Legislative and Regulatory Update
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In This Issue [No.129] July 30, 2005
Supreme Court High Courts & Tribunals RBI Ministry of Finance Ministry of Home Affairs Ministry of Railways Ministry of Health and Family Welfare International Cases and News
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- Sushil Kumar Sharma Vs. Union of India (UOI) and Ors.
MANU/SC/0418/2005
The petitioner filed Writ Petition under Article 32 of the Constitution challenging the constitutional validity of Section 498A, IPC on account of its misuse. According to the petitioner people try to take undue advantage of the sympathies exhibited by the courts in matters relating to alleged dowry torture. The Supreme Court, observed that the avowed object for which Section 498A IPC was introduced is to combat the menace of dowry death and cruelty meted out to married women by the husband, in-law and relatives.
It is a well settled principle that if a statutory provision is otherwise intra-vires, constitutional and valid, mere possibility of abuse of power in a given case would not make it objectionable, ultra-vires or unconstitutional. If there is abuse, the court by upholding the provision of law, may still set aside the decision and grant appropriate relief to the person aggrieved. Above being the position, the court held that there was no substance in the plea that Section 498A has no legal or constitutional foundation.
Smt. Ram Sakhi Devi Vs. Chhatra Devi and Ors.
MANU/SC/0413/2005
The appellant questioned the legality of the judgment rendered by a Single Judge of the Patna High Court in Second Appeal under Section 100 of the Code of Civil Procedure.
The plea raised was that the High Court could not have interfered with the judgment of the First Appellate Court, without framing a substantial question of law as enjoined by Section 100 of the Code.
The court after examining the said section concluded that the jurisdiction of the High Court to entertain a second appeal is confined only to such appeals, which involve a substantial question of law and it cannot interfere, in concurrent finding of facts recorded by Lower Courts except in case of perversity, illegality or irregularity in those findings.
It was held in the instant case that on a perusal of the impugned judgment passed by the High Court it did not show that any substantial question of law had been formulated. Thus the judgment was held not maintainable.
Aanaimuthu Thevar (Dead) by LRs. Vs. Alagammal and Ors.
MANU/SC/0416/2005
This appeal is against the dismissal of a suit for declaration of title over property on the ground of res judicata. .
The former suit was jointly filed by one Muthuswami as owner and mortgagor with the mortgagee, for possession and injunction the same was decreed against them. The subsequent suit was filed by the appellant who has purchased the said property from Muthuswami.
The Supreme court observed, that the present appellant was, therefore, litigating under the same title which Muthuswami had in the suit house.Further there was no appeal was filed against the earlier suit and in the issues framed in the former suits, the question of title and ownership of the suit house were substantially involved. Therefore the subsequent suit for declaration of title through the same person was held barred by the principle of res judicata.
Bombay
Khairulal Jabbar & Ors. Vs. L.C.T. Korea Horizon & Ors.
The suit by crew members was filed for recovery of arrears of salary besides certain sums which the was paid for maintenance of vessel. The vessel was confiscated and later on sold. The order of confiscation was passed by the Collector of Customs and also imposed penalty on the crew members. The owner of the vessel was given an option to redeem the vessel by paying fine. Union of India (defendant no 4) did not dispute the amount claimed in the suit, it claimed that before paying the arrears of salary they should be paid the amount of penalty imposed upon the crew members. As per the plaintiff the penalty is imposed on crew members and it cannot be recovered from the sale proceeds of the vessel which is the property of the owner of the vessel. The contention of defendant no. 4 was that since the vessel stood confiscated he is entitled to receive the entire sum o the sale proceeds
As per the court the vessel was confiscated and an option was given to the owner to pay fine and redeem the vessel, therefore the moment the fine is paid, the confiscation of vessel will be lifted. It was held that defendant no. 4 is not entitled to amount of personal penalty and even sale proceeds are not payable to defendant no. 4. the suit was decreed in favour of the plaintiffs.
Income Tax Appellate Tribunal
Promain Ltd. Vs. deputy Commissioner of Income Tax
Special bench consisting of 5 members was constituted under section 255 (3) of the Income Tax Act, 1961 to consider the Tribunal’s power to adjudicate upon the issue relating to validity of the search conducted under section 132 while disposing the appeal against block assessment. The assessee – company had challenged the validity of search conducted under sec. 132 in its appeal.
Search action under sec. 132 has three limbs, i.e., initiation of search, conduct of search and conclusion of search. Initiation of search includes all the actions culminating into issue of warrant of authorization assumes significance and relevance. The other two limbs do not have any direct bearing on the validity of search.
It was held that the tribunal has no power, either express or incidental/implied, to adjudicate upon the issue relating to the validity of search conducted under sec. 132 while disposing appeal against block assessment. Search action under sec 132 initiation of search which, includes all the actions culminating into issue of warrant of authorization assumes significance and relevance are not justiciable in an appeal before the Tribunal. As per the bench the only remedy in this matter lies in the form of writ from High Court.
Kerala
Annie Francis v. D.E.O., Aluva
The preponderant question to be decided in the present matter was “whether Article 30(1) of the Constitution confers a right on management of a minority educational institution to appoint a qualified high school teacher of its choice as headmaster without considering the seniority?". The court analyzing R.44, Chap.XIV-A, of Education Rules (Kerala), 1959 in light of Article 30(1) held that the Supreme Court’s decision in St. Thomas U.P. School and a Division Bench of this court in Haji Abdul Salam upheld the minority management’s action of selecting a headmaster other than the seniormost teacher.
Moreover, the court pointed out, as N. Ammad’s case followed by other decisions of the Supreme Court, has already upheld the Full Bench decision of this court in A.M. Patroni’s case and the Division Bench decision in Manager Corporate Educational Agency Case, those decisions cannot be held to be bad law. In addition, the court concluded, there are direct rulings by the Supreme Court on the point explaining the right of minority institutions with regard to appointment of Headmaster under R.44. And also, the court reasoned, since the ruling in T.M.A Pai case does not go counter to the cases relevant for deciding this matter the Supreme Court’s judgments have to be followed.
Tamil Nadu
Digvision Electronics Ltd. v Indian Bank
The issue in question before Madras High Court was whether a bank or Financial Institution, after the Enforcement of Security Interest and Recovery of Debt Laws Amendment Act 2004 could take action under Securitisation Act without the permission of the Debt Recovery Tribunal if the application was already pending before the same.
The High Court held that under the proviso of sec 19(i) of SIRDL Act 1973 as inserted by Amendment Act 2004, no Bank or Financial Institution would take action without the permission of the tribunal if no action had been taken earlier under the Securitisation Act.
It was further held that the application could be continued or a fresh application could be filed before the Tribunal in respect of unsecured assets not covered under Securitisation Act.
AP-DIR
Risk Management and Inter- Bank Dealings - Commodity Hedging
Circular No. A.P. (DIR Series) Circular No.03 Dated 23.07.2005: Vide the above circular, RBI decided to delegate the authority to select commercial bank ADs (Authorised Dealers) for granting permission to listed companies to hedge the price risk in respect of any commodity (except gold, silver, petroleum and petroleum products) in the international commodity exchanges/markets. RBI states that ADs may grant permission to corporates only after obtaining approval from the Reserve Bank. ADs would be required to submit a Board resolution before permitting corporates to undertake hedge transactions. Moreover banks which have been granted permission to approve commodity hedging may submit an annual report to the Chief General Manager, Reserve Bank of India, Foreign Exchange Department, Central Office, Forex Markets Division, Amar Building, 5th Floor, Mumbai – 400 001 as on March 31 every year.
Miscellaneous Series
OLTAS- File Segregation Utility Developed by Tax Information Network (TIN)
Circular No DGBA.GAD.No.382/42.01.034 /2005-2006 Dated 26.07.2005:Reserve Bank of India (RBI), has vide this circular, issued guidelines for using File Segregation Utility (FSU) wherein the functionality of the new utility is described in detail. Tax Information Network (TIN) has developed a FSU on the basis of the discussions of CBDT with NSDL (TIN) and banks.
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