SUPREME COURT

• DIRECT TAXATION

Commissioner of Income Tax-I, Ahmedabad Vs.Gold Coin Health Food Pvt. Ltd. (Decided on 18.08.2008)

Levy of penalty - Whether the penalty under Section 271(1)(c) of the Income Tax Act, 1961 can be levied if the returned income after addition of concealed income is a loss

A combined reading of the Wanchoo Committee's recommendations and the Circular makes the position clear that Explanation 4(a) to Section 271(1)(c) intended to levy the penalty not only in a case where after addition of concealed income, a loss returned, after assessment becomes positive income but also in a case where addition of concealed income reduces the returned loss and finally the assessed income is also a loss or a minus figure. Therefore, penalty is leviable even in a case where addition of concealed income reduces the returned loss. In a case where on setting of the concealed income against any loss incurred by the assessee under any other head of income or brought forward from earlier years, the total income is reduced to a figure lower than the concealed income or even to a minus figure the penalty would be imposable because in such a case "the tax sought to be evaded" will be tax chargeable on concealed income as if it is "total income".

• CRIMINAL

Code of Criminal Procedure, 1973

Superintendent of Police, Karnataka Lokayuktha and Anr. Vs.B. Srinivas (Decided on 18.08.2008)

Inherent Powers of High Court - Whether High Court under Section 482 of Cr. PC can set aside proceeding on ground of allegation of delay in completion of investigation by investigating agency

Whether the accused has been deprived of fair trial on account of delay or protracted investigation would depend on various factors including whether such a delay was reasonably long or caused deliberately or intentionally to hamper the defence of the accused or whether delay was inevitable in the nature of things or whether it was due to dilatory tactics adopted by the accused. Therefore, where the accused alleges he has been deprived of fair trial on account of protracted investigation he has also to establish that he had no role in the delay. Once it is established then High Court cannot under Section 482 set aside proceeding on ground of allegation of delay in completion of investigation by investigating agency.

Deficiency in investigation - Whether deficiency or defect in investigation can be a ground for setting aside the proceeding

An illegality committed in the course of investigation does not affect the competence and the jurisdiction of the court for trial. If, therefore, cognizance is in fact taken, on a police report vitiated by the breach of a mandatory provision relating to investigation, it cannot be set aside unless the illegality in the investigation can be shown to have brought about a miscarriage of justice.

Arjun Mahto Vs. State of Bihar (Decided on 13.08.2008)

Reliability of evidence of related eye-witness - Whether evidence by eye witnesses can be discarded merely on ground that the said witnesses are related to the accused

Merely because the eye-witnesses are family members their evidence cannot per se be discarded. When there is allegation of interestedness, the same has to be established. Mere statement that being relatives of the deceased they are likely to falsely implicate the accused cannot be a ground to discard the evidence which is otherwise cogent and credible. In the present case, evidence of the injured witness was of vital importance and it was corroborated with sufficient evidence. And since it is a serious case of dacoity, any leniency in sentence would not only be undesirable but also would be improper.

• EXCISE

Sandur Micro Circuits Ltd.Vs. Commissioner of Central Excise, Belgaum (Decided on 13.08.2008)

Circular contrary to a exemption Notification - Whether a circular can have an overriding effect over a notification issued in respect of same matter

A Circular cannot take away the effect of Notifications statutorily issued. The Circular cannot whittle down an exemption Notification and restrict the scope of the exemption Notification or hit it down. In other words, by issuing circular, a new condition restricting the scope of the exemption or restricting or whittling it down cannot be imposed.

• SERVICE

V. Sivamurthy Vs. State of Andhra Pradesh and Ors. (Decided on 12.08.2008)

Compassionate Appointment - Whether compassionate appointment of sons/daughters/spouses of government servants who retire on medical invalidation is unconstitutional and invalid

When compassionate appointment of a dependant of a government servant who dies in harness is accepted to be an exception to the general rule, there is no reason or justification to hold that an offer of compassionate appointment to the dependant of a government servant, who is medically invalidated, is not an exception to the general rule. In fact, refusing compassionate appointment in the case of medical invalidation while granting compassionate appointment in the case of death in harness, may itself amount to hostile discrimination. The case of dependants of medically invalidated employees stands on an equal footing to that of dependants of employees who die in harness for purpose of making an exception to the rule. For the very reasons for which compassionate appointments to a dependant of a government servant who dies in harness are held to be valid and permissible, compassionate appointments to a dependant of a medically invalidated government servant have to be held to be valid and permissible.

• ELCTRICITY

Electricity Regulatory Commissions Act, 1998 Punjab State Electricity Board Vs. SIEL Ltd. and Ors. (Decided on 18.08.2008)

Discrimination in fixation of tariff - Whether imposition of cross-subsidy wherein industrial consumers pay more than actual average cost of supply and grant of subsizidation for consumers in agricultural and domestic sector is valid

The object of the 1998 Act is to prevent discrimination in fixation of tariff by imposing cross-subsidy, but at the same time under Section 29(5) of the 1998 Act, if the State Government so chooses to subsidise the supply of energy to any particular class of consumers, the same can be done provided the burden of loss suffered by the Company is borne by the State Government and not imposed on any other class of consumers.

• FAMILY

Hindu Minority and Guardianship Act, 1956

Nil Ratan Kundu and Anr. Vs. Abhijit Kundu (Decided on 08.08.2008)

Custody of a minor child - Who should be given custody of a minor child and whether the paramount consideration has to be the `welfare of the child' or the rights of the parents under a statute for the time being in force

In deciding a difficult and complex question as to custody of minor, a Court of law should keep in mind relevant statutes and the rights flowing therefrom. But such cases cannot be decided solely by interpreting legal provisions. It is a humane problem and is required to be solved with human touch. A Court while dealing with custody cases, is neither bound by statutes nor by strict rules of evidence or procedure nor by precedents. In selecting proper guardian of a minor, the paramount consideration should be the welfare and well-being of the child. In selecting a guardian, the Court is exercising parens patriae jurisdiction and is expected, nay bound, to give due weight to a child's ordinary comfort, contentment, health, education, intellectual development and favourable surroundings. But over and above physical comforts, moral and ethical values cannot be ignored. They are equally, or we may say, even more important, essential and indispensable considerations. If the minor is old enough to form an intelligent preference or judgment, the Court must consider such preference as well, though the final decision should rest with the Court as to what is conducive to the welfare of the minor.

HIGH COURT

• MOTOR VEHICLES

DELHI HIGH COURT

M.C.D. Vs. Raj Kishore Tiwari (Decided on 04.08.2008) MANU/DE/1062/2008

Whether in a motor vehicles case vicarious liability can be fastened on the employer for the negligent acts of employee during the course of employment

If the owner of the vehicle is taking the defence of theft by the driver responsible for the accident it will neither absolve the owner nor the insurer from indemnifying the risk of the third party. The reason is that by virtue of vicarious liability even though a person can only be held responsible for the consequences of his own action in certain circumstances, by reason of the particular legal relationship with the wrongdoer, a person can be held liable for the wrongful acts of another person. But for making a master vicariously liable for the wrongful act of his employee, it is, however, necessary that the wrongful act of the employee must fall within the course of the employment. Hence, for the negligent acts of employee vicarious liability can be fastened on the employer.

• CRIMINAL

DELHI HIGH COURT

Code of Criminal Procedure, 1973

Mukesh Vs. State (Decided on 01.08.2008) MANU/DE/1056/2008

Inherent powers of High Court - Whether High Court under Section 482 Cr. PC would be justified in dismissing an appeal without going into the merits of the appeal in cases where steps have been taken for securing the presence of the appellant by coercive means

The inherent powers of the High Court, as pointedly preserved in Section 482 of the Cr. PC, are always to be used with care and caution. Dismissal of an appeal by the High Court should be in exercise of its inherent powers and should be exercised with the greatest circumspection and restraint. There would be no justification to dismiss the Appeals, merely because the appellant or his advocate fails to appear or prosecute the appeals on a date of hearing. Dismissal would be justified where the Court has employed steps available to it to secure the presence of the convict. It would be justified where non-bailable warrants have not had the desired effect of ensuring the presence of the appellant/convict, or by completion of steps for declaring the convict as a proclaimed offender. But a party, who chooses not to participate in the hearing of his appeal, can scarcely complain of violations of his Fundamental Right to remonstrate against the curtailment of his personal freedom. A convict cannot abuse the process and defeat criminal justice. Hence, High Court would not be justified in dismissing an appeal without going into the merits of the appeal but would be justified if it is manifestly an abuse of the process of the Court.

• ELECTION

BOMBAY HIGH COURT 

Jyoti W/o Sanjay Walke @ Rukhama D/o Adelu Mane and Rajesh S/o Sudam Rathod Vs. The State of Maharashtra through Secretary, Department of Rural Development and Ors. (Decided on 18.07.2008) MANU/MH/0641/2008

Whether Returning Officer was justified in rejecting the nomination papers of persons belonging to Nomadic Tribes on the ground that the definition of Backward Class of citizens as provided in Section 3(a-3) of the Bombay Village Panchayats Act, 1958 does not include persons form Other Backward Classes(OBC)

On perusal of Section 3(a-3) of the Bombay Village Panchayats Act, 1958 the Court held that the persons belonging to Other Backward Classes, Vimukta Jatis and Nomadic Tribes are included in the definition of "Backward Class of citizens". If the contestants belong to Nomadic Tribes they were entitled to contest the elections under the reserved constituencies kept for backward class of citizens. The Returning Officer not justified in rejecting the nomination papers.

• PROPERTY

BOMBAY HIGH COURT 

Development Control Regulations for Greater Bombay

Lokhandwala Infrastructure Pvt. Ltd. (previous known as Lokhandwala Builders) Vs. Municipal Corporation of Greater Mumbai and Ors (Decided on 31.07.2008) MANU/MH/0652/2008

Where there is a large municipal plot and the buildings occupied by the tenants are situated on a portion of the proposed plot, whether under Regulation 33(7) of the Development Control Regulations for Greater Bombay, the Corporation is obliged to permit the developer appointed by the municipal tenants to redevelop the entire plot rather than subdividing the plot and then allowing redevelopment of the subdivided plot

Where the plot could be easily subdivided and the developer appointed by the tenants / occupants could be permitted to redevelop the subdivided plot under D.C.R. 33(7), the decision of the Corporation in permitting the redevelopment of the entire plot under D.C.R. 33(7) by the developer appointed by the tenants / occupants would amount to distributing Government largesse without any justification. Therefore, in the absence of any legal impediment for subdivision of the plot in question, the decision of the Corporation to allow the developer appointed by the municipal tenants to redevelop the entire plot instead of the subdivided plot amounts to conferring relief to the municipal tenants / occupants in excess of what is contemplated under D.C.R. 33(7).

• NEGOTIABLE INSTRUMENTS ACT, 1881

MADRAS HIGH COURT 

Naseer Vs. Balaji and Suresh (Decided on 04.07.2008) MANU/TN/0815/2008

Dishonour of cheque - In a case of dishonour of cheque, whether a court situated at a place from where the legal notice has been issued will be clothed with any territorial jurisdiction to entertain the complaint

The components for an offence under Section 138 of the Negotiable Instruments Act include (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount and (5) failure of the drawer to make payment within 15 days of the receipt of the notice. Therefore, a complainant can choose any one of those courts having jurisdiction over any one of the local areas within the territorial limits of which any one of those five acts was done.

Whether a proceeding under Section 138 of N.I Act in a particular court can be quashed on ground that the institution of proceedings in the said court would cause hardship to the parties involved in the proceedings

Merely because the parties to the criminal complaint will be put to hardship that cannot be a ground for quashing the proceedings but it may be a good ground to seek transfer of the cases to some other competent Court which will be convenient for the parties to attend.

• FAMILY

ALLAHABAD HIGH COURT

Amod Kumar Srivastava Vs.State of U.P. and Ors. AND Smt. Neelam Srivastava Vs. State of U.P. and Anr. (Decided on 23.05.2008) MANU/UP/0359/2008

Maintenance allowance - Whether a wife, who wilfully disobeys the directions given by the Court in the decree for the restitution of conjugal rights, can claim maintenance allowance under the provisions of Section 125 of the Code of Criminal Procedure 1973

If a decree for the restitution of conjugal rights is passed against the wife and having knowledge thereof she wilfully disobeys the directions given by the court in the decree, then she is not entitled to get any maintenance allowance from her husband. In such view of the matter, the order of interim maintenance in favour of the wife cannot be sustained.

Whether an unmarried daughter who has attained majority, but unable to maintain herself can claim maintenance

The liability to maintain a child who has attained majority arise only (a) if that child is not a married daughter and (b) if it is unable to maintain itself on account of (i) physical or mental abnormality or (ii) injury. The Code therefore, makes it clear that any child who has attained majority is not automatically entitled to claim maintenance even if he or she is unable to maintain himself or herself as was the case under the old Code. Hence, unless inability to maintain themselves is attributed to any physical or mental abnormality or injury within the meaning of Section 125(1)(c) Cr.P.C., the unmarried daughters would be disentitled to get maintenance allowance from their father after attaining majority under the provisions of Section 125 Cr.P.C.

TRIBUNAL AND COMMISSION

• EXCISE

CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH, MUMBAI

Central Excise Act, 1944

CCE, Aurangabad v. Bajaj Auto Ltd. (Tri- Mumbai) (Decided on 02.06.2008) MANU/CM/0309/2008

Assessable Value - When goods are cleared by the X company to Y company, whether assessable value could be rightly denied on the ground of related person if the Chairman of both the companies are the same and is also a a share holder of Y company

Shareholders, do not, by reason only of their shareholding, have an interest in the business of the company. Equally, the fact that two companies have common directors does not mean that the one company has an interest in the business of the other. Both the Respondents were not related persons and the assessable value has been correctly arrived.

CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT AHMEDABAD

Kaveri Metallising & Coating Industries Pvt. Ltd. v.CCE, Ahmedabad (Tri- Ahmedabad) (Decided on 02.05.2008) Manu/CS/0255/2008

Manufacture - Whether process of metallising and lacquering and laminating on duty paid Polyester, BOPP/PUC films etc. as well as selling of duty paid films amounts to manufacture under Section 2(f) of Central Excise Act, 1944

Impugned product is a film to start with and remains a film after lamination or metallization and no new and distinct product comes into existence. Hence, no manufacture takes place inasmuch as no new and distinct product comes into existence is in relation to Section 2(f).

• CONSUMER

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI

Consumer Protection Act, 1986

"Awaz", Punita Society, Ahmedabad, "Jagrut Nagrik", Baroda, Gujarat and Pradeep Kumar Thakur, New Delhi v. Reserve Bank of India, Mumbai and Ors. (Decided on 07.07.2008) MANU/CF/0107/2008

Exorbitant interest by bank on credit cards - Whether banks can charge the credit card users interest at rates ranging from 36 per cent to 49 per cent per annum if there is any delay or default in payment within the time specified and whether it amounts to charging usurious rates of interest

Charging of interest at rates ranging from 36 per cent to 49 per cent per annum is exorbitant and amounts to exploitation of the borrowers/debtors and is usurious . Penal interest can be charged only once for one period of default and shall not be capitalized . Charging of interest with monthly rests is also an unfair trade practice .

Jurisdiction - Whether Consumer Court has jurisdiction to entertain the complaint against banks for deficiency in service

If the bank has adopted any unfair trade practice, Section 14(1)(f) specifically empowers the Consumer Fora to give a direction to the bank/banks to discontinue such unfair trade practice. And therefore a complaint under Consumer Protection Act, 1986 would be maintainable.