Legal News & Views

The Supreme Court, in P Sreekumar v State of Kerala, has held that there is no prohibition in law to file a second FIR in relation to the same incident, if it was not filed by the same person, who had filed the first FIR, as a counter-complaint, based on the allegations different from the allegations made in the first FIR. Article referred: http://www.livelaw.in/second-fir-different-person-based-different-allegations-not-prohibited-sc-read-judgment/

The Supreme Court while observing that the law laid down by the Supreme Court in MSP Infrastructure Ltd. vs. Madhya Pradesh Road Development Corporation Ltd. held in M/s Lion Engineering Consultants v State of MP,  that the ‘public policy of India’ refers to law in force in India whether state law or Central law. The Court also observed that under the Arbitration Act objection, having not been raised under Section 16(2) of the Act before the arbitrator related to the jurisdiction of the arbitration tribunal, could be raised under Section 34 of the Act.

The Supreme Court, in Municipal Corporation, Ujjain vs. BVG India Limited, has reiterated that unless the court concludes that the decision-making process or the decision taken by the authority bristles with mala fides, arbitrariness, or perversity, or that the authority has intended to favour someone, the constitutional court will not interfere with the decision-making process or the decision of administrative authorities, especially those relating to acceptance of tender and award of contract. A three-judge bench comprising Justice Ranjan Gogoi, Justice R Banumathi and Justice Mohan M Shantanagoudar summarized scope of judicial review, as follows: * Under the scope of judicial review, the high court could not ordinarily interfere with the judgment of the expert consultant on the issues of technical qualifications of a bidder when the consultant takes into consideration various factors including the basis of non-performance of the bidder; * A bidder who submits a bid expr...

In National Insurance Co. Ltd. vs Risheendran Nambiar, the insurer had rejected a claim because cheque towards the premium along with the proposal form was issued by a third party, who had no insurable interest in the proposed risk, the same was in violation of Section 64 VB of the Insurance Act and, hence, the proposal form was rejected. However, NCDRC found that the agent of the insurer had delayed in depositing the form and the cheque. The said cheque with form was handed over to the agent on 10.04.2003, while it was deposited by the agent on 9.5.2003 and accident leading to the claim occurred on 11.5.2003, while the letter rejecting the proposal was issued by the insurer on 12.3.2003. Therefore referring to Sub-Section (5) of Section 42 of the Insurance Act, NCDRC held the insurance company liable  for the act of omission or commission by its accredited Agent.

Against a reference made to it by a 2 judge bench in Asian Resurfacing of Road Agency Pvt. Ltd. VS. Central Bureau of Investigation, with regard to the Jurisdiction of the High Court to consider the challenge against an order framing a charge under Prevention of Corruption Act, and also to grant stay in such matters, the Supreme Court held that the Order framing charge is not purely an interlocutory order nor a final order. Jurisdiction of the High Court is not barred irrespective of the label of a petition, be it under Sections 397 or 482 Cr.P.C. or Article 227 of the Constitution. However, the said jurisdiction is to be exercised consistent with the legislative policy to ensure expeditious disposal of a trial without the same being in any manner hampered. Thus considered, the challenge to an order of charge should be entertained in a rarest of rare case only to correct a patent error of jurisdiction and not to reappreciate the matter. Even where such challenge is entertained and...

In Ganpat Bakaramji Lad vs The State of Maharashtra, the question before the Supreme Court was “Whether a dying declaration can be rejected merely because the same is not read over to the declarant and the declarant admitting the same to have been correctly recorded?” A full bench decided that a dying declaration cannot be rejected merely because the same is not read over to the declarant and the declarant admitting the same to have been correctly recorded. We hold and clarify that this can be one of the factors, if it assumes significance in the facts and circumstances of any case.

The Supreme Court, in Anilkumar Jinabhai Patel (D) v Pravinchandra Jinabhai Patel, has reiterated that the limitation period prescribed under Section 34(3) of the Arbitration and Conciliation Act would commence only from the date of the signed copy of the award delivered to the party making the application for setting it aside. The bench of Justice RK Agrawal and Justice R Banumathi made this observation while referring to State of Maharashtra and Ors v Ark Builders Pvt Ltd, wherein it was held that the expression “...party making that application had received the arbitral award...” cannot be read in isolation and it must be understood that Section 31(5) of the Act requires a signed copy of the award to be delivered to each party. The bench was hearing an appeal challenging a Bombay High Court judgment which held that challenge to the arbitral award was time-barred under the provisions of Section 34 of the Arbitration and Conciliation Act, 1996. Article referred: http://...

In Va Tech Wabag Limited vs Cholamandalam Ms. General, a container truck while carrying membranes from Chennai Port to Nemmeli met with an accident while in transit.  On intimation being given to the insurer, a surveyor was appointed to assess the loss to the complainant.  The surveyor assessed the loss at Rs.1.60 crores but the claim was rejected vide letter dated 19.4.2012. The only question before NCDRC which arises for consideration in this complaint is as to whether goods were in tail end transit at the time the truck met with an accident and the goods were consequently damaged.  The term 'tail end transit' has not been defined anywhere in the insurance policy. In the ordinary parlance, the aforesaid term would mean the final phase of the journey. A term, which is not clearly defined and therefore is capable of the several interpretations depending upon the factual matrix, would be a vague term and the benefit of such a term would accrue to the insur...

In Sri Dibakar Bhattacharjee vs Air India, the West Bengal State Consumer Disputes Redressal Commission directed Air India to pay compensation of Rupees Two Lakhs each to two lawyers who could not appear before the Supreme Court on the date of hearing as the coat and gown and other case files was in the luggage which got misplaced by the Airline. The Commission said that though the Carriage by Air Act, 1972 has defined the liability of airline under various circumstances, Honble Supreme Court in The Consumer & Citizens Forum v. Karnataka Power Corporation [1994 (1) CPR 130] laid down that the provisions of this Act give the consumer an additional remedy besides those that may be available under other laws for the time being in force. In the instant case, the OP Airlines sought to compensate the Complainants in terms of the relevant provisions of the Carriage by Air Act, 1972 and as amended vide Act 28 of 2009 dated 20-03-2009. However, as discussed hereinabove, given that ...

IN M.P. Mansinghka vs. Dainik Pratah Kaal & ors., the Madhya Pradesh High Court has held that while reporting a Court proceeding, which is yet to be taken to its logical end, no offender can be permitted to publish a report which only refers to a version of the one side and completely omits that defence put up from the other side. The manner in which the reporting of the Court proceeding has been done, it is clear that the purpose is to report the version of the one party which will tarnish the reputation of the other side and such type of selective reporting is permitted to be carried out then the Courts will be undermining the rights of the other party which is to lead life with dignity. The court made this observation while disposing a plea of a man who had challenged the magistrate court order refusing to issue process against the accused. The complaint before the magistrate court was that newspaper Dainik Pratah Kaal published a news item apparently indicated about th...

While hearing the case between Manek Lodge Properties vs. Additional Commissioner of Income Tax, Mumbai bench of Income Tax Appellate Tribunal (ITAT) recently held that rent received by an association of co-owners with only an objective to derive income from letting out of property is taxable under the head Income from House Property.  Assessee in the instant case being a resident association of person filed its return of income for the relevant assessment year and declared a total income at Rs. 92.48 lakhs.  During the course of assessment proceedings the Assessing Officer (AO) noticed that Assessee was an Association of Persons (AOP) consists of 18 members who were co-owners of a property named as Manek Lodge Properties and the Assessee earned rental income from the said property and the same was offered under the head income from house property by the AO while completing the assessment. Read more at: http://www.taxscan.in/rent-association-co-owners-derive-income-...

In M/S EMAAR MGF LAND LIMITED vs AFTAB SINGH, the Supreme Court has upheld the National Consumer Dispute Redressal Commission (NCDRC) order that held that arbitration clause in the agreements cannot circumscribe the jurisdiction of a consumer fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.  Earlier, the three-member bench of the NCDRC had made the following observations: * The disputes which are to be adjudicated and governed by statutory enactments, established for specific public purpose to sub-serve a particular public policy are not arbitrable; * There are vast domains of the legal universe that are non-arbitrable and kept at a distance from private dispute resolution; * The subject amendment was meant for a completely different purpose, leaving status quo ante unaltered and subsequently reaffirmed and restated by the Hon’ble Supreme Court;

In KSEB v Kurien E Kalathil, in a writ petition filed by contractor Kurien E Kalathil, the high court, with the consent of the counsel for the parties, referred the matter to sole arbitrator Justice KA Nayar to resolve dispute relating to items which they could not amicably resolve, even though there was no such arbitration agreement between the parties. The order of the high court that directed KSEB to pay Rs.12,92,29,378 with simple interest at the rate of 9% per annum in the dispute arising out of a contract between the board and the contractor, was challenged before the apex court. Supreme Court referring to Afcons Infrastructure Ltd and Anr v Cherian Varkey Construction Co (P) Ltd held that since referring the parties to arbitration has serious consequences of taking them away from the stream of civil courts and subject them to the rigour of arbitration proceedings, in the absence of arbitration agreement, the court can refer them to arbitration only with written consent of part...

In JAGDISH vs MOHAN & ORS., the appeal was against the compensation awarded. The appellant had lost both hands and was designated 90% disable and the tribunal did not take loss of future prospect in hand. The Supreme Court increasing the compensation to Rs. 25,38,308/- held that in making the computation in the present case, the court must be mindful of the fact that the appellant has suffered a serious disability in which he has suffered a loss of the use of both his hands. For a person engaged in manual activities, it requires no stretch of imagination to understand that a loss of hands is a complete deprivation of the ability to earn. Nothing – at least in the facts of this case – can restore lost hands. But the measure of compensation must reflect a genuine attempt of the law to restore the dignity of the being. Our yardsticks of compensation should not be so abysmal as to lead one to question whether our law values human life. If it does, as it must, it must provide a...

The Supreme Court in M/S. FORTUNE INFRASTRUCTURE vs TREVOR D’LIMA & ORS., while deciding on the damage claimed by the defendent from breach of contract held :- “As per the settled law, the damages become due on the date when the breach of contract takes place, and are normally assessed by the reference to the time of breach. The aforesaid rule is based on the principle that the injured party is presumed to be in knowledge of the breach as soon as it is committed and at that time he can take appropriate measures of mitigation to control the loss flowing from the breach. The courts may deviate from the aforesaid rule and fix appropriate date in facts and circumstance of a case if aforesaid presumptions could not be established or it would not be reasonable to follow the rule. “It may be noted that where there is non-delivery of the flat/house, and the developer has refused to provide alternative and equivalent accommodation, and the buyer lacks means to purchase a substitute f...

In United India Periodicals Pvt. Ltd, vs CMYK Printech Ltd., the defendant had argued that the compromise settlement has been fraudulently signed by one of its old employees, who earlier had the authority of the board but the same permission have been revoked by the board much before the impugned settlement. The defendants argued that under the provisions of Order XXIII Rule 3 CPC satisfaction of the Court about a valid agreement or compromise is a mandatory requirement. According to him, a settlement agreement entered into by a person acting on behalf of the company ostensibly on the basis of a general authorization made fifteen years before and the manner in which the settlement took place without any opportunity for the Board of Directors of the company being apprised about the proposed terms of settlement was illegal. The Delhi High Court deciding against the defendant referred to Valapad Co-operative Stores Limited Vs. Srinivasa Iyer, AIR 1964 Kerala 176 it has been held as und...

In SUNIL B. NAIK vs GEOWAVE COMMANDER, settling an important point of law in admiralty jurisdiction, the Supreme Court has held that a maritime claim against the charterer of a ship, who is not the de jure owner of the ship, cannot be enforced through a restraint order against the ship owned by a third party. The Supreme Court bench comprising Justice J Chelameswar and Justice SK Kaul was considering appeals challenging the refusal of Bombay High Court to enforce maritime claims through the arrest of vessel Geowave Commander. The vessel Geowave Commander was chartered and hired by Reflect Geophysical Pte Ltd, to carry out seismic survey operations off the coast of Gujarat near Okha port in the year 2012 as per tender awarded by ONGC. Article referred: http://www.livelaw.in/chartered-ship-owned-third-party-cant-arrested-maritime-claim-charterer-sc-read-judgment/

In Larsen and Toubro Limited vs State of Chhattisgarh, the issue was challenging notices issued to it demanding that it be registered under provisions of BOCW Act and that it pays 1% Cess charges under the Building and Other Construction Workers Welfare Cess Act, 1996. The question now posed before the Court was whether the provisions of the BOCW Act would be applicable to a factory, where the manufacturing process has started and the provisions of Factories Act are already in force. Answering the question in the negative, the Court relied on the judgment in the case of Lanco Anpara Power Limited v. State of Uttar Pradesh and Ors, wherein the Supreme Court had held that the provisions of the Factories Act would apply “only when the manufacturing process starts for which the building/project is being constructed”. Article referred: http://www.livelaw.in/manufacturing-starts-factories-act-apply-instead-building-construction-workers-act-chhattisgarh-hc-read-judg...

In Achintya Kumar Barua vs. Ranjit Barthkur, the NCLAT has held recently that if any director desires to attend board meetings by video conferencing, the company is bound to allow attendance in this manner. In other words, it is not up to the company or at the discretion of the Chairman/Company Secretary whether or not to allow attendance by video conferencing. The right and option is with any director who so desires. NCLAT has held that the words of Section 173(2) of the Companies Act, 2013 are clear on this. There are, of course, some specified resolutions which cannot be considered in a meeting held by video-conference. However, a proviso inserted to Section 173(2) by the Companies (Amendment) Act, 2017, though not yet brought into effect, says that even in respect of these matters, if the required quorum is physically present, other directors can attend and participate by video-conferencing.

In Adarsh Cooperative Housing Society Ltd. ...Petitioner(s) Vs Union of India & Ors., the Supreme Court has rejected Adarsh Cooperative Housing Society’s plea to restrain release of a feature film “Aiyaary” which allegedly projects the society in an unacceptable manner and that is likely to have some impact on the litigations. A three-judge bench headed by Chief Justice of India Dipak Misra observed: “The doctrine of sub-judice may not be elevated to such an extent that some kind of reference or allusion to a member of a society would warrant the negation of the right to freedom of speech and expression which is an extremely cherished right enshrined under the Constitution.” The court observed that the Censor Board has already given the certificate and has also taken the suggestions from the competent authorities of the Army. With regard to contentions with respect to pending litigations, the bench observed: “A film with regard to a particular situation does not affect th...

In Prabodh K. Mehta V/s Charuben K. Mehta, the Bombay High Court ruled that while a judgment and order of conviction of a foreign Court against an Indian citizen can be looked into by authorities and Courts in India, such judgment would not be ipso facto binding on such authorities. The Court held that If we hold that such a judgment of a foreign Court for an offence committed in that country, is binding on the Courts and authorities in India while exercising their judicial and quasi-judicial powers, it will amount to directly or indirectly enforcing the judgment of the foreign Court. What is the effect of such order of conviction, would depend upon variety of factors such as, nature of the proceedings, purpose for which the said order of conviction needs to be taken into consideration, nature of conviction and effect thereof on the proceedings, nature of consequences of the ultimate decision to be taken in the said proceedings, are some of the factors which will have to be taken ...

In INDIABULLS HOUSING FINANCE LIMITED vs M/S. DECCAN CHRONICLE HOLDINGS LIMITED AND OTHERS, the Supreme Court has held that where an entity granting a loan is not a ‘banking company’ or a ‘financial institution’ under clauses (d) and (m), respectively, of Section 2(1) of the SARFAESI Act of 2002, but subsequently merges with a ‘financial institution’, the successor-in-interest shall be deemed to be a ‘secured creditor’ for the purpose of Section 2(1)(zd) of the Act and shall be entitled to effect recovery in accordance with Section 13 of the Act. http://www.livelaw.in/lender-merges-financial-institution-successor-interest-entitled-recovery-sarfaesi-act-rules-sc-read-judgment/

In DIT v. Dawood Abdulhussain, Mumbai bench of Income Tax Appellate Tribunal (ITAT) recently ruled that capital gain exemption under section 54F of the Income Tax Act cannot be denied to the Assessee even though he has only a partial or fractional ownership in the residential house. Assessee in the present case, is an individual duly filed his return of income for the relevant assessment year and declared total income at Rs. 5,96,947 and processed under section 143(1) of the Act. During the relevant year, he purchased a house property and claimed exemption regarding the capital gain arising from the house property under section 54F of the Income Tax Act 1961.  During the assessment proceedings, the Assessing Officer (AO) noticed that the Assessee had received an amount of Rs. 1,00,00,000 on surrender of tenancy rights in respect of a flat and the investment made by the Assessee towards the purchase of the new residential house was in excess of the amount received on surren...

In ITC LIMITED vs BLUE COAST HOTELS LTD. & ORS., the Supreme Court, held that while recovering secured property from Non- Performing Assets (NPAs), a secured creditor should mandatorily consider the debtor’s representation under Section 13 (3A), after the initiation of proceedings under Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Bench comprising Justice S.A. Bobde and Justice L. Nageswara Rao, however, clarified that this condition can also be constructively satisfied and that the creditor need not send a direct reply or rejection to such representation. Article referred: http://www.livelaw.in/secured-creditor-mandatorily-consider-debtors-representation-s-13-3a-sarfaesi-act-sc-read-judgment/

In the case of Sonega Trades & Investments Private Limited vs. Income Tax Officer, Mumbai bench of Income Tax Appellate Tribunal (ITAT) recently held that interest income earned from capital gains bonds would be taxable under the head other income and the same cannot be taxed as business income.  The assessee, a resident engaged in the business of warehousing and letting out of House Property has filed its return of income for the relevant assessment year and declared loss of Rs. 12,53,864.  During the course of assessment proceedings, the Assessing Officer (AO) noticed that during the year the assessee earned interest of Rs.2.97 Lakhs from Capital Gains Bonds which was treated as business income and certain other miscellaneous income aggregating to Rs.48,407 was also claimed as business income.  While completing the assessment proceedings the AO assessed all the said incomes under the head income from other sources.  Article referred: http://www.t...