Legal News & Views

In JAGMOHAN BEHL vs STATE BANK OF INDORE, the Court heard an Appeal challenging an order passed by a Single Judge, whereby the suit seeking recovering of rent and mesne profits was directed to the transferred to the District Court, observing that it did not relate to a commercial dispute. The Single Judge had pointed out the fact that the suit did not seek to enforce any right under an agreement relating to immoveable property. The Division Bench of the Court, however, opined, “The use of expression “any other relief pertaining to immoveable property” would mean disputes relating to breach of agreement and damages payable on account of breach of agreement would be covered under sub-clause (vii) to clause (c) to Section 2 of the Act when it is arising out of agreement relating to immoveable property exclusively used in trade and commerce.”  Section 2(1) (c) (viii) includes “agreements relating to immoveable property used exclusively in trade or commerce” within the definiti...

In Maharaja Amrinder Singh vs. CWT, the appellant is the wealth tax assessee and is subjected to payment of Wealth Tax under the Act. The case pertains to the Assessment Years 1981-82, 1982-83 and 1983-84. The issue involved in these three assessment years was decided by the Tribunal in favour of the appellant (assessee) which gave rise to filing of the appeals before the High Court by the Revenue under Section 27-A of the Act questioning therein the legality and correctness of the orders of  the Tribunal.  The High Court allowed the appeals filed by the Revenue, which has given rise to filing of these appeals by way of special leave before this Court by the assessee. The short question, which arose for consideration in these appeals, is whether the High Court was justified in allowing the appeals filed by the Revenue and thereby was justified in setting aside the orders passed by the Tribunal. Having heard the learned counsel for the parties and on perusal o...

In M/s N. K. Jewellers vs. CIT, in the year 2000, one of the assessee’s employee was found in possession of Rs.30 lacs cash pursuant to search carried by Railway Police (‘GRP’) while returning by train. The cash was requisitioned and seized u/s 132A of the Income Tax Act. Consequently,  block assessment proceeding was initiated against assessee u/s. 158BD treating the same as assessee’s concealed income. The assessees’ main contention was that the search proceedings initiated u/s 132 are invalid and that the block assessment proceedings are without jurisdiction since it cannot be based on a search conducted on a train by the police authorities.  The order was confirmed by the Appellate Tribunal and the High Court later.  The Supreme Court held that the plea that the search proceedings initiated u/s 132 are invalid and that the block assessment proceedings are without jurisdiction cannot be entertained because s. 132A provides that the 'reason to believe' or ...

In Income-tax Officer vs Shri. Ramakrishna M. J, Assessee, sold his property and purchased a new house within the prescribed time. The capital gain was also used for alteration / renovation on the purchased unit and to the construction of the third floor. Since he utilised the entire amount for construction of new house within the provisions of Section 54F of the Income Tax Act, assessee claimed the benefit of the provision. However, the claim was disallowed on the ground that the same would amount to construction of new unit in addition to the unit that the assessee has purchased. The AO was of the opinion that the exemption is only available for purchase of units within two years out of the sale proceeds from the date of transfer of the capital asset. On appeal, the first appellate authority allowed the contentions of the assessee. the department challenged the order before the Appellate Tribunal. The ITAT noted the fact that the assessee had spent an amount of Rs.32,50,000/- tow...

The Gujarat High Court in a landmark judgment stated that even though a woman has converted to another religion after marriage she is nevertheless entitled to inherit her father’s ancestral property as per the Hindu Succession Act. Justice JB Pardiwala, in a matter where a Hindu woman converted to Islam after marrying a Muslim man and renounced Hindu faith, does not disqualify her to inherit father’s property. As per the Hindu Succession Act, if a person has converted then it does not disqualify her from claiming her share in the ancestral property. The Act only disqualifies the descendants of the convert who are born to the convert after such conversion from inheriting the property of any of their Hindu relatives. In the present matter, the state revenue authorities were of the opinion that since she has renounced her religion voluntary and hence does not have any right to share in father’s property. Nasimbanu Friozkhan Pathan from Vadodara renounced Hinduism and embraced Isla...

In significant judgement in Dr. Jasvir Singh Rana vs. II Dept., tge Delhi ITAT, in a significant ruling, held that assessee can avail the benefit of capital gain exemption if provisional possession of the new property was transferred within two years of disposal of the old property. The bench, while overruling the contentions of the department, ruled that when the provisional possession of the property is transferred to the assessee, benefit of section 54F of the Income Tax Act, 1961 cannot be denied to him merely on ground that the registration of the sale deed has not been made in his favour. Assessee sold his immovable property and jewellery for purachasing a new residential unit from M/s. Unitech Acacia Project Private Limited which was provisionally allotted to him. Assessee further deposited the remaining property in the capital gain account scheme and claimed u/s 54 and 54F of the Income Tax Act. However, the claim was rejected by the department on ground that the assesse...

In ICON HEALTH AND FITNES, INC vs SHERIFF USMAN AND ANR, The Court was hearing a suit filed by ICON Health and Fitness Inc, which is a company incorporated under the laws of the United States.  The subject matter of the suit was IHFI’s trademark ifit/ iFIT, which it uses for fitness devices such as wearable and software applications for fitness devices. The suit was filed against defendants who were offering a fitness related App under the name ifit on the App Store and on the Google Play Store. The defendants were also offering fitness bands for sale under the name IFIT on e-commerce portals such as www.amazon.in. The Court noted that the defendants were using a mark identical to that of the plaintiff for identical devices and software and for identical class of consumers. Further, the channels through which the defendants were offering their devices and software were also identical to those of the plaintiff. Justice Gupta, therefore, opined that the impugned mark had...

In UNION OF INDIA & ORS. vs M. KARUMBAYEE, the Supreme Court has dismissed the appeal filed by the Govt. and upheld the Madras High Court Judgment which had held that children born out of void marriages are legitimate. The matter relates to the appointment on compassionate grounds in Southern Railway, of  a deceased employee’s son, born to his second wife, as he did not have any issue from his first wife. The Southern Railway rejected the claim for appointment on the ground that children born to second wife were not recognised and second wife was not entitled to any benefits, as per the instructions of the Railway Board.   According to the Railway Board’s Circulated, dated 2.1.1992, appointment on compassionate ground, cannot be granted to the children born to second wife. The Madras Bench of the CAT rejected the Railway’s contention on the basis of the judgment rendered by the Division Bench of the Kolkata High Court in the case of Smt.Namita Goldar and another v...

In DAMINI AND ANOTHER vs JODHPUR VIDYUT VITRAN NIGAM LIMITED, the question before the Supreme Court was what is the period of limitation for filing a suit or claim under The Fatal Accidents Act, 1855 is the issue arising for consideration in this case? The appellants are the widow and son of one Pradeep Bhai Patel who worked as a driver of a bus. The deceased died from electrocution during the course of his employment. The appellants filed an application under Section 1A of the Fatal Accidents Act, 1855 bclaiming Rs.22,68,000/- towards damages which was resisted on the ground of limitation among other grounds. According to the respondents, under Article 82 of The Limitation Act, 1963, the claim should have been presented within two years from the date of death of the person. The contention was upheld and the claim petition was dismissed. The decision was upheld by the High Court as well, and thus, the appellants are before this Court.  It is the c...

In Webster v Doak (New Zealand), the appeal concerns the desire of the second Respondent (Children’s Health Camps the New Zealand Foundation for Child and Family Health and Development known as Stand Children’s Services (Stand)) to use a building on land it owns in Paraparaumu (the land) for the purposes of establishing a “Children’s Village” (a children’s health camp). In late 2015, Stand sought a declaration in the High Court to the effect that a restrictive covenant registered against the title to the land will not prevent it using the building for a children’s health camp. The Appellants, together with six other immediate neighbours of the land, opposed the granting of the declaration. The restrictive covenant provides that, no buildings may be constructed or used for commercial or industrial use unless such use is a predominant use under the code of ordinances of the Kapiti Coast District Council for such lot. The issue is whether the use of the building on the land as a chil...

In Vinod Kumar Kataria Vs. Arufa,  first appeal has been filed by the Appellant against the order passed by the State Commission. Appellant/complainant had purchased the first floor of the property from the opposite party and sale deed was executed in his favour. The possession of the flat in question was handed over to the complainant in October 2012. It was alleged that, after shifting in the aforesaid premises, the complainant realized that, the OP had used inferior quality material in the construction of the flat and noticed major defects. Based on this fact, the complainant filed complaint before the State Commission for refund of the total amount of purchase price amounting to Rs. 25,00,000/- alongwith Rs. 1,50,000/- as expense of sale deed. The State Commission, however, dismissed the complaint at the admission stage on the ground of limitation and on the ground that other occupants have filed a civil suit for illegal construction and the complainant may also join the ...

In Taluka Co-operative Education Society Ltd. Vs. State of Maharashtra and Ors., the High Court of Bombay held that In case of a Society, the will of majority of the members of Society is supreme. If they decide to get themselves not to be governed by the Maharashtra Cooperative Societies Act and to be governed only by provisions of Maharashtra Public Trust Act, there is nothing wrong. The decision deserves to be respected subject to verification of the facts and following the due procedure.

In Ganpat Singh Vs. The State of Madhya Pradesh, appeal arises from a judgment of a Division Bench of High Court. The High Court affirmed the conviction of the Appellant under Section 302 of the Indian Penal Code, 1860 (IPC). Additional Sessions Judge by a judgment found the Appellant guilty of an offence under Section 302 of the IPC and sentenced him to imprisonment for life. The case rested entirely on circumstantial evidence. The circumstances which weighed with the trial Court were that, deceased was last seen accompanying the Appellant; deceased had taken with her the jewellery of PW1 and PW2 which was recovered from the Appellant; and the Appellant had no explanation of how the articles were found in his possession. The Supreme Court while overturning the decision of the High Court said, there are no eye-witnesses to the crime. In a case, which rests on circumstantial evidence, the law postulates a two-fold requirement. First, every link in the chain of circumstances nec...

The European Court of Justice has recently given a judgement that dealt with unfair commercial practices of a debt collection agency. This judgement is special as, contrary to many other judgements of the Court on the Unfair Commercial Practices Directive, it did not relate to the behaviour prior to entering into the agreement with a consumer, but to the behaviour in the performance of such agreement. This judgement may lead to consumer authorities looking more critically at all that may occur after an agreement has been entered into, a settlement agreement for example. If a consumer is (seriously) disadvantaged in such an agreement, this could be qualified as an aggressive commercial practice. This observation subsequently means that the consumer is not only eligible for compensation for the loss suffered, but also that the whole settlement agreement must be nullified. This case concerned a Lithuanian debt collection agency, Gelvora, that had entered into agreements with vari...

For the benefit of the purchase of a property portfolio, A obtained a mortgage loan from a bank of approximately € 3 million. A had to repay this loan at the latest on 14 June 2013. Subsequently, A identified B as a buyer of the mortgaged properties of A and for this the lawyer of A made all the necessary arrangements with the relevant authorities and the said lawyer committed to B that the sale agreement shall be signed by A on a particular place and time. Meanwhile, A identified another person who would be paying more and refused to honour the agreement with B with the argument that he had never appointed his lawyer as his power of attorney and the said lawyer had acted without his written authority. The matter went to Supreme Court which agreed with the Court of appeals and gave stress on the conclusions which can be drawn from the actions of the various parties in the absence of any specific power of attorney. The court concluded that  the actions of the Lawyer...

In MRS SHIVANI RAJIV SAXENA vs DIRECTORATE OF ENFORCEMENT, the Delhi High Court while denying bail to Mrs. Shivani Saxena, the woman director of two Dubai-based firms, arrested in connection with a money laundering case arising out of the Rs. 3,600 crore VVIP chopper scam said that the offence alleged against the petitioner falls under the the category of economic offences which stand on a graver footing. These crimes are professionally committed by white-collared people which inflict severe injuries on both health and wealth of the nation. Such offences need to be dealt with a heavy hand the category of economic offences which stand on a graver footing. These crimes are professionally committed by white-collared people which inflict severe injuries on both health and wealth of the nation. Article referred: http://www.livelaw.in/economic-offences-need-treated-heavy-hand-delhi-hc-denies-bail-woman-director-vvip-chopper-case-read-judgment/

 The judgment of the Supreme Court in Mobilox Innovations Pvt.Ltd. v.Kirusa Software Pvt.Ltd. rendered by a bench of Justices R. F Nariman and Sanjay Kishan Kaul settles a significant issue under the Insolvency and Bankruptcy Code 2016. The issue was whether the existence of a dispute by itself without the record of initiation of any suit or arbitration proceedings in relation to it is sufficient to make an application for insolvency resolution at the instance of operational creditor unsustainable. The Supreme Court looked at the details of the Code and held that operational creditors are those creditors to whom an operational debt is owed, and an operational debt, in turn, means a claim in respect of the provision of goods or services. Further a claim by operational creditor can be defeated  as per Section 8(2)(a)  by bringing out to the notice of debtor the existence of a dispute , if any, and record of the pendency of the suit or arbitration proceedings filed bef...

The Supreme Court in M.D.Frozen Foods Exports Pvt. Ltd. & Ors. vs Hero Fincorp Ltd.  has held that NBFC is entitled to initiate both arbitration proceedings and SARFAESI proceedings with respect to a loan account, and that the ‘doctrine of election’ was not attracted in such a scenario. It was further clarified that there was no illegality in an Non-Banking Financial Company(NBFC) invoking SARFAESI Act for recovery of loan arrears with respect to an account classified as Non- Performing Asset(NPA) before the NBFC got notified under the Act. It was also clarified that the provisions of the SARFAESI Act would become applicable qua all debts owing and live when the Act became applicable to the borrowing, provided the following factors existed :- 1) Existence of a present actionable debt; 2) Status of the person invoking the jurisdiction is that of a secured creditor; 3) Assets have been secured in satisfaction of the debt; and 4) That the debtor/borrower should have b...

In Adiveppa & Ors. Vs Bhimappa & Anr., the Supreme Court recently reiterated the principle that all assets in a Hindu Undivided Family would be presumed to be joint property belonging to all its members and that the burden to prove otherwise is on the family member asserting such claim. Article referrd: http://www.livelaw.in/huf-assets-taken-joint-property-unless-proven-otherwise-sc-read-judgment/

In D. SAROJAKUMARI Vs R. HELEN THILAKOM & ORS., the Supreme Court has held that once a person took part in the process of selection and was not found fit for appointment, the said person was estopped from challenging the process of selection. This was in a contest between two Music Teachers claiming appointment in a school under the management of Church of South India. There were two schools under the management- Samuel LMS High School, and Light of the Blind School, which was meant for visually challenged students. One Helen Thilakom was working as a part-time music teacher in the Light of the Blind School. Selection process for direct recruitment for full-time music teacher in Samuel School was notified. Helen participated in the selection process. But she was rejected, and one Saroja kumari got selected. Thereupon, Helen challenged the selection process contending that the vacancy in Samuel School could not have been filled up by direct recruitment. She contended that she w...

In the matter of Pacific Gulf Shipping (Singapore) Pte Ltd v. SRK Chemicals Ltd & Anr,  the Bombay High Court has held that an admiralty court does not have jurisdiction to arrest cargo on board a ship for an unrelated claim. Justice SC Gupte was hearing a notice of motion filed by the defendants (SRK Chemicals) seeking release of 20,000 MT of salt that was kept as security at an open yard in Kutch, Gujarat, in lieu of cargo belonging to the defendants. Plaintiffs claimed cost of $221,656.29 for carriage of salt belonging to the defendants in their vessel MV Pacific Pioneer from the load port of Kandla to the discharge port of Chittagong, towards outstanding demurrage charges, interest and other costs. In an ex-parte order by a single bench of the high court dated February 10, 2017, the defendant’s cargo was arrested. On February 13, following the defendant’s request, the order of arrest was vacated and 20,000 MT of industrial salt belonging to the defendants was t...

The issue raised in the writ petition United Bank of India & Anr. Vs. State of West Bengal & Ors., is whether a secured creditor is entitled to invoke the provisions of Section 14 of the Act of 2002 subsequent to the sale of an immovable property over which it claims security interest? The petitioners submited that, the first petitioner had made an application under Section 14 of the Act of 2002 before the concerned District Magistrate on September 9, 2013. Such application has not been considered and decided till date. He seeked expeditious disposal of such application. The Calcutta High Court said that the words ‘sale and ‘transfer’ used in Section 14 of the Act of 2002 are not synonymous. The word ‘transfer’ used as a verb means that, a person is conveying or removing from one place or one person to another or is passing or handing over something to another person. It can also mean changeover of the possession or control of a given thing. Transfer is, therefore, wid...

In UNION OF INDIA AND ANOTHER vs M/S. KUMHO PETROCHEMICALS COMPANY LIMITED AND ANOTHER, the questions before the apex Court was that, (1) whether the order of continuation of anti-dumping duty, made after expiry of the duty period, is bad in law? (2) Whether such a Notification issued after the expiry date of the original Notification is without any legal authority and is, therefore, null and void? The two judge bench comprising of Justice A.K Sikri and Justice Ashok Bhushan upheld the finding of the High Court that once the earlier Notification by which anti-dumping duty was extended by five years, i.e. up to January 01, 2014, expired, the Central Government was not empowered to issue any Notification after the said date, namely, on January 23, 2014, inasmuch as there was no Notification in existence the period whereof could be extended. It was also held that the High Court, has rightly held that the Notification extending anti-dumping duty by five years, i.e. up to January 01, 2...

In Vijay Gupta vs Greenpolis Welfare Association, the the chairman of a real estate company approached a Delhi court seeking injunction against home buyers coming to his house or office following delay in possession of flats. The case pertains to Vijay Gupta, chairman-cum-MD of Orris Infrastructure Ltd. The company, in arrangement with another company, started a residential project called Greenpolis in Gurgaon, Haryana. The possession got delayed and the buyers got anxious. Their attempts at meeting Gupta as “Greenopolis welfare association” did not work out in a positive direction. The association had informed Gupta on September 3 that the buyers are left with no other option but to hold peaceful agitation at his office and residence on September 9. Calling the assembly of hundreds of buyers at his doorsteps illegal, Gupta came to court seeking an injunction saying the buyers might turn aggressive like what happened recently in Haryana’s Panchkula where thousands of s...

In Mihir Kumar Hazara Choudhury vs Life Insurance Corpn. & Anr., the Supreme Court while dismissing the appeal filed by an Assistant of LIC against punishment imposed for financial irregularities on job, observed that the delinquent employee cannot make a plea that punishment ought to be avoided as no loss or profit was caused as a result of the misconduct. The appellant was found to have issued receipts to policy holders, without actually receiving payment from them. On notice being issued to him, he did not specifically deny the charges, but made a plea that the error happened due to pressure of work and family worries. The enquiry officer entered a finding that the appellant acted with mala fides. On the basis of enquiry report, the appellant was dismissed from service.

In V. CHITAMBARESH, SHAJI P. CHALY & SATHISH NINAN, the Full Bench of Justices V. Chitambaresh, Shaji P Chaly and Sathish Ninan held that an employee can claim higher amount of gratuity in excess of the statutory minimum fixed by the Payment of Gratuity Act, in cases where the gratuity insurance schemes availed of by the employer yields higher returns. Article referred: http://www.livelaw.in/employee-entitled-to-gratuity-over-above-statutory-limit-if-gratuity-insurance-availed-of-by-employer-yields-higher-amount-kerala-hc-fb-read-judgment/

In A. Saiyed vs State of Maharashtra, the Bombay High Court has held that the Federation of Labour Law Practitioners cannot be registered as a trade union under the Trade Unions Act, 1926. The court further noted that the term ‘trade union’ means any combination, whether temporary or permanent, it must be formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen or between employers and employers or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more trade unions. The court held we do not see any industry and we do not see any relationship of employer and employer or workmen and workmen. The district level associations as members of the 3rd respondent, therefore, are not employees, nor is the Federation their employer. If it [Federation] could not have made an  application under Chapter II for registration as a Trade Union, hav...

In M/s. Merck Ltd. & Anr. vs Radha Nath Nandi, the the cheque was returned by the bank of the complainant/payee, before forwarding it to the drawer bank for encashment. Curiously, the payee bank had endorsed in the return slip that ‘account name & cheque name differs/no funds’. The complainant lodged complaint thereupon, after sending the statutory notice. He had a case that the name was not written in full by the drawer deliberately to harass him. The respondent/drawer approached the High Court for quashing the proceedings before the Magistrate. The Calcutta High Court quashed the proceeding holding that without producing the cheque before the drawer bank, complaint under Section 138 of the Negotiable Instruments Act will not be maintainable. Article referred: http://www.livelaw.in/without-producing-cheque-drawer-bank-complaint-sec-138-ni-act-not-maintainanble-calcutta-high-court-read-order/

In Ahuja Builders Vs. Doonvalley Technopolis Pvt. Ltd., the Delhi High Court said that if there is an arbitration agreement between the parties and any dispute arising under the Contract is needed to be referred to the Arbitrator. Under Clause 13 of said Contract Agreement, what is referable is 'a dispute arising out of or in any way connected with Contract Agreement'. But for referral the existence of 'Dispute' is sine qua non. The money payable under the Contract was calculated by the Defendant and the calculation is accepted by the Plaintiff as it is, there exists no dispute between them in relation to the terms of Contract. The applicant/Defendant has also not contended anywhere that, there is any dispute between the parties relating to the amount payable under the Contract or of any other nature. Its plea is based on mere existence of arbitration Clause 13 in the Contract. Therefore the present suit is filed for the recovery of the said amount under Order XXXV...

In Sadhu Forging Limited Vs. Continental Engines Ltd., the Delhi High Court said that it is well-settled that procedure is the handmade of justice. It is undisputed that even at this stage, a party can file documents but with the leave of the Court. The plaintiff cannot be non-suited from filing the documents it seeks to rely upon even at this stage. Though in the decision Nishant Hannan (supra) this Court was dealing with unimpeachable documents, however the fact remains that under Order VII Rule 14 CPC read with Section 151 CPC the plaintiff can file additional documents with the leave of the Court when the plaintiffs evidence is going on. Provision under Order VII Rule 14 CPC is essentially to assist parties and the Court in adjudication of the dispute.

In Prem Prakash Vs. Santosh Kumar Jain & Sons (HUF) and Ors., the appeal before the Supreme Court was against the final judgment passed by the High Court of Delhi whereby learned Single Judge of the High Court allowed the eviction petition filed by the Original Owner-Respondent No. 1 while setting aside the judgments passed by the Court of Additional Rent Controller, and the Rent Control Tribunal, Delhi, respectively. The only point for consideration before this Court was whether in the present facts and circumstances of case, the order of eviction passed by the High Court was just and proper.  The initial burden to prove that the sub-tenant is in exclusive possession of the property is on the owner, however, the onus to prove the exclusive possession of the sub tenant is that of preponderance of probability only and he has to prove the same prima facie only and if he succeeds then the burden to rebut the same lies on the tenant.  In Associated H...

The National Company Law Tribunal, Chennai, reserved an order that would clarify whether a PSU would fall within the ambit of a “corporate person” under the Insolvency and Bankruptcy Code. The matter before the Tribunal pertains to Petitions filed by power producers Ind. Bharath Power Gencom Ltd, Ind. Bharath Thermal Limited and Aarkay Energy (Rameshwaram) Limited against Tamil Nadu Generation and Distribution Company Ltd. (Tangedco), the State government-owned power  distribution company. Article referred: http://www.livelaw.in/can-a-psu-be-a-corporate-person-under-bankruptcy-code-nclt-chennai-reserves-order/