SUPREME COURT

• ARBITRATION

Department of Telecommunications v. Gujarat Co-operative Milk Marketing Federation Ltd. (Decided on 24.09. 2010) MANU/SC/0755/2010

Arbitral Award - Invalidation of Award passed by Arbitrator of low rank - Scope and interference of Court thereof - Whether Rank of Arbitrator can be a ground to invalidate the Award?

Held, the mere fact that the Arbitrator was of a rank lower than the officer who rejected the claim of the subscriber would not invalidate the arbitration or can be a reason for imputing bias to the Arbitrator. There is nothing irregular or erroneous in the said procedure. There was thus no ground for the High Court to interfere with the findings arrived at by the Arbitrator in exercising the power of judicial review. By assuming a non-existing appellate jurisdiction and by making wrong assumptions and drawing wrong inferences, the learned Single Judge has interfered with a reasoned arbitral award.

• CUSTOMS AND EXCISE LAWS

Commissioner of Central Excise, Visakhapatnam-ii v. M/s NCC Blue water products ltd. (Decided on 24.09.2010) MANU/SC/0756/2010

Assessment of Excise Duty - Sale of Shrimps and Shrimps seeds without requisite permission - Section 35(L)(b) of the Central Excise Act, 1944  - Whether sale by the Assessee without requisite Permission from the Development Commissioner, are to be assessed to Excise Duty?

Held, all excisable goods produced or manufactured in India are exigible to duty of Excise under Section 3 of the Act, the duties of Excise on any excisable goods, which are produced or manufactured by a 100 per cent EOU and allowed to be sold in India shall be an amount equal to the aggregate of the duties of customs which would be leviable under Section 12 of the Customs Act, 1962. The plea taken by the Assessee was that they were liable to pay duty under Section 3(1) of the Act together with customs duty on the imported raw material used in the manufacture of said finished goods, lying in the stock whereas the stand of the revenue was that Excise Duty under the proviso to Section 3(1) of the Act was payable on the finished goods with no customs duty being leviable on the raw materials used in the manufacture of finished goods.

• CRIMINAL LAW

V.P. Shrivastava v. Indian explosives ltd. & Ors. (Decided on 24.09.2010) MANU/SC/0757/2010

Discharge from Service - Voluntary Suppression Scheme - Sections 420 and 406 of Indian Penal Code, 1860 (IPC) - Whether the allegations in the complaint make out a case of criminal breach of trust, as defined in Section 405 of the IPC against the Appellants?

Held, no prima facie case had been made out against the Appellants in respect of the alleged offences under Sections 420 and 406 IPC. Even if the allegations made in the complaint are taken to be correct on their face value, may amount to breach of terms of contract by FCIL but do not constitute an offence of "cheating" punishable under Section 420 of the IPC. There was nothing in the complaint which may even suggest remotely that the IEL had entrusted any property to the Appellants or that the Appellants had dominion over any of the properties of the IEL, which they dishonestly converted to their own use so as to satisfy the ingredients of Section 405 of the IPC, punishable under Section 406 IPC. No prima facie case had been made out against the Appellants in respect of the alleged offences under Sections420 and 406 IPC, The complaint lacks any such substance. it was a fit case where the High Court should have exercised its jurisdiction under Section 482 of the Code quashing the complaint against the Appellants.

• Commercial Laws

Mumbai International Airport Pvt. Ltd. v. M/s Golden Chariot Airport & Anr. (Decided on 22.09.2010) MANU/SC/0746/2010

Extension of License - Oral assurance for extension - Non-compliance of assurance thereof -  Whether  a license can be held to be irrevocable  on  oral assurance for extension license 

Held, there is no scope for an oral extension of license. Therefore, the reasoning given by the Estate Officer, for not calling the officers of AAI to prove the case of oral extension of license of the contesting Respondent, was sound and does not call for any interference by this Court even when it acted as an appellate authority. It was amply demonstrated that the contesting Respondent has blown hot and cold by taking inconsistent stand, and had therefore prolonged several proceedings for more than a decade. The Court was constrained to hold that it did not pursue its proceedings honestly in different fora Appeals, were allowed with costs assessed at Rs.5,00,000/- to be paid by the contesting Respondent in favour of the Supreme Court Mediation Center within a period of two months.

Sandur Manganese and Iron Ores Ltd. v. State of Karnataka and Ors. (Decided on 13.09.2010) MANU/SC/0695/2010

Re-grant of Mining lease – Recommendation by Chief Minister  -  Section 11 of Mines and Minerals (Development and Regulation) Act, (MMDR) 1957 - Whether the State Government's recommendation and the proceedings of the Chief Minister are contrary to the provisions of Section 11 of the MMDR Act and Rules 59 and 60 of Mineral Concession Rules and not valid in law 

 Held, Vested power under a statute to be exercised by authority only in the manner provided in the statute itself - Section 2 of the MMDR Act, which is a parliamentary declaration, makes it clear that the State Legislature is denuded of its legislative power to make any law with respect to the regulation of mines and mineral development to the extent provided in the MMDR Act - It is not open to the State Government to justify grant based on criteria that are de hors to the MMDR Act and the Mineral Concession Rules - Perusal of the proceedings of the Chief Minister shows no clear reasons as to why Respondents were preferred over other applicants - Evaluation of all  applications has been done in the manner not envisaged by Section 11 -  Proceedings of the Chief Minister violative of Section 11(4) of the Act as the sub-section permits only the applications made pursuant to the notification to be taken into account and not applications made prior to the notification - Hence proceedings of the Chief Minister are contrary to the provisions and invalid in law - State Government directed to consider all applications afresh and make a recommendation to the Central Government

Recommendation by Chief Minister – Rule 35 of  Mineral Concession Rules, 1960 - Whether Rule 35 of the Mining Concession  Rules justify the recommendation of the State Government in favour of the Respondents 

Held, Rule 35 permits the State Government to differentiate between the "end use" of the minerals for the purpose of Sub-section (2) of Section 11 in addition to the matters in Section 11(3) - In the present case, all the parties, namely, Appellants and Respondents expressed their intention to use iron ore from the mines for producing steel and, therefore, the same "end use" requirement is satisfied- Rule 35 requires its application only in cases covered by Section 11(2) and not by Section 11(4) and thus, to the extent that it is Section 11(4) that covers Notification under Rule 59(1) and not Section 11(2)- State Government committed an error in relying on Rule 35 to exclude the Appellants

• SALES TAX

The Indure Ltd. and Another v. Commercial Tax Officer and Ors. (Decided on 20.09.2010) MANU/SC/0739/2010

Sales Tax Liability in Pursuance of terms of contract - Whether import of MS Pipes by Appellants was pursuant to a term of contracts between Appellant No.1 and National Thermal Power Corporation Limited (for short 'N.T.P.C.').

Held, that import had occasioned only on account of the covenant entered into between the Company and N.T.P.C. and the imported pipes were used exclusively for erection and commissioning of the plant. Respondents have failed to establish that these pipes were not used in the plant of N.T.P.C. Company has already deposited the Sales Tax liability "under protest". Respondent State would refund the same to the Company with Simple Interest at the rate of 6 percent from the date of its deposit till its refund within a period of three months, from the date of communication of the said order. In case amount is not refunded within three months, from the date of communication of said order, then Respondents would be liable to pay Compound Interest on the amount deposited by Appellants with the Respondents at the rate of 12 percent per annum. Appellant company is entitled to claim benefit under Section 5(2) of the Act.

HIGH COURTS

• PROPERTY LAWS

ALLAHABAD HIGH COURT

Gopal Singh Visharad and Ors. v. Zahoor Ahmad and Others (Ayodhya Case), (Decided on 30.09.2010) MANU/UP/1185/2010

ISSUES FOR BRIEFING

1. Whether the disputed site is the birth place of Bhagwan Ram?

The disputed site is the birth place of Lord Ram. Place of birth is a juristic person and is a deity. It is personified as the spirit of divine worshipped as birth place of Lord Rama as a child.

Spirit of divine ever remains present every where at all times for any one to invoke at any shape or form in accordance with his own aspirations and it can be shapeless and formless also.

2. Whether the disputed building was a mosque,  When was it built and by whom?

The disputed building was constructed by Babar, the year is not certain but it was built against the tenets of Islam. Thus, it cannot have the character of a mosque.

3. Whether the mosque was built after demolishing a Hindu temple?

The disputed structure was constructed on the site of old structure after demolition of the same. The Archaeological Survey of India has proved that the structure was a massive Hindu religious structure.

4. Whether the idols were placed in the building on the night of December 22/23rd, 1949?

The idols were placed in the middle dome of the disputed structure in the intervening night of 22/23.12.1949.?

5. Whether any of the claims for title is time barred?

O.O.S. No. 4 of 1989, the Sunni Central Board of Waqfs U.P., Lucknow and others Vs. Gopal Singh Visharad and others and O.O.S. No.3 of 1989, Nirmohi Akhara and Another Vs. Sri Jamuna Prasad Singh and others are barred by time.

6. What will be the status of the disputed site e.g. inner and outer courtyard?

It is established that the property in suit is the site of Janm Bhumi of Ram Chandra Ji and Hindus in general had the right to worship Charan, Sita Rasoi, other idols and other object of worship existed upon the property in suit. It is also established that Hindus have been worshipping the place in dispute as Janm Sthan i.e. a birth place as deity and visiting it as a sacred place of pilgrimage as of right since time immemorial. After the construction of the disputed structure it is proved the deities were installed inside the disputed structure on 22/23.12.1949. It is also proved that the outer courtyard was in exclusive possession of Hindus and they were worshipping throughout and in the inner courtyard (in the disputed structure) they were also worshipping. It is also established that the disputed structure cannot be treated as a mosque as it came into existence against the tenets of Islam.

• CRIMINAL LAWS

BOMBAY HIGH COURT

Shankar Maruti Bamne v. State of Maharashtra, (Decided on 23.09.2010) MANU/MH/1139/2010

Conviction based on Testimony of sole eye-witness- Challenge against thereto - Section 27 of the Indian  Evidence Act, 1872  - Whether the Trial Court justified in convicting the accused on the testimony of sole eye-witness?

Held, the testimony of this witness has been completely corroborated by the medical evidence as well as discovery made by the Appellant of the weapon of offence under Section 27 of the Evidence Act. The evidence of eye witness, discovery of weapon of offence under Section 27 of Evidence Act coupled with the medical evidence proves the charge of murder against the Appellant beyond all reasonable doubts It is well settled that conviction can be based on the testimony of the sole eye witness provided the evidence of such witness is cogent, trustworthy, reliable and is corroborated by other evidence and therefore criminal appeal is liable to be dismissed.

DELHI HIGH COURT

Ajay Jain v. Registrar of Companies NCT of Delhi and Haryana (Decided on 22.09.2010) MANU/DE/2450/2010

Making of False Statement in Prospectus - Section 63 and 628 of the Companies Act, 1956 - Petitioner herein has filed this petition under Section 482 of Code of Criminal Procedure, 1973  for quashing of criminal complaint against for making false statement in the prospectus 

Held, Petition is dismissed as the Petitioner's company while issuing prospectus made a statement to intending investors where it gave projections of profits and business of the company of only in the field of leasing and made untrue and misleading statement to the investors. The intention of making a false statement is to mislead or deceive the person to whom the statement is made. It is obvious that the statement made in the prospectus was prima facie a false statement deliberately made knowing fully well that the funds were not going to be utilized for the purpose they were collected .The plea taken by the petitioner that the case falls under Section 406 IPC was not tenable and it was prima facie a case of deliberately making a false statement and regarding calculation of period of limitation would start only after the date of filing of balance sheet and not from the date of issuing prospectus.

Gujarat High Court

Vithalbhai Nathabhai Sondarva Vs. State of Gujarat (Decided on 16.09.2010) MANU/GJ/0684/2010

Reduction of Sentence Period – Conviction and sentence under Sections 498(A), 306 of the Indian Penal      Code, 1860 – Appeal based on the point of quantum of punishment with contention that based on age a very harsh conviction has been imposed

Held, Allegations levelled against the present Appellant very serious in nature, but when sufficient period of sentence has already been undergone, in view of the poverty of the Appellant, the present case fit to consider the submissions made by the Appellant. The conviction though confirmed, order of sentence sentencing the Accused modified to the extent that instead the appellant-accused is hereby sentenced to undergo the period of sentence already undergone.

• CIVIL LAWS

BOMBAY HIGH COURT

Yashwanta and Ors. v. Mahadeo and Ors. (Decided on 22.09.2010) MANU/MH/1138/2010

Restoration of possession - Valuation of suit for declaration of title under Bombay Court Fees Act 1959 - Whether court fee shall be calculated under Sections 6(iv)(ha) and 6(iv)(diii) provison of the Bombay Court Fees Act?

Held, there is no question of paying any court fee for that relief on sale consideration paid by added Defendant No. 6 .objection of Petitioners is misconceived. A title suit valued appropriately initially, the challenge to lis pendense transfers is not essential. There is no finding of any jurisdictional error or perversity in the approach of learned Trial Court. Hence The petition is dismissed and rule is discharged.

• DIRECT TAXATION

BOMBAY HIGH COURT

Bombay Mercantile Coop Bank v. CBDT (Decided on 13.09.2010)

Condonation of delay -  Section 119(2)(b) of the Income Tax Act - Delay in appointment of the statutory auditor by the Registrar and a consequent delay in preparing the Section 44AB tax audit report - Whether delay in filing ROI due to late appointment of auditor would be condoned or not?

Held, as the power to appoint statutory auditors is that of the Central Registrar and that was done on 3rd September, 2001. The Registrar appointed Chartered Accountants to be statutory auditors in place of the Departmental Auditors. This change was made in respect of all societies. Therefore, the assessee cannot be blamed for the delay in carrying out its audit as the same was beyond its control. Contention of the Revenue that the departmental auditors had started the audit in the year 2000 and it was for the assessee to get the audit expedited cannot be accepted. Though the departmental auditors might have started the audit, it appears that pursuant to the said policy decision that was taken, the departmental auditors were replaced by the Chartered Accountants to be the statutory auditors. Therefore, the reason given for delay deserves to be accepted . It is well settled that in matters of condonation of delay a highly pedantic approach should be eschewed and a justice oriented approach should be adopted and a party should not be made to suffer on account of technicalities.

• Commercial Law

KERALA HIGH COURT

Vodafone Essar Cellular v. ACIT (Decided on 17.09.2010)

Discount given at the time of supply of Sim Cards and Recharge coupons-   Whether a "sale" of a Sim Card is  acceptable for rendering services to ultimate subscribers  to fall within  deduction under Section 194H.

Held, the argument that there is a "sale" of a Sim Card is not acceptable because a Sim Card has no value or use for the subscriber other than to get connection to the mobile network. Supply of the Sim Card is only for the purpose of rendering continued services by the Assessee to the subscriber of the mobile phone. Consequently, the charges collected by the Assessee at the time of delivery of Sim Cards or Recharge coupons is for rendering services to ultimate subscribers. The distributor is the middleman arranging customers or subscribers for the Assessee after ensuring proper identification and documentation. Besides the discount given at the time of supply of Sim Cards and Recharge coupons, the Assessee is not paying any amount to the distributors for the services rendered by them like getting the subscribers identified, doing the documentation work and enrolling them as mobile subscribers to the service provider namely, the Assessee. The argument that the relationship between the Assessee and the distributors is principal to principal basis is not acceptable. The distributor is an agent and canvasses business for the Assessee. The terminology used by the Assessee for payment to the distributors is immaterial. In substance the discount given at the time of sale of Sim Cards or Recharge coupons by the Assessee to the distributors is a payment for services rendered to the Assessee and falls within Section 194H. The contention that discount is not paid by the Assessee to the distributor but is reduced from the price and so deduction under Section 194H is not possible is not acceptable because the Assessee should have given discount net of the tax amount or given full discount and recovered tax amount thereon from the distributors.

• INSURANCE LAWS

DELHI HIGH COURT

Radiant Overseas Pvt. Ltd. Vs. Insurance Regulatory and Development Authority of India and Anr. (Decided on 21.09.2010) MANU/DE/2410/2010

Petition against Order passed by IRDA -  Business falls outside from the purview of the IA and that it does not require to obtain a licence from the IRDA - Whether Petitioner be considered carrying on the business of insurance in India?

Held, when a company incorporated outside India gets itself registered in India and does business in India through its agent authorised to accept insurance proposal, and to pay claims, and to do other business incidental to the work of the agency then it is considered that the company carries on business at the place of business in India .The facts of the present case shows that the Petitioner company was collecting prima on behalf of the Ukrainian company but the collection of the premium and the delivery of the certificate, both by the Petitioner, takes place in India . In the considered view of the Court, there is considerable merit in the case of the IRDA that the Petitioner is carrying on the business of insurance in India. Hence,writ petition is dismissed as the Court finds no error having been committed by the IRDA in passing the impugned order dated 30th July 2010.