Legal News & Views

The Supreme Court of India has set aside a Madras High Court judgment in the case Tamil Nadu Mercantile Bank Ltd vs State. After this decision by the apex court, trial courts are now allowed to proceed with the prosecution of former directors of the bank who allegedly colluded with managers of five different firms to commit fraud against the bank. SC says, bank fraud not just a civil dispute. According to the charge sheets in the case, the managers of the five  firms were maintaining current account with the bank since 2000, and they collectively siphoned around INR 2.51 crore from the bank with the help of the other accused, sources informed. The fraud which was first discovered in June 2003, deployed the following modus operandi: The accused managed to encash cheques at the bank’s Tiruppur branch despite the drawers accounts not having the requested amount. Apparently, the branch manager facilitated the transactions using the Local Bill Discounting provisions. Later, after l

The Nation Consumer Disputes Redressal Commission directing a payout of a record Rs 5.90 crore compensation to the next of kin of a Delhi man who died in a lift mishap a decade ago has given a great boost to the cause of several consumers and lawyers fighting similar battles between the city's consumer forums. Last week the national commission had directed OTIS, RAW and Military Engineering Services (MES) to pay the compensation to the family of Vipin Handa (46), Director with the Research & Analysis Wing (RAW) who was crushed to death after the stalled lift that he was being helped out of starting moving downwards. On March 20, 2003 Handa was in the lift with 12 other officers after finishing a meeting at the Research Analysis Wing (RAW) office, Lodhi Road, Delhi when it stalled between the seventh and sixth floors. While one person was rescued just before Handa, the others got out of the lift when it opened on the sixth floor. In 2005, his wife Rashmi Handa and two child

The Supreme Court  announced on Tuesday that payments deferred or delayed to landowners will attract higher compensations, and would make such aquisitions void. In a significant judgment, the Supreme Court has held that if compensation for land acquired under the 1894 act has not been paid to the land owner or deposited with a competent court and retained in the treasury, then the acquisition would be deemed to have lapsed and would be covered under the 2013 law entitling the landowners to higher compensation. However, the only rider is that such an award of compensation should be five years or more prior to the enactment of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which was notified on Jan 1, 2014. "The deposit of compensation amount in the government treasury is of no avail and cannot be held to be equivalent to compensation paid to the landowners/persons interested," said a bench of Justice R.M.L

The Supreme Court has said that Indian courts have the jurisdiction to restrain foreign arbitration cases from going ahead, but permitted a dispute over the Board of Control for Cricket in India's media rights between World Sport Group (Mauritius) and MSM Satellite (Singapore) to be decided by the Singapore-based International Chamber of Commerce (ICC). A single judge of the Bombay High Court had on September 17, 2010 referred the row to the ICC for arbitration, but a division bench had stalled the process on an appeal. A two-judge top court bench, led by Justice AK Patnaik, restored the singlejudge order on January 24, 2014. The issue relates to the Indian Premier League's media rights. World Sport had first sought ICC arbitration. The top court rejected the contention that because an agreement provided "that any party may seek equitable relief in a court of competent jurisdiction in Singapore, or such other court that may have jurisdiction over the parties, the Bomb

An insurance company's delay in meeting the just dues of a medical insurance policy holder resulted in it being forced to pay him nearly double the sum. The District Consumer Disputes Redressal Forum, Kolkata, Unit - II, even issued a warrant of arrest against a divisional manager of the United India Insurance Company Ltd after which the company paid the entire sum due along with costs and damages. Had the company heeded the decision of the insurance ombudsman, it would have got away by paying the policy holder only Rs 18,855. By forcing him to approach the consumer court, the company ended up paying an additional Rs 18,250 in costs and punitive damages. Sugata Shankar Roy, an advocate, who was the complainant in this case held a medical insurance policy of Rs 50,000. After hospitalization, the insurance company reimbursed only Rs 17,884. Not satisfied with this he approached the insurance ombudsman who ordered on November 16, 2012, that an additional Rs 18,855 was due to

The Supreme Court has awarded an additional Rs 75,000 to an unmarried embroidery worker who lost a leg in a road accident, saying “loss of marriage prospects” should be taken into account while calculating damages in such cases. Justices S.J. Mukhopadhyaya and V. Gopala Gowda also awarded Sanjay Kumar Rs 1 lakh for “loss of amenities”, enhancing the total amount to Rs 14.59 lakh, after the bench had nearly doubled the Rs 6.35-lakh compensation fixed by Delhi High Court. Kumar, a bachelor, had sought additional compensation on the ground that the accident had hurt his marriage prospects but the high court had declined to consider the plea. The top court disagreed. “On the point of loss of marriage prospects, we feel that it is a major loss, keeping in mind the young age of the appellant…” the bench said, adding the high court had “gravely erred in not awarding adequate compensation separately under this head”, clubbing it instead under “loss of future enjoyment of life” an

The Supreme Court has ruled that a written undertaking given by a borrower that he would not dispose of his properties during the currency of the loan cannot be enforced, unless it is registered. Even if it is written on a stamped paper, the undertaking will not create a charge on the properties. In this case, Haryana Financial Corporation vs Gurcharan Singh, the proprietor of a steel manufacturing unit took a loan which it could not repay. The corporation sold his properties and appropriated the proceeds on the ground that the proprietor had given an undertaking that he would not dispose of his properties during the pendency of the loan. The proprietor moved the court and won. Dismissing the appeal of the corporation, the Supreme Court clarified there will be no charge on the properties, unless there is deposit of title deeds or an undertaking through a registered document. Article referred: http://www.business-standard.com/article/opinion/cancellation-of-licences-upheld-1140112008

When a person employs his brother as a driver of his vehicle, there is employer-employee relationship under the Workmens' Compensation Act and the insurance company is liable to compensate for his death in a road accident in the course of employment, the Supreme Court ruled in the case, T S Shylaja vs Oriental Insurance Co. In this case, a 20-year-old youth was driving his vehicle when a truck hit and killed him. His mother sought compensation and the Commissioner under the Act granted him Rs 4.48 lakh. However, the insurance company moved the Karnataka High Court arguing that the youth was employed by his brother and therefore there was no employer-employee relationship under the Act. The high court agreed with that and stated that the remedy is under the Motor Vehicles Act. The mother moved the Supreme Court which reversed the high court judgment. The court asked the insurance company to pay the compensation within three months with 12 per cent interest. Article referred: http

The right of a bona fide purchaser of property for consideration in a public auction was asserted by the Supreme Court in the judgment, Sadashiv Prasad Singh vs Harendar Singh. In this case, a partnership firm took loan from Allahabad Bank mortgaging certain properties but the debt was not repaid, leading to public auction by the recovery officer appointed by the debt recovery tribunal. Later, a partner challenged the auction in the Allahabad High Court. It set aside the auction on the ground that the recovery officer had not complied with Rule 11 of the Income Tax (Certificate Proceedings) Rules. The high court held that the proceedings before the recovery officer were in flagrant violation of the IT Rules. The purchaser moved the Supreme Court, which set aside the high court order. The court said that the objection raised to the auction long after the property had passed on to a third party should have been rejected by the high court. Article referred: http://www.business-standard

The Supreme Court ruled last week that if an arbitration appeal can be filed in a district court or a high court, the choice under the Arbitration and Conciliation Act has to be exercised in favour of the high court. Usually, the court where the appeal was filed first will have the jurisdiction, according to the Act. But this suit raised a peculiar problem. In this case, chief engineer vs Atlanta Ltd, both the parties were dissatisfied with the arbitral award. The chief engineer of the Maharashtra public works department, who was asked to pay Rs 58 crore plus interest at the rate of 20 per cent by the arbitrator, moved the appeal before the Thane district court because a bypass was to be built in that district. Builder Atlanta, equally dissatisfied with the award, moved the Bombay High Court on the same day, creating a jurisdictional conundrum as both the appeals were filed on the same day, in different courts. Two courts cannot deal with the same award. This situation has not been co

The Delhi high court has noted that every citizen has the “fundamental right to travel abroad” and that nobody can be denied a passport for want of compulsory registration of an adoption deed. While deciding a petition, Justice Manmohan held that to obtain a passport, the adoption of the applicant has to be legal and there is no compulsion that it must be registered. The court directed the passport authority to decide petitioner’s request for passport in accordance with law within four weeks. “This court is of the view that every citizen of India has the fundamental right to travel abroad. Though the said right is subject to reasonable restrictions, yet this court is of the opinion that the restrictions have to be in accordance with law and the same cannot be unreasonable,” the bench said. The court’s order came on a petition in which a passport-seeker had claimed that the passport office had refused to issue him a passport on the ground that his adoption deed dated September 20, 1

 A  three Judge Bench of the Supreme Court  issued landmark guidelines relating to Death Penalty, while allowing all the 13 Writ Petitions filed by 15 Death Convicts in various cases. The Bench consisted of Chief Justice P.Sathasivam, Justice Ranjan Gagoi and Justice Shiv Kirti Singh commuted the death sentence imposed on Suresh, Ramji, Bilavendran, Simon, Gnanprakasam, Madiah ,Praveen Kumar, Gurmeet Singh, Sonia, Sanjeev, Sundar Singh, Jafar Ali, Magan Lal Berala, Shivu and Jadeswamy. The Supreme Court also overruled the Two Judge Bench Judgment in Bhullar Case which held that a death sentence imposed on a prisoner was convicted for a terrorist act cannot be commuted on the ground of delay. While concluding the Judgment Justice Sathasivam said; “Right to seek for mercy under Article 72/161 of the Constitution is a constitutional right and not at the discretion or whims of the executive. Every Constitutional duty must be fulfilled with due care and diligence; otherwise judicial in

Nagpur bench of Bombay High Court has ruled that employees have no right to demand overtime work. "The employees have no right to overtime work, which is necessitated by exigencies. Merely because for length of time of whatever duration the shifts were so arranged as to include overtime work, that would not confer on a workman the right to overtime work," Justice Ravi Deshpande ruled while quashing an order of Nagpur Industrial Court. "The employer has a right to withdraw the overtime work even unilaterally and such action on his part does not amount to change requiring a notice under Bombay Industrial Relations (BIR) Act," the court added. Five permanent employees of MIDC Hingna-based Neco Schubert and Salzer Limited had lodged a complaint with Industrial Court under Maharashtra Recognition of Trade Unions (MRTU) and Prevention of Unfair Labour Practices (PULP) Act, 1971, along with and BIR Act, on the ground that the employer was engaged in unfair labour prac

Dealing a blow to the practice of investing unaccounted and ill-gotten money in real estate, the Supreme Court has ruled that the government would be justified to deprive a person of his property if he cannot explain the legitimate source of funds to acquire it. "If a subject acquires property by means which are not legally approved, sovereign would be perfectly justified to deprive such persons of the enjoyment of such ill-gotten wealth. There is public interest in ensuring that persons who cannot establish that they have legitimate sources to acquire the assets held by them do not enjoy such wealth," a bench of Justices H L Gokhale and J Chelameswar said. Before arriving at this conclusion that could send a chill down the spine of real estate mafia and those acquiring benami property, the bench studied the provisions to deal with this contentious issue in several countries. The question before the bench was whether a person, who had been acquitted from the charge of

If there is voluntary surrender of income it does not mean that there is automatic immunity from penalty for concealment of income.  This has been so held by the Supreme Court of India in the case of Mak Data P. Ltd. v. CIT (2013) 358 ITR 593 (SC).   In this case, the assessee-company filed its return of income for the assessment year 2004-05 declaring an income of Rs. 16,17,040 with the tax audit report. It was the statutory duty of the assessee to record all the transactions in the books of account, to explain the source of payments made and declare its true income in the returns filed Certain documents comprising share application forms, bank statements, memorandum of association of companies, affidavits, copies of income-tax returns and assessment orders and blank share transfer deeds duly signed were found in the course of survey proceedings under section 133A of the IT Act on 16.12.2003, in the case of a sister concern of the assessee and impounded.  During the course of the

An employee who suffers injuries at work should be compensated by Employees' State Insurance Corporation (ESIC) even if the employer fails to pay the mandatory contribution to the corporation, the Kerala high court has held. If the employer fails to pay the contribution, the employee cannot be considered uninsured, the court ruled. Justice S S Satheesachandran made the ruling while considering an appeal filed by ESIC challenging an order by the commissioner for workmen's compensation to pay Rs 59,671 to Kalyani, a worker with Maria Tiles of Paliakara in Thrissur for the injuries she suffered. It admitted in court that Maria Tiles was a covered establishment under the Employee State Insurance Act but argued that the employee was not registered nor any contribution paid in respect of her until the accident took place on December 30, 1999. Her employer remitted contribution for her for the month of December 1999 only on May 23, 2001. Thus she was not an insured employee, th

Coercive means can be adopted to enforce attendance of doctors in courts to give evidence if they fail to turn up despite receiving summons, said the Kerala high court. The issue of doctors not appearing in courts to support medical evidence came up before a single bench of the high court while considering a petition related to an assault on a couple from Kattiparuthi in Tirur. In a complaint filed by Beeran Kutty before the Tirur judicial first class magistrate, it was alleged that an eight-member gang of persons known to him trespassed into his house at 8.30am on December 6, 2002 and assaulted him and his wife. The couple suffered serious injuries and underwent treatment in a hospital, the complaint had said. Police conducted an investigation and concluded that it was a false case. However, the petitioner filed a protest complaint before the magistrate court and adduced evidence. In order to prove that he suffered injuries, the petitioner took steps to summon the investigating

Clinching proof of committing rape against each accused is not necessary and a person can be convicted in a gangrape case even if there is no medical evidence against him, the Supreme Court today said. "This court has consistently held that where there are more than one person acting in furtherance of their common intention of committing rape on a victim, it is not necessary that the prosecution should adduce clinching proof of a completed act of rape by each one of the accused on the victim," a bench headed by Justice A K Patnaik said. The court passed the order convicting six persons in a gangrape case despite medical evidence saying that only four had committed the crime. "As per the medical evidence, four persons had committed rape on the prosecutrix. Explanation 1 to Section 376(2)(g), IPC, states that where a woman is raped by one or more in a group of persons acting in furtherance of their common intention, each of the persons shall be deemed to have commit

Justice AV Sesha Sai of the AP high court on Wednesday held that proceedings against a dead person are invalid and hence cannot be subjected to judicial scrutiny. He made this order while allowing a petition by city advocate R C Misra and set aside the proceedings launched by the Ranga Reddy district revenue authorities in the name of Erram Mallaiah in 2006 under sections 6 to 10 of the Urban Land (Ceiling & Regulation) Act, 1976. Mallaiah had died long before that. The revenue wing's action in declaring Mallaiah as a holder of surplus land and initiating relevant proceedings against him after his death was invalid in the eyes of law, the judge said. Moreover, the authorities took up this exercise in the absence of the family members or legal representatives of Mallaiah, he said. Petitioner Misra told the court that he had purchased a piece of land in Guttala Begumpet village in RR district in 1998. However, revenue authorities issued proceedings against the original owner

A Supreme Court bench of justice CK Prasad and justice JS Khehar held DNA test as the accurate proof in a dispute over the parenthood of a child and said a person cannot be forced to pay maintenance to such a child.  The Supreme Court held the proof based on scientific advancement “must prevail” over the definite proof envisioned under law and said it was correct to determine the parenthood of a person through a DNA test. It stressed that the result of DNA test was said to be scientifically accurate and it could not force a man to bear the fatherhood of a child when the scientific reports prove to the contrary. This order of the Supreme Court was delivered on a petition filed by a man who moved the apex court against a high court order directing him to pay Rs. 900 per month to his wife and Rs. 500 to her daughter after holding him to be the child’s father on the basis of Section 112 of Evidence Act, which said any child born during the subsistence of a marriage, would be presumed to

Cancelling a loan that it had sanctioned has earned State Bank of India a stiff fine of 1 lakh. The State Consumer Disputes Redressal Commission ruled in favour of a garment export company and directed SBI to pay the owner of the firm the sum as compensation for causing him mental agony. The firm's proprietor, K Ramani, applied for a loan of 24 lakh from the Small and Medium Enterprise City Credit Centre of State Bank of India, Egmore. In his submission to the consumer redressal commission, he said bank officials thoroughly scrutinised documents pertaining to the expansion of his enterprise and sanctioned a loan of 22.5 lakh. He submitted all documents required for the loan, including the title deed of land owned by his daughter as mortgage. However, the bank later refused to release the loan, stating that it found discrepancies in the submitted documents. The bank's action was arbitrary and unjust, Ramani said. In its counter, the bank said it did release the loan b

The Supreme Court has ruled that a bank employee can claim pension and encashment of leave even when removed from service. The case pertained to the denial of the claims of late S.K. Kool who was removed from service ‘as a measure of punishment’ by Bank of Baroda. In response to a special leave petition by the bank, Justice Chandramouli Kumar Prasad ruled on December 11 that employee’s heirs are entitled to superannuation benefits. He ordered Bank of Baroda to disburse the entire amount that the respondent is found entitled to along with interest at 6 per cent within six weeks. He did not find any merit in the bank’s appeal and dismissed it with costs of Rs 50,000 to be paid out along with other dues. The bank had argued that where cessation of service takes place on account of employee’s resignation or his dismissal/termination, all leaves to his credit lapse. INDUSTRIAL TRIBUNAL The matter was initially referred to the Industrial Tribunal which had ruled that the denia

The Delhi high court has held that lower courts have "comprehensive" power to alter or add charges in a criminal case at any stage of trial prior to the pronouncement of judgement. "The court has ample power to amend or alter a charge only with a condition that it should give full opportunity to the accused to make out his defence," a bench of justices Kailash Gambhir and Indermeet Kaur said. Referring to a provision of Code of Criminal Procedure, it said, "This section (216) invests comprehensive power in the court to remedy the defects in the framing or non-framing of a charge, whether discovered at the initial stage of the trial or at any subsequent stage prior to judgement. "If there is any omission in the charge framed at the commencement of trial and the omission is discovered at any time before giving the judgement, that omission can be remedied under this section and an appropriate charge may be framed," the bench said. The observatio

Background: The aim of the Consumer Protection Act is to provide speedy justice within a time bound period. To achieve this objective, the Act prescribes a period of 30 days for filing a reply, with the leeway of one extension of 15 days. However, the casual approach of parties against whom a case is filed (opponents) can delay proceedings. Earlier, the consumer fora were liberal in granting extension upon extension to permit opponents to file their reply to the complaint "in the interest of justice". As opponents started taking undue advantage of the liberal approach, consumers were harassed with unnecessary delay and needless adjournments. Realizing this, the fora have become strict in enforcing the time frame for filing of replies. Case Study: Kanan Kintwear had filed a complaint against Tata AIG before the Maharashtra State Commission. The notice was served on July 24, 2013, but the insurance company failed to file its reply within 45 days. On October 15, 2013, Tat

The Supreme Court said Friday that someone whose name does not figure either in an FIR or a chargesheet but whose role in an alleged crime surfaces during the course of a trial would be subjected to the said trial. A constitution bench of Chief Justice P. Sathasivam, Justice B.S Chauhan, Justice Ranjana Prakash Desai, Justice Ranjan Gogoi and Justice S.A. Bobde said that the evidence against such an accused would be sufficient when evidence was being recorded and not at the stage of cross-examination of witnesses. The court observation came while addressing five questions referred to it by a three- judge bench Dec 8, 2011, on the stage at which Section 319 of the Code of Criminal Procedure (CrPC) would come into play to try a person whose role in a crime surfaces during the course of a trial and at what stage would the evidence be read against such an accused. Section 319 of the CrPC spells out the proviso for the joint trial of a person, who though not been named as an accused,

The Supreme Court has said that merely because a person is an income tax assessee is not sufficient to hold that a property in his name actually belongs to him. "The property in the name of an income tax assessee itself cannot be a ground to hold that it actually belongs to such an assessee," said a bench of Justice Chandramauli Kumar Prasad and Justice M.Y.Eqbal in their judgment on Monday. "In case this proposition is accepted, in our opinion, it will lead to disastrous consequences. It will give opportunity to the corrupt public servants to amass property in the name of known persons, pay income tax on their behalf and then be out from the mischief of law," said Justice Prasad speaking for the bench. The court ruling came while upholding the decision of the special court rejecting discharge pleas of two former DMK ministers in Tamil Nadu - K.Ponmudi and N.Suresh Rajan - accused of amassing assets by corrupt means in the name of their relatives and friends.

The Kerala High Court on Wednesday held that gold pledged for loan could be retained  by a bank even if the loan is repaid, when the customer has another loan is pending with the same bank. However, the court made it clear that banker’s lien will not apply to gold entrusted to the bank for safe custody in a locker. Justice V Chithambaresh passed the order while disposing of a petition filed by Nakulan, of Kollam, seeking a directive to Canara Bank to release the gold ornaments pledged on the petitioner clearing only the gold loan. He said that he had taken a personal loan of `25,000 in January 2012. No security of any sort was obtained at the time of transaction. He also availed a gold loan of Rs. 85,000 in May 2012 by pledging 46.7 grams of gold. The petitioner said that he was willing to clear the gold loan in its entirety and so, the bank is bound to release the gold ornaments without retaining them as security for the personal loan. However, the bank submitted that the gold or

In a significant observation in the coal scam case, the Supreme Court made it plain that huge investments adding up to Rs 2 lakh crore could not be invoked as a ground for regularizing coal mines allotted in violation of norms. The comment from a bench of Justice RM Lodha, Justice Madan B lokur and Kurian Joseph came after it noticed that project proponents in many pre-2006 coal block allocations had begun investing in plants anticipating grant of licences by states on the basis of an allocation letter from the Centre. The government will note the remarks carefully as it hopes the court does not cancel allocations on a large scale, concerned as it is about the fallout on a power sector facing fuel shortages and price escalation and a further fallout on a slowing economy. The bench found the action of project promoters to be incompatible with the laid down procedure — an allottee had to first secure a mining plan, followed by forest clearance (if block falls in forest land) and a

The Supreme Court has come up with yet another landmark judgment in Criminal Law which is in the right direction of cleansing the criminal prosecution system of our country. The Apex Court was considering a Criminal Appeal by the State of Gujarat against acquittal of an accused person, who was originally awarded death penalty by the Trial Court. The accused stood trial for rape and brutal murder of a six year old child.  The case began on filing a complaint  at  Navrangpura  Police  Station,  Ahmedabad, alleging the  kidnapping/abduction  of  a  six  year  old  girl  child  on 27.2.2003  by the accused enticing the child with a “gola”  (crushed  ice, with sweet flavoured syrup), and later she was  taken to  a   field and raped.  The child was  murdered  by inflicting injuries on her  head and other parts of the body with bricks and murderer took away the  “jhanjris” (anklets) worn by her, by chopping off her feet just  above  her  ankles. One of the most horrendous crime reported in