Legal News & Views

The Madras High Court today ruled that a school management could not be compelled to admit a student if it is not satisfied with the pupil's character and discipline even though he or she is meritorious. Dismissing a petition filed by the father of a girl who scored 489 out of 500 in the class X examination, seeking a direction to the school management to admit his daughter in class XI, Justice S Vaidhyanathan said the school authorities were right in denying admission for her girl, who was allegedly" disobedient and disrespectful". "Teachers are the best judges" to evaluate the character of a student and not parents, the judge said. "Education was the panacea for all the evils in the world, but education without moral values and behaviour will definitely vouchsafe reversal attitude. Knowledge was not given but earned and character was not granted but cultivated over the years," the court observed. The court could not compel the management to a...

Pawan Chandra, 43, filed an application under the RTI Act seeking certain information relating to the passport issued to his wife by the Regional Passport Officer. The officer informed him that the info cannot be furnished. Such information is not liable to be disclosed in view of the provision of Section 8(1)(j) of the RTI Act which prohibits it, he was told by the High Court of Karnataka. After his appeal was rejected by the first appellate authority, the Joint Secretary, Ministry of External Affairs, Chandra had appealed the Central Information Commissioner, and had approached the High Court. The HC in its order noted that even if that issue of appeal before the CIC is kept aside, the Passport Officer was right in his stand. "The reasons indicated are justified in view of the provisions contained in the RTI Act. Hence, the same does not call for interference." Chandra's advocate said he was seeking personal details of his wife as "there are certain matrimonial d...

To avoid any confusion, appoint the intended beneficiary as nominee A few weeks ago, the Bombay High Court (Mr. Justice G.S. Patel, the Bombay High Court in Jayanand Jayant Salgaonkar vs. Jayashree Jayant Salgaonkar) overturned an earlier judgment that had declared that nominees, and not legal heirs, will get the ownership rights of share certificates. The ruling has once again thrown open the debate on the ownership of an investor’s assets once s/he dies. Who is the legitimate owner of the assets — the nominee or the legal heir/s? In general, the nominee is deemed to be a trustee or a custodian under the law and must distribute the assets to the legal heirs named in a will, or according to the country's succession laws. This is true for all financial instruments, except shares and debentures. What’s also interesting is that the new Insurance Laws (Amendment) Act, 2015, makes nominees — restricted to immediate family members such as spouse, parents and children — the beneficia...

The state consumer disputes redressal commission has held that a builder or property developer cannot unilaterally terminate a registered agreement between him and the buyer of a flat. Dismissing an appeal by a Pune-based builder, a two-member bench of the commission, headed by S A Kulkarni, also held on June 12 that lopsided agreements favouring the builder more and going against the provisions of the Maharashtra Flat Ownership Act cannot be legally sustained. The matter is related to a community housing scheme developed at Dhanori along the Vishrantwandi Road by Sankalpa Constructions, a partnership firm headed by Prabhakar Bhosale and Vandana Bhosale. The company entered into the position of service provider by undertaking construction activity of small tenements for distribution among members of a particular community. It signed agreements with individual members of the scheme and registered the same.  One of the members, Haribhau J Ghode of Bhairavinagar, who filed a com...

In its prima facia order the SEBI has directed Goldmine Agro Limited (GAL) that the company shall not mobilize funds from investors. Further, the company and its present and past directors are prohibited from issuing prospectus or any offer document or issue advertisement for soliciting money from the public for the issue of securities, in any manner whatsoever, either directly or indirectly. The GAL Company is found guilty of issuing Non–Convertible Secured Redeemable Debentures ("NCDs") to the public in the guise of private placement. It is found that by mobilizing fund through Offer to Issue NCDs, GAL has violated the provisions of the Companies Act, 1956 (Section 56, Section 60 read with Section 2(36), Section 73, Sections 117B–117C) read with the Debt Securities Regulations. The SEBI relying on the Sahara case [Sahara India Real Estate Corporation Limited v. SEBI, (2013) 1 SCC 1 ] ruled that the Offer of NCDs  is  prima facie  a public issue in accordance with th...

In a ruling that might come as a shocker to police officers and solace to victims of crime, the Madras High Court Bench here has held that the State government is liable to pay compensation to the victims even in cases which remain unsolved for years together and recover the money from the criminals after the police succeed in nabbing them. Passing interim orders on a petition filed by the father of a 15-year-old girl who was murdered for gain in Pudukottai district in March 2011, Justice S. Nagamuthu said: “When a citizen’s right is infringed by an unscrupulous criminal and when the crime could not be even detected by the State agencies, then the State government is liable to pay compensation.” The judge agreed with petitioner’s counsel G. Karuppasamy Pandian that neither the Crime Branch-Criminal Investigation Department (CB-CID) nor the Central Bureau of Investigation (CBI) had been able to crack the murder case despite having dealt with it for nearly two years and 20 months res...

Showing concern over a very serious issue of infringement of right to privacy in cases where the lawyers produce very personal documents of the parties as an evidence before the Court, a division bench of S. Muralidhar and I.S. Mehta JJ., issued directions to the lower courts with respect to the steps which should be taken into care while producing documents before the court which is of a ‘sensitive nature’. In the instant case, the appellant is seeking the permanent custody of his minor children, and for that he produced the ‘personal diary’ maintained by one of his child before the Court to show that he desires to stay with his father even after his vacations are over. The Court stated that contents of the document reflect inter alia the very private and personal feelings and opinions of a young child about his parents, sibling, friends and relatives, and it is not something which should be casually placed in the public domain to violate the right of privacy of the author of the di...

The National Consumer Commission has dismissed the complaint of the Confederation of Exporters and Expo Mart Exhibitors alleging deficiency in service by India Exposition Mart Ltd which charged them external development charges over and above the price of space allotted to them. Exporters were allotted individual spaces in a complex in Greater Noida, in the National Capital Territory, to showpiece their wares. But they were aggrieved by the demand of extra payments and the extent of space allotted to them. The commission rejected their complaint holding that the exporters were not consumers according to the definition of the word in the Consumer Protection Act. According to the law, those who buy goods or avail of services for commercial purposes are not consumers. They cannot approach the consumer forums, but should seek other legal forums.

Dealing with the question of admissibility of confessional statements so as to establish criminal conspiracy vide Section 120B of the Penal Code, 1860, a bench comprising of  Dr. A.K. Sikri and UU Lalit observed that the High Court’s approach of relying upon the confessional statements, otherwise inadmissible, with the aid of 'other connected evidence' is contrary to law. The inadmissibility of confessional statements, as submitted by advocate Sushil Kumar on behalf of the Appellants,  stood accepted and established by the Court owing to the joint operation of Sections 25 and 26 of the  Evidence Act, 1872,whereby confession to a police officer and confession made by an accused in police custody do not stand proved as against him. The definition of the term 'confession' meanwhile, was restricted to “mean a direct acknowledgment of guilt and not the admission of an incriminating fact, howsoever grave or conclusive”. Extending its deliberation to Section 27 of the Eviden...

Supreme Court of United Kingdom- Deciding on the issue whether the court should order the return to France of two little girls who have been living with their mother in Scotland since July 2013, the Court unanimously dismissed the appeal filed by the father and observed that, for the purposes of ‘habitual residence’, the stability of residence, rather than its degree of permanence, is important. The present appeal before the Court concerns the application of Article 3 of the Hague Convention on the Civil Aspects of International Child Abduction (‘the Convention’) which states that it is unlawful to remove or retain a child in breach of rights of custody attributed to a person under the law of the state in which the child was ‘habitually resident’ immediately before removal or retention. The Court, hence, delved into the discussion as to what elements constitute a ‘habitual residence’ and noted that for the purposes of applying the Hague Convention, ‘habitual residence’ is to be determi...

National Consumer Disputes Redressal Commission (NCDRC): While holding Post Graduate Institute of Medical Education & Research (PGI), Chandigarh guilty of medical negligence, NCDRC upheld the order of Chandigarh State Commission and also enhanced the total compensation from Rs 10 lakh to Rs 20 lakh in case of death of a girl due to delay in treatment. The Commission was hearing an appeal filed by the parents of the deceased challenging the order of Chandigarh State Commission vide which the Institute was directed to pay Rs 7 lakh and Chandigarh Transport Undertaking (CTU) to pay Rs 3 lakh to them. The parents of the deceased approached NCDRC for enhancement of compensation awarded by the State Commission. PGI, Chandigarh had also filed appeal before Commission in the matter. The facts of the case are that a schoolgirl aged about 16 years, on her way from her school to residence was crushed by a CTU bus when she was attempting to board it in July 2012. She was admitted into Advance ...

National Consumer Disputes Redressal Commission (NCDRC): While declaring the repudiation of claim of a policyholder by the insurance company on the ground of non-disclosure of material facts as improper, NCDRC directed the insurance company to pay the insurance cover amount to the policyholder. A pilot of a private airline had approached NCDRC alleging that he was denied insurance claim on the ground that he did not disclose the fact that he was a known case of Hypertension and chronic kidney disease. Earlier, the complainant who was working for Jet Lite (India) Ltd. as pilot from 01.12.2007 had obtained a policy Ltd. of Rs.1.00 crore in April, 2009 from New India Assurance Co. and paid a sum of Rs.56, 200/- as premium. Later, in December, 2009, when the complainant was declared ‘permanently unfit’  for flying, he approached the insurance company for his policy claim but his claim was repudiated on the ground that he did not disclose the fact that he was a known case of Hypertensio...

Kerala High Court: Dealing as to whether the power of the President/ Governor as provided in the Constitution is subjected to Judicial Review, a division bench of Ashok Bhushan CJ. and A.M. Shaffique J, reiterated that the decision of the President of India and the Governor under Article 72 and 161 of the Constitution respectively, is not immune from the power of Judicial review under Article 226 of the Constitution, however, only very limited judicial power is available in certain cases. The present appeal was filed by the appellant, who was convicted under Section 138 read with Section 141 of the Negotiable Instrument Act, 1881, when his clemency petition before the President of India was rejected. The Counsel for the petitioner, P.B. Sahasranaman, contended that Chief Judicial Magistrate should not proceed with the steps in execution of the judgment, as clemency power of the President is subject to judicial review. R. Prasanth Kumar, Counsel for the respondent contended that the p...

In a landmark ruling, the National Consumer Disputes Redressal Commission (NCDRC) on Monday asked real estate major Unitech to pay buyers compensation at the rate of 12% per annum for delay in delivery of flats, overruling the builder-buyer agreement that had set the rate at 1.8% per annum. The order came in a case filed by 24 buyers of a housing project, Vistas, in Sector 70 of Gurgaon. The buyers alleged that they had booked the flats in 2009-10 and delivery was promised in 36 months. In his order, Justice V K Jain directed the company to pay compensation at the rate of 12% per annum on the amount paid for the period from the date of delivery originally promised to the new date. The new delivery dates promised by the company are between February 2016 and February 2018. The NCDRC also ruled that any delay beyond the new deadline promised would draw a compensation of 18% per annum. "In order to ensure that the opposite parties honour the revised date of delivery of possess...

In a landmark verdict that can severely impact several foreign investors and their investments in Indian real estate projects, the Bombay High Court has ruled that offshore investors cannot seek legal recourse for their assured return investments in India. The court has upheld that FDI in real estate can be made only by way of equity and not debt by way of any fixed return. These assured return investments typically happen through structured quasi debt instruments. The court has refused relief to Dutch government-backed financial institution FMO against realty developer Hubtown in a suit for recovery of its investment of over Rs 532 crore. It has observed that the structure of the deal was devised to circumvent restrictions imposed by the FDI regulations. The ruling, for sure, will force many current and future transactions involving FDI into real estate to go for major restructuring. The court observed that the conduct of FMO in routing the FDI investment through subsidiaries of...

In-laws cannot be burdened with any kind of liability towards a woman, whether directly or indirectly, and all such responsibilities should be of her husband, a Delhi court has said. The court's observations came on an appeal filed by the father-in-law of a woman, in a domestic violence case, against a trial court order directing him to pay arrears of electricity dues and to continue paying electricity charges for the premises occupied by her. "In-laws of a wife cannot be burdened directly or indirectly with any liability towards a wife. All such direct liabilities are to be directed against her husband and the estate of the husband," Additional Sessions Judge Pulastya Pramachala said. The court while setting aside the trial court order to make payment of all subsequent electricity bills in respect of premises occupied by the woman said keeping the legal position in mind it is not sustainable. "As per law right to residence is not extended, against the self a...

The Calcutta High Court last week dismissed the appeal of a company and some of its directors facing the charge of issuing cheques that were dishonoured, observing that the magistrate need not give elaborate reasons for issuing process. In this case, Fairdeal Suppliers Ltd vs Piyarelal Iron & Steel Ltd, the latter complained that the cheques bounced. The magistrate at first issued process to all the accused persons and they appeared before him. However, later the order was recalled and a fresh police report was demanded. After the report, the magistrate discharged them. The payee appealed to the session court, which ruled that the discharge was wrong. The appeal came to Supreme Court. The accused persons argued that the complaint did not explain the specific role of the directors and the magistrate's order was cryptic. The high court rejected these contentions and allowed the trial to proceed. Article referred: http://www.business-standard.com/article/opinion/0fficial-discret...

If acquiring and letting of properties is the business of a company, it comes under the income tax head 'income from business', and not 'income from house property', Supreme Court has ruled in the case, Chennai Properties and Investments Ltd vs CIT. The company acquired properties in Chennai and to let them out. The rental income was shown as income from business in the return filed by the company. The assessing officer, however, refused to tax the same as business income. According to him, since the income was received from letting out of the properties, it was in the nature of rental income. The company appealed to the commissioner who held that it was business income. The revenue authorities moved the Madras High Court against the ruling. The high court accepted the view of the tax authorities. Therefore, the company appealed to Supreme Court. It reversed the judgment of the high court. Supreme Court conceded that the dividing line between business income and rental ...

Directors of companies and partners of firms have been fastened with stricter onus by the Supreme Court in cheque bouncing cases. It ruled last week that notice of dishonour of cheques to the company is sufficient, and there is no need to serve separate notices on the directors. The directors are supposed to know about the dishonour when the company gets the notice. There is sufficient time, nearly 75 days, to find which directors are responsible for the fault and therefore, there is no need to prolong the process by serving notices on each director or partner. The Supreme Court overruled the Bombay High Court which had maintained that separate notices were essential. Allowing the appeal case, Kirshna Texport & Capital Markets Ltd vs Ila Agrawal, the court asked the high court to reconsider its view regarding the trial of two directors. Analysing Sections 138 and 141 of the Negotiable Instruments Act, the court said: "There is nothing in Section 138 which may even remotely sug...

Before launching an income tax search and seizure, it is not necessary for the authorities to allow the assessee to inspect documents to verify whether there is sufficient ground for the order, the Supreme Court stated while disapproving the contrary view taken by the Delhi High Court in the case, Director General vs Spacewood Furnishers Ltd. It is necessary to record the reasons for ordering the search because the court may have to verify whether it was legal and not arbitrary. But that principle "would not confer on the assessee a right of inspection of the documents or to a communication of the reasons at the stage of issuing the authorisation," the court underlined. It clarified that it was only at the stage of commencement of the assessment proceedings after completion of the search and seizure that the requisite information may be disclosed to the assessee. The high court view would make the exercise counter-productive. Moreover, the high court committed a "ser...

Debt Recovery – SARFAESI – Declaring Account as NPA 2015 STPL(Web) 581 JHAR (JHAR) - Judgment Date: 14-10-2014 - order valid PARITRAN TRUST, JHARKHAND Vs. PUNJAB NATIONAL BANK, DELHI AND OTHERS Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Sections 13 (2), 13 (3-A) – Declaring account as NPA – Recovery of debt – Proposal of the borrower for raising additional unsecured loan was approved by all the respondent-Banks – Petitioner-Trust did not fulfill the condition contained in letter dated 14-12-2010 – In-spite of opportunities granted to the petitioner, it failed to regularize its account and discharge its loan liability – Do not find any arbitrariness, illegality or irregularity in rejecting the representation dated 21-1-2012 of the petitioner or in letter dated 9-12-2011 whereby notice under Section 13(2) of the SARFAESI Act, 2002 was issued by the respondent-Banks.