Legal News & Views

In Rajesh Projects (India) Pvt. Ltd vs. CIT, the issue before the Delhi High Court was the nature of the payments made towards lease. Do they constitute rent so as to attract Section 194-I? The court is of opinion that clearly these payments are not “rent”. That they are annual payments cannot be doubted. Yet, part of the payment is clearly capital in nature. Clause 1 of the lease deeds entered into in each of the cases, clearly points to the fact that a small percentage of the agreed amounts were paid as part of the lease premium and were towards acquisition of the asset; they fell, consequently in the capital stream and were not “rents”. The balance of such premium payments were spread over a period of 8 to 10 years, in specified annual or bi-annual installments. Here, distinction between a single payment made at the time of the settlement of the demised property and recurring payments made during the period of its enjoyment by the lessee is to be made. This distinction is c...

In Mother Hospital Pvt. Ltd vs. CIT, the Supreme Court held that We are in agreement with the view taken by the High Court. Building which was constructed by the firm belonged to the firm. Admittedly it is an immovable property. The title in the said immovable property cannot pass when its value is more than Rs.100/- unless it is executed on a proper stamp paper and is also duly registered with the sub-Registrar. Nothing of the sort took place. In the absence thereof, it could not be said that the assessee had become the owner of the property. As is clear from the plain language of the Explanation, it is only when the assessee holds a lease right or other right of occupancy and any capital expenditure is incurred by the assesee on the construction of any structure or doing of any work in or in relation to and by way of renovation or extension of or improvement to the building and the expenditure on construction is incurred by the assessee, that assessee would be entitled to de...

In Anita. D. Kanjani Vs ACIT, the ITAT Mumbai held that The mere fact that possession was delivered later, would not detract from the fact that assessee (allottee) was conferred a right to hold the property on issuance of an allotment letter. The payment of balance amount and delivery of possession are consequential acts that relate back to and arise from the rights conferred by the allotment letter upon the assessee. Holding period should be computed from the date of issue of allotment If we do so, the holding period becomes more than 36 months and consequently, the property sold by the assessee would be long term capital asset in the hands of the assessee and the gain on sale of the same would be taxable in the hands of the assessee as Long Term Capital Gain. Article referred: http://taxguru.in/income-tax/property-holding-period-should-be-computed-from-allotment-letter-date.html#sthash.Z8TxegiO.dpuf

In Red Chillies Entertainment Pvt. Ltd. Vs Asstt. Commissioner of Income Tax,  ITAT Mumbai held that the very fact that the assessee abandoned the projects goes to prove that the projects were not found to be viable or workable. Therefore, keeping in view the business interest, the assessee decided to abandon the projects. In fact, in the CBDT circular no.16 of 6th October 2015, the Board has clearly stated that cost incurred in abandoned projects should be allowed as revenue expenditure under section 37 of the Act. In view of the aforesaid, we allow assessee’s claim of deduction. Article referred: http://taxguru.in/income-tax/red-chillies-entertainment-pvt-asstt-commissioner-income-tax-itat-mumbai.html#sthash.Qlrad9gT.dpuf

In M/s Singh Caterers & Vendors & Anr. v. Indian Railways Catering And Tourism Corporation Ltd., writ petition has been filed challenging termination letter passed by Respondent-IRCTC terminating temporary license awarded to Petitioners for management of On Board Catering Services in Train on ground that, Petitioners had failed to accept award of temporary license and had not paid the security deposit and license fee within stipulated time. Respondent in terms of Clause 4.8 of tender document also debarred Petitioners from participating in future projects of Respondent, IRCTC for a period of one year and forfeited Standing Earnest Money Deposit (SEMD) of Rs.3 lakhs. High Court is of view that cutting/overwriting in present case is not a violation of a mandatory condition and is not material as there is no ambiguity or discrepancy in bid amount. Petitioners bid despite cutting/overwriting clearly mentions the revised bid amount. In fact, revised bid amount has been mention...

In Syed Mansoor Hasan Rizvi Vs Director, Local Bodies, the Allahabad High Court has held that the departmental proceedings are quasi judicial proceedings and the inquiry officer functions as quasi judicial officer. “He is not merely a representative of the department. He has to act as an independent and impartial officer to find out the truth,” said Justice Devendra Kumar Arora while quashing a dismissal order passed by inquiry officer in a departmental inquiry. “The major punishment awarded to an employee visit serious civil consequences and as such the departmental proceedings ought to be in conformity with the principles of natural justice. Article referred: http://www.livelaw.in/departmental-proceedings-inquiry-officer-quasi-judicial-officer-not-depts-representative-allahabad-hc/

In  MURJIBHAI VISHRAM VARSANI Vs SALEMAMAD JUMA SAMEJA, the Gujarat High Court has ruled that an unregistered partnership firm can file a criminal complaint for a dishonoured cheque under section 138 of the Negotiable Instruments Act. The HC clarified this position while dealing with three cases involving a similar issue. This was because various high courts had passed contrary orders. The issue was whether section 69(2) of the Partnership Act bars an unregistered firm from lodging such a criminal complaint. Citing orders passed by various high courts and the Supreme Court, Justice J B Pardiwala concluded that section 69(2) of the Act does not prohibit an unregistered partnership firm from filing a criminal complaint. "The said section has no application to criminal cases. Under these circumstances it could be said that Section 69(2) of the Partnership Act is applicable only where the civil rights are invoked and not in criminal cases. Non-registration of the firm has no legal...

In Berger Paints India Ltd. Vs. C.I.T., Delhi-V,  the short question before the Supreme Court was  whether “premium” collected by the appellant-Company on its subscribed share capital is “capital employed in the business of the Company” within the meaning of Section 35D of the Act so as to enable the Company to claim deduction of the said amount as prescribed under Section 35D of the Act? While dismissing the appeal the Hon'ble court held that as rightly pointed out by the learned Attorney General appearing for the Revenue, the Companies Act provides in its Schedule V- Part II (Section 159) a Form of Annual Return, which is required to be furnished by the Company having share capital every year. Column III of this Form, which deals with capital structure of the company, provides the break up of “issued shares capital break up“. This column does not include in it the “premium amount collected by the company from its shareholders on its issued share capital“. This is indi...

Himachal Pradesh Financial Corporation Vs. Anil Garg The Respondent applied for a loan of Rs.1.90 lakhs in 1989 to purchase a Swaraz Mazda truck and executed a hypothecation deed. Repayment schedule commenced from 10.1.1990 culminating on 10.7.1994. Rs.10,000/- only was repaid on 6.3.1991. The vehicle was seized on 6.5.1991 under Section 29 of the State Finance Corporation Act, 1951 and auction sold on 4.9.1991 for a sum of Rs.1.46 lakhs. A Money Suit was filed before the Senior Sub Judge, Shimla for recovery of the balance of Rs.1,25,270/- along with future interest and costs. The Suit was withdrawn on 12.12.1995 under Order 23, Rule 1 of the Code of Civil Procedure stating that the Appellant desired to proceed under the Himachal Pradesh Public Moneys (Recovery of Dues) Act, 1973. The Suit was dismissed as withdrawn. Recovery Certificate was then issued under the Act on 19.4.1996 for a sum of Rs.1,94,283/- followed by a warrant of arrest. 7. The Respondent thwarted the Certifi...

The Supreme Court, in Union of India vs. Besco Ltd, has held that even if an arbitrator is specified in the agreement for arbitration, the chief justice or the designated judge is free to appoint an independent arbitrator, having due regard to the qualification, if circumstances so warrant. Article referred: http://www.livelaw.in/chief-justice-can-appoint-independent-arbitrator-though-arbitrator-named-agreement-sc/

The allegation of fraud and collusion between the counsel for opposite parties, after many years, ipso facto does not render the decree invalid, the Supreme Court has observed in M/s Brakewel Automotive Components (India) Pvt Ltd vs PR Selvam Alagappan. Article referred: http://www.livelaw.in/allegation-fraud-collusion-counsel-many-years-doesnt-render-decree-invalid-sc/

The Bombay High Court in Mr Sanjay Sadanand Varrier v/s M/s Power Horse India Pvt.Ltd. has held that a winding up petition filed by an employee under Section 439 r/w sections 433(e) and 434 of the Companies Act, 1956, as a creditor based on the claim of recovery of his unpaid salary and wages is maintainable. Article referred: http://www.livelaw.in/winding-petition-employee-creditor-claiming-recovery-unpaid-salary-maintainable-bombay-hc/

Order 2 Rule 2 of Code of Civil Procedure Suit to include the whole claim.- (1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court. (2) Relinquishment of part of claim—Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished. (3) Omission to sue for one of several reliefs—A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs, but if he omits except with the leave of the court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted. Restating the law laid down in Gurbux Singh vs. Bhooralal, the Supreme Court, in Jayantilal Chimanlal Patel vs. Vadilal Purushottamdas Patel, ...

Order 7 Rule 11 of Code of Civil Procedure Rejection of plaint.- The plaint shall be rejected in the following cases:— (a) where it does not disclose a cause of action; (b) where the relief claimed is undervalued, and the plaintiff, on being required by the court to correct the valuation within a time to be fixed by the court, fails to do so; (c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the court to supply the requisite stamp paper within a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to be barred by any law; (e) where it is not filed in duplicate; (f) where the plaintiff fails comply with the provision of Rule 9. The Supreme Court, in Kuldeep Singh Pathania vs. Bikram Singh Jarya, has held that for an enquiry under Order VII Rule 11 (a) of Code of Civil Procedure, only the pleadings of the plaintiff can b...

The Supreme Court, in Canara Bank vs. M. Amarender Reddy, has held that it is permissible to simultaneously issue notice to the borrower about the intention to sell the secured assets and also to issue a public notice for sale of such secured asset by inviting tenders from the public or by holding public auction. “There is no need to wait for the expiry of 30 days from issuance of notice of intention to sell the secured asset given to the borrower, for publication of a public notice for sale of such asset. Nor is there any requirement to give a separate individual notice prior to deciding on the mode of sale of the secured asset,” the bench said. Article referred: http://www.livelaw.in/notice-borrower-intention-sell-secured-asset-public-notice-sale-can-issued-simultaneously-sc/

The Madhya Pradesh High Court in SHRI RAWATPURA SARKAR LOK KALYAN TRUST Vs SHRI SHRINAGARDHAM UDASEEN ASHRAM NIJI NYAS SIRSAWAN CHITRAKOOT has held that re-cross examination of the witnesses under Order 18 and Rule 17 of Civil Procedure Code after evidence is closed is permissible in a civil suit. The trial court had dismissed the application of the petitioner for re-cross examination of the witness  after evidence is closed on ground that the petitioner could not file the application under Order 18 and Rule 17 of the CPC to re-cross examine the witnesses as the power to recall the witnesses for the same is vested only with it. Article referred: http://www.livelaw.in/re-cross-examination-witnesses-permissible-evidence-closed-mp-hc-read-order/

The Calcutta High Court, in PS Mitra vs Manor Travels Private Limited, has held that a judgment and order of conviction and sentence of imprisonment till the rising of the Court and an order of compensation imposed under Section 357(3) of the Code of Criminal Procedure with a direction to undergo imprisonment in default of payment of such compensation is appealable. Justice Joymalya Baggi, observed that Supreme Court in Vijayan Vs. Sadanandan held that ‘compensation’ shall be deemed to be a ‘fine’ for the purposes of Section 64 of I.P.C. and in default of payment of such compensation the Court shall have the power to impose imprisonment upon the defaulter. Article referred: http://www.livelaw.in/ni-act-order-undergo-imprisonment-default-pay-compensation-appealable-calcutta-hc/

In The State of Maharashtra V/s. Smt. Kamaladevi Kailashchandra Kaushal, the Bombay High Court after 21 Years hiked compensation amount awarded by MACT. Justice MS Sonak was hearing an appeal filed by the state and others against the MACT order dated August 5, 1995.  In the MACT order, the appellants were directed to jointly pay a compensation of Rs.1,65,000 to the widow, mother and children of the deceased. In the appeal among the points raised before the High Court was whether in the absence of any cross appeal or cross objections on the part of the claimants, the appeal court is entitled to award ‘just compensation’ to the claimants, in the appeal instituted by the owner? Referring to the decision of the Hon’ble Supreme Court in Ningamma and anr. vs. United India Insurance Company Limited, (2009) the High Court held that section 166 of the MV Act deals with “just compensation” and even if in the pleadings no specific claim was made, a party should not be dep...

The Allahabad High Court in Bimal Kumar S/o Arun Kumar Dixit vs State of U.P.  has held that when an acquittal was obtained by playing fraud upon the court, it is no acquittal in the eyes of law, and in such a case the bar of Section 362 CrPC would not come into play. Article referred: http://www.livelaw.in/trial-court-can-re-call-judgment-vitiated-fraud-allahabad-hc-read-judgment/

The Madhya Pradesh in NAVAL KISHORE GATTANI Vs THE STATE OF MADHYA PRADESH held that while exercising jurisdiction of section 482 of Criminal Procedure Code this court cannot indulge in a “roving inquiry” to ascertain the two conflicting versions concerned to any incident whether it is correct or not. Furthermore the court held it is the sole domain of the trial court to enquire and deduce to the truth of two conflicting versions relating to the incident one given by the petitioner and the other by the prosecution. Article referred: http://www.livelaw.in/hc-cant-carry-roving-inquiry-conflicting-versions-incident-mp-hc-read-order/

The Supreme Court, in Dr KS Palanisami vs Hindu community in general and citizens of Gobichettipalayam, has observed that courts are not entitled to ignore clear words or add something of its own or dilute the meaning of any clear word used in the Will. Article referred: http://www.livelaw.in/court-cant-ignore-clear-words-dilute-meaning-add-something-used-will-sc/

While deciding in Hussain vs Union of India, the division bench of Supreme Court issued the following directions: (i) Bail applications be disposed of normally within one week; (ii) Magisterial trials, where accused are in custody, be normally concluded within six months and sessions trials, where accused are in custody, be normally concluded within two years; (iii) Efforts be made to dispose of all cases, which are five years old, by the end of the year; (iv) As a supplement to Section 436A, but consistent with the spirit thereof, if an undertrial has completed period of custody in excess of the sentence likely to be awarded if conviction is recorded, such undertrial must be released on personal bond. Such an assessment must be made by the trial courts concerned from time to time; (v) The above timelines may be the touchstone for assessment of judicial performance in annual confidential reports. emphasis added) (vi) The high courts are requested to ensure that bail applications ...

The Supreme Court, in IMAX Corporation vs. M/S E-CITY Entertainment, has held that Part-I of the Arbitration and Conciliation Act 1996, has no application in a case where parties chose and agreed to the arbitration being conducted outside India and the arbitration was in fact held outside India. Article referred: http://www.livelaw.in/plea-set-aside-award-passed-arbitration-proceedings-held-abroad-not-maintainable-india-sc/

The Supreme Court, in Om Prakash vs Mishri Lal (Deceased), has reiterated that a co-owner can alone maintain a suit for eviction of the tenant without joining the other co-owners if such other co-owners do not object. Article referred: http://www.livelaw.in/co-owner-alone-can-maintain-eviction-suit-sc/

The Supreme Court, in N Paraeswaran Unni vs G Kannan, has held that a reminder notice to the drawer of the cheque cannot be construed as an admission of non-service of the first notice by the complainant. Article referred: http://www.livelaw.in/cheque-bounce-reminder-notice-cant-construed-admission-non-service-first-notice-sc/

In Sasi vs Aravindakshan Nari, the Supreme Court has issued several guidelines relating to review petitions :- 1) High courts to dispose of review petitions as expeditiously as possible. 2) An endeavour has to be made by the high courts to dispose of the applications for review with expediency. 3) It is the duty and obligation of a litigant to file a review and not to keep it defective, as if a defective petition can be allowed to remain on life support, as per his desire. 4) It is the obligation of the counsel filing an application for review to cure or remove the defects at the earliest. 5) The prescription of limitation for filing an application for review has its own sanctity. 6) The registry of the high courts has a duty to place the matter before the judge/bench with defects, so that there can be pre-emptory orders for removal of defects. 7) An adroit method cannot be adopted to file an application for review and wait till its rejection and, thereafter, challenge...

The Chhattisgarh High Court, in Manik Mehta vs. UCO Bank, has observed that even when the secured asset belongs to the guarantor, the borrower can also prefer an appeal to the Debt Recovery Tribunal (DRT). Setting aside the DRAT order, Justice Prashant Kumar Mishra observed: “The legislature intends to provide relief to the borrower by restoring the possession of the secured asset. Even if the term ‘borrower’ includes a ‘guarantor’, it does not exclude he borrower himself to disentitle him to prefer any appeal when the measures are taken under Section 13 (4) of the Act, 2002.” Article referred: http://www.livelaw.in/borrower-can-prefer-appeal-drt-even-mortgaged-property-belongs-guarantor-chhattisgarh-hc-read-judgment/

The Supreme Court in Pratibha Pratisthan vs. Manager, Canara Bank held that on a plain and simple reading of all the provisions of the Consumer Protection Act, 1986 it is clear that a Trust is not a person and therefore not a consumer. Consequently, it cannot be a complainant and cannot file a consumer dispute under the provisions of the Act.

The Bombay High Court in State of Maharashtra Vs Suresh Vitthal Mule, R/o. Kasheli, Tal. Rajapur, Dist. Ratnagiri has held that merely driving a vehicle at a high speed is not enough to attract the offence of rash and negligent driving while dismissing the state government's application to overturn the acquittal of a Ratnagiri resident accused of running his vehicle over the legs of a woman resulting in amputation of her left leg.

A bench of Justice Atul Sreedharan of Madhya Pradesh High Court in Dr.B.C.Jain vs Maulana Saleem has laid down seven-point landmark guidelines for the police and the subordinate courts over handling of cases in which the government doctors are accused of patient’s death due to negligence. The seven-point guidelines issued by the court were :- 1) That, all allegations relating to negligent conduct on the part of a Government Doctor for which a prosecution u/s. 304-A IPC and/or its cognate provisions, or under such other law involving penal consequences is sought, the same shall be enquired into by a Medical Board consisting of at least three doctors, constituted by the Dean of any Government Medical College in the State of Madhya Pradesh, upon the request of the Police, Administration or the directions of a Court/Tribunal/Commission, within seven days of such requisition 2) The doctor so selected by the Dean of the Medical College concerned to sit on the Medical Board, shall not b...

The Supreme Court, in M/s. Purohit and Company vs. Khatoonbee, has observed that though there is no limitation period to raise a claim for compensation before a Motor Accident Claims Tribunal, it should be done within a reasonable time. Article referred: http://www.livelaw.in/claim-compensation-mact-must-raised-within-reasonable-time-sc-read-judgment/

A judicial functioning has to be done in a judicial manner, observed the Supreme Court while holding that Section 33(2) of the Stamp Act does not empower the judge of the high court to direct the officer of the high court to enquire and to find out the nature and character of the document. A three-judge bench headed by Justice Dipak Misra, in Black Pearl Hotels (Pvt) Ltd vs. Planet M Retail Ltd, observed that the duty of determination of an instrument or, to explicate, to determine when there is a contest a particular document to be of specific nature, the adjudication has to be done by the judge after hearing the counsel for the parties. Article referred: http://www.livelaw.in/judicial-functions-cant-delegated-sc-read-judgment/

The Delhi High Court, in ALUPRO BUILDING SYSTEMS PVT LTD vs OZONE OVERSEAS PVT LTD,  has clarified and settled that Section 21 of the Arbitration & Conciliation Act 1996, is mandatory to be complied with before reference of disputes to arbitration. In other words, without such notice, the arbitration proceedings that are commenced would be unsustainable in law. The court also held that mere acceptance of supplies by a party on the basis of invoices containing an arbitration clause would not amount to acceptance by the party of such arbitration clause. The court clarified that there could not be an arbitration agreement by implication and a mere endorsement of receipt of goods on the invoices cannot lead to an inference that a party agreed to the arbitration clause printed on the said invoices. Holding that the same is not an arbitration agreement which could be validly invoked, the court declared the award as null and void. Article referred: http://www.livelaw.in/not...

Can the owner of a well-known trade mark like Mercedes Benz sustain an infringement claim against an ice cream manufacturer that uses it as its corporate or trading name? This doubt was expressed by a single bench of Bombay High Court, which has been answered by the full bench holding that there is no infringement in such a case. The full bench of Bombay High Court in Cipla Limited vs, Cipla Industries Pvt. Ltd. has held that the use of a registered trade mark as corporate name or trading name or style is excluded from the purview of Sections 29(1), 29(2) and 29(4) of the Trade Marks Act, 1999, and these provisions are restricted to the use of a trade mark ‘as a trade mark’, i.e., in the ‘trade marky’ sense. Article referred: http://www.livelaw.in/no-infringement-defendant-uses-registered-trade-mark-corporate-name-respect-dissimilar-goods-bombay-hc-fb/

The Supreme Court in JSW Infrastructure Limited Versus Kakinada Seaports Limited, held that:- a) This Court in Ramana Dayaram Shetty vs. International Airport Authority of India, (1979) held that the words used in documents cannot be treated to be surplusage or superfluous or redundant and must be given some meaning and weightage. b) The law is well settled that superior courts while exercising their power of judicial review must act with restraint while dealing with contractual matters. A Three Judge Bench of this Court in Tata Cellular vs. Union of India, (1994) held that (i) there should be judicial restraint in review of administrative action; (ii) the court should not act like court of appeal; it cannot review the decision but can only review the decision making process (iii) the court does not usually have the necessary expertise to correct such technical decisions.; (iv) the employer must have play in the joints i.e., necessary freedom to take administrative decisions within...

The Madhya Pradesh High Court in Rahul Jain Vs Smt. Namrata Jain has held that the jurisdiction of High Court under Article 227 of the Constitution of India cannot be exercised to correct all errors of a judgment of a Court acting within its limitation. Article referred: http://www.livelaw.in/article-227-cannot-exercised-correct-errors-judgment-court-acting-within-limitation-mp-hc/

The Delhi High Court in Kanoria Industries vs Union Of India held that a review petition is maintainable before the high court after the special leave petition (SPL) is dismissed as withdrawn by the Supreme Court. Article referred: http://www.livelaw.in/review-petition-maintainable-hc-dismissal-slp-withdrawn-delhi-hc-read-judgment/

In Dr. Subhas Chandra Das vs State of Orissa, the Hon'ble Orissa High Court has, in a medical negligence case, observed that it is the duty of a doctor to explain his patient or relatives chances of success and the risk of failure of the suggested treatment and inform them about the foreseeable risks and possible negative effects of the treatment, keeping in mind the patient’s specific condition. Article referred: http://www.livelaw.in/doctors-must-explain-risk-suggested-treatment-patients-orissa-hc/

The Supreme Court, in Senathi Na. Venkitasalapathi Ayyer & Sons Private Trust vs. Indhumathi, has observed that mere description or the name of a trust could not be taken as determinative of the character of the trust without examining the nature of the trust. Article referred: http://www.livelaw.in/mere-name-trust-cant-taken-determinative-character-sc-read-order/

In COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA VS DEEPAK GUPTA, the Supreme Court has opined that if a practicing chartered accountant commits misconduct while he holds the certificate of practice issued by the Institute of Chartered Accountants of India, he would be liable for punishment if the misconduct is proved.... Article referred: http://www.livelaw.in/proved-misconduct-chartered-accountant-holds-certificate-practice-punishable-sc-read-order/