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1990 (8) TMI 419
Issues:
The issues involved in the judgment are the legality of the demand for enhancement of tuition fees, the validity of the circular issued to parents, the injunction on collecting enhanced fees, and the jurisdiction to order a refund.
Legality of Demand for Enhancement of Tuition Fees:
The suit was filed for a declaration that the demand for enhancement of tuition fees, as per the circular issued to parents, was illegal and invalid. An injunction was granted to restrain the petitioner from collecting the enhanced fee for a specific period. However, the appeal against this injunction was dismissed, leading to a Civil Revision Petition in the High Court.
Validity of Circular Issued to Parents:
The circular dated 19.12.1989, which notified parents about the enhancement of tuition fees, was at the center of the dispute. The respondent sought a declaration that this circular was illegal and invalid. The subsequent legal proceedings revolved around the validity and enforceability of this circular.
Injunction on Collecting Enhanced Fees:
An injunction was granted to prevent the petitioner from collecting the enhanced fee from students for a specified period. This injunction was a subject matter of appeal and led to further legal actions, including the filing of an interlocutory application for a refund of excess amounts collected during the period covered by the injunction.
Jurisdiction to Order a Refund:
The key contention in the judgment was the jurisdiction of the trial judge to order a refund of excess amounts collected during the period of the injunction. The petitioner argued that the prayer for refund in the interlocutory application exceeded the scope of the suit, as there was no specific prayer for a consequential decree for refund in the original plaint. The High Court held that the trial judge had no jurisdiction to direct a refund when there was no such prayer in the suit itself.
In conclusion, the Civil Revision Petition was allowed, and the order directing the refund of excess amounts collected by the petitioner was set aside due to the lack of jurisdiction. The judgment emphasized the importance of aligning interlocutory applications with the scope of the original suit and highlighted the limits of the court's authority in granting relief beyond the prayers sought in the pleadings.
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1990 (8) TMI 418
Issues:
Challenge to orders passed by Collector and Additional Chief Secretary under Bombay Land Revenue Code and Rules regarding cancellation of entry in revenue records and subsequent legal proceedings.
Detailed Analysis:
1. The petitioner, a Co-operative Society, challenged the orders passed by the Collector and Additional Chief Secretary regarding the cancellation of an entry in the revenue records related to a land purchase in a public auction. The Society contended that the Revenue Authorities acted beyond their powers under the Bombay Land Revenue Rules and sought relief under Article 226 of the Constitution of India.
2. The petitioner Society purchased the land through a public auction and completed construction of about 60 houses. The Revenue Authorities initiated proceedings to cancel the entry made in favor of the petitioner after an unreasonable delay. The Society argued that the delay in exercising revisional powers was unjustified, citing legal precedents emphasizing the need for timely action by authorities.
3. The petitioner's counsel referred to legal judgments highlighting the importance of exercising revisional powers within a reasonable time frame. The Supreme Court and the High Court judgments emphasized that undue delays in exercising statutory powers could cause irreparable harm to affected parties and could lead to the quashing of orders passed after such delays.
4. The Court noted that the Revenue Authorities lacked the power to cancel entries in revenue records arbitrarily, especially after a significant period had elapsed since the initial certification. The petitioner had followed all necessary procedures, including obtaining approvals from relevant authorities, and the Revenue Authorities' actions were deemed to be ultra vires and based on a misconception of legal provisions.
5. The Court held that the orders of the Collector and Additional Chief Secretary were beyond their jurisdiction and proceeded on a misconception of relevant legal provisions. The Collector's order dated 30th January 1988 and the Additional Chief Secretary's order dated 29th November 1989 were quashed and set aside. The petition was allowed, and no costs were awarded in the circumstances of the case.
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1990 (8) TMI 417
Issues Involved:
1. Whether the suit is within the time limit.
2. Applicability of U.P. Act No. XIII of 1936 to the rights of Hindus.
3. Validity of notification under Section 5(1) of the Muslim Waqf Act, 1936.
4. Jurisdiction and limitation due to the commencement of the U.P. Muslim Waqf Act, 1960.
5. Representative nature of the suit.
6. Effect of the Supreme Court judgment in Ghulam Abbas v. State of U.P.
7. Validity of the building as a mosque under Islamic law.
8. Legal status of the building as a mosque surrounded by a graveyard.
9. Necessity of a Mutwalli for the suit's maintainability.
10. Non-joinder of alleged deities.
Issue-wise Detailed Analysis:
Issue 1: Whether the suit is within the time limit.
The court considered the applicability of the Limitation Act, 1908, particularly Article 120, which prescribes a six-year limitation period for suits seeking declarations. The plaintiffs argued that the cause of action arose on 23-12-1949, when Hindus allegedly placed idols in the mosque. The court noted that the plaintiffs claimed continuing injuries, which would renew the cause of action daily. However, the court emphasized that the plaintiffs must establish the use of the mosque for prayers and the graveyard for burials to invoke Section 23 of the Limitation Act, which deals with continuing wrongs. This required oral evidence, making it inappropriate to decide the issue as a preliminary matter.
Issue 2: Applicability of U.P. Act No. XIII of 1936 to the rights of Hindus.
The court concluded that the issue did not fall under Clause (b) of Order XIV Rule 2(2) of the Code of Civil Procedure, which deals with bars to the suit created by any law. The defendants argued that any notification under the Act was not binding on Hindus, implying that the civil court had jurisdiction to adjudicate the title to the property. This issue, therefore, did not constitute a bar to the suit.
Issue 3: Validity of notification under Section 5(1) of the Muslim Waqf Act, 1936.
The court noted that the suit was filed by multiple plaintiffs, not just the Sunni Central Board of Waqfs. The issue referred only to the Board's right to file the suit, not the other plaintiffs. The court held that this issue did not constitute a bar to the suit under Clause (b).
Issue 4: Jurisdiction and limitation due to the commencement of the U.P. Muslim Waqf Act, 1960.
This issue was linked to the findings on Issue No. 17 by the learned Civil Judge, which stated that no valid notification under Section 5(1) of the Muslim Waqf Act was made. The court held that this did not bar the suit but rather questioned the extent to which the plaintiffs' suit could be decreed. The court emphasized that this issue did not fall under Clause (b).
Issue 5: Representative nature of the suit.
The court found that this issue related to the character of the suit. Even if the suit was not representative, it would not lead to its dismissal. Therefore, this issue did not fall under Clause (b).
Issue 6: Effect of the Supreme Court judgment in Ghulam Abbas v. State of U.P.
The court noted that this issue was related to Issue No. 5(e), which was already determined not to fall under Clause (b). Therefore, this issue also did not constitute a bar to the suit.
Issue 7: Validity of the building as a mosque under Islamic law.
The court held that these issues related to the plaintiffs' claim about the property being a mosque and graveyard. These were questions of fact requiring adjudication, not bars to the suit under Clause (b).
Issue 8: Legal status of the building as a mosque surrounded by a graveyard.
Similar to Issue 7, the court held that this issue required factual adjudication and did not constitute a bar to the suit under Clause (b).
Issue 9: Necessity of a Mutwalli for the suit's maintainability.
The court noted that this issue related to the relief for possession and did not challenge the plaintiffs' right to obtain other reliefs. It did not constitute a bar to the suit under Clause (b).
Issue 10: Non-joinder of alleged deities.
The court held that the plea of non-joinder stood on the same footing as mis-joinder, which was not a bar to the suit under Clause (b).
Conclusion:
The court concluded that none of the issues, except those related to limitation (Issues 3 and 5(f)), fell under Clause (b) of Order XIV Rule 2(2) of the Code of Civil Procedure. However, even these issues required factual adjudication, making it inappropriate to decide them as preliminary issues. The court emphasized the importance of resolving the dispute comprehensively and expeditiously, given its significance to the nation. Therefore, the court dismissed the application to decide the issues as preliminary issues and rejected the prayer for hearing and deciding the issues as preliminary issues.
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1990 (8) TMI 416
Issues Involved:
1. Legality of the order dated September 25, 1970, passed by the Collector, Hissar.
2. Jurisdiction of the civil court in light of Section 15 of the 1972 Act.
3. Ownership and classification of the disputed property as public premises.
4. Applicability of the principle of res judicata.
5. Bar of limitation on the suit filed by respondent No. 1.
Summary:
1. Legality of the Order Dated September 25, 1970:
The High Court of Punjab & Haryana declared the order dated September 25, 1970, passed by the Collector, Hissar, under the Punjab Public Premises and Land (Eviction & Land Recovery) Act, 1959, as illegal and void. It restrained the State of Haryana from dispossessing respondent No. 1 based on that order. The Supreme Court, however, found that the High Court was not justified in questioning the Collector's determination that the premises were public premises under the 1972 Act.
2. Jurisdiction of the Civil Court:
The Supreme Court emphasized that Section 15 of the 1972 Act bars the jurisdiction of civil courts in matters related to the eviction of unauthorized occupants from public premises. The High Court erred by not considering this bar and by entertaining the suit filed by respondent No. 1, which challenged the Collector's order.
3. Ownership and Classification of the Disputed Property:
The High Court held that there was insufficient evidence to classify the disputed property as public premises belonging to the State. However, the Supreme Court noted that the Collector and the Commissioner had both found the property to be public premises belonging to the State Government. The Supreme Court criticized the High Court for reversing these concurrent findings based on an earlier written statement by the Municipal Committee, which was not upheld in court.
4. Applicability of the Principle of Res Judicata:
The High Court ruled that the principle of res judicata did not apply as there was no prior decision that the disputed property was public premises under the 1959 Act. The Supreme Court, however, found that the High Court's judgment failed to consider the finality of the Collector's order, which had been affirmed by the Commissioner and was not successfully challenged in subsequent legal proceedings.
5. Bar of Limitation:
The High Court held that the bar of limitation could not be invoked because the Collector's order was void. The Supreme Court disagreed, stating that the Collector's determination of the property as public premises was within his jurisdiction and not a nullity. Therefore, the suit filed by respondent No. 1 was barred by Section 15 of the 1972 Act.
Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's judgment and decree. It restored the judgments of the lower courts, which had dismissed the suit filed by respondent No. 1. The Supreme Court also provided respondent No. 1 with the opportunity to remove stored petrol and diesel oil from the disputed premises within four weeks, with necessary facilities to be provided by the appellants and respondent No. 2.
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1990 (8) TMI 415
Issues:
1. Validity of the orders issued by the High Court regarding admissions in Post-graduate Medical Courses.
2. Existence of a fake judgment presented before the High Court.
3. Legitimacy of admissions granted based on the fake orders.
4. Necessity of investigation by the Central Bureau of Investigation (CBI) into the fraudulent activities.
Analysis:
Issue 1: Validity of High Court Orders
The Supreme Court granted leave to petitioners not party to the High Court Writ Petition No. 5267 of 1990 to file a special leave petition. The High Court orders directed admission to Post-graduate Medical Courses solely based on M.B.B.S. results, canceling the selection examination. The Supreme Court declared the first order as non-existent and the subsequent order as bogus, emphasizing the need to uphold the sanctity of judicial processes. Admissions based on M.B.B.S. results post the impugned orders were deemed invalid, and the Principals of medical colleges were directed to comply with the new directive for a selection examination.
Issue 2: Fake Judgment
An investigation revealed the production of a fake order from Allahabad High Court, leading to subsequent directions from the Lucknow Bench. The Supreme Court identified a deep-seated conspiracy behind the fake order and subsequent admissions. It ordered the annulment of admissions secured based on the fraudulent orders, highlighting the seriousness of misleading the judiciary and citizens through such deceitful actions.
Issue 3: Legitimacy of Admissions
The Supreme Court emphasized that candidates who gained admission based on the fake orders could not continue in the Post-graduate Courses. Despite the absence of these candidates before the Court, the decision to vacate such admissions was made in the interest of justice and fairness. The Court stressed the importance of upholding the rules of natural justice while ensuring that the selection process for admissions remains fair and transparent.
Issue 4: CBI Investigation
In light of the fraudulent activities and the need to bring the perpetrators to justice, the Supreme Court directed the Central Bureau of Investigation (CBI) to conduct a thorough investigation. The Court underscored the significance of maintaining the purity of the judicial system and ensuring that citizens are not misled by conspiratorial actions. The CBI was given a two-month timeline to complete the investigation and submit a report to the Supreme Court and the Chief Justice of Allahabad High Court. Additionally, costs were imposed on the identified respondents to cover the expenses incurred during the legal proceedings.
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1990 (8) TMI 414
Issues:
Challenge to impugned orders granting exemption under S. 20(1)(b) of the Urban Land (Ceiling and Regulation) Act, 1976 with a condition of paying penalty. Whether the land was vacant land and if penalty could be imposed while granting exemption under S. 20(1)(b) of the said Act.
Detailed Analysis:
The petitioner challenged the impugned orders granting exemption under S. 20(1)(b) of the Urban Land Act with a condition of paying a penalty of 20% of the land value. The petitioner's counsel argued that the land was not vacant as construction was ongoing on the appointed day, thus exempt from the Act's provisions. Additionally, the imposition of a penalty was contested based on the absence of such a provision in earlier circulars. The petitioner also claimed that construction started in compliance with building rules, even though plans were approved later, validating the construction. The respondent contended that the State Government had the discretion to impose penalties under S. 20 of the Act, citing a previous High Court decision supporting this stance.
The definition of "vacant land" under S. 2(q) excludes land with buildings constructed or under construction on the appointed day with appropriate authority approval. In this case, construction was ongoing without approval on the appointed day, despite subsequent approval. The Court held that subsequent approval did not validate the construction on the appointed day, as per the Act's provisions. The Central Government's circular directed exemption for constructions started before the Act's commencement, aligning with the petitioner's case where plans were approved before the Act's enforcement.
The respondent argued that the State Government could issue additional guidelines beyond the Central Government's directions. However, the Court emphasized that guidelines could not restrict the Government's power under S. 20(1)(b) to grant exemptions for undue hardship. Imposing a penalty was deemed inconsistent with the Act's purpose of alleviating hardship. The Court clarified that the State Government lacked the authority to impose penalties through circulars without statutory backing. Consequently, the impugned order imposing a penalty during exemption under S. 20(1)(b) was set aside, ruling in favor of the petitioner.
In conclusion, the Court ruled in favor of the petitioner, setting aside the order imposing a penalty during exemption under S. 20(1)(b) of the Urban Land Act. The judgment emphasized the limitations on the State Government's power to impose penalties without statutory authorization, aligning with the Act's objective of mitigating undue hardship for individuals.
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1990 (8) TMI 413
Issues:
1. Limitation period for filing appeals.
2. Validity of the claim based on deeds of 1943 and 1945.
3. Application of Section 43 of the Transfer of Property Act.
Analysis:
Issue 1:
The appellants sought condonation of delay in filing the appeals, arguing that they had diligently pursued prior proceedings based on legal advice. However, the Supreme Court found that the delay of 1198 days was not justified. The Court noted the lack of proper affidavits or evidence to demonstrate due diligence in seeking remedies. The appeals were deemed time-barred and dismissed.
Issue 2:
The respondents claimed rights based on a deed dated 30.7.1945, which the Consolidation Officer upheld, recognizing their title. In contrast, the appellants relied on a subsequent document from 2.8.1945, following an earlier deed from 23.11.1943. The Court found that the creation of a tenancy during the existence of a prior one did not confer any rights. The circumstances surrounding the grant of patta to the respondents further supported their claim. The High Court, in quashing previous orders, highlighted errors in the lower authorities' conclusions. The Court affirmed the respondents' valid title under the 1945 deed, rejecting the appellants' claim based on the 1943 deed.
Issue 3:
Regarding the application of Section 43 of the Transfer of Property Act, the appellants argued that even if the 1943 deed was invalid, they acquired tenancy rights confirmed by the 1945 deed. However, the Court explained that Section 43 pertains to estoppel by deed, allowing a transferee to claim subsequent interests based on fraudulent or erroneous representations. Since the 1943 deed was invalid due to an existing lease, no rights were conferred upon the appellants. The Court upheld the respondents' title under the 1945 deed, rejecting the appellants' contention under Section 43.
In conclusion, the Supreme Court upheld the High Court's decision, dismissing the appeals and directing each party to bear their costs. The judgment emphasized the respondents' valid title under the 1945 deed and refuted the appellants' claims based on the 1943 deed and Section 43 of the Transfer of Property Act.
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1990 (8) TMI 412
Issues:
The judgment involves the dismissal of a money suit on the ground of limitation, with key issues including the acknowledgment of liability, application for permission to sue as an indigent person, and the interpretation of Section 13 of the Limitation Act.
Issue 1: Acknowledgment of Liability
The plaintiff's appeal was against the dismissal of her money suit due to limitation. The respondent utilized the plaintiff's gold ornaments for renovation, as acknowledged in a Will. However, the Will's revocation and subsequent events led to the suit being filed afresh, raising the issue of limitation based on the dates of cause of action.
Issue 2: Application for Permission to Sue as an Indigent Person
The plaintiff's application for permission to sue as an indigent person was initially rejected, leading to subsequent legal proceedings. The court analyzed the implications of the rejection, the subsequent filing of the suit with court fee, and the application of Section 13 of the Limitation Act in this context.
Judgment Analysis:
The court emphasized that for a suit to be within time, it must be apparent on the face of the plaint. The acknowledgment of liability was a crucial aspect, with the court noting that the Will did not contain a valid acknowledgment that could extend the period of limitation. The court highlighted the necessity of an acknowledgment indicating a present subsisting liability for it to be valid under Section 18 of the Limitation Act.
Regarding the application for permission to sue as an indigent person, the court delved into the interpretation of Section 13 of the Limitation Act. It clarified that the exclusion of time under Section 13 is distinct from that under Section 14, emphasizing that Section 13 applies when an application is rejected, and court fee is subsequently paid in good faith.
The court differentiated between cases where a suit or appeal is filed as an indigent person and those where a fresh suit is filed independently. It underscored that Section 13 allows for the conversion of the same proceeding into a regular suit or appeal on payment of court fee, excluding the time spent in the original application process.
Ultimately, the court upheld the dismissal of the suit as out of time, emphasizing that Section 13 does not apply to a fresh suit filed independently of the original proceedings. The appeal was consequently dismissed without costs.
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1990 (8) TMI 411
Issues:
Interpretation of whether a sum received by the assessee as "salami" for a leave and license agreement constitutes a capital receipt not chargeable to tax.
Analysis:
The case involved a reference from the Commissioner of Income-tax regarding the taxability of a sum of &8377; 2 lakhs received by the assessee under a leave and license agreement. The Income-tax Officer treated the sum as a revenue receipt, arguing that the agreement was not a long-term lease and was not registered under the West Bengal Premises Tenancy Act. The Commissioner of Income-tax (Appeals) disagreed, relying on precedents, and held the sum to be a capital receipt. The Tribunal upheld this decision, emphasizing the reasonableness of the rent and the absence of evidence supporting the revenue nature of the receipt.
The legal arguments presented by the parties focused on whether the sum should be considered a revenue receipt or a capital receipt. The counsel for the Revenue contended that the sum represented advance rent and should be taxed accordingly. However, the amicus curiae referenced relevant case law, including the Supreme Court decision in Durga Das Khanna, to support the position that the sum was a capital receipt. The court acknowledged the similarity of the present case to past judgments, emphasizing the need for the tax authorities to demonstrate the revenue nature of the sum.
Drawing parallels to previous cases like Durga Das Khanna and Purnendu Mullick, the court highlighted the importance of assessing whether the sum received was below market rates to determine if it constituted advance rent. The court reiterated that the burden of proof lies with the Income-tax Officer to establish the revenue nature of the receipt, which was not fulfilled in this case. Consequently, the court concluded that the sum received as "salami" was a capital receipt, aligning with the principles established in prior decisions.
While affirming that the sum was a capital receipt not chargeable to tax as revenue, the court directed the Tribunal to consider whether it would be taxable as a capital gain. The judgment emphasized the need for further examination on the taxability aspect, leaving the final determination of tax liability on the capital receipt to be addressed by the Tribunal. The court concurred on the decision, and no costs were awarded in the matter.
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1990 (8) TMI 410
Issues:
1. Jurisdiction of the civil court in a suit challenging the election of a managing committee of a registered society.
2. Interpretation of Sections 23 and 25 of the Registration Act in relation to the maintainability of the suit.
3. Application of the legal principles regarding exclusion of jurisdiction of the civil court.
Analysis:
1. The case involved a society registered under the Societies-Registration Act, where certain members challenged the election of the managing committee and sought rendition of accounts in a civil court. The central issue was whether such a suit was maintainable in the civil court, as per the provisions of Sections 23 and 25 of the Registration Act. The lower courts had allowed the suit to proceed, leading to an appeal to the Supreme Court.
2. The Supreme Court emphasized that a litigant has the right to approach a civil court unless jurisdiction is expressly or impliedly barred. Referring to legal precedents, it was established that the exclusion of civil court jurisdiction should not be readily inferred and must be clearly indicated by law. The Court highlighted the need for a careful analysis of the Registration Act's provisions to determine the suit's maintainability.
3. The Court examined Sections 23 and 25 of the Registration Act, which deal with audit requirements and disputes regarding the election of office-bearers, respectively. It was clarified that Section 23 pertained to audit matters and did not address the relief of rendition of accounts sought in the suit. Regarding Section 25, which governs disputes related to office-bearer elections, the Court noted that specific conditions must be met for a statutory dispute to be maintainable. In this case, the members challenging the election may not fulfill the requirements of Section 25, making their suit permissible in the civil court.
4. The Court concluded that the suit challenging the election of office-bearers was maintainable in the civil court, as the conditions under Section 25 were not met by the members. It was also highlighted that the relief sought fell within the ambit of Section 9 of the Civil Procedure Code. The Court directed the trial court to expedite the suit's disposal, considering the annual nature of the elections and any changes in circumstances. The appeal was dismissed, with no costs awarded.
Conclusion:
The Supreme Court affirmed the maintainability of the suit challenging the election of office-bearers of a registered society in a civil court, based on the interpretation of relevant provisions of the Registration Act. The judgment clarified the application of legal principles regarding civil court jurisdiction and directed the trial court to promptly address the suit's disposition.
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1990 (8) TMI 409
Issues:
Interpretation of lease deeds for construction expenses as rentable income.
Analysis:
The case involved a reference under section 256(1) of the Income-tax Act, 1961 for the assessment year 1982-83. The question at hand was whether the investments made by lessees in the construction of the third and fourth floors of a building should be considered as rent. The assessee leased out the floors to two individuals who further sublet the premises. The Income Tax Officer (ITO) treated a portion of the investments as rental income of the assessee, leading to an addition of a specific amount to the total income.
The assessee contended that the investments by the lessees were capital in nature and should not be taxed as rental income. The Appellate Authority Commissioner (AAC) agreed with the assessee, stating that the conditions for assessing rental income were not met, and the expenses incurred by the lessees were capital in nature, hence not taxable.
The revenue appealed against the AAC's decision before the Tribunal. The Tribunal held that the investments made by the lessees did not resemble rent and were considered capital receipts. The High Court agreed with the Tribunal's decision, emphasizing that the construction of the floors was done by the lessees on behalf of the assessee, and there was no element of advance rent involved. The Court found no reason to interfere with the Tribunal's finding and ruled in favor of the assessee.
In conclusion, the Court determined that the investments made by the lessees in the construction of the floors should be treated as capital receipts in the hands of the assessee, not as rental income. The judgment was delivered in favor of the assessee, and no costs were awarded.
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1990 (8) TMI 408
Issues Involved:
1. Whether the instruments of transfer were proper and duly stamped.
2. Whether the alteration of the articles of Mathrubhumi was valid.
3. Whether the alteration of the articles and refusal to register the transfer of shares was mala fide and not in good faith.
4. Whether Article 17 is applicable to this case.
5. Even if Article 17 is applicable, whether there were sufficient grounds under that article to refuse transfer.
6. What is the order to be passed?
Detailed Analysis:
1. Whether the instruments of transfer were proper and duly stamped:
The board of directors of Mathrubhumi refused to register the transfer of shares on the ground that the instruments of transfer were not duly stamped or properly cancelled. The court held that the transfer forms where stamps were not cancelled at all were validly refused. However, for the other forms, the court found that the stamps affixed on separate sheets of paper and produced along with the transfer forms were sufficient. The court emphasized that the purpose of the Stamp Act is to collect revenue, not to arm litigants with technicalities. Therefore, the applications dealt with in reason No. 2 were deemed duly stamped, and the decision of the board regarding these was set aside.
2. Whether the alteration of the articles of Mathrubhumi was valid:
The court examined whether the extraordinary general meeting held on March 13, 1989, and the subsequent alteration of the articles were valid. The court found that the notice and explanatory statement for the meeting were legal and valid. The court rejected the contention that the alteration was mala fide, noting that the alteration was made in good faith for the benefit of the company. The court held that the alteration of the articles of Mathrubhumi was valid.
3. Whether the alteration of the articles and refusal to register the transfer of shares was mala fide and not in good faith:
The court considered the argument that the alteration of the articles and the refusal to register the transfer of shares were done with a collateral purpose to prevent the Times of India from gaining control over Mathrubhumi. The court found that the dominant purpose of the alteration was to empower the board to reject share transfers, which was not an unlawful purpose. The court held that the alteration and refusal to register the transfer were not mala fide and were done in good faith.
4. Whether Article 17 is applicable to this case:
The court examined the applicability of Article 17, which was introduced on March 13, 1989, to the transfers in question. The court held that Article 17, which conferred power on the board to decline to register the transfer of shares, was not applicable to the transfers that were lodged before its introduction. The court noted that the transfers were completed and the applications were lodged before March 8, 1989, when the company had no power to decline the transfer. Therefore, the court held that Article 17 was not applicable in this case.
5. Even if Article 17 is applicable, whether there were sufficient grounds under that article to refuse transfer:
The court scrutinized the reasons provided by the board for refusing the transfer of shares. The court found that the reasons were not legitimate or valid. The court noted that the allegations against the Times of India group were based on historical events and were not relevant to the present management. The court also found that the price paid for the shares was not excessive and that the Times of India had no intention to start a Malayalam publication. The court held that even if Article 17 were applicable, there were no proper grounds for rejecting the transfer applications.
6. What is the order to be passed:
The court set aside the resolution of the board of directors of Mathrubhumi dated March 20, 1989, in respect of the shares that were duly stamped and directed Mathrubhumi to register the transfer of these shares in the names of Vardhaman Publishers Ltd. and Dharmayug Investments Ltd. The court also directed Mathrubhumi to rectify its register of members accordingly and to give notice of the rectification to the Registrar of Companies within 30 days. The court disallowed the prayer for setting aside the resolution in respect of shares where stamps were not cancelled at all and directed Mathrubhumi to return these shares with the share transfer applications and uncancelled stamps to the petitioner within 30 days. There was no order as to costs.
Summary of the findings:
Point No. 1: All the applications for transfer except the applications where stamps were not cancelled at all were proper and duly stamped.
Point No. 2: The notice and explanatory statement of the extraordinary general meeting of Mathrubhumi of March 13, 1989, were legal and valid. The contention that alteration of the articles and refusal to register shares were mala fide, cannot be accepted. The alteration of the articles of Mathrubhumi is valid.
Point No. 3: Article 17 is not applicable in this case.
Point No. 4: Even if Article 17 is applicable no proper grounds were available for rejecting the application for share transfers.
Orders:
C.P. No. 29 of 1989: The resolution of the board of directors of Mathrubhumi dated March 20, 1989, is set aside in respect of the shares mentioned. Mathrubhumi is directed to register the transfer of these shares in the name of Vardhaman Publishers Ltd. and rectify its register of members accordingly. Mathrubhumi must comply with the necessary formalities within 30 days, failing which the petitioners may have the judgment executed through an officer appointed by the court at the cost of Mathrubhumi. The prayer for setting aside the resolution in respect of shares where stamps were not cancelled is disallowed.
C.P. Nos. 30 and 42 of 1989: The resolution of the board of directors of Mathrubhumi dated March 20, 1989, is set aside in respect of the shares mentioned. Mathrubhumi is directed to register the transfer of these shares in the name of Dharmayug Investments Ltd. and rectify its register of members accordingly. Mathrubhumi must comply with the necessary formalities within 30 days, failing which the petitioners may have the judgment executed through an officer appointed by the court at the cost of Mathrubhumi.
C.P. No. 46 of 1989: The resolution of the board of directors of Mathrubhumi dated March 20, 1989, is set aside in respect of the shares mentioned. Mathrubhumi is directed to register the transfer of these shares in the name of Vardhaman Publishers Ltd. and rectify the register of members accordingly. The petitioner must pay the transfer fee for certain shares and re-present the application for others as directed. Mathrubhumi must comply with the necessary formalities within 30 days, failing which the petitioners may have the judgment executed through an officer appointed by the court at the cost of Mathrubhumi.
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1990 (8) TMI 407
Issues involved: Appeal against order dismissing leave to defend suit under Order 37, Rule 2, Code of Civil Procedure.
Summary:
1. The Supreme Court heard both parties and granted special leave to appeal against the High Court's order dismissing Civil Review No. 3067 of 1989, which affirmed the Sub-Judge's order declining leave to defend the suit under Order 37, Rule 2.
2. The Court emphasized that leave should not be granted if it would only prolong litigation with frivolous defenses. Leave should be given if a real issue is raised, indicating a plausible defense. Summary judgment should not be granted in cases of serious factual conflicts or legal issues. The Court should not reject a defense solely based on implausibility or inconsistency.
3. After examining the defense and previous criminal complaints, the Court found a triable issue present, allowing the Appellant to defend the suit. Citing English law, the Court noted that a defense more than "shadowy" but less than "probable" warrants leave to defend.
4. The appeal was allowed, granting the Appellant leave to defend the suit with the condition that the deposited amount of Rs. 20,000 be paid to the Plaintiff during the suit's pendency, to be restituted if the Plaintiff fails in the suit. The High Court and trial Court orders were set aside.
5. Leave to defend was granted on specified terms, and the Court addressed the issue of deposits made during the trial, allowing the Appellant to withdraw certain sums while the Plaintiff could withdraw the Rs. 20,000 deposited in the Court registry. The appeal was disposed of with no costs incurred.
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1990 (8) TMI 406
Issues Involved:
1. Legality of the transfer of ownership of the first respondent to the third respondent.
2. Continuity of service for the workers of the first respondent company.
3. Applicability of Section 25-FF of the Industrial Disputes Act.
4. Status of the first respondent under Article 12 of the Constitution of India.
Detailed Analysis:
1. Legality of the transfer of ownership of the first respondent to the third respondent:
The petitioner, the General Secretary of the Employees Union of Karnataka Agro Proteins Ltd. (K.A.P.L.), sought a writ of mandamus directing the respondents to transfer the ownership of the first respondent to the third respondent, subject to the third respondent absorbing and continuing the service of the workers. The first respondent, a body corporate under the Companies Act, 1956, was declared a 'Relief Undertaking' by the Government of Karnataka to ensure continuous operation and provide relief against unemployment. Due to significant financial losses, the first respondent was declared a sick industrial company by the Board for Industrial and Financial Reconstruction (BIFR), which suggested winding up the company or transferring ownership.
2. Continuity of service for the workers of the first respondent company:
The petitioner argued that the respondents were not justified in selling the assets of the first respondent to the third respondent without ensuring the continuity of service for the workers, as required under the proviso to Section 25-FF of the Industrial Disputes Act. The petitioner emphasized that the main purpose of declaring the first respondent as a 'Relief Undertaking' was to ensure continuous operation and provide relief against unemployment.
3. Applicability of Section 25-FF of the Industrial Disputes Act:
The court examined Section 25-FF, which provides that upon the transfer of ownership or management, every workman who has been in continuous service for not less than one year is entitled to notice and compensation as if retrenched under Section 25-F. The court referred to the Anakapalle Co-operative Agricultural and Industrial Society Ltd. v. Their Workmen case, which clarified that the termination of services due to transfer does not amount to retrenchment, but employees are entitled to compensation as if it were retrenchment. The court reiterated that the only claim employees can make is for compensation against their employers, not for re-employment against the transferee.
4. Status of the first respondent under Article 12 of the Constitution of India:
The first respondent contended that it was not an instrumentality or agency of the State and thus outside the purview of Article 12. The third respondent, a co-operative society, also argued that it was not an 'authority' under Article 12, as neither the State nor the Central Government had contributed any capital. The court concluded that the petitioner had no legal right to compel the respondents to transfer the assets with the condition of absorbing the workmen, as the law does not support such a condition.
Conclusion:
The court dismissed the writ petition, stating that the law does not support the petitioner's claim for a special direction to transfer ownership subject to the third respondent absorbing and continuing the services of the workmen. The court emphasized that the employees' legitimate claim is for compensation against their employers, not for re-employment against the transferee. The petition was dismissed with no order as to costs.
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1990 (8) TMI 405
Issues:
Claim for interest on the decree amount without specific direction in the decree.
Analysis:
The respondent, a retired Deputy Superintendent of Police, filed a suit claiming entitlement to promotion from Police Inspector to Deputy Superintendent of Police from a specific date. The Trial Court dismissed the suit, but the Addl. District Judge reversed this decision, granting the promotion and associated benefits to the respondent. The decree became final as no appeal was filed against it. The respondent then sought execution of the decree for arrears of salary, pension, and other amounts, also claiming compound interest at 12% per annum. The State objected to the interest claim, arguing that the decree did not include any direction for interest. The Execution Court, however, allowed the interest claim, leading to subsequent appeals and revisions by the State, all of which were dismissed.
The Supreme Court noted that the original decree did not contain any provision for interest, and the respondent had not claimed interest during the suit proceedings. The Court emphasized that the executing court is bound by the terms of the decree and cannot modify it based on its own views of fairness. While acknowledging the power of courts to award interest in certain circumstances, the Court clarified that such power cannot be exercised by the Execution Court without a specific direction in the decree. The Court highlighted that previous cases where interest was awarded involved explicit directions from the court, unlike the present case.
Consequently, the Supreme Court held that the Execution Court exceeded its jurisdiction by awarding interest to the respondent without a specific provision in the decree. The Court allowed the appeal, setting aside the order granting interest to the respondent and ruled that there would be no order as to costs.
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1990 (8) TMI 404
Issues involved: Environmental pollution caused by industrial units in green belt area, health hazards to population, alleged corruption, compliance with pollution control laws, misuse of legal process.
Environmental Pollution and Health Hazards:
The letter treated as a writ petition alleged environmental pollution caused by Jhunjhunwala Oil Mills and a refinery plant in a green belt area, affecting three villages and the Sarnath temple. Smoke, dust, and effluents emitted were said to be causing health hazards, affecting crops, spreading diseases, and impacting children's growth. Schools, nursing homes, and hospitals in the vicinity were also claimed to be adversely affected.
Compliance with Pollution Control Laws:
The petitioner sought directions to check pollution, alleging lack of safety measures by the industrial units' proprietor. The respondent claimed compliance with the Air (Prevention and Control of Pollution) Act, 1981, and the Water (Prevention & Control of Pollution) Act, 1974, with no complaints from any authority regarding violations. Orders from the Pollution Control Board indicated no instances of non-compliance.
Alleged Corruption and Misuse of Legal Process:
The respondent alleged a long-standing rivalry with the petitioner, portraying the petitioner as an antisocial element involved in blackmailing. Criminal proceedings had been initiated against the petitioner, and the respondent argued that the application was a misuse of legal process. The Court emphasized the need for genuine public interest in invoking Article 32 and cautioned against misuse of this legal safeguard.
Judgment:
The Court, after considering the facts, rivalry between the parties, and compliance with pollution control laws, found that there was no prima facie evidence of pollution or ecological imbalance attributable to the respondent. The Court highlighted the importance of Article 32 as a safeguard for fundamental rights but dismissed the petition, stating it lacked merit and was an abuse of the legal process. The Court emphasized the need to prevent misuse of legal avenues for personal vendettas and to protect genuine public interest cases from being overshadowed by such applications.
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1990 (8) TMI 403
The writ petition challenged the Tribunal's orders dismissing the petitioner's applications under s. 254 of the Act without granting an opportunity to be heard. The High Court held that an opportunity of being heard must be given before disposing of an application under s. 254. The Court also noted that the petitioner had an alternative remedy available by filing a reference under s. 256(1), but since the petitioner did not avail of this remedy, the Court declined to interfere. The petition was dismissed.
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1990 (8) TMI 402
Issues Involved:
1. Constitutional validity of Section 3(3C) of the Essential Commodities Act, 1955.
2. Validity and impact of the notification dated March 24, 1966.
3. Entitlement to notice and hearing before zoning and price fixation.
4. Zoning and price fixation as legislative policy and its judicial review.
Detailed Analysis:
1. Constitutional Validity of Section 3(3C) of the Essential Commodities Act, 1955:
The appellants challenged the constitutional validity of Section 3(3C) of the Essential Commodities Act, 1955, claiming it violated their fundamental rights under Article 19(1)(g) and Article 19(1)(f). However, the court noted that the Act received protection under Article 31C of the Constitution and was included in the 9th Schedule as item No. 126, making it immune from such attacks. Additionally, a recent Constitution Bench judgment in M/s. Shri Sitaram Sugar Company v. Union of India upheld the validity of Section 3(3C), rendering the point no longer res integra.
2. Validity and Impact of the Notification Dated March 24, 1966:
The appellants contended that the notification dated March 24, 1966, placing their factories in Zone No. 1, caused them significant losses. The notification was issued based on the recommendations of the Sugar Inquiry Commission, which divided the country into five zones for price fixation purposes. The court found that the notification was a statutory one, issued under the powers conferred by the Defence of India Rules, 1962, and the Sugar (Control) Order, 1963. The notification was based on a detailed inquiry and recommendations by experts, making it valid and unassailable.
3. Entitlement to Notice and Hearing Before Zoning and Price Fixation:
The appellants argued that they were entitled to notice and hearing before being placed in Zone No. 1. The court referred to the exhaustive study conducted by the Sugar Inquiry Commission, which included representations from various stakeholders, including state governments and the sugar industry. The court held that zoning and price fixation are legislative actions and do not require individual notices or hearings. The principles of natural justice do not apply to legislative measures, as established in previous judgments such as Saraswati Industrial Syndicate Ltd. v. Union of India and Union of India v. Cynamide India Ltd.
4. Zoning and Price Fixation as Legislative Policy and Its Judicial Review:
The court emphasized that zoning and price fixation are integral parts of a legislative policy aimed at ensuring fair prices and equitable distribution of sugar. The policy decisions were based on recommendations from experts and were within the exclusive domain of the Central Government. The court reiterated that such policy decisions do not ordinarily attract judicial review unless they conflict with the Constitution, the governing Act, or general principles of law. The court cited previous judgments, including Shri Sitaram Sugar Company and Anakapalle Coop. Agrl. & Industrial Society Ltd. v. Union of India, to support its conclusion that zoning on a unit-wise basis is impracticable and would defeat the purpose of price control.
Conclusion:
The court dismissed the appeals, holding that the appellants' contentions were devoid of merit. It concluded that the zoning and price fixation were legislative actions based on expert recommendations and did not require individual notices or hearings. The court upheld the validity of Section 3(3C) of the Essential Commodities Act, 1955, and the notification dated March 24, 1966, affirming that these measures were in the best economic interest of the sugar industry and the general public. The appeals were dismissed without costs.
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1990 (8) TMI 401
Issues Involved:
1. Validity of the quit notice issued u/s 106 read with 111(h) of the Transfer of Property Act.
2. Application of the doctrine of promissory estoppel.
3. Jurisdiction of the trial court under Sec. 41 of the Presidency Small Cause Courts Act.
4. Constitutional validity of the Maharashtra Amendment Acts of 1963 and 1976.
Summary:
1. Validity of the Quit Notice:
The respondent, a statutory body constituted under the Bombay Port Trust Act, 1879, issued a quit notice u/s 106 read with 111(h) of the Transfer of Property Act to terminate the tenancy of Vasantkumar. The appellants contended that the notice became ineffective as the State Act ceased to be operative from February 1, 1975, and the Central Act came into force. The Court held that the notice enures for the benefit of the successor in title of the lessor, and by operation of law, the respondent acquired the rights of the predecessor Board, making the quit notice valid and the suit for ejectment maintainable.
2. Doctrine of Promissory Estoppel:
The appellants argued that the respondent is estopped from ejecting them based on a promise made by the Estate Manager that they would be granted tenancy in the reconstructed building upon depositing a certain amount. The Court held that the Estate Manager lacked the authority to make such a promise, and even if made, it was subject to the approval of the Board, which was not granted. The doctrine of promissory estoppel cannot be applied to acts prohibited by law or beyond the authority of the officer making the promise. Therefore, the plea of promissory estoppel was rejected.
3. Jurisdiction of the Trial Court:
The appellants contended that the trial court lacked jurisdiction under Sec. 41 of the Presidency Small Cause Courts Act. The Court declined to entertain this point as it was neither raised in the writ petition nor argued in the High Court. It was also not included in the grounds of appeal or the synopsis of the case. Since it involved mixed questions of fact and law, the Court refused to consider it for the first time at this stage.
4. Constitutional Validity of the Maharashtra Amendment Acts:
The appellants challenged the vires of Sections 2, 3, and 4 of the Maharashtra Amendment Act, 1963, and the amended Sec. 46(2) of the Presidency Small Cause Courts Act as amended by the Maharashtra Amendment Act of 1976, arguing they offended Art. 14 of the Constitution. Although this point was raised in the grounds of appeal, it was not argued before the Court. The Court emphasized the need for full-dressed arguments on constitutional questions and declined to address this issue in the absence of such arguments.
Conclusion:
The appeal was dismissed, affirming the validity of the quit notice and rejecting the application of promissory estoppel. The Court also declined to entertain the jurisdictional challenge and the constitutional validity issue due to procedural lapses. The order of ejectment passed by the Small Cause Court was upheld.
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1990 (8) TMI 400
Issues Involved:
1. Applicability of the Minimum Wages Act to the Company.
2. Classification of the Company as an oil mill.
3. Compliance with sections 5 and 9 of the Minimum Wages Act.
4. Nature of the employees' categories under the Minimum Wages Act.
Issue-wise Detailed Analysis:
1. Applicability of the Minimum Wages Act to the Company:
The judgment addresses whether the Minimum Wages Act applies to the Company. The Company argued that it does not run an industry covered by the Act, contending that it manufactures vanaspati, not oil. However, the prosecution maintained that the factory is an oil mill, which is covered by the Act. The Court concluded that the Company is indeed covered by the Act, as it sells oil and refined oil in addition to vanaspati, making it an oil mill within the meaning of item 5 of Part I of the Schedule to the Act.
2. Classification of the Company as an Oil Mill:
The primary issue was whether the Company, which manufactures vanaspati, falls under the classification of an oil mill as per the Act. The Court found that vanaspati is essentially hydrogenated vegetable oil and retains the basic characteristics of oil despite undergoing various processes. Therefore, the Company, which sells oil and refined oil in addition to vanaspati, is classified as an oil mill. The Court emphasized that oil remains oil if it retains its essential properties, and the processes it undergoes do not convert it into a different substance.
3. Compliance with Sections 5 and 9 of the Minimum Wages Act:
The Company contended that it was not bound by the recommendations of the committees appointed under section 5 of the Act, as no representative of the vanaspati industry was included. The Court rejected this argument, stating that the Company was issued a questionnaire as an oil mill and had the opportunity to present its case. The Court noted that sections 5 and 9 were complied with, as the committees included representatives of oil mills, and the Company was invited to submit its views.
4. Nature of the Employees' Categories under the Minimum Wages Act:
The Company argued that it employs workers in connection with the hydrogenation process, who do not fall within the categories of skilled, semi-skilled, and unskilled employees covered by the Act. The Court dismissed this contention, noting that the Company failed to identify any employees outside these categories. The Court concluded that the specified categories exhaust the types of workers employed in any undertaking, barring specialists and technical experts not covered by the Act.
Conclusion:
The Court upheld the conviction and sentences imposed on the appellants under section 22A of the Minimum Wages Act. The appeals were dismissed, affirming that the Company is classified as an oil mill and is subject to the provisions of the Act. The Court found no merit in the arguments regarding non-compliance with sections 5 and 9 or the classification of employees. The sentences awarded were deemed appropriate, and no arguments were made to suggest they were excessive.
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