
  
  Issues:
  Contempt petition filed by husband against wife and mother-in-law for breach of undertaking and court directions.
  
  Analysis:
  The case involves a matrimonial dispute where the husband filed a contempt petition against his wife and mother-in-law for violating undertakings given to the court and court directions. The wife was permitted to take their child to the USA on the condition of filing undertakings to bring the child back to India when required by the Family Court. However, the wife failed to comply with the undertakings and court orders, leading to the husband initiating contempt proceedings.
  
  The wife had obtained custody of the child from the Family Court but failed to appear for further proceedings, leading to the court appointing the husband as the guardian of the child and directing the wife to restore custody to him. Despite court orders and undertakings, the wife did not abide by the directions, prompting the husband to seek contempt action against her and her mother.
  
  The Supreme Court found both the wife and mother-in-law guilty of contempt for willfully disobeying court orders and undertakings. The court noted the defiant attitude of the contemnors and emphasized the importance of respecting court notices and orders. Despite pleas for leniency, the court imposed penalties on both respondents.
  
  The mother-in-law, aged about 65 years, was fined Rs. 50,000 with a default imprisonment of three months and seizure of her passport for five years. The wife, being well-educated and employed at the World Bank, was sentenced to three months simple imprisonment, a fine of Rs. 50,000, and an additional one-month imprisonment in default of fine payment. The Union of India was directed to ensure compliance with the court's orders regarding the wife. The contempt petition was disposed of accordingly.

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• 2003 (7) TMI 738
  
  The Supreme Court of India in 2003 condoned delay and admitted the Appeals, tagging them with C.A. No. 4048/2001 and C.A. No. 6604/2001.

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• 2003 (7) TMI 737
  
  Issues Involved:
  1. Whether the mortgage-deed in dispute is a sham, ostensible, and without consideration, and is not duly attested.
  2. Whether the defendant paid Rs. 1,000/- through cheque on 12-10-1960 to the plaintiff and wrote a document acknowledging the debt, thereby making the suit within limitation.
  3. Relief sought by the plaintiff.
  
  Detailed Analysis:
  
  Issue 1: Whether the mortgage-deed in dispute is a sham, ostensible, and without consideration, and is not duly attested.
  The defendant admitted the execution of the mortgage-deed dated 9-4-1949 but denied receipt of consideration and proper attestation. The trial court decided in favor of the plaintiff, holding that the mortgage-deed was executed by the defendant and bore his signatures. The appellate court upheld this finding, confirming that the plaintiff advanced a loan of Rs. 37,000/- to the defendant, who executed a simple mortgage to secure the repayment.
  
  Issue 2: Whether the defendant paid Rs. 1,000/- through cheque on 12-10-1960 to the plaintiff and wrote a document acknowledging the debt, thereby making the suit within limitation.
  The plaintiff claimed that the defendant paid Rs. 1,000/- and acknowledged the debt in writing on 11-12-1960, thus renewing the limitation period under Sections 18 and 19 of the Limitation Act, 1963. The trial court found in favor of the plaintiff, holding that the payment and the acknowledgment were proved, thus making the suit within the limitation period. However, the appellate court disagreed, finding that the plaintiff failed to prove the payment and the document's execution by the defendant, thus dismissing the suit as barred by limitation.
  
  Reevaluation of Issue 2:
  The High Court reexamined the evidence and found the defendant's testimony unreliable. The court noted the defendant's inconsistent statements and attempts to manipulate handwriting samples. The testimony of Kishan Chand, who witnessed the defendant writing the acknowledgment letter, was found credible. The court concluded that Ex.-1, the acknowledgment letter, was indeed written by the defendant, thereby invoking Section 18 of the Limitation Act and starting a fresh limitation period from the date of the acknowledgment.
  
  Relief:
  The High Court restored the trial court's judgment and decree, which had decreed the suit for Rs. 40,000/- with costs and pendente lite and future interest at 6% p.a. The court ordered that if the defendant fails to pay the decretal amount, the mortgaged property should be sold, and the proceeds applied towards the payment. If the sale proceeds are insufficient, the plaintiff can recover the balance from other properties and the person of the defendant.
  
  Conclusion:
  The appeal was allowed, the judgment of the learned single judge was set aside, and the trial court's judgment and decree were restored. The respondents were ordered to pay the costs throughout.

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• 2003 (7) TMI 736
  
  Issues:
  - Misdeclaration of goods as prime quality
  - Violation of principles of natural justice
  - Consideration of expert opinions
  - Confiscation of goods under Customs Act
  
  Misdeclaration of Goods as Prime Quality:
  The case involved the misdeclaration of imported steel slabs and blooms as prime quality, leading to proceedings initiated by the Commissioner for misdeclaration. The appellants initially requested re-export of the goods and submitted expert opinions from various sources, including the National Metallurgical Laboratory (NML). The Commissioner, based on NML's opinion, concluded that the goods were non-alloy steel blooms/slabs of seconds/defective quality, not eligible for concessional duty rates.
  
  Violation of Principles of Natural Justice:
  The appellant argued a violation of natural justice principles, stating that the second NML report was obtained without their knowledge and not provided to them, leading to a lack of opportunity to contest the evidence. They contended that all evidence on record should have been considered, including opinions from other experts like IIT Chennai and S.G.S. India Pvt. Ltd. The Tribunal agreed, noting a clear violation of natural justice and set aside the impugned orders for de novo adjudication.
  
  Consideration of Expert Opinions:
  The Commissioner's decision to solely rely on NML's opinion and disregard other expert reports was challenged. The Tribunal highlighted the importance of considering all expert opinions available, especially when there is a discrepancy between reports. The appellant's request for re-examination of experts and re-evaluation of opinions in the presence of department officials was granted to ensure a fair assessment.
  
  Confiscation of Goods under Customs Act:
  While the Commissioner ordered confiscation of the goods, no redemption fine was imposed as the appellants' request for re-export was accepted, subject to a penalty under Section 112(a) of the Customs Act. The Tribunal's decision to remand the case for re-evaluation and consideration of all expert opinions aimed to address the procedural and substantive issues raised by the appellants, ensuring a just and thorough adjudication process.

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