SUPREME COURT

• CRIMINAL LAWS

Childline India Foundation and Anr. Vs. Allan John Waters and Ors. (Decided on 18.03.2011) MANU/SC/0254/2011

Sexual and physical abuse of children - Challenge against Acquittal - Childline India Foundation filed a complaint alleging sexual and physical abuse at the Anchorage Shelters - Whether High Court was justified in acquitting all the accused by interfering with the order of conviction and sentence passed by the Trial Court?

Held, statements of PWs 1 and victims showed how accused sexually abused the children at the shelter homes and the analysis of the entire material clearly supported the prosecution case - Hence, it could not be claimed that the prosecution had not established all the charges leveled against the accused - Trial Judge correctly appreciated the evidence of victims and arrived at a proper conclusion, on the other hand, the High Court committed an error in holding that their statements were suspicious and not proved beyond shadow of doubt - Impugned judgment of the High Court acquitting all the accused set aside - Conviction and sentence passed by the Trial Court restored - Appeals allowed.

State of M.P. Vs. Ramesh and Anr. (Decided on 18.03.2011) MANU/SC/0255/2011

(a)  Challenge against Acquittal - Respondent No.2 filed an FIR stating that her husband (deceased) died after falling during a spell of giddiness - Another complaint was filed, in respect of the same incident, by PW.2 along with PW.1, daughter of deceased stating that the Respondents had murdered deceased - Respondents were convicted under relevant provisions of IPC - On appeal, High Court reversed the judgment of Trial Court and acquitted Respondents - Hence this Appeal

Held, in the instant case, Trial Court after considering the entire evidence on record came to the conclusion that the injuries found on the person of the deceased could not have been received from a fall on the ground - Injuries found on his body were in consonance with the deposition of P.W.1 - Also, statement of P.W.1 was affirmed by the statements of other witnesses, proved circumstances and medical evidence - Further, all the witnesses examined by the prosecution were neighbours of deceased - Thus, they were the natural witnesses and the Trial Court rightly placed reliance on their testimonies - Hence, findings recorded by the High Court being contrary to the evidence on record and thus, were held to be perverse and set aside - Impugned judgment of Trial Court restored - Appeal allowed.

(b)  Deposition of child witness - Reliability of

Held, deposition of a child witness may require corroboration, but in case his deposition inspired the confidence of the Court and there was no embellishment or improvement therein, the Court may rely upon his evidence - Evidence of a child witness must be evaluated more carefully with greater circumspection because he was susceptible to tutoring - Only in case there was evidence on record to show that a child was tutored, the Court could reject his statement partly or fully - However, an inference as to whether child was tutored or not, could be drawn from the contents of his deposition - Appeal allowed.

Sahebrao Mohan Berad Vs. State of Maharashtra (Decided on 18.03.2011) MANU/SC/0253/2011

 Murder - Challenge against Conviction - A report was filed before police stating that the deceased (wife of Appellant) met with an accidental death due to drowning - Whether High Court has rightly convicted the Appellant under Section 302 and 201 of the Indian Penal Code

Held, as per medical evidence the death was due to strangulation - Doctor specifically denied the suggestion that the deceased met with an accidental death due to drowning - Hence, High Court was right in holding that the circumstances proved pointed out towards the guilt of the Appellant and further deceased met with a homicidal death - Appeal dismissed.

• SERVICE LAWS

B. Premanand and Ors. Vs. Mohan Koikal and Ors. (Decided on 16.03.2011) MANU/SC/0249/2011

 Determination of Inter se seniority - Appellant Special Category appointees filed instant appeal alleging that they were senior to Respondent General Category appointees - Single Judge and Full Bench of High Court held that Respondents were senior to Appellants on the basis of principles of equity, justice and good conscience - Whether the Single Judge and Full Bench of High Court has rightly relied on the principles of equity, justice and good conscience, rather than law, while holding Respondents senior to Appellants

Held, as per Rule 27(c), seniority was to be determined by date of first effective advice made by Public Service Commission to State Government for appointment - In instant case, first effective advice for Appellants was made by Public Service Commission on 8-7-1992 whereas advice for Respondent was made on 6-4-1993, hence, Appellants were senior to Respondents - Rule 27(c) made it clear that Appellants are senior to Respondents as advice for their appointments were made prior to that for Respondents - Full Bench and Single Judge had relied on equity, justice and good conscience, rather than law, however, such approach was incorrect - When there was a conflict between law and equity, it was law which was to prevail - Equity could only supplement law when there was a gap in it, but it could not supplant law - Impugned judgments of Single Judge and Full Bench, therefore, were set aside - Appeal allowed.

• EXCISE LAWS

Sangam Spinners Ltd. Vs. Union of India (UOI) and Ors. (Decided on 18.03.2011) MANU/SC/0256/2011

Excise - MODVAT credit - Appellant's MODVAT credit claim in respect of diesel oil used for generation of electricity in their factory premises rejected by the Assistant Commissioner - Petition filed against Assistant Commissioner's order dismissed by the High Court- Appeal against High Court order contending that by the insertion of the 2nd proviso in Rule 57D by Notification No. 11/95-CE (NT) dated 16.03.1995 they became entitled for the credit of duty paid on high speed diesel oil which was used for generation of electricity - Whether the Appellants were entitled to MODVAT credit of duty paid on High Speed Diesel oil at any time during the period commencing on and from 16.03.1995 and ending with the day of Finance Act, 2000?

Held, high speed diesel oil for the purpose of generation of electricity was specifically excluded from the list of eligible inputs in the Notification No. 5/94- CE (NT) dated 01.03.1994 issued under Rule 57A of the Rules and also under Notification No. 8/95-CE (NT) dated 16.3.1995 from the list of eligible inputs - Therefore, on a conjoint reading of the aforesaid Notifications dated 01.03.1994 and 16.3.1995 as also the amendment to Rule 57D of Rules, it was sufficiently indicated that the Appellants were not entitled to MODVAT credit of duty paid in respect of high speed diesel oil which was used for the purpose of generation of electricity - Appeals dismissed.

• SALES TAX LAWS

Commercial Taxes Officer Vs. Jalani Enterprises (Decided on 17.03.2011) MANU/SC/0252/2011

Sales Tax - Determination of rate of sales tax on Jaljira - Whether Jaljira, not being a masala, falls under the residuary clause and is accordingly is liable to be assessed to sales tax at the rate of 10% and not

Held, Jaljira was a mixture of different spices after grinding and mixing - Therefore, it was nothing but a Masala packed into packets of different nature/quantity and sold to the consumers - Hence, Jaljira was taxable at the rate of 16% - Impugned judgment of the High Court set aside - Order passed by the Tax Assessment Officer was restored - Appeal allowed.

• DIRECT TAXATION LAWS

Guffic Chem P. Ltd. Vs. C.I.T., Belgaum and Anr. (Decided on 16.03.2011) MANU/SC/0250/2011

Direct Taxation - Non-Competition Fee - Assessee received Rs. 50 Lakhs from 'X' as a non-competition fee for agreeing not to compete with 'X' for 20 years in the territory of India - Assessing Officer (AO) assessed said receipt as income - Commissioner overruled the decision of AO and held that the said receipt was for loss of a source of income and capital in nature - Tribunal upheld the order of the Commissioner - On appeal, High Court reversed the order of the Tribunal and held the said receipt to be revenue in nature - Hence, instant appeal - Whether a payment under an agreement not to compete was a capital receipt or a revenue receipt?

Held, the position in law was clear and well settled that there was a dichotomy between receipt of compensation by an assessee for the loss of agency and receipt of compensation attributable to the negative/restrictive covenant - The compensation received for the loss of agency was a revenue receipt whereas the compensation attributable to a negative/restrictive covenant was a capital receipt - In the instant case, as the amount was received for a non-compete covenant, it was capital in nature - Impugned judgment of the High Court set aside and order of the Tribunal restored - Appeal allowed.

HIGH COURT

• CIVIL LAWS

DELHI HIGH COURT

Roshan Lal and Anr. Vs. Union of India (UOI) (Decided on 22.03.2011) MANU/DE/0932/2011

Civil - Death by poisoning - Dead body of the deceased was found on a platform- Appellant's claim for compensation before Railway Claims Tribunal submitting that deceased was a bona fide passenger was rejected by the Tribunal - Whether the Railway Claim Tribunal has rightly dismissed claim petition filed by the petitioner?

Held, the death of the deceased took place because of poisoning - There was nothing on record to prove that the railway authorities had anything to do with the poisoning incident or that they were negligent in avoiding such poisoning - Hence the claim petition filed by the appellant was rightly rejected by the Tribunal - Appeal dismissed.

• TAXATION LAWS

DELHI HIGH COURT

Madhu Rani Mehra Vs. Commissioner of Income Tax (Decided on 21.03.2011) MANU/DE/0927/2011

Direct Taxation - Capital asset - Valuation of stock-in-trade received by a partner of a firm on dissolution of the firm - Tribunal held that the option to value stock at the lower denominator of cost or market was available only to a going concern and as the firm had dissolved, the stock had to be valued at the market value - Whether Tribunal was correct in law in valuing the opening stock at market price

Held, when a partnership firm dissolved and one individual of the erstwhile firm continued to make a living out of a business and received stock of the firm, it was a capital asset in his hands - When that asset was introduced into a business as stock, it gets converted into stock-in-trade - The value of said stock would have to be the market value on the date of introduction - Hence, capital asset treated as stock-in-trade of proprietary business has to be valued at market value - Appeal allowed.

CALCUTTA HIGH COURT

J.K. Industries Ltd. Vs. Commissioner of Income Tax (Decided on 17.03.2011) MANU/WB/0147/2011

Direct Taxation - Claim of deduction on business expenditure - Disallowance of expenditure - Whether the Tribunal was justified in law in disallowing the foreign travel expenditure of the spouses of the Appellant's Managing Directors and Deputy Managing Directors who accompanied their husbands on business visit and its purported findings that the accompaniment of the spouses was not for business expedience/purpose of the business/direct or indirect benefit to the Appellant and disallowing the expenditure for the assessment year 2000-01 are arbitrary, unreasonable and perverse

Held, as per resolution taken by the Assessee regarding the expenditure for foreign tour of the wife of the Managing Director, the Company had not taken decision for spending on the foreign tour of the wife of a Deputy Managing Director - Thus, amount claimed for the foreign tour of the wife of the Deputy Managing Director was on the face of it not authorized by the said resolution and could not be considered for deduction under Section 37 of the Income Tax Act, 1961 - However, as regards the expenditure made for the foreign tour of the wife of the Managing Director, the same was authorized by the resolution of the Board of Directors for commercial expediency - Thus , it was not within the province of the Income-tax Authority to disallow such expenditure by sitting over the decision of the Board, in the absence of any specific bar created by the Statute for such expenditure - Order of the Tribunal below set aside - Direction given to the Assessing Officer to give benefit of deduction on the amount spent on the foreign tour of only the wife of the Managing Director - Appeal partly allowed.

• FOOD ADULTERATION LAWS

BOMBAY HIGH COURT

The State of Maharashtra At the instance of Shri R.D.Kokadwar, Food Inspector, Food and Drug Admn Vs. Bhausaheb Balaji Korde, Bhima Gajaba Holgir, Dagadu Baban Kanawade and The Firm Lingeshwar Sahakari Dudh Vyavsaik Sanstha Ltd. (Decided on 22.03.2011) MANU/MH/0379/2011

Food Adulteration - Challenge against Acquittal - Complainant, Food Inspector, filed complaint against accused person alleging breach of Section 7(v) read with Rule 50 of the Rules under the Prevention of Food Adulteration Act 1954, for not holding valid licence for storage and sale of cow milk - Judicial Magistrate acquitted all the accused being accused Nos. 1 to 4 - Whether accused committed offence under Section 7(v) of the PFA Act, for not having valid licence for storage of milk for sale, and consequently, committed offences punishable under Sections 16 and 17 of the PFA Act?

Held, as per material on record the accused society was not manufacturing or selling or storing milk for distribution or sale purpose, and the alleged sale of milk to the complainant by accused, was for limited purpose of taking sample and analysis, and it was apparent that the accused society was not doing business of selling milk, nor storage of milk was for the sale - There was nothing on record to indicate that the accused society was indulging into storage of milk for the purpose of sale, and in the absence of evidence in that behalf, it could not be said that licence under Rule 50 of the Rules under the PFA Act, was necessary for the business run by the accused - Accused society was merely an agent of the Milk Federation, and collected milk from the farmers and supplied the same to the Milk Federation for its further supply to the Government - Hence, view adopted by the Trial Court, while acquitting the accused persons was a possible view - Moreover, the reasoning adopted by the trial court for arriving at the conclusion of acquittal of the accused for the charges levelled against them was appropriate - Appeal dismissed.

• INTELLECTUAL PROPERTY LAWS

BOMBAY HIGH COURT

J.K. Sons Vs. Parksons Games and Sports and Mr. Ketan Mehta, Sole Proprietor of K.D. Corporation (Decided on 18.03.2011) MANU/MH/0370/2011

Infringement of Trade Mark - Passing off - Whether respondents themselves having infringed the mark of another, were entitled to any protection in respect thereof including as against the Appellants even assuming that they had otherwise made out a case for passing off and/or infringement of trade marks or of copyright?

Held, it was necessary for the Appellants to establish that the third party was in fact the proprietor of the mark 555 and that the respondents had infringed the same - In the instant case, there were no averments, to indicate that the Respondents' marks/cartons/labels were an imitation of the mark State Express 555 - There was no evidence whatsoever to the effect that the third party used the mark 555 or created the labels/cartons or marks prior to the creation of and use by the Respondents of the marks/labels and cartons - Appellants had not produced any evidence, and the pleadings were insufficient, to hold that the goods were such as to cause deception - Thus the Appellants must fail on facts - Appeal dismissed.

• COMPANY LAWS

ALLAHABAD HIGH COURT

Nirmal Jain Vs. Pradeshiya Industrial and Investment Corporation of U.P. and Anr (Decided on 18.03.2011) MANU/UP/0463/2011

 Recovery of loan from Petitioner the sole guarantor for the loan advanced by the Pradeshiya Industrial & Investment Corporation of U.P. (PICUP)

(a) Whether, PICUP a Financial Institution, can invoke provisions of the U.P. Public Monies (Recovery of Dues) Act, 1972 ('Recovery Act') for realization of the loan amount in view of Section 34 of the Recovery of Debts Due to the Banks and Financial Institutions Act, 1993 ('DRT Act')

Held no, after the coming into force of the DRT Act, recourse to the provisions of the U.P. Public Moneys (Recovery of Dues) Act, 1972 cannot be taken for recovery of dues because the U.P. Act does not find mention in Section 34(2) of the DRT Act.

(b) Whether the principles applicable to the principal debtor would also apply to a guarantor

Held, the case of a guarantor can be no different from that of the principal debtor - A guarantor is also a debtor - Liability of a guarantor is coextensive with the principal debtor - It is open to the State Financial Corporation to proceed against the principal debtor as also the guarantor or jointly to recover the dues - Notice of recovery of land revenue quashed - Petition allowed.

• CRIMINAL LAWS

BOMBAY HIGH COURT

Mr. Vinoskumar Ramachandran Valluvar and Essar Logistics Ltd. Vs. The State of Maharashtra (Decided on 18.03.2011) MANU/MH/0360/2011

 Issuance of notice prior to seizing of the bank accounts - Whether Section 102 of the Criminal Procedure Code, 1973 required the issuance of a notice to a person before or simultaneously with the action of attaching the Bank account

Held, Section 102 of the CrPC did not require the issuance of notice to a person before or simultaneously with the action of attaching (his) bank account in order to preserve secrecy in the mode of investigation lest valuable evidence would be lost - Opportunity of hearing to be given to the accused before taking action would frustrate the proceeding, obstruct the action, defeat the ends of justice and make the provisions of law relating to investigation lifeless, absurd and self-defeating - Further, like any other property a bank account was freezable - Freezing the account was an act in investigation and like any other act, it commands and behoves secrecy to preserve the evidence - It did not deprive any person of his liberty or his property - Ordered accordingly.