Legal News & Views

In National Insurance Company Limited Vs Pranay Sethi and Ors., a Five Judge Constitution Bench of the Supreme Court on Tuesday guidelines on fixation of future prospects for deciding compensation in motor accident claims. The Bench was hearing a reference by a two Judge Bench to resolve the conflicting opinion between the three Judge Bench Judgments in Reshma Kumari and others v. Madan Mohan and another and Rajesh and others v. Rajbir Singh. The seminal controversy before the Court was, “where the deceased was self-employed or was a person on fixed salary without provision for annual increment, etc., what should be the addition as regards the future prospects”. The Bench observed that Section 168 of the Act deals with the concept of “just compensation” and the same has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. According to the bench, the...

In Haryana State Roads and Vs. Development Corporation Ltd., vs The D.C.I.T., the Income Tax Appellate Tribunal [ITAT], Chandigarh bench, has held that the appellate authority cannot dismiss an appeal by pointing out the defects in its form without granting an opportunity to the assessee to cure the defects.  The bench comprising judicial member Ms. Diva Singh and Accountant member, Ms. Annapurna Gupta held so while hearing both parties contentions.  This appeal filed by the assessee has been preferred against the order passed by the Ld. Commissioner of Income Tax (Appeals), relating to assessment year 2012-13. Dissatisfied by the order, the assessee approached the Commissioner of Income Tax (CIT). however, the first appellate authority dismissed the appeal by stating that it was defective since the appeal has not been filed in the prescribed format according to the Rule 45 of the Income Tax Rules. It said that the verification in the appeal memo was signed by un...

In Shri Arunkumar Nathan  Vs.  Asst. Commissioner of Income Tax,  Bangalore bench of the ITAT, on Wednesday, observed that purchasing of two properties in different localities cannot be claim tax deductions under sec 54 of the Income Tax Act, 1961. The Assesse sold his residential property and has purchased two apartments in two different localities, and he claimed tax deductions for both properties under sec 54 of the income tax act 1961. But the Asst. CIT denied the claim of the Assessee and observed that the benefit is available to one residential unit under the said provision. The Assessee argued that the order of the department is so far it is prejudicial to the interest of the Appellant is bad and the CIT erred in law and facts in holding that the amendment to Finance Act 2014 is clarificactory in nature even though the memorandum explaining the Finance Act 2014 clearly states that the amendment will apply in relation to AY 2015-2016 and subsequent asse...

The Supreme Court has interpreted the width and amplitude of inherent powers of the State Electricity Regulatory Commission in Gujarat Urja Vikas Nigam Limited vs Solar Semiconductor Power Company, and has held that the tariff fixed in terms of power purchase agreement (PPA) between the power producer and distributor cannot be altered invoking inherent powers. The separate but concurring judgments written by Justice Kurian Joseph and Justice R Banumathi examined the scope of powers of Electricity Regulatory Commission under the Electricity Act 2003. Article referred: http://www.livelaw.in/electricity-commission-no-inherent-power-alter-tariff-ppa-power-generator-distributor-sc-read-judgment/

In COMMISSIONER OF INCOME TAX - III vs VASAVI PRATAP CHAND, a division bench of the Delhi High Court upheld the order of the ITAT that the value of land as declared and assessed under Section 7(4) of the Wealth Tax Act could not be adopted as market value of the asset as on 1.4.1981 for purposes of computing taxable gain under the Income Tax Act. A bench comprising of Justice S.Muralidhar and Justice Pradhiba M. Singh held so while considering bench of appeals under Section 260A of the Income Tax Act, 1961. Article referred: http://www.taxscan.in/value-declared-wealth-tax-return-cannot-taken-cost-acquisition-computing-capital-gain-income-delhi-hc/12534/

The National Consumer Disputes Redressal Forum in POST MASTER GENERAL Vs MANOJ KUMAR has held the Post Master General in Chandigarh and Lodhi Road in New Delhi guilty of deficiency in service for failing to deliver the application forms of two law graduates to the Delhi High Court Registrar in time, leading to the applicants losing precious chance of participating in the Delhi Judicial Service Examination. The state commission had held the post offices to be deficient in service as they failed to deliver the packets containing the application forms of the complainants for appearing in the Delhi Judicial Services Examination-2015, by or before 07.11.2015, the last date for submission of such applications. The state commission had held, “As per contents of Citizen Charter issued by the Department of Posts, Ministry of Communications and Information Technology, Government of India, qua delivery of speed post, it is stated that from State Capital to State Capital speed post will r...

The Supreme Court, in International Asset Reconstruction Company Of India Ltd vs The Official Liquidator Of Aldrich Pharmaceuticals Ltd And Others, has held that the prescribed period of 30 days under Section 30(1) of the Recovery of Debts and Bankruptcy (RDB) Act, 1993, for preferring an appeal against the order of the recovery officer cannot be condoned by application of Section 5 of the Limitation Act. In the instant case, an appeal was preferred by the aggrieved against the order of recovery officer before the tribunal beyond the prescribed period of 30 days and the tribunal held that Section 5 of the Limitation Act not being applicable to proceedings under Section 30 of the Act, the delay beyond the prescribed period could not be condoned. The bench comprising Justice AM Sapre and Justice Navin Sinha observed that the definition of “application” under Section 2(b) of the Act was confined to Section 19 of the RDB Act only. Its meaning could not be extended beyond that pres...

The Supreme Court once again in Sri Chittaranjan Maity Vs. Union of India reiterated that intervention of the Court is envisaged only in few circumstances like fraud or bias by the Arbitrators, violation of natural justice. The Court cannot correct the errors of the Arbitrators. The court was hearing an appeal against the judgment of the Division bench of the Calcutta High Court which had in its judgment considered and ordered against the  the arbitrability of the disputes for the first time, particularly, when the Respondent has not urged the issue relating to 'No Claims Certificate' before the Chief Justice, Arbitral Tribunal or before the learned Single Judge. The Supreme Court said that this Court, in Mcdermott International Inc. v. Burn Standard Co. Ltd. and Ors., has held that, the party questioning the jurisdiction of the Arbitrator has an obligation to raise the said question before the Arbitrator. It has been held that, after the 1996 Act came into force, und...

In Pankajbhai Rameshbhai Zalavadia Vs. Jethabhai Kalabhai Zalavadiya (deceased), the Appellant filed a suit on 24.06.2008 seeking to set aside a sale deed executed in March 1995 in respect of a parcel of land which was purchased by Defendant No. 7. As on the date of filing of the suit, Defendant No. 7 was already dead. Upon the report of the process server to this effect, the trial Court on 31.03.2009 ordered that the suit had abated as against Defendant No. 7. Initially, the Appellant filed an application Under Order 22 Rule 4 of the Code for bringing on record the legal representatives of deceased Defendant No. 7 which the trial Court rejected. Thereafter the Appellant chose to file an application for impleading the legal representatives of deceased Defendant No. 7 on record, Under Order 1 Rule 10 of the Code. The aforementioned application also came to be dismissed by the trial Court on 03.09.2011, and confirmed by the High Court by passing the impugned judgment. Hence, thi...

In CHIKKANNA SHETTY vs THE STATE OF KARNATAKA, the High Court observed that sophisticated bookish language employed in the declaration raises reasonable doubt as to whether declarant’s mind was translated into writing in its true sense and further held that dying declaration shall be recorded in the language expressed by the declarant. In the instant case, the deceased victim, according to the prosecution case, was an illiterate, coolie with rustic background, but the dying declaration was seen recorded in a sophisticated language. Article referred: http://www.livelaw.in/dying-declaration-recorded-declarants-language-karnataka-hc-read-judgment/

In AHLUWALIA CONTRACT (INDIA) LIMITED vs UNION OF INDIA, the Delhi High Court held that it is imperative for the claiming party to submit proof of injury suffered in order to successfully claim damages for loss of profits in an arbitration proceeding. The Court, while rejecting the evidences supplied by the Appellants supporting their claim of losses incurred as not worthwhile, opined that damages claimed cannot be granted as a matter of course; some material evidence is necessary. Article referred: http://www.livelaw.in/proof-injury-suffered-necessary-awarding-damages-towards-loss-profits-arbitration-proceedings-delhi-hc-read-judgment/

In SHALINI LANBAH Vs M/S. UNITECH LIMITED,  the National Consumer Disputes Redressal Commission has observed that on the failure of the builder to deliver the possession of a flat within the stipulated time, the buyer cannot be made to wait indefinitely. Taking note of the compensation clauses in the builder-buyer agreement, the Commission considered it a case where the builder was not in a position to offer possession of the apartment, instead of a case of mere delay on the builder’s part. Article referred: http://www.livelaw.in/home-buyer-cannot-expected-wait-indefinitely-delivery-possession-flat-ncdrc-read-order/

In CIT vs. Madhur Housing And Development Co, the Supreme Court held that any payment by a closely-held company by way of advance or loan to a concern in which a substantial shareholder is a member holding a substantial interest is deemed to be “dividend” on the presumption that the loans or advances would ultimately be made available to the shareholders of the company giving the loan or advance. However, the legal fiction in s. 2(22)(e) does not extend to, or broaden the concept of, a “shareholder”

In CIT vs. Balbir Singh Maini, under an unregistered JDA between a co-operative housing society of which the Taxpayer was a member and developers, certain plot of lands were put up for development against consideration in money as also by way of allotment of flats, free of cost to members. After the payment of two instalments, developer defaulted in payment of the balance instalments, which resulted in the termination of JDA. The Tax Authority assessed the Taxpayer to capital gains tax in the year in which JDA was executed with reference to the entire amount, including the amount receivable by the member. Under Income Tax Act, 1961 (ITA) definition of “transfer” includes a  transaction that allows  the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in Section 53A of Transfer of Property Act, 1882 (‘TOPA’). SC noted that the provisions of TOPA will apply to a contract that is registered. An ...

In M/S. DURO FELGUERA, S.A vs M/S. GANGAVARAM PORT LIMITED, the Supreme Court held that there cannot be a single arbitration reference for disputes arising out of different agreements, even if they are inter-linked to a single transaction. GPL had awarded a tender work to DF and FGI, its Indian subsidiary. Later, the original contract was split up into five separate contracts, with different job descriptions. Four of such contracts were with FGI, the Indian subsidiary, and one of them was with DF.  Each contract had a separate arbitration clause. Apart from that, DF had entered into a performance guarantee agreement with GPL for the performance of contract by FGI, which also had an arbitration clause. Later, a tripartite MoU was entered into between GPL, DF and FGI, which had listed their performance obligations with reference to the split up contracts. Article referred: http://www.livelaw.in/cannot-single-arbitration-reference-disputes-arising-different-agreements-...

In DAYAWATI vs YOGESH KUMAR GOSAIN, a division bench of Delhi High Court has held that it is legal to refer a criminal compoundable case as one under Section 138 of the NI Act to mediation. The Bench of Acting Chief Justice Gita Mittal and Justice Anu Malhotra was answering a reference made by Metropolitan Magistrate Shri. Bharat Chugh (as he then was). The bench heard Amicus curiae Mr. J.P. Sengh, Sr. Advocate, Advocates Siddharth Aggarwal and Ms. Veena Ralli in the case.  The bench found that, though the Code of Civil Procedure contains a specific provision in Section 89 of the C.P.C. enabling reference of matters to alternate dispute redressal, however, so far as criminal cases are concerned, it is amply clear that the Code of Criminal Procedure does not contain any express statutory provision enabling the criminal court to refer the parties to a forum for alternate dispute resolution including mediation. The same is the position regarding cases under the NI Act. ...

In Kusum Agarwal . vs M/S. Harsha Associates Pvt. Ltd, the respondent being builders of an office complex offered to sale a commercial space to the Appellants for which they took money in two instalments but failed to deliver possession. The District forum order delivery of the space which was not done. The Respondents appealed before State Forum while revealing that the space had already been sold. The State Forum merely ordered refund of the money paid but failed to order paymeny of interest. When the Appellants approached NCDRC for the interest portion, the NCDRC did not consider the plea but reject the application as not maintainable as the Appellants were not consumers since the property in question is a commercial space.  The Supreme Court found that objection raised by the NCDRC was never raised by the Respondents and set aside the order of the National Commission stating that the respondent had not even challenged the order of the State Commission and that the Nat...

The Bombay High Court in  Radhakrishna Co-operative Housing Society Limited vs State of Maharashtra, imposed ₹5 lakh cost on petitioners reminding them about the limitations of a review jurisdiction. A bench of Justice SC Dharmadhikari and Justice MS Sonak observed that it is being seen lately that litigants try to go behind binding orders of the high court by canvassing arguments before the Supreme Court that do not give the entire or true picture of the case, and all this is done taking advantage of the liberty granted by the Supreme Court to file a review.

In LIC vs Smt. Manju Sharma, the Consumer Commission has decided that if some results of the blood pathology are higher but not abnormal or show nothing dangerous, the insurer cannot repudiate a claim. The Commission said so dismissing the appeal of the Life Insurance Corporation of India against the order of the South Mumbai district forum by which it was directed to pay Rs 2.50 lakh to the complainant, wife of the insured who died of dengue. In the instant case, complainant Manju Sharma had approached the consumer forum against the LIC’s denial to pay her the claimed sum. Article referred: http://www.livelaw.in/higher-not-abnormal-pathology-report-no-ground-denying-insurance-claim-consumer-commission-read-order/

In SARDAR VALLABHBHAI PATEL EDUCATION SOCIETY vs Income Tax Dept., Justices Akil Kureshi and Biren  Vaishnav of Gujarat High Court, held that mere allotment of Permanent Account Number (PAN) under section 139A of the Income Tax Act, 1961 would not not make the allottee necessarily a separate entity for the purpose of assessment of tax.  The petitioner, Sardar Vallabhbhai Patel Education Society, is an educational society and is also a trust registered under the Bombay Public Trust Act. The petitioner society runs various educational institutions including one N.G.Patel polytechnic college. The petitioner opened a bank account to maintain the separation of funds of N.G.Patel polytechnic. As required by the bank, the PAN of N.G.Patel polytechnic were given for opening the account and they had deposited a sum of Rs. 2.37 crores in the account. On scrutiny of returns filed by the petitioners, the AO found the above receipt and initiated proceedings on the ground that N.G.Pate...

The Madras High Court has laid down guidelines for recording and production of statements under Section 164 of the Code of Criminal Procedure. The directions were issued by a Special Division bench comprising Chief Justice Indira Banerjee and Justice P.N. Prakash. The Bench was constituted after Justice Prakash came across a bail plea of a hearing and speech impaired person accused of sexually exploiting at least four other hearing and speech impaired people. Article referred: http://www.livelaw.in/madras-hc-lays-guidelines-recording-witness-statements-confessions-dying-declarations-tip-reports-read-judgment/

In NABHA POWER LIMITED (NPL) vs PUNJAB STATE POWER CORPORATION LIMITED,  the Supreme Court, on Thursday, while cautioning Commercial Courts against looking into the implied terms of a contract and opining that a contract should be read as it is, as per its express terms,  took note of the ‘five condition test’ for an implied condition to be read into the contract. The test requires the following conditions to be satisfied: (1) reasonable and equitable; (2) necessary to give business efficacy to the contract; (3) it goes without saying, i.e., The Officious Bystander Test; (4) capable of clear expression; and (5) must not contradict any express term of the contract. The Bench, however, noted that these principles “would not be to substitute this Court’s own view of the presumed understanding of commercial terms by the parties if the terms are explicit in their expression”. It opined that the explicit terms of a contract are always the final word with regard to the intention...

In M/S. METERS AND INSTRUMENTS PRIVATE LIMITED Vs KANCHAN MEHTA, the Supreme Court has clarified that an accused in a case under Section 138 of Negotiable Instruments Act can be discharged even without the consent of the complainant, if the Court is satisfied that the complainant has been duly compensated. It was also held that the normal role of criminal law that composition of offence is possible only with the consent of complainant/victim is not applicable for cases under Sec.138 of NI Act. This was because the offence under Section 138 was ‘primarily a civil wrong’. Therefore, the power under Section 258 of the Code of Criminal Procedure to stop trial and discharge the accused was available to the Magistrate even though the summary trial under Chapter XXI of Cr.P.C. Article referred: http://www.livelaw.in/breaking-sc-issues-directions-speedy-disposal-cheque-cases-court-can-close-proceedings-satisfaction-payment-cheque-amount-cost-interest-read-judgment/

In OM PRAKASH Vs RELIANCE GENERAL INSUARANCE & ANR., the Supreme Court has observed that though the owner has to intimate the insurer immediately after the theft of the vehicle, this condition should not bar settlement of genuine claims, particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. A bench comprising Justice RK Agrawal and Justice S Abdul Nazeer observed that the decision of the insurer to reject the claim has to be based on valid grounds and rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. The claim was rejected on the ground that there has been a delay of eight days in informing the insurer about the theft occurred. Article referred: http://www.livelaw.in/insurance-claim-cant-rejected-mere-delay-intimating-insurer-vehicle-theft-sc-read-order/

A three-Judge Bench of the Supreme Court has summarized the principles that need to be kept in mind by the High Courts while considering a plea for quashing an FIR/ Criminal Proceedings under Section 482 of the Code of Criminal Procedure on the ground of settlement between parties. The Bench comprising Chief Justice of India Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud passed the judgment on a Petition challenging an order passed by the Gujarat High Court, wherein the Appellants’ plea under Section 482 of Cr.P.C had been rejected. The Appellants had sought quashing of the FIR filed against them on the ground that they had amicably settled the dispute with the complainant. The complainant had also filed an affidavit to that effect. The High Court had, however, noted that the case involves extortion, forgery and conspiracy and therefore, it was not in the interest of society at large to accept the settlement. Article referred: http://www.livelaw.in/...

Justices Akil Khureshi and Biren Vaishnav, COMMISSIONER OF INCOME Vs M/S.AKASH ASSOCIATION  held that section 50C of the Income Tax Act is applicable to a case where even a case where the document evidencing transfer of the capital asset has not been presented for registration Section 50C of the Income Tax Act provides for special provision for full value of consideration in certain cases. It was contended on behalf of the Revenue that the transfer of the land, in the instant case was took place under a Banakhat (agreement for sale) which was not registered and that therefore there was no occasion for the Stamp Valuation Authority to assess the value of the land for the purpose of payment of stamp duty upon its transfer. Overruling the department’s contention, the bench noted that it ignores the plain language used in subsection (1) of section 50C which provides for the adoption of the valuation of the Stamp Valuation Authority for the purpose of payment of stamp duty not ...

Hon’ble supreme court of India in a recent judgment delivered on 31st August 2017 in a case between HRD Corporation (Marcus Oil and Chemical Division) and Gas Authority of India Limited (GAIL India Limited), 2017 SCC online SC 1024, dealt with the challenge filed under S.12 of the Act claiming that appointment of two Arbitrators of the three-member panel Justice Mr. Lahoti and Justice Mr. Doabia are hit by Schedule V& Schedule VII of the amended Act. After the 2016 amendment Act, a dichotomy is made by the Act between persons who become “ineligible” to be appointed as Arbitrators and persons about whom justifiable doubts exist as to their independence or impartiality. Justice Lahoti’s appointment is challenged on the ground that the Arbitrator has been an adviser to GAIL in another unconnected matter. In fact, Justice Mr. Lahoti had given a legal opinion in another unconnected matter. Hence Court concluded that such an isolated issue of the legal opinion given in an unconnected mat...