Legal News & Views

In Second Appeal No.:- CIC/CCITM/A/2017/182415-BJ, Mr. Subramanian K Ansari vs CPIO, Dy. Commissioner of Income Tax, the applicant Subramanian K Ansari had sought information from the Income Tax Department about the balance sheets and profit and loss accounts of last 10 years of the Cambata Aviation Ltd, which had ceased operations in 2016. The applicant alleged that M/s Cambata Aviation Pvt. Ltd had deprived salary/wages to more than 2100 employees since March, 2016 on the pretext of bad condition of finance and loss in the business resulting in extreme financial hardships to him and hundreds of other employees. He further alleged that the said Company was also willfully defaulting in payment of statutory dues of PF/ST/LIC/ESIC and Credit Society, etc. Despite citing financial difficulties, the company had recruited more than 800 employees in 2014 and 2015, and in this backdrop the employee wanted to know the truth of its claims. The Public Information Officer denied disclos...

In Civil Appeal No. 4261 of 2019, Reliance Life Insurance Co Ltd vs Rekhaben Nareshbhai Rathod, the District Forum dismissed the complaint filed by the Respondent inter alia, on the ground that there was a non-disclosure of the fact that the insured had held a previous policy in the proposal form filled up by the proposer. The appeal filed by the respondents was, however, allowed by the SCDRC and reaffirmed by the NCDRC. On appeal, the Supreme Court decided that the fundamental principle is that insurance is governed by the doctrine of uberrima fidei. This postulates that there must be complete good faith on the part of the insured. The relationship between an insurer and the insured is recognized as one where mutual obligations of trust and good faith are paramount. In the present case, the insurer had sought information with respect to previous insurance policies obtained by the assured. The duty of full disclosure required that no information of substance or of interes...

In CIVIL APPEAL NO.3944 OF 2019,  LIFE INSURANCE CORPORATION OF INDIA vs MANISH GUPTA, the claim of the insured after Mitral Valve Replacement surgery was repudiated by the appellant on the ground that the respondent was suffering from a pre-existing illness. In the proposal form the insured had under disclosure of health details and medical information under the column of 'past history', among  which “cardiovascular disease e.g.: Palpitations, heart attack, stroke, chest pain” was included, had replied in the negative. The District Forum held in favour of the respondent. The NCDRC, while affirming the SCDRC, held that though the treating doctor had recorded, under the column of 'past history', that this was a known case of rheumatic heart disease since childhood, the notes did not indicate that it had been recorded on the basis of the information furnished by the patient. The insurer argued before the Supreme Court that the Health-plus policy falls in the NMG cate...

In CIVIL APPEAL NO(S). 3912 OF 2019, BHARAT WATCH COMPANY vs NATIONAL INSURANCE CO. LTD., the insurer based on the finding of the surveyor repudiated the claim of theft on the ground that the insurance policy excludes claim against theft/burglary without forcible and violent entry to and/or exit from the premises as in the present case. The District as well as the State Forum allowed the claim as the exclusion clause had not been intimated to the insured. On appeal, NCDRC however rejected the claim and allowed the appeal filed by the insurer. The Supreme Court decided that the fact that  there was a contract of insurance is not in dispute and has never been in dispute. The only issue is whether the exclusionary conditions were communicated to the appellant. The District Forum came to a specific finding of fact that the insurer did not furnish the terms and conditions of the exclusion and special conditions to the appellant and hence, they were not binding. When the case travel...

In FIRST APPEAL NO.1839 OF 2018, SBI Insurance Company vs Madhubala & Others, a first appeal filed by SBI Insurance Company against an order of the Motor Accidents Claims Tribunal wherein the appellants were directed to pay a compensation of Rs. 11,93,000 to the family of a carpenter who died in an accident with a bus that was being driven on the wrong side. The owner and driver of the offending bus did not resist the claim petition. The insurer challenged the award only on the ground that because the policies of insurance issued by the insurer of the offending vehicle were cancelled by the Insurance Company after the occurrence of the incident on account of bouncing of the cheques issued towards premium, the Insurance Company is not liable to indemnify the owner of the offending vehicle. Therefore, the Insurance Company has right to recover the compensation from owner of offending vehicle, paid to the claimants, towards satisfaction of the award passed by the Tribunal....

In CRIMINAL REVISION APPLICATION NO.1 OF 2007, Popat Bhaginath Kasar vs State of Maharashtra, the appellant as the driver of a tempo ran over a young boy who died at the spot. The trial court convicted the driver under Section 304A & 279 of IPC as well as Section 184 and 183(1) of the Motor Vehicles Act. On appeal, the lower appellate court only convicted him under Section 304A of IPC and also reduced his sentence. Against this the driver appealing before the Bombay High Court and while admitting the accident, tried to establish that the speed was not very high rather the boy had coming running before the vehicle and driver inspite of best efforts by braking and trying to avoid failed to do so and ran over the boy. The High Court observed that one of witness who was also the passenger had said that while the driver tried to avoid the boy, the vehicle was travelling fast. The court said that while there is no specific yardstick to measure what constitute rash driving, the r...

In CRIMINAL APPEAL NO(S). 607-608 /2019, VIJAY GOPALA LOHAR vs PANDURANG RAMCHANDRA GHORPADE, the Respondent issued two notices against bounced cheques and as no payment was made even after the receipt of the notices, he filed two complaints under Section 138 of the NI Act. In the noticed, though the amount mentioned was same as the cheques under consideration, there was a reference to the loan amount which had to be returned by the appellant according to the notices. The Trial Court held  that the notices were defective on the ground that the notices mentioned loan amount and not the cheque amount and were therefore contrary to Section 138 of the NI Act. As the High Court on appeal differed with the trial court and convicted the appellant, the said appellant came before the Supreme Court. It was argued on behalf of the appellant that clause(b) of the proviso to Section 138 of the NI Act to submit that the demand by the notice should be only for the cheque amount and not for a...

In ARBITRATION PETITION NO.466 OF 2017, Gautam Landscapes Private Limited. vs Shailesh S.Shah, the Bombay High Court has held that in view of Section 11 (6A) of the Arbitration and Conciliation Act, 1996, a court can entertain and grant any interim or ad-interim relief in an application under Section 9 of the said Act when a document containing arbitration clause is unstamped or insufficiently stamped.

In CIVIL APPEAL NO(s). 3303 OF 2019, UNION OF INDIA vs PARMAR CONSTRUCTION COMPANY, the lease agreement has arbitration clause but the agreement was not stamped. So question was raised as to the effect of an arbitration clause contained in a contract which requires to be stamped. The Supreme Court observed that as per judgment in SMS Tea Estates (P) Ltd. v. Chandmari Tea Co. (P) Ltd., it has been already decided that while arbitration clause in an agreement is to be treated as a independent agreement to refer the disputes to arbitration, which is independent of the main contract or instrument, and further an arbitration agreement in an unregistered but compulsorily registerable document can be acted upon and enforced for the purpose of dispute resolution by arbitration, however for a unstamped lease deed, which contains an arbitration clause, the provisions of the Indian Stamp Act require the Judge hearing the Section 11 application to impound the agreement and ensure that stamp duty ...

In CIVIL APPEAL NO. 2553 OF 2019,  Babu Ram vs Santokh Singh, the issue before the Supreme Court was regarding scope and applicability of Section 22 of the Hindu Succession Act, 1956, and particularly, whether preferential right given to an heir of a Hindu under said Section 22 will be inapplicable if the property in question is an agricultural land. The Supreme Court observed that Section 22 of the Act says:- Preferential right to acquire property in certain cases –  (1) Where, after the commencement of this Act, an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others, devolves upon two or more heirs specified in class I of the Schedule, and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.  (2) The consideration for which any inte...

In CIVIL APPEAL NO. 1099 OF 2008, Smt. P. Leelavathi vs V. Shankarnarayana Rao, the plaintiff claimed share of some properties in possession of her brothers alleging that though the properties are in her brothers name, they are not self acquired by her brothers, rather their father had actually paid the money and therefore the properties being benami transactions of her father, she had rights to the same.  On appeal, the Supreme Court referring to various transactions observed that while considering a particular transaction as benami, the intention of the person who contributed the purchase money is determinative of the nature of transaction and what the intention of the person who contributed the purchase money, has to be decided on the basis of the surrounding circumstance; the relationship of the parties; the motives governing their action in bringing about the transaction and their subsequent conduct etc. The source of the money has never been the sole consideration but no...

In CIVIL APPEAL No. 3339 of 2019, RAJ NARAIN vs UNION OF INDIA & ORS., Raj Narain, who was working as a Sorting Assistant in Railway Mail Service (RMS) was convicted in February 1997 by the Trial Court finding him involved in forged payments of high value money orders. He was dismissed from service with effect from the date of conviction. Later, the High Court, in 2001, allowed his appeal and acquitted him. After acquittal, the Tribunal as well as the High Court ordered payment of back wages  only to the period between the date of his acquittal and the date of his reinstatement but not from the date of removal from service as claimed by him. He appealed before the Supreme Court quoting Ranchhodji Chaturji Thakore v. Superintendent Engineer, Gujarat Electricity Board and Union of India v. Jaipal Singh in support of his claim to contend that in case the criminal proceedings are initiated at the behest of the employer, and the employee is acquitted, he would be enti...

In CIVIL APPEAL NO. 2431 OF 2019, Varun Pahwa vs Mrs. Renu Chaudhary, amendment of the plaint was sought as the Plaintiff was described as Varun Pahwa through Director of Siddharth Garments Pvt. Ltd. though it should have been Siddharth Garments Pvt. Ltd. through its Director Varun Pahwa in a suit for recovery of loan. The plaintiff in the amendment also mentioned that the money had been lent by the Pvt. Ltd. and therefore the amendment should be allowed. The Trial Court, whose order was later upheld by the High court, declined the amendment on the ground that the application is an attempt to convert the suit filed by a private individual into a suit filed by a Private Limited Company which is not permissible as it completely changes the nature of the suit. The Supreme Court on appeal, observed that the error made in the memo of parties was clearly inadvertent mistake on the part of the counsel who drafted the plaint and that such inadvertent mistake cannot be refused to be correc...

In CIVIL APPEAL NO. 12238 OF 2018, Pioneer Urban Land & Infrastructure Ltd. vs Govindan Raghavan, an appeal was filed before the Supreme Court  by the builder against the order of the National Consumer Forum. The builder had relied upon various clauses of the Apartment Buyer’s Agreement to refute the claim of the respondent but was rejected by the commission which found the said clauses as wholly one-sided, unfair and unreasonable, and could not be relied upon. The Supreme Court on perusal of the Apartment Buyer’s Agreement found stark incongruities between the remedies available to both the parties. For example, Clause 6.4 (ii) of the Agreement entitles the Appellant – Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser. Clause 6.4 (iii) of the Agreement entitles the Appellant – Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 da...

In Pinak Bharat & Co. vs Anil Ramrao Naik, the High Court at Bombay has dealt with the issue of valuation of immovable property and its stamp duty in execution of a decree or an award. The court said that in such situations, the following questions have come up:- 1) When submitted for adjudication under the Maharashtra Stamp Act, how should the authority, the Collector of Stamps, assess the ‘market value’ of the property? 2) Is he required to accept the value of the accepted bid, as stated in the court-issued sale certificate? 3) Is he required to spend time and resources on an independent enquiry? 4) Or is some of the available material on the record of this Court, and which underlies the auction sale, sufficient for his purposes? 5) Is there a meaningful distinction to be drawn between sales by the government and government bodies at a predetermined price, which has to be accepted by the adjudicating authority as the market value, and a sale by or through a court? The Co...

IN THE DEPUTY DIRECTOR DIRECTORATE OF ENFORCEMENT DELHI vs AXIS BANK & ORS, the Delhi High Court while disagreeing with the view of the tribunal (as constituted under PMLA) has held that the Recovery of Debts and Bankruptcy Act, SARFAESI Act and Insolvency and Bankruptcy Code does not prevail over the provisions of Prevention of Money-Laundering Act. Incidentally this order is also contrary to the order of the NCLT Mumbai which has held that the Insolvency Code would prevail over PMLA. The High Court held that:- The empowered enforcement officer has the authority of law in PMLA to attach not only a "tainted property" - that is to say a property acquired or obtained, directly or indirectly, from proceeds of criminal activity constituting a scheduled offence - but also any other asset or property of equivalent value of the offender of moneylaundering, the latter not bearing any taint but being alternative attachable property (or deemed tainted property) on account of ...

In Hiralal Govekar v. Sheela Surlakar, the complainant gave a flat to the petitioner on leave and license basis. According to the complainant, the petitioner handed-over to her a cheque in the sum of Rs 12,000 drawn on State Bank of India, towards payment of license fee for one month. However, when presented for encashment, the cheque was returned dishonoured on account of “insufficient funds”. In such background, the complainant filed a complaint under Section 138 against the petitioner, in which the impugned order of issue of process was passed. The Bombay  High Court while allowing the appeal held that a complaint under Section 138 of the Act, lies only against the drawer of the cheque, when the cheque issued by the drawer, on his account is dishonoured for want of funds. It was not seriously disputed during the course of the arguments at bar that the petitioner is neither a drawer nor the cheque is issued on his account. It is thus difficult to see as to how, pro...