[No.222]

Supreme Court

• K.C.C. Software Ltd. and Ors. v. Director of Income Tax (Inv.) and Ors.

In a search and seizure conducted by the respondents in the premises of the appellants certain assets were seized. On that very day, the appellants received a letter from Bank that operation of five bank accounts of appellant No. 1 had been restrained by order issued under Section 132(3) of the Income Tax Act, 1961. The Bank issued a similar letter to appellant No. 3 intimating that she had been restrained from operating her Savings Bank account by Order passed under Section 132(3) of the Act. The appellants challenged the orders on ground that existence of the lockers and the bank accounts were disclosed by the Appellants in the regular books of account maintained and no opportunity was provided to establish the said fact and hence, there was no justification for keeping the restraint on the operation for the bank accounts. Appellant No. 3 moved an application under Section 132B of the Act to the Deputy Commissioner of Income Tax for release of her jewellery and FDR. Since, the nature and source was duly explained, the limitation of 60 days in terms of Section 132(8A) expired. The Income Tax Department issued two fresh warrants of authorization under Section 132 of the Act in respect of the bank accounts. Thereafter, the bank accounts of the Appellants were searched and seized through withdrawal of cash by demand drafts. Appellants Nos. 1 and 3 moved an application under Section 132B of the Act for release of the amount seized. Since the authorities did not respond to the same the Appellants filed a Writ Petition. The Writ Petition was dismissed. Hence, the present appeal. Held, there are different stages under Section 132(1) of Act. First stage is seizure, then comes adjudication on the non disclosure aspect and then determination relatable to Section 132(8A). An Authorized Officer acting under Section 132(1)(iii) of the Act has full power and jurisdiction to seize cash balance lying in bank account as these would come within the meaning of "money" and/or "assets" as provided under Section 132(1)(iii) of the Act. Further, amount seized has not become a part of the Consolidated Fund of India and is deposited in separate PD account of the concerned Commissioner and is held in the custody till final determination of the tax liability by the assessing officer for the relevant assessment years and that is permissible - As there is no challenge to the order passed under Section 132B of the Act no relief can be granted to the Appellants. Assessment to be completed within the time statutorily provided. Appeal disposed of.

• Swaika Properties Pvt. Ltd. and Anr. v. State of Rajasthan and Ors.

The Appellants had filed a Writ Petition before the Calcutta High Court challenging the acquisition proceedings, but the Supreme Court holding that the Calcutta High Court did not have the territorial jurisdiction to entertain the Writ Petition dismissed the same. Till 1987, the Appellants did not challenge the acquisition proceedings and the Writ Petition was filed by it before the Rajasthan High Court, which had the territorial jurisdiction in the matter. The same was withdrawn which was again filed within the next four months. In the meantime, the State Government had taken possession before the filing of the Writ Petition. On appeal challenging the acquisition proceedings, the High Court dismissed the Writ Petition filed by the Appellants upholding the acquisition proceedings in respect of the land of the Appellants. On further appeal, the Division Bench upheld the Judgment and order passed by the Single Judge. Hence, the present appeal. Appellant contended that there was no delay on the part of the Appellants in filing the Writ Petition challenging the acquisition proceedings. Respondents contended that the acquisition of the land couldn't be challenged after taking over of the possession and after the award having become final. Held, a Writ Petition challenging the Notification for acquisition of land, if filed after the possession having been taken, is not maintainable. Writ petition having been filed after taking over the possession and the award having become final, the same deserves to be dismissed on the ground of delay and laches. Accordingly, impugned orders were affirmed and appeal was dismissed.

High Courts

Bombay

• Bilal Ismail Bhayat and Ors. v. M.M.R.D.A. and Anr.

Plaintiffs seek an injunction restraining the Mumbai Metropolitan Region Development Authority and its Executive Engineer from demolishing four shops belonging to the Plaintiffs. Executive Engineer issued three notices under Section 3(Z2) of the Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 calling upon the Plaintiffs to produce evidence showing that three out of four shops were constructed prior to 1st January, 1995. Order was passed by the Second Defendant holding that the Plaintiffs were eligible for rehabilitation in the form of one shop. Other shops were held to be non-eligible and demolition order was passed. Plaintiff contended that Second defendant (Executive Engineer) of First Defendant had no power to issue notice except when land required for infrastructure project like construction or widening of road. Defendants contended that even if land is private land, shops being unauthorized were liable to be demolished in public interest and compensation would be paid to owner of land. Held, when the Metropolitan Commissioner of the first Defendant is vested with the exercise of powers of the Municipal Commissioner and when the Authority is conferred with the jurisdiction to exercise the powers conferred upon the Municipal Corporation, all powers of the Commissioner and of the Corporation can be exercised. Further, when such Authority prepares a project or scheme with a view to provide infrastructure within the territorial limits of the Municipal Corporation, both the Metropolitan Commissioner and the Authority are deemed to be respectively the Municipal Commissioner and the Corporation and are vested with all the powers under the Corporation Act of 1888 and the Regional and Town Planning Act of 1966 save and except for those that are specifically carved out. Hence, by virtue of Section 17 of MMRDA Act, 1974 challenge to the jurisdiction of the first Defendant to initiate action under Section 351 of the Mumbai Municipal Corporation Act, 1888 is without any basis or foundation. Defendants were entitled to exercise such powers by virtue of the provisions of Section 17 of the MMRDA Act, 1974. Plaintiffs to produce documentary material before Competent Authority regarding their entitlement to separate accommodation in respect of each shop in their occupation. Plaintiff not entitled to any other relief. Notice of Motion disposed of.

• Parmanand Patel and Indu Patel v. Sudha Chowgule and Ors.

In a suit in which chamber summons arose was filed by Plaintiff No. 1 through his wife as a next friend, inter alia, for a declaration that the document purporting to be his Will and two letters purported to be gifts of shares of the Defendant No. 5 company by him in favour of the Defendant No. 2, his elder daughter were null and void and of no effect in law as Defendant No. 2 got the same by exerting undue influence on Plaintiff No. 1. On the death of Plaintiff No. 1, Plaintiff No. 2-wife and Defendant No. 2-daughter moved separate applications seeking impleadment and transposition as Plaintiffs in the said suit and also as legal heirs and legal representatives of the estate of the deceased Plaintiff No.1. Defendant opposed this application on the ground that the applications are not made for being impleading as legal representative of the estate of the deceased but in order to assert their independent rights in the suit. The issue involved was whether the Applicants are seeking to be brought on record as legal representatives of the deceased in order to assert an independent or a hostile right or do they wish to pursue the same cause of action already pleaded by the deceased Plaintiff . Held, it is a well settled law that it was not open to a legal representative of a deceased to assert his individual or hostile title to the suit. In the present case, in both chamber summons the Applicants have prayed for impleadment as a legal heir and legal representative of the estate of the deceased Plaintiff. In the affidavit in support the Applicants claim that they are entitled to continue the suit as heirs of the deceased Plaintiff and did not seek any relief for themselves, independent of the rights sought by the deceased Plaintiff or in any manner hostile thereto. Merely because they have stated that they want to be brought on record as legal heir, it cannot be assumed that they seek to assert a right independent of the right asserted by the deceased Plaintiff and they are not entitled to be brought on record as legal representatives. Hence, no merit in the submission of the Defendant. Application Allowed.

PIB

• Government Approves Continuation of Credit Linked Capital Subsidy Scheme

PIB Dated 21.02.2008: The Government and Cabinet Committee on Economic Affairs (CCEA) gave its approval to continuation of the Credit Linked Capital Subsidy Scheme (CLCSS) for Micro & Small Enterprises during 11th Plan. The validity of this scheme was upto 31.03.2007 i.e. the end of X Five Year Plan. During initial period of five years, very few units could take advantage of the scheme, therefore, the scheme was modified and made more attractive by increasing the rate of subsidy from 12% to 15% and raising the ceiling of loan from Rs.40 lakh to Rs. 1.00 crore in September, 2005.

The Ministry of Micro, Small & Medium Enterprises has been operating for technology upgradation of Small Scale Industries under which capital subsidy on the Institutional Finance was provided in specified sub-sectors/products for induction of well established and improved technologies approved under the scheme. Consequently, the Scheme became popular among Micro and Small Enterprises with about 2400 units availing financial assistance (term loan) of Rs.727 crore (approx.) from the financial institutions and utilising a subsidy of Rs.80 crore (approx.) under the Scheme in a period of one-and-a-half years of its operation. At the request of many prominent Associations of Micro and Small Enterprises, the Ministry of Micro and Small Enterprises took initiative to extend the period of validity of CLCSS during XI Plan period for the benefit of Micro and Small Enterprises.

The Micro and Small Enterprises will be able to modernise their plants & machineries and upgrade their manufacturing technologies and will be able not only to survive in the most competitive environment of the present era of liberalisation and globalisation but will also be able to make remarkable progress and provide employment to many people and contribute to the national economy.

SEBI

Mutual Fund

• Standard Warning in Advertisements by Mutual Funds

Circular No. : SEBI/IMD/CIR No.12/118340/08 Dated 26.02.2008: SEBI has issued guidelines regarding Advertisements by Mutual Funds through Audio-Visual mediain exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996.

The hasty manner in which the standard warning "Mutual Fund investments are subject to market risks, read the offer document carefully before investing" is recited in the audio visual and audio media renders it unintelligible to the listener/ viewer. So, in order to improve the manner in which the said message is conveyed to the investors it has been decided in consultation with AMFI that with effect from April 1, 2008:

- The time for display of the standard warning be over a period of five seconds in case of audio advertisements and shall be read in an easily understandable manner.

- In case of audio visual advertisements the time for display and voice over of the standard warning be enhanced to five seconds.

All mutual funds are required to comply with the above requirements in letter and spirit.

Telecom Regulatory Authority of India

Press Release

• TRAI Releases Consultation Paper on Issues Relating to Entry of Certain Entities into Broadcasting and Distribution Activities

Press Release No . : 21/2008 Dated  25.02.2008: A consultation paper on the Issues relating to entry of certain entities into Broadcasting and Distribution activities has been issued by the TRAI. At present activities relating to the broadcasting sector, which include owning a TV or a Radio channel as well as its distribution through various distributing platforms, are mainly in the hands of Prasar Bharatii (an autonomous body created by an Act of Parliament) and the private sector.

The focus of consultation paper is on various factors involved in deciding the future policy, in the interest of broadcasting sector and public at large, on the entry of these entities into this sector. The consultation paper throws up questions to stakeholders about the entry and extent of involvement of these entities into broadcasting domain alongwith the safeguards required to prevent any possible misuse by these entities. The paper also highlights the constitutional provisions relating to Central and State Governments on the subject.

Cases

• Avron j. Arave, warden v. Maxwell hoffman

Respondent Maxwell Hoffman was convicted of first-degree murder and sentenced to death. Hoffman sought federal habeas relief on the grounds that, inter alia, his counsel had been ineffective during both pretrial plea bargaining and the sentencing phase of his trial. District Court, granted Hoffman's federal habeas petition in part and ordered the State of Idaho to resentence him. The Ninth Circuit Court of Appeals affirmed the District Court's decision regarding ineffective assistance of counsel during sentencing but reversed with respect to the ineffective assistance claim during plea negotiations. Hoffman now abandons his claim that counsel was ineffective during plea bargaining. The State agrees that the instant motion to vacate and dismiss with prejudice moots Hoffman's claim and asks that the motion be granted. Held, Respondent's motion granted because his claim for ineffective assistance of counsel during pretrial plea bargaining is moot, vacate the judgment of the Court of Appeals to the extent that it addressed that claim. The case is remanded to the United States Court of Appeals for the Ninth.

• Stephen Danforth, Petitioner v. Minnesota

New constitutional rules announced by this Court that place certain kinds of primary individual conduct beyond the power of the States to proscribe, as well as "watershed" rules of criminal procedure, must be applied in all future trials, all cases pending on direct review, and all federal habeas corpus proceedings. After this Court announced said "new rule" for evaluating the reliability of testimonial statements in criminal cases, in Crawford v. Washington, petitioner sought state postconviction relief, arguing that he was entitled to a new trial because admitting the victim's taped interview at his trial violated Crawford's rule. The Minnesota trial and appeals courts concluded that Crawford did not apply retroactively (Teague v. Lane). The State Supreme Court agreed, and also concluded that state courts are not free to give a decision of this Court announcing a new constitutional rule of criminal procedure broader retroactive application than that given by this Court. Petitioner's conviction became final before the new rule in Crawford was announced. Crawford shall not be applied retroactively on collateral review. Jurisprudence concerning the "retroactivity" of "new rules" of constitutional law is primarily concerned, not with the question whether a constitutional violation occurred, but with the availability or nonavailability of remedies.

News

• British co-pilot dies in flight

A British plane was diverted forcefully to Turkey on 25th Feb after the co-pilot died mid-flight. The flight was heading to Pathos in Cyprus from Manchester, which had to land in Istanbul after declaring a medical emergency on the flight deck. The GB Airways did not disclose the co-pilot's name, age and cause of death by saying that he died of natural causes. The same flight containing 156 passengers was flown on Monday to Cyprus.

• Fat Britain to pay more tax

In a never seen and heard a new rule has been introduced by insurance firms in Britain. From now being over weight would cost more as the insurance firms soon going to levy a 'fat tax' on seriously obese people. This would increase the premiums by 50% and the threshold at which the higher rate starts will be lowered. Legal & General, UK's biggest life insurer, confirmed that 13% of new applicants faced paying the higher premiums, which would apply to anyone with a body mass index of 30 or higher, point at which people are declared obese. Being a smoker also would increase the premium may be by 400% as it comes under high-risk categories.