SUPREME COURT

• Law Of Elections

Nandiesha Reddy Vs. Mrs. Kavitha Mahesh (Decided on 08.07.2011) MANU/SC/0762/2011

Failure to subscribe the nomination papers - Dismissal of Election Petition - Returned Candidate filed Applications under Sections 83 and 86 of the Representation of the People Act, 1951 read with Order VII Rule 11 of the Code of Civil Procedure, 1908 for dismissal of the election petition - High Court dismissed the said applications - Hence this petition - Whether High Court was correct in dismissing the Applications filed by the Returned Candidate

Held, Section 33(4) of the Act casts duty on a Returning Officers to satisfy himself that the names and the electoral roll numbers of the candidates and their proposes as entered in the nomination paper are the same as in the electoral rolls and, therefore, in our opinion, the Election Petitioner for the purpose of maintaining an election petition shall be deemed to be a candidate. Election Petitioner has averred that her nomination was subscribed by ten electors and that averment at this stage has to be treated as correct . There was still time left for presenting the nomination paper and in case the same would have been accepted for scrutiny, the Election Petitioner could had made deposit within the time. It is only after expiry of the time had the Election Petitioner not made the deposit, the nomination was liable to be rejected. It is trite that if an Election Petitioner wants to put forth a plea that a nomination was improperly rejected to declare an election to be void it is necessary to set out the averments for making out the said ground. The reason given by the Returning Officer for refusal to accept the nomination and the facts necessary to show that the refusal was improper is required to be set out in the election petition. In the absence of the necessary averments it cannot be said that the election petition contains the material facts to make out a cause of action. Section 83(1)(a) inter alia provides that an election petition shall contain a concise statement of the material facts. Further, Section 87 of the Act provides that subject to the provisions of the Act and the Rules framed there under every election petition shall be tried in accordance with the procedure applicable under the Code of Civil Procedure to the trial of suits. Order VI of the Code of Civil Procedure is devoted to the pleadings generally and Rule 2(i) thereof, inter alia, provides that every pleading shall contain statement in a concise form all the material facts on which the party pleading relies for claim. In an election petition, which does not contain material facts, no relief can be granted. The phrase 'material fact' as used in Section 83(1)(a) of the Act or Order VI Rule 2 of the Code of Civil Procedure has not been defined in the Act or the Code of Civil Procedure. In our opinion all specific and primary facts which are required to be proved by a party for the relief claimed are material facts. It is settled legal position that all material facts must be pleaded by the party on which the relief is founded. Its object and purpose is to enable the contesting party to know the case which it has to meet. An election petition can be summarily dismissed if it does not furnish the material facts to give rise to a cause of action. However, what are the material facts always depend upon the facts of each case and no rule of universal application is possible to be laid down in this regard. In the present case, the election petition does contain material facts and it is not liable to be dismissed at the threshold.

• Customs Law

Gammon India Ltd. Vs. Commissioner of Customs, Mumbai (Decided on 06.07.2011) MANU/SC/0739/2011

Exemption Notification - Benefit - Entitlement to - Notification No. 17/2001/Cus. Dated 1st March, 2001 - Customs, Excise and Gold (Control) Appellate Tribunal allowed the appeal preferred by the Commissioner of Customs and held that the Appellant were not entitled to benefit of exemption notification 17/2001/Cus - Hence this appeal - Whether import of the specified machine by Gammon can be considered to be an import "by a person who has been awarded a contract for construction of the roads in India", so as to fulfill Condition No. 38, laid down in Exemption Notification No. 17/2001/Cus dated 1st March, 2001

Held in case of ambiguity, a taxing statute should be construed in favour of the Assessee - assuming that the said principle is good and sound - does not apply to the construction of an exception or an exempting provision; they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of it must go to the State. This is for the reason explained in Mangalore Chemicals and other decisions, viz., each such exception/exemption increases the tax burden on other members of the community correspondingly. Once, of course, the provision is found applicable to him, full effect must be given to it. As observed by a Constitution Bench of this Court in Hansraj Gordhandas v. H.H. Dave that such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption. In the instant case the language of condition No. 38 in the Exemption Notification is clear and unambiguous, there is no need to resort to the interpretative process in order to determine whether the said condition is to be imparted strict or liberal construction. The decision of the Tribunal, holding that the Appellant was not entitled to the benefit of Exemption Notification No. 17/2001-Cus dated 1st March, 2001, cannot be flawed. The appeal being bereft of any merit is dismissed accordingly, with costs, quantified at `50,000/-.

• Environmental Laws

Lafarge Umiam Mining Pvt. Ltd. Vs. Union of India (UOI) and Ors. (Decided on 06.07.2011) MANU/SC/0735/2011

Clearance for mining of Limestone - Section 3(1) read with Clause (v) of Sub-section (2) of Section 3 of the Environment (Protection) Act, 1986 - Central Government on 27th January, 1994 issued Environmental Impact Assessment Notification whereby it directed that on and from the date of publication of the said Notification expansion or modernization of any activity or a new project listed in Schedule-I shall not be undertaken in India unless it has been accorded environmental clearance by the Central Government in accordance with the procedure specified in the Notification - Appellants made an application for granting environmental clearance for limestone mining project at Nongtrai, East Khasi Hills District, Meghalaya - Whether ex post facto environmental and forest clearances dated 19th April, 2010 and 22nd April, 2010 respectively stood vitiated by alleged suppression by M/s. Lafarge regarding the nature of the land. In this connection it was contended by learned Amicus and by the learned Counsel appearing on behalf of SAC that the EIA clearance under Section 3 of the 1986 Act dated 09th August, 2001 9 (being a parent clearance) was obtained by M/s. Lafarge on the basis of "absence of forest" with full knowledge that the project site was located on forest land

Held, the site clearance dated 18th June, 1999 and EIA clearance dated 09th August,. 2001 were based on misrepresentation by M/s. Lafarge. They proceeded on the basis that there was no forest. That, both the said clearances stood vitiated by suppression of material fact of existence of forest by M/s. Lafarge and as a sequel the subsequent revised environmental clearance dated 19th April, 2010 and forest clearance (Stage - I) dated 22nd April, 2010 stood vitiated. In this connection, it was submitted that having regard to Para 4.3.1 of the National Forest Policy, 1988 tropical rain/ moist forest is required to be totally safeguarded; that, the project is located in a tropical moist forest and no forest clearance ought to have been granted by MoEF because of the special ecological significance recognized by the 1988 policy. According to SAC, the fact that tropical moist forest existed in the area and continues to exist was known to M/s. Lafarge at all material times as can be seen from the NEHU Report of 1997 in which it has been categorically stated that the vegetation at the study site is a mixed moist deciduous forest composed of deciduous and evergreen tree elements; that, in the same Report it has been further stated that the vegetation of the area is a tropical semi-evergreen forest composed of deciduous and evergreen elements which is further corroborated by the assessment of Floral Diversity prepared by NEHU dated June, 2010 in which it has been stated that the forest in the study area is tropical moist deciduous forest, tropical semi-evergreen forest, savanna, sub-tropical broad leaves forest, forest garden, orchards and riparian forest; that, the vegetation in the unbroken area is tropical moist deciduous type with variable canopy cover mostly sparse. Thus, according to SAC and CEC, the undisputed position emerging from the record that the subject area is covered by a tropical moist forest deserving highest degree of ecological protection ought to have been taken into account by MoEF which was not done at the time of initial clearances dated 18th June, 1999 and 09th August, 2001. No reason to interfere with the decision of MoEF granting site clearance dated 18.6.1999, EIA clearance dated 09th August, 2001 read with revised environmental clearance dated 19th April, 2010 and Stage-I forest clearance dated 22nd April, 2010. Accordingly, I.A. No. 1868 of 2007 preferred by M/s. Lafarge stands allowed with no order as to costs. Consequently, I.A. No. 2937 of 2010 preferred by SAC is dismissed.

Environment - Application for clearance for mining in India - Guidelines to be followed by the Central Government, State Government and the various authorities under the Forest (Conservation) Act, 1980 and the Environment (Protection) Act, 1986 

Held, the words "environment" and "sustainable development" have various facets. At times in respect of a few of these facets data is not available. Care for environment is an ongoing process. Time has come for this Court to declare and we hereby declare that the National Forest Policy, 1988 which lays down far-reaching principles must necessarily govern the grant of permissions under Section 2 of the Forest (Conservation) Act, 1980 as the same provides the road map to ecological protection and improvement under the Environment (Protection) Act, 1986. The principles/ guidelines mentioned in the National Forest Policy, 1988 should be read as part of the provisions of the Environment (Protection) Act, 1986 read together with the Forest (Conservation) Act, 1980. This direction is required to be given because there is no machinery even today established for implementation of the said National Forest Policy, 1988 read with the Forest (Conservation) Act, 1980. Section 3 of the Environment (Protection) Act, 1986 confers a power coupled with duty and, thus, it is incumbent on the Central Government, as hereinafter indicated, to appoint an Appropriate Authority, preferably in the form of Regulator, at the State and at the Center level for ensuring implementation of the National Forest Policy, 1988. The difference between a regulator and a court must be kept in mind. The court / tribunal is basically an authority which reacts to a given situation brought to its notice whereas a regulator is a pro-active body with the power conferred upon it to frame statutory Rules and Regulations. The Regulatory mechanism warrants open discussion, public participation, circulation of the Draft Paper inviting suggestions. The basic objectives of the National Forest Policy, 1988 include positive and pro-active steps to be taken. These include maintenance of environmental stability through preservation, restoration of ecological balance that has been adversely disturbed by serious depletion of forest, conservation of natural heritage of the country by preserving the remaining natural forests with the vast variety of flora and fauna, checking soil erosion and denudation in the catchment areas, checking the extension of sand-dunes, increasing the forest/ tree cover in the country and encouraging efficient utilization of forest produce and maximizing substitution of wood. Thus, Court opined that under Section 3(3) of the Environment (Protection) Act, 1986, the Central Government should appoint a National Regulator for appraising projects, enforcing environmental conditions for approvals and to impose penalties on polluters. There is one more reason for having a regulatory mechanism in place. Identification of an area as forest area is solely based on the Declaration to be filed by the User Agency (project proponent). The project proponent under the existing dispensation is required to undertake EIA by an expert body/ institution. In many cases, the court is not made aware of the terms of reference. In several cases, the court is not made aware of the study area undertaken by the expert body. Consequently, the MoEF/ State Government acts on the report (Rapid EIA) undertaken by the Institutions who though accredited submit answers according to the Terms of Reference propounded by the project proponent. However, at times the court is faced with conflicting reports. Similarly, the government is also faced with a fait accompli kind situation which in the ultimate analysis leads to grant of ex facto clearance. To obviate these difficulties, a regulatory mechanism should be put in place and till the time such mechanism is put in place, the MoEF should prepare a Panel of Accredited Institutions from which alone the project proponent should obtain the Rapid EIA and that too on the Terms of Reference to be formulated by the MoEF.

(ii) In all future cases, the User Agency (project proponents) shall comply with the Office Memorandum dated 26.4.2011 issued by the MoEF which requires that all mining projects involving forests and for such non-mining projects which involve more than 40 hectares of forests, the project proponent shall submit the documents which have been enumerated in the said Memorandum.

(iii) If the project proponent makes a claim regarding status of the land being non-forest and if there is any doubt the site shall be inspected by the State Forest Department along with the Regional Office of MoEF to ascertain the status of forests, based on which the certificate in this regard be issued. In all such cases, it would be desirable for the representative of State Forest Department to assess the Expert Appraisal Committee.

(iv) At present, there are six regional offices in the country. This may be expanded to at least ten. At each regional office there may be a Standing Site Inspection Committee which will take up the work of ascertaining the position of the land (namely whether it is forest land or not). In each Committee there may be one non-official member who is an expert in forestry. If it is found that forest land is involved, then forest clearance will have to be applied for first.

(v) Increase in the number of Regional Offices of the Ministry from six presently located at Shillong, Bhubaneswar, Lucknow, Chandigarh, Bhopal and Bangalore to at least ten by opening at least four new Regional Offices at the locations to be decided in consultation with the State/UT Governments to facilitate more frequent inspections and in-depth scrutiny and appraisal of the proposals.

(vi) Constitution of Regional Empowered Committee, under the Chairmanship of the concerned Chief Conservator of Forests (Central) and having Conservator of Forests (Central) and three non-official members to be selected from the eminent experts in forestry and allied disciplines as its members, at each of the Regional Offices of the MoEF, to facilitate detailed/in-depth scrutiny of the proposals involving diversion of forest area more than 5 hectares and up to 40 hectares and all proposals relating to mining and encroachments up to 40 hectares.

(vii) Creation and regular updating of a GIS based decision support database, tentatively containing inter-alia the district-wise details of the location and boundary of (i) each plot of land that may be defined as forest for the purpose of the Forest (Conservation) Act, 1980; (ii) the core, buffer and eco-sensitive zone of the protected areas constituted as per the provisions of the Wildlife (Protection) Act, 1972; (iii) the important migratory corridors for wildlife; and (iv) the forest land diverted for non-forest purpose in the past in the district. The Survey of India top sheets in digital format, the forest cover maps prepared by the Forest Survey of India in preparation of the successive State of Forest Reports and the conditions stipulated in the approvals accorded under the Forest (Conservations) Act, 1980 for each case of diversion of forest land in the district will also be part of the proposed decision support database.

(viii) Orders to implement these may, after getting necessary approvals, be issued expeditiously.

(ix) The Office Memorandum dated 26th April, 2011 is in continuation of an earlier Office Memorandum dated 31st March, 2011. This earlier O.M. clearly delineates the order of priority required to be followed while seeking Environmental Clearance under the Environment Impact Assessment Notification 2006. It provides that in cases where environmental clearance is required for a project on forest land, the forest clearance shall be obtained before the grant of the environment clearance.

(x) In addition to the above, an Office Memorandum dated 26th April, 2011 on Corporate Environmental Responsibility has also been issued by the MoEF. This O.M. lays down the need for PS Us and other Corporate entities to evolve a Corporate Environment Policy of their own to ensure greater compliance with the environmental and forestry clearance granted to them.

(xi) All minutes of proceedings before the Forest Advisory Committee in respect of the Forest (Conservation) Act, 1980 as well as the minutes of proceedings of the Expert Appraisal Committee in respect of the Environment (Protection) Act, 1986 are regularly uploaded on the Ministry's website even before the final approval/decision of the Ministry for Environment and Forests is obtained. This has been done to ensure public accountability. This also includes environmental clearances given under the EIA Notification of 2006 issued under the Environment (Protection) Act, 1986. Henceforth, in addition to the above, all forest clearances given under the Forest (Conservation) Act, 1980 may now be uploaded on the Ministry's website.

(xii) Completion of the exercise undertaken by each State/UT Govt. in compliance of this Court's order dated 12.12.1996 wherein inter-alia each State/UT Government was directed to constitute an Expert Committee to identify the areas which are "forests" irrespective of whether they are so notified, recognized or classified under any law, and irrespective of the land of such "forest" and the areas which were earlier "forests" but stand degraded, denuded and cleared, culminating in preparation of Geo-referenced district forest-maps containing the details of the location and boundary of each plot of land that may be defined as "forest" for the purpose of the Forest (Conservation) Act, 1980.

(xiii) Incorporating appropriate safeguards in the Environment Clearance process to eliminate chance of the grant of Environment Clearance to projects involving diversion of forest land by considering such forest land as non-forest, a flow chart depicting, the tentative nature and manner of incorporating the proposed safeguards, to be finalized after consultation with the State/ UT Governments.

• Constitutional Laws

Ram Jethmalani and Ors. Vs. Union of India (UOI) and Ors. (Decided on 04.07.2011) MANU/SC/0711/201

Unaccounted monies in certain named powerful individuals in India, also including leaders of many political parties - Ineffective and slow investigation alleged - Special Investigation Team (SIT) sought to be constituted under a former judge or two of the Apex Court for investigation - Whether there is a need to constitute a SIT as sought to supervise the investigation

Held, it is necessary to create a body that coordinates, directs, and where necessary orders timely and urgent action by various institutions of the State . High Level Committee to be constituted by the Union of India, comprising of various officials from respective departments as specified to be forthwith appointed with immediate effect as a Special Investigation Team . SIT so constituted, to be headed by and include the Hon'ble Mr. Justice B.P. Jeevan Reddy as Chairman and Hon'ble Mr. Justice M.B. Shah as Vice-Chairman and the SIT will function under their guidance and direction. SIT to be charged with the responsibilities and duties of investigation, initiation of proceedings, and prosecution, whether in the context of appropriate criminal or civil proceedings of: (a) all issues relating to the matters concerning and arising from unaccounted monies of Hassan Ali Khan and the Tapurias; (b) all other investigations already commenced and are pending, or awaiting to be initiated, with respect to any other known instances of the stashing of unaccounted monies in foreign bank accounts by Indians or other entities operating in India; and (c) all other matters with respect to unaccounted monies being stashed in foreign banks by Indians or other entities operating in India that may arise in the course of such investigations and proceedings and other responsibilities as clarified and specified. Union of India to issue appropriate notification and publish the same forthwith

Right to Information

Unaccounted monies issue - Disclosure of documents referenced by Union of India including names and bank particulars relating to various bank accounts of Indian citizens in the Principality of Liechtenstein (Liechtenstein) -Denial of disclosure on the ground of they being secured pursuant to an agreement of India with Germany for avoidance of double taxation and prevention of fiscal evasion and disclosure of such names and other documents and information as secured from Germany would jeopardize its relations with India

Held, the agreement, by itself, does not proscribe the disclosure of the relevant documents and details of the same, including the names of various bank account holders . Agreement between Germany and India is with regard to German and Indian citizens' liability to pay taxes to Germany and/or India and does not even remotely touch upon information regarding Indian citizens' bank accounts in Liechtenstein that Germany secures and shares that have no bearing upon the matters that are covered by the double taxation agreement between the two countries - Information sought does not fall within the ambit of Article 26 of DTAA, which as referred therein means information necessary for carrying out the purposes of the agreement. Clause indicate that there is no absolute bar of secrecy, instead the agreement specifically provides that the information may be disclosed in public court proceedings, which the instant proceedings are. The proceedings in the instead matter relates both to the issue of tax collection with respect to unaccounted monies deposited into foreign bank accounts, as well as with issues relating to the manner in which such monies were generated, which may include activities that are criminal in nature also. Comity of nations cannot be predicated upon clauses of secrecy that could hinder constitutional or criminal proceedings. The language in the treaty cannot be interpreted in the manner sought by Union of India . The actions of governments can only be lawful when exercised within the four corners of constitutional permissibility and no treaty can be entered into, or interpreted, such that constitutional fealty is derogated from. The Double taxation agreement with Germany not an obstacle to disclosure

Unaccounted monies issue - Disclosure of documents referenced by Union of India (UOI) - Denial of information on the ground of infringing Right to privacy on individuals concerned

Held, right to privacy is an integral part of right to life, a cherished constitutional value. Revelation of bank account details of individuals, without establishment of prima facie grounds to accuse them of wrong doing, would be a violation of their rights to privacy. The mere fact that a citizen has a bank account in a bank located in a particular jurisdiction cannot be a ground for revelation of details of his or her account that the State has acquired State cannot compel citizens to reveal, or itself reveal details of their bank accounts to the public at large, either to receive benefits from the State or to facilitate investigations, and prosecutions of such individuals, unless the State itself has, through properly conducted investigations, within the four corners of constitutional permissibility, been able to establish prima facie grounds to accuse the individuals of wrong doing . It is only after the State has been able to arrive at a prima facie conclusion of wrong doing, based on material evidence, would the rights of others in the nation to be informed comes into play . UOI to disclose to the Petitioners all documents and information secured in connection with the matters specifically subject to the conditions that UOI is exempted from revealing the names of those individuals who have accounts in banks of Liechtenstein, and revealed to it by Germany, with respect of who investigations/enquiries are still in progress and no information or evidence of wrongdoing is yet available, names of those individuals with bank accounts in Liechtenstein, as revealed by Germany, with respect of whom investigations have been concluded, either partially or wholly, and show cause notices issued and proceedings initiated may be disclosed. SIT as constituted to take over the matter of investigation of the individuals whose names disclosed by Germany as having accounts in banks in Liechtenstein, and expeditiously conduct the same and to review the concluded matters also in this regard to assess whether investigations have been thoroughly and properly conducted or not, and on coming to the conclusion that there is a need for further investigation shall proceed further in the matter . After conclusion of investigations by SIT, the names may be disclosed with regard to whom show cause notices have been issued and proceedings initiated

High Courts

• Civil Laws

DELHI HIGH COURT

Pradeep Tyagi Vs. Delhi Financial Corporation and Ors. (Decided on 04.07.2011) MANU/DE/2493/2011

Notice - Recovery of Arrears - Section 32G of the State Financial Corporations (SFC) Act, 1951 - Petition seeks to impugn the action of Respondent No.1 issuing certificate for recovery as arrears of land revenue and further seeks to restrain the Respondent from causing arrest to the Petitioner

Held, though notice as aforesaid was issued to the Respondent no.3 Collector, Ghaziabad also but the Petitioner did not take steps for service of the Respondent No.3; a perusal of the order sheet shows that the same appears to have escaped the attention of the Court also and the matter was being listed for the last several dates, for hearing. The Supreme Court in Andhra Pradesh State Financial Corporation v. GAR Re-Rolling Mills (1994) 2 SCC 647 has held that the doctrine of election would not apply to cases where the ambit and scope of the two remedies is essentially different and that to hold otherwise may lead to injustice. It was further held that the State Financial Corporation must be held entitled and given full protection by the Court to recover its dues and it cannot be bound down to adopt only one of the two remedies provided under the Act. It is not the case of the Respondent No.1 DFC simultaneously pursuing the remedies under Section 29 and Section 32G. The Respondent No.1 DFC is not found to be under any disability to take recourse to the rights and remedies available to it under Section 32G for recovery of the amounts remaining due after recourse has been taken to Section 29. The Supreme Court in GAR Re-Rolling Mills (supra) has held that time has come for the Court to stop granting any indulgence to such persons. It was held that the aim of equity is to promote honesty and not to frustrate the legitimate rights of Financial Corporations which after advancing the loans take steps to recover their dues from the defaulting party. The Full Bench of this Court as far back as in Digambar Prasad v. S.L. Dhani 1969 ILR (Delhi) 1016 held that the grant of a writ is in the discretion of the court and court will decline to exercise discretion where conduct of the petitioner is such that it would be inequitable and unjust to grant him the relief. There is thus no merit in the petition; the same is dismissed.

• Service Laws

GAUHATI HIGH COURT (AGARTALA BENCH) 

Md. Aziz @ Md. Abdul Aziz, Ex. CT/GD, S/o Late Dangabab Ali Vs. The Union of India (UOI), represented by the Secretary to the Government of India, Ministry of Home Affairs, The Inspector General of Police, The Deputy Inspector General of Police and The Commandant, GC, CRPF (Decided on 30.06.2011) MANU/GH/0361/2011

Compulsory retirement with reduction in pension - Challenge in writ petition was to order passed under Section 11(1) of CRPF Act, 1949 and Rule 40(1) of CRPF Rules, 1955, by Commandant, against Petitioner, imposing penalty of compulsory retirement with 20 per cent reduction in pension

Held, No violation of natural justice and departmental enquiry was conducted in accordance with rules and existing departmental instructions and there was no irregularity or miscarriage of justice either by enquiry officer or disciplinary authority or by appellate authority. Punishments awarded, apparently, was not disproportionate, in view of gravity of charges leveled and proved against Petitioner, warranting interference in exercise of writ jurisdiction. Petition dismissed

• Criminal Laws

BOMBAY HIGH COURT

Central Bureau of Investigation (At the instance of Mr. N.S.Raju, PI, CBI) Vs. Dilip Sudhakar Pendse, Nalini Properties Pvt. Ltd. and Anuradha Dilip Pendse (Decided on 07.07.2011) MANU/MH/0852/2011

Order of committal - Application for Remand - Opposed thereof - Section 306 of Code of Criminal Procedure (C.r.P.C.), 1973  - Petitioner filed chargesheet against eight for the offences punishable under Section 120-B read with Sections 420, 468, 471 and 477-A of the Indian Penal Code "IPC" 1860 - Petitioner further filed an application for tendering pardon to accused no. 2 which was granted by the court - An application came to be filed by the present Respondents seeking remand of the said special case to the Court of CMM, Mumbai which was allowed - Hence this appeal

Held Apex Court held that the District Magistrate was not a persona designata, and an Additional District Magistrate, on authorisation, was included in the definition of the District Magistrate. It is not in dispute that in the present case, all the offences charged with are punishable with the sentence for a term upto seven years. As such, in a metropolitan area, these offences could be tried either by the CMM or ACMM. A conjoint reading of Sections 17, 29 and sub-section (5) of Section 306, the word used "Chief Judicial Magistrate" in sub-section (5) clause (a) (i) cannot be termed as Chief Judicial Magistrate alone and would include the Additional Chief Metropolitan Magistrates. If the tender of pardon is accepted by the ACMM, the case would be required to be committed for trial to the Court of Session. No doubt that the CMM would alone be entitled to exercise the administrative powers of transfers from one MM to another or from one ACMM to another. However, the power under Section 306(5) is not a power of transfer. It is a judicial power mandating the Magistrate taking cognizance to commit the case either to the Court of Session or the Special Judge, if the Magistrate taking cognizance is the CJM. In my considered view, it is only when the Magistrate taking cognizance is a MM, the case will be required to be made over to the Chief Metropolitan Magistrate. I find that the learned Special Judge has erred in holding that the ACMM had transferred the case to the Sessions Judge which power he did not possess and only the CMM possesses. At the costs of repetition, the order dated 16th September 2008 passed by the learned ACMM was not an order of transfer but was an order of committal of the case to the Court of Sessions.

BOMBAY HIGH COURT

Manjuviranna Kantayya Rai Vs. The State of Maharashtra (Decided on 07.07.2011) MANU/MH/0853/2011

Criminal Conspiracy - Conviction - Challenge against thereto - Trial Court convicted Accused No.2 and 4 for offence punishable under section 302, 120(b) of the Indian Penal Code but acquitted Accused Nos. 1 and Accused No.3 acquitted for the same charges giving benefit of doubt. - Hence this appeal

The essence of a criminal conspiracy is the unlawful combination and ordinarily the offence is complete when the combination is framed. Law making conspiracy a crime is designed to curb immoderate power to do mischief which is gained by a combination of the means. The encouragement and support which coconspirators Give to one another rendering enterprises possible which, if left to individual effort, would have been impossible, furnish the ground for visiting conspirators and abettors with condign punishment. For an offence punishable under Section 120B, the prosecution need not necessarily prove that the perpetrators expressly agree to do or cause to be done illegal act; the agreement may be proved by necessary implication. Offence of criminal conspiracy has its foundation in an agreement to commit an offence. A conspiracy consists not merely in the intention of two or more, but in the agreement of two or more to do an unlawful act by unlawful means. So long as such a design rests in intention only, it is not indictable. When two agree to carry it into effect, the very plot is an act in itself, and an act of each of the parties, promise against promise, actus contra actum, capable of being enforced, if lawful, punishable if for a criminal object or for use of criminal means. The prosecution has placed reliance on the evidence of PW Nos.1, 5 and 7. PW No.1. Not found that acquitted Accused No.1 Paresh Bhanushali and Accused No.3 Vindo Sahu had actually participated in conspiracy to commit murder of Tambhale. Even if they were present in one or two meetings, it can not be inferred from the facts and circumstances of the case that they can be held guilty for the charge of conspiracy to commit murder of Tambhale. The reasons given by the trial Court in acquitting Accused Nos.1 and 3 seem to be reasonable and the view taken by the trial court is a possible view in recording the order of acquitting in respect of Accused Nos.1 and 3. The trial Court had reasonably appreciated the evidence placed on record and had awarded conviction and sentence against Accused Nos.2 and 4. An order of grant of sanction was passed in view of the provisions of Section 39 of the Arms Act. Hence, there is any infirmity or error in the judgment and order of conviction passed against Accused Nos.2 and 4.. Criminal Appeal No.422 of 2004 filed by Original Accused No.2 and Criminal Appeal No.15 of 2004 filed by Original Accused No.4 are dismissed. Criminal Appeal No.207 of 2004 filed by the State against order of acquittal in respect of Original Accused No.1 and Original Accused No.3 stands dismissed.

• Direct Taxation LawS

CALCUTTA HIGH COURT 

Dheeraj Construction and Industries Ltd. Vs. Commissioner of Income-tax (Decided on 01.07.2011) MANU/WB/0445/2011

Assememt - Search and Seizure - Section 260 A of the Income Tax, 1961 - Whether the findings recorded by the Assessing Officer in respect of the aforesaid two transactions are based on any document recovered in course of search and seizure and secondly, if those findings are not so based, whether the Assessing Officer was justified in making assessment in the block assessment

Held finding of the Assessing Officer is not based on any material obtained during search and seizure but is founded on the documents reflected in the return of the Assessee and further enquiry made by the Assessing Officer indicating that no such persons existed at the address given by the Assessee. In course of search and seizure, a certificate of license showing that Shri Umesh Narayan Jha as proprietor of Sakti Construction who was found to be an employee of the propriety concern of D. K. Goyal was recovered. The Photostat certified copy of the cheque which was encashed after deleting the account payee mark in favour of Sakti Construction and making it a self drawn one has been placed before us by Mr. Poddar showing that the same was not seized at the time of search and seizure. Moreover, the payment by the said cheque was not made to Sakti construction and it was a self paid bearer cheque encashed by the drawer himself. Thus, merely because a license in the name of Sakti Construction was recovered from the office of the Assessee, such fact has nothing to do with the said encashment in favour of the drawer. Thus, the addition of Rs. 20 lacs which is shown in the regular books of account as payment made to M/S Faissan Construction and M/s. Sakti Construction as cash payment of Rs. 10 lakh each on August 24, 1995 and August 25, 1995 respectively as fictitious entry in block assessment was patently illegal as it had no connection with the search and seizure. Hence, as regards bogus purchases to the extent of Rs. 39,78,315/- and at the same time, the other finding as regards the alleged fictitious entry of Rs. 20 lac were based on no material recovered from search and seizure.

Block Assessment - Whether in view of our aforesaid finding the addition of Rs. 39, 78,315/- and a further sum of Rs. 20 lac can be made in block assessment

Held Supreme Court in a recent decision in the case of CIT v. Hotel Blue Moon held Chapter XIV-B provides for an assessment of the undisclosed income unearthed as a result of search without affecting the regular assessment made or to be made. Search is the sine qua non for the block assessment. The special provisions are devised to operate in the distinct field of undisclosed income and are clearly in addition to the regular assessments covering the previous years falling in the block period. The special procedure of Chapter XIV-B is intended to provide a mode of assessment of undisclosed income, which has been detected as a result of search. It is not intended to be a substitute for regular assessment. Its scope and ambit is limited in that sense to materials unearthed during search. It is in addition to the regular assessment already done or to be done. The assessment for the block period can only be done on the basis of evidence found as a result of search or requisition of books of accounts or documents and such other materials or information as are available with the assessing officer. Therefore, the income assessable in block assessment under Chapter XIV-B is the income not disclosed but found and determined as the result of search under Section 132 or requisition under Section 132-A of the Act. The finding as regards addition of Rs. 39, 78,315/- and a further sum of Rs. 20 lac is not based on any materials unearthed on search and seizure and thus, not liable to be assessed on block assessment under Chapter XIV B of the Act but should be subject to regular assessment. The appeal is allowed in part by answering the first question as regards the amount of Rs. 39,78, 315/- and Rs. 20 lac in the negative and against the Revenue.

Tribunals

• Direct Taxation Laws

IN THE ITAT MUMBAI 'J' BENCH

Shri Sanjay H. Jagwani Vs. Income Tax officer (Decided on 04.07.2011) MANU/IU/0624/2011

Addition of amount in Income Tax on account of gift received - Justification of - Assessing Officer held the gift of Rs. 25 lacs received by Assessee as not genuine and brought the same to tax under section 68 as unexplained cash credit - CIT(A) dismissed the appeal of the Assessee and upheld the Order of the Assessing Officer - Hence this Appeal - Whether or not the CIT(A) was justified in upholding the addition of Rs. 25lakhs on account of gift said to have received by the Assessee from his father-in-law

Held, the Assessee has furnished the details about identity of donor, his relationship and also some details about financial status of the donor. However, the Assessee has not given complete details about financial status of the donor inasmuch as the annual income of the donor from M/s. Super Technical Enterprises are not furnished, nor the Assessee has filed the bank statement of the donor for the relevant period. In view of the fact that the donor is a close relative of the Assessee, it is, indeed possible for the Assessee to give more specific details about creditworthiness of the donor by giving details of his status in Super Technical Enterprises, and income from the said concern, or such other cogent material as may reasonably establish the credit worthiness. In the alternative, the Assessee can produce copies of bank account from which the remittances in question have been made so as to demonstrate that the monies have actually been directly received from the said person. Hence, the matter is restored to the Assessing Officer for adjudication denovo and directing the Assessee to produce all such details about creditworthiness of the donor as he may be able to obtain. Appeal allowed

• Excise Laws

CESTAT WEST ZONAL BENCH AT AHMEDABAD

Chetna Zarda Company Shri Dinesh L. Daiya Vs. Commissioner of Central Excise (Decided on 01.07.2011) MANU/CS/0086/2011

Non-payment of Excise Duty - Investigating officers while carrying out verification found out that actual stock of ZATPAT gutkha in statutory records was 17,27,250 pouches of ZATPAT gutkha kept in the factory without accountal in the statutory records with the intention of clandestine clearances and 17,27,592 pouches of ZATPAT gutkha which were shown in the RG-1 Register were clandestinely cleared without payment of duty of excise - A Show cause notice dated was issued proposing confiscation of seized goods, appropriation of duty of Rs. 6,48,965/- paid on clearance of seized goods and imposition of penalty on all the three Appellants - M/s. Chetna Zarda Company filed appeal against aforesaid orders and Commissioner (Appeal) remanded the case to the adjudicating authority with the directions that both the notices shall be decided by a single officer in a single order after considering all the pleas made by the Appellants - Commissioner (Appeal) dismissed the appeal of the Appellants - Hence this appeal

Held, the FIFTY FIFTY gutkha, also carries the same date of manufacture of February 2006. As such, the findings of the Commissioner (Appeal) are factually incorrect. In this scenario, the party's plea that such dates were wrongly shown on the outer bags, are required to be accepted. If that be so, the stock of ZATPAT gutkha matched with the stock as recorded in RG-1 register. There is virtually no evidence on record to show that the goods recorded in RG-1 were cleared by the Appellants and the goods actually found in the premises were the one which were manufactured in January and February 2006 and not entered in RG-1 record. The confirmation of demand of duty on such goods is not called for, inasmuch as no reasonable prudent man would first clear the recorded goods and would keep the clandestinely manufactured goods in their factory. As such, by extending the benefit of doubt, Order of confirmation of demand of duty, imposition of penalty and confiscation of the goods against M/s. Chetna Zarda Company and imposition of penalty on Shri Dinesh L. Daiya set aside . Both the appeals are, accordingly allowed with consequential relief to the Appellants.