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• 2009 (7) TMI 1404
  
  ISSUES PRESENTED and CONSIDERED

  The core legal question considered in this judgment was the applicability of Section 78 of the Transfer of Property Act in determining the priority of mortgages between two nationalized banks, Indian Bank and Punjab National Bank, over the same property. Specifically, the issue was whether the Indian Bank, as the prior mortgagee, could be postponed in favor of the subsequent mortgagee, Punjab National Bank, due to alleged negligence in accepting certified copies of title deeds for creating an equitable mortgage.

  ISSUE-WISE DETAILED ANALYSIS

  Relevant legal framework and precedents:

  The legal framework primarily involved Section 78 of the Transfer of Property Act, which addresses the postponement of a prior mortgagee in cases of fraud, misrepresentation, or gross neglect. The Court also referenced decisions from the Calcutta High Court and Kerala High Court, which had previously dealt with the validity of creating equitable mortgages using certified copies of title deeds.

  Court's interpretation and reasoning:

  The Court acknowledged that while there was no legal bar to creating an equitable mortgage with certified copies of title deeds, the question was whether the Indian Bank's actions amounted to gross negligence, thus allowing Punjab National Bank to have priority under Section 78. The Court emphasized that the negligence must be such that it induced the subsequent mortgagee to advance money on the security of the mortgaged property.

  Key evidence and findings:

  The Indian Bank had accepted certified copies of the sale deed and Will when creating the equitable mortgage. An affidavit from the owner, stating that the original title deeds were lost, was obtained two months after the mortgage creation. The Court found that Indian Bank had not conducted due diligence at the time of the mortgage creation, as evidenced by the lack of immediate inquiry or verification regarding the absence of original title deeds.

  Application of law to facts:

  The Court applied Section 78, concluding that Indian Bank's failure to act prudently amounted to gross negligence, which allowed the property owner to induce Punjab National Bank to advance a loan using the original title deeds. This negligence justified the postponement of Indian Bank's priority in favor of Punjab National Bank.

  Treatment of competing arguments:

  The Indian Bank argued that accepting certified copies was permissible and that there was no negligence. Punjab National Bank contended that the Indian Bank's lack of due diligence constituted gross negligence, justifying the application of Section 78. The Court sided with Punjab National Bank, emphasizing that the Indian Bank's actions facilitated the subsequent mortgage.

  Conclusions:

  The Court concluded that the Indian Bank was grossly negligent in accepting certified copies without adequate verification, which allowed the property owner to secure a subsequent loan with Punjab National Bank using the original title deeds. Consequently, the Indian Bank's mortgage was postponed in favor of Punjab National Bank's mortgage.

  SIGNIFICANT HOLDINGS

  The Court held that Section 78 of the Transfer of Property Act applied due to Indian Bank's gross negligence, resulting in the postponement of its mortgage priority. The judgment reinforced the principle that banks must exercise due diligence when creating mortgages, especially when accepting certified copies of title deeds. The Court affirmed the decision of the Debts Recovery Appellate Tribunal, dismissing the writ petition filed by Indian Bank.

  Verbatim quotes of crucial legal reasoning:

  "If the original owner had stated at the beginning that original title deeds were lost, in normal circumstances, a bank would be expected to make certain verification or even require the intending borrower to publish adequate notice."

  Core principles established:

  The judgment established that while creating equitable mortgages with certified copies is legally permissible, banks must exercise due diligence to avoid gross negligence that could lead to the postponement of their mortgage priority under Section 78 of the Transfer of Property Act.

  Final determinations on each issue:

  The Court determined that Indian Bank's negligence justified the application of Section 78, resulting in the postponement of its mortgage priority in favor of Punjab National Bank. The writ petition was dismissed, and the order of the Debts Recovery Appellate Tribunal was upheld.

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• 2009 (7) TMI 1403
  
  Issues Involved:
  1. Whether the First Information Report (FIR) lodged against the appellants was an act of mala fide and based on political considerations.
  2. Whether a criminal proceeding is maintainable when the appellants have obtained a civil decree in their favor.
  3. Whether the contents of the FIR disclose a cognizable offence under Sections 420/465/467/468/471 read with Section 120B of the Indian Penal Code.
  
  Summary:
  
  Issue 1: Mala Fide and Political Considerations
  The appellants contended that the FIR lodged by the respondents was an act of mala fide and based on political considerations. The Supreme Court noted that the appellants had obtained a decree in their favor against the State, the Collector, and Shri Kahla Singh, and the respondents, acting in their official capacity, were bound by the said decree. The Court observed that the institution of the criminal case must be held to be an act of mala fide on the part of the respondents, satisfying some of the parameters laid down in Bhajan Lal's case, such as the allegations in the FIR not constituting any offence and the proceedings being manifestly attended with mala fide.
  
  Issue 2: Maintainability of Criminal Proceeding
  The appellants argued that having obtained a decree in their favor, a criminal proceeding would not be maintainable. The Supreme Court clarified that while the judgment of the Civil Court would not be binding on a criminal court, the facts and circumstances of this case indicated that the appellants' actions did not satisfy the ingredients of Sections 467, 468, and 469 IPC. The Court referred to the principle that an entry in a Revenue Record of rights is merely evidence of possession and does not create or extinguish title.
  
  Issue 3: Disclosure of Cognizable Offence
  The appellants contended that the contents of the FIR, even if taken at face value, did not disclose a cognizable offence under the relevant sections of the Indian Penal Code. The Supreme Court agreed, stating that only because the appellants transferred a portion of the property without complete ownership, it did not by itself satisfy the ingredients of the alleged offences. The Court referred to its decision in Devendra & Ors. v. State of U.P. & Anr., emphasizing that the mere filing of an application for mutation does not amount to a criminal offence.
  
  Conclusion:
  The Supreme Court set aside the impugned judgment of the High Court, allowing the appeal. The Court made it clear that this order should not be construed as a judgment regarding the right, title, and interest over the property in question.

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• 2009 (7) TMI 1401
  
  Issues:
  1. Appointment of an arbitrator under the Arbitration and Conciliation Act, 1996 for disputes related to agreements between parties.
  2. Disputes regarding transfer of land, business closure, compensation, and damages.
  3. Jurisdictional issue of maintaining an arbitration petition at the High Court or before the Chief Justice of India.
  4. Allegations of coercion, forum shopping, and abuse of legal process.
  
  Analysis:
  1. The applicant filed for the appointment of an arbitrator under Sections 11(5), 11(9), and 11(12) of the Arbitration and Conciliation Act, 1996, concerning disputes arising from agreements with the respondents regarding business investments and ownership rights.
  2. Disputes revolved around the non-transfer of land, alleged illegal business closure, compensation claims, and damages, necessitating arbitration for resolution as per the agreements dated 29.1.2005 and 2.2.2005.
  3. Respondents contended that the arbitration petition at the High Court was not maintainable due to the nature of the agreements falling under international commercial arbitration, requiring application before the Chief Justice of India, leading to the withdrawal of the initial application.
  4. Respondents raised objections of no live dispute, forum shopping, coercion in agreements, and multiple litigations by the applicant, asserting that the arbitration clause was abandoned and the present application was an abuse of legal process.
  5. After reviewing the agreements and considering the disputes, the Court found the need for arbitration and appointed Hon'ble Mr. Justice S.N. Variava as the arbitrator to adjudicate the disputes, directing the parties to appear before him in Mumbai on a specified date.
  6. The arbitration petition was allowed, and parties were directed to bear their own costs, emphasizing the expeditious resolution of the arbitration matter by the appointed arbitrator.
  
  This comprehensive analysis covers the key issues, legal aspects, arguments presented, and the final decision rendered by the Court in the judgment.

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• 2009 (7) TMI 1400
  
  Issues:
  1. Suspension and disciplinary proceedings against the Petitioner by the Securities and Exchange Board of India (SEBI).
  2. Petitioner's challenge to the suspension and subsequent disciplinary actions.
  3. Petitioner's appeal process and request for an Independent Member to hear the appeal.
  4. Petitioner's request regarding official accommodation and financial dues.
  5. Petitioner's repeated filing of Writ Petitions before the High Court.
  6. Applicability of statutory remedy and alternative legal principles.
  
  Analysis:
  
  1. The Petitioner, appointed as Division Chief by SEBI, was suspended pending a departmental inquiry. Despite challenging the suspension, subsequent disciplinary actions were taken against him based on an Inquiry Report, leading to the imposition of a major penalty of dismissal from service. The Petitioner filed an appeal under Regulation 88 of SEBI (Employees Service) Regulations, 2001, and sought permission to engage a lawyer for the appeal process.
  
  2. The Petitioner, aggrieved by the Respondents' actions, filed a Writ Petition seeking expedited hearing of his appeal by Independent Members and requested to retain official accommodation. The Court directed the Petitioner to cooperate with the authority and allowed him to occupy the premises until the appeal's disposal, with the condition to vacate if the appeal was dismissed.
  
  3. The Petitioner failed to argue his case before the Appellate Authority, filed another Writ Petition challenging a communication requiring his presence for the appeal hearing, and requested consideration of his resignation. The Respondents contested the Petition, stating they would deal with the resignation as per the law.
  
  4. The Petitioner's contention that the whole-time member of the Board lacked jurisdiction to hear the appeal was dismissed by the Court. The Court emphasized the need for the Petitioner to cooperate with the Appellate Authority to expedite the appeal process, as per the Regulations.
  
  5. The Court noted the Petitioner's repeated filing of Writ Petitions before the High Court, indicating a lack of bona fide in the present Writ Petition. The Court highlighted that the Petitioner's grounds and averments were previously addressed in earlier Writ Petitions, and the current petition lacked merit.
  
  6. Despite discussing the contentions raised, the Court held that the present Writ Petition was not maintainable as the Petitioner should pursue the statutory remedy before the Appellate Authority. The Court emphasized the principle of exhausting alternative remedies before approaching the Court, citing relevant legal precedents.
  
  7. The Court discharged the Rule, disposed of the Petition with directions for the Petitioner to cooperate with the Appellate Authority, and urged the Authority to expedite the appeal process. The Court clarified that its observations in the order should not prejudice the Petitioner before the Appellate Authority. No costs were awarded in the matter.

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• 2009 (7) TMI 1399
  
  Issues Involved:
  
  1. Whether the Foreign Investment Promotion Board (FIPB) erred in granting approval to Takata Corporation for setting up a wholly owned subsidiary in India.
  2. Applicability and interpretation of Press Notes 1 and 3 (2005 series) concerning foreign investment and joint ventures.
  3. Whether the FIPB approval violated the contractual agreements between the parties.
  4. The scope of judicial review in administrative decisions by FIPB.
  
  Issue-wise Detailed Analysis:
  
  1. FIPB Approval to Takata Corporation:
  
  The primary issue was whether the FIPB's approval to Takata Corporation to establish a wholly owned subsidiary in India for manufacturing automotive airbag modules and steering wheels was erroneous. The petitioners argued that this approval violated the existing agreements and press notes, as Takata had a prior joint venture with the petitioners in the same field. The court noted that the FIPB was aware of the agreements and had considered the potential jeopardy to the Indian partner's interests. The FIPB had ensured that Takata would provide engineering assistance and components for four years, which exceeded the contractual obligations, demonstrating that the interests of the Indian partner were safeguarded.
  
  2. Applicability and Interpretation of Press Notes 1 and 3 (2005 Series):
  
  The court examined the applicability of Press Notes 1 and 3 (2005 series), which require government approval for foreign investments in cases where there is an existing joint venture in the same field. The term "same field" was defined by the four-digit National Industrial Classification (NIC) 1987 Code. It was admitted by both parties that Takata's new proposal fell within the same field as the previous joint venture, thus necessitating government approval. The court found that the FIPB had correctly applied the press notes and had considered the potential jeopardy to the existing joint venture when granting approval.
  
  3. Violation of Contractual Agreements:
  
  The petitioners contended that the FIPB approval violated the Shareholder's Agreement and the Collaboration Agreement, which were focused on the manufacture of seat belts. The court highlighted that the agreements contained a non-compete clause limited to seat belt manufacturing, and the parties had mutually agreed that the restrictions would only apply to seat belts. The court emphasized that contractual rights should be adjudicated in civil courts, not in writ proceedings, and found no breach of the agreements by the FIPB's decision.
  
  4. Scope of Judicial Review:
  
  The court clarified the scope of judicial review, emphasizing that it does not serve as an appellate forum to reassess the merits of administrative decisions. Instead, it focuses on the decision-making process, ensuring legality, rationality, and procedural propriety. The court found that the FIPB's decision was made within the legal boundaries, considering relevant facts and circumstances, and was not arbitrary or unreasonable. The FIPB had taken necessary precautions to protect the petitioners' interests, and the decision-making process was deemed fair and just.
  
  Conclusion:
  
  The court dismissed the writ petition, concluding that the FIPB had acted within its discretion and had adequately protected the interests of the Indian partner. The FIPB's approval was not contrary to the press notes or the contractual agreements, and the judicial review found no procedural impropriety or irrationality in the decision-making process. There was no order as to costs.

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• 2009 (7) TMI 1398
  
  The petition was filed against the rejection of the prayer under sections 190(1)(a) and 156(3) of the Cr.P.C. The court remanded the matter back to the concerned court for a fresh hearing, directing consideration of the grounds raised in the petition. The petition stands disposed of.

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• 2009 (7) TMI 1397
  
  Issues:
  - Appeal against Adjudication Order imposing penalty for contravention of Foreign Exchange Regulation Act, 1973
  - Failure to make pre-deposit of penalty leading to dismissal of appeals
  
  Analysis:
  The Appellate Tribunal for Foreign Exchange, New Delhi, delivered a judgment regarding appeals filed against an Adjudication Order imposing penalties under the Foreign Exchange Regulation Act, 1973. The penalties were imposed due to contravention of provisions related to the repatriation of export proceeds. The appellants failed to take reasonable steps for repatriation after exporting goods, leading to the penalties. The appeals were accompanied by applications for dispensation of pre-deposit, which were decided by the Tribunal. Despite multiple notices and opportunities, the appellants did not appear for hearings. The Tribunal allowed a dispensation of 40% of the penalty amount but directed the appellants to make a pre-deposit of the remaining 60% within 30 days, failing which the appeals would be dismissed solely on this ground.
  
  The Enforcement Directorate, represented by Shri A.C. Singh, argued for the dismissal of the appeals based on the provisions of Section 52(2) of the Foreign Exchange Regulation Act, 1973. This section mandates the pre-deposit of penalties while filing appeals, unless the Tribunal dispenses with it due to undue hardship. The grounds for undue hardship, as per legal precedents, include an ex-facie bad order or financial disability. The Tribunal emphasized that the statutory scheme is clear and unambiguous, and it cannot reinterpret it to avoid harsh consequences. Reference was made to a Supreme Court judgment to support this stance.
  
  Ultimately, the Tribunal concluded that the appeals should be dismissed due to the non-compliance with the order requiring the pre-deposit of the penalty. The impugned order imposing penalties was maintained and sustained. The dismissal of the appeals was based on the failure of the appellants to adhere to the Tribunal's directive regarding the pre-deposit of the penalty amount within the specified timeframe.

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• 2009 (7) TMI 1396
  
  The Supreme Court Order in 2009 (7) TMI 1396 stated that the Additional Director was authorized to sign the warrant with retrospective effect as per the budget provision. The Department would need to seek review in the High Court after the Finance Act is passed. The case was adjourned for eight weeks.

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• 2009 (7) TMI 1395
  
  Issues Involved:
  1. Validity of the Inter Corporate Deposit Agreement.
  2. Validity of the deeds of personal and corporate guarantees.
  3. Consideration for the contracts of guarantee.
  4. Arbitrator's interpretation and application of Section 127 of the Contract Act.
  5. Public policy and fairness of the arbitral award.
  6. Judicial intervention and modification of the arbitral award.
  
  Detailed Analysis:
  
  1. Validity of the Inter Corporate Deposit Agreement:
  The arbitrator held that the Inter Corporate Deposit Agreement executed by M/s Ganga Automobiles Ltd. in favor of the petitioners was for consideration. The arbitrator found that as of 14th February 1997, M/s Ganga Automobiles Ltd. owed Rs. 2.70 crores and Rs. 1 crore respectively to the petitioners based on previous agreements. The arbitrator concluded that the past existing liability constituted valid consideration for the new agreements.
  
  2. Validity of the Deeds of Personal and Corporate Guarantees:
  The arbitrator determined that the deeds of guarantee executed by respondent No. 2 Sh. G. Sagar Suri and respondent No. 3 M/s Delhi Auto were void. The arbitrator reasoned that these respondents could not be presumed to be aware that the transaction of 14th February 1997 was based on past existing liability of M/s Ganga Automobiles Ltd. The arbitrator also referenced Sections 142 and 143 of the Contract Act, indicating that any guarantee obtained by means of misrepresentation is invalid.
  
  3. Consideration for the Contracts of Guarantee:
  The arbitrator applied illustration (c) of Section 127 of the Contract Act, which states that past consideration is not sufficient for a contract of guarantee. However, the court found this interpretation incorrect based on various judicial precedents. The court held that a past consideration is sufficient for a contract of guarantee, referencing judgments from multiple High Courts and legal commentaries.
  
  4. Arbitrator's Interpretation and Application of Section 127 of the Contract Act:
  The court reviewed several judgments and legal texts that contradicted the arbitrator's interpretation of illustration (c) to Section 127. The court noted that the language of Section 127 is wide enough to include past transactions as valid consideration. The court found that the arbitrator's reliance on illustration (c) was misplaced and contrary to established legal principles.
  
  5. Public Policy and Fairness of the Arbitral Award:
  The court found the award to be contrary to public policy because it left the petitioners with a paper decree against a wound-up company, while dismissing claims against the respondents who were guarantors and from whom recovery could be made. The court held that the award was unfair and unreasonable, as it deprived the petitioners of the benefit of the guarantees and protected the respondents to the detriment of the petitioners.
  
  6. Judicial Intervention and Modification of the Arbitral Award:
  The court held that it has the power to modify the arbitral award, even though Section 34 of the Arbitration Act, 1996, does not expressly provide for such power. The court reasoned that modification is necessary to serve the purpose of expeditious and fair resolution of disputes. The court set aside the award in so far as it disallowed the claims against respondents Sh. G. Sagar Suri and M/s Delhi Auto, and partially against respondent Sh. Ashwini Suri.
  
  Conclusion:
  The court concluded that the arbitrator's award was based on an incorrect interpretation of legal principles and was contrary to public policy. The court modified the award to hold the respondents liable as guarantors for the amounts due from M/s Ganga Automobiles Ltd. The petitions were allowed with costs awarded to the petitioners.

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• 2009 (7) TMI 1394
  
  The Bombay High Court dismissed the appeal as the issue was covered by a previous judgment in the case of CIT Vs. M/s. Star India Pvt. Ltd. No costs were awarded.

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• 2009 (7) TMI 1393
  
  Issues involved: Appeal against addition of donation received by assessee trust from four parties for assessment year 2002-03.
  
  Details of the Judgment:
  
  1. Assessing Officer's Opinion: The Assessing Officer considered the companies as bogus front companies of Usha Group, treated the donation as income of the assessee due to lack of identity papers, tax returns, and account books of the donors.
  
  2. Submission before CIT (Appeals): The assessee submitted that donations were received by account payee cheques, provided details to the Assessing Officer, filed confirmation certificates, income-tax particulars of donors, and donors were produced under section 131 with account books. Affidavits filed before CIT (Appeals) were not admitted as additional evidence.
  
  3. CIT (Appeals) Decision: CIT (Appeals) confirmed the addition, stating that receiving donations by cheque does not establish their genuineness. Representatives of donor companies failed to provide adequate evidence or identification papers. Affidavits filed during appellate proceedings were considered additional evidence and not admitted.
  
  4. Tribunal's Decision: The Tribunal found the revenue's approach flawed, emphasizing that if donations were proven to be received, the matter should be examined in that context. The Tribunal criticized the rejection of affidavits as fresh evidence and remitted the matter back to the Assessing Officer for a fresh examination after considering the material produced by the assessee.
  
  5. Conclusion: The appeal of the assessee was allowed for statistical purposes, setting aside the decisions of both CIT (Appeals) and the Assessing Officer, and remitting the matter back to the Assessing Officer for re-examination.
  
  *Order pronounced in open court on 10th July 2009.*

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• 2009 (7) TMI 1392
  
  Issues Involved:
  1. Territorial Jurisdiction of the Court
  2. Validity of the Arbitral Proceedings and Appointment of Arbitrator
  
  Summary:
  
  1. Territorial Jurisdiction of the Court:
  The primary issue raised by the respondents was whether the Calcutta High Court had the territorial jurisdiction to entertain the writ petition. The petitioners argued that part of the cause of action arose in Kolkata as various letters, including the appointment of the arbitrator, were received there. However, the Court held that the mere service of notices in Kolkata did not constitute an integral part of the cause of action. The decisions to appoint the arbitrator and the arbitral proceedings were conducted in New Delhi and Mumbai, respectively. Therefore, the Court concluded that it lacked territorial jurisdiction to entertain the writ petition, relying on precedents such as *State of Rajasthan v. Swaika Properties* and *Oil and Natural Gas Commission v. Utpal Kumar Basu*.
  
  2. Validity of the Arbitral Proceedings and Appointment of Arbitrator:
  The petitioners sought to quash the arbitral proceedings initiated by the Director General of Supplies and Disposals, arguing that the appointment of the arbitrator after the termination of previous proceedings was invalid. The Court noted that the controversies involved whether the Director General had the power to appoint a new arbitrator after the termination of previous proceedings u/s 32 of the Arbitration and Conciliation Act, 1996, and whether the new arbitrator had jurisdiction. However, the Court refrained from expressing any opinion on the merits of these controversies, as it had already determined that it lacked jurisdiction to entertain the writ petition.
  
  Conclusion:
  The writ petition was dismissed due to the lack of territorial jurisdiction. The Court emphasized that the service or receipt of letters in Kolkata did not constitute a material, integral, or essential part of the cause of action. Consequently, the petitioners' arguments regarding the validity of the arbitral proceedings and the appointment of the arbitrator were not addressed on merits. The Court also denied the petitioners' request for a stay of the judgment, as there was nothing to stay following the dismissal of the writ petition.

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• 2009 (7) TMI 1391
  
  Issues involved: Dismissal of appeals by Income Tax Appellate Tribunal (ITAT), filing of appeals under section 260-A of the Income Tax Act, 1961, and dismissal of applications under section 254 of the Income Tax Act by the Tribunal.
  
  Summary:
  
  1. The Income Tax Appellate Tribunal (ITAT) dismissed the appeals of the appellants/assessees, leading them to file appeals under section 260-A of the Income Tax Act, 1961. The appeals are currently pending consideration before the Delhi High Court. Additionally, the appellants also filed applications under section 254 of the Income Tax Act before the Tribunal, citing errors apparent on the face of the record. However, the Tribunal dismissed these applications through impugned orders dated 30-6-2009. The appellants argued that there were apparent errors in the Tribunal's orders, which are already subject to appeal before the High Court. The High Court allowed the appellants to raise these grounds during the appeal hearing.
  
  2. The Tribunal, while considering the appellants' applications under section 254 of the Income Tax Act, stated that it is not permissible to re-examine the merits of the case and arrive at a different conclusion from the one already reached. The Tribunal emphasized that if its view was erroneous, the appropriate remedy would be to file an appeal against the impugned orders. As the orders in question were already under appeal, the Tribunal reserved the right for the appellants to raise grounds highlighting the alleged errors apparent on the face of the record during the appeal hearings. Consequently, the appeals were disposed of by the High Court.

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• 2009 (7) TMI 1390
  
  The Supreme Court of India dismissed the appeal in the case with citation 2009 (7) TMI 1390. Judges were Mr. S.H. Kapadia and Mr. Aftab Alam.

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• 2009 (7) TMI 1389
  
  Issues Involved:
  1. Whether the respondents banks can take possession of the secured assets after issuing sale certificates in respect of auction purchasers.
  2. Whether the respondents banks can maintain an application under Section 14(1)(2) of the SARFAESI Act before the concerned Judicial Magistrate, seeking police assistance to take possession of the secured assets.
  
  Issue-wise Detailed Analysis:
  
  1. Whether the respondents banks can take possession of the secured assets after issuing sale certificates in respect of auction purchasers:
  
  The core issue revolves around whether the banks, having issued sale certificates to auction purchasers, can still take possession of the secured assets. The petitioners argued that once a sale certificate is issued, the bank loses its status as a "secured creditor" and the property ceases to be a "secured asset." They contended that the banks should have taken actual physical possession at the time of issuing notice under Section 13(4) of the SARFAESI Act and that symbolic possession is insufficient.
  
  The court, however, found that the language of Section 13(4) of the SARFAESI Act does not mandate actual physical possession before issuing a sale certificate. The Act allows secured creditors to take possession of the secured assets and transfer them, including by sale, without specifying that physical possession is a prerequisite. The court emphasized that the object of the SARFAESI Act is to enable speedy recovery of debts and ensure that third-party purchasers can acquire clear title to the property without undue delay.
  
  2. Whether the respondents banks can maintain an application under Section 14(1)(2) of the SARFAESI Act before the concerned Judicial Magistrate, seeking police assistance to take possession of the secured assets:
  
  The petitioners argued that the banks, having taken only symbolic possession and issued sale certificates, cannot seek police assistance under Section 14(1)(2) to take physical possession. They based their argument on the language of Section 14(1), which refers to "secured creditors" and "secured assets," suggesting that these terms no longer apply once a sale certificate is issued.
  
  The court rejected this argument, stating that Section 14 should not be read in isolation but in conjunction with other provisions of the SARFAESI Act, such as Sections 13(4), 13(6), and 13(8). The court found that the Act's purpose is to facilitate the recovery of debts and that the banks retain their status as secured creditors even after issuing sale certificates. The court held that the banks are entitled to seek police assistance under Section 14(1)(2) to take physical possession of the secured assets, ensuring that the auction purchasers can obtain clear title and possession without unnecessary delays.
  
  Conclusion:
  
  The court concluded that the respondents banks are legally entitled to take physical possession of the secured assets after issuing sale certificates to auction purchasers. The banks can maintain an application under Section 14(1)(2) of the SARFAESI Act before the concerned Judicial Magistrate, seeking police assistance to take possession of the secured assets. The writ petitions were dismissed, and the court emphasized that the interpretation of the SARFAESI Act should align with its objective of enabling speedy recovery of debts and ensuring clear title transfer to third-party purchasers.

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• 2009 (7) TMI 1388
  
  Issues Involved:
  1. Appropriation of the amount of Rs. 89,78,84,930/- towards interest or principal sum.
  2. Entitlement of the respondent to charge interest on interest/compound interest.
  
  Summary:
  
  Issue 1: Appropriation of Amount

  The primary issue was whether the respondent could adjust the amount of Rs. 89,78,84,930/- towards interest or was obliged to appropriate it towards the principal sum due under the award. The court referred to the Supreme Court's judgment in I.C.D.S. Ltd. v. Smt. Smithaben H. Patel and Ors. AIR 1999 Supreme Court 1036, which held that post-decretal payments must be made in terms of the decree or as agreed between the parties. The court found that the appellant had deposited the amount specifically towards the principal sum, and the respondent had accepted and withdrawn it without any protest or reservation. Therefore, there was an implied agreement that the amount was to be appropriated towards the principal sum.

  Issue 2: Interest on Interest/Compound Interest

  The respondent's calculation included compound interest, which was not granted by the Arbitrator. The Supreme Court's order dated 15.09.2006 clarified that compound interest was not allowed. The court concluded that the calculation made by the respondent was incorrect and the appellant could not be directed to make payment as per this calculation. The appellant's calculation, which appropriated the amount towards the principal sum and calculated simple interest as modified by the Supreme Court, was found to be correct.

  Conclusion:

  The court set aside the order dated 19.11.2008 passed by the Learned Single Judge. The Ld. Single Judge was directed to decide if any further amount was payable by the appellant to the respondent in light of this judgment. Any amount found payable would be paid out of the amount deposited by the appellant during the pendency of the appeal, and the remaining amount, if any, would be refunded to the appellant. If no amount was found due, the entire amount deposited would be refunded to the appellant.

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• 2009 (7) TMI 1387
  
  Issues Involved:
  1. Validity of the FIR and charge sheet under Section 498A IPC.
  2. Scope and power of quashing an FIR and charge sheet under Section 482 CrPC.
  
  Detailed Analysis:
  
  1. Validity of the FIR and charge sheet under Section 498A IPC:
  
  The appellant challenged the FIR and charge sheet filed against him under Section 498A IPC, arguing that no case for prosecution was made out. The FIR, filed by Respondent No. 2, alleged various instances of mental and physical harassment by the appellant, including ceasing financial support and spreading false information. The charge sheet reiterated these allegations, stating that the appellant committed the offense under Section 498A IPC.
  
  Section 498A IPC pertains to "Husband or relative of husband of a woman subjecting her to cruelty," where "cruelty" is defined as conduct likely to drive the woman to commit suicide or cause grave injury (Explanation a) or harassment with a view to coercing her to meet unlawful demands (Explanation b).
  
  Upon examining the FIR and charge sheet, the Court found no allegations suggesting conduct likely to drive Respondent No. 2 to commit suicide or cause grave injury, nor any harassment to coerce her to meet unlawful demands. Thus, the ingredients of Section 498A IPC were not met, and the FIR and charge sheet did not prima facie constitute an offense under this section.
  
  2. Scope and power of quashing an FIR and charge sheet under Section 482 CrPC:
  
  The Court reiterated the well-settled principles for quashing an FIR and charge sheet under Section 482 CrPC, emphasizing that this power is exercised to prevent abuse of the process of law and court. The Court referred to several precedents, including Nagawwa v. Veeranna Shivalingappa Konjalgi, State of Haryana v. Bhajan Lal, and Pepsi Foods Ltd. v. Special Judicial Magistrate, which outline circumstances under which quashing is appropriate, such as when the allegations do not disclose any offense or are inherently improbable.
  
  In the present case, the Court concluded that the FIR and charge sheet did not disclose any offense under Section 498A IPC. The allegations were found to be insufficient to constitute "cruelty" as defined under the section. Consequently, the Court held that the High Court erred in rejecting the appellant's petition for quashing the FIR and charge sheet.
  
  Conclusion:
  
  The Supreme Court allowed the appeal, quashing the proceedings initiated against the appellant under Section 498A IPC, and emphasized the necessity of proper scrutiny of allegations before proceeding with criminal charges.

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• 2009 (7) TMI 1386
  
  Issues Involved:
  1. Method of determining the offer price.
  2. Reference date for the determination of the offer price.
  3. Validity of the Board's direction to re-calculate the offer price.
  
  Summary:
  
  Issue 1: Method of determining the offer price
  The primary grievance of the appellants is that the Board was not justified in directing them to re-calculate the offer price by reckoning the date of public announcement as the reference date in terms of Regulation 20 of the takeover code. Their contention is that they calculated the offer price of Rs. 14.75 per share having regard to the date on which the BoD passed the resolution to convene the EGM u/s 81(1A) of the Companies Act for seeking approval of the shareholders for allotment of Part A convertible debentures to the appellants on a preferential basis. The Board argued that the offer price should be calculated with reference to the date of public announcement, which was 22-1-2008.
  
  Issue 2: Reference date for the determination of the offer price
  The question that requires consideration is as to what should be the reference date for the determination of the offer price which the appellants as acquirers are required to offer to the existing shareholders of the target company. Regulation 20 of the takeover code deals with the offer price. Explanation (ii) to Regulation 20(11) provides that where the public announcement is made pursuant to acquisition by way of firm allotment in a public issue or preferential allotment, then the offer price under Sub-regulation 4(c) is to be worked out with reference to twenty-six week period preceding the date of 'the board resolution which authorized the firm allotment or preferential allotment'. The BoD meeting of 21-7-2006 did not authorize the preferential allotment of shares carrying voting rights. The voting rights which triggered the takeover code were acquired by the appellants only on 26-1-2008 when the period of 18 months expired and the compulsorily convertible debentures got converted automatically and the BoD in their meeting on that day allotted equity shares to the appellants. It is on this date the BoD authorized the preferential allotment to the appellants within the meaning of Explanation (ii) to Regulation 20(11).
  
  Issue 3: Validity of the Board's direction to re-calculate the offer price
  The directions of the Board in para 5(a) of the impugned communication requiring the appellants to re-calculate the offer price with reference to the date of public announcement in terms of Regulation 20 cannot be sustained as it is contrary to the plain language of Explanation (ii) to Regulation 20(11) of the takeover code. The same is accordingly set aside. The appellants are directed to re-calculate the offer price by reckoning 26-1-2008 as the date in terms of Explanation (ii) as discussed hereinabove and offer the revised price to all the shareholders.
  
  Conclusion:
  The appeal is disposed of with no order as to costs. The appellants are directed to re-calculate the offer price by reckoning 26-1-2008 as the reference date in terms of Explanation (ii) to Regulation 20(11) of the takeover code.

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• 2009 (7) TMI 1385
  
  Issues involved:
  The issues involved in this case are:
  1. Whether the Tribunal was justified in not adjudicating ground No. 2 regarding the ex parte assessment under Section 144 of the Income Tax Act?
  2. Whether the Tribunal was justified in directing to treat entire receipt of Rs. 2,97,839 as taxable income?
  3. Whether non-production of documents can lead to an ex parte assessment against the assessee?
  4. Whether the return available on record, duly audited by a chartered accountant, can be considered in the absence of account books?
  
  Summary:
  
  Issue 1:
  The appellant filed a return showing total income of Rs. 7,675 along with audited accounts. Despite several opportunities, the appellant did not produce books of account, bills, and vouchers. An ex parte assessment under Section 144 was made, adding Rs. 2,97,839 to the total income of the assessee. The Tribunal confirmed the order of the Commissioner (Appeals) and dismissed the appeal.
  
  Issue 2:
  The appellant argued that the amount of Rs. 2,97,839 received was for repair and maintenance work, and only the profit should be added to the income. However, the assessing officer added the entire amount as income. The Tribunal upheld this decision, stating that the suppressed receipt was rightly added to the income.
  
  Issue 3:
  The respondent argued that despite multiple opportunities given to the appellant to explain the difference in receipts, no valid explanation was provided. The Tribunal agreed that the undisclosed receipt of Rs. 2,97,839 was rightly added to the income of the assessee due to lack of explanation for its suppression.
  
  Issue 4:
  The assessing officer, Commissioner (Appeals), and Tribunal all agreed that the suppressed receipt should be added to the income as the appellant failed to provide a valid explanation for the discrepancy. The Tribunal found no substantial question of law in the appellant's arguments and dismissed the appeal.
  
  In conclusion, the High Court upheld the decision to add the undisclosed receipt to the income of the assessee, as the appellant failed to provide a satisfactory explanation for the difference in receipts.

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• 2009 (7) TMI 1384
  
  Issues involved: Whether the charge sheet issued to the Respondent in connection with a disciplinary inquiry was required to be approved by the disciplinary authority or not.
  
  Summary:
  The Petitioner challenged an order passed by the Central Administrative Tribunal regarding the issuance of a charge sheet without approval from the disciplinary authority. The Tribunal held that the charge sheet should have been approved before issuance to be valid. The Petitioner referred to Rule 14(3) of the Central Civil Services Rules, stating the procedure for imposing major penalties. The rule mandates the disciplinary authority to draw up or cause a charge sheet to be drawn up. An office order from the Department of Revenue specified that approval for issuing a charge memo must be obtained from the Finance Minister in disciplinary cases. The Respondent obtained approval for initiating major penalty proceedings but did not seek approval for issuing the charge sheet from the disciplinary authority. The Court found no error in the Tribunal's conclusion that the charge sheet was issued without jurisdiction due to lack of approval. The Court upheld the Tribunal's order and granted liberty to the Petitioners to take appropriate action against the Respondent.
  
  In conclusion, the Court disposed of the writ petition in accordance with the above findings.

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