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1991 (9) TMI 373
Issues Involved:
1. Application under Section 482 of the Code of Criminal Procedure for quashing criminal proceedings.
2. Allegations of false representations and inducement under Sections 420, 467, 471, and 477A of the Indian Penal Code.
3. Jurisdiction and maintainability of prosecution against corporate entities.
4. Nature and scope of inherent powers of the High Court under Section 482 of the Code of Criminal Procedure.
5. Examination of prima facie evidence and allegations.
6. Determination of whether the dispute is of civil or criminal nature.
7. Suppression of material facts and mala fide intentions.
Detailed Analysis:
1. Application under Section 482 of the Code of Criminal Procedure:
This application seeks to quash the criminal proceedings under Sections 420, 467, 471, and 477A of the Indian Penal Code, read with Section 120B and/or Section 109/114 of the IPC, related to Complaint Case No. 1483 of 1990.
2. Allegations of False Representations and Inducement:
The complaint alleges that the accused made false representations regarding the independence and management of GL, its financial health, and future prospects, which induced the complainant to purchase shares at an inflated price. Specific representations included GL being an independent company, GECI having no detailed knowledge of GL's workings, and GL's profitability and growth potential. The complainant relied on these representations and purchased 5,37,000 shares of GL for Rs. 3,49,05,000.
3. Jurisdiction and Maintainability of Prosecution Against Corporate Entities:
The court held that a corporate body cannot be prosecuted for offenses requiring mens rea (guilty mind), such as those under Sections 420, 467, 471, and 477A of the IPC. The court cited precedents where it was held that corporate entities cannot possess the requisite mens rea. Additionally, offenses involving mandatory imprisonment cannot be imposed on corporate bodies, making the prosecution against the companies not maintainable.
4. Nature and Scope of Inherent Powers of the High Court under Section 482:
The court discussed the inherent powers under Section 482, emphasizing that these powers should be exercised to prevent abuse of the process of the court or to secure the ends of justice. The court can quash proceedings if the complaint does not disclose any offense, is frivolous, vexatious, or if the allegations are inherently improbable.
5. Examination of Prima Facie Evidence and Allegations:
The court examined whether the allegations in the complaint, even if taken at face value, constituted the offenses alleged. It was found that the representations made by the accused were inconsistent and inherently improbable. The complainant, being a large public company with access to financial experts, could not have reasonably relied solely on the accused's representations without conducting its own due diligence.
6. Determination of Whether the Dispute is of Civil or Criminal Nature:
The court concluded that the dispute was of a civil nature, arising out of a commercial transaction. The complainant had conducted extensive investigations and obtained detailed information before agreeing to the purchase. The court noted that untrue praise of goods does not amount to cheating and that the principle of caveat emptor (buyer beware) applied.
7. Suppression of Material Facts and Mala Fide Intentions:
The court identified several instances of suppression of material facts by the complainant, including the takeover of GL's management by SWL, the involvement of Mr. Bansi Mehta (a director of SWL), and the statutory auditors' rejection of the alleged hidden losses. The court also noted a letter from SWL to GECI demanding concessions and threatening criminal prosecution if the demands were not met, indicating a mala fide intention to exert pressure on the petitioners.
Conclusion:
The court found that the allegations were patently absurd and inherently improbable, the dispute was of a civil nature, and the criminal proceedings were initiated with an oblique motive. The continuation of the proceedings would be an abuse of the process of the court. Therefore, the application was allowed, and the criminal proceedings were quashed.
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1991 (9) TMI 372
Issues Involved:
1. Validity of cancellation of approval for ad hoc appointments.
2. Applicability of Chapter II, Regulation 20 of the U.P. Intermediate Education Act, 1921.
3. Compliance with principles of natural justice.
4. Justification of the order based on new reasons not originally stated.
Detailed Analysis:
1. Validity of Cancellation of Approval for Ad Hoc Appointments:
The writ petition challenges the order dated 6-9-1990 by the District Inspector of Schools (D.I.O.S.) canceling the approval granted on 27-8-1990 for the appointment of petitioners as ad hoc Assistant Teachers in L.T. Grade. The D.I.O.S. initially approved the appointments but later suspended and subsequently canceled the approval, citing the lapse of eight posts under Chapter II, Regulation 20 of the U.P. Intermediate Education Act, 1921. The court found that the D.I.O.S.'s reason for cancellation was unsustainable as it misapplied Regulation 20, which was inapplicable after the enforcement of the U.P. Secondary Education Service Commission and Regional Selection Boards Act, 1982.
2. Applicability of Chapter II, Regulation 20 of the U.P. Intermediate Education Act, 1921:
The court examined whether the posts in dispute were surrendered and required fresh sanction from the Director of Education before making ad hoc appointments. Regulation 20 presupposes the Committee of Management's power to advertise vacancies within three months of their occurrence. However, after the enforcement of the Service Commission Act, the power to advertise and fill vacancies shifted exclusively to the Commission. The court concluded that Regulation 20 was inapplicable to the institution as the vacancies were to be notified to the Commission, not advertised by the Committee of Management. Thus, the D.I.O.S.'s reason for canceling the approval based on Regulation 20 was invalid.
3. Compliance with Principles of Natural Justice:
The petitioners argued that the cancellation order was passed without providing them an opportunity for a hearing. The court found that no notice was given to the petitioners, and the D.I.O.S. failed to prove that the Manager was asked to inform the petitioners about the hearing. The court emphasized that the principles of natural justice require direct notice to the affected parties. The failure to provide such notice rendered the D.I.O.S.'s order invalid due to the violation of natural justice.
4. Justification of the Order Based on New Reasons Not Originally Stated:
The learned Standing Counsel attempted to justify the cancellation order by introducing new reasons, such as collusion with a Clerk and the order being 'Farji' (fake). The court held that the validity of the D.I.O.S.'s order must be judged based on the reasons mentioned in the original order and cannot be supplemented by new reasons in the form of affidavits or otherwise. This view is supported by the precedent set in Mohinder Singh Gill v. Election Commissioner, AIR 1987 SC 851.
Conclusion:
The court quashed the order dated 6-9-1990 by the D.I.O.S., reinstating the approval granted on 27-8-1990 for the petitioners' appointments. The petitioners are entitled to their salaries as Assistant Teachers from the date of joining. The writ petition was allowed with costs.
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1991 (9) TMI 371
Issues:
Challenge against notices of demand by Municipal Council based on service charges. Interpretation of Article 285 of the Constitution and Section 135 of the Indian Railways Act, 1890. High Court's decision negating the claim of the Union of India. Applicability of Section 135 of the Railways Act in relation to Article 285 of the Constitution.
Analysis:
The Supreme Court heard an appeal challenging the judgment of the Bombay High Court regarding notices of demand issued by the Municipal Council for service charges. The Union of India contended that the demand was not valid based on Article 285 of the Constitution read with Section 135 of the Indian Railways Act, 1890. The High Court rejected the claim, stating that until Parliament provides otherwise, properties are liable to taxes. The High Court also found that Section 135 of the Railways Act did not override the saving of laws under Article 285(2) of the Constitution.
The Supreme Court disagreed with the High Court's interpretation, stating that Section 135 of the Railways Act is saved under Article 285(1) of the Constitution. This provision exempts Union property from state taxes unless Parliament decides otherwise. Section 135 of the Railways Act outlines rules for taxation of railways by local authorities, with the Central Government controlling the liability and extent of taxation. The Court emphasized that the Railways Act operates separately from state legislation under Article 285. The High Court's reasoning to exclude Section 135 from Article 285 was deemed erroneous.
The Supreme Court allowed the appeal, setting aside the High Court's decision and issuing a writ directing the Municipal Council to refrain from demanding service charges from the railway. The Court clarified that the local authority's rights under Section 135 of the Railways Act are preserved if the Central Government intervenes. No costs were awarded in this case. The judgment emphasized the clear distinction between constitutional and legal provisions, highlighting the applicability of Section 135 in the context of taxation of railways by local authorities.
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1991 (9) TMI 370
Issues:
Interim ex parte order of injunction in a suit under Section 138 of the Negotiable Instruments Act, 1881; Applicability of Order 39, Rule 1, C.P.C. and Section 41 of the Specific Relief Act, 1963 in granting injunction; Jurisdiction of Civil Court in granting temporary relief in criminal matters.
Analysis:
The appeal challenges an interim ex parte order of injunction granted in a suit under Section 138 of the Negotiable Instruments Act, 1881. The respondent issued cheques to the appellant, which were dishonored, leading to a demand for payment under Section 138. The respondent sought an injunction to restrain the appellant from proceeding under Section 138. The appellate court admitted the appeal despite general restrictions, citing the lower court's lack of understanding of legal principles as a reason.
The impugned order restrained the appellant from initiating proceedings under Section 138, treating it as a civil matter, not recognizing its criminal nature. The lower court's oversight of relevant laws like Order 39, Rule 1, C.P.C., and Section 41 of the Specific Relief Act, 1963, led to the erroneous injunction.
The dispute between the parties regarding the transaction's nature allows either party to seek civil remedies. However, the criminal court should not be restrained from examining a complaint under Section 138. Section 41 of the Specific Relief Act prohibits injunctions in certain cases, including criminal proceedings, which the lower court failed to consider.
The respondent argued that temporary relief can be granted even if a final relief is barred by law. Still, the court held that if a statutory bar exists for final relief, temporary relief cannot be granted. Citing precedents, the court determined that the injunction sought falls under Section 41(b) and (d) of the Specific Relief Act, barring such injunctions in this case.
The lower court's error in granting the interim injunction was highlighted, emphasizing the need for proper legal consideration before issuing such orders. The impugned order was set aside, and the appeal was allowed without costs, concluding that the criminal court's jurisdiction should not be restricted by a civil court in matters like these.
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1991 (9) TMI 369
Issues:
- Second bail application filed by Applicant Shobha Ram in a case under Sections 302/307/452, I.P.C.
- Grounds for the second bail application based on parity with a co-accused who was granted bail.
- Argument regarding the rejection of bail application of another co-accused not being brought to the notice of the court.
- Precedents and legal principles related to granting bail based on parity.
- Consideration of the principle of parity in bail applications.
Detailed Analysis:
1. The judgment deals with a second bail application filed by Applicant Shobha Ram in a case involving serious charges under Sections 302/307/452, I.P.C. The first bail application by the applicant and another co-accused was previously rejected by the court on merits. The present application is based on the argument of parity with a co-accused who was granted bail after the rejection of the first application.
2. The applicant's contention is that since a co-accused, Chandra Pal, was granted bail by a different judge after the rejection of the first bail application, the principle of parity should apply, and the applicant should also be granted bail. However, the State and complainant argue that the rejection of another co-accused's bail application by a different judge was not brought to the notice of the court that granted bail to Chandra Pal.
3. The State and complainant assert that the ground of parity should not apply in this case as the rejection of bail of another co-accused was not disclosed during the bail hearing of Chandra Pal. The applicant's counsel argues that there should be no parity in the rejection of bail applications, and the applicant's case is similar to the co-accused who was granted bail.
4. The judgment refers to various precedents where second bail applications were allowed based on the principle of parity when a co-accused was granted bail after the rejection of the first application. The court considers previous cases where bail was granted solely on the ground of parity, emphasizing that the decision should be based on the merits of the case and similarity with the co-accused who was granted bail.
5. Legal principles related to granting bail based on parity are discussed, citing cases where bail was allowed on grounds of similarity with co-accused who were granted bail in similar circumstances. The court also considers decisions where the claim of parity was rejected due to lack of disclosure about the rejection of bail applications of other co-accused.
6. Ultimately, the court finds merit in the applicant's argument regarding the principle of parity and grants bail to Shobha Ram based on similar circumstances with the co-accused who was previously granted bail. The court orders the release of the applicant on bail upon fulfilling the necessary conditions set by the Chief Judicial Magistrate.
This detailed analysis of the judgment highlights the issues, arguments presented, legal precedents considered, and the ultimate decision to grant bail based on the principle of parity in similar cases.
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1991 (9) TMI 368
Issues Involved:
1. Whether a civil court possesses the power to review, suo motu, its concluded finding on an issue in a suit.
2. The finality of the trial court's decision on the issue of tenancy.
3. The scope and limitations of a court's power to review under the Code of Civil Procedure.
Issue-wise Detailed Analysis:
1. Whether a civil court possesses the power to review, suo motu, its concluded finding on an issue in a suit:
The primary question addressed in this judgment is whether a civil court has the inherent power to review its own order without an application from any party. The judgment clarifies that the power of review is not inherent in a court but must be conferred by statute. The court examined various judicial authorities and concluded that the power to review must be sought in a statutory provision. The judgment cites cases such as *Grindlays Bank v. Central Govt. Industrial Tribunal* and *State of Gujarat v. Sardar Begum* to emphasize that the power of review is limited to procedural errors or inadvertent errors and does not extend to substantive errors in the court's findings.
2. The finality of the trial court's decision on the issue of tenancy:
The trial court initially decided that the question of tenancy did not arise because the defendants had obtained purchase certificates under the Kerala Land Reforms Act, implying tenancy. However, upon reviewing the records, the trial judge discovered that the purchase certificates were not binding on the plaintiff and defendants 1 to 6, as they were not parties to the proceedings in which the certificates were granted. Consequently, the trial judge reviewed his earlier order suo motu, concluding that the inference of tenancy was erroneous. The judgment emphasizes that the trial court's initial finding on the issue of tenancy was conclusive and could not be altered except under Section 152 of the Code of Civil Procedure or upon a review application by a litigant under Order 47, Rule 1 of the Code of Civil Procedure.
3. The scope and limitations of a court's power to review under the Code of Civil Procedure:
The judgment extensively discusses the scope and limitations of a court's power to review under the Code of Civil Procedure. It reiterates that the power of review is created by statute and must be exercised within the circumstances specified in the statute. The judgment rejects the argument that a court has a general inherent power to review its orders suo motu, except in cases of procedural errors or inadvertent errors. The court also distinguishes between procedural errors, which relate to the mode or form of conducting judicial proceedings, and substantive errors, which pertain to the court's findings on legal rights or duties. The judgment concludes that the error corrected by the trial judge in this case was substantive, not procedural, and therefore, the trial judge acted without authority in reviewing his order suo motu.
Conclusion:
The judgment concludes that the trial judge acted without authority in reviewing his order dated 25-11-1988 and in referring the issue of tenancy to the Land Tribunal. The court holds that the power of review is not inherent in a civil court and must be conferred by statute. The judgment sets aside the impugned order and directs the trial judge to dispose of the suit in accordance with the law. The petitioners are awarded costs from the respondents.
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1991 (9) TMI 367
Issues:
1. Quashing of complaint and legal proceedings under Section 138 of the Negotiable Instruments Act.
2. Requirement of notice under Section 138 of the Act.
3. Application of Section 141(2) of the Act regarding liability of company directors.
Detailed Analysis:
1. The judgment involves the quashing of complaints and legal proceedings under Section 138 of the Negotiable Instruments Act. The petitioner, a director of a company, was accused of dishonoring cheques issued by another director of the company. The trial court had summoned the petitioner for trial under Section 138 of the Act based on preliminary evidence presented.
2. The issue of the requirement of notice under Section 138 of the Act was raised in the judgment. The section mandates that the payee must issue a notice to the drawer of the dishonored cheque within 15 days of receiving information from the bank regarding the dishonor. In this case, it was highlighted that no notice was issued to the petitioner individually, but only to the company. The absence of a notice directly to the accused director was deemed essential for criminal liability.
3. The application of Section 141(2) of the Act regarding the liability of company directors was discussed. Section 141 imposes liability on individuals in charge of the company's conduct of business for offenses committed by the company. However, it was noted that the complainant had not implicated the petitioner in the complaints, failing to establish any wrongdoing on the part of the accused director. The judgment emphasized the necessity of alleging the involvement of directors for liability under Section 141.
In conclusion, the judgment quashed the complaints and legal proceedings against the petitioner, highlighting the absence of a required notice under Section 138 and the failure to establish liability under Section 141(2) of the Act. The decision aimed to prevent the abuse of the criminal court process and directed further proceedings against the remaining accused.
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1991 (9) TMI 366
Issues:
Interpretation of the date of the award under Section 28A of the Land Acquisition Act, 1894.
Validity of applications under Section 28A without a certified copy of the court's award.
Applicability of Section 5 of the Limitation Act to applications before quasi-judicial bodies.
Correctness of rejecting applications under Section 28A as time-barred.
Detailed Analysis:
1. Interpretation of the date of the award under Section 28A:
The key issue in this judgment revolves around determining the date of the award under Section 28A of the Land Acquisition Act, 1894. The court emphasized that the knowledge of the party affected by the award, whether actual or constructive, is crucial for fair play and natural justice. The interpretation of "the date of the award" must consider when the award is communicated or known by the party concerned, rather than a rigid literal or mechanical approach. The court held that the date of the award is when the party receives notice or acquires knowledge of the award, either actually or constructively.
2. Validity of applications under Section 28A without a certified copy:
The judgment clarified that while filing an application under Section 28A, it is not mandatory to accompany it with a certified copy of the court's award. However, if an applicant chooses to submit a certified copy, the time spent obtaining it can be excluded. Filing an application without a certified copy is considered valid, and the collector has the discretion to grant time for submission. The court criticized the rejection of applications for lacking certified copies, stating it was an incorrect exercise of jurisdiction by the Special Land Acquisition Officer (SLAO).
3. Applicability of Section 5 of the Limitation Act to quasi-judicial bodies:
The judgment highlighted that Section 5 of the Limitation Act applies strictly to proceedings in courts and not to quasi-judicial bodies or executive authorities. The court cited legal precedents to support this position and noted that the inclusion of a proviso in Section 28A by Parliament confirms this legal understanding. The petitioners' reliance on Section 5 of the Limitation Act was deemed a mistaken legal approach.
4. Correctness of rejecting applications as time-barred:
The court found that the SLAO's rejection of the applications under Section 28A was based on a misconception of law. The petitioners had averred in their affidavits that they acquired knowledge of the court's award shortly before filing the applications. The court held that the SLAO's assumption of the applications being time-barred was incorrect, leading to unsustainable orders. Consequently, the court allowed the petitions, quashed the impugned orders, and directed the SLAO to review the applications on merit and in accordance with the law.
In conclusion, the judgment delves into the nuances of interpreting the date of the award, the requirements for applications under Section 28A, the limitations of Section 5 of the Limitation Act, and the correct application of law in rejecting time-barred applications.
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1991 (9) TMI 365
Issues:
1. Grant of bail by High Court and subsequent cancellation of bail order.
2. Authority of one Bench to upset the order of another Bench in the same Court.
3. Judicial discipline and finality of orders.
Analysis:
1. The appellant, an accused in a murder case, had his bail application rejected by the trial Court. He then approached the High Court, where his bail application was initially dismissed with the condition to renew it after the police report post-investigation. Subsequently, the appellant renewed his bail plea before the Sessions Judge, which was again rejected. However, a petition before the High Court was allowed by Mr. Justice B.C. Varma, granting bail to the appellant. Another accused, Dharmendra Kumar Sharma, also obtained bail from Mr. Justice G.C. Gupta. The State filed a petition for cancellation of the bail order based on Mr. Justice Gupta's observation that the accused persons did not deserve bail. The High Court, in the impugned judgment, cancelled the bail granted by Mr. Justice B.C. Varma, leading to the appellant challenging this decision before the Supreme Court.
2. The Supreme Court emphasized that no Bench can comment on or overturn the decision of a co-ordinate Bench of the same Court. It was highlighted that if the State disagreed with the bail order, it should have approached the Supreme Court directly. The judgment of Mr. Justice B.C. Varma had become final as per the High Court's jurisdiction. The Court noted that if there were grounds for bail cancellation due to misuse or new evidence, the prosecution could have moved for cancellation. The cancellation by Mr. Justice Gupta was deemed unauthorized as it was based solely on his observations in another case, setting a precedent against judicial discipline and the finality of court orders.
3. The Supreme Court set aside the impugned order and reinstated the bail granted to the appellant by Mr. Justice B.C. Varma. However, the Court clarified that the State could seek bail cancellation based on objectionable conduct or fresh material, but it should be heard by the Chief Justice or a different Judge to maintain fairness. The judgment highlighted the importance of upholding judicial discipline, respecting the finality of court orders, and preventing endless attempts to reopen matters before different Benches. Ultimately, the appeal was allowed, restoring the appellant's bail and establishing guidelines for future bail cancellation petitions.
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1991 (9) TMI 364
Issues:
1. Jurisdiction of the court based on the cause of action.
2. Interpretation of Clause 12 of the Letters Patent.
3. Consideration of balance of convenience in determining the forum for the suit.
Jurisdiction of the Court Based on the Cause of Action:
The appeal challenged an order refusing leave to sue in the Madras High Court for recovery of a specific sum. The plaintiff alleged that the cause of action arose mostly in Madras, while the defendants contended it arose solely in Cochin. The court emphasized that a litigant can file a suit in the High Court if the cause of action arises wholly within its jurisdiction, with leave required only if it arises partly within the jurisdiction. The court cited previous judgments to clarify the scope of Clause 12 of the Letters Patent regarding the court's jurisdiction over suits based on the location of the cause of action or the defendant's presence within the jurisdiction.
Interpretation of Clause 12 of the Letters Patent:
The court examined the provisions of Clause 12 of the Letters Patent, emphasizing that the court's jurisdiction is determined by the location of the cause of action or the defendant's presence within the jurisdiction. The court highlighted the importance of considering all relevant facts to determine jurisdiction, including the location of immovable property or where the cause of action arises. Reference was made to previous judgments from other High Courts to support the interpretation of the clause and the criteria for granting leave to sue in the High Court.
Consideration of Balance of Convenience in Determining the Forum for the Suit:
The court discussed the principle of balance of convenience in deciding the forum for the suit, which extends from the doctrine of 'forum convenient.' It noted that the court may decline to grant leave to sue even if the cause of action arises partly within its jurisdiction. The court cited previous judgments to emphasize that convenience is a crucial factor in determining the forum for the suit, and the court must assess the balance of convenience based on the facts presented. The court highlighted the need to consider the potential hardship on both parties and to make a decision based on the actual facts rather than assumptions.
In conclusion, the court set aside the impugned order and remitted the case to the Original Side of the Court for a re-hearing and decision on whether leave should be granted, emphasizing the importance of proper adjudication based on all relevant facts before determining the forum for the suit.
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1991 (9) TMI 363
Issues:
1. Quashing of criminal case against accused 1 to 3.
2. Interpretation of relationship between accused firms.
3. Impact of Appellate Collector's order on criminal complaint maintainability.
Detailed Analysis:
1. The petition was filed under Section 482 of the Criminal Procedure Code seeking to quash the criminal case against accused 1 to 3. The complaint alleged that the accused firms were involved in evading Central Excise Duty by misdeclaring values and suppressing relationships between the companies. The accused were charged under various sections of the Central Excises and Salt Act, 1944. The investigation revealed mutual business interests between the firms, with the first accused selling goods to the fourth accused at undervalued rates, leading to duty evasion amounting to Rs. 2,27,409.33. The accused argued that the complaint should be quashed based on previous decisions and orders indicating that the fourth accused was not a related company. The prosecution contended that the complaint should proceed as the offences alleged were made out.
2. The main contention revolved around the relationship between the accused firms. The Appellate Collector's order dated 28.4.81 had set aside the finding that accused 1 and 4 were related persons, allowing the first accused to file price lists in Part-I. The defense argued that this finding by the Collector should bar the current complaint alleging a related person status between the accused firms. However, the prosecution maintained that the Collector's finding did not preclude the criminal complaint as the offences were established based on the investigation's findings regarding the relationship and business practices between the firms.
3. The judgment delved into the impact of the Appellate Collector's order on the maintainability of the criminal complaint. Citing legal precedents, the court held that the Collector's finding did not operate as a bar to the criminal proceedings. Referring to previous cases, it was established that departmental proceedings and findings did not bind criminal courts, and judgments in one forum did not necessarily affect proceedings in another. Therefore, the court dismissed the petition seeking to quash the criminal case against accused 1 to 3, emphasizing that the allegations in the complaint constituted the offences as charged, irrespective of the Collector's previous decision regarding the relationship between the accused firms.
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1991 (9) TMI 362
Issues Involved:
1. Jurisdiction of the Court
2. Alleged infringement of trade mark
3. Alleged passing off
4. Alleged infringement of copyright
5. Leave under Clause 14 of Letters Patent
Detailed Analysis:
1. Jurisdiction of the Court:
The defendants opposed the notice of motion on the grounds of lack of jurisdiction, arguing that the natural forum for the alleged cause of action would be the Court at Calcutta, not Bombay. The plaintiffs failed to prove that the defendants had any dealings in Bombay, as no substantial evidence was provided. The Court concluded that it had no jurisdiction to entertain the suit for the alleged infringement of trade mark and passing off. The Court emphasized that the plaintiffs' conduct to clutch at the jurisdiction of this Court lacked bona fides and that the averments made in the plaint were incorrect.
2. Alleged Infringement of Trade Mark:
The plaintiffs sought a permanent injunction to restrain the defendants from infringing their registered trade marks. The defendants contended that they had no dealings in Bombay, and the Court found no substantial evidence to prove that the defendants marketed their goods in Bombay. The Court referred to the case of Firm Bhagwan Das v. Watkins Mayor & Co., which required proof that the goods were sent for sale in commercial quantity. The plaintiffs failed to meet this requirement, and the Court held that it had no jurisdiction over the trade mark infringement claim.
3. Alleged Passing Off:
The plaintiffs also sought an injunction to prevent the defendants from using deceptively similar marks or labels. The Court reiterated that there was no proof of commercial-scale supply of the defendants' goods in Bombay. Citing the case of Himachal Pradesh Horticulture Produce Marketing and Processing Federation Ltd. v. M/s. Mohan Meakin Breweries Ltd., the Court held that without evidence of transactions in Bombay, it lacked jurisdiction to entertain the passing off claim.
4. Alleged Infringement of Copyright:
The Court acknowledged that it had jurisdiction to entertain the suit for alleged infringement of the 1st plaintiff's copyright under Section 62 of the Copyright Act, 1957, as the plaintiffs carried on business in Bombay. However, the suit was a composite one, combining multiple causes of action without obtaining leave under Clause 14 of the Letters Patent. The Court decided not to exercise jurisdiction over the copyright infringement claim in isolation at this stage, pending the disposal of the petition for leave under Clause 14.
5. Leave under Clause 14 of Letters Patent:
The plaintiffs tendered a petition for leave under Clause 14 of the Letters Patent at the conclusion of arguments. The Court noted that such petitions could be entertained at any stage but expressed reluctance to grant leave due to the plaintiffs' conduct in making incorrect jurisdictional averments. The Court dismissed the notice of motion with costs, granting the plaintiffs liberty to take out a fresh notice of motion if leave under Clause 14 was granted.
Conclusion:
The Court dismissed the notice of motion, holding that it lacked jurisdiction over the trade mark infringement and passing off claims but had jurisdiction over the copyright infringement claim. The plaintiffs were allowed to seek leave under Clause 14 of the Letters Patent and take out a fresh notice of motion if such leave was granted. The Court emphasized the plaintiffs' blameworthy conduct in making untrue jurisdictional averments.
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1991 (9) TMI 361
Issues Involved:
1. Whether the suit by the plaintiffs under Section 6 of the Specific Relief Act, 1963, is maintainable.
2. Whether the plaintiff is entitled to any relief under Section 6 of the Specific Relief Act, 1963.
Issue-Wise Detailed Analysis:
1. Whether the suit by the plaintiffs under Section 6 of the Specific Relief Act, 1963, is maintainable:
The Bombay High Court had framed the issue of whether the suit by the plaintiffs under Section 6 of the Specific Relief Act, 1963, was maintainable. The High Court, after considering various authorities, held that the plaintiff bank was a licensee and even after the expiry of the licence period, it could not be dispossessed otherwise than in due course of law. The plaintiff, being in settled possession for a long time, was entitled to file a suit under Section 6 of the Act. The High Court decreed the suit but observed that litigation takes an inordinate amount of time, and big corporations and public bodies are taking advantage of this delay by remaining in possession without any right, title, or interest.
The Supreme Court, upon reviewing the facts, emphasized that Section 6 provides a summary remedy to any person dispossessed without consent, otherwise than in due course of law. The Court noted that the plaintiff bank was a licensee whose licence period had expired on 31st December 1986, and thereafter, its possession was that of a trespasser. The Court concluded that the plaintiff had not been dispossessed by using any force and that the bank had vacated the premises due to a fire on 12th April 1990. Therefore, the Supreme Court held that the plaintiff bank, being a licensee and having become a trespasser after 31st December 1986, had no right to claim possession from the company, the true owner of the premises.
2. Whether the plaintiff is entitled to any relief under Section 6 of the Specific Relief Act, 1963:
The High Court had granted a decree in favor of the plaintiff bank, directing the defendant company to hand over possession of the suit premises. However, the Supreme Court disagreed with this conclusion. The Court noted that the purpose of Section 6 is to restrain a person from using force and to dispossess a person without his consent otherwise than in due course of law. The Supreme Court found that the plaintiff bank had not been dispossessed by force and had vacated the premises due to a fire. The bank's possession after the expiry of the licence period was that of a trespasser, and the true owner, the company, had not used any force to dispossess the bank.
The Supreme Court emphasized that the conduct of the plaintiff bank, an instrumentality of the State, was unsupportable as it continued to remain in unlawful possession as a trespasser. The Court held that the plaintiff bank was not entitled to any decree under Section 6 of the Act. The Court also noted that the High Court had indirectly suggested that the defendant company file a suit for possession based on title, which the company had already done.
The Supreme Court concluded that granting any decree in this litigation under Section 6 of the Act would not serve the ends of justice and would unnecessarily prolong litigation between the parties, wasting public money and valuable court time. The Court held that the plaintiff bank, in the facts and circumstances of the present case, was not entitled to any decree under Section 6 of the Act and dismissed the suit.
Separate Judgments:
The judgment includes a separate opinion by K. Ramaswamy, J., who disagreed with the majority opinion. Justice Ramaswamy emphasized that the respondent bank was in settled possession and was entitled to remain in possession until ejected in due course of law. He held that the decree for possession under Section 6 of the Act was not illegal and dismissed the appeal. Due to the conflicting judgments, the matter was referred to a larger bench for resolution.
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1991 (9) TMI 360
Issues Involved:
1. Entitlement of the accused to copies of muddamal Articles if they consist of documents under Section 173(7) of the Code of Criminal Procedure, 1973.
Issue-wise Detailed Analysis:
Entitlement of Accused to Copies of Muddamal Articles:
1. Context and Background:
The primary issue revolves around whether the accused, charged under the Prevention of Corruption Act, are entitled to copies of certain documents seized during a raid (referred to as muddamal Articles) under Section 173(7) of the Code of Criminal Procedure, 1973. The Special Judge had earlier rejected the accused's request for these documents, stating that they do not fall under the purview of Section 173(7).
2. Arguments by the Petitioners:
The petitioners argued that even though the documents are seized as muddamal Articles, they remain documents as per Section 173(7) of the Code. They contended that the accused are entitled to these documents for their defense, as the prosecution is likely to rely on them. Denying access to these documents would hamper the defense and vitiate the trial.
3. Arguments by the State:
The State, represented by Mr. Trivedi, contended that muddamal Articles, even if they consist of documents, are not covered by Section 173(7). The State argued that the judgment in Praveenkumar J. Shah v. State does not apply to this case.
4. Legal Provisions:
- Section 173(5) and (7) of the Code: These sections outline the obligation of the investigating officer to provide the accused with documents on which the prosecution intends to rely.
- Sections 165 and 100 of the Code: These sections pertain to the search and seizure of Articles during an investigation.
5. Court's Analysis:
The court examined whether muddamal Articles, if they consist of documents, fall under the documents referred to in Section 173(7). It was noted that muddamal Articles are produced before the court for identification during the trial and are not necessarily used as documentary evidence. The prosecution clarified that they do not intend to use these Articles as documentary evidence against the accused.
6. Precedents and Interpretations:
- Praveenkumar's Case: The court distinguished this case, noting that it involved the supply of enlarged photographs used by an expert to form an opinion, which were necessary for the defense.
- Section 207 of the Code: This section outlines the documents that must be provided to the accused, including those forwarded with the police report under Section 173(5).
7. Conclusion:
The court concluded that muddamal Articles, even if they consist of documents, are not covered by Section 173(7) unless the prosecution intends to use them as documentary evidence. The prosecution's statement that they will not use these Articles as evidence means the accused are not entitled to copies. However, if the prosecution later decides to use these documents as evidence, the accused would then be entitled to copies as per Section 207.
8. Final Judgment:
The court upheld the Special Judge's order, dismissing the revision application. The interim relief was extended for four weeks to allow the petitioners to approach a higher forum.
Summary:
The High Court of Gujarat ruled that the accused are not entitled to copies of muddamal Articles under Section 173(7) of the Code of Criminal Procedure, 1973, unless the prosecution intends to use these documents as evidence. The court dismissed the revision application, upholding the Special Judge's order, and extended the interim relief for four weeks to allow the petitioners to seek further legal recourse.
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1991 (9) TMI 359
Issues Involved:
1. Realisation of balance sale consideration.
2. Validity of the sale deed under undue influence and fraud.
3. Applicability of Sections 91 and 92 of the Indian Evidence Act.
4. Admissibility of oral evidence to contradict the terms of the written agreement.
Detailed Analysis:
1. Realisation of Balance Sale Consideration:
The plaintiff entered into an agreement with the defendants on 22-6-1981 to sell a property for Rs. 16,000, with Rs. 4,000 paid as advance. However, only Rs. 1,000 was paid, and Rs. 3,000 was reserved to pay off a debt to the Development Corporation for Scheduled Castes and Scheduled Tribes. The sale deed executed on 21-12-1981 listed the consideration as Rs. 10,000, with Rs. 7,000 paid before the Sub-Registrar and Rs. 3,000 reserved for the debt. The plaintiff alleged that the defendants agreed to pay the remaining Rs. 5,000 upon registration but paid only Rs. 2,000. The suit was filed to recover the remaining Rs. 3,000 with interest and costs.
2. Validity of the Sale Deed Under Undue Influence and Fraud:
The plaintiff alleged that the sale deed was executed under undue influence and fraud by the defendants, showing a lesser consideration. However, there was no evidence supporting this claim, and both lower courts did not find the sale deed vitiated. It was concluded that the sale deed was executed by the plaintiff of his own free volition.
3. Applicability of Sections 91 and 92 of the Indian Evidence Act:
The core legal question was whether the plaintiff could contend a difference in consideration in the sale deed (Ext. A2) under Sections 91 and 92 of the Indian Evidence Act. Section 91 states that when the terms of a contract are reduced to a document, no evidence shall be given except the document itself. Section 92 further prohibits any oral agreement to contradict, vary, add to, or subtract from the terms of the document. Provisos to Section 92 allow evidence to invalidate a document due to fraud, intimidation, illegality, or failure of consideration, and to prove separate oral agreements on matters the document is silent on. However, since the document specified the consideration as Rs. 10,000, and there was no evidence of fraud or failure of consideration, the plaintiff could not claim a different amount.
4. Admissibility of Oral Evidence to Contradict the Terms of the Written Agreement:
The judgment referenced several case laws to support the interpretation of Sections 91 and 92. The Allahabad High Court in Md. Taki Khan v. Jang Singh held that oral evidence contradicting the terms of a written document is inadmissible. The Bombay High Court in Bai Hiradevi v. Official Assignee stated that parties cannot prove a different consideration than what is mentioned in the document. The Madras High Court in K.S. Narasimhachari v. Indo Commr. Bank and the Mysore High Court in S. Rajanna v. S.M. Dhondusa reinforced that consideration is a term of the contract, and oral evidence cannot alter it.
The judgment concluded that Sections 91 and 92 barred the plaintiff from claiming a consideration different from what was stated in the sale deed. Since the plaintiff's case was solely that the actual consideration was Rs. 16,000 instead of Rs. 10,000, this claim was inadmissible.
Conclusion:
The judgment set aside the decrees of the lower courts, allowed the second appeal, and dismissed the suit. The plaintiff was not entitled to plead or prove that the consideration for the sale was more than what was mentioned in the sale deed due to the prohibitions in Sections 91 and 92 of the Indian Evidence Act. Both parties were ordered to bear their own costs throughout the proceedings.
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1991 (9) TMI 358
Issues Involved:
1. Rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure.
2. Validity of the partition decree based on the arbitration award.
3. Allegation of fraud in obtaining the partition decree.
4. Whether the suit is barred by limitation.
5. Applicability of Sections 32 and 33 of the Arbitration Act.
6. Whether the plaintiff needs to seek cancellation of the decree.
Issue-wise Detailed Analysis:
1. Rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure:
The defendants sought rejection of the plaint under Order VII Rule 11, arguing that the suit did not disclose a cause of action and was barred by limitation. The Court noted that the plaintiff's averments in the plaint must be presumed correct for the purpose of deciding the application. The plaintiff alleged that the partition decree was a sham and that the properties remained joint HUF properties. The Court held that the plaint disclosed a cause of action and the suit could not be rejected at this stage without recording evidence.
2. Validity of the partition decree based on the arbitration award:
The plaintiff contended that the partition decree obtained in 1963 was a sham, intended only to defraud tax authorities, and that no actual partition took place. The defendants argued that the decree was valid and binding. The Court noted that the plaintiff was a minor at the time of the decree and claimed to have become aware of it only in 1984. The Court held that whether the decree was a sham and whether the partition actually took place were questions of fact that required evidence to be recorded.
3. Allegation of fraud in obtaining the partition decree:
The plaintiff alleged that the partition decree was obtained fraudulently to reduce tax liabilities and that the properties continued to be treated as joint HUF properties. The Court referred to several precedents where fraudulent transactions were held to be sham and nominal, not affecting the joint family status. The Court held that the allegations of fraud could not be dismissed without recording evidence and that the suit was maintainable on this ground.
4. Whether the suit is barred by limitation:
The defendants argued that the suit was barred by limitation as it was filed in 1986, while the decree was passed in 1963. The plaintiff contended that he became aware of the decree only in 1984 and that the right to sue accrued when he was threatened with exclusion from the HUF properties in 1985. The Court held that the question of limitation could not be decided at this stage without recording evidence and that the suit appeared to be within time based on the plaintiff's averments.
5. Applicability of Sections 32 and 33 of the Arbitration Act:
The defendants argued that the suit was barred by Sections 32 and 33 of the Arbitration Act, which preclude challenges to arbitration awards and agreements. The Court held that these sections did not apply as the plaintiff was not challenging the arbitration agreement or award per se but was alleging that the award and decree were sham and intended to defraud tax authorities. The Court cited precedents supporting the maintainability of a suit challenging a decree on grounds of fraud.
6. Whether the plaintiff needs to seek cancellation of the decree:
The defendants contended that the plaintiff needed to seek cancellation of the decree to maintain the suit. The plaintiff argued that the decree was void and could be ignored without seeking its cancellation. The Court referred to several precedents where it was held that a void document could be ignored, and a suit for substantive relief could be maintained without seeking cancellation of the document. The Court held that the plaintiff was not legally bound to seek cancellation of the decree and could directly seek partition and other reliefs.
Conclusion:
The applications for rejection of the plaint were dismissed. The Court held that the plaint disclosed a cause of action, the suit was not barred by limitation, and the allegations of fraud required recording of evidence. The suit was maintainable, and the plaintiff was not required to seek cancellation of the decree. The issues raised by the defendants could not be decided without framing issues and recording evidence.
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1991 (9) TMI 357
Issues Involved:
The issue involves the High Court granting leave to the Respondent-landlord to plead subsequent events in a revision proceeding, leading to the grant of possession without a formal enquiry or recording of evidence.
Judgment Details:
Issue 1: Distinction between Pleading and Proof
The appellant-tenant contended that the High Court erred in assuming the subsequent events alleged by the respondent as proved without a formal enquiry or evidence. The Court emphasized the distinction between pleading and proof, stating that if facts are admitted, there may not be a need for further proof. However, depending on the circumstances, the Court may require independent proof. The Court highlighted the flexibility in procedures when dealing with subsequent events in appeals or revisions, allowing for evidence to be adduced through affidavits or oral examination as necessary.
Issue 2: Consideration of Subsequent Events
The Court referred to legal principles emphasizing that courts can consider subsequent events that impact the parties' entitlement to relief. In this case, the Court set aside the orders under appeal and remitted the matter to the High Court to consider both the subsequent events relied upon by the respondent and those raised by the appellant. The High Court was directed to decide on the need for oral evidence or affidavit-based evidence based on the nature of the facts presented. The Court urged expeditious disposal of the revision petition within three months from the date of the order.
Conclusion:
The Court set aside the previous orders and disposed of the appeal by remitting the matter to the High Court for a fresh consideration of the subsequent events raised by both parties. The High Court was instructed to decide on the evidentiary requirements based on the nature of the facts presented and to dispose of the revision petition in accordance with the law within three months. No costs were awarded in this matter.
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1991 (9) TMI 356
Issues:
1. Validity of the detention order under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
Analysis:
The petitioner filed a petition under Articles 226 and 227 of the Constitution of India seeking a writ of habeas corpus to quash the detention order passed under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The petitioner was apprehended at the airport with hidden gold in an electric iron in January 1990. He was released on bail in February 1990, and the detention order was passed in May 1990. The petitioner argued that the delay in passing the detention order indicated non-application of mind and unnecessary continued detention. The counter-affidavit filed did not adequately explain the delay in passing the order.
The additional affidavit filed by the Deputy Secretary, Delhi Administration, mentioned the timeline of events leading to the detention order. However, the reasons for the delay were not clear, and the petitioner was on bail during this period. The court noted that the detention order was served on the petitioner almost four months after it was passed, and it was served only after the petitioner had surrendered. The court found no satisfactory explanation for the delay in executing the detention order and questioned the lack of efforts to serve the order while the petitioner was on bail.
The Union of India cited a Supreme Court judgment regarding the test of proximity in detention orders. The court acknowledged that a reasonable nexus between the prejudicial activity and the purpose of detention could overlook the delay. However, in this case, the court found that there was no additional material necessitating the detention order beyond what was available at the time of the petitioner's arrest. The court held that the respondents failed to adequately explain the delay in passing the detention order, even after a significant period had elapsed since the petitioner's arrest.
Ultimately, the court made the Rule absolute, quashed the detention order dated 23.5.1990, and directed the immediate release of the petitioner unless required in any other case. The detention order was set aside, emphasizing the lack of justification for the delay and the absence of new grounds for detention beyond the initial arrest circumstances.
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1991 (9) TMI 355
Issues involved: Whether the National Council of Educational Research and Training (NCERT) is "State" as defined under Article 12 of the Constitution.
Summary:
The appellant, an employee of NCERT, challenged the termination of his services by moving the Delhi High Court under Article 226 of the Constitution. NCERT objected to the writ jurisdiction of the High Court, claiming it is not an instrumentality or authority under Article 12. The High Court upheld the objection, leading to the appeal.
In determining if a body is an instrumentality or agency of the Government, factors such as powers, functions, finances, and control are considered. State assistance, share capital, monopoly status, and State control are indicative factors. However, Article 12 should not be broadly interpreted to include every autonomous body with a nexus to the Government.
The NCERT, a registered society, assists the Ministry of Education in implementing educational policies. Its activities include research, training, and publication of educational materials. The Executive Committee, comprising government officials and educationists, manages its affairs. While the Government controls grant utilization, NCERT is largely autonomous.
Comparisons were drawn to previous cases like ICPS and CSIR to determine if NCERT qualifies as "State" under Article 12. The Court found NCERT does not meet the criteria for being classified as "State" and dismissed the appeal, concurring with the High Court's decision.
In conclusion, the appeal challenging NCERT's classification as "State" under Article 12 was dismissed, with no order as to costs.
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1991 (9) TMI 354
Issues Involved:
1. Invocation of provisions of section 52(2) of the Income-tax Act.
2. Estimation of sale value of jewellery at Rs. 2,60,000 against the declared value of Rs. 72,000.
Detailed Analysis:
1. Invocation of Provisions of Section 52(2) of the Income-tax Act:
The primary issue in the appeal is whether the provisions of section 52(2) of the Income-tax Act, 1961, were rightly invoked by the assessing officer. The assessee argued that there was no evidence to prove that the sale consideration declared was understated. The sale was conducted through a broker, and the payment was received via a crossed cheque, which was duly credited to the assessee's account. Both the broker and the purchaser confirmed the sale in their statements recorded under section 131 of the Income-tax Act.
The Tribunal relied on the Supreme Court's decision in K.P. Varghese v. ITO [1981] 131 ITR 597, which held that section 52(2) can only be invoked if there is evidence that the consideration for the transfer of a capital asset has been understated by the assessee. The burden of proving such understatement is on the revenue. The Tribunal found that the revenue did not discharge this burden, as there was no evidence to suggest that the assessee received more than the declared consideration.
2. Estimation of Sale Value of Jewellery:
The assessee had inherited jewellery valued at Rs. 1,50,000 in the wealth-tax assessment for the assessment year 1977-78. Most of the jewellery was sold in August 1979 for Rs. 72,000. The assessing officer estimated the fair market value of the jewellery at Rs. 2,60,000, leading to a computed capital gain of Rs. 2,25,000 after considering the cost at Rs. 35,000 as on 1-1-1964.
The Tribunal noted that the valuation in the wealth-tax assessment was an estimate and not the actual sale value. It also observed that four items of jewellery were not sold and were not traceable. The Tribunal found that the revenue's reliance on the wealth-tax valuation and the assessment of the assessee's brother (who received cash for the sale of his share of jewellery) was insufficient to prove that the sale price was understated.
The Tribunal concluded that the circumstances did not support the revenue's contention that the sale price was understated. The sale was conducted through a broker, and the payment was made by a crossed cheque, which was accounted for in the assessee's records. The Tribunal held that the revenue failed to provide direct or indirect evidence of understatement of consideration and thus could not invoke section 52(2).
Conclusion:
The Tribunal found in favor of the assessee, holding that there was no evidence to prove that the sale consideration was understated. The order of the Commissioner of Income-tax (Appeals) was set aside, and the appeal was allowed.
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