SUPREME COURT

• ARBITRATION LAWS

Oil & Natural Gas Corporation v. M/s. Wig Brothers Builders & Engineers Pvt. Ltd. (Decided on 08.10.2010) MANU/SC/0828/2010

Challenge to Award under sections 30 and 33 of the Arbitration Act, 1940 - Scope and Powers of Courts

Held, It is now well settled that a court, while considering a challenge to an award under Sections 30 and 33 of Arbitration Act, 1940, does not examine the award, as an appellate court. It will not reappreciate the material on record. An award is not open to challenge on the ground that the arbitrator had reached a wrong conclusion or had failed to appreciate some facts. But if there is an error apparent on the face of the award or if there is misconduct on the part of the arbitrator or legal misconduct in conducting the proceedings or in making the award, the court will interfere with the award. In the instant matter, while passing the award exceeded his jurisdiction by ignoring the express bar contained in the contract and in awarding the compensation.

The Arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has traveled outside the bounds of the contract, he has acted without jurisdiction.

• PROPERTY LAWS

Har Narain (Dead) by LRs v. Mam Chand (Dead) by LRs. & Ors. (Decided on 08.10.2010) MANU/SC/0827/2010

Sale deed - Execution thereof whether subject to the doctrine of lis pendens

Held, doctrine of lis pendens would apply in the present case as the registration of the sale deed was subsequent to filing of the Suit and subsequent purchasers cannot claim benefit of the provisions of Section 19(b) of the Specific Relief Act, 1963. The subsequent purchaser has to be aware before he purchases the suit property. Thus, in the instant case the purchasers could not be held to be bona fide purchasers for value paid in good faith without notice of the original contract and the sale in their favour was subject to the doctrine of lis pendens. Legal maxim, pendente lite, nihil innovetur; provides that as to the rights of the parties to the litigation, "the conveyance is treated as if it never had any existence; and it does not vary them."

D.R. Rathna Murthy Vs Ramappa (Decided on 08.10.2010) MANU/SC/0830/2010

Sale Deed - Allegation of inter-lineations by one Party in the document whereby changing the nature of sale from absolute to conditional - Issue of Appreciation of Evidence - Power of High Court to interfere in proceedings under Second Appeal

The High Court can interfere with the findings of fact even in the Second Appeal, provided the findings recorded by the Courts below are found to be perverse i.e. not being based on the evidence or contrary to the evidence on record or reasoning is based on surmises and misreading of the evidence on record or where the core issue is not decided. There is no absolute bar on the re-appreciation of evidence in those proceedings, however, such a course is permissible in exceptional circumstances.

The trial court appreciated the evidence of the parties and their witnesses and came to the conclusion that the word "Avadhi" and the last part of the sale deed were inserted after the execution of the document making it a conditional sale deed from absolute sale deed. The suit was dismissed. The First Appellate Court without realising that there was contradiction in the oral testimony of two marginal witnesses, re-appreciated the entire evidence and reached the contrary conclusion. The High Court realising that the findings of facts recorded by the First Appellate Court were perverse, proceeded with appreciation of evidence and came to the conclusion that the trial court was right. The findings so recorded by the High Court were based on a proper appreciation of evidence and the statutory provisions applicable in the case. The animus to attestation has been totally absent. It is settled legal proposition that the document may be admissible but probative value of the entries contained therein may still be required to be examined in the fact and circumstances of a particular case.

As apparent from the facts and circumstances, there were inter-lineations after the document stood executed. The additions in question were of suspicious circumstances of a grave nature and hence ignored.

Kammana Sambamurthy (D) By LRs. v. Kalipatnapu Atchutamma (D) & Ors. (Decided on 08.10.2010) MANU/SC/0809/2010

Enforceability of Agreement to Sell - Whether agreement could be enforced against the vendor to the extent of his half share in the property - Terms of the agreement show that the vendor represented to the vendee that he was absolute owner of the property that fell to his share in the partition effected with his brothers and he did not have any male

Held, the present case is not a case of the performance of a part of the contract but the whole of the contract insofar as the vendor is concerned since he had agreed to sell the property in its entirety but it later turned out that vendor had only half share in the property and his wife held the remaining half. The agreement is binding on the vendor as it is without being fractured. There is neither segregation or separation of contract nor creation of a new contract. The conclusion of High Court that vendee is not entitled to seek specific performance of the agreement to the extent of half share of vendor's wife cannot be faulted. As clear from the evidence the vendee had no knowledge that vendor's wife has half share in the property which devolved upon her on the death of her son in testate.

• CONTEMPT OF COURT

Dinesh Kumar Gupta v. United India Insurance Co. Ltd. and Ors. (Decided on 08.10.2010) MANU/SC/0819/2010

Obstruction in administration of justice - Implementation of the award of compensation and initiation of inquiry against the Judge of the Motor Accident Claims Tribunal - High Court initiated suo moto contempt proceeding

Held, it is the settled law that casual or accidental or unintentional acts of disobedience under the circumstances, which negate any suggestion of contumacy, would amount to contempt in theory only and does not render the contemnor liable to punishment. Initiation of the contempt proceeding against the petitioner in the instant matter was based on a wholly wrong premise based on unsustainable and unfounded facts, which cannot be treated sufficient material.

• BANKING LAWS

Punjab and Sind Bank v. Allied Beverages Company Pvt. Ltd. and Ors. (Decided on 01.10.2010) MANU/SC/0802/2010

Rate of Interest - Award thereof - Section 19(20) Chapter IV of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 - Whether the High Court has power and jurisdiction under Section 34 of the Code of Civil Procedure, 1908 to change the periodicity of the payment of interest? Whether the claim of the Company for further reduction of the rate of interest feasible and acceptable?

Held, Award of interest pendente lite and post-decree is discretionary with the Court as it is essentially governed by Section 34 CPC dehors the contract between the parties. If the court finds that in the principal sum adjudged on the date of the suit the component of interest is disproportionate with the component of the principal sum actually advanced the court may exercise its discretion in awarding interest pendente lite and -post-decree interest at a lower rate or may even decline awarding such interest. The discretion shall be exercised fairly, judiciously and for reasons and not in an arbitrary or fanciful manner.

It was also held that a request made by the Company for further reduction upto 12% p.a was not allowed since it was a commercial transaction and the Bank being a nationalized bank

• SERVICE LAWS

Vijendra Kumar Verma v. Public Service Commission, Uttarakhand and Ors. Decided on 08.10.2010 (MANU/SC/0808/2010)

Selection of Judicial officers for Uttaranchal Judicial Service - Correctness of selection Criteria under challenge - Relief sought in form of declaration that since a new selection criterion was introduced during the midstream of the selection, the process stands vitiated

Held, the requirement and the necessity for having basic knowledge of computer operation, as one of the eligibility criteria and conditions for selection was well prescribed. This was also specifically mentioned in the advertisement issued making it clear to all the intending candidates that they must have basic knowledge of computer operation. When the list of successful candidates in the written examination was published in such notification itself, it was also made clear that the knowledge of the candidates with regard to basic knowledge of computer operation would be tested at the time of interview for which knowledge of Microsoft Operating System and Microsoft Office Operation would be essential. In the call letter also which was sent to the Appellant at the time of calling him for interview, the aforesaid criteria was reiterated and spelt out. Therefore, no minimum benchmark or a new procedure was ever introduced during the midstream of the selection process. All the candidates knew the requirements of the selection process and were also fully aware that they must possess the basic knowledge of computer operation meaning thereby Microsoft Operating System and Microsoft Office Operation. Appellant appeared knowing the said criteria and has taken a chance and opportunity therein without any protest at any stage and now cannot turn back to state that the aforesaid procedure adopted was wrong and without jurisdiction. It is also to be considered that the Indian judiciary is taking steps to apply e-governance for efficient management of Courts and accordingly, the new judges who are being appointed are expected to have basic knowledge of the computer operation. Therefore, the requirement of having basic knowledge of computer operation should not be diluted. However directions can be recommended to make the procedure more transparent. Procedure for testing the knowledge may not be foolproof but at the same time it cannot be said that the same was not reasonable or that it was arbitrary. Appellant thus failed to make out any case for interference with the impugned orders. Appeal dismissed

State of Orissa and Anr. vs. Sangram Keshari Misra and Anr. (Decided on 19.10.2010) MANU/SC/0860/2010

Charges framed by disciplinary authority - Quashing of charge memorandum and corrigendum issues in connection related thereto - Whether act of High Court in this regard sustainable - Adverse remarks against officers of the State Government in regard to issuance of corrigendum by High Court whether correct

Held, normally a charge sheet is not quashed prior to the conducting of the enquiry on the ground that the facts stated in the charge are erroneous. It is well settled that the correctness or truth of the charge is the function of the disciplinary authority. Therefore the contention raised that the charge to have been quashed without reserving to the State to proceed in accordance with law was quashed. The corrigendum was issued under a bona fide impression that correction of a typographical error in the charge memorandum could be issued when there was an order of interim stay, and therefore there was no intention to violate the interim stay. Consequently the High Court was justified in closing the contempt proceedings. But the High Court was not justified in expressing disapproval and issuing a warning to the senior officers of the State Government, which is deleted

• INSURANCE LAWS

Suraj Mal Ram Niwas Oil Mills (P.) Ltd. v. United India Insurance Co. Ltd. and Anr. (Decided on 08.10.2010) MANU/SC/0814/2010

Insurance - Repudiation of Insurance claim - Breach of Condition

Held, the special condition i.e. "each and every consignment" must be declared before dispatch of goods was clear and admits of no ambiguity. Appellant was obliged to declare "each and every consignment" before it left Appellant's factory premises and there was nothing in policy to suggest that insured had liberty to pick and choose dispatches, which they wanted to declare to insurer. Appellants were required to declare only those dispatches in which they had an insurable interest. There was breach of special condition in cover note for insurance policy on the part of Appellant. Therefore, repudiation of claim of Appellant by Respondents was justified - Appeal was of no Merit. Appeal Dismissed

• CRIMINAL LAWS

Maharashtra State Electricity Distribution Co. Ltd. and Anr. v. Datar Switchgear Ltd. and Ors. (Decided on 08.10.2010) MANU/SC/0815/2010

Quashing of Criminal Complaint - Exercise of Inherent Powers by High Court - Offence committed punishable under Sections 192 and 199 read with Section 34 of the Indian Penal Code, 1860

Held, inherent powers have to be exercised sparingly and with caution to secure the ends of justice and to prevent the abuse of the process of the Court. Wherever by a legal fiction the principle of vicarious liability is attracted and a person who is otherwise not personally involved in the commission of an offence is made liable for the same, it has to be specifically provided in the statute concerned. Neither Section 192 nor Section 199 of the Indian Penal Code incorporate the principle of vicarious liability, and therefore, it was incumbent on the Complainant to specifically aver the role of each of the accused in the complaint. In the instant case even the Board Resolution, adduced by Complainant, did not established that Appellant No. 2 herein was involved in alleged fabrication of false evidence or adducing same in evidence before Arbitral Tribunal. Document in question was submitted by Appellant No. 1 with an intention to support averments in written statement filed on their behalf, which could possibly influence decision of arbitral Tribunal. No prima facie case made out against Appellant No. 2 and the present was the fit case to exercise jurisdiction under Section 482. Prima Facie case had been made out against Appellant No. 1, therefore powers under Section 482 could not exercised in favour of Appellant No. 1. Impugned order against Appellant No. 2 quashed.

HIGH COURT

• EXCISE LAW

CALCUTTA HIGH COURT

Custom and Excise Law Pioneer Tubewell Industries (P) Ltd. v. State of West Bengal (Decided on 06.10.2010) MANU/WB/0581/2010 

Excise- Revision application of dismissal for review filed by the petitioner against an order passed by the 5th Bench of City Civil Court at Kolkata- Whether the ex-parte decree is sustainable when there is an embargo created under Section 11D of Central Excise Act, 1944?

Held, that the test of Section 11D of the Central Excise Act does not apply to a contractual field between a seller and a buyer where the dispute relates to a payment of an excess amount on account of excise duties and other levies. In the instant case the opposite party as plaintiff sought for the relief on account of fraudulent act of the petitioner to receive an excess money on account of excise duty not chargeable or leviable and the jurisdiction of the civil court cannot be said to be ousted by implication of Section 11D of the Central Excise Act 1944.

• CIVIL LAWS

Bandana Mukherjee v. Soma Mukherjee and Ors. (Decided on 05.10.2010) MANU/WB/0582/2010 

Title Suit- Revision application at the instance directed against the order where the Plaintiff filed an application under Order 39 Rule 1 and 2 read with Section 151 of the C.P.C. for passing interim relief's and restraining the Defendant Nos. 2 to 5 from realizing the 50% of the monthly salary of the Defendant No. 1 in favour of the Plaintiff-Whether the impugned order shall sustain?

Held, that the observations made by the learned lower Appellate Court cannot be supported as there is commission of errors of law and so the findings should be set aside. Full relief cannot be granted to the plaintiff at this stage but the employer may be directed to deduct 50% of the monthly salary of the defendant No. 1 for the present and to keep it under separate accounts by the concerned authority, that is, the defendant Nos. 2 to 5 for securing payment. The plaintiff has shown a strong prima facie hereof the mandatory injunction is necessary to prevent irreparable injury to the plaintiff .In the instant case the application was allowed and the Defendant Nos. 2 to 5 were directed to deduct 50% of the monthly salary of the Defendant No. 1 and to keep the same under a separate account. The deducted money shall be adjudicated from time to time upon application by the either parties to the suit and finally appropriate orders shall be passed at the time of passing the judgment.

State Bank of India v. Sri Mrinal Sarkar and Anr (Decided on 06.10.2010) MANU/WB/0580/2010 

Title Suit-In compliance of Section 34 of the SARFAESI Act -The Petitioner Bank has filed instant Revision application Challenging the order- Whether Civil Court has power to decide or determine or to pass any order touching the action taken by a secured Creditor under the SARFAESI Act.

Held-that the Civil Court has no power to decide or determine or to pass any order touching the action taken by a secured creditor under the SARFAESI Act. The jurisdiction of the Civil Court has been expressly ousted under Section 34 of the SARFAESI Act and any order passed by the Civil Court under the SARFAESI Act is illegal and without jurisdiction which cannot be allowed to sustain. In the case in hand the court below allowed the said application under Section 151 filed by the opposite parties directing the petitioner bank to revert back the possession and/or hand over the possession back to the opposite party though such possession has been taken by taking recourse to Section 13(4) of the SARFAESI Act. Such an order cannot be sustained in view of an ouster clause embodied under Section 34 of the SARFAESI Act. The dismissal of an application under Section 151 of the Code of Civil Procedure or any finding made in this revision application by this Court will not stand in the way of the appropriate forum while deciding the rights of the opposite parties .The petitioner bank and the appropriate forum shall be free to decide in accordance with law.

• FAMILY LAW

PATNA HIGH COURT

Joginder Bhagat and Ors. v. Jai Narayan Bhagat and Ors. (Decided on 07.10.2010) MANU/BH/0920/2010

Suit for partition- In compliance of Section 3 of the Bihar Consolidation and Prevention of Fragmentation Act-Schedule II property is the joint family property acquired by the defendant No. 1 in the capacity of Karta out of joint family fund.- Whether the Schedule II properties is joint family properties and the have got unity of title and possession over the same?

Held, that the Plaintiffs have failed to prove that Schedule II property is joint family property. On the contrary it is found that the defendant has been able to prove that the said property is his self-acquired property. So far Schedule II property is concerned, the Plaintiff have got no unity of title and possession therefore the finding of the learned Court below on this point is confirmed.

• CRIMINAL LAW

Birendra Tiwari Son of Brij Raj Tiwari, Proprietor of Patna Transport Organisation v. The State of Bihar and Shri S. Sinha, Area Sales Manager, Mahavir Spinning Mills Ltd. (Decided on 05.10.2010) MANU/BH/0921/2010 

Criminal- Petition against order in cognizance of offences under Section 407 and 120B of the Indian Penal Code 1860 -As per the complaint the accused persons were required to release the consignment after production of the transport receipt receipt but the Accused transporter had delivered the consignments to somewhere else without production of transport receipt and hence the transporter committed offence of criminal breach of trust- Whether the allegation made in the complaint petition discloses a purely a civil dispute?

Held, in the instant case the Court is satisfied that it is not a purely civil dispute, but contents of the complaint petition discloses specific case of commission of offence under Section 407 of the Indian Penal Code. Taking the view into account the petitioner has not made out an exceptional case warranting exercise of inherent in his favour. Keeping this in view the fact that the matter remained pending before this Court for a long period, it is desirable to direct the court below to proceed with the case expeditiously, so that the case may come to its logical end without any further delay.

• CRIMINAL LAW

DELHI HIGH COURT

Hitek Industries Industries (Bihar) Ltd. and Ors. v. The State of Delhi and Anr. MANU/DE/2667/2010 (Decided on 08.10.2010)

Criminal- Petition filed for quashing of complaint under Section 138 of Negotiable Instruments Act-In the instant case Petitioners entered into a compromise with the respondent and the learned Trial Court took cognizance of the offence in disregard to the compromise which resulted breach of compromise agreement- What if the Respondent does not agree to the compromise- Whether the Court has power to force compromise on the respondent?

Held, that the Court should quash the Criminal Complaint and consider that this is not the spirit of the judgment of the Supreme Court. The word 'compromise' itself signifies an agreement between the two parties to compound the offence. If the parties do not agree to compound the offence, the Court has to proceed with the complaint. It is different thing that the Court on considering the offer of payment of cheque amount plus cost may not award a punishment of imprisonment and may only award penalty plus compensation. The Court cannot force the Respondent to enter into a compromise on deposit of cheque amount or the penalty amount by the accused. The Court can only advise/ask the Respondent to consider the offer of compromise. The petitioner during arguments offered to pay 15% of the cheque amount as cost to be deposited with Legal Aid. It is submitted that in view of this offer of the petitioner the petition should be allowed and complaint under Section 138 NIC Act should be quashed.

• INTELLECTUAL PROPERTY LAW

BOMBAY HIGH COURT

Twentieth Century for Film Corporation. v. Sohail Maklai Entertainment Pvt. Ltd. & Anr. (Decided on 14.10.2010)

Infringement of copyright in the film - Copyright Act, 1957 - - Plaintiff claimed injunction restraining the Defendants from releasing its film 'K' in theatres or broadcasting or otherwise communicating it to the public in any manner or exporting its copies so as to infringe the script, screen, storyline and dialogues in its copyrighted work or so as to pass off the said film as and for the Plaintiff's film as an Indian version - Whether Defendants shall exhibit, release for exhibition or broadcast their film 'K' in any jurisdiction in the present form?

Held, In the present case, original novel expression of the idea in both the films of the Plaintiff and the Defendants relate to a man held hostage in a telephone booth by a sniper . Consequently, the injunction as prayed for granted . So the test of concluding whether the second work is a pirated copy is the impression of the average viewer and if other test is that if those parts were removed from the copied work whether the remainder would become meaningless and hence what must be seen is the substance, the foundation, the kernel and the copied work and to see if the rest can stand without it . Hence Defendants shall not exhibit, release for exhibition or broadcast their film 'K' in any jurisdiction in the present form so as to infringe the Plaintiff's copyright in the script, screenplay, story and dialogues so as to pass off the suit film as that of the Plaintiff's film 'P' without the consent of the Plaintiff

TRIBUNAL

• INCOME TAX APPELLATE

DELHI HIGH COURT

Commissioner of Income Tax v. Jindal Stainless Limited  (Decided on 06.10.2010) MANU/DE/2633/2010 

Direct Tax- Rectification under Section 154 of Income Tax Act, 1961- Appellant Tribunal deleted the addition of ` 39.28 lacs made by the Assessing Officer under Section 154 of the Act on the ground that AO's action was on a debatable issue and jurisdiction under Section 154 of the Act-Hence appeal.- Whether Assessing Officer can invoke jurisdiction u/s 154 to rectify assessment due to mere change of opinion and make disallowance of bad debts claimed by the Assessee?

Held, that in the present case Tribunal has rightly held that a decision on a debatable point of law cannot be treated as a mistake apparent from the record and hence Assessing Officer cannot invoke jurisdiction u/s 154 to rectify assessment due to mere change of opinion. Bad debts claimed by the Assessee cannot be disallowed.