Legal Reference Library

IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 23rd December, 2015 W.P.(C) No.5975/2013 MANU NARANG & ANR ..... Petitioners Versus THE LT. GOVERNOR, GOVERNMENT NATIONAL CAPITAL TERRITORY OF DELHI AND ORS .... Respondents In a landmark verdict that will benefit thousands of land owners in Delhi, the high court on Wednesday allowed registration of properties even if valued below the minimum circle rate of the area.

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No.958 OF 2010 Prem Nath Bali ……Appellant(s) VERSUS Registrar, High Court of Delhi & Anr. ……Respondent(s) 29) One cannot dispute in this case that the suspension period was unduly long. We also find that the delay in completion of the departmental proceedings was not wholly attributable to the appellant but it was equally attributable to the respondents as well. Due to such unreasonable delay, the appellant naturally suffered a lot because he and his family had to survive only on suspension allowance for a long period of 9 years. 30) We are constrained to observe as to why the departmental proceeding, which involved only one charge and that too uncomplicated, have taken more than 9 years to conclude the departmental inquiry. No justification was forthcoming from the respondents’ side to explain the undue delay in completion of the departmental inquiry except to throw blame on the appellant's cond...

The Supreme Court has ruled that a widow can be a manager of a joint family in some particular circumstances. An apex court bench gave the ruling while deciding a property dispute between cousins of a family in Uttar Pradesh in a suit filed in 1978 in favour of the mother who bought the property. A bench comprising justices Ranjan Gogoi and N V Ramana said, “Such a role (as manager) necessarily has to be distinguished from that of a Karta which position the Hindu widow cannot assume by virtue of her disentitlement to be a coparcener in the Hindu Undivided Family (HUF) of her husband. Regrettably the position remains unaltered even after the amendment of the Hindu Succession Act in 2005.” “Though women could not be treated as Karta of a joint family, she can be a manager of a joint family, in some particular circumstances,” it said. The bench also held that the expression ‘Manager’ can be understood as denoting a role distinct from that of the Karta. The case dates back to 1978, whe...

If the symbol Rs/Rs is missing on the package of a product for sale, it could invite penalty under the Legal Metrology (Enforcement) Rules, 2011. The offence is compoundable, but the rules are valid, the Delhi High Court stated last week in its judgment, M/s IMS Mercantiles Ltd vs Union of India. In this case, the premises of the firm were inspected by a team of Legal Metrology officials and they found that one of the packets containing rechargeable LED flash lights did not bear the word 'Rs'. The MRP shown on the package merely showed 'MRP 299.00'. The firm was asked to pay Rs 25,000 for the lapse. It challenged the action in the high court and also argued that the rules were against the Legal Metrology Act. The high court dismissed the writ petition.

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1323 OF 2015 (Arising out of Special Leave Petition (Civil) No.10161 of 2014) Mount Mary Enterprises . ... Appellant Versus M/s. Jivratna Medi Treat Pvt. Ltd. ... Respondent 9. The main reason assigned by the trial court for rejection of the amendment application was that upon enhancement of the valuation of the suit property, the suit was to be transferred to the High Court on its original side. In our view, that is not a reason for which the amendment application should have been rejected. With regard to amendment of plaint, the following observation has been made by this Court in the case of North Eastern Railway Administration, Gorakhpur v. Bhagwan Das (D) by LRs. (2008) 8 SCC 511 : "16. Insofar as the principles which govern the question of granting or disallowing amendments under Order 6 Rule 17 C.P.C. (as it stood at the relevant time) are concerned, these are also well settled. Order 6 Rul...

                                                                                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION                 WRIT PETITION NO.73 OF 2014 GSL (India) Ltd.                                       ... Petitioner          v/s     Asset Reconstruction Co. (India) Ltd. ... Respondents 46. We have carefully perused the reasoning of the Full Bench of the Delhi High Court in the case of Amish Jain1 and with the great respect and utmost humility, we are unable to agree with the view expressed therein. Firstly, we are unable to agree with the finding of t...

The Delhi High Court has directed the Insurance Regulatory and Development Authority of India (Irdai) to convene an urgent meeting of insurance companies in Delhi to address the problem of 'duress and coercion' used by them to force a contracting party to abandon legitimate rights under law. The order was passed in the judgment, Worldfa Exports Ltd vs United India Insurance. The conduct of the companies, violating the provisions of the Contract Act and consumer laws, was severely condemned by the court. The firm in this case had taken a fire insurance policy and there was a fire in its premises. It claimed Rs 12 crore, but the surveyor assessed the loss at Rs six crore. The insurer tendered Rs 5.62 crore and asked the firm to send an undated discharge voucher in 'full and final settlement' of the claim. The company which was in distress due to the long delay in settling the claim signed the voucher. The high court pointed out that no law permitted an insurance compa...

Many persons are unaware of life insurance which comes free with their credit/debit cards but the banks that issue them have a responsibility to fulfil their duty towards its customers. If they fail to get the promised amount from the insurance company, the banks will be guilty of deficiency in service. The National Consumer Commission held so in its judgment last week, HDFC Bank vs Pooja Kapoor. The bank had issued a gold card to Pankaj Kapoor and wife Pooja with the benefit of insurance for Rs 5 lakh in case of accidental death. The bank's arrangement was with New India Assurance. Pankaj died in an accident, but the widow did not claim the insurance benefit for a long time, though the condition in the policy prescribed a 30-day limit. She was not aware of the benefit when the bank account was closed due to the death. The bank did not tell her either. Later, she learned about the insurance and she approached the bank. It referred the claim to the insurer, which rejected it on ...

The Calcutta High Court has ruled that the power of the provident fund commissioner to impose penalty on employers who delay their contribution is limited by certain considerations. Sections 14A and 32A of the Provident Fund Act grant the authorities the power to recover penalty not exceeding the amount of arrears and specify the rate of penalty. But the authorities have the discretion to reduce it. The argument of the authorities that they cannot reduce the penalty was rejected by the high court in the case, Topcon International Ltd vs RPF Commissioner. The authorities can take into consideration factors like frequency of the delays, the number of days delayed, power cuts, non-realisation of debts by the employer, the delay on the part of the authorities to claim damages and whether the company has been declared sick. The court clarified that though the authorities could reduce the amount of penalty or damages, that discretion could not be used to waive it altogether. Before levying a...

Interest paid by a company on borrowings from banks to advance money to its own subsidiary is 'business expenditure' on which tax deduction can be claimed, the Supreme Court has ruled in its judgment, Hero Cycles Ltd vs CIT. In this case, the company which was the promoter of Hero Fibres Ltd, took loans and paid interest on it. The money was paid to the sister concern due to business expediency in view of an undertaking given to financial institutions that it would provide additional margin to meet working capital for meeting any cash losses. When the company claimed deduction on it as business expenditure, the revenue authorities denied it. The company moved the Punjab and Haryana High Court but it dismissed the appeal maintaining that when loans were taken from banks at which interest was paid for purposes of business, the interest component could not be claimed as business expenditure. The company moved the Supreme Court. Allowing its appeal, the apex court gave a wider mean...

The Supreme Court last week gave thumbs up to settlement of disputes against litigation among business family members when it ended three-decade row in the case, Rajni Sanghi vs Western Indian State Motors Ltd. The court ruled that if the parties settled their differences amicably, their agreement shall prevail though there were other proceedings like arbitration. Even if there is an arbitration award, which has not been made into a decree of the court, the family arrangement will override it. This was a case of partition of business among four branches of a family whose head died in 1961. Differences cropped up in the 1980s and there was litigation in three high courts with complicated questions of fact and law. There was also an arbitration award which was not made decree of the court. Meanwhile, the parties filed settlement deeds before the Bombay and Rajasthan high courts. The disputes continued over technical details. Ultimately, the Supreme Court upheld the settlement arrived at ...

The Supreme Court has ruled that a widow can be a manager of a joint family in some particular circumstances. An apex court bench gave the ruling while deciding a property dispute between cousins of a family in Uttar Pradesh in a suit filed in 1978 in favour of the mother who bought the property. A bench comprising justices Ranjan Gogoi and N V Ramana said, “Such a role (as manager) necessarily has to be distinguished from that of a Karta which position the Hindu widow cannot assume by virtue of her disentitlement to be a coparcener in the Hindu Undivided Family (HUF) of her husband. Regrettably the position remains unaltered even after the amendment of the Hindu Succession Act in 2005.” “Though women could not be treated as Karta of a joint family, she can be a manager of a joint family, in some particular circumstances,” it said. The bench also held that the expression ‘Manager’ can be understood as denoting a role distinct from that of the Karta. The case dates back to 1978, whe...

In two rare verdicts, Central Information Commission has awarded compensation to applicants fighting for information on their provident fund and salary. A senior citizen resident of Dhanbad, who had been seeking information from his employer Bharat Coking Coal Limited on deduction from his salary towards provident fund for two years, has been awarded a compensation of Rs 15,000. Another resident of Brahmpuri, who was employed as a teacher on contract by East Delhi Municipal Corporation, has been awarded a compensation of Rs 8,000 for being wrongfully denied information on his emoluments for three years. RTI applicant B K Mukhopadhyay, who was working as senior technical inspector in Bharat Coking Coal Limited, had sought information about provident fund deductions from his salary between 1986 and 1991 after he came to know that his contribution had not been properly deposited. However, the organization did not give him any information. While arguing his case before the Commission, ...

The Allahabad high court has issued a notice to the Noida Authority chairman on Tuesday stating that no builder should be allowed to change the floor area ratio of their apartments without prior consent of the home buyers. The court has asked the Noida Authority to submit an affidavit with the court within a month, with details off all those projects which have been sanctioned changes in floor area ratio so far, by deviating from the original layout plans. This order has been given by the Allahabad High court on Wednesday after the Noida Extension Flat Owners welfare Association filed a petition with the high court against the builders who have increased the floor area ratio of apartments without prior consent from buyers.

The Bombay High Court, while quashing the order of the sessions court refusing maintenance to a second wife by the husband, held that it was not required for the woman to prove her marriage through documentary evidence, if the couple lived together. The woman had challenged a 2005 order of the Kolhapur sessions court, which had, while allowing the maintenance of Rs500 to the daughter, turned down that of the woman on the grounds that the husband was already married and his spouse was alive. The husband argued before the High Court that maintenance under section 125 of the CrPC can only be granted to the legally married wife. This ground was strongly opposed by the woman, saying that it was a summary remedy and the same was not intended to affect the civic rights of the party. After going through several Supreme and High Court judgments, the court held, "In matters of this nature, it is sufficient if the claimant prima facie satisfies the court that the claimant and responden...

Rajasthan High Court on Friday directed that no registration of flats in multi-storey buildings will be allowed in the state without issuance of completion certificate by the competent authority. The single bench of the court issued the order on a petition by Chiranjilal Pilania against Dev Developers in Sikar, who constructed a G+5 multi-storey building on the municipal land after getting permission for a G+3 multi-storey building plan on his private land, violating the building plans in connivance with the municipal officials. The court said the illegal constructions have become a scourge in urban and semi-urban centres across the state. The regulatory authorities are fighting what seems to be a losing battle against such constructions. The reason lies inter alia in corruption, inefficiency, sheer volume of work and neighbourhood apathy. Consequently, a belief has taken root in the minds of the builders and general public that laws regulating buildings plans can be violated with ...

The Punjab and Haryana High Court has made it clear that a deceased victim’s family cannot strike a compromise with the accused on behalf of the dead. “Legal heirs of the deceased have entered into a compromise with the accused. It is inexplicable how they can be allowed to do so on behalf of a dead person. Possibility that they have acted under pressure or for some consideration cannot be ruled out,” Justice Rajan Gupta has asserted. IN THE HIGH COURT OF PUNJAB & HARYANA AT                                              CHANDIGARH.                                                CRM-M-22257 of 2014                                           ...

In what will help speed up decisions in consumer cases, Supreme Court has ruled that a party will not get more than 45 days for replying to a complaint in a consumer forum.  The court said this period cannot be extended under any circumstances. Underlining that Consumer Protection Act, 1986, aims at providing expeditious relief to consumers against unfair trade practices and deficiency in services, a three-judge bench led by Justice Anil R Dave held that no party shall henceforth be given more than 45 days to adduce explanation to a complaint. If a party fails to do so, the right to submit a written statement shall be closed and the case may be decided straightaway in the complainant’s favour.  Article referred: http://indianexpress.com/article/india/india-news-india/cant-give-beyond-45-days-for-replying-to-complaint-in-consumer-cases-supreme-court/

While dismissing the petition challenging the validity of Section 7-A of the Hindu Marriage Act, 1955, the Division Bench of S.K. Kaul, C.J. and T.S. Sivagananam, J. relying on the decision of S.Nagalingam v. Sivagami, (2001) 7 SCC 487, upheld the validity of Section 7-A [as inserted by the Hindu Marriage (Tamil Nadu Amendment) Act, 1967] as the provision applies to any marriage between two Hindus solemnized in the presence of relatives, friends or other persons and that the presence of a Priest is not mandatory for the performance of a valid marriage. Article referred: http://blog.scconline.com/post/2015/11/26/validity-of-s-7-a-of-the-hindu-marriage-act-1955-upheld/

In the case where the Court was deciding the question regarding the exhibition of Compact Discs filed in defence by the accused and to get the same proved from Forensic Science Laboratory, the bench of Dipak Misra and P.C. Pantt, JJ held that the courts below erred in law in rejecting the application to play the compact disc in question to enable the public prosecutor to admit or deny. In the case where a female child aged nine years was alleged to be sexually abused by his uncle, considering the fact that the compact disc in question had the conversation between the father of the victim and son and wife of the appellant regarding alleged property dispute, the Court referred to various judgments of this court where it was held that tape recorded conversation is admissible provided first the conversation is relevant to the matters in issue; secondly, there is identification of the voice; and, thirdly, the accuracy of the tape recorded conversation is proved by eliminating the possibili...

Declaring the Karnataka Religious Institutions and Charitable Endowments (Amendment) Act, 2011 and the Karnataka Religious Institutions and Charitable Endowments (Amendment) Act, 2012 discriminatory and violative of Constitutional Rights, the High Court held that if the law passed by a legislature is struck down by the Courts as being invalid for one or the other reason, it would be competent for the appropriate Legislature to cure the  said infirmity and pass a validating law so as to make the provisions of the said earlier law effective from the date when it was passed. But the changed or altered conditions should be such that the previous decision would not have been rendered by the Court if those conditions had existed at the time of declaring the law as invalid. Article referred: http://blog.scconline.com/post/2015/12/04/legislature-cannot-directly-overrule-a-decision-or-make-a-direction-as-not-binding-on-it-but-has-power-to-make-the-decision-ineffective/

The Supreme Court has held that a landholder’s right to be fairly compensated for his land acquired by the government cannot be compromised as right to property has long been recognised a human right. A bench of Justices V Gopala Gowda and Amitava Roy said the government cannot undermine the land owner’s right by not granting fair compensation to them. The court said it is constitutional obligation to ensure that a land loser is adequately compensated. “The right to property having been elevated to the status of human rights, it is inherent in every individual, and thus has to be venerably acknowledged and can, by no means, be belittled or trivialised by adopting an unconcerned and nonchalant disposition by anyone, far less the state, after compulsorily acquiring his land by invoking an expropriatory legislative mechanism,” the bench said. Article referred: http://www.deccanherald.com/content/515900/sc-landholders-right-fair-share.html

A Two Judge Bench of the Supreme Court comprising of Justices J.S.Khehar and R.Banumati has held that, in view of the Amended Section 142(2) of Negotiable Instruments (Amendment) Second Ordinance 2015, the place where a cheque is delivered for collection i.e., the branch of the bank of the payee or holder in due course, where the drawee maintains an account, would be the determinative of the place of territorial jurisdiction for filing Complaint under the NI Act. The Bench was hearing an Appeal from an order dated 5.5. 2011 of Madhya Pradesh High Court in which it is held that the Jurisdiction to file a Complaint under NI Act lay only before the Court where-in the original drawee bank was located. The High Court relied on the Three Judge Bench Judgment of the Supreme Court in Dashrath Rupsingh Rathod vs. State of Maharashtra. Criminal Appeal No. 1557 of 2015 (Arising out of SLP (Crl.) No. 7850 of 2011), Criminal Appeal No. 1562 of 2015 (Arising out of SLP (Crl.) No. 9758 of 2011), Cr...

A married daughter is eligible to get government job of her deceased's father on compassionate grounds, the Chhattisgarh High Court has observed. Justice Sanjay K Agrawal made the observation on Tuesday while hearing a petition filed by Sarojani Bhoi (28) who had challenged the state government on the ground that she was not given the job of her father who passed away in 2011. Article referred: http://www.dnaindia.com/india/report-married-daughter-eligible-for-deceased-father-s-govt-job-on-compassionate-grounds-chhattisgarh-hc-2151213

In a judgment that will shield parents against unruly and unsupportive children, the Punjab and Haryana High Court has given a new meaning to their relationship. The High Court has asserted that a son is a mere licensee putting up on the premises owned by his father. The District Magistrate is competent to order his eviction. The judgment by Justice Hemant Gupta and Justice Sneh Prashar came on a petition by Gurpreet Singh against his father and other respondents. The Bench said: “The petitioner is a licensee living on the premises on the basis of concession given by his father to live in the property owned by him. As a licensee, the petitioner is only permitted to enjoy the possession of the property licensed, but without creating any interest in the property. A licence stands terminated the moment the licensor conveys a notice of termination of the licence. There is no vested right of any kind in the licensee to remain in possession of the property licensed,” it said. Arti...

HDFC to pay for negligence The National Consumer Disputes Commission last week ruled that HDFC Bank was negligent by not verifying the signatures on applications for net banking and electronic money transfer, leading to siphoning of money from the salary account of one Swapan Kumar. According to his complaint, bank officials conniving with a former security guard of the bank, forged his signatures on applications. Ordering compensation, the commission observed that "had the concerned bank manager been careful, he would have rejected the applications… The official at least on noting the difference in signatures was expected to contact the complainant to verify them." Article referred: http://www.business-standard.com/article/opinion/disparity-in-computing-compensation-115112200776_1.html Note: This is a potentially dangerous situation. In this case, the plaintiff was a able prove that he had not applied for net banking. But with the all pervading presence of net based t...

The Tax Court of Cologne has ordered a minority shareholder to pay income and sales tax (case no. 13 K 3023/13). The shareholder was making a business out of systematically raising legal challenges and then being persuaded to withdraw his claims in return for a lavish settlement. The man cashed up to five-figure sums through his attorneys in return for dropping his objection to necessary capital increases, for example. As his holdings were in each case small (between € 10 – 500), the tax court assumed that the aim of the challenges was not the assertion of a claim for compensation. What the man in fact wanted was just one thing: to capitalize as a shareholder from his power to adopt an obstructionist position. The Tax Court of Cologne interpreted this as a long-term activity. This serves to underline the system that lies behind it. After all, the accused shareholder had been acting in exactly this manner for years, not only in his own name but also in that of a limited liability compa...

Federal Labor Court, decision dated February 10, 2015 – 9 AZR 455/13 Facts of the case The employee was employed since more than 20 years. The employer terminated the employment with immediate effect and additionally gave statutory notice of termination under due respect of the applicable notice period in case the dismissal with immediate effect may be invalid. Furthermore the letter of termination said: “In case that only the statutory notice of termination is effective, you are released from your duty to work with immediate effect, taking into account all leave and overtime claims.” The parties reached a settlement ending the employment 5 weeks after notice was given. Although this period would have sufficed to grant the entire leave, the employee claimed compensation for the leave. The Federal Labor Court sided with the plaintiff. The decision According to precedents set by the Federal Labor Court, it was possible so far to grant any remaining days of leave by releasing the empl...

Requirements for the official hearing of an employee Federal Labor Court, decision dated February 12, 2015 – 6 AZR 845/13 High demands have always been placed on terminating an employment relationship by an employer. This is especially true for so-called termination due to suspicion. Even the suspicion of a serious breach of duty can represent important grounds for an extraordinary termination of an employment relationship. A prerequisite is that the suspicion is supported by objective facts and that these suspicions destroy the trust necessary for the continuation of the employment relationship. There is a risk that the employee who will be terminated will be wrongly accused. Accordingly, the employer must make all reasonable efforts to clarify the underlying facts. This also means providing the employee with the opportunity to weigh in and comment on the allegations. The Federal Labor Court has substantiated the requirements for such an official hearing of the employee in the deci...

The Supreme Court of the Republic of Lithuania developed interpretation of provisions of the Tort law providing more guarantees to the employee injured at work in case when company (the employer) went bankrupt and extended regulations of company director liability. The Supreme Court found that in case of indirect liability (company is liable for the damages caused by its employees) and liquidation of such Company due to bankruptcy the damage incurred to injured person shall not be left because of Company bankruptcy. An employee who was injured at work shall have right to direct his request of damage compensation to the person who caused the damage. In this particular case it is the director of the Company. This interpretation is based on Principles of European Tort Law providing for liability for auxiliaries. As to the merits of the case, the employee was injured at work and the director of the Company was found guilty for the criminal offence related to labor safety and failure to en...

Lingard v. Milne-McIsaac, 2015 ONCA 213 – This Court of Appeal case arises from a motor vehicle accident which occurred on October 28, 2008. The plaintiff sustained injuries when his vehicle was rear-ended by an uninsured vehicle. The Motor Vehicle Accident Report (MVA Report) prepared by the police at the scene of the accident listed the driver, owner and insurance company. On June 29, 2010, the plaintiff’s doctor determined that he would require back surgery as a result of the accident. The plaintiff commenced a Statement of Claim on September 24, 2010 seeking damages from both the driver and owner of the vehicle. On or about January 25, 2011, the plaintiff learned that the defendant vehicle was uninsured and the insurance was cancelled prior to the subject accident. As a result, the plaintiff brought a motion for leave to amend his Statement of Claim to claim uninsured motorist coverage from his insurer, Wawanesa Insurance Company. The motion judge denied the plaintiff leave, findi...

ACIT vs. Victory Aqua Farm Ltd (Supreme Court) S. 32: The "functional" test has to be applied to determine whether an asset is "plant". Even a pond designed for rearing prawns can be "plant" In Commissioner of Income Tax vs. Anand Theatres 224 ITR 192 it was held that except in exceptional cases, the building in which the plant is situated must be distinguished from the plant and that, therefore, the assessee’s generating station building was not to be treated as a plant for the purposes of investment allowance. It is difficult to read the judgment in the case of Anand Theatres so broadly. The question before the court was whether a building that was used as a hotel or a cinema theatre could be given depreciation on the basis that it was a “plant” and it was in relation to that question that the court considered a host of authorities of this country and England and came to the conclusion that a building which was used as a hotel or cinema theatre could...

Himalayan Cooperative Group Housing Society Vs. Balwan Singh (Supreme Court) The client is not bound by a statement or admission which he or his lawyer was not authorised to make. The Lawyer generally has no implied or apparent authority to make an admission or statement which would directly surrender or conclude the substantial legal rights of the client unless such an admission or statement is clearly a proper step in accomplishing the purpose for which the lawyer was employed Generally, admissions of fact made by a counsel is binding upon their principals as long as they are unequivocal; where, however, doubt exists as to a purported admission, the Court should be wary to accept such admissions until and unless the counsel or the advocate is authorised by his principal to make such admissions. Furthermore, a client is not bound by a statement or admission which he or his lawyer was not authorised to make. Lawyer generally has no implied or apparent authority to make an admission ...

Supreme Industries Ltd vs. ACIT (Bombay High Court) S. 254(2): ITAT must adopt a justice oriented approach and not defeat the legitimate rights on the altar of procedures and technicalities. Even a mistake by the assessee can be rectified (i) It is a settled position in law that every authority exercising quasi judicial powers has inherent/ incidental power in discharging of its functions to ensure that justice is done between parties i.e. no prejudice is caused to any of the parties. This power has not to be traced to any provision of the Act but inheres in every quasi judicial authority. This has been so held by the Supreme Court in Grindlays Bank Ltd. v/s. Central Government Industrial Tribunal 1980 SCC 420. Therefore, the aforesaid principle of law should have been adopted by the Tribunal. It is expected from the Tribunal to adopt a justice oriented approach and not defeat the legitimate rights on the altar of procedures and technicalities. This is particularly so when there ...

CIT vs. Punjab Stainless Steel Industries (Supreme Court) Meaning of the word “turnover” in s. 80HHC explained. Sale proceeds of scrap is not “turnover” for s. 80HHC. Revenue should encourage assessees to bring in foreign exchange (i) The word “turnover” means only the amount of sale proceeds received in respect of the goods in which an assessee is dealing in. So far as the scrap is concerned, the sale proceeds from the scrap may either be shown separately in the Profit and Loss Account or may be deducted from the amount spent by the manufacturing unit on the raw material. When such scrap is sold the sale proceeds of the scrap cannot be included in the term ‘turnover’ for the reason that the unit is engaged primarily in the manufacturing and selling of steel utensils and not scrap of steel. Therefore, the proceeds of such scrap would not be included in ‘sales’ in the Profit and Loss Account of the assessee (The situation would be different in the case of a person who is primarily ...

Entire law on the taxation of deceased persons and their estate explained in the context of the Income-tax Act and the Central Excise Act The Supreme Court had to consider whether a dead person’s property, in the form of his or her estate, can be taxed without the necessary machinery provisions in a tax statute. The question was whether an assessment proceeding under the Central Excises and Salt Act, 1944, can continue against the legal representatives/estate of a sole proprietor/manufacturer after he is dead. HELD by the Supreme Court: (i) The individual assessee has ordinarily to be a living person and there can be no assessment on a dead person and the assessment is a charge in respect of the income of the previous year and not a charge in respect of the income of the year of assessment as measured by the income of the previous year. Wallace Brothers & Co. Ltd. v Commissioner of Income-tax. By section 24B of the Income-tax Act the legal representatives have, by fiction of la...

Spentex Industries Ltd vs. CCE (Supreme Court) The Supreme Court was concerned with whether or not the manufacturer/exporter is entitled to rebate of the excise duty paid both on the inputs and on the manufactured product, when excise duty is paid on a manufactured product and also on the inputs which have gone into manufacturing the product and such manufactured product is exported? HELD in that context by the Court: (i) It is to be borne in mind that it is the Central Government which has framed the Rules as well as issued the notifications. If the Central Government itself is of the opinion that the rebate is to be allowed on both the forms of excise duties the government is bound thereby and the rule in-question has to interpreted in accord with this understanding of the rule maker itself. Law in this respect is well settled and, therefore, it is not necessary to burden this judgment by quoting from various decisions. Our purpose would be served by referring to one such decisi...

A woman has inalienable rights over stridhan and she can claim it even after separation from her husband, the Supreme Court has ruled, saying that denying it would amount to domestic violence making the husband and in-laws liable to face criminal prosecution. As per Hindu law, stridhan is whatever a women receives during her lifetime including all movable, immovable property, gifts etc received prior to marriage, at the time of marriage and during child birth. A bench of Justices Dipak Misra and Prafulla C Pant quashed the order of a trial court and Tripura High Court which had held that a woman cannot claim her stridhan after separation from her husband and criminal proceedings cannot be initiated against husband and in-laws for not handing over the properties. It pulled up the courts for dismissing the plea of a woman on the ground that she lost the right over stridhan after judicial separation with husband. The court said that the Protection of Women from Domestic Violence Act...

Dealing with the question that the interest received by banks after bills of exchange have been discounted by them and a party defaults and hence has to pay compensation by way of interest as payment is made after the date stipulated in the bill of exchange is liable to tax under the Interest Tax Act, 1974, the bench of Dr. A.K. Sikri and R.F. Nariman, JJ held that the Interest Tax Act, unlike the Income Tax Act, 1961 has focused only on a very narrow taxable event which does not include interest payable on default in payment of amounts due under a discounted bill of exchange. Interpreting Section 2(7) of the Interest Tax Act, the Court said that interest is chargeable to tax under the Interest Tax Act only if it arises directly from a loan or advance which is clear from the word “on” used in the said Section. Stating that “Loans and advances” has been held to be different from “discounts” and the legislature has kept in mind the difference between the two, it was explained that inter...

A Punjab and Haryana high court bench has said that women should be given preference over men in compassionate appointments, when both are born of public servants dying in harness. The high court bench of justice Rajiv Narain Raina, while dismissing the plea of a Hoshiarpur youth, said able-bodied men should be left to fend for themselves in the country today in the war of attrition fought daily in the employment market and in court. “This special provision is meant to secure chastity of the weaker sex and that they are not driven to red-light areas, to put it bluntly,” justice Raina said. The petitioner had argued that he was denied the job on the wrong premise as the facts recorded in his case were wrong. He had three sisters while it was recorded while denying the job that he had two elder brothers and a sister. “It makes little difference as to the numerical strength of members of the family while dealing with a case of compassionate appointment. when we talk of rights of childr...

The Bombay High Court last week allowed the petition of Italian firm Sideralba SPA seeking the execution of a foreign award in its favour against Mumbai firm Shree Precoated Steels Ltd. There was a series of disputes between the Italian firm, the Mumbai firm, its sister concern in UAE and insurer New India Assurance over dispatch of steel items, some of which were damaged while the ship with the consignment from Mumbai was damaged at Djibouti. The high court rejected the arguments of the Mumbai firm resisting the execution of the award stating that "the findings of facts rendered by the arbitral tribunal cannot be interfered with in this court and it cannot refuse to enforce the foreign award by adjudicating upon the disputes between the parties on merits… According to Swiss law applicable to the parties, the award has achieved finality." The judgment cited several Supreme Court judgments in respect of execution of foreign awards and concluded that enforcement could be refuse...

The common practice of keeping vacancies of chairpersons in tribunals pending for long periods and allowing bureaucrats to act as their heads received another blow, this time from the Gujarat High Court. The State Electricity Regulatory Commission was topless for a long time and one technical member was presiding over it along with a former employee of the electricity board. This was challenged by Utility Users' Welfare Association. Allowing most of its prayers, the high court stated that since "the vacancy of chairperson was not filled up for a long time and a large number of litigants are waiting for adjudication, the state government is directed to undertake the process for making the appointment of chairperson at the earliest, but not later than three months." The court ruled that the powers exercised by the commission are equal to that of a civil court and so a person with judicial background must preside over it as far as possible. Otherwise, it may result in the ex...

A charitable institution is entitled to set apart 25 per cent of the total income for charitable purposes even if it is not spent in the assessment year. It is an option permitted in the Income Tax Act but the limit should be observed. The Supreme Court stated that both the commissioner of appeals and the Andhra Pradesh High Court erred while allowing a larger percentage in the case, CIT vs G R Govindarajulu. The total income was Rs 99 lakh out of which Rs 47 lakh was spent on charity and Rs 32 lakh was set to be spent for charitable purposes in the following year. The assessee claimed that it was therefore entitled to have deduction of the entire amount and its tax liability was nil. The assessment officer did not agree stating that no option for the purpose was exercised before filing the returns and it was not done in a valid manner. Though the appellate authority and the high court accepted that contention, the Supreme Court pointed out that Rs 32 lakh was more than 25 per cent of ...

The Bombay High Court last week ruled that expenses incurred by a professional going abroad for treatment of eye is not eligible for income tax deduction. The assessee in this case, Dhimant Thakar vs CIT, was a lawyer and he argued that good vision was important for pursuing his profession. His claim for the assessment year 1986-87 was rejected by the revenue authorities. His appeal was also rejected by the Commissioner of Income Tax (Appeals) who observed that if the logic of the lawyer was stretched, it would mean that even expenditure incurred on food to preserve oneself should be treated as allowable under Section 37(1) of the Income Tax Act as being incurred for business or profession. On appeal, the high court upheld the view of the authorities observing that "eyes are essential not only for the purpose of business or profession but for purposes other than these which are so many. It is therefore clear that the said expenditure as claimed by the professional is not in th...

If an arbitrator nominated by the contesting parties withdraws from the proceedings, the court can select a substitute arbitrator of its own choice. "It is the court's duty to give effect to the policy of law, that is to promote efficacy of arbitration," the Supreme Court has stated in its judgment, Shailesh vs Mohan. In this case, the parties selected a retired judge of the Supreme Court from a panel of names but she resigned midway. The parties could not agree on a new name and the matter went back to the Bombay high court. It substituted one of its retired judges in her place. This was opposed by one of the parties, which argued that once the arbitrator withdraws, the agreement ended and the court could not name another. Rejecting this argument, the Supreme Court stated that under Section 15(2) of the Arbitration and Conciliation Act, when the mandate of an arbitrator terminates, a substitute arbitrator "shall" be appointed. Arbitration must go on. For e...

In a landmark ruling, the Supreme Court on Wednesday upheld a law made in Maharashtra in 1977, which requires that before courts get into the facts of a case, they should decide on jurisdiction when questions are raised on issues, including that of delay beyond a legally set bar of three years. The verdict, by a bench of Justices M Y Eqbal and Kurian Joseph, comes on a bunch of appeals against separate orders passed by the Bombay high court in disputes mostly over property development.The court has held that section 9A of the Maharashtra Amendment Act, 1977, is a law by itself and deters litigants from filing suits beyond a three-year limitation. The law was intended to end “frivolous, belated suits“ against the government. The SC was asked to decide on the section’s constitutional validity in 2012. Wednesday’s verdict is a setback to industrialist Nusli Wadia, who had dragged to court Ferani Hotels, a group company of the late real estate baron G L Raheja and now managed by his son ...

The Bombay High Court has ruled that information regarding development plans of a building company can be disclosed by the municipal authorities on an application under the Right to Information Act. In this case, Ferani Hotels Ltd and Nusli Wadia, the two parties had an agreement to develop certain lands in Mumbai. The relationship turned sour and the agreement was terminated, leading to a suit in the high court. Meanwhile, Wadia moved an application before the public information officer of the Municipal Corporation of Greater Mumbai seeking details of the architectural plans and reports submitted by the company to the municipal commissioner and his approval. When the information was denied, Wadia moved the state information commissioner, who ordered the release of the information. The company appealed to the high court, arguing that the information sought did not serve any social or public interest, it was only for private interest. Moreover, it would harm its business interest and wo...

The Supreme Court has ruled that the government cannot amend its export-import policy to take away rights already accrued to exporters under a specific scheme. A special scheme related to their performance was announced in 2004 to boost exports by giving incentives on some items. Later it was amended by removing certain items. This spawned a rash of petitions in various high courts, which took different stands, especially Bombay and Gujarat high courts. All the parties appealed to the Supreme Court. In its common judgment, DGFT vs Kanak Exports, the court stated the government can decide policy. However, if the government realised that the earlier policy was "ill-considered" it was free to withdraw it but it could do so only prospectively, but not from a back date. "Duty credit entitlement cannot be snatched from exporters by making the amendment retrospectively."

When several persons are guilty of causing a road accident leading to death or injury, the claim for compensation can be made against each,or all of them. The claimant has a choice. The persons liable can later sue each other for their share of liability after paying the amount to the claimant. This rule was reiterated in the case, Kamlesh vs Attar Singh, by the Supreme Court. A speeding car hit an equally negligent tempo killing a passenger in the latter. His widow, mother and three minor children sued the drivers of both vehicles, the owner of the car and its insurance company. The tribunal found that they were all guilty of 'composite negligence' and they should pay Rs 5.81 lakh to the family. The tempo driver appealed to the Punjab & Haryana High Court, which set aside the award made by the tribunal. The family appealed to the Supreme Court and it restored the order of the tribunal, stating that the high court had not assessed the evidence properly.

After an award is passed in an arbitration, there cannot be any examination or cross-examination of witnesses in court on an allegation of legal misconduct by the arbitrator. The court can only examine the records of the arbitration proceedings, the Supreme Court has stated in its judgment, Cochin Shipyard Ltd vs Apeejay Shipping Ltd. "Examination of any witness in court is impermissible to substantiate legal misconduct on the part of the arbitrator. It is because it must be palpable from the proceedings," the court said. In this case, the government undertaking agreed to build a ship for Apeejay. Disputes arose between them which were referred to arbitration by a retired Supreme Court judge. The shipyard moved the civil judge to execute the award of 2009. Apeejay then wanted to examine the arbitrator and the general manager (GM) on its allegation that the arbitrator was guilty of legal misconduct (not moral misconduct, which is different in law). The judge rejected it. The K...

In a collaboration agreement between the holder of land and the developer, there need not exist a sale of the property. The income tax authorities cannot assume there is a transfer and order compulsory pre-emptive purchase under Section 269UD of the Income Tax Act. This provision intends to prevent tax evasion by undervaluation of property. In this judgment delivered by the Supreme Court last fortnight, Unitech Ltd vs Union of India, the building company had an agreement with Vidarbha Engineering Industries, lessee of land received from the Nagpur Improvement Trust, to raise a commercial complex. The builder will get 78 per cent of the developed area and the lessee will retain 22 per cent as consideration. The revenue authorities issued a show cause notice to Unitech accusing it of undervaluation of property. The Bombay High Court dismissed the challenge of Unitech, leading to the appeal. The Supreme Court stated that the tax authority as well as the high court made decisions on wrong ...

The Supreme Court has ruled that names of gods or holy books cannot be trademarked to sell goods and services. A bench of Justice Ranjan Gogoi and Justice N V Ramana also said that allowing such a thing could offend people’s sensibilities. “There are many holy and religious books like Quran, Bible, Guru Granth Sahib, Ramayan, etc. The answer to the question as to whether any person can claim the name of a holy or religious book as a trademark for goods or services marketed by him is clearly ‘no’,” said the bench. The bench said as per the law, one cannot take advantage of gods and goddesses to sell products. The bench was hearing an appeal by Lal Babu Priyadarshi from Patna, who sought to trademark the word ‘Ramayan’ to sell incense sticks and perfumes. Priyadarshi appealed against the Intellectual Property Appellate Board’s decision in favour of one Amritpal Singh, who contended that ‘Ramayan’ can’t be registered as a trademark as the name of a religious book can’t be monopolised b...

Prosecution has been using electronic evidence to seek conviction of accused for a decade but for the first time, the Supreme Court on Monday permitted an accused to bring on record taped telephonic conversations to prove his innocence in a child sexual abuse case. The ruling assumes significance as the SC reversed concurrent decisions of a trial court and the Punjab and Haryana High Court which had rejected the accused's plea to produce recorded telephonic conversations between his wife and son with the girl's father to drive home that he had been framed because of a lingering property dispute with the girl's family. The accused had moved the trial court to take on record a compact disc purportedly containing telephonic conversations between Sandeep Verma (the girl's father) and Saurabh (the accused's son) and Meena Kumari (the accused's wife). He had pleaded with the trial court to get its authenticity tested by a forensic laboratory and match it with voic...

The Madras High court today said as per 'dharma', sons are duty-bound to maintain the mother and directed a man settled in Canada and earning Rs. 3 lakh a month, to provide his mother living in India with Rs. 15,000 a month. Disposing of a criminal revision petition filed by the first son of the woman, Pon Devaki, Justice S Vimala of the Court's Madurai Bench, said the "right of the mother to expect her children to maintain (her) is not only statutory right, constitutional right, fundamental right, natural and moral right but also human right." The petition challenged the order of the Madurai Family Court to pay Rs. 3000 a month to his mother. The judge said "as per "dharma", the sons are duty-bound to maintain the mother. When dharma says that sons should take care of their parents, it means duty, breach of duty is punishable," the judge said. The judge said the son should not have made his mother approach the Family Court. The first s...