SUPREME COURT

• CONSUMER

New India Assurance Company Vs. Zuari Industries Ltd. (Decided on 01.09.2009) MANU/SC/1586/2009

Claim and award of insurance policies pursuant to alleged short circuiting and flashover producing over currents in the factory of Respondent-Complainant - Claim challenged on the grounds that loss did not occur due to fire - Whether the National Consumers Disputes Redressal Commission rightly allowed the claim of the Respondent?

The proximate cause is not the cause which is nearest in time or place but the active and efficient cause that sets in motion a train or chain of events which brings about the ultimate result without the intervention of any other force working from an independent source. In the present case, it is evident from the chain of events that the fire was the efficient and active cause of the damage. Had the fire not occurred, the damage also would not have occurred and there was no intervening agency which was an independent source of the damage.

• SERVICE

Regional Manager, Bank of Baroda Vs. Anita Nandrajog (Decided on 01.09. 2009) MANU/SC/1587/2009

Respondent treated as having voluntarily terminated her employment on grounds of unauthorized absenteeism - Industrial tribunal passes award holding the order passed by the bank as illegal and unjustified under section 10 of the Industrial Disputes Act - Writ petition filed against the award of the tribunal dismissed in High Court - Whether the action of the bank is legal and justified in the wake of the judgments passed by the lower courts?

Under Clause 17(b) of the Bipartite Settlement it is clear that if an employee is absent without leave for more than 150 days and has no more leave to his/her credit then the Bank can validly order voluntary cessation of employment. Also, under Clause 17(b), when the management is reasonably satisfied that the employee has no intention of joining duty, it may call upon the employee to report for duty within 30 days failing which action could be taken under Clause 17(b). In the present case such a notice was given by the Bank but the respondent wanted leave for another eight months. It is thus clear that she had no intention of resuming duty within 30 days. Hence, the action of the Bank in terminating her service on the ground of voluntary cessation of employment was valid.

• DIRECT TAXATION

Liberty India Vs. Commissioner of Income Tax (Decided on 31.08.2009) MANU/SC/1585/2009

Claim for deduction on increased profits as profit of the industrial undertaking on account of DEPB and Duty Drawback credited to the Profit & Loss account - Assessing Officer denied deduction under Section 80IB of the Income Tax Act on the ground that the said two benefits constituted export incentives, and not profits derived from industrial undertaking - Whether profit from Duty Entitlement Passbook Scheme (DEPB) and Duty Drawback Scheme could be said to be profit derived from the business of the Industrial Undertaking eligible for deduction under Section 80IB of the Income-tax Act, 1961?

DEPB/Duty Drawback are incentives which flow from the Schemes framed by Central Government or from Section 75 of the Customs Act, 1962, hence, incentives profits are not profits derived from the eligible business under Section 80IB. They belong to the category of ancillary profits of such Undertakings. Analyzing the concept of remission of duty drawback and DEPB, the remission of duty is on account of the statutory/policy provisions in the Customs Act/Scheme(s) framed by the Government of India. In the circumstances, profits derived by way of such incentives do not fall within the expression "profits derived from industrial undertaking" in Section 80IB. Hence, the assessee was not entitled to deduction under Section 80IB of the Income Tax Act, 1961.

• INSURANCE

National Insurance Co. Ltd Vs. Parvathneni (Decided on 31.08.2009) MANU/SC/1588/2009

Claim for insurance pursuant to occurrence of accident - Claim challenged on grounds that there was no valid insurance coverage on date of accident and the company had no liability to pay any compensation - Whether a Court in exercise of its jurisdiction under Article 142 of the Constitution of India compel the company to pay compensation?

If the insurance company has no liability to pay then it cannot be compelled by the Order of the Court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle. Article 142 of the Constitution of India does not cover such type of cases. However, it is directed that the case be placed before the Chief Justice of India for constituting a larger bench to decide the following questions :

(1) If an Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor Vehicles Act or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle.

(2) Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142? Does Article 142 permit the Court to create a liability where there is none?

• FAMILY

Anil Kumar Jain Vs. Maya Jain (Decided on 1.09.2009) MANU/SC/1593/2009

Appellant and Respondent decide to obtain a decree of mutual divorce under section 13B of the Hindu Marriage Act, 1955 on account of differences - Respondent backtracks and does not want the marriage ties to be dissolved - District Court and High Court dismiss the petition - Can a decree be passed on a petition for mutual divorce under the Hindu Marriage Act when one of the petitioners' withdraws consent to such decree prior to the passing of such decree?

The Supreme Court can in special circumstances pass appropriate orders to do justice to the parties in a given fact situation by invoking its powers under Article 142 of the Constitution of India, but in normal circumstances the provisions of the statute have to be given effect to. The stand of the Respondent (wife) that she wants to live separately from her husband but is not agreeable to a mutual divorce is not acceptable, since living separately is one of the grounds for grant of a mutual divorce and admittedly the parties are living separately for more than seven years. In these situations, the petition for grant of mutual divorce under Section 13B of the Hindu Marriage Act, 1955, is accepted.

HIGH COURTS

• SERVICE

DELHI HIGH COURT

Asif Iqbal Vs. Union of India (Decided on 01.09.2009) MANU/DE/1922/2009

Petitioner was sent from Ministry of Finance to an Education Foundation under the Ministry of Minority Affairs on deputation basis - Pursuant to an order, the deputation period of Petitioner was cut short and sought to be repatriated to the parent cadre - Order challenged by Petitioner before Tribunal was dismissed - Whether the decision to repatriate casts a stigma on the ability and efficiency of the petitioner in the wake of the dismissal of the original application by the tribunal?

Even an efficient officer may turn out to be a misfit in a particular position or in a particular organization. Merely because an officer is not able to deliver goods due to factors which may or may not be within his control or his aptitude or his suitability to hold a particular post in a particular organization, does not mean that the officer can be tarred as inefficient or incompetent or unable to perform his duties satisfactorily. It does appear from a reading of the papers that the Petitioner, even though he may be an efficient officer with the Department of Revenue, happened to be not well suited for the job of a Secretary of the Foundation. It is merely fortuitous that the Petitioner is not well suited to the job of a Secretary to the Foundation requiring his repatriation to his parent cadre. Hence, no stigma has been cast upon the Petitioner in this regard. Court cannot comment on this one way or the other because this is a purely administrative matter.

• TENANCY

BOMBAY HIGH COURT

Shri Yadav Mahadu Koli Vs. Smt Sumitrabai Popatlal Shah (Decided on 1.09.2009) MANU/MH/0833/2009

Decree of eviction passed against original Defendant on grounds of willful default and damage to the property - The Order is challenged in Revision by the Appellants i.e. legal representatives of the original Defendant - Whether a denial of title of landlord by tenant, when such denial of title is not bonafide, forfeits the right of tenancy?

As per Section 12(1) of the Bombay Rent Act, a landlord shall not be entitled to recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of the said Act. One of the conditions of tenancy or lease as per Section 111(g) of the Transfer of Property Act, is that the tenant shall not deny the title of the landlord or shall not renounce his character as tenant by setting up title in third person or in himself. Section 111(g) of the Transfer of Property Act is not inconsistent with the scheme of the Bombay Rent Control Act. Giving consideration to the   facts and circumstances on record, the revision application has no merit and deserves to be dismissed.

• PROPERTY

BOMBAY HIGH COURT

Balaram & Ors Vs. Bhausing & Ors (Decided on 29.08.2009) MANU/MH/0834/2009

Claim for possession on title and past mesne profit - Plaintiff allegedly had executed an agreement of sale in respect of the land reserving his right in mango trees in the land and the defendant thereafter put in possession of the land - Defendant seeks dismissal of the claim of Petitioner on grounds of protection under section 53A of the Transfer of Property Act i.e "part performance" - Whether the defendant is entitled to protection of his possession in view of the doctrine of "part performance"?

The Plaintiff had executed an agreement of sale of two acres of alluvial land, in favour of the Defendant. The Plaintiff agreed to sell the land to the Respondent as he has received money in cash and handed over possession of the land to the Defendant. For the protection of "part performance", Paragraph 3 of Section 53A of the T.P. Act speaks of two eventualities, namely, (i) "and the transferee has performed his part of the contract", and (ii) "or is willing to perform his part of the contract". In the circumstances it cannot be said that the present Defendant has not performed his part of the contract as nothing has remained to be done by him. Hence, the Defendant is entitled to protection and the suit liable to be dismissed.