SUPREME COURT

• Service Laws

Ajmer Vidyut Vitran Nigam and Ors. Vs. Navin Kumar Saini (Decided on 29.10.2010) MANU/SC/0923/2010

Regularisation of Service - Workmen asked to perform the function of the Junior Clerk - Whether entitled to scale of Junior Clerk from the relevant period in question?

Held, that the case of the workmen ought to have been considered for regularisation as Lower Division Clerk when the case of other persons similarly situated were considered by the Selection Committee. Persons junior to the workmen have been given the regular pay scale of the post of Junior Clerk with effect from 01.04.1982 whereas the workmen herein were appointed as Junior Clerks by order dated 26th June, 1984. They cannot be allowed to suffer only because they qualified in written examination and appointed as Junior Clerks by order dated 26th June, 1984. As the Respondents were found fit for appointment as Junior Clerks on the basis of the limited written examination, there does not seem any valid reason to suggest that they shall not be fit to be regularised as Junior Clerks when persons junior to them were regularised and given the regular scale of pay with effect from 1st April, 1982.

Therefore the Appellants were directed to consider the cases of Respondents for regularization as Junior Clerks with effect from 1st April, 1982 and in case they are found fit for regularization, grant them the pay-scale thereof from the said date.

• Family Laws

N. Srihari (dead) through LRs. and Ors. Vs. N. Prakash and Ors. (Decided on 29.10.2010) MANU/SC/0922/2010

Execution of document duly registered - Whether done under undue influence - Correctness thereof under challenge?

Held, that the alleged deed executed was though a registered document was not of free will as it provided that Smt. Chandramma was transferring only life interest. More so, the document contained large number of properties including eleven houses which had never been a subject matter of the Will dated 2.1.1956. The document on record i.e. the Will dated 2.1.1956 had never been admitted as required under the law.

Therefore, no fault can be found with the judgment impugned given by the High Court. Such a document cannot be taken on record. The said document had been examined and it made it clear that the said document did not create only the life interest for Smt. Chandramma, rather it created equal rights for both the beneficiaries. More so, once the freehold rights had been acquired in the said property at a subsequent stage by the beneficiaries, Smt. Chandramma had a right to deal with half share of the said property in any manner she liked. The case do not warrant review of the impugned judgment. 

• Commercial Laws

ORYX Fisheries Private Limited Vs. Union of India (UOI) and Ors. (Decided on 29.10.2010) MANU/SC/0921/2010

Cancellation of the registration certificate issued to act as Exporter - Whether action of cancellation fair and in compliance with principles of natural justice?

Held, in the instant case the alleged guilt of the Appellant has been prejudged at the stage of show cause notice itself. The cancellation order quotes the show cause notice and is a non-speaking one and is virtually no order in the eye of law. Since the same order is an appealable one it is incumbent on the third Respondent to give adequate reasons. The court was constrained to observe that unfortunately the matter was not considered by the High Court. Therefore, the order of the High Court could not be approved .The cancellation of the registration certificate of the Appellant be set aside and the registration to be declare valid if it was not vitiated for any other reason.

• Property Laws

Tamil Nadu Housing Board, Chennai Vs. M. Meiyappan and Ors. (Decided on 29.10.2010) MANU/SC/0914/2010

Question of delay and laches in entertaining a writ petition having been filed after a lapse of 16 years of the date of Award without any explanation for the delay-Whether High Court was not justified in entertaining the writ petition?

Held, the High Court was not justified in entertaining the writ petition. The writ petition failed on the short ground that the writ petition had been filed 16 years after the award was announced by the Collector. It is trite law that delay and laches is one of the important factors which the High Court must bear in mind while exercising discretionary power under Article 226 of the Constitution.

In the present case, as already stated, the Respondents did not furnish any explanation as to why it took them 16 years to challenge the acquisition of their lands, when admittedly they were aware of the acquisition of their lands and had in fact participated in these proceedings before the Land Acquisition Collector. The High Court should have dismissed the writ petition at the threshold on the ground of delay and laches on the part of Respondent. 

• Commercial laws

Angel Baby Products Pvt. Ltd. Vs. New Okhla Industrial Development Authority and Ors. (Decided on 27.10.2010) MANU/SC/0907/2010

waiver of penalty -Whether the High Court power to interfere by dismissing the Writ Petition would be maintainable?

Held, that neither this court was  inclined to interfere with the order of the High Court or the decision of the NOIDA relating to imposition of penalty and interest nor inclined to accept the interpretation given by the Officer on Special Duty to the order passed by the Chief Executive Officer on 24th March, 2002. Accordingly it was directed that in calculating the penalty and interest as payable under the agreement entered into between the parties, the said period of two months from the date of the order dated 24th March, 2002, shall be excluded. 

• Service tax

Association of Leasing And Financial Service Companies Vs. Union of India (UOI) and Ors (Decided on 26.10.2010) MANU/SC/0909/2010

Imposition of service tax- Whether entire power of taxation in respect of hire-purchase transactions is now vested only in the States under Entry54 of List II and that the Parliament has no power at all including the power to levy a service tax?

Held, that the word "sale" is a nomen juris. It is the name of a consensual contract. Service tax is a value added tax. Amount received as principal is not the consideration for services rendered. Such amount is credited to the capital account of the lessor/hire-purchase service provider. It is the interest/finance charge which is treated as income or revenue and which is credited to the revenue account. Such interest or finance charges together with the lease management fee/processing fee/documentation charges are treated as considerations for the services rendered and accordingly they constitute the value of taxable services on which service tax is made payable. Service tax is leviable on 10 per cent of interest portion vide Notification No. 4/2006. Service tax imposed by Section 66 (as amended) on value of taxable services referred to in Section 65(105)(zm) read with Section 65(12), insofar as it relates to financial leasing services including equipment leasing and hire-purchase is within the legislative competence of the Parliament under Entry 97, List I of the Seventh Schedule to the Constitution. Contracts entered to be dealt with by competent authority in accordance with the law laid down.

• Sales Tax 

Bhai Jaspal Singh And Anr. Vs. Assistant Commissioner of Commercial Taxes and Ors.* (Supreme Court) (Decided on 22.10.2010) MANU/SC/0885/2010

Exemption - Application of Rule 41 of West Bengal Sales Tax Rules, 1995, Rule 3(116) of Bengal Finance (Sales Tax) Act, 1941 and Section 31 of the Act, 1994 - (i) Whether the Assessee was entitled to get the tax exemption under Rule 3(116) of Bengal Finance (Sales Tax) Act, 1941.

Held, (i) In computing the valuation of plant and machinery, only the cost price/purchase price of the equipment invested by the Assessee had to be taken into account. Expression "investment" in plant and machinery was not subject to the impact of depreciation in the value of plant and machinery. Since Assessee's investment was more than 5 lacs before said period in question and since the investment continues to remain unchanged, Assessee was not entitled to exemption from payment of sales tax either under the Rules or under the notification.

(ii) Whether interest on tax can be charged only after quantification of tax liability by Assessing Officer.

(ii) Interest was compensatory in character and was imposed on an Assessee who  withheld payment of any tax as and when it is due and payable. Where tax due on the basis of the return has not been paid before the expiry of the last date of filing of such return, provision of Section 31(2) would apply to the recovery of such demand for the amount of tax due. Hence Assessee would be liable to pay interest even before quantification of tax liability.

HIGH COURTS

• LAW OF CONTRACT

DELHI HIGH COURT

Ashok Kumar khanna Vs. Johnson and Johnson co. and anr. (Decided on 01.11.2010) MANU/DE/2863/2010

Right of Distributorship for supply of various surgical and other items - Privity of contract - Whether there was any contract between the Plaintiff and Defendant in preliminary objection?

Held,  that there was no privity of contract between Plaintiff and Defendant no 2.The tender to Defendant No.2 was submitted by Defendant No.1 and the order by the hospital was also placed on Defendant No. l. The Plaintiff had claimed no relief against defendant No.1. The issue was decided against the Plaintiff and in favour of Defendant No.2. and therefore dismissed against Defendant No.2 and was decreed only against Defendant No.1 for recovery of Rs 30,000/- with pendente lite and future interest at the rate of 9% per annum and proportionate costs of the suit.

• SALES TAX

DELHI HIGH COURT

Reliance Infrastructure Ltd. Vs. Commissioner of Trade Taxes and Ors. ( Decided on 01.11.2010) MANU/DE/2885/2010

Revisionary power of Commissioner under Section 74A of the DVAT Act 2004- whether after the repeal of the DST Act a suo motu power of revision under Section 74A of the DVAT Act can be initiated.

Held, that on the basis of the analysis in the instant case the Division Bench held that the power of revision earlier available with the Commissioner has suffered a legal death. The submission shows that the Division Bench had categorically opined that Section 74A was in the statute book w.e.f. 1.4.2005. The revisional authority could have exercised the power and the legislature by making the said provision retrospective w.e.f. 1.4.2005 has clothed the authority with the said power. This court was disposed to think that the Division Bench possibly would have upheld the action had the amendment would have come into effect w.e.f. 1.4.2005. In view of the preceding analysis, court thought that this matter be placed before the Hon'ble Chief Justice for constitution of an appropriate larger Bench.

• SERVICE LAWS

DELHI HIGH COURT

CT. Arvind Kumar Vs. GNCT of Delhi and Ors. (Decided on 01.11.2010) MANU/DE/2872/2010

Dereliction in the discharge of official duties -where the inquiry officer actively participated in cross-examining a witness ?

Held, in the instant case no part of the statement made by PW-3 has been relied upon by the inquiry officer It is settled law that unless a wrong at a domestic inquiry results in a prejudice to the accused, the same is immaterial.

The first question was to seek an answer pertaining to the difference in what he told Insp. V. K. Kalia on 14.5.2005 and what he deposed before the inquiry officer and the second was the question by way of suggestion that he had been won over by the petitioner. The first question was not in the nature of cross-examination. It only sought a response of the witness with reference to the alleged previous statement made by the witness. The second question assumed the character of a cross-examination, but its nature showed the trivialness of the question, answer whereof was expected. It was noted that the inquiry officer had not referred to the same.

• BANKING LAWS

DELHI HIGH COURT

Ram Murty Pyara Lal and Ors. Vs. Central Bank of India and Ors. (Decided on 01.11.2010) MANU/DE/2878/2010

Redemption of the mortgaged property - Main issue in the instant case was till which stage the right of redemption can be exercised over the mortgaged property - whether the provisions of the Transfer of Property Act, including Sections 60 and 69, will be applicable or whether the provisions of the SARFAESI Act will be applicable with respect to redemption ?

Held, that there is no doubt that the provisions of the SARFAESI Act would be applicable because the said Act was a special Act dealing with respective rights and obligations with respect to proceedings took thereunder. It was trite that a special legislation would prevail over a general legislation. There was no necessity to burden our judgment with case laws on this point and which indeed were legion. The provisions of the SARFAESI Act would therefore prevail in case of any conflict and inconsistency of any provision therein with any provisions of the Transfer of Property Act and the CPC. That being so, various judgments which had been cited on behalf of the petitioners under the provisions of the Transfer of Property Act and the CPC would not apply at all.

• CIVIL LAW

PUNJAB AND HARYANA HIGH COURT

Sakshi Sehgal Vs. State Bank of India (Decided on 29.10.2010) MANU/PH/2204/2010

Non-filing of the written statement within stipulated period of time- applicability of provision of Order 8 Rule 1 Civil Procedure Code- Whether Defendant-petitioner can file written statement before the learned Trial Court?

Held, by keeping in mind , the golden rule that provision of Order 8 Rule 1 C.P.C. are not mandatory rather directory in nature and on sufficient cause being shown, Defendant can be permitted to file written statement after expiry of 90 days the court allowed Defendant- petitioner to file written statement before the learned Trial Court on or before 30.11.2010 with advance copy to the Plaintiff. Defendant - Petitioner herein had to pay Rs. 5,000/- as costs to the Plaintiff. It was made clear that no further time would be granted to Defendant in the event of non-filing of the written statement.

PUNJAB AND HARYANA HIGH COURT

Balwant Ram and Anr. Vs. Gendi Devi and Ors. (Decided on 29.10.2010) MANU/PH/2202/2010

Status quo qua possession of the suit property till the disposal of the suit- an application of ad-interim injunction during the pendency of the appeal.- whether suit decreed by the learned Trial Court vide judgment and decree dated 09.06.2010 after remand was maintainable?

Held, that parties should maintain status quo till the disposal of the appeal and the Appellate Court should decide the appeal itself at its own merit in accordance with law within 90 days from the date of certified copy of this order placed before the First Appellate Court. In the instant case present petition could be disposed of without notice to the respondents because notice to the respondents would unnecessary cause delay in the disposal of the appeal. Therefore, the Court proposed to decide this petition without notice to the respondents.

• BANKING LAW

BOMBAY HIGH COURT

Amit H. Jhaveri of Mumbai and Brader Incorporated Vs. Bank of Baroda a Banking Company (Decided on 12.10.2010) MANU/MH/1262/2010

Fraudulent bank transactions-Whether the Appellate Tribunal was justified in deciding the matter in favour of the Respondents?

Held that after referring to the facts of the case and precedents of various cases held that the Petitioners were the direct beneficiaries of the fraudulent transaction. When a person takes financial benefits for the purpose of business by fraudulent means or otherwise, then such a person can be said to be a debtor of the bank. It is not mandatory that unless and until all necessary documents are executed at the time of taking financial help the alleged fraudulent transaction can also be covered under the definition of debt. There is no infirmity in the order passed by the Appellate Tribunal. Petition was dismissed.

TRIBUNALS

• ITAT MUMBAI

Income Tax Officer Vs. M/s. Techno Shares & Stocks Ltd (Decided on 20.10.2010) MANU/IU/0536/2010

Depreciation- Applicability of Section 32(1)(ii) of the Income Tax Act, 1961- Whether Tribunal erred in allowing the depreciation on BSE Membership card to the Assessee

Held, In the present case the ratio in the case of Techno Shares & Stocks Ltd. v. CIT was no more res integra. Depreciation was allowable on the cost of the membership card under Section 32(1)(ii) of the Income Tax Act, 1961.

• SECURITIES AND EXCHANGE BOARD OF INDIA

Add Life Pharma Limited Vs. Securities and Exchange Board of India (Decided on 27.10.2010) MANU/SB/0110/2010

Dematerialization request-Application of Regulation 54(5) of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 -Whether the Adjudicating Officer was justified in imposing penalty on the Appellant company?

Held, that the plea of the Appellant company that it had changed its Registrar and Transfer Agent due to which the data base of the shareholders could not be shifted to the new agent on account of lack of coordination between the two was unconvincing and unacceptable. The shareholders of the company were denied the right to trade in the shares for no fault of theirs. The Appellant was guilty of culpable negligence in dealing with the requests from the investors. The adjucating officer was justified in passing such order penalizing the Appellant company..

AREVA T&D SAS and Ors. Vs. The Securities and Exchange Board of India (Decided on 29.10.2010)

Calculation of offer price in indirect acquisition-Application of The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997- Whether the Securities and Exchange Board of India was justified in considering the date of press release as the date of calculation of offer price?

Held, that after referring to the facts of the case held that the date 30th November, 2009, was a press release date to make the public aware that they were entering into exclusive negotiations for the acquisition of the parent company. No agreement was reached between them on that date and the parties had only agreed to negotiate in an exclusive manner in order to reach a final agreement for the proposed sale. The press release did not amount to an announcement of the global acquisition of the parent company. The Share Purchase Agreement was executed between the parties on 20th January, 2010, when a legally binding and concluded contract for taking over the parent company came into existence on that date. It was on this date that the global acquisition of the parent company was also announced. The Board was in error in directing the appellants to recalculate the offer price with reference to 30th November, 2009. This date was directed to be ignored and the parties to proceed further in accordance with law. Appeal was allowed.

• MUMBAI SECURITIES APPELLATE TIBUNAL

Alstom Sextant 5 and Ors. Vs. The Securities and Exchange Board of India (Decided on 29.10.2010) MANU/SB/0111/2010

Acquisition of shares-Board directed the Appellants to work out the offer price of the shares with reference to three dates namely, November 30, 2009, May 29, 2010 and June 7, 2010- whether or not the Board erred in directing the Appellants to recalculate the offer price with reference to November 30, 2009?

Held, in the instant case it is hold that Board erred in directing the Appellants to recalculate the offer price with reference to November 30, 2009. It was clear from the press releases that no agreement was reached between them on that date and the parties in fact only agreed to negotiate in an exclusive manner in order to reach a final agreement for the proposed sale. Therefore, November 30, 2009 cannot be considered as a reference date for calculating the offer price as on that date there was no agreement to acquire the parent company and there was only an intention to try and reach an agreement in that regard.

• CENTRAL INFORMATION COMMISSION

 RIGHT TO INFORMATION

Mr. Vinod Bharti Vs. Mr. Pawan Kumar Bhatia Public Information Officer and Manager (Decided on 28.10.2010) MANU/CI/0647/2010

Refusal of the information without giving any exemption under Section 8(1) of the Right to Information Act 2005- Whether PIO had any reasonable cause to offer for refusing to obey the directions of the Commission for providing the information.

Held, It was evident in the instant case that the PIO was determined not to follow the law and the directions of a statutory authority. It appeared that the PIO had no reasonable cause to offer for refusing to obey the directions of the Commission for providing the information. The PIO had not referred to any of the exemption clauses of Section 8(1) of RTI Act which was a codification of the fundamental right of the citizens where it specifies that denial of information can only be based on the exemption clauses of Section 8(1) of the RTI Act. The Commission therefore decided that Mr. Pawan Kumar Bhatia, Manager and PIO has no reasonable cause for refusing to give information. Since the delay has been for over 100 days the Commission imposes the maximum penalty of Rs. 25000/- leviable under Section 20(1) of the RTI Act 2005.

Mr. Rajkumar Vs. Public Information Officer, Government of NCT of Delhi (Decided on 28.10.2010) MANU/CI/0648/2010

Compensation for harassment and unnecessary humiliation- Whether deemed PI Os were guilty for not supplying the complete required information ?

Held, that it was apparent in the instant case that the deemed PI Os were guilty of not furnishing information within the time specified under Sub-section (1) of Section 7 by not replying within 30 days, as per the requirement of the RTI Act 2005.It appeared that the deemed PI Os actions attracted the penal provisions of Section 20 (1). A show cause notice were issued to them where and they were directed give their reasons to the Commission to show cause why penalty should not be levied on them as mandated under Section 20 (1). They would have to submit proof of having given the information to the appellant also.. If there were other persons responsible for the delay in providing the information to the Appellant then PIO was directed to inform such persons of the show cause hearing and directed them to appear before the Commission with him.