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Showing posts with label Judgment. Show all posts
Showing posts with label Judgment. Show all posts

Wednesday, 4 August 2021

Minority Scholarship: Petition filed in Supreme Court against High Court judgment

 Indian Currency- Rupees- Salary.jpg 

The petition also alleged that the Kerala High Court erred in understanding the distinction between backward communities and minority communities. The state government had formed a committee headed by Justice JB Koshy to study the backwardness of the Christian community.

The petition also stated that if the committee finds that there was backwardness among Christians, the government can formulate special schemes for them.

The petition also alleged that the High Court erred in understanding the distinction between backward communities and minority communities. The state government had formed a committee headed by Justice JB Koshy to study the backwardness of the Christian community.

The petition also stated that if the committee finds that there was backwardness among Christians, the government can formulate special schemes for them.

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Monday, 2 August 2021

Centre: Onus on States to implement Supreme Court order quashing Section 66A

 Information & Technology Act 

The Union Govt informed the Apex Court that the onus lies with the states to implement the Supreme Court’s 2015 Judgment quashing the ‘draconian’ section 66A of Information & Technology Act & said that it has repeatedly advised the states to drop all cases registered under the provision.

On July 5, the Top Court had expressed shock & dismay over Police continuing to register cases under section 66A despite it being quashed 6 years ago. NGO ‘People's Union for Civil Liberties’ (PUCL) had pointed out that states have registered thousands of cases post-judgment & that the Centre needed to step in for immediate withdrawal of these cases.

Interestingly, in such a sensitive case before a bench headed by Justice R F Nariman, the ministry of electronics & information technology chose a ‘Scientist G’ officer to file the response to the PUCL's petition seeking implementation of the SC's March 24, 2015 judgment in the Shreya Singhal case. The scientist said he was filing the affidavit with inputs from the ministries of home affairs & the information & broadcasting. The matter is scheduled for fresh hearing on Monday before the bench headed by Justice Nariman.

“The Section (66A) has become null & void with effect from the date of the judgment,” the Centre said & informed the court that between Feb-May 2019, as many as 21 states & UTs have responded to the Centre intimating that the police have been directed not to register cases under Section 66A & that no prosecution has been undertaken by the state under this provision after it was erased from the statute book by the Supreme Court.

PUCL had told the court through senior Lawyer Sanjay Parikh that Maharashtra, which had registered 349 cases prior to the judgment, registered 381 more FIRs invoking Section 66A post-judgment. The Centre said the Maharashtra government on February 21, 2019 had informed the Centre that it has “complied with the SC Judgment & that no prosecution has been initiated post-March 24, 2015 under section 66A of the IT Act, 2000.”

 

PUCL said the state governments must be directed to collect & collate all information about cases lodged & pending under 66A & order their immediate dropping/withdrawal. This could be achieved by a direction to the DGPs to take necessary steps & to the HCs to issue suitable advisory to the district judges for closure of cases in the courts within their jurisdictions.

On July 5, the SC had expressed shock & dismay over police across India invoking Section 66A to arrest persons for social media posts even six years after the SC had erased it from the statute book finding it to be in breach of right to free speech guaranteed under Article 19 of the Constitution.

Taking up the petition, the bench led by Justice Nariman, who had authored the March 24, 2015 judgment in the Shreya Singhal case striking down Section 66A, had said, “Amazing is all that I can say. What is going on is terrible & distressing. How could the provision be invoked by police even six years after the Supreme Court had struck it down?” Parikh had said that it is shocking that more cases under Section 66A have been registered post-2015 judgment.

“Shocking is the right word to use,” Justice Nariman had said & asked the Union Govt to file a response to the plea by PUCL, which requested the court to direct the Centre to collect data about all cases registered by police & pending trial under Section 66A & send a communication to all trial courts & DGPs to close the cases.

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Tuesday, 27 July 2021

HC takes Suo motu cognizance of noise Pollution caused by modified Bikes, Royal Enfield Bullets and other new era two-wheeler

 Bike.png 

The Allahabad High Court, Lucknow Bench took suo motu cognizance of noise pollution caused by modified bikes, including Royal Enfiled Bullets and “new era two-wheelers”.

Justice Abdul Moin observed that it is a matter of grave concern that such bikes cause immense noise pollution as well as inconvenience to citizens. Since the authorities have not cared to look into the matter, the Judge opined that it is for the Court to take notice of the same.

“Let the State authorities look into the matter and take strict action in accordance with law and crack down on such vehicles causing pollution through modified silencers”.

Justice Moin was of the view that the bike riders have reformed the noise mufflers or silencers in such a way that the vehicle can be heard from hundred meters away, causing immense discomfort to the aged and the infirm, as well as children and other persons who may prefer silence.

“The problem of noise pollution is like the legend of Hydra where anyone who attempted to behead the Hydra found that as soon as one head was cut off, two more heads would emerge from a fresh wound, so much so that the destruction of Hydra became one of the 12 Labours of Hercules”.

Further, if any person is found modifying the silencer, the Motor Vehicles Act 1988 makes that person liable for causing noise pollution. There were also rules prescribing the noise control levels when motor vehicles are drives in public places, the Court pointed out.

The Court further pointed that the bike riders cannot plead the defense that the Motor Vehicles Act may not be applicable to foreign motorcycles such as Harley Davidson, UN Commando, Suzuki Intruder, Bid Dog, etc.

“The said excuse merits rejection taking into consideration the Noise Pollution Rules, 2000 which are applicable for all vehicular movement and not restricted to Indian made vehicles and bikes alone”, the Court said.

 

The respondents have been asked to indicate to the Court the action which has been taken against the vehicles causing noise pollution through modified silencers by the next date of hearing.

Case Details

Before: Allahabad High Court

 

Case Title: Suo Moto PIL v. State of Uttar Pradesh

Read Order ;


 

SOURCE ; .latestlaws.com/

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Monday, 26 July 2021

HC reiterates Pawnor does become liable to pawnee for anything more than the value of the goods pledged

 Delhi High Court 

On 20th July, a bench of Delhi High Court consisting of Justices Ravi Sahai Endlaw and Asha Menon, held that under Section 176 of the Contract Act, the pawnor, if not otherwise liable for the debt as a borrower or as a guarantor or otherwise, does not merely from the act of making a pledge, become liable to the creditor/pawnee, for anything more than the value of the goods pledged. Further, on literal interpretation of Section 176 also, the court was unable to hold it to be making a pawnor liable for more than the value of the pawned goods.

Facts of the case:

The legal question arising for consideration, in the present writ petition under Article 226 of the Constitution of India, is, whether by virtue of Section 176 of the Indian Contract Act, 1872 the pawnor, even if different from borrower or the principal debtor, becomes liable for payment of entire debt, even if has not furnished any guarantee for repayment of the entire debt i.e. over and above the value of the pawned goods. The aforesaid legal question has arisen in the following facts and circumstances:

The respondent no.1, Barclays Bank,  on the request of the petitioner and the respondent no.2 Company, had sanctioned credit facilities aggregating Rs.15,00,00,000/-, in favour of the respondent no.2 Company and the petitioner had agreed to pledge 2,00,000 shares held by him in the respondent no.2 Company as a collateral security for repayment of the said credit facilities to be granted by the respondent no.1 Bank to the respondent no.2 Company. The respondent no.2 Company did not adhere to the financial discipline and committed a breach of conditions agreed with the respondent no.1 Bank. Thereafter the respondent no.1 Bank, vide its letter dated 23rd March, 2010 called upon the respondent no.2 Company to repay the outstanding dues of Rs.9,44,58,836/- along with future interest, and informed the respondent no.2 Company that upon failure of the respondent no.2 Company, the respondent no.1 Bank would be constrained to sell the pledged shares and appropriate the sale proceeds thereof towards its dues; (x) however the pledged shares could not be sold, as the shares of the respondent no.2 Company were delisted from the Bombay Stock Exchange/National Stock Exchange.  Hence, the present suit was filed.

Contention of the petitioner:

 

The following contention has been submitted on behalf of the respondent:

  1. It was pleaded that notice/summons of the aforesaid OA No.60/2011 filed by the respondent no.1 Bank before the Debt Recovery Tribunal (DRT) was not served on the petitioner.
  2. It was submitted that the respondent no.2 Company also failing to appear before the DRT, both, the respondent no.2 Company and the petitioner were proceeded against ex parte, and the DRT directed the respondent no.2 Company and the petitioner, to pay to the respondent no.1 Bank, the amount aforesaid of Rs.11,14,85,036.86/- with pendente lite and future interest and costs, within two months.
  3. It was further submitted that the petitioner, vide his letter dated 27th July, 2010 informed the respondent no.1 Bank that he had resigned as Managing Director of the respondent no.2 Company.
  4. It was also argued that neither the documents executed at the time when the respondent no.1 Bank granted the credit facilities nor the pleadings or evidence of the respondent no.1 Bank before the DRT, reflect the petitioner to be the borrower/debtor of the respondent no.1 Bank.
  5. It was also contended that the petitioner, in his personal capacity, only executed a Share Pledge Agreement, as pledgor and was liable to pay only in default of the respondent no.. 2 company.

Contention of the Respondent:

The counsel for the respondent no.1 Bank had argued on the following ground:

 
  1. It was pleaded that notice/summons of the aforesaid OA No.60/2011 filed by the respondent no.1 Bank before the Debt Recovery Tribunal (DRT) was not served on the petitioner.
  2. It was submitted that the respondent no.2 Company also failing to appear before the DRT, both, the respondent no.2 Company and the petitioner were proceeded against ex parte, and the DRT directed the respondent no.2 Company and the petitioner, to pay to the respondent no.1 Bank, the amount aforesaid of Rs.11,14,85,036.86/- with pendente lite and future interest and costs, within two months.
  3. It was further submitted that the petitioner, vide his letter dated 27th July, 2010 informed the respondent no.1 Bank that he had resigned as Managing Director of the respondent no.2 Company.
  4. It was also argued that neither the documents executed at the time when the respondent no.1 Bank granted the credit facilities nor the pleadings or evidence of the respondent no.1 Bank before the DRT, reflect the petitioner to be the borrower/debtor of the respondent no.1 Bank.
  5. It was also contended that the petitioner, in his personal capacity, only executed a Share Pledge Agreement, as pledgor and was liable to pay only in default of the respondent no.. 2 company.

Contention of the Respondent:

The counsel for the respondent no.1 Bank had argued on the following ground:

  1. It was submitted that the said admission of the petitioner read with Clause 2.1 aforesaid of the Share Pledge Agreement contains an agreement of the petitioner to be liable jointly and severally with the respondent no.2 Company for the dues of the respondent no.1 Bank.
  2. It was contended that the additional affidavit filed by the petitioner has shied away from disclosing all the said particulars and the writ petition is liable to be dismissed on this ground as well.
  3. It was argued that the petitioner, in his letter dated 27th July, 2010 only claimed to have resigned from the Managing Directorship of the respondent no.2 Company but did not plead that he was not liable for the dues.
  4. It was also submitted that the petitioner is guilty of delay and laches at each and every stage as the preferred Review Application as well as appeal before the DRAT and even this writ petition has been filed after long delay from the impugned order of the DRAT.

Observation of the court:

The Hon’ble bench of the High Court observed the following:

  1. The parties expressly agreed that in the event of any default by the borrower, the respondent no.1 Bank would be entitled to transfer or register in its name the pledged shares and to receive all amounts payable. However, there is no clause, that on any default or breach by the respondent no.2 Company as borrower, the petitioner would become personally liable for the borrowings of the respondent no.2 Company.
  2. The court was unable to agree with the contention of the counsel for the respondent no.1 Bank, that the petitioner admitted his liability before the Recovery Officer.
  3. The court was of the view that the respondent no.1 Bank was fishing for material, to fasten liability on the petitioner.

In the circumstances aforesaid, need was not felt by the court to go into the question of applicability of the provisions of the Contract Act to pledge of shares in DEMAT form. The court therefore held that the DRT, while pronouncing the ex parte order dated 29th August, 2013, had nothing before it to fasten liability of the dues of the respondent no.1 Bank on the petitioner.

 Read Judgment ;

 

 

 

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HC: Rights of a patentee unlike that of the proprietor of a trademark are not natural or common law rights but are statutory rights

 Trademark.jpg 

On 20th July, a bench of Delhi High Court consisting of Justices Rajiv Sahai Endlaw and Amit Bansal, held that the rights of a patentee, unlike that of the proprietor of a trade mark, are not natural or common law rights, but are a creation of law i.e. are statutory rights. Thus, for a patentee to enjoy protection, the rights have to be within. The four corners of the statute i.e. the Patents Act and there are no rights independently thereof or inherent or common law rights of an inventor or patentee.

In the present case where the court found that where the appellants/plaintiffs while claiming one invention only i.e. DAPA, were claiming two patents with respect thereto, with infringement of both, by the respondent(s)/defendant(s). The same alone in the view of the court strikes at the very root of the claim of the appellants/plaintiffs and disentitles the appellants/plaintiffs from any interim relief.

Facts of the case:

In the present case the AstraZeneca AB, Sweden and AstraZeneca Pharma India Ltd (plaintiff/appellant) have argued nine appeals and challenged the orders/judgments which were pronounced within a span of 16 days, with both, independently of each other, on the same facts, concluding that the appellants/plaintiffs, during the pendency of the suits for permanent injunction to restrain infringement of patent in manufacturing DAPA, a drug to treat people suffering from type-II diabetes mellitus, are not entitled to any interim injunction restraining respondent(s)/defendant(s) from manufacturing and selling the pharmaceutical products which are alleged to be in breach of the patent of the appellants/plaintiffs.

Contention of the Plaintiff:

 

The learned counsel for the petitioner submitted the following contention:

  1. It was submitted that both, IN 147 and IN 625 were granted to Bristol Myers Squibb Company, which vide Assignment Deed dated 1st February, 2014, assigned the rights therein to the appellant/plaintiff AstraZeneca AB, Sweden, which stood registered as the patent holder qua the said patents.
  2. It was argued that that DAPA, being the subject matter of the two patents, is used worldwide, to treat people suffering from type-II diabetes mellitus and that IN 147 is the genus patent and IN 625 is the species patent. It was also stated that the appellants/plaintiffs have been granted patent for DAPA, in approximately 70 countries.
  3. It was also submitted that that DAPA is not obvious from IN 147 because IN 147 has a million possibilities; any attempt to reach DAPA from the Markush structure of IN 147 is nothing but an attempt to take recourse to hindsight, which is discouraged under Patent Law.
  4. It was contended that that neither of the respondent(s)/defendant(s) have carried out any research and development and are merely piggybacking on the inventions of the appellants/plaintiffs concerning DAPA.

Contention of the Respondents/defendants:

The respondents submitted the following contention:

 
  1. It was submitted that that IN 147 expired on 2nd October, 2020 and there could thus be no interim injunction qua IN 147.
  2. It was also contended that the respondent(s)/defendant(s) have raised a credible challenge to the validity of IN 625 and once the Court finds that the respondent(s)/defendant(s) have a credible challenge to the validity of IN 625, no interim injunction can be granted.
  3. It was also submitted that the appellants/plaintiffs having agreed to the term of US patent equivalent of IN 625 to be the same as that of US patent equivalent of IN 147, cannot make a case contrary thereto in India.
  4. It was stated that that DAPA would be obvious to a person skilled in the art, on account of the manner in which he would appreciate the contents of IN 147 and that IN 625 is also vulnerable to challenge because the appellants/plaintiffs did not inform the Indian Patent Office about the status of all the corresponding foreign patent applications.
  5. It was further submitted that Sun Pharma Laboratories Limited and Abbott Healthcare Private Limited had also obtained licenses qua IN 625, demonstrating that the appellants/plaintiffs are not exclusively marketing DAPA in India but are willing to monetise the patent via licensing.

Observation and judgement of the court:

The Hon’ble bench of the court observed the following:

  1. The bench was of the opinion that with respect to one invention, there can be only one patent.
  2. Rights of a patentee, unlike that of the proprietor of a trade mark, are not natural or common law rights, but are a creation of law i.e. are statutory rights.
  3. For the grant of a patent with respect to an article, as DAPA is, it was essential that it is a a new product, technically advanced, capable of industrial application, not obvious to a person skilled in the art, not been used at any time before filing of patent application, not a mere discovery of a new form of a known substance etc.
  4. A patent, vide Section 48 of the Act, confers a right on the patentee of a product patent, as DAPA is, to, during the life of the patent which is s limited, whereafter, notwithstanding the new product having been invented by the patentee, patentee no longer has exclusive right to make, use or offer for sale the same and anyone else interested can also make, use or offer for sale the new product.
  5. In our opinion, a single formulation as DAPA, is incapable of protection under two separate patents having separate validity period. The appellants/plaintiffs, in their pleadings, are not found to have pleaded the difference; save for pleading that DAPA was discovered by further research.

Based on the above the court that once the appellants/plaintiffs, before the USPTO applied for and agreed to the validity period of US patent equivalent of IN 625 ending on the same day as the validity period of the US patent equivalent to IN 147, the appellants/plaintiffs, in this country are not entitled to claim different periods of validity of the two patents.

 

Thus, finding no merit in the appeal, it was dismissed.

Read Judgment ;
 
 

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HC: Arbitral award liable to be set aside when it is not proved that the notice of institution of Arbitral proceeding was not duly served

 Hong Kong Arbitration, pic by: South China Morning Post 

On 15thJuly, a bench of Delhi High Court consisting of Justice Vibhu Bhakru, held that since it could not be established that the petitioner was duly served  the notices regarding constitution of the Arbitral Tribunal or had due notice of the arbitral proceedings at the material time therefore there was merit in the petitioner’s contention that she did not have notice of appointment of the Arbitral Tribunal or of the arbitral proceedings. Based on the aforementioned, the arbitral award was set aside by the court.

Facts of the case:

The petitioner had filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 impugning an arbitral award dated 01.05.2016passed by the Arbitral Tribunal whereby the Tribunal had accepted that the total amount of ₹1,43,92,456/- was payable to respondent no.1 in respect of its claim; and an amount of ₹62,57,590/-. was payable to respondent no.2 in respect of its claim. The petitioner has assailed the impugned award on the ground as set out in Section 34(2)(a)(iii) of the Act – that the petitioner was not given a proper notice of appointment of the Arbitral Tribunal or of the arbitral proceedings and, was unable to defend the case.

Contention of the petitioner:

The learned counsel for the petitioner submitted the following contention:

 

  1. It was averred that the petitioner had divorced Mr. Nitin Chawla on 05.03.2016 and has been residing separately and therefore had nothing to do with the Borrower Company nor was a working director in the Borrower Company.
  2. The petitioner assailed the impugned award on the sole ground that she did not have any notice of the arbitral proceedings. It was also submitted that the impugned award is liable to be set aside as no communication was received by the petitioner from the respondents.
  3. It was submitted that no notice was received by the petitioner  of initiation of arbitral proceedings nor a notice from the Arbitral Tribunal nor a copy of the ex parte award prior to 29.09.2018 and therefore, was unable to place her defence.
  4. It was also urged that that the petitioner had filed Form No. DIR 11 with the Ministry of Corporate Affairs, that is, her notice of resignation from the office of a Director.

Contention of the Respondent:

Mr. Pandey, learned counsel appearing for the respondent argued in favour of the order on the following ground:

  1. It was submitted that the petitioner had signed the Power of Attorney nominating the respondents to act, take possession, create mortgage, to register property in the land registry or municipal records along with letter of continuity.
  2. It was argued that the petitioner is a director of the company and is liable for the acts and omissions of the company as the company is an artificial person that functions through natural persons.
  3. He further submitted that the notice was sent through e-mail. In addition, dasti service was also affected.
  4. He further submitted that the factum of divorce between the petitioner and Mr. Nitin Chawla is not relevant for the present petition. He submitted that the petitioner is the director of the Borrower company (M/s Chawla Iron Traders Private Limited) and was actively involved in the affairs of the company

Observation and judgement of the court:

 

The hon’ble bench of the court observed the following:

  1. The arbitral record does not indicate that any notice for the appointment of an arbitrator was sent to the petitioner.
  2. . The arbitral record also indicates that a notice dated 01.02.2016 was sent to the petitioner at two addresses- one at A–156, Second Floor, Meera Bagh, Delhi –110087 and the second at B–5/12, Paschim Vihar, Delhi–110063.
  3. It is seen that there is a specific noting against the name of the petitioner indicating that she had refused service of the notice. However, it is pointed out that the said noting is against her first address and there is no such noting against her second address
  4. It is important to note that that the Arbitral Tribunal had proceeded on the basis that the petitioner had refused service of the notice. But, there is no evidence or any material to indicate that the petitioner had refused service of the notice sent to her at her Paschim Vihar address.

Based on the above circumstances the court found that there is merit in the contention that the record does not clearly establish that the petitioner had in fact received notice of the proceedings at the said address. Thus, the impugned award insofar as the petitioner is concerned, was set aside.

The court further clarified that the respondents are at liberty to institute fresh proceedings against the petitioner.

 Read Judgment;

 

 

 

source ; .latestlaws.com

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HC expounds Section 144B (7) of the Income Tax Act provides for a personal hearing of the Party

 Income Tax directives 

On 16th July, a bench of Delhi High Court consisting of Justice Navin Chawla, while setting aside the notice of demand passed under section 156 of the Income Tax Act, 1961 by the Assessing Officer, held that held that an order challenging the assessment under section 143(3) read with Section 144B of the Income Tax Act provides for the personal hearing of the party against whom such order is made.

Facts of the Case:

The Present writ petition had been filed challenging the assessment order dated 22nd June 2021 passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, notice of demand dated 22nd June 2021 passed under Section 156 of the Act and notice for penalty dated 22nd June 2021 passed under Section 274 read with Section 270A of the Act for the Assessment Year. A direction was also sought by the petitioner to restrain the respondents from giving effect to the impugned assessment orders and notices.

Contention of the Petitioner:

The learned Counsel for the petitioner submitted the following contention:

 

  1. It was submitted that the Respondent gave the Petitioner very short time to submit its reply, i.e. by 25th April, 2021.
  2. It was also submitted that the Petitioner made request to the Respondent for grant of adjournment for fifteen days as the time allowed was too short taking into consideration the complexity of the issue and the prevalent lockdown, due to which the employees were not able to reach their place of work.
  3. It was argued that the petitioner vide order dated 25th May,2021 in addition to a detailed reply, categorically requested for grant of personal hearing to explain its case. However, neither the response was considered nor a personal hearing was granted and in fact the respondent passed the impugned order dated 22nd June, 2021.
  4. It was contended that the said impugned order and notices had been passed without proper appreciation of the facts of the present case and without affording the Petitioner an opportunity of hearing, which is in gross violation of principles of natural justice and therefore is not in accordance with the provisions of the Act.

Contention of the Respondent:

Mr.Puneet Rai, learned senior standing counsel appearing on behalf of the respondent contended the following:

  1. It was submitted that the respondent did not consider the submission/objection filed by the petitioner as it was given without a covering letter and was not warranted as it was against the basic purpose for which faceless assessment was introduced.
  2. It was also urged that the expression used in clause (vii) of sub Section (7) of Section 144B is 'may' and not 'shall' and therefore, there is no vested right in the petitioner to claim a personal hearing.

    Observation and judgement of the court:

     Having heard learned counsel for the parties, this Court wass of the view that Section 144B (7) provides for a personal hearing of the party.

    Thus, the impugned assessment order dated 22nd June 2021, notice of demand dated 22nd June 2021 passed under Section 156 of the Act and notice for penalty dated 22nd June 2021 were set aside and the matter was remanded back to the Assessing Officer, who shall grant an opportunity of personal hearing to the petitioner by way of a Video Conferencing and thereafter pass a reasoned order in accordance with law.

    Read Judgment  ;


     

 

source ; .latestlaws.com

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HC directs CBI to enquire into the authenticity of the email which is allegedly sent by the Income Tax Department

 Spam email (Pic by Google).jpg 

On 16th July, a bench of Delhi High Court consisting of Justics Manmohan and Navin Chawla while hearing a suit determining the authenticity of an email of adjournment and extension by the Income Tax Department, directed the Central Bureau of Investigation (CBI) to enquire as to whether the email had been issued to the petitioner or not, and if so, by whom. The CBI was asked to file its enquiry report with the Court within four weeks.

The court further held that it is constitutionally bound to ensure that citizens of this country who invoke the extra ordinary jurisdiction of this Court are not intimidated by allegations of forgery and prosecution.

Facts of the case:

The Present writ petition has been filed challenging the assessment order dated 01st June 2021. Petitioner has also sought sufficient time in future to file a reply after considering the lockdown position in U.P. and NCT of Delhi as well as the fact that the Petitioner-Company is represented by a Resolution Professional who is an independent professional and is dependent upon the past employees of the Petitioner-Company to file its response.

Contention of the petitioner:

 

Learned counsel for the petitioner had stated the following contention:

  1. It  was submitted that the petitioner on 31 May 2021 at around 02:00 p.m. had asked for an adjournment and extension of time to submit his reply citing the reason that the Resolution Professional of the Petitioner was unable to access the records of the Petitioner-Company due to various lockdown restrictions imposed by the State of Uttar Pradesh.
  2. Learned counsel for the petitioner had stated that on the same day at around 04:00 p.m., the Respondent had granted an adjournment by way of an email till 14th June 2021.
  3. Learned counsel for the petitioner had emphasised that the assessment order was bad in law because on 31st May 2021, the adjournment sought by the Resolution Professional of the petitioner company had been granted and the matter had been adjourned for 14th June 2021.

Contention of the Respondent:

Learned counsel for respondent had vehemently opposed the petition by contending the following:

 

  1. It was submitted that the petitioner had approached this Court with unclean hands. He had stated that the alleged email dated 31st May, 2021 which was the basis for filing the writ petition had not originated from the office of the respondent and therefore, had prayed that the writ petition be dismissed.
  2. It was also submitted that all communications from the Respondent to the Petitioner originated from following e-mail id, which is the official e-mail id of the Respondent:

delhi.dcit.cen6@incometax.gov.in

However, as per the records of Respondent, the email address provided by the Petitioner to the Respondent for communication with the Petitioner is as follows:

 tax@lotusgreens.in

Observation and judgement of the court:

  1. The Court was of the view that the matter was  serious in nature as one of the parties has either forged the document in question and/or is not telling a complete truth.
  2. The Court clarified that in the event it is found that the email dated 31 July, 2021had been forged and fabricated by the petitioner it would initiate action under Sections 191/192/196 of the IPC.

In the view of the above the Court directed the Central agency, namely Central Bureau of Investigation (CBI) to enquire as to whether the email dated 31st May, 2021 had been issued to the petitioner or not, and if so, by whom. The CBI shall file its enquiry report with this Court within four weeks. The Deponent of the writ petition and the counter affidavit are also directed to cooperate with the officials of the CBI.

It was also held that the court is constitutionally bound to ensure that citizens of this country who invoke the extra ordinary jurisdiction of this Court are not intimidated by allegations of forgery and prosecution and that too by officials who do not exercise the duty of care by enquiring as to whether the email had been issued by another wing or Department of Revenue.

 Read Judgment ;

 

 

source ;  latestlaws.com

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Saturday, 24 July 2021

HC: To Arise A Right Under Bank Guarantee Agreement, Demand Has To Be Made Within Validity Period Of Agreement and not during the claim period

 Kerala High Court 

The Kerala High Court recently comprising of a bench of Justice N.Nagaresh observed that It is settled law that invocation of the Bank Guarantee after the validity period but within the claim period, is perfectly lawful and ought to be respected. But the HC cleared that the petitioner cannot have any advantage by the incorporation of a clause in terms of the said Exception 3 to Section 28 of the Indian Contract Act, in the Bank Guarantee since the right of the petitioner to have the Bank Guarantee invoked, is only during the currency of the Bank Guarantee and not during the extended claim period of one year. (COCHIN PORT TRUST V BANK OF INDIA & ANR.)

Facts of the case

The petitioner, Cochin Port Trust is aggrieved by the refusal of the 1st respondent to encash Bank Guarantee and transfer the same to the petitioner. The petitioner sought to declare that invocation of the Bank Guarantee during the claim period is a valid invocation and is binding on the Bank.

The petitioner in this writ petition stated that a tender was floated by them for awarding the work of providing consultancy services for design and supervision of flyover and ROB at ICTT area in Vallarpadam. The 2nd respondent emerged as a successful bidder and therefore they executed the agreement. Thence, 2nd respondent was required to provide performance security in the form of a Bank Guarantee which he furnished on 21.07.2014.

Later, the 1st respondent bank agreed to pay the petitioner on demand all money payable by the 2nd respondent. The Bank Guarantee was valid up to 30.09.2015 but was extended by a year and it was stipulated that though the period of Bank Guarantee is extended, the claim period is up to one year after the expiry of the validity of the Bank Guarantee. The Bank Guarantee was extended from time to time on the same conditions and the final extension was up to 31.03.2019 with a claim period up to 31.03.2020.

 

Later, certain defects were noticed and Bank was informed to return the Bank Guarantee amount but they did not initiate remedial measures even within a period of one month.

Contention of the Parties

The petitioner contended that the Bank Guarantee cannot be paid as the guarantee period has lapsed and only claim period is remaining. The claim period of one year over and above the validity period is incorporated as per Exception 3 to Section 28 of the Contract Act, by the Banking Laws Amendment Act, 2012. Whereas the respondents contended that the right of the petitioner to have the Bank Guarantee invoked, is only during the currency of the Bank Guarantee and not during the extended claim period of one year.

 

The 1st respondent contended that the petitioner cannot have any advantage by the incorporation of a clause in terms of the said Exception 3 to Section 28 of the Indian Contract Act, in the Bank Guarantee. The right of the petitioner to have the Bank Guarantee invoked, is only during the currency of the Bank Guarantee and not during the extended claim period of one year. No relief can therefore be given to the petitioner in this writ petition.

Court Observation and Judgment

The HC dismissing the petition remarked, “The extended period of claim provided for under Exception 3 to Section 28 of the Contract Act is therefore intended for extinguishment of the rights or discharge of any party from any liability under a Bank Guarantee/agreement. To arise a right under the Bank Guarantee Agreement, demand has to be made within the period of validity of the Agreement. Having not made any demand within the validity period of the Bank Guarantee, the petitioner is not entitled to invoke the Guarantee during the claim period after the expiry of the validity period of the Bank Guarantee.

 The writ petition is therefore without any legal merit and is hence dismissed."

 

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HC: Right to Travel cannot be breached if the quantum of individual loan is not a threat to the economic interests of India

  

The Calcutta High Court recently comprising of a bench of Sabyasachi Bhattaharya observed that fundamental right to travel abroad cannot be eclipsed on mere account of absence of conclusive evidence against an individual and if the amount of loan credited to the said individual does not hamper the overall economy of the country.  (Mritunjay Singh Vs. Union of India & Ors.}

The court impugned the LOC issued by the CBI against the petitioner in matter surrounding default in repayment of loan.

Facts of the case

The petitioner was a Director of Kaushik Global Logistic Limited (KGLL) between March 19, 2009 and July 11, 2012. The said company defaulted in repayment of a term loan availed from the State Bank of India (SBI), Alipore Branch, Kolkata.

A criminal case was initiated by the Central Bureau of Investigation (CBI), in which the petitioner was one of the accused. The petitioner denies being a guarantor as per Form C5A dated February 7, 2013, when a fresh letter regarding grant of individual limits within the overall limit was issued by the guarantors for KGLL, which did not include the petitioner's name as a guarantor. It is the further case of the petitioner that the Bank has an award against the borrower-Company passed by the Debts Recovery Tribunal under the SARFAESI Act.

 

A Look-Out Circular was put forth in the petitioner’s name.

The order of the CBI Court was upheld by the Sessions Court on July 7, 2017 in Criminal Revision Case No. 186 of 2016.

Contention of the Parties 

Learned counsel for the petitioner argued that the right to travel abroad is a fundamental right and, in the present case, the livelihood of the petitioner, who is a sailor, depends on overseas travel.

It is also contended that Section 10A of the Passports Act, 1967 is the only statute empowering the Central Government to suspend a passport or restrict overseas travel of a citizen and provides for a prior opportunity of hearing to the affected person. In the present case, no opportunity of hearing was given to the petitioner before issuance of the LOC.

It was further submitted that the ground for request to issue LOC was invalid on the date of the request, that is, January 17, 2020, since the writ petitioner had resigned as Director of KGLL as long back as on July 11, 2012.

 

It was submitted that no other reason for such request and the consequential issuance of LOC were disclosed either by the Bank or the Immigration Authorities.

Learned counsel appearing for the Union of India takes a rather neutral stand in submitting that the Immigration Authorities are bound by law to issue an LOC if so requested by a competent authority, being the SBI in the present instance.

Learned counsel appearing for the respondent no.3-Bank contends that the present liability of the borrower-Company is over Rs.144 crore. Learned counsel harps on the contention that the petitioner is also a guarantor of the Company, whose liability is co-extensive with the borrower.

 

Courts Observation and Judgment

The court relied upon the judgment passed in the case of UCO Bank Vs. Dr. Siten Saha Roy & Ors.[WP No. 23412(W) of 2012], wherein it was held, inter alia, that “economic interests of India” could not be ascertained merely on the quantum of loan and is on a much higher footing, directly and adversely impacting the share market or the economy of the country as a whole, which would be jeopardized in the event the accused is permitted to travel abroad, to such an extent that it destabilizes the entire economy of the country. Therefore the said ground cannot be confined to individual loans on the basis of commercial transactions.

The bench noted, “The petitioner has successfully demonstrated that he was not a Director of the Company at the relevant juncture when the borrower company is alleged to have committed fraud. Thus, there is no basis whatsoever for issuance of the impugned LOC and the consequential subsequent extension thereof against the petitioner.”

 The bench dismissing the petition remarked, "in view of the reasons set forth above, WPO No.105 of 2020 is allowed on contest, thereby quashing the Look-Out Circular and the subsequent extension thereof, issued against the writ petitioner. Respondent nos. 1 and 2 shall take immediate steps for circulation of this Order to the concerned Airport Authorities and/or other agencies which were intimated about the issuance and extension of the LOC so that no further steps are taken against the petitioner on the basis of the said Look-Out Circular as well as the subsequent extension thereof."

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HC: An Institution that is not registered under the Reserve Bank of India Act cannot be regulated through provisions of SEBI Act, 1992

 SEBI 

The High Court of Jharkhand recently comprising of a bench of Justice Sujit Narayan Prasad observed that An Institution that is not registered under the Reserve Bank of India Act cannot be regulated through provisions of SEBI Act, 1992.

The explanation for this is that if the company’s constitution opposes the law, there is no way to regulate it under the S.E.B.I. Act of 1992. (Green Ray International Limited vs The State of Jharkhand)

Facts of the case

The petitioner company is a registered company under the Companies Act as a Public Company Limited by shares, carrying out the business in pursuance to the MAAs have started the business but without any complaint whatsoever and without providing an opportunity of hearing to the petitioners, the authorities have taken restrainment measures by sealing the office and restraining the petitioner’s units in carrying out their business and therefore, the writ petition has been filed.

Contention of the Parties 

 

It was been contended by the learned counsel appearing for the petitioners that in absence of any complaint from any quarter, the action which has been taken by sealing the office, is not proper and such decision has been taken without providing any opportunity of hearing to the petitioners, hence, the action of the respondents being arbitrary, therefore, direction may be passed for allowing the writ petitioners to carry out their business.

Mr. Anil Kumar Sinha, learned senior counsel appearing for the respondent-S.E.B.I. has submitted that since the  petitioner company is not running in pursuance to the provision of Reserve Bank of India Act, 1934, therefore, keeping the objects and intents of the Securities and Exchange Board of India Act, 1992, even if any inquiry would be conducted the factual scenario pertaining to non-registration under theReserve Bank of India Act, 1934, will not be changed.

Court Observation and Judgment 

 

The Learned Court observed, “though the petitioners’ are claiming that they are doing the business of gold and silver coins from the counter-affidavits filed by the respondents it appears that they are also involved in non-banking activities like collecting money from the customers without NBFC of Reserve Bank of India.”

While dismissing the petition the Court noted, "This Court after considering the aforesaid submission is in agreement thereto as because so long as the institution is not registered under the provision of Reserve Bank of India Act 1934, there cannot be any meaning of regulating by virtue of S.E.B.I. Act, 1992. The reason being that when the constitution of the company itself dehors the rule, there is no question of regulating it under the S.E.B.I. Act, 1992. It has also been informed that with respect to the affairs of this company, FIR has been instituted and now the matter is being looked into by the Central Bureau of Investigation.

This court in view of the entirety of the facts and circumstances and as per the discussion made hereinabove, is of the considered view that the prohibitory order passed by the authority in pursuance to the raid/enquiry conducted by the concerned authority and if such decision has been taken, the same cannot be faulted with."

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HC : An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community;

 Orissa High Court 

The High Court of Orissa recently comprising of a bench of Justice S.K. Sahoo remarked that granting bail to the petitioner in economic offences of this nature would be against the larger interest of public and State as it involves criminal misappropriation and cheating of huge amount of public money and there is also reasonable apprehension of tampering with the witnesses. (Ashwini Kumar Patra vs Republic Of India )

Facts of the case

One Roop Lal Meena, Deputy General Manager, Union Bank of India, Bhubaneswar lodged a written complaint before the Superintendent of Police, CBI, Bhubaneswar stating therein that the accused bank officials of Union Bank of India, entered into a criminal conspiracy with three private builders, seven borrowers of housing loan and some unknown bank officials in the year 2017 and by abusing their respective official positions, housing loans were sanctioned in favour of the borrowers on the basis of false/ fictitious documents by violating the guidelines of the Bank. The petitioner along with other accused Bank officials without obtaining approved plan released the entire loan amounts which were allegedly diverted by the accused builders for other purposes which caused undue wrongful loss to the Bank.

On receipt of the written complaint and prima facie finding the petitioner was charged for offences punishable under Sections 120-B, 420, 467, 468 and 471 of Penal Code, 1860 i.e. IPC  and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 i.e. PCA. In course of investigation, the investigating officer recorded the statements and arrested the petitioner for the commission of offences under Sections 409, 420 and 471 read with section 120-B IPC Section 13(2) read with Section 13(1)(d) PCA.

The instant petition was filed under Section 439 of Criminal Procedure Code i.e. CrPC for grant of bail.

 

Contention of the Parties

Petitioner contended that the petitioner’s job in the capacity of Assistant Marketing Manager was not to verify the documents provided by the builders rather it was the duty of the Manager, Advance and Chief Manager of the Bank to scrutinize such documents and to obtain prior approval of plan before disbursing the loan amounts. Secondly, it was contended that since investigation has been completed and the petitioner is a local man and he has been dismissed from the services of the Bank, there is no chance of his absconding or tampering with the evidence, therefore, the bail application may be sympathetically considered.

Learned Special Public Prosecutor contended that the petitioner has mentioned false or fictitious statements while processing the credit information and net-worth assessment of the borrowers in the loan proposals, which clearly reflects his malafide intention of concealing the facts and deviating the procedures of the Bank. Secondly, it was contended that the quantum of misappropriation amount being very high and the petitioner being a local person, he is very likely to influence and gain over the witnesses in case he is enlarged on bail and therefore, the bail application should be rejected.

 

Courts Observation and Judgment

The Court relied on judgment Y.S. Jagan Mohan Reddy v. C.B.I., (2013) 7 SCC 439 wherein it was held, “ Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deeprooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country."

The Court referred to the case of Prahalad Singh Bhati -Vrs.- NCT, Delhi [(2001) SCC 674] wherein it was said, “While granting the bail, the Court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character, behaviour, means and standing of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public or state and similar other considerations”

 

The Court observed that the accusation against the petitioner relates to commission of economic offences which are considered to be grave offences and are to be viewed seriously. Such offences affect the economy of the country as a whole and it involves deep-rooted conspiracy and huge loss of public fund. It was further observed that in such type of offences, while granting bail, the Court has to keep in mind, inter alia, the larger interest of public and State.

Furthermore, the Court said, “the crime was committed in a cool, calculated and organized manner causing wrongful loss of crores to the Bank. There are prima facie materials showing involvement of the petitioner in the deep-rooted conspiracy with other co-accused persons to cause such a huge loss to the Bank.

Granting bail to the petitioner in economic offences of this nature would be against the larger interest of public and State as it involves criminal misappropriation and cheating of huge amount of public money and there is also reasonable apprehension of tampering with the witnesses.”

 Hence, the bail application was rejected.

 

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