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2009 (8) TMI 1306
The appeal under Section 37(2)(b) of the Arbitration Act 1996 was filed against an arbitral tribunal's order dismissing the appellant's application and allowing the respondent's application, both under Section 17 of the Act. The appellant was a dealer for retail sale of petroleum products from premises owned by the respondent. Disputes arose leading to termination of the dealership, prompting arbitration proceedings. The appellant sought interim measures to resume sale and supplies during arbitration, while the respondent sought to restrain the appellant from interfering with its operations. The arbitrator found that allowing the appellant to operate during arbitration was not in public interest due to allegations of stock variation and tampering. The arbitrator decided that the respondent could operate the outlet during arbitration without creating third-party rights. The Court considered the principles applicable to an appeal under Section 37(2)(b), akin to those for an appeal against an order under Order 39 Rules 1 and 2 CPC. It emphasized that appellate interference is warranted only if the discretion was exercised perversely or contrary to law. The Court found no perversity in the arbitral tribunal's discretion under Section 17 of the Act. The appellant argued that previous interim orders favored them, but the Court noted such orders were ex parte and did not bind the arbitrator. The Court referenced a Supreme Court judgment stating interim orders are temporary and not precedents. The arbitrator was not bound by earlier interim orders, and the appellant's argument was dismissed. The appellant contended that the respondent's application under Section 17 was barred by a consent order, but the Court found no merit in this argument. The Court held that the order did not preclude the respondent from applying under Section 17, as no agreement existed barring such an application. The right under Section 17 is statutory and cannot be waived in the manner suggested by the appellant. The appellant argued the arbitrator failed to address possession, but the Court found the arbitrator's decision allowing the respondent to operate the outlet addressed this issue. The agreement indicated the respondent owned the land and equipment, and the appellant was merely a licensee. The arbitrator's order aligned with the agreement and protected the appellant's rights by prohibiting third-party rights until arbitration concluded. The appellant's argument for specific enforcement of the agreement was unsupported. The Court noted agreements of this nature are not specifically enforceable, and the remedy is for compensation. The arbitrator's decision to allow the respondent to operate the outlet, while preserving the appellant's right to compensation, was consistent with legal principles. The appellant challenged the arbitrator's reference to public interest, arguing equities favored them as a widow of a defense official. However, the Court upheld the arbitrator's concern for public interest, given allegations of tampering with measuring instruments. Allowing the appellant to operate could harm customers, who could not be compensated for short supply. The appellant raised the issue of the arbitrator being functus officio, arguing the mandate expired before the order. However, the Court found the appellant's conduct implied consent to extend arbitration, as they proceeded with their application under Section 17. The appellant could not challenge the arbitrator's mandate after seeking relief under the same proceedings. The Court noted the 1996 Act does not specify a time limit for awards, but the parties' conduct extended arbitration. The appellant did not raise the issue before the arbitrator or seek court intervention under Section 14. The appeal under Section 37 assumes ongoing arbitration proceedings, and the appellant's argument was deemed inconsistent. The Court dismissed the appeal, noting the appellant's reliance on earlier orders was misplaced. The appeal was dismissed with costs of Rs 35,000/- payable to the Delhi Legal Services Authority, with the respondent ensuring compliance during arbitration.
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2009 (8) TMI 1305
1. ISSUES PRESENTED and CONSIDERED The core legal questions considered in this judgment were: - Whether the imposition of the death penalty on the accused falls within the 'rarest of rare' doctrine.
- The admissibility and reliability of confessional statements under the Maharashtra Control of Organised Crime Act, 1999 (MCOCA).
- The validity of the Test Identification Parade (TIP) and its evidentiary value.
- The application of procedural justice and fairness standards in capital sentencing.
- Whether the High Court's acquittal of certain accused and substitution of death penalty with life imprisonment was justified.
2. ISSUE-WISE DETAILED ANALYSIS Capital Sentencing and 'Rarest of Rare' Doctrine: - Legal Framework and Precedents: The judgment revisits the principles established in Bachan Singh v. State of Punjab and subsequent cases, emphasizing a consistent and principled approach to capital sentencing.
- Court's Interpretation and Reasoning: The Court highlighted the necessity of procedural fairness and the rigorous application of the 'rarest of rare' test, emphasizing that the death penalty should only be imposed when life imprisonment is unquestionably foreclosed.
- Key Evidence and Findings: The Court found that the trial court had considered irrelevant factors in imposing the death penalty and failed to establish that life imprisonment was foreclosed.
- Application of Law to Facts: The Court concluded that the circumstances did not justify the death penalty, given the lack of prior convictions and the acquittal by the High Court.
- Treatment of Competing Arguments: The Court rejected the State's argument that the criminal history of the accused warranted the death penalty, emphasizing the presumption of innocence.
- Conclusions: The appeals for the imposition of the death penalty were dismissed, and the sentences were reduced to life imprisonment.
Admissibility of Confessional Statements under MCOCA: - Legal Framework and Precedents: Section 18 of MCOCA allows confessions made to police officers to be admissible, provided they are recorded following specific procedures.
- Court's Interpretation and Reasoning: The Court found that the confessions were recorded in compliance with MCOCA, despite minor procedural irregularities.
- Key Evidence and Findings: The Court relied on the confessional statements of the accused and co-accused, which were corroborated by other evidence.
- Application of Law to Facts: The confessional statements were deemed admissible and formed the basis for conviction under MCOCA.
- Treatment of Competing Arguments: The Court rejected the argument that the confessions were inadmissible due to the absence of a mandatory certificate, finding substantial compliance with the law.
- Conclusions: The confessional statements were upheld as valid evidence, supporting the convictions of the accused.
Validity of Test Identification Parade (TIP): - Legal Framework and Precedents: TIPs are not substantive evidence but serve to corroborate in-court identifications.
- Court's Interpretation and Reasoning: The Court found the TIPs to be reliable, despite some delays and procedural challenges.
- Key Evidence and Findings: Several witnesses identified the accused in TIPs, corroborating their in-court identifications.
- Application of Law to Facts: The Court held that the TIPs were conducted within a reasonable timeframe and were not vitiated by procedural lapses.
- Treatment of Competing Arguments: The Court dismissed arguments about the TIPs' validity due to alleged irregularities, emphasizing the corroborative nature of in-court identifications.
- Conclusions: The TIPs were accepted as corroborative evidence, supporting the identification of the accused.
3. SIGNIFICANT HOLDINGS - The Court reiterated the principles of the 'rarest of rare' doctrine, emphasizing the need for procedural fairness and the presumption of innocence.
- The Court upheld the admissibility of confessional statements under MCOCA, even in the absence of a mandatory certificate, provided there was substantial compliance with the law.
- The Court confirmed that TIPs serve as corroborative evidence and found the identifications made in TIPs to be reliable.
- The Court dismissed the State's appeals for the imposition of the death penalty and upheld the sentences of life imprisonment for the accused.
- The Court emphasized the importance of a consistent and principled approach to capital sentencing, grounded in procedural justice and fairness.
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2009 (8) TMI 1304
The appellants were allowed to withdraw the writ petition and the appeal without expressing a view on their right to approach the FIPB. The order of the learned single Judge was set aside, and the appeal was dismissed as withdrawn. The Writ Petition (Civil) No. 5633-34/2006 was disposed of as the authorities passed an order on the representation made by the respondents.
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2009 (8) TMI 1303
Issues Involved:
1. Validation of transactions under Section 536(2) of the Companies Act.
2. Mortgage and hypothecation rights of secured creditors.
3. Burden of proof for validation of transactions.
4. Consequences of validation on secured creditors' rights.
5. Evaluation of transaction genuineness and bonafides.
6. Consideration of equitable principles for transaction validation.
7. Procedural directions for handling company assets in liquidation.
Detailed Analysis:
1. Validation of Transactions Under Section 536(2) of the Companies Act:
The primary issue revolves around the applicant's request to validate a transaction under Section 536(2) of the Companies Act, which typically renders any disposition of company property after the commencement of winding-up proceedings void unless the court orders otherwise. The court emphasized that the legislative intent is to treat such transactions as void, with exceptions only when transactions are genuine and bonafide. The applicant bears the burden of proving that the transaction is genuine, bonafide, and not in contravention of statutory provisions.
2. Mortgage and Hypothecation Rights of Secured Creditors:
The court examined the rights of the secured creditor, Bank of Baroda, which had a mortgage and hypothecation over the company's assets, including the plant and machinery in question. The court found that the applicant's contention that the property was not mortgaged was unsupported by evidence. The registration of charge and the affidavit from the bank confirmed the mortgage, and the sale without the bank's consent was deemed to frustrate the bank's rights.
3. Burden of Proof for Validation of Transactions:
The court highlighted that the applicant failed to discharge the burden of proof required for validating the transaction. The invoice lacked details of actual delivery, and there was no evidence of exclusive possession or crediting of the sale consideration to the company's account. The absence of sufficient proof led the court to conclude that the transaction was neither genuine nor bonafide.
4. Consequences of Validation on Secured Creditors' Rights:
The court noted that validating the transaction would adversely affect the rights of the secured creditor, Bank of Baroda, which held the first charge over the property. Such validation would counter the enforcement of the bank's legal rights and was not aligned with the legislative intent of Section 536(2).
5. Evaluation of Transaction Genuineness and Bonafides:
The court assessed the transaction's genuineness and bonafides, finding neither element satisfied. The applicant's failure to demonstrate the transfer of consideration to the company's corpus and the lack of evidence for exclusive possession undermined the claim of a genuine transaction.
6. Consideration of Equitable Principles for Transaction Validation:
The court reiterated that validation of transactions under Section 536(2) should be based on equitable and just considerations. The transaction must be in the ordinary course of business or arise from extreme necessity, neither of which was demonstrated in this case. The court referenced principles from previous judgments, emphasizing the need for bona fide transactions without notice of winding-up proceedings.
7. Procedural Directions for Handling Company Assets in Liquidation:
The court addressed various procedural aspects related to the handling of company assets in liquidation. It directed the Official Liquidator (OL) to conduct fresh valuations and issue advertisements for the sale of assets, ensuring the interests of the company and creditors are protected. The court also provided directions for the apportionment of sale proceeds and the handling of disputes over asset ownership.
In conclusion, the court dismissed the application for transaction validation, affirming the statutory presumption of voidity under Section 536(2) of the Companies Act. The court's decision was grounded in the lack of evidence for transaction genuineness, the adverse impact on secured creditors' rights, and the failure to meet the burden of proof.
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2009 (8) TMI 1302
Issues Involved:
1. Contravention of provisions of section 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973.
2. Failure to take reasonable steps for realization of export proceeds.
3. Adverse legal presumption under section 18(3) of the Foreign Exchange Regulation Act, 1973.
4. Adequacy of steps taken by the appellants to recover outstanding dues.
5. Quantum of penalty imposed.
Issue-wise Detailed Analysis:
1. Contravention of provisions of section 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973:
The appeals were filed against the Adjudication Order imposing penalties for contravention of section 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973. The appellant-company and its directors were penalized for failing to take reasonable steps to realize export proceeds amounting to US $2,53,429.99 from M/s. Bangladesh Power Development Board (BPDB), Dhaka. The exports were made during 1993-94, and 10% of the total invoice value remained unpaid.
2. Failure to take reasonable steps for realization of export proceeds:
The appellants argued that they took reasonable steps for the realization of the outstanding dues. They provided details of their efforts, including entering into a contract with BPDB, supplying goods as per specifications, and addressing objections raised by BPDB regarding the quality of materials supplied. Despite these efforts, BPDB did not release the remaining 10% of the proceeds and invoked bank guarantees.
3. Adverse legal presumption under section 18(3) of the Foreign Exchange Regulation Act, 1973:
Under section 18(3) of the Foreign Exchange Regulation Act, 1973, an adverse legal presumption is raised against the exporter if the export price is not repatriated within the prescribed period. The Tribunal noted that the export price was not repatriated, raising an adverse legal presumption against the appellants. The appellants were required to rebut this presumption by proving that they took all reasonable steps to recover the payments.
4. Adequacy of steps taken by the appellants to recover outstanding dues:
The Tribunal examined whether the steps taken by the appellants were reasonable. The appellants claimed to have rectified the defects in the supplied goods and initiated legal proceedings against BPDB. However, the Tribunal found that there was no documentary evidence to support the rectification of defects and that the legal proceedings were not effective. The Tribunal concluded that the steps taken by the appellants were routine and casual, and did not constitute reasonable efforts to recover the outstanding dues.
5. Quantum of penalty imposed:
The Tribunal considered the quantum of the penalty imposed against the appellants. It noted that the penalty amount was commensurate with the violations and was not harsh or excessive. The Tribunal upheld the penalty against the appellant-company but absolved the partners from any penalty, citing a ruling by the Hon'ble High Court of Kolkata that a partnership firm and its partners cannot be held guilty for the same contravention simultaneously.
Conclusion:
The Tribunal upheld the penalty imposed against the appellant-company for contravening the provisions of section 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973. It found that the appellants failed to take reasonable steps to realize the export proceeds and could not rebut the adverse legal presumption raised against them. The partners of the appellant-firm were absolved from any penalty, and the appellants were directed to deposit the balance amount of the penalty within 15 days.
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2009 (8) TMI 1301
Issues:
Jurisdiction of Appellate Tribunal for Foreign Exchange under section 52(4) FER Act, 1973; Legality, propriety, and correctness of adjudication order; Authorization for filing revision petition by Deputy Legal Adviser; Abuse of process by Enforcement Directorate; Service of notice on respondents; Delay in filing revision petition.
Analysis:
The Appellate Tribunal for Foreign Exchange was tasked with examining the legality, propriety, and correctness of an adjudication order issued by the Additional Commissioner of Central Excise exonerating a party from allegations of contravening the FER Act, 1973. The Enforcement Directorate filed a revision petition challenging this order, invoking the tribunal's jurisdiction under section 52(4) of the Act. The revision petition was filed after about 6 months, raising questions about the timeliness of the appeal.
The revision petition was signed by the Deputy Legal Adviser, Shri T.K. Gadoo, without clear authorization from the Central Government under Article 77 of the Constitution of India. The Enforcement Directorate argued that the impugned order was perverse and warranted revision, even though the authorization for filing the petition was not established. The tribunal, however, noted that it possessed suo moto powers of revision, which could be exercised in the absence of explicit authorization.
The respondent contended that the filing of the revision petition was an abuse of process and challenged the legality of the petition. The tribunal delved into the constitutional provisions governing executive actions of the Government of India, emphasizing the need for proper authorization for such actions. It was highlighted that the filing of the revision petition under the signature of the Deputy Legal Adviser lacked the necessary delegation of authority, rendering it procedurally flawed.
Furthermore, issues regarding the service of notice on respondents and the delay in filing the revision petition were raised. The tribunal observed that all respondents were not effectively served, casting doubts on the maintainability of the petition. Additionally, the unexplained delay of 6 months in filing the petition was deemed unjustified, especially in the absence of complex factual considerations necessitating such a delay.
Ultimately, the tribunal dismissed the revision petition on grounds of procedural irregularities, lack of proper authorization for filing, failure to serve all respondents, and unjustified delay. The decision highlighted the importance of adhering to procedural requirements and timely filing of appeals in legal proceedings.
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2009 (8) TMI 1300
Issues Involved:
1. Contravention of provisions of Section 3(b) and 3(c) of the Foreign Exchange Management Act, 1999.
2. Legality of the confessional statements and their retraction.
3. Seizure of Indian Currency and documents.
4. Admissibility of confessional statements as evidence.
5. Opportunity of cross-examination of witnesses.
6. Standard of proof required in quasi-criminal proceedings.
Issue-wise Detailed Analysis:
1. Contravention of Provisions of Section 3(b) and 3(c) of FEMA, 1999:
The appellant was penalized for contravention of Section 3(b) and 3(c) of the Foreign Exchange Management Act, 1999. The investigation revealed that the appellant made payments totaling Rs. 51 lakhs to various bookies for the credit of persons resident outside India without RBI's permission, thus violating Section 3(d) of FEMA, 1999. Additionally, the appellant received Rs. 2,50,000/- from Ashok Kamdar on behalf of a Pakistani national, contravening Section 3(c).
2. Legality of the Confessional Statements and Their Retraction:
The appellant argued that the confessional statements were forcibly recorded and retracted them immediately. The Tribunal, however, found the retraction to be an afterthought, unsupported by evidence of coercion. The Tribunal emphasized that the voluntary nature of any statement is critical, referencing the Supreme Court's ruling in Vinod Solanki v. Union of India, which mandates that confessional statements must be corroborated by independent evidence.
3. Seizure of Indian Currency and Documents:
The Enforcement Directorate seized Rs. 2,50,000/- from the appellant's residence and Rs. 4,00,000/- from his business premises. The Tribunal noted that the seized currency and documents corroborated the appellant's involvement in hawala transactions. The appellant's failure to explain the large sums involved led to an adverse inference against him.
4. Admissibility of Confessional Statements as Evidence:
The Tribunal held that statements recorded by Enforcement Directorate officers are substantive pieces of evidence. The Supreme Court's judgment in Kanhaiyalal v. Union of India was cited, affirming that such statements are admissible if made voluntarily. The Tribunal found the appellant's statements to be voluntary and corroborated by other evidence, thus admissible.
5. Opportunity of Cross-Examination of Witnesses:
The appellant contended that the impugned order was passed without allowing cross-examination of witnesses. The Tribunal dismissed this argument, referencing the Supreme Court's ruling in Surjit Singh Chhabra v. UOI, which states that cross-examination is not a right and can be denied if not justified by specific reasons or circumstances.
6. Standard of Proof Required in Quasi-Criminal Proceedings:
The Tribunal emphasized that the standard of proof in quasi-criminal proceedings like this one does not require mathematical precision but a degree of probability that a prudent person would believe. The Tribunal cited the Supreme Court's judgment in Collector of Customs, Madras v. D. Bhoormull, which allows for an inference of guilt based on the probability of the case and the inability of the accused to explain incriminating facts within their knowledge.
Conclusion:
The Tribunal upheld the Adjudicating Officer's order, finding the appellant guilty of violating Sections 3(b) and 3(c) of FEMA, 1999. The penalty imposed was deemed commensurate with the violations, and the appeal was dismissed. The appellant was directed to deposit the balance penalty amount within 15 days, failing which recovery would proceed as per law.
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2009 (8) TMI 1299
Issues: Jurisdiction of the Appellate Tribunal under Section 52(4) of Foreign Exchange Regulation Act, 1973; Procedural irregularities in filing the revision petition; Authority to file the revision petition in the name of Union of India; Delay in filing the revision petition; Service of notice on respondents.
The judgment delivered by the Appellate Tribunal for Foreign Exchange, New Delhi pertains to a revision petition filed by the Enforcement Directorate against five respondents challenging an Adjudication Order exonerating the respondents from contravention of certain sections of the Foreign Exchange Regulation Act, 1973. The Enforcement Directorate invoked the revisional jurisdiction of the Tribunal under Section 52(4) of the Act to examine the legality of the Adjudication Order. The revision petition was filed after a significant delay of almost one year without any explanation for the delay, and certain discrepancies were noted in the filing. The respondents neither appeared nor were represented throughout the proceedings despite repeated notices and adjournments.
The Tribunal highlighted the procedural irregularities in the filing of the revision petition. It was observed that the petition lacked signatures and was filed under the name of an individual who was not authorized to represent the Union of India or the Enforcement Directorate. The Tribunal emphasized the necessity of proper authorization and delegation of power for filing such petitions on behalf of the government. Reference was made to constitutional provisions regarding the authority to sue or be sued in the name of the Union of India, emphasizing the need for adherence to established rules and procedures. The lack of delegation of authority to the individual filing the petition was considered a serious procedural flaw.
Another significant issue addressed in the judgment was the delay in filing the revision petition and the failure of the Enforcement Directorate to provide a valid reason for the delay. Despite multiple adjournments, no satisfactory explanation was presented for the delay exceeding 11 months. Additionally, the Tribunal noted the incorrect address provided for the respondents, who had reportedly moved from the stated address several years prior to the filing of the petition. This further highlighted the lack of diligence on the part of the Enforcement Directorate in pursuing the matter effectively.
In light of the procedural irregularities, lack of proper authorization, significant delay, and failure to serve notice on the respondents effectively, the Tribunal concluded that the revision petition was not maintainable and ordered its dismissal. The Tribunal emphasized the importance of adherence to procedural requirements and the necessity of valid authorization when filing petitions on behalf of governmental bodies. The judgment underscored the need for diligence and compliance with legal formalities in such matters to ensure the integrity and validity of legal proceedings.
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2009 (8) TMI 1298
Issues: Jurisdiction of Appellate Tribunal under FER Act, 1973; Validity of revision petition filed by Enforcement Directorate; Service of notice on respondents; Authority to file revision petition under the name of Union of India; Procedural correctness of filing revision petition by Assistant Legal Adviser; Maintaining addresses of respondents for service of notice.
In this judgment by the Appellate Tribunal for Foreign Exchange, New Delhi, the Tribunal was approached through a revision petition by the Enforcement Directorate challenging an adjudication order exonerating the respondents from allegations related to acquisition and deposit of foreign exchange in contravention of various sections of the FER Act, 1973 and the Exchange Control Manual. The Tribunal was tasked with examining the legality, propriety, and correctness of the adjudication order in question. The respondents, particularly respondent Nos. 1 and 3, faced issues with the service of notice and the correctness of their identification in the proceedings. Despite repeated attempts by the Tribunal to ensure effective service on the respondents, they remained absent and unrepresented throughout the proceedings, leading to doubts about the validity of the process.
The Tribunal deliberated on the authority behind the filing of the revision petition by the Enforcement Directorate. It was noted that the revision petition was filed in the name of the Union of India but signed by an Assistant Legal Adviser (ALA) without clear authorization or delegation of authority on record. The Tribunal analyzed constitutional provisions regarding the expression of executive actions by the Government of India and the necessity for proper authorization for such actions. It was concluded that the filing of the revision petition by the ALA without demonstrated authority was procedurally incorrect and lacked the necessary support for such an executive action.
Furthermore, the issue of maintaining addresses of respondents for the service of notice was raised. The Enforcement Directorate failed to assert the availability of the respondents at the addresses provided in the revision petition, leading to doubts about the effectiveness of the service of notice. Despite requests for additional adjournments by the ALA, the Tribunal found it unjustified to delay proceedings when the addresses of the respondents were not confirmed. Ultimately, the Tribunal dismissed the revision petition as not maintainable and ordered its rejection, emphasizing the need for procedural correctness in such legal actions.
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2009 (8) TMI 1297
Issues:
- Contravention of provisions of section 9(1)(e) of the Foreign Exchange Regulation Act, 1973
- Contravention of provisions of section 8(1) of the Foreign Exchange Regulation Act, 1973
Analysis:
1. The appeals were filed against the Adjudication Order imposing penalties for contravention of FER Act provisions. The appellants initially challenged the pre-deposit order but complied with the High Court's directive to deposit 30% of the penalty amount. The appeals were now considered for final disposal on merits.
2. The Show-Cause Notices were issued for placing a sum to the credit of a company outside India and for acquiring and transferring foreign exchange in contravention of FER Act provisions. Investigations revealed the involvement of the director in contravention activities, leading to seizure of documents and statements recorded under FER Act.
3. The appellant argued that charges were wrongly imposed, explaining a consignment scenario and justifying the accounting entries. The written submissions emphasized misinterpretation of accounts, absence of RBI permission, and professional rivalry influencing complaints against the appellants.
4. Section 9(1)(e) prohibits placing sums to the credit of persons outside India without RBI permission. The appellant's waiver of the amount owed to a foreign entity raised questions, as unilateral actions without RBI involvement led to adverse inferences against the appellants.
5. Regarding foreign exchange acquisition and transfer, the appellant claimed to act as an agent for the company's interests. However, the documents and statements indicated direct involvement in remittances and transactions, violating FER Act restrictions under Section 8(1).
6. The maturity amount of an insurance policy was repatriated, providing relief to the appellant in one instance. Despite justifications, the tribunal found the charges under sections 9(1)(e) and 8(1) proven, emphasizing the seriousness of economic offenses and the need for justice in such cases.
7. The tribunal upheld the impugned order, deeming the penalty appropriate and not excessive. The dismissal of the appeal was based on the confirmed contraventions and the need for penalty payment within a specified timeframe to avoid further recovery actions by the respondent.
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2009 (8) TMI 1296
Issues:
Dismissal of appeals for non-compliance with pre-deposit order under Section 19(1) FEM Act, 1999.
Analysis:
The judgment by the Appellate Tribunal for Foreign Exchange involved the dismissal of six review petitions filed for recalling an order dated 26.3.2008 due to non-compliance with a pre-deposit order. The appeals were against Adjudication Orders imposing penalties under the Foreign Exchange Management Act, 1999. The Tribunal dismissed the appeals for failing to comply with the pre-deposit order, which was modified by the High Court of Madras. The appeals were filed under Section 19 FEM Act, 1999, and the Tribunal noted a typographical error in quoting Section 52(2) FER Act, 1973, instead of Section 19(1) FEM Act, 1999. The Tribunal highlighted the stringent pre-deposit scheme under Section 19(1) FEM Act, 1999, emphasizing the need to safeguard penalty realization.
The statutory scheme under Section 19(1) FEM Act, 1999, mandates every appellant to make a pre-deposit of penalty unless dispensation is granted by the Tribunal to prevent undue hardship. The Tribunal is empowered to allow dispensation with or without conditions. The judgment referenced legal precedents emphasizing that dispensation should be granted when the impugned order is legally flawed or when the appellant faces financial constraints. The Tribunal's duty is to ensure penalty recovery by imposing suitable conditions as per the Second Proviso of Section 19(1) FEM Act, 1999.
The factual scenario revealed that the appellants failed to comply with the pre-deposit order dated 14.3.2007, despite opportunities granted by the High Court of Madras and subsequent legal proceedings. The appellants did not make any pre-deposit as required, leading to the dismissal of their appeals. The Tribunal found no grounds for review, as the appellants failed to establish any errors apparent on the face of the record or present fresh evidence with a substantial impact on the decision. The dismissal of the review petitions was upheld, and the order was passed accordingly, maintaining the original decision to dismiss the appeals for non-compliance with the pre-deposit order.
In conclusion, the judgment underscores the importance of compliance with pre-deposit orders under the FEM Act, 1999, and the Tribunal's authority to grant dispensation in cases of undue hardship. The appellants' failure to adhere to the pre-deposit requirements resulted in the dismissal of their appeals, highlighting the significance of procedural compliance in legal proceedings before the Appellate Tribunal for Foreign Exchange.
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2009 (8) TMI 1295
Issues:
Violation of section 9(1)(a) of the Foreign Exchange Regulation Act, 1973.
Analysis:
1. The appeal was filed against an Adjudication Order imposing a penalty for contravention of section 9(1)(a) of the FERA, 1973. The appellant had made partial payment of the penalty amount. The main argument was that the payment made was not to a person resident outside India but to a Chartered Accountant, thus falling under a different section of the Act.
2. The Show-Cause Notice alleged that the appellant made a payment to a person resident outside India without permission, which violated section 9(1)(a) of the FERA. The appellant argued that the payment was made to a Chartered Accountant for the original amount, not directly to a foreign resident. It was contended that the offense, if any, should fall under a different section of the Act, not 9(1)(a).
3. Section 9(1)(a) of the FERA, 1973, prohibits making payments to or for the credit of any person resident outside India without permission from the RBI. The statutory scheme under this section is clear that such payments require authorization.
4. The appellant admitted to receiving a demand draft from a foreign resident's NRE account and making a payment through a Chartered Accountant. Statements from the Chartered Accountant and another individual corroborated the appellant's admission. The evidence supported the charge under section 9(1)(a) of the FERA.
5. The appellant retracted his confession, alleging coercion, but failed to provide evidence to support this claim. Legal precedents were cited to establish that a retracted confession can be valid if proven voluntary and corroborated by other evidence, which was the case here.
6. The Tribunal found that the ingredients of section 9(1)(a) were proven, and the appellant was rightly held guilty. However, considering the circumstances, the penalty amount was deemed excessive, and it was reduced to the amount already deposited by the appellant. The appeal was partly allowed, and the pre-deposited amount was to be appropriated towards the penalty.
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2009 (8) TMI 1294
The Supreme Court granted leave and directed the de-sealing and examination of two laptops by the IT Department and EMAAR-MGF Group representatives. Data related to specific entities to be copied, with authenticated hard copies provided for EMAAR-MGF Group. Other data may be inspected but not copied unless connected to EMAAR-MGF Group. S.R. Batliboi & Co. can consent or challenge IT Department's claim, with provision for making available hard copies if challenge fails. The Civil Appeal was disposed of with the question of law kept open. No costs were awarded.
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2009 (8) TMI 1293
The Supreme Court directed the de-sealing and examination of two laptops by the IT department to verify data related to specific entities. The IT department can copy data of certain folders/files, and authenticated hard copies of data pertaining to EMAAR-MGF group must be provided. Other data can be inspected but not copied unless connected to EMAAR-MGF group. S.R. Batliboi & Co. can consent or challenge IT department's claims, with the civil appeal disposed of accordingly.
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2009 (8) TMI 1292
Issues involved: Determination of fair market value for acquired agricultural lands, consideration of settlement in Lok Adalat for valuation, application of legal principles for compensation calculation.
Summary:
Issue 1: Determination of fair market value
The appellants owned agricultural lands in New Delhi, subject to acquisition by the Union of India. The Land Acquisition Collector categorized the lands into three groups and fixed market values. The appellants sought enhancement of compensation, leading to the Reference Court assessing the fair market value higher. The High Court, however, determined a different value based on various factors including location, development potential, and land quality.
Issue 2: Settlement in Lok Adalat
A contention was raised regarding a Lok Adalat settlement where the market value of similar land was fixed at a certain amount. The High Court considered this settlement but ultimately based its decision on legal principles established by previous court judgments. The settlement was not considered a valid basis for determining fair market value due to lack of detailed particulars and similarity assessment of the lands involved.
Issue 3: Application of legal principles
The Supreme Court emphasized the importance of considering various factors such as land location, development potential, and positive/negative aspects while determining fair market value. Legal precedents highlighted the need for a thorough evaluation based on established principles rather than relying solely on settlements or agreements. The Court dismissed the appeals, affirming the High Court's decision based on legal principles and lack of appeal information from a related case.
In conclusion, the Supreme Court upheld the High Court's decision on fair market value determination for the acquired lands, emphasizing the significance of legal principles over settlements like the one in Lok Adalat. The judgment highlighted the complex factors involved in assessing compensation for land acquisition, underscoring the need for a comprehensive evaluation based on established legal norms.
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2009 (8) TMI 1291
Issues involved: Common issues of facts and law involved in two appeals arising from a common judgment regarding the validity and applicability of government notifications related to royalty rates for mining activities.
L.P.A. No. 793 of 2002:
The appellant held a lease for mining pebbles from a river basin under the Bihar Minor Mineral Concession Rules, 1972. Dispute arose over the retrospective application of royalty rates as per government notifications dated 24.3.2001 and 26.12.2001. The appellant challenged the demand notices and subsequent orders, claiming that the higher royalty rate should apply only from 26.12.2001, not retrospectively from 1.4.2001.
The High Court analyzed the notifications and expert committee reports. The Court noted that the appellant did not contest the validity of the notifications but disputed the retrospective application of the higher royalty rate. Relying on legal precedents, the Court held that the higher rate could not be enforced prior to 26.12.2001. The Court emphasized the importance of notification dates in determining the applicability of royalty rates, ensuring fairness to the lessees.
The Court referred to a Supreme Court judgment to support its decision, highlighting the potential injustice if the higher rate was applied for the period before the final notification date. The Court concluded that the appellant should pay the increased royalty rate from 26.12.2001 onwards, not retrospectively from 24.3.2001. Consequently, the Court allowed L.P.A. No. 793 of 2002, setting aside the previous orders and modifying the judgment in favor of the appellant.
L.P.A. No. 893 of 2002:
Similar to the previous appeal, this case involved a lessee challenging the retrospective application of royalty rates as per government notifications. The Court found the issues and arguments to be identical to the previous appeal. Consequently, the order of the appellate authority was set aside, and the judgment of the Single Judge was modified in favor of the appellant.
In conclusion, both L.P.A. No. 793 of 2002 and L.P.A. No. 893 of 2002 were allowed by the High Court. The appellants were directed to pay the revised royalty rates from 26.12.2001 onwards, with adjustments for amounts already deposited. No costs were awarded in the circumstances of the case.
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2009 (8) TMI 1290
Issues Involved:
1. Legality of the extensions granted u/s 36A(4) of the Narcotic Drugs and Psychotropic Substances Act, 1985.
2. Entitlement of the appellant to bail under Section 167(2) of the Code of Criminal Procedure, 1973.
Summary:
Issue 1: Legality of the Extensions Granted u/s 36A(4) of the Act
The appellant was arrested on 12th February 2007 for offences punishable u/s 24, 29, 30, and 38 of the Narcotic Drugs and Psychotropic Substances Act, 1985. The Narcotics Control Bureau (NCB) filed applications for extensions of time to complete the investigation and file a complaint, which were granted by the Special Judge on 2nd August 2007 and 30th January 2008. The appellant contended that these extensions did not satisfy the conditions laid down in Section 36A(4) of the Act, specifically that they were granted without notice to the accused and did not constitute valid reports of the public prosecutor. The Supreme Court found that the applications did not indicate any application of mind by the public prosecutor, did not show the progress of the investigation, nor the compelling reasons for the extension. The Court held that the extensions granted were contrary to law and must be struck down.
Issue 2: Entitlement to Bail under Section 167(2) of the Code
The appellant filed an application for bail on 4th February 2008, arguing that the investigation had not been completed within the stipulated period. The Special Judge rejected this application on 13th February 2008, and the High Court dismissed the appellant's challenge to this order. The Supreme Court noted that the High Court had deviated from the categorical directions given in the case of Hitendra Vishnu Thakur v. State of Maharashtra, which required notice to the accused and a proper report from the public prosecutor for any extension beyond 180 days. The Supreme Court found that the extensions granted were invalid, and thus the appellant was entitled to bail.
Conclusion:
The Supreme Court allowed the appeal, set aside the orders of the Special Judge dated 13th February 2008 and the High Court dated 5th September 2008, and directed that the appellant be released on bail.
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2009 (8) TMI 1289
Issues Involved:
1. Entitlement to maintain a suit for infringement and passing off.
2. Validity of the plaintiff's registration as the proprietor of the trade mark.
3. Applicability of Sections 27, 28, 29, 45, and 53 of the Trade Marks Act, 1999.
4. Grant of interlocutory reliefs.
5. Validity of the assignment deed and non-joinder of necessary parties.
6. Leave under Clause 14 of the Letters Patent.
Detailed Analysis:
1. Entitlement to Maintain a Suit for Infringement and Passing Off:
The plaintiff sought to join the cause of action for passing off with the cause of action for infringement of a trade mark and for a combined trial of these issues. The court noted that if the plaintiff is entitled to maintain the suit on the cause of action pleaded, it would be entitled to leave under Clause 14 of the Letters Patent.
2. Validity of the Plaintiff's Registration as the Proprietor of the Trade Mark:
The plaintiff claimed ownership of the trade mark "HAYWARDS 5000" via a Deed of Assignment from defendant No. 2. The registration of the plaintiff as the subsequent proprietor was challenged on grounds that the application was signed only by defendant No. 2 and not by Shaw Wallace Distilleries Ltd., which was alleged to be a joint owner.
3. Applicability of Sections 27, 28, 29, 45, and 53 of the Trade Marks Act, 1999:
- Section 27: Bars the institution of proceedings for infringement of an unregistered trade mark. The court clarified that this bar does not apply to a registered trade mark being protected by an assignee pending registration as the proprietor.
- Section 28: Grants exclusive rights to the registered proprietor to use the trade mark and obtain relief for infringement. The court held that interlocutory reliefs could be granted to an assignee pending registration under Section 45.
- Section 45: Allows for the registration of assignments and transmissions. The court emphasized that the acquisition of title by assignment precedes the application for registration and that the court has discretion to admit documents in evidence even if not yet registered.
- Section 53: Bars proceedings for infringement by a permitted user but does not apply to an assignee pending registration.
4. Grant of Interlocutory Reliefs:
The court held that interlocutory reliefs could be granted to an assignee of a registered trade mark even if their application under Section 45 is pending. The court can exercise discretion to admit documents in evidence and grant relief based on a prima facie case.
5. Validity of the Assignment Deed and Non-Joinder of Necessary Parties:
The court rejected the submission that the assignment deed was invalid due to the absence of Shaw Wallace Distilleries Ltd.'s signature on the application under Section 45. The court noted that the document as a whole indicated that the trade marks were owned by different entities and not all were inadvertently assigned to Shaw Wallace Distilleries Ltd. The court emphasized the importance of pleadings and rejected the contention based on a lack of factual basis.
6. Leave Under Clause 14 of the Letters Patent:
The court granted leave under Clause 14 of the Letters Patent, allowing the plaintiff to join the cause of action for passing off with the cause of action for infringement and for a combined trial of these issues.
Conclusion:
The court made the petition absolute in terms of prayer (a), allowing the plaintiff to maintain the suit and granting the necessary leave. The costs were to be costs in the cause.
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2009 (8) TMI 1288
Issues involved: Cross appeals arising out of CIT(A)'s order for A.Y. 2003-04.
Assessee's appeal (ITA no. 1603/Del/09):
Issue 1 - Ground no. 1:
The claim of the assessee for interest on excess sugar price for 1978-79 and 1979-80.
- Assessee claimed interest accrued on deposits of excess sugar price not to be treated as income.
- AO disallowed the claim citing previous disallowance.
- CIT(A) directed AO to decide in accordance with ITAT's direction for A.Y. 1999-2000.
- Tribunal found issue in favor of assessee based on earlier orders, allowed the claim.
Issue 2 - Ground no. 2:
Assessee's claim for interest liability on excess sugar price realization.
- Assessee claimed exclusion of interest accrued from taxable income.
- AO disallowed claim citing previous disallowance.
- CIT(A) directed AO to decide in accordance with ITAT's direction for A.Y. 1999-2000.
- Tribunal found issue in favor of assessee based on earlier orders, allowed the claim.
Issue 3 - Ground no. 3:
Disallowed claim of bad debt written off.
- Assessee did not press this ground, so it was dismissed.
Issue 4 - Ground no. 4:
Treatment of interest income as income from other sources instead of business income.
- Assessee's detailed arguments were not considered by CIT(A).
- Tribunal deemed the ground premature, directed assessee to approach CIT(A) first.
Revenue appeal (ITA no. 1785/Del/2009):
Issue 1 - Ground no. 1:
Disallowed interest on late payment of PF.
- AO made disallowance based on previous assessment.
- CIT(A) deleted the disallowance.
- Tribunal upheld CIT(A)'s decision based on previous orders.
Issue 2 - Ground no. 2:
Disallowed interest on interest-free loans to bodies corporate.
- AO made disallowance based on previous assessment.
- CIT(A) deleted the disallowance.
- Tribunal upheld CIT(A)'s decision based on previous orders.
In conclusion, assessee's appeal was partly allowed, and revenue's appeal was dismissed.
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2009 (8) TMI 1287
Issues Involved:
1. Validity of the notification dated 07.01.2009.
2. Clarification regarding the use of non-woven bags.
3. Classification of non-woven polypropylene bags as plastic bags.
Summary:
1. Validity of the Notification Dated 07.01.2009:
The notification dated 07.01.2009, issued by the Lt. Governor of the National Capital Territory of Delhi u/s 5 of the Environment (Protection) Act, 1986, forbade the use, sale, and storage of all kinds of plastic bags in specified areas such as hotels, hospitals, restaurants, malls, and main markets. This notification was challenged in WP(C) 883/2009, where the Division Bench upheld its validity, stating, "The limitations imposed are in public interest and have, apparently, been enforced in several other parts of India also."
2. Clarification Regarding the Use of Non-Woven Bags:
The Department of Environment, Government of NCT of Delhi, issued a clarification on 20.02.2009 regarding the use of non-woven bags, stating that they contained 98.3% polypropylene, a non-biodegradable material. The clarification concluded that such bags fall within the ambit of the High Court's order and should not be allowed in local shopping complexes and main markets.
3. Classification of Non-Woven Polypropylene Bags as Plastic Bags:
The petitioner argued that non-woven bags made of fibre grade propylene should not be classified as plastic bags since they are breathable, porous, and do not choke the sewage system. However, the court noted that the non-woven bags comprised 98.3% polypropylene, which is a plastic material. The court stated, "Whether it is polypropylene fibre or it is polypropylene film, the end product made out of it would remain to be plastic." Thus, non-woven polypropylene bags fall within the expression "plastic bags" as per the notification dated 07.01.2009.
Conclusion:
The court dismissed the writ petition, concluding that non-woven polypropylene bags are plastic bags and fall under the prohibition outlined in the notification dated 07.01.2009. The court emphasized that the clarification dated 20.02.2009 was unnecessary since the notification already covered "all kinds of plastic bags," making the biodegradability of the bags irrelevant. The petitioner's argument that non-woven polypropylene bags are an alternative to plastic bags was also rejected.
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