Legal News & Views

CIT Vs. Ram Singh (Rajasthan High Court) Strictures passed regarding poor quality of orders of the ITAT. Government urged to ensure that only competent persons are appointed Members of the ITAT .........We also notice that the members of the Tribunal have developed an unhealthy habit of quoting totally unrelated judgments which are not applicable at all to the facts of the case, to pass orders not otherwise sustainable on facts or in law. We strongly deprecate such a tendency on the part of the members of the Tribunal, which is quite naturally a professional Tribunal comprised of expert members, one member from the Revenue side and another member from the accounting side, with considerable experience in their respective fields and to whom we can attribute expertise. We feel sorry that the confidence posed by the Legislature is not being justified by passing orders that are outcome from the Tribunal now-a-days.

The Bombay High Court has dismissed the petition of Marine Geotechnics LLC of Houston, US, against the Mumbai-based Coastal Marine Construction & Engineering Ltd stating that an ex-parte summary judgment obtained in a foreign country against an Indian company could not be termed a 'debt' due and payable by it in a winding up petition under the Companies Act. The Indian company was not represented before the Houston court when the US firm obtained a decree against it. It was not made order of the court in India. In such circumstances, it could not be said that the debt became payable, the high court said. Article referred: http://www.business-standard.com/article/opinion/half-full-win-for-liquor-bars-114031600740_1.html

The Supreme Court ruled last week that a landlord-tenant dispute in West Bengal cannot be sent for arbitration even if there is a clause in the agreement recommending it. The tenancy in this case, Ranjit Kumar vs Anannya Chowdhury, was terminated upon which the tenant invoked the arbitration clause before the civil judge. He dismissed the plea to set up an arbitral tribunal, but on appeal the Calcutta High Court approved of arbitration. The landlord appealed to the Supreme Court, which set aside the high court order. It said that when the West Bengal Premises Tenancy Act mandates that the civil judge shall deal with eviction and related tenancy matters, the arbitration route is closed to the tenant. Article referred: http://www.business-standard.com/article/opinion/half-full-win-for-liquor-bars-114031600740_1.html

When there is merger or amalgamation of units, the employees have a right to get positioned appropriately in the merged service. There is, however, no vested right for an employee to have a particular position in the integrated or merged service. It is always open to the authorities concerned to lay down the principles with regard to fixation of seniority. On the other hand, incoming employees cannot be kept for all times as a different cadre and denied promotion while those in the parent cadre enjoy that benefit. The Supreme Court stated so while setting aside the judgment of the Madhya Pradesh High Court in the case, Panchraj Tiwari vs MP State Electricity Board. A junior engineer of the Rural Electricity Cooperative Society was aggrieved when he was denied promotion after the society was merged in the board. The board interpreted the terms of the merger with regard to staff as denying promotion to the employees of the absorbed society. The Supreme Court stated that though courts do...

The Supreme Court last week set aside the sale of a property under the Securitisation (SARFAESI) Act as it was done according to a private treaty between the creditor and the buyer without any agreement in writing and violating the rules of public auction. The judgment in the case, J Rajiv vs M/s Pandiyas, stated that "there were no terms settled in writing between the parties that the sale can be affected by private treaty." Moreover, the borrowers who could not repay the loans were not called at the meeting between the creditor bank and its agent for conducting the sale. Though the property was bought in 2006, the court directed that it shall be returned to the borrowers on certain conditions to protect all parties. Referring to an earlier judgment the court stated " .....Rule 8, which relates to Sale of immovable secured assets and Rule 9 which relates to time of sale, issue of sale certificate and delivery of possession etc. With regard to Section 13(1), this Cour...

If a party to an agreement joins arbitration proceedings without raising objections, it cannot question the jurisdiction of the arbitration tribunal at a later stage. It would be deemed that the party had waived its right to object to the jurisdiction of the arbitration panel, the Supreme Court has stated in the judgment, Union of India vs M/s Pam Development (P) Ltd. In this case, the government had entered into an agreement with the works contractor to construct an electric loco shed. Later it terminated the contract alleging delay on the part of the contracting firm and inferior quality of work. This led to disputes and the contractor moved the Calcutta High Court to appoint an arbitrator. The High Court appointed a retired judge as the sole arbitrator. He decided in favour of the contractor. The government then moved the High Court to set aside the award. The court dismissed the application, leading to the appeal in the Supreme Court. In the apex court, the government argued that ...

The Competition Commission of India (CCI) has upped the ante on competition law compliance by Indian companies. Now a director or a senior officer incharge of the affairs of a company may be held personally liable for anti-competitive conduct of the company. The company may be penalised separately for such anti-competitive conduct. The CCI in a recent order against Bengal Chemist and Druggist Association (BCDA) not only penalised the association for its anti-competitive conduct but additionally held 78 of its senior officers to be personally liable for taking/endorsing such anti-competitive conduct of the BCDA. The aggregate fine imposed on the BCDA and its officers was approximately Rs 18.38 crore (out of which the amount of fine imposed upon the BCDA was a mere Rs 13.24 lakh). The BCDA case marks the first instance when the infringement of competition law by a trade association triggered action against its senior officers. Under the Competition Act, the term "company...

Brushing aside technical objections raised by an insurance company, the Madras high court has asked it to pay compensation to a worker injured while on duty. In 2005, D Sivasankar, a helper earning a monthly salary of 3,650, was shifting a granite stone weighing 50kg when he lost balance. The stone fell on his hand, injuring him grievously. He was administered 17 stitches at a private hospital and later shifted to a government hospital. Claiming he suffered a permanent disability of 15% and lost 17% of his earning capacity, he sought compensation. The owner of the firm said the "injuries were superficial" and Sivasankar had not produced any documents to prove loss in his employment opportunities. Further, he was covered by a group insurance policy of Oriental Insurance. Sivasankar filed an insurance claim, but Oriental rejected it. Sivasankar filed a complaint before the commissioner for workmen's compensation seeking a compensation of 1.5 lakh. Partly allowing th...

MCA vide circular no 04/2014 dated 25th March 2014 has clarified that the resolution passed under section 293 (Restrictions on powers of Board ) of the Companies Act, 1956 prior to 12.09.2013 with reference to borrowings (subject to the limits prescribed) and / or creation of security on assets of the company will be regarded as sufficient compliance of the requirements of section 180 (Restrictions on powers of Board) of the Companies Act, 2013 for a period of one year from the date of notification of section 180 of the Act.   The clarification has been issued since Ministry has received many representations regarding various difficulties arising out of implementation of section 180 of the Companies Act, 2013 with reference to borrowings and/or creation of security, based on the basis of ordinary resolution. Article referred: http://timesofindia.indiatimes.com/city/chennai/Insurance-firm-to-pay-compensation-to-injured-worker/articleshow/32683121.cms

 1) The Ministry of Corporate Affairs has notified 183 new sections of the Companies Act 2013 and some sub- sections of 13 sections which were already notified by notification dated 12th September 2013 and remaining schedule, in the fourth phase today, by way of notification dated 26th March 2014. 2) These sections have been notified to come into effect from 1st April 2014. 3) With the notification of these sections, now a total of 283 sections of the new Act stand notified. 4) With the notification of aforesaid sections, it can be assumed that relevant rules will also be notified shortly as most of them are dependent on rules. 5) The sections remaining to be notified are related to National Financial Reporting Authority, Investor and Education Protection Fund, Compromise and arrangement, oppression and mismanagement, winding up, sick companies ,special courts, national company law tribunal. Majority of these sections are not notified due to pending case in Supreme court w...

Dismissing a petition by a woman who had levelled allegations of cruelty against her husband and his family members, the Bombay High Court has recently observed that mere harassment did not amount to cruelty as defined by the law on domestic cruelty unless it was done with a definite motive and an unlawful demand. Justice Revati Mohite Dere was hearing a revision application of the 35-year-old woman who had sought criminal action against her 45-year-old brother-in-law and in-laws residing in Malad. Earlier, on November 2, 2011, the sessions court had rejected her plea for the same, although a notice was issued to her husband. The woman’s octogenarian father-in-law had died during the pendency of her application. While referring to Section 498A (husband or relative of husband of a woman subjecting her to cruelty) of the Indian Penal Code (IPC), Justice Dere observed that in the entire complaint, there was no illegal demand of any kind alleged to have been made by the respondents. ...

A housewife is the backbone of a home - HC Not satisfied with a meager compensation of Rs 3 lacs for an accident victim who suffered permanent disability, the Himachal Pradesh High Court today enhanced it to Rs 12.5 lakhs. Allowing an appeal made by the victim, the single Bench of Acting Chief Justice Mansoor Ahmad Mir held that the compensation awarded by the Tribunal to the tune of Rs. 3 lacs is meager and required to be enhanced keeping in view all factors necessary in assessing the compensation. The victim met with anaccident on July 30, 2001 in which she had suffered multiple grievous injuries, back bone and spinal joint dislocation, which made her life miserable. In his order the judge observed that a housewife was the backbone of a home, maintaining the domestic home and takes all steps to keep her husband, children and other family members united, in good health and joyous mood. She was not only deprived of the income from domestic work and selling milk, but also had t...

The high court of Bombay at Goa has held that the area of courtyard cannot be included to calculate the built-up area of a residential unit for assessing the income tax liability of a construction firm. The order comes as a relief to a partnership firm, whose claim of deduction amounting to 1.71 crore was not allowed by the income-tax appellate tribunal (ITAT). ITAT ordered that the built-up area should have included a courtyard that was excluded by the firm while computing the built-up area to claim deduction. The case pertains to the interpretation of Section 80-IB (10) of the Income Tax Act. The section provides that the amount of deduction in the case of an undertaking developing and building housing projects approved before March 31, 2008, by a local authority, will be 100% of the profits from such housing project if the residential unit has a maximum built-up area of 1,500 square feet (as is applicable for Goa). The question before the high court was whether the area of t...

The Supreme Court Thursday ruled that "intoxication" of a person cannot be a ground for diluting the offence of murder into rpt into unintentional killing. The apex court said it was "difficult to accept" the contention that the incident of burning his wife to death falls in the category of unintentional killing or culpable homicide not amounting to murder (with intention) since the accused was under the influence of liquor. "We find it difficult to accept this contention. Assuming that the accused was fully drunk, he was fully conscious of the fact that if kerosene is poured and a match-stick lit and put on the body, a person might die due to burns. "A fully drunk person is also sometimes aware of the consequences of his action. It cannot, therefore, be said that since the accused was fully drunk and under the influence of liquor, he had no intention to cause death of the deceased- wife," a bench comprising justices K S Radhakrishnan and Vikra...

Landlords can evict tenants under a Bengal act even if there is an agreement under the central arbitration legislation, the Supreme Court has ruled. A bench of Justices A.K. Patnaik and Y. Gopala Gowda recently passed the judgment while allowing the appeal filed by a landlord in Salt Lake challenging a Calcutta High Court ruling that had taken the view that the arbitration agreement in the rent deed would prevail over the West Bengal Premises Tenancy Act, 1997. Ranjit Kumar Bose had filed an eviction suit in a Barasat court in 2008 against his tenant, Ananya Chowdhury, who had a 600sqft shop at Salt Lake’s HA block. The tenant had filed a counter-plea in the court of the civil judge (senior division), at Barasat, North 24-Parganas, requesting that the matter be referred to an arbitrator under the central Arbitration and Conciliation Act, 1996, as the tenancy agreement contained an arbitration agreement. The civil judge dismissed the plea, following which Chowdhury appealed in ...

Dr LH Hiranandani Hospital in Mumbai has been slapped with a fine of Rs. 3.8 crore for anti-competitive practices by the Competition Commission of India (CCI), the first time the increasingly assertive anti-trust regulator has penalised a hospital . The CCI said the super-specialty hospital's exclusive agreement with stem cell banking company Cryobanks International India limited consumer choice and had the potential to mould consumer preferences and distort the market mechanism completely in the long run . "Such agreements notonly affect the competition adversely but are also against the spirit of health services and affectfreetradebesidesbeing anti-consumer ," the CCI said in its order . The action against Hiranandani is basedon a complaintfiledlast year by Ramakant Kini , a lawyer and family friend of Mumbai resident M Anu Jain,who was denied maternity services by the hospital during the 38 th week of her pregnancy becauseshe refused to avail the services of Cryob...

If there is any ambiguity in the terms of an insurance policy, the benefit should go to the consumer, a consumer forum here has ruled, asking an insurance company to pay the entire medical claim amount to a man who underwent a surgery. Manicklal Rathi, 69, took a mediclaim policy from National Insurance Company Ltd at an annual premium of Rs 28,000 under which he was covered up to a medical expenditure of Rs 4 lakh. Rathi, who had a policy for Rs 2 lakh since 2000, enhanced the cover to Rs 4 lakh in February 2010. Two months later, he underwent a knee replacement surgery, incurring an expenditure of Rs 2.69 lakh. However, the company did not settle the full amount and withheld Rs 79,131. The company did not respond to his representations, prompting him to approach the Consumer Protection Council, Tamil Nadu, which filed a complaint on his behalf at the district consumer disputes redressal forum, Chennai (North). In its reply, the company said according to the terms of the policy...

The Kerala High Court on Monday held that the pension amount, received by a retiree on account of his past services, should not be attached in execution of any decree or order for realisation of money. Justice V Chitambaresh passed the order while hearing a petition filed by 59-year-old Leela Bhai of Kottarakkara challenging the order of Sub Court, Kottarakkara, granting permission to attach the pension amount of her.   The Indian Overseas Bank had obtained a decree for realisation of money from the petitioner. The execution court ordered attachment from pension at the rate of  `6,300 per month. The petitioner contended that no part of the pension could be attached under the Pensions Act 1871 and Kerala Service Rules, 1959. The bank took the stand that stipend and gratuities allowed to pensioners had been exempted from attachments under the provision of the Code of Civil Procedure 1908. The court observed that pension was specifically exempted from attachment under the ...

Observing that the right of the accused to have his witnesses examined or to have documents produced on his behalf cannot be denied, the Madras High Court (Madurai Bench) has allowed a petition and permitted the revision petitioner to adduce defence witnesses, which was earlier denied by the Kulithurai Judicial Magistrate Court. The case is that on August 6, 2004, one T Hentry, the petitioner/accused, borrowed Rs.2 lakh from one P Natarajan (complainant) to discharge a debt and on the same day, the petitioner issued a cheque dated December 6, 2004 for a sum of Rs. 2 lakh drawn on State Bank of India, Karungal Branch. The cheque was presented on January 6, 2005 for collection in Tamil Nadu Merchantile Bank at Pallihadi and the same was dishonoured on the ground of insufficient funds.. Thereafter, on February 1, 2005, Natarajan issued a statutory notice to which the petitioner sent a reply disputing all the averments stated in the notice. The complainant had himself examined as a ...

 Most consumer fora have been dismissing telecom complaints since September 1, 2009, by mechanically referring to the SC ruling in general manager, telecom v/s M Krishnan that says disputes must be resolved through arbitration under the Indian Telegraph Act. This is not correct. Case Study: The Meghalaya state commission, while considering this issue, observed that the ratio of a decision must be understood in the background of the facts of that case. So it would not be proper to blindly place reliance on a decision without considering the differences between the cases. Section 7B of the Telegraph Act provides that a dispute relating to telegraph line, appliance or apparatus, between the consumer and the Telegraph Authority (viz the director general of posts and telegraphs or any officer empowered by him/her), must be resolved through arbitration. In 1985, the ministry bifurcated, so the director, posts & telegraphs, ceased being concerned with telecommunications. So it ma...

 The Supreme Court on Monday ordered swift completion of trial against MPs and MLAs facing charges of corruption and serious criminal charges. The apex court directed the trial courts to conclude trial against MPs and MLAs in such cases within one year from the framing of charges against them. If a trial court cannot complete the trial within one year, it has to explain the reasons for this to concerned chief justice of the high court, the top court said. The SC order came on a PIL on decriminalization of politics. The law commission in its report had said that disqualification after conviction and sentence of more than two years has proved ineffective because of long delay in trials. The commission said filing of chargesheet in heinous crimes against MPs and MLAs may not be an appropriate stage to disqualify them. The law commission however, said that MPs and MLAs can be disqualified if the trial court framed charges against them. Article referred: http://times...

Managers of schools, hostels and other institutions which distribute food for their inmates will be absolved from the rigours of the Food Adulteration Act, if food items they store are adulterated, according to a judgment of theSupreme Court delivered last week. The court ruled the law would punish them only if the food items were stored for sale, not otherwise. In this case, Rupak Kumar vs State of Bihar, the jail superintendent was booked for storing adulterated haldi and rice in the jail. The chief judicial magistrate issued process. The high court did not quash the prosecution. On appeal, the Supreme Court quashed the prosecution, stating that storage and distribution of adulterated food items are not offences under the Act. Only manufacture and storage for sale are prohibited. Article referred: http://www.business-standard.com/article/opinion/storing-adulterated-food-no-crime-114030900546_1.html

Observing that in cases resting on circumstantial evidence, the prosecution has to establish and prove the circumstance on which it proposes to rely. The Bombay High Court has quashed and set aside the conviction of a man who was convicted for killing his wife. “The prosecution has not been able to establish that the accused was present in the village and was seen near the scene of the incident i.e. his house from 12/3/2006. None of the witnesses examined by the prosecution unerringly establish the presence of the appellant and consequently, merely because of finding of the dead body of the wife of accused in the house, presumption cannot be drawn that it was the appellant who had committed the crime,” said a division bench headed by justice P V Hardas while acquitting the accused. “The circumstances should be of a conclusive nature .The circumstances so proved should form a complete chain which should exclude every hypothesis of the innocence of the accused. The circumstances so ...

A Bench led by Chief Justice P Sathasivam appreciated the possible difficulties of investigators in concluding inquiries within seven days. The Supreme Court on 5th March extended the time limit from a week to 15 days for police to conclude preliminary inquiries and register FIRs in criminal cases. The court also set an outer time-limit of six weeks for extraordinary cases where police will need to specify the reasons why the inquiries could not be completed within a fortnight. A Bench led by Chief Justice P Sathasivam appreciated the possible difficulties of investigators in concluding the inquiries within seven days in cases relating to white-collar crimes, economic offences and matrimonial disputes. The bench agreed with the submissions of Additional Solicitor-General Sidharth Luthra that, in a variety of cases involving massive documents and expert evidence and also especially in matrimonial cases, where the first attempt should be made for reconciliation, the time-limit of s...

Courts in two countries cannot have concurrent jurisdiction in arbitration as it would create conflicting decisions, unnecessary complications and inconvenience. It would also go against the spirit of the Arbitration and Conciliation Act which is to enable parties to resolve disputes speedily, economically and finally. The Supreme Court stated so while setting aside the view of the Bombay High court which had ruled that the courts in England and India have concurrent jurisdiction in the disputes between Enercon India Ltd and Enercon GMBH, incorporated under German laws. There might also be an "ugly rush" to get one forum decide before the other and it would be "a recipe for confusion and injustice". In this case, two Indians entered into a joint venture agreement with the German corporation and formed the Indian company to manufacture and sell wind turbine generators. However, the latter alleged that the German firm stopped shipments of the supplies. The reason urg...

In the absence of mother, the father becomes the natural guardian of the minor boy, ruled the Bombay High Court recently while handing over a child's custody to his father, who was acquitted of killing his wife (the boy's mother). A division bench of justices PV Hardas and Ajey Gadkari pronounced the judgement on a habeas corpus (produce person in court) petition filed by Satara resident Amol Pawar after his father-in-law refused to let the boy stay with him. Pawar married Ramesh Dhotre's daughter in November 2010. Within two years of marriage, Pawar's wife died of burn injuries. The police arrested Pawar for alleged cruelty and murder under provisions of the Indian Penal Code. After his arrest, the minor son was being looked after by Dhotre, who resides in Baramati. In April 2013, the sessions court at Satara acquitted Pawar of all charges following which Pawar approached Dhotre seeking custody of his son. However, Dhotre didn't allow Pawar to take the chi...

The Bombay high court has upheld the validity of the Rs1lakh rule that states that if a bank goes bust, its depositors will get up to a maximum of Rs 1 lakh from the banking insurance system. A division bench comprising Justice Abhay Oka and Justice Mahesh Sonak dismissed petitions filed by a number of credit societies that had deposited over Rs 20 crore in the Vasantdada Shetkari Sahakari Bank, which was ordered to be wound up after the Reserve Bank of India cancelled its banking licence. The high court bench pointed out that the scheme was framed to ensure security to small depositors — as of 2009, around 89% of the deposits in the banking system in India were less than Rs 1 lakh. "The purpose of the deposit insurance scheme is to afford some cover to small depositors by providing them with a safety net so that the entirety of their deposits are not wiped out, when the banks in which they are held, go into liquidation," said the judges. "The provisions of the (law),...